No. 16-242

IN THE

Supreme Court of the United States_________

TEXAS PACKAGE STORES ASSOCIATION, INC.,Petitioner,

v.

FINE WINE & SPIRITS OF NORTH TEXAS, L.L.C. AND

SOUTHERN WINE AND SPIRITS OF TEXAS, INC.,Respondents.

_________

On Petition for a Writ of Certiorari to theUnited States Court of Appeals

for the Fifth Circuit_________

BRIEF IN OPPOSITION FORRESPONDENT SOUTHERN GLAZER’S WINE

AND SPIRITS OF TEXAS II, LLC_________

NEAL KUMAR KATYALCounsel of Record

SEAN MAROTTAMORGAN L. GOODSPEEDHOGAN LOVELLS US LLP555 Thirteenth Street, N.W.Washington, D.C. 20004(202) 637-5600neal.katyal@hoganlovells.com

Counsel for RespondentSouthern Glazer’s Wine andSpirits of Texas II, LLC

(i)

QUESTIONS PRESENTED1. Whether the Fifth Circuit properly held that

this Court’s decision in Granholm v. Heald, 544 U.S.460 (2005), did not constitute a significant change indecisional law sufficient to reopen a final judgmentunder Federal Rule of Civil Procedure 60(b)(5).

2. Whether a trade association not bound by aninjunction against the government has Article IIIstanding to move to dissolve the injunction.

ii

CORPORATE DISCLOSURE STATEMENT

Effective July 1, 2016, Respondent Southern Wineand Spirits of Texas, Inc. changed its name andentity type to Southern Glazer’s Wine and Spirits ofTexas II, LLC. Southern Glazer’s Wine and Spiritsof Texas II, LLC identifies Southern Glazer’s Wineand Spirits, LLC as a parent company of SouthernGlazer’s Wine and Spirits of Texas II, LLC. SWSHoldings, Inc. is a privately held corporation that isa parent company of Southern Glazer’s Wine andSpirits, LLC.

TABLE OF CONTENTSPage

(iii)

QUESTIONS PRESENTED ........................................iCORPORATE DISCLOSURE STATEMENT ............iiTABLE OF AUTHORITIES.......................................ivINTRODUCTION........................................................1STATEMENT ..............................................................3

A. Texas’s Alcoholic Beverage Code .............3B. Merits Proceedings Below ........................4C. Rule 60(b)(5) Proceedings Below..............5

ARGUMENT ...............................................................7I. THE FIFTH CIRCUIT’S DECISION

DOES NOT CREATE A CIRCUITSPLIT .............................................................8

II. GRANHOLM DID NOT ANNOUNCEA SIGNIFICANT CHANGE INDECISIONAL LAW.....................................13

III. SEVERAL SERIOUS VEHICLEPROBLEMS WOULD IMPEDE THISCOURT’S REVIEW......................................14A. Petitioner Does Not Have

Standing To Seek Rule 60(b)Relief .......................................................15

B. Any Decision On The Twenty-firstAmendment Would Not ChangeThe Outcome Below................................17

C. The State’s Absence DiminishesThe Case’s Importance ...........................19

CONCLUSION ..........................................................20

iv

TABLE OF AUTHORITIESPage

CASES:

Agostini v. Felton,521 U.S. 203 (1997)......................................6, 9, 13

Arnold’s Wines, Inc. v. Boyle,571 F.3d 185 (2d Cir. 2009) ...........................11, 12

Bacchus Imports, Ltd. v. Dias,468 U.S. 263 (1984)......................................5, 9, 10

Brooks v. Vassar,462 F.3d 341 (4th Cir. 2006)..........................11, 12

Cabral v. City of Evansville, Ind.,759 F.3d 639 (7th Cir. 2014)................................17

Capital Cities Cable, Inc. v. Crisp,467 U.S. 691 (1984)................................................9

Cooper v. McBeath,11 F.3d 547 (5th Cir. 1994).......................... passim

Cutter v. Wilkinson,544 U.S. 709 (2005)..............................................19

