Alexis Bailly Vineyard, Inc., a Minnesota corporation; The Next Chapter Winery, LLC, a Minnesota limited liability company Plaintiffs - Appellants
John Harrington, in his official capacity as Commissioner of the Minnesota Department of Public Safety Defendant-Appellee Adam Ruhland Amicus on Behalf of Appellant(s)
Submitted: March 14, 2019
from United States District Court for the District of
Minnesota - Minneapolis
SHEPHERD, ERICKSON, and KOBES, Circuit Judges.
Bailly Vineyard, Inc. and The Next Chapter Winery, LLC
(collectively, Farm Wineries) appeal from an order granting
summary judgment to the Commissioner of the Minnesota
Department of Public Safety (Commissioner). The district
court held that the Farm Wineries lack standing to challenge
a Minnesota statute that requires them to manufacture their
wine with a majority of the ingredients grown or produced in
Minnesota. On appeal, the Farm Wineries claim that the
district court erred by granting summary judgment to the
Commissioner and ask us to consider the merits of the
dispute. We reverse the district court's order granting
summary judgment and remand for further proceedings.
uses a three-tiered alcohol distribution system that
separates the functions of manufacturer, wholesaler, and
retailer. Retailers cannot manufacture alcohol and
manufacturers cannot sell their product directly to retailers
or the general public. See Minn. Stat. §§
340A.301, 340A.401. Alternatively, Minnesota offers a
"farm winery" license that allows manufacturers of
wine or cider to sell their products directly to retailers
and consumers. Minn. Stat. § 340A.315, subd. 2. The
Minnesota Farm Wineries Act is part of an effort by Minnesota
to "encourage and support the fledgling farm winery
industry . . . [and to] nurture grape growing and
winemaking." Research Department, Minn. House of
Representatives, Farm Wineries, at 1 (June 2012),
qualify as a farm winery, license holders must pay an annual
license fee of $50, produce less than 75, 000 gallons of wine
annually, and be located on agricultural land. Minn. Stat.
§ 340A.315, subds. 1, 2, 9. The Act also mandates that a
farm winery produce wine "with a majority of the
ingredients grown or produced in Minnesota."
Id. § 340A.101, subd. 11.
recognizes that growing grapes in northern climates is
difficult and it may not be possible in some years for farm
wineries to source more than half of their ingredients from
Minnesota suppliers. So, the Act provides for an
"affidavit exception" to the in-state requirement.
Farm wineries may file an affidavit stating that
"Minnesota-produced or -grown grapes, grape juice, other
fruit bases or honey is not available in quantities
sufficient to constitute a majority of the . . . wine
produced by a farm winery." Minn. Stat. § 340A.315,
subd. 4. If the Commissioner agrees, "the farm winery
may use imported products" for one year, "after
which time the farm winery must use the required amount of
Minnesota products . . . unless the farm winery  files a
new affidavit." Id.
Commissioner has never denied an affidavit request, but he
does investigate them and the process is more than a rubber
stamp. The Commissioner requires farm wineries to explain why
they require an exemption from the in-state requirement and
occasionally conducts site visits to ensure compliance. Farm
wineries have historically filed affidavit requests when
in-state growing conditions made it difficult or impossible
for them to purchase enough ingredients from Minnesota
Farm Wineries hold farm winery licenses and want to expand
their operations. Specifically, the Farm Wineries want to
create new varieties, work with higher quality ingredients
and more reliable suppliers, and increase the quantity of
wine they produce. They argue that the in-state requirement
prevents them from doing so.
pre-enforcement action, the Farm Wineries seek a declaration
that the Act's in-state requirement violates the dormant
Commerce Clause. Following discovery, the parties filed
cross-motions for summary judgment. The district court
granted the Commissioner's motion, holding that the Farm
Wineries did not have standing to challenge the Act. Despite
finding that the inability to grow their businesses
constituted an injury in fact, the court determined that the
Farm Wineries caused their own injuries when they chose to
seek a farm winery license instead of a wine manufacturer
license. The court therefore held that the Farm Wineries'
injuries were not fairly traceable to the statute and that
they lacked standing. The Farm Wineries timely appealed.
review the district court's standing analysis de
novo. Disability Support All. v. Heartwood Enters.,
LLC, 885 F.3d 543, 545 (8th Cir. 2018). To establish
standing, a plaintiff must show: "(1) a concrete and
particularized injury, that (2) is fairly traceable to the
challenged conduct, and (3) is likely to be redressed by a
favorable decision." Va. House of Delegates v.
Bethune Hill, 139 S.Ct. 1945, 1950 (2019). When a
plaintiff is the object of government action, "there is
ordinarily little question that the action or inaction has
caused him injury, and that a judgment preventing or
requiring the action will redress it." Lujan v.
Defs. of Wildlife, 504 U.S. 555, 561-62 (1992). Because
the Farm Wineries are the ...