Chicago Wine Co. v. Braun:
Seventh Circuit Re-Affirms State Authority to Impose In-State-Presence Requirements and Common-Carrier Bans on Retail Alcohol Deliveries

1. Introduction

In Chicago Wine Company v. Mike Braun, the United States Court of Appeals for the Seventh Circuit confronted yet another clash between the Constitution’s dormant Commerce Clause and the States’ broad regulatory powers preserved by § 2 of the Twenty-First Amendment. The plaintiffs—an Illinois wine retailer (Chicago Wine Co.) and three Indiana consumers—sought to strike down two interconnected pillars of Indiana’s alcohol regime:

• the requirement that a retailer maintain a physical premises in Indiana before it may deliver wine to consumers, and
• the categorical ban on retailers’ use of common carriers (UPS, FedEx, etc.) for direct-to-consumer delivery of wine.

The district court granted summary judgment to Indiana officials; a split Seventh Circuit panel—via two separate concurring opinions—affirmed. While Judge Easterbrook focused on the absence of discrimination, Judge Scudder found discrimination but held the scheme justified under the Twenty-First Amendment. Together the opinions crystallise an important holding: States may, consistent with the federal Constitution, demand in-state physical presence from retail alcohol sellers and may bar common-carrier deliveries so long as those rules apply even-handedly (Easterbrook) or are supported by concrete public-health evidence (Scudder).

2. Summary of the Judgment

The Seventh Circuit affirmed summary judgment for Governor Braun, Attorney-General Rokita, the Indiana Alcohol & Tobacco Commission, and the industry intervenor. The outcome rests on two independent but complementary strands:

1. Non-Discrimination Analysis (Easterbrook): Indiana’s rules treat in-state and out-of-state retailers identically: none may ship through common carriers and all must hold an Indiana retail permit tied to a physical location. Because no discrimination exists, traditional dormant-Commerce scrutiny never engages.
2. Justification Under § 2 (Scudder): Assuming the physical-presence rule does discriminate, Indiana produced sufficient “concrete evidence” that the regime advances legitimate, non-protectionist ends—under-age-drinking prevention, temperance, and enforcement practicality—so § 2 shields the statutes.

Either path leads to the same destination: Indiana may exclude out-of-state retailers from the direct-to-consumer wine market unless they establish bricks-and-mortar stores and use their own trained employees for delivery.

3. Analysis

3.1 Precedents Cited and Their Influence

• Tennessee Wine & Spirits Retailers Ass’n v. Thomas, 588 U.S. 504 (2019) – The Court’s modern template for alcohol-Commerce conflicts. Both opinions parse Tennessee Wine for its two-step test (discrimination → justification) and its caution that § 2 does not “sanction every discriminatory feature” of a three-tier system.
• Granholm v. Heald, 544 U.S. 460 (2005) – Earlier invalidation of producer-level discrimination; cited for the inadmissibility of “in-state presence” as a proxy for residency, yet limited to winery-shipping context.
• Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) – Balancing test for facially neutral but burdensome laws. Judge Scudder assumes its continued relevance; Judge Easterbrook doubts Pike ever applies to nondiscriminatory alcohol regulations.
• Seventh Circuit trio: Baude v. Heath (2008), Lebamoff Indiana (2012), and Lebamoff Illinois (2018) – provide binding or persuasive authority upholding Indiana’s carrier ban and signalling that physical-presence rules can survive Pike once evidentiary showings are made.
• Recent Circuit split cases (3d, 4th, 6th, 8th, 9th, 1st, etc.) – Judges benchmark Indiana’s scheme against the national landscape, reinforcing an emerging consensus that retail-level physical-presence rules generally pass constitutional muster.

3.2 The Court’s Legal Reasoning

(a) Easterbrook’s Concurrence – “No Discrimination, No Problem”

1. Assumption without deciding: even under a strict reading of Tennessee Wine, outright discrimination is unlawful.
2. Common-carrier ban: applies equally to all retailers, therefore non-discriminatory. Prior Seventh Circuit precedents already upheld it.
3. Physical-presence rule: Every would-be retailer—Hoosier or Illinoian—must secure an Indiana storefront and an available permit. Cost asymmetry does not equal constitutional discrimination.
4. Three-tier legitimacy: Because the challenged provisions merely reinforce Indiana’s facially neutral three-tier system, scrutiny ends. Pike balancing is unnecessary.