Diamond v. Charles,476 U.S. 54 (1986)................................................16

FW/PBS, Inc. v. City of Dallas,493 U.S. 215 (1990)..............................................15

Granholm v. Heald,544 U.S. 460 (2005)...................................... passim

Horne v. Flores,557 U.S. 433 (2009)......................................2, 8, 11

Illinois v. Gates,462 U.S. 213 (1983)..............................................19

Kendall-Jackson Winery, Ltd. v. Branson,212 F.3d 995 (7th Cir. 2000)..........................16, 17

v

TABLE OF AUTHORITIES—ContinuedPage

S. Wine & Spirits of Am. v. Div. ofAlcohol & Tobacco Control,731 F.3d 799 (8th Cir. 2013)..........................10, 19

Wilson v. McBeath,No. A-90-CA-736, 1991 WL 540043(W.D. Tex. June 13, 1991) .....................................4

Wine Country Gift Baskets.com v.Steen, 612 F.3d 809 (5th Cir. 2010)...............12, 13

CONSTITUTIONAL PROVISIONS:U.S. Const. amend. XXI ................................. passim

U.S. Const. art. I, § 8, cl. 3 ............................. passim

STATUTES:Tex. Alco. Bev. Code, Acts 1977, 65th

Leg., p. 526, ch. 194 ...............................................3

Tex. Alco. Bev. Code Ann. § 109.53....................4, 15

RULES:Fed. R. Civ. P. 60(b)(5) ................................... passim

Fed. R. Civ. P. 60(b)........................................ passim

(1)

IN THE

Supreme Court of the United States_________

No. 16-242_________

TEXAS PACKAGE STORES ASSOCIATION, INC.,Petitioner,

v.

FINE WINE & SPIRITS OF NORTH TEXAS, L.L.C. AND

SOUTHERN WINE AND SPIRITS OF TEXAS, INC.,Respondents.

_________

On Petition for a Writ of Certiorari to theUnited States Court of Appeals

for the Fifth Circuit_________

BRIEF IN OPPOSITION FORRESPONDENT SOUTHERN GLAZER’S WINE

AND SPIRITS OF TEXAS II, LLC_________

INTRODUCTIONThe Fifth Circuit first decided this case 25 years

ago, when it enjoined the Texas Alcoholic BeverageCommission (the “Commission”) from enforcing astatutory restriction on liquor retailers. The originalplaintiffs are no longer in the picture. The State ofTexas likewise gave up its defense of the statuteyears ago. All that is left are three industry mem-bers who intervened in the dispute. In 2014, one ofthose, Petitioner here, moved for relief from thedecades-old injunction under Federal Rule of CivilProcedure 60(b)(5). The Fifth Circuit denied the

2

motion, holding that Petitioner had failed to demon-strate sufficient changed circumstances for Rule60(b) relief.

That is the sole decision underlying this petition forcertiorari. Although one might be forgiven for think-ing otherwise after reading the petition, this caseinvolves only the Fifth Circuit’s unremarkable deci-sion to let sleeping dogs lie.

For that reason, this case does not create the cir-cuit split that Petitioner purports to identify. Thepetition describes a split between the Second andEighth (and possibly Fourth) Circuits, on the onehand, and the Fifth Circuit here, on the other. Itasserts that those courts have divided over theproper interpretation of this Court’s decision inGranholm v. Heald, 544 U.S. 460 (2005). But thatassertion ignores the idiosyncratic procedural pos-ture of the decision below. Because Petitioner filed aRule 60(b)(5) motion, it was not permitted “to chal-lenge the legal conclusions on which [the] priorjudgment or order rest[ed].” Horne v. Flores, 557U.S. 433, 447 (2009). Instead, it was tasked withshowing that Granholm constituted a significantchange in the governing law. Id. The Fifth Circuitcorrectly held that Petitioner did not make thatshowing.

No other court has considered the same Rule60(b)(5) question. The petition cites three casesinvolving direct attacks on liquor regulations, notattempts to dissolve a pre-Granholm injunction. Andtwo of those cases are further distinguishable be-cause they did not involve the type of liquor regula-tion at issue here. The claimed circuit split is nonex-istent or, at the very most, a shallow 1-1.

