Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—7th Cir.: Challenge to Indiana law that restricts alcohol sales survives constitutional scrutiny, (Aug 6, 2025)

By Brian Craig, J.D.

Indiana’s retail-premises requirement for delivery of wine does not violate the Dormant Commerce Clause.

In a lawsuit brought by wine manufacturer Chicago Wine Co. challenging Indiana’s regulatory scheme for sale of wine, the U.S. Court of Appeals for the Seventh Circuit has found no constitutional violations. In affirming the federal district court opinion, Circuit Judge Frank Easterbrook wrote that Indiana’s retail-premises requirement for delivery of wine does not violate the Dormant Commerce Clause because Indiana does not discriminate against out-of-state sellers. In a separate concurring opinion, Circuit Judge Michael Scudder wrote that while Indiana discriminates against of-of-state wine manufacturers, the discrimination is permitted under the Twenty-First Amendment (Chicago Wine Co. v. Braun, No. 21-2068 (7th Cir. Aug. 5, 2025)).

Chicago Wine filed suit in federal district court in Indianapolis, alleging that Indiana’s restrictions discriminate against interstate commerce by imposing differential treatment on companies’ ability to sell products in Indiana based on their physical presence in the State of Indiana. The district court entered summary judgment for the state officials, concluding that the scheme is not discriminatory and reflects a valid exercise of the State’s authority to regulate alcohol pursuant to the Twenty-First Amendment. Chicago Wine appealed. Circuit Judge Easterbrook and Judge Scudder wrote separate concurring opinions. Circuit Judge Michael Kanne, a member of the panel at the time of oral argument, died before the court issued its opinion.

Dormant Commerce Clause. Judge Easterbrook wrote in his concurring opinion that Indiana’s retail-premises requirement does not discriminate and therefore does not violate the Dormant Commerce Clause. Under the Dormant Commerce Clause and after the U.S. Supreme Court decision in Tennessee Wine & Spirits Retailers Association v. Thomas, 588 U.S. 504 (2019), all discrimination against out-of-state suppliers is forbidden. The essential question turns out to be whether Indiana discriminates. If Indiana does not discriminate against out-of-state suppliers, Chicago Wine lacks a good claim no matter what constitutional rules apply to the interstate distribution of alcohol.

Chicago Wine argued that opening a retail store is discriminatory and burdensome. But Judge Easterbrook concluded that Indiana’s retail-premises requirement does not discriminate by either the source of the beverages or the state citizenship of the proprietor. Judge Easterbrook found any citizen of Indiana who wants to deliver wine would be burdened by the need to open what seems an unnecessary retail store. State laws that impose costs equally on in-state and out-of-state citizens and their businesses are nondiscriminatory for the purpose of the Dormant Commerce Clause. Because Indiana’s retail-premises requirement does not discriminate, Judge Easterbrook found no constitutional violation with the Indiana scheme.

Twenty-First Amendment. Circuit Judge Scudder affirmed the Indiana regulatory scheme, but based his reasoning on the Twenty-First Amendment rather than the Dormant Commerce Clause. Judge Scudder found that Indiana’s differential treatment of in-state and out-of-state retailers with respect to wine self-deliveries is discriminatory and violates the Dormant Commerce Clause. But Judge Scudder found that Section 2 of the Twenty-First Amendment justifies the discrimination. Indiana’s physical-presence requirement is a valid exercise of the State’s authority to regulate alcohol under the Twenty-First Amendment. The State’s legitimate, non-protectionist interests in promoting temperance, policing under-age drinking, and enforcing its alcohol regulations against those who sell to consumers combine to support Indiana’s physical-presence requirement for retailers.

Common carriers. Judge Scudder also wrote in his concurring opinion that Indiana’s regulatory scheme involving common carriers does not violate the Dormant Commerce Clause. Chicago Wine argued also that prohibiting use of common carriers, such as FedEx and UPS, violates the Dormant Commerce Clause. Judge Scudder found that the common carrier ban does not impose such a heavy burden on interstate commerce as to overcome the State’s legitimate interest in combatting underage drinking. Several circuits have upheld state laws that forbid only out-of-state retailers from shipping wine by common carrier while allowing in-state retailers to do so.

Accordingly, the Seventh Circuit affirmed the district court decision and upheld Indiana’s regulatory scheme.

The Case is No. 21-2068.

Judge: per curiam.

Attorneys: Robert David Epstein (Epstein Seif Porter & Beutel, LLP) for Chicago Wine Co. Benjamin M. L. Jones, Office of the Attorney General, for Mike Braun.

Companies: Chicago Wine Co.

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