(b) Scudder’s Concurrence in the Judgment – “Yes Discrimination, But Justified”

1. Step 1 – Discrimination found: Out-of-state retailers categorically denied permits as they cannot satisfy in-state-premises prerequisite; residents can. Practical effect is protectionist.
2. Step 2 – Twenty-First Amendment justification: Indiana produced sworn enforcement testimony and expert evidence showing:
   • Routine on-site inspections (13,000+ annually) are impossible across state lines.
   • Physical premises facilitate permit suspension, counterfeit detection, and under-age compliance stings.
   • Local permit-cap formulas help curb overall alcohol availability (temperance).
   These data constitute the “concrete evidence” Tennessee Wine demands.
3. Common-carrier ban under Pike: Even if Pike applies, Indiana’s need for face-to-face age checks outweighs any interstate burden, especially in light of federal pre-emption (Rowe) barring states from imposing ID-verification duties on carriers.

3.3 Impact of the Decision

This case pushes the doctrinal needle in three respects:

• Clarifies the evidentiary bar for justifying discriminatory alcohol laws—sworn law-enforcement affidavits, detailed inspection statistics, and market-specific expert reports suffice.
• Solidifies a circuit trend upholding retail-level physical-presence requirements even after Tennessee Wine. The Seventh now firmly aligns with the 2d, 3d, 4th, 6th, 8th, and 9th Circuits.
• Limits Pike’s reach in the alcohol context. Both opinions hint—one explicitly, one implicitly—that Pike may be a dead letter where the challenged law is part of a core three-tier structure.

Practically, the ruling means:

• Online wine retailers wishing to sell in Indiana must either partner with licensed Indiana wholesalers and retailers or establish their own Indiana retail operation.
• States defending similar regimes now possess a roadmap for building the “concrete record” that Tennessee Wine requires.
• Consumer-centric suits attacking three-tier strictures will increasingly face an uphill battle absent evidence of blatant protectionism or thinly-supported public-health claims.

4. Complex Concepts Simplified

Dormant Commerce Clause

Even when Congress is silent, states may not pass laws that overtly or covertly favor in-state economic interests.

Twenty-First Amendment – § 2

Gives each state primary authority to control importation and distribution of alcohol within its borders, but not to discriminate for purely economic protectionism.

Three-Tier System

A post-Prohibition regulatory structure separating producers → wholesalers → retailers, designed to curb tied-house abuses and promote temperance.

In-State Physical-Presence Requirement

Rule requiring a retailer to maintain brick-and-mortar premises (and usually warehouse & staff) within the state as a condition of licensure.

Pike Balancing

A test weighing a law’s local benefits against its burdens on interstate commerce when the law is facially neutral.

Concrete Evidence Standard

Post-Tennessee Wine, a state must back discriminatory alcohol laws with tangible proof—data, inspections, expert analysis—not mere conjecture.

5. Conclusion

Chicago Wine Co. v. Braun fortifies the constitutional safe-harbour for traditional three-tier features at the retail level. Whether one adopts Judge Easterbrook’s minimalist “no discrimination” lens or Judge Scudder’s more granular “discrimination but justified” pathway, the destination is the same: Indiana’s physical-presence mandate and common-carrier prohibition survive federal scrutiny. The decision confirms that:

• Economic inconvenience to out-of-state actors does not, by itself, equate to unconstitutional discrimination.
• States that marshal concrete enforcement and public-health evidence can uphold even facially discriminatory alcohol rules.
• The dormant Commerce Clause remains tempered—perhaps uniquely—in the alcohol realm by the Twenty-First Amendment’s grant of regulatory primacy to the States.

For courts, regulators, and industry alike, the ruling supplies a well-reasoned blueprint for balancing interstate-commerce principles against local control of a historically sensitive commodity.