3

Even had there been a true circuit split, severalvehicle problems would impede this Court’s review.First, Petitioner does not have Article III standing tochallenge the District Court’s injunction against theCommission. Because Petitioner is not bound by theinjunction it seeks to challenge, a favorable judgmentwould not redress any injury to it. Second, thisCourt’s review of the question presented would notbe outcome-determinative, as the Fifth Circuit alsodenied the Rule 60(b)(5) motion on Privileges andImmunities Clause grounds. Petitioner has forfeitedany attempt to challenge that alternative holding byfailing to challenge it below. Third, the unusualprocedural posture and the Commission’s choice notto participate mean that the State of Texas will notbe defending its own (long-enjoined) statute. TheState’s absence is a telling indicator of this case’spractical importance.

All told, there is no shortage of legal and prudentialreasons why the Court’s review is unwarranted inthis oddity of an appeal. The petition should bedenied.

STATEMENT

A. Texas’s Alcoholic Beverage CodeIn 1977, Texas enacted the Texas Alcoholic Bever-

age Code. Acts 1977, 65th Leg., p. 526, ch. 194, § 1.The Code adopts a three-tier distribution system forthe sale of alcoholic beverages. Pet. App. 2a. Thefirst tier consists of producers, such as distillers andwineries. They distribute their products to thesecond tier of state-licensed wholesalers. Thosewholesalers, in turn, sell to the third tier of state-licensed retailers. Retailers sell alcohol to the ulti-mate consumers.

4

In addition to requiring wholesalers and retailersto be licensed in-state, the Code imposes a duration-al-residency requirement on individuals seekingliquor permits: “No person who has not been a citizenof Texas for a period of one year immediately preced-ing the filing of his application therefor shall beeligible to receive a permit under this code.” Tex.Alco. Bev. Code Ann. § 109.53. For corporations, atleast 51% of the corporation’s stock must be owned“by citizens who have resided within the state for aperiod of one year and who possess the qualificationsrequired of other applicants for permits.” Id. TheCode contains a grandfather clause that excludesbusinesses operating prior to 1935. Id.

B. Merits Proceedings BelowIn 1990, Richard Wilson and Steve Cooper tried to

acquire a San Antonio nightclub called Baby Dolls.Pet. App. 2a, 4a. Baby Dolls was operated in Texasby a Texas corporation, which held a mixed-beveragepermit. Cooper v. McBeath, 11 F.3d 547, 549 (5thCir. 1994). Wilson was a resident of Florida andCooper a resident of Tennessee. Id. Their purchaseof the Texas corporation was stymied when theCommission determined that the corporation wouldbe ineligible to hold a liquor permit if its controllingshareholders were no longer Texas residents. Id.

Wilson and Cooper sued W.S. McBeath, the then-administrator of the Commission, to enjoin enforce-ment of the Code’s durational-residency requirement.See Wilson v. McBeath, No. A-90-CA-736, 1991 WL540043 (W.D. Tex. June 13, 1991). They argued thatthe relevant provisions of the Code violate the Con-stitution’s Commerce Clause and Privileges andImmunities Clause by discriminating against out-of-

5

state residents. Id. at *1. The Texas Package StoresAssociation (“TPSA”)—Petitioner here—intervenedas defendant. Id.

The District Court held that the Code’s durational-residency requirement violated both the CommerceClause and the Privileges and Immunities Clause.Id. at *5, *10. It enjoined the Commission fromenforcing the relevant provisions. Id. at *11.

In 1994, the Fifth Circuit affirmed. Cooper, 11 F.3d547. In assessing the dormant Commerce Clause’sinteraction with the Twenty-first Amendment, theFifth Circuit concluded that “the Amendment did notentirely remove state regulation of alcoholic beverag-es from the ambit of the Commerce Clause.” Id. at555 (quoting Bacchus Imports, Ltd. v. Dias, 468 U.S.263, 275 (1984)). The court further held that becausethe Commission’s asserted state interest “in facilitat-ing background checks” fell outside the “core con-cerns underlying the Twenty-first Amendment,” thedurational-residency requirement could not stand.Id. And the Fifth Circuit noted that it did not needto reach the District Court’s alternative Privilegesand Immunities Clause holding. Id. at 556 n.10.

