OPINION OF THE COURT
POLLAK, District Judge.
Plaintiffs—two New Jersey wine enthusiasts, a New Jersey couple who seeks access to more Kosher wines, and a California winery—have brought suit in the United States District Court for the District of New Jersey against Jerry Fischer, New Jersey's Director of Alcoholic Beverage Control, alleging that several aspects of New Jersey's Alcoholic Beverage Control Law ("ABC Law") infringe on the dormant Commerce Clause in violation of 42 U.S.C. § 1983.
New Jersey law, like the laws of many states, establishes a "three-tier" structure for alcohol distribution and sales. Pursuant to that structure, alcoholic beverages are sold by (1) suppliers and manufacturers to (2) wholesalers, who in turn sell to (3) retailers, who then sell alcohol to consumers. In Granholm v. Heald, 544 U.S. 460, 125 S.Ct. 1885, 161 L.Ed.2d 796 (2005), the Supreme Court reaffirmed the view expressed by five justices in North Dakota v. United States, 495 U.S. 423, 110 S.Ct. 1986, 109 L.Ed.2d 420 (1990), that such a "three-tier system ... is `unquestionably legitimate.'" Granholm, 544 U.S. at 489, 125 S.Ct. 1885 (citing North Dakota, 495 U.S. at 432, 110 S.Ct. 1986 (plurality op.) & id. at 447, 110 S.Ct. 1986 (Scalia, J., concurring in the judgment)). The Granholm Court nevertheless cautioned that "straightforward attempts to discriminate in favor of local producers" of alcoholic beverages by, for instance, "subjecting out-of-state [producers], but not local ones, to the three-tier system," are "contrary to the Commerce Clause and ... not saved by the [states' authority to regulate alcoholic beverages under] the Twenty-first Amendment." Id. at 474, 489, 125 S.Ct. 1885 (internal quotation marks omitted).
Plaintiffs filed this suit in 2003, contending that five aspects of New Jersey's laws regulating wine contravene this nondiscrimination principle in violation of the dormant Commerce Clause. The first two statutory provisions at issue involve privileges
Plaintiffs also challenge two aspects of New Jersey's rules regarding the personal importation of wine. N.J. Stat. § 33:1-2(a) provides in pertinent part as follows:
Plaintiffs challenge both the one-gallon cap on importation and the reciprocity provision prohibiting importation of wine from states that bar the entry of New Jersey wine.
Finally, plaintiffs seek to invalidate New Jersey's ban on direct shipments of wine from wineries to consumers via common carrier. When plaintiffs filed suit in 2003, the ABC Law allowed in-state, but not out-of-state, wineries to make such shipments. However, in anticipation of Granholm,
After three New Jersey wholesalers— Fedway Associates, R & R Marketing, and Allied Beverage Group—intervened in the District Court on behalf of the defendant, the parties filed cross-motions for summary judgment, contesting (1) plaintiffs' standing to sue, and (2) the validity of the above portions of New Jersey's ABC Law. The District Court held that plaintiffs met the applicable standing requirements, and that the challenged provisions were largely constitutional. Both sides appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291.
"Standing implicates both constitutional requirements and prudential concerns." Common Cause of Pa. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir.2009). Constitutional standing, which should be considered "before examining issues of prudential standing," Joint Stock Soc'y v. UDV N. Am., Inc., 266 F.3d 164, 175 (3d Cir.2001), includes three well-known elements:
Common Cause of Pa., 558 F.3d at 258 (quoting Sprint Commc'ns Co. v. APCC Servs., Inc., 554 U.S. 269, 128 S.Ct. 2531, 2535, 171 L.Ed.2d 424 (2008)). "`The party invoking federal jurisdiction bears the burden of establishing these elements,'" and, on summary judgment, "the plaintiff cannot rely on mere allegations `but must set forth by affidavit or other evidence specific facts'" demonstrating that these requirements have been met. Joint Stock Soc'y, 266 F.3d at 175 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)) (internal quotation marks and citation omitted).
