The federal court decision in Dwinell, LLC v. McCullough, No. 2:23-cv-10029-SB-KES (C.D. Cal. Apr. 7, 2025), offers an instructive reminder that the biggest hurdles for those challenging alcohol laws under the Dormant Commerce Clause are often not constitutional—but procedural. In this case, the court granted summary judgment in favor of the State of California, not because its three-tier alcohol system passed Commerce Clause scrutiny, but because the plaintiffs failed to demonstrate Article III standing.

The Challenge: Out-of-State Wineries and California’s Three-Tier System

The plaintiffs—Dwinell, LLC (Washington) and Buckel Family Wine LLC (Colorado)—challenged two features of California’s Alcoholic Beverage Control Act (“ABC Act”):

  1. The “Presence Requirement”: The ABC Act allows producers to sell directly to retailers if they obtain a winegrower license. The statute itself doesn’t expressly bar out-of-state applicants, but the Department of Alcoholic Beverage Control (ABC) interprets the law to require an in-state physical presence—something out-of-state wineries lack.
  2. The “Importer Requirement”: Even if out-of-state wineries obtained a winegrower license, the ABC still requires that out-of-state alcohol be consigned to a licensed importer, adding cost and complexity.

Together, these requirements prevent out-of-state wineries from selling directly to California retailers on the same terms as in-state competitors. The plaintiffs argued that this regulatory scheme violates the Dormant Commerce Clause, which prohibits states from enacting protectionist policies that discriminate against interstate commerce.

The Court’s Ruling: No Standing, No Review

Despite the potentially significant Dormant Commerce Clause issues raised, the court never reached them. Instead, Judge Stanley Blumenfeld, Jr. granted summary judgment to the defendants on narrow procedural grounds:

“Because Plaintiffs have failed to establish an injury in fact, the Court grants summary judgment for Defendants.”

Let’s unpack what that means.

What Went Wrong for the Plaintiffs?

Under Lujan v. Defenders of Wildlife, a plaintiff must demonstrate:

  1. An injury in fact that is concrete and imminent,
  2. That is fairly traceable to the challenged law,
  3. And that is likely to be redressed by a favorable court ruling.

The court found that Dwinell and Buckel failed the first prong. Why?

1. Allegations Didn’t Match the Evidence

In their pleadings, plaintiffs claimed:

  • They wanted to sell wine directly to California retailers,
  • That they had contacted specific retailers who were interested in purchasing,
  • That they would apply for winegrower licenses if allowed.

But at the summary judgment stage, the proof collapsed:

  • Neither winery had actually contacted any California retailers (despite saying otherwise),
  • The only retailer communications came from their lawyers during litigation,
  • Their plans were vague, future-oriented, and contingent—e.g., “we would begin contacting retailers if…”

The court labeled these as speculative “some day intentions,” insufficient to show actual or imminent harm. Hoisted on their own petard.

2. No History of Sales or Losses in California

Unlike plaintiffs in other successful Dormant Commerce Clause cases, neither winery had previously sold to California retailers, nor had they stopped doing so due to the ABC Act. There was no evidence of lost business or economic injury. One plaintiff had some direct-to-consumer California sales, but the court found no link between that and retail demand.

3. Harm Depended on Third Parties

The court emphasized that any future injury was dependent on the decisions of independent retailers, not the plaintiffs’ own conduct. This made the injury too speculative under Ninth Circuit precedent (Thomas v. Anchorage Equal Rights Comm’n).

Why This Case Still Matters

Although the court sidestepped the Dormant Commerce Clause and 21st Amendment analysis, this case reinforces a critical lesson for anyone seeking to challenge state alcohol laws:

You must be able to prove not just your objection to the law, but a real, current or imminent harm from it.

It’s not enough to show a regulatory barrier exists—you must demonstrate with affidavits, evidence, and business activity that you are prepared and positioned to do the thing the law allegedly prevents. This is especially vital in pre-enforcement challenges, where plaintiffs haven’t yet been fined or prosecuted.

The opinion also highlights how procedural missteps can prevent courts from reaching the merits of what might be a meritorious constitutional claim. The plaintiffs’ Dormant Commerce Clause theory—that California’s licensing and importing scheme systematically disfavors out-of-state producers—is a familiar and powerful one, especially after the Tennessee Wine and Granholm line of cases. But without the right facts, it never got its day in court.

Final Thought The Dwinell case reminds us that in alcohol litigation, the courtroom door isn’t opened by constitutional arguments alone—it swings on factual predicates like standing, ripeness, and injury. For suppliers, retailers, or advocates contemplating legal challenges to protectionist state regimes, this decision offers a roadmap of what not to miss.

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