That is where things stood for 20 years.

C. Rule 60(b)(5) Proceedings BelowIn 2014, Petitioner moved under Federal Rule of

Civil Procedure 60(b)(5) for relief from the injunctionentered against the Commission. Pet. App. 5a. Itargued that this Court’s 2005 decision in Granholmrepresented a significant change in decisional lawthat rendered the injunction’s continuing operationinequitable. The Commission (the original defend-ant) did not join the motion. Id. Nor did Wilson andCooper (the original plaintiffs) file a response. Id.

6

Instead, two out-of-state corporations, Respondentshere, intervened as plaintiffs. Id. at 5a-6a.

The District Court indicated that it was “not con-vinced” that there was sufficient new law forRule 60(b) purposes. Id. at 28a. It also suggestedthat any effect Granholm might have on the Com-merce Clause analysis would be insufficient to reo-pen the judgment, as Petitioner had failed to chal-lenge the alternative Privileges and ImmunitiesClause holding. Id. at 29a. Rather than ruling onthe merits, though, it held that Petitioner lackedstanding to seek Rule 60(b) relief. Id. at 32a.

A majority of the Fifth Circuit reversed the DistrictCourt’s jurisdictional holding and denied the motionon its merits instead. The court acknowledged that adistrict court has discretion under Rule 60(b)(5) to“relieve a party or its legal representative from afinal judgment” if “applying it prospectively is nolonger equitable.” Id. at 15a. Among other things,relief may be appropriate where a party demon-strates a “significant change” in decisional law. Id.at 16a (quoting Agostini v. Felton, 521 U.S. 203, 215(1997)). The court considered whether Granholmwas in fact “a significant change in decisional lawwarranting relief from the injunction under Rule60(b)(5).” Id. It concluded that Granholm “was not.”Id.

The Fifth Circuit adopted the second rationaleidentified by the District Court as well: Petitioner’sfailure to challenge the original holding that Texas’sdurational-residency requirement violates the Privi-leges and Immunities Clause. Id. at 21a. BecausePetitioner bore the burden of demonstrating itsentitlement to relief, its failure to carry that burden

7

on the Privileges and Immunities issue provided anindependent basis to deny the Rule 60(b)(5) motion.Id.

Judge Jones dissented on jurisdictional grounds.Id. at 22a-26a. She, too, would have rejected theRule 60(b)(5) motion. But, like the District Court,she would have held that Petitioner lacked Article IIIstanding. She explained that “only the State wasbound by the Cooper injunction not to enforce theresidency requirement, and TPSA was not so bound.”Id. at 24a. As a result, the Commission’s failure toparticipate meant that “TPSA’s indirect injury fromthe injunction is not redressable by this court be-cause any judgment in TPSA’s favor cannot removethe injunction against the Commissioner.” Id. at26a.

This petition followed.

ARGUMENTPetitioner’s question presented does not merit this

Court’s review. The petition strives mightily toportray the decision below as answering a constitu-tional question and creating a circuit split. See, e.g.,Pet. 8. But the procedural posture shows otherwise.In 2016, the Court of Appeals made the rather mun-dane decision to reject a request to reopen a 1994injunction on the basis of dicta in a 2005 opinion ofthis Court. That decision does not conflict with thedecision of any other court, and it comes with a hostof vehicle problems that counsel against grantingreview.

8

I. THE FIFTH CIRCUIT’S DECISION DOESNOT CREATE A CIRCUIT SPLIT.

The petition attempts to manufacture a split be-tween the Fifth Circuit’s decision below and deci-sions of the Second and Eighth (and possibly Fourth)Circuits. It argues that those courts have dividedover the question that Petitioner believes is present-ed here: whether a State may apply residency re-quirements to the wholesale and retail tiers of athree-tier alcohol distribution system. Pet. i. Forseveral reasons, that framing is wrong.