An injury-in-fact must be "a palpable and distinct harm" that, even if "widely shared," "`must affect the plaintiff in a personal and individual way.'" Toll Bros., Inc. v. Twp. of Readington, 555 F.3d 131, 138 (3d Cir.2009) (quoting Defenders of Wildlife, 504 U.S. at 560 n. 1, 112 S.Ct. 2130). The causation prong then "focuses on who inflicted [the] harm." Id. at 142. While "[t]he plaintiff must establish that the defendant's challenged actions, not the actions of some third party, caused the plaintiff's injury," "[t]his causal connection need not be as close as the proximate causation needed to succeed on the merits of a tort claim," and "an indirect causal relationship will suffice." Id. Finally, the redressability prong "looks forward" to determine whether "`the injury will be redressed by a favorable decision.'" Id. (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)). "Redressability is not a demand for mathematical certainty," but it does require "a `substantial likelihood'" that the injury in fact can be remedied by a judicial decision. Id. at 143 (quoting Vt. Agency of Natural
"The requirements of prudential standing," meanwhile, "serve `to avoid deciding questions of broad social import where no individual rights would be vindicated and to limit access to the federal courts to those best suited to assert a particular claim.'" Joint Stock Soc'y, 266 F.3d at 179 (quoting Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 225 (3d Cir.1998)). Prudential standing
Oxford Assocs. v. Waste Sys. Auth. of E. Montgomery County, 271 F.3d 140, 146 (3d Cir.2001) (quoting Davis v. Phila. Hous. Auth., 121 F.3d 92, 96 (3d Cir.1997)) (emphasis omitted). Although "the zone of interests `test denies a right of review if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit,'" "`[t]he test is not meant to be especially demanding.'" Davis, 121 F.3d at 98 (quoting Clarke v. Secs. Indus. Ass'n, 479 U.S. 388, 399-400, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987)).
We first consider whether plaintiffs Robert and Judy Freeman have standing to sue. The Freemans describe themselves as "wine collectors" and "home winemakers" who travel to the west coast several times each year in order to visit wineries. They allege that the ABC Law has prevented them from obtaining several wines they would like to drink, but which are unavailable in New Jersey stores. The Freemans state that they would ideally like to receive direct shipments from wineries, but they also assert that (1) New Jersey law allows them to buy in-state, but not out-of-state, wines directly from producers at wineries and storefronts, and (2) traveling to distant wineries in order to return with small quantities of wine is highly impracticable.
The Freemans argue that they are unable to obtain wines that they desire via interstate commerce. In addressing the same argument, the Seventh Circuit has concluded that when "plaintiffs want to drink [wines that] are not carried by [in-state] resellers" and are prevented from otherwise obtaining those wines by state law, they have "establishe[d] injury in fact." Bridenbaugh v. Freeman-Wilson, 227 F.3d 848, 849 (7th Cir.2000); accord Baude v. Heath, No. 05-cv735, 2007 WL 2479587, at *7-*8 (S.D.Ind. Aug.29, 2007), rev'd in part on other grounds, 538 F.3d 608 (7th Cir.2008); Cherry Hill Vineyards, LLC v. Hudgins, 488 F.Supp.2d 601, 602-08 (W.D.Ky.2006), aff'd sub nom. Cherry Hill Vineyards, LLC v. Lilly, 553 F.3d 423 (6th Cir.2008). We agree. The Freemans are directly constrained by the provisions of the ABC Law preventing the importation of (1) more than a gallon of out-of-state wine without a special permit, and (2) any wine from states that prohibit the importation of New Jersey wines. Moreover, although the Freemans are "not in the business of selling alcoholic beverages and therefore could not violate" the other statutory provisions at issue "if they
The question then becomes whether the Freemans' injury is fairly traceable to the statutes at issue. As an initial matter, we reject defendant's contention that the traceability prong is not met because New Jersey's statutory scheme does not, in fact, offend the dormant Commerce Clause. "`Standing in no way depends on the merits of the plaintiff's contention that the particular conduct is illegal....'" Marion v. TDI, Inc., 591 F.3d 137, 149 (3d Cir.2010) (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). The question for purposes of the traceability prong is not whether the ABC Law is unconstitutionally discriminatory, but rather whether, be it even-handed and constitutional or not, it is causally connected to plaintiffs' injury in fact. We thus consider whether plaintiffs have presented evidence that each of the challenged provisions impedes their ability to purchase wine in interstate commerce.
