January 13th, 2009
In just five legislative days, Michigan House Bill 6644 was introduced, edited, voted upon, and enrolled. In a disappointing turn of events, the Michigan Senate passed HB 6644, with substitutions, by a count of 36 Yeas and just 2 Nays on December 18, 2008. The bill then returned to the House for a final vote on concurrence, the result of which was 98 Yeas and 4 Nays, subsequently, HB 6644 was ordered enrolled. Governor Granholm approved the bill on January 9, 2009, now called Public Act 474’08 2008 Addenda.
While the original bill would have banned all retail to consumer direct shipping, the Senate made substitutions that provide a very small opening for retailer direct shipments. This comes after Michigan retailers, who count catering as a significant source of income, raised concerns over the potential loss of revenue. In the bill that was approved by the Senate, House, and signed by Governor Granholm last Friday, retailers are allowed to deliver to consumers if they adhere to these restrictive criteria:
- obtain a specially designated merchant license issued by Michigan, or another state’s equivalent for out-of-state retailers;
- only deliver its products through the hands of their own employees and NOT by an agent or a third party delivery service while also verifying the age of the recipient, (the only situation in which retailers may use a third-party service is if the municipality is surrounded by water and does not have road access);
- have the employees who deliver their products receive alcohol server training through a Michigan Liquor Control Commission approved server training program.
These substitutions provide relief for those lucky Michigan retailers who do not have state-wide wine shipping aspirations. Caterers who obtain the specially designated merchant license (and their own means of transportation) should find the bill satisfactory. But for those retailers who hoped to serve consumers across the state of Michigan, this bill is a blow to their direct shipping business. Although the Senate prevented the outright ban of retail-to-consumer direct shipments, there is little for retailers to smile about because they still face an indirect ban: the restriction on the use of third-party delivery services. Tom Wark, Executive Director of the Specialty Wine Retailers had this to say on the matter.
Our view of Michigan’s HB 6644 is that it is equally unconstitutional as the law that was just overturned in the District Court. However, this doesn’t surprise us as the goal of this legislation was always to do whatever was necessary to prevent Michigan consumers from legally accessing the wines they want and to protect in-state wholesalers. HB 6644 may appear to be facially neutral, but the law is unquestionably discriminatory in its effect and in its intent.
When Judge Hood’s September 30th, 2008 ruling on Siesta Village Market LLC v. Granholm effectively ordered Michigan to allow out-of-state retailers to direct ship wine to Michigan consumers, hopes were high. It was thought that the case would establish a precedent for future retail direct shipping litigation. But in November, with the prospect of having to comply with Judge Hood’s ruling–to allow out-of-state retailers to direct ship to Michigan consumers–looming, Michigan wine wholesalers and the state Liquor Commission organized to introduce HB 6644 in the most discrete manner. The organized efforts of Michigan wholesalers enabled this legislation to pass with surprising speed and support and without public discussion, tactics that prevented retailers and consumers from organizing in protest.
In the strange world of Michigan wine legislation, it is possible to allow one licensed wine vendor to direct ship, while preventing another licensed wine vendor from doing the same, while restricting the needs of wine enthusiasts and consumers. An appeal inSiesta Village Market is still possible, but for now retailers are out of luck in Michigan.