1. Most notably, this case’s procedural posturemeans that it does not actually address the questionthat Petitioner has proposed. The Fifth Circuit didnot “invalidat[e] a state law” or “creat[e] a splitamong the courts of appeals” on a constitutionalquestion. Pet. 8. Rather, the “key question” that theFifth Circuit identified “is whether [Granholm] was asignificant change in decisional law warranting relieffrom the injunction under Rule 60(b)(5).” Pet.App. 16a. The petition identifies no other court thathas asked that question—let alone answered itdifferently.

As this Court has explained, the scope of reliefunder Rule 60(b)(5) is narrow. In particular, “Rule60(b)(5) may not be used to challenge the legalconclusions on which a prior judgment or orderrests.” Horne, 557 U.S. at 447. It instead givesdistrict courts the limited authorization to reexaminea judgment when a moving party demonstrates that“changed circumstances warrant relief.” Id. If theclaimed change consists of a new legal decision, themoving party must demonstrate that the new deci-sion has “so undermined” the previously governing

9

rules that they are “no longer good law.” Agostini,521 U.S. at 217-218; see id. at 239 (requiring “a bonafide, significant change in subsequent law”).

In its 1994 opinion, the Fifth Circuit assessed theTexas durational-residency requirement by balanc-ing the federal Commerce Clause interests againstthe States’ Twenty-first Amendment interests. SeeCooper, 11 F.3d at 555. Relying on this Court’sdecisions in Bacchus, 468 U.S. 263, and CapitalCities Cable, Inc. v. Crisp, 467 U.S. 691 (1984), itheld that the Twenty-first Amendment shieldsdiscriminatory liquor laws only where the stateinterests asserted are closely tied to the Amend-ment’s purpose. Cooper, 11 F.3d at 555. That wasnot true of the durational-residency requirement,which the State had argued facilitates backgroundchecks on permit applicants. Id.

A decade later, this Court decided Granholm. InGranholm, it held that state laws permitting in-stateproducers to ship wine directly to in-state consum-ers, while denying out-of-state producers the sameopportunity, impermissibly discriminated againstinterstate commerce. See 544 U.S. at 472-475. Suchlaws were not saved by the Twenty-first Amend-ment; the “Amendment did not give States theauthority to pass nonuniform laws in order to dis-criminate against out-of-state goods.” Id. at 484-485.The Court thus reaffirmed the rule from Bacchusand Capital Cities that the Twenty-first Amendmentdoes not override “the nondiscrimination principle ofthe Commerce Clause.” Id. at 487. It noted, howev-er, that its holding was limited to producers. Id. at489. The three-tier system itself remained “unques-tionably legitimate.” Id. (citation omitted). It addedthat “State policies are protected under the Twenty-

10

first Amendment when they treat liquor producedout of state the same as its domestic equivalent.” Id.

The question that the Fifth Circuit faced below waswhether this Court’s Granholm decision had signifi-cantly changed the governing law on the Twenty-firstAmendment. The Fifth Circuit reasonably “an-swer[ed] in the negative.” Pet. App. 18a. It ex-plained that Granholm “did not expressly alter thestandard for reviewing Commerce Clause challengesto state alcohol regulations”; that Granholm refusedto overrule Bacchus; and that Granholm’s commentsabout the three-tier system were dicta. Id. at 18a-19a.

As the petition points out (Pet. 9-11), the EighthCircuit recently affirmed a State’s durational-residency requirement, relying in part on theGranholm dicta. See S. Wine & Spirits of Am. v. Div.of Alcohol & Tobacco Control, 731 F.3d 799 (8th Cir.2013). But that case concerned a direct attack on aliquor law, not an attempt to dissolve a previouslyentered injunction. The Eighth Circuit describedGranholm not as a significant change in the law butas the latest in an approach marked by “a case-by-case balancing of interests that defies ready predict-ability.” Id. at 809. In fact, the Eighth Circuitappeared to agree that the relevant paragraph inGranholm was only dicta. See id. Had that casearrived in the same procedural posture as this one,the Eighth Circuit may well have come to the sameconclusion as the Fifth Circuit below. As a result,there is no split on the narrow Rule 60(b)(5) questionthat this case actually presents.