The first two of plaintiffs' challenges are to provisions of New Jersey law that effectively allow in-state wineries to sell directly to consumers and retailers, but forbid out-of-state wineries from engaging in sales to anyone but wholesalers. The question as to traceability is whether these provisions exclude wine from New Jersey that would otherwise appear on the market, thereby limiting the number of out-of-state wines that the Freemans may purchase. Cutting against the view that the Freemans are traceably injured by their resultant inability to purchase a wide array of out-of-state wines is the fact that the record does not clearly establish that any out-of-state wineries would, but for the statute, open retail sales rooms in New Jersey. Pointing in the other direction is record evidence that many out-of-state wineries have attempted, without success, to interest New Jersey wholesalers in their wines, and that other out-of-state wineries will not try either to (1) enter the three-tier system via a wholesaler, because doing do so would cut deeply into profits,
Plaintiffs have also presented evidence that they would return from their winery trips with more wine if New Jersey law so allowed. Accordingly, part of their inability
The same evidence that demonstrates causation suffices, in this case, to demonstrate redressability: Removing the restrictions placed by the ABC Law on consumers and out-of-state wineries would, on this record, lead to greater availability of a greater number of wines that plaintiffs wish to purchase.
The Freemans also have prudential standing to challenge the statutory provisions at issue. While defendant argues that the Freemans, who knew plaintiffs' counsel in this case before it was filed, are thereby without a personal stake in its outcome, there is no evidence that the Freemans' œnophilia, upon which their standing is grounded, is anything but sincere, or that they are actually attempting to litigate an interest held by their attorneys. Similarly, there is no indication that the Freemans have come to court with a generalized grievance; their injury as wine enthusiasts who wish to purchase certain wines is a highly particularized one.
The remaining question as to the Freemans, then, is whether or not they fall within the "zone of interests" protected by the dormant Commerce Clause. Insofar as the regulations "directly affect[ ]" the Freemans as individuals "participating in commerce," they have standing to redress "their dormant Commerce Clause right to access interstate markets." Oxford Assocs., 271 F.3d at 148. The Freemans may accordingly proceed with their challenge to the importation restrictions, which directly regulate their participation in interstate commerce.
The other provisions, by contrast, directly regulate producers, not consumers,
In challenging the prohibitions on direct sales by out-of-state wineries and the direct shipment ban, the Freemans present themselves as in-state consumers wishing to access out-of-state products. Their interest in overturning these features of New Jersey law therefore dovetails with the commerce-protective purpose of the dormant Commerce Clause. The Freemans accordingly satisfy the zone-of-interest test as to all of the challenged provisions of the ABC Law.
"[T]he presence of one plaintiff with standing is sufficient to satisfy that requirement." Forum for Academic & Institutional Rights v. Rumsfeld, 390 F.3d 219, 228 n. 7 (3d Cir.2004) (citing Bowsher v. Synar, 478 U.S. 714, 721, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986)), rev'd on other grounds, 547 U.S. 47, 126 S.Ct. 1297, 164 L.Ed.2d 156 (2006). Accordingly, having concluded that the Freemans possess both constitutional and prudential standing to raise all of the claims at issue, we do not consider the standing of the other plaintiffs.
"The dormant Commerce Clause `prohibits the states from imposing restrictions that benefit in-state economic interests at out-of-state interests' expense, thus reinforcing the principle of the unitary national market.'" Am. Trucking Ass'ns v. Whitman, 437 F.3d 313, 318 (3d Cir.2006) (quoting Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 298 F.3d 201, 210 (3d Cir.2002)) (internal quotation marks omitted). The clause "therefore prohibits a state from impeding free market
Any statute that "discriminates against interstate commerce on its face or in effect" is thus "subject to heightened scrutiny." Id. at 319. "The party challenging the statute has the burden of proving" that the statute is discriminatory, Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 462 F.3d 249, 261 (3d Cir.2006) ("Cloverland II"), but if the plaintiff meets that burden, "the State must demonstrate (1) that the statute serves a legitimate local interest, and (2) that this purpose could not be served as well by available nondiscriminatory means," Am. Trucking Ass'ns, 437 F.3d at 319. If the plaintiff does not meet its burden of showing that the statute is discriminatory, we instead use "the balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), to determine whether the burdens on interstate commerce substantially outweigh the putative local benefits." Cloverland II, 462 F.3d at 258.
Historically, courts have struggled with the question of to what extent the dormant Commerce Clause applies in the context of alcoholic beverage restrictions, given the broad regulatory authority granted to states by section 2 of the Twenty-First Amendment.
We first consider plaintiffs' challenges to the statutory provisions allowing only in-state wineries to sell directly to retailers and consumers.
In Granholm, the Supreme Court clarified that "[t]he mere fact of nonresidence should not foreclose a producer in one State from access to markets in other States." 544 U.S. at 472, 125 S.Ct. 1885.
