Like most states, Minnesota has a three-tier system for distributing alcoholic beverages – the manufacturer sells to a wholesaler who sells to a retailer. Minnesota allows local wineries to apply for a farm winery license, which permits the holder to sell direct to both retailers and consumers. The catch is that the winery must use more than 50% of its grape juice from grapes produced in Minnesota. A winery may obtain a one-year dispensation from this requirement if it certifies that sufficient supplies of Minnesota grapes are impossible to obtain.
Two farm wineries sued the Minnesota Commissioner of Public Safety, who enforces the statute, alleging that it violates the dormant commerce clause by discriminating against out-of-state grape juice. The District Court granted the Commissioner’s motion for summary judgment. The Court acknowledged that the statute caused plaintiffs injury in fact, because it interfered with their ability to expand their businesses. But it reasoned that, if plaintiffs wanted to use more out-of-state grapes, they could apply for a wine manufacturing license, which imposes no such limitation. Thus, the injury they sustained was the product of their own voluntary business decision. The catch, however, is that a wine manufacturer must use the three-tier distribution system. It cannot sell directly to either retailers or consumers.
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