It might be that the Eighth Circuit’s decision inSouthern Wine conflicts with the Fifth Circuit’s 1994

11

decision in Cooper. See S. Wine, 731 F.3d at 812.That 1994 decision, however, is not the basis for thispetition. And the decision that is the basis for thispetition neither created nor perpetuated a split withthe Eighth Circuit. It simply enforced this Court’scommand that “Rule 60(b)(5) may not be used tochallenge the legal conclusions on which a priorjudgment or order rests.” Horne, 557 U.S. at 447.

2. Procedural posture aside, there is at most ashallow 1-1 split between the Fifth Circuit and theEighth Circuit about the constitutionality of dura-tional-residency requirements. The petition suggeststhat the Second and Fourth Circuits have alsoweighed in. See Pet. 8-9, 11-12 (citing Arnold’sWines, Inc. v. Boyle, 571 F.3d 185 (2d Cir. 2009), andBrooks v. Vassar, 462 F.3d 341 (4th Cir. 2006)).Neither of the two cases it cites, however, involveddurational-residency requirements like Texas’s.That factual difference matters.

In Arnold’s Wines, the Second Circuit considered achallenge to New York’s licensing requirements,which required out-of-state producers to ship tostate-licensed wholesalers rather than directly toconsumers. 571 F.3d at 187. The Second Circuitrejected the challengers’ arguments as “a frontalattack on the constitutionality of the three-tiersystem”—the very system that Granholm had en-dorsed. Id. at 190. But the court said nothing aboutdurational-residency requirements like Texas’s. Asthe Fifth Circuit noted here, such requirements arenot “an inherent aspect of the three-tier system.”Pet. App. 21a. A State may well require that alcoholbe funneled through in-state wholesalers or retailers.That does not mean it may similarly require thatthose in-state wholesalers or retailers have lived in

12

the State for a certain period of time. Arnold’s Winesanswered the first question; this case (the 1994edition) answered the second.

So too for the Fourth Circuit’s decision in Brooks.The Fourth Circuit did not confront a durational-residency requirement. It considered two particularcomponents of Virginia’s three-tier system: an excep-tion to import restrictions for small amounts ofalcohol for personal consumption, and a rule thatstate-owned liquor stores must sell wine producedonly at Virginia wineries. 462 F.3d at 345. TheFourth Circuit held that the personal-consumptionrule was simply a de minimis exception to the three-tier system. Id. at 355. And it upheld the Virginia-winery rule under the market-participant doctrine.Id. at 357. Judge Niemeyer further suggested thathe would limit the Commerce Clause inquiry todiscrimination at the producer level, but he wrote forjust himself on that point. See id. at 354. Andneither Judge Niemeyer’s separate opinion nor thecourt’s opinion mentioned durational-residencyrequirements at all.

Indeed, the Fifth Circuit itself has embraced thisvery distinction between physical-residency require-ments (for example, requiring that an alcohol retailerbe incorporated in Texas) and durational-residencyrequirements (for example, requiring that an ownerof such a corporation have lived in Texas for someperiod of time). In Wine Country Gift Baskets.com v.Steen, 612 F.3d 809, 821 (5th Cir. 2010), the FifthCircuit explained that regulations concerning the“physical location of businesses” are “a critical com-ponent of the three-tier system” and are thus per-missible under Granholm. The same could not besaid of regulations concerning the “legal residence of

13

owners.” Id. In the decision below, the Fifth Circuitreiterated that distinction. See Pet. App. 21a.

Because the Second and Fourth Circuits have notevaluated durational-residency requirements, andbecause physical-residency requirements are distinctunder the Fifth Circuit’s own reasoning, there is atmost a split between the Fifth and Eighth Circuits.And, as explained, it is a split that a Rule 60(b)(5)denial does not truly implicate.