The ABC Law violates this rule by allowing in-state, but not out-of-state, wineries to sell directly to consumers. In-state wineries are thereby allowed to skip the first two tiers—wholesalers and retailers—while out-of-state wineries must involve both of these tiers in order for their wine to reach consumers. Accordingly, these aspects of the ABC Law are subject to strict scrutiny as discriminatory on their face.
Defendant and intervenors raise three arguments to the contrary, none of which is persuasive. First, defendant argues that, because each location at which an in-state winery sells wine is considered to be a part of the winery premises, all sales are technically "on-premises"—meaning that the law is non-discriminatory, because, by definition, only New Jersey wineries have premises in New Jersey. This transparent attempt at obfuscation is, however, squarely at odds with the statutory language allowing in-state wineries to sell wines "in six salesrooms apart from the winery premises." N.J. Stat. § 33:1-10(2a) & (2b) (emphasis supplied).
Second, defendant and intervenors asseverate that the law is non-discriminatory because out-of-state wineries may sell directly to consumers on their own premises in their home states. This argument misconceives the demands of the dormant Commerce Clause. The dormant Commerce Clause does not protect the rights of all wineries to engage in the same form of commerce; it prohibits states from treating in-state-wineries differently from out-of-state wineries. See, e.g., Granholm, 544 U.S. at 472, 125 S.Ct. 1885. Because this regulation mandates differential treatment, it is discriminatory, even if the wineries are, in some sense, competing on an equal footing.
Finally, intervenors argue that Cherry Hill Vineyard, LLC v. Baldacci, 505 F.3d 28 (1st Cir.2007), which upheld privileges given by Maine to small wineries against a Commerce Clause challenge, should persuade us to uphold the direct-sale provisions of the ABC Law. The statute in Baldacci, however, made "[f]arm winery licenses ... available on equal terms to instate and out-of-state vineyards alike." Id. at 36. In fact, the Baldacci court explained that this aspect of the Maine law was what protected it from the charge that it "explicitly discriminate[s] against interstate commerce." Id. Because New Jersey allows only in-state wineries to sell directly to consumers, precisely this equal-handedness is absent from the direct-sales provisions of the ABC Law. Baldacci supports our view that the direct-sale provisions of the ABC Law are facially discriminatory.
New Jersey law also authorizes in-state wineries to bypass wholesalers and
Contrary to the District Court's conclusion, the discriminatory character of these provisions would not be cured by allowing out-of-state wineries to become licensed wholesalers.
Neither defendant nor intervenors attempts to save the provisions of the ABC Law allowing in-state wineries to make direct sales to consumers and retailers by arguing that they are necessary to serve some legitimate local purpose. Accordingly, we hold that these portions of the ABC Law violate the dormant Commerce Clause.
As discussed above, N.J. Stat. Ann. § 33:1-2(a) caps the importation of out-of-state wine for personal use at one gallon unless the importing individual secures a special permit. Absent such a permit, the statute also bans the importation of any alcoholic beverages from states that refuse to allow individuals to enter with alcohol from New Jersey. Plaintiffs again argue that these provisions facially discriminate against interstate commerce.
No party contends that the one-gallon cap on the importation of out-of-state wine is facially non-discriminatory, and that provision does, in fact, treat in-state and out-of-state wine differently in a way that harms interstate commerce. Specifically, the requirements that any individual seeking to enter New Jersey with a greater amount of wine (1) apply for a special permit, and (2) pay a fee for the permit, directly burden interstate, but not intrastate, commerce. Moreover, since New Jersey wineries are currently able to sell unlimited quantities of wine to residents, this provision operates to limit the amount of out-of-state, but not in-state, wine that may circumvent the three-tier system. Accordingly, this provision is also subject to strict scrutiny.
The reciprocity provision of § 33: 1-2(a) also facially discriminates against interstate commerce. As with the permit fee, the reciprocity requirement prevents certain wine—in this case, wine from specified jurisdictions—from entering the state outside the strictures of the three-tier system, while local winemakers are free to sell as much wine as they can directly to New Jersey residents. Moreover, as the Supreme Court has noted, reciprocity provisions like New Jersey's "risk[ ] generating the trade rivalries and animosities, the alliances and exclusivity, that the Constitution and, in particular, the Commerce Clause were designed to avoid." Granholm, 544 U.S. at 473, 125 S.Ct. 1885.
The District Court nonetheless held that the reciprocity provision is constitutional because defendant interprets it not to apply to wine imported for personal use. "When considering a facial challenge to a state law, `a federal court must, of course, consider any limiting construction that a state court or enforcement agency has proffered.'" Brown v. City of Pittsburgh, 586 F.3d 263, 274 (3d Cir.2009) (quoting Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494 n. 5, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982)). But we will only adopt a proffered limiting construction when the statute is actually "susceptible to a construction that avoids constitutional difficulties." Brown, 586 F.3d at 275. In this case, defendant's narrowing interpretation is contrary to the plain meaning of the statute. The statute provides in part that
N.J. Stat. § 33:1-2(a). The reciprocity provision is thus a prohibitory exception from the rule delineating the quantities of alcohol that may otherwise be imported for personal use. As a result, the provision cannot be read to contain an exception allowing importation for personal use, because to imply that exception would read the reciprocity clause out of the statute entirely. We therefore reject defendant's limiting interpretation and subject the reciprocity provision to strict scrutiny.
As with the provisions regarding sales to consumers and retailers, no party has provided us with any argument that the reciprocity provision is necessary to effectuate some legitimate local interest. We thus hold it unconstitutional as violative of the dormant Commerce Clause.
Finally, plaintiffs seek to invalidate New Jersey's ban on direct shipments of wine from any winery, whether in-state or out-of-state, to consumers.
In their attempt to meet this burden, plaintiffs note that some wineries sell their goods only by direct shipment. But the choice by certain producers to conduct sales only by direct shipment is irrelevant
Plaintiffs also contend that the direct shipment ban disproportionately affects out-of-state wineries because those producers must funnel all of their wine through the three-tier system. But, assuming that this requirement disadvantages out-of-state producers, it is not an effect of the direct-shipment ban—which even-handedly forces all wine sales out of one channel and into other available channels—but by the features of the ABC Law invalidated above, which allow New Jersey wineries to circumvent the three-tier system. This argument therefore also fails to demonstrate that the direct shipment ban is discriminatory in effect.
Finally, plaintiffs contend that many consumers cannot, or will not, undertake to travel to distant locations to purchase wine. Even if true, this fact, standing alone, does not demonstrate that the direct shipment ban harms interstate commerce by privileging in-state producers at the expense of out-of-state wineries. And while several types of evidence could show such an effect, plaintiffs have failed to present any competent evidence that the ban burdens interstate commerce. The Federal Trade Commission report on which they rely,
In fact, the gravamen of plaintiffs' argument is not that non-New Jersey wines are excluded from the market, but rather that a subset of those wines, which are produced by small wineries that do not have much volume or perhaps capital, would only be able to enter the New Jersey market via direct shipping, which is prohibited. But, as with wineries that deliver
Because plaintiffs do not argue in the alternative that the direct shipping ban fails the balancing test of Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), we reject their challenge to the direct shipping ban and affirm the District Court's opinion insofar as it held that ban to be constitutional.
Having determined that the provisions of the ABC Law (1) allowing in-state wineries to sell directly to consumers and retailers, and (2) limiting the importation of out-of-state wine intended for personal consumption into New Jersey violate the dormant Commerce Clause, we turn to the issue of the proper remedy. The invalid statutory provisions are constitutionally underinclusive, in that their provision of privileges to in-state wineries alone renders them invalid. This deficiency can be remedied in one of two ways—either by "declar[ing the offending provisions] a nullity and order[ing] that [their] benefits not extend to the class that the legislature intended to benefit, or [by] extend[ing] the coverage of the statute to include those who are aggrieved by the exclusion." Heckler v. Matthews, 465 U.S. 728, 738, 104 S.Ct. 1387, 79 L.Ed.2d 646 (1984). In this case, neither the parties nor the District Court has expressly considered the choice between extension and nullification. For this reason, and because the choice between extension and nullification is "within the constitutional competence of a federal district court," id. at 739 n. 5, 104 S.Ct. 1387, we will remand to the District Court for a determination of the appropriate remedy. See also, e.g., SEC v. Graystone Nash, Inc., 25 F.3d 187, 194 (3d Cir.1994) (suggesting remand "[w]hen significant factors" were not previously "weighed in" choosing a remedy).
For the foregoing reasons, we (1) affirm the District Court's determination that the Freemans have standing to sue, (2) vacate the District Court's invalidation of New Jersey's fee schedule for retail and wholesale licenses, (3) reverse the District Court's determination that the direct sales