II. GRANHOLM DID NOT ANNOUNCE ASIGNIFICANT CHANGE IN DECISIONALLAW.

For largely the same reasons, Petitioner is wrongthat the Fifth Circuit’s denial of Rule 60(b) relief isinconsistent with Granholm. Pet. 13-17. Granholmdid not suggest that it was announcing a significantchange in decisional law. To the contrary, it ex-plained and followed “modern” Twenty-first Amend-ment jurisprudence in rejecting as unconstitutionalthe discriminatory treatment of out-of-state produc-ers. See 544 U.S. at 486-488. In dicta, it also reaf-firmed the “previously recognized” legitimacy of thethree-tier system. Id. at 489.

Perhaps understandably, then, Petitioner neverargues outright that Granholm effected “a bona fide,significant change” from the law that the FifthCircuit applied in 1994. Agostini, 521 U.S. at 239;see Pet. 13-17. Nor does Petitioner cite any case inwhich a court has relied on dicta to grant reliefunder Rule 60(b)(5). Absent either showing, there isno conflict between this Court’s decision inGranholm and the Fifth Circuit’s denial of Rule 60(b)relief.

14

The many faults that Petitioner ascribes to theFifth Circuit’s analysis are thus beside the point.The petition argues, for example, that “[t]he decisionbelow did not consider the long history and pervasivepractice among the States of similar regulations.Nor did it confront the reasons that justify treatingliquor wholesalers and retailers differently based onwhere they or their owners are located or live.”Pet. 16. That should come as no surprise. If thiscase had involved a direct attack on a liquor regula-tion, those considerations might have been appropri-ate. Given the procedural posture, though, the FifthCircuit properly declined to conduct the full-scalemerits inquiry that Petitioner demands. Rule 60(b)requires nothing more.

III. SEVERAL SERIOUS VEHICLEPROBLEMS WOULD IMPEDE THISCOURT’S REVIEW.

Even if the Fifth Circuit had directly confrontedGranholm and had split with the Eighth Circuit, thiscase still would not merit review. On the one hand,there would be only a shallow 1-1 split. On the otherhand, there would be several serious vehicle prob-lems. Those vehicle problems mean that this Courtlikely cannot reach the merits; that even if it couldreach the merits, its decision would not change theoutcome below; and that even if it could change theoutcome below, it would at most revive a long-enjoined statute that the State itself has not both-ered to defend. The petition attempts to downplaythose problems, but to no avail. Even viewed in itsmost promising light, this unusual case is not worththe Court’s time.

15

A. Petitioner Does Not Have Standing ToSeek Rule 60(b) Relief.

The first vehicle problem is also the most glaring:Petitioner does not have standing to seek Rule 60(b)relief. See Pet. App. 7a-15a (discussing the standingissue); id. at 22a-26a (Jones, J., dissenting) (same).Because standing is jurisdictional, this Court mustassure itself of Petitioner’s standing before answer-ing the question presented—and would not be able toanswer the question presented at all because Peti-tioner does not have standing. See FW/PBS, Inc. v.City of Dallas, 493 U.S. 215, 231 (1990) (“The federalcourts are under an independent obligation to exam-ine their own jurisdiction, and standing is perhapsthe most important of the jurisdictional doctrines.”(internal quotation marks and brackets omitted)).

To reiterate, the District Court originally grantedan injunction against the Commission, not Petition-er. Yet the Commission was not a party to eitherPetitioner’s Rule 60(b)(5) motion or its appeal. TheFifth Circuit divided over the question whetherPetitioner has standing in these circumstances. Themajority held that “there is no redressability problemwhere, as here, the intervenor can sue the state toenforce the law at issue.” Pet. App. 14a; see Tex.Alco. Bev. Code Ann. § 109.53 (providing that “[a]nypackage store permittee who shall be injured in hisbusiness or property by another package store per-mittee by reason of anything prohibited in [theresidency requirements] may institute suit * * * torequire enforcement”). The private right of actionmade all the difference.

As the dissent correctly pointed out, however, thequestion is not so simple. The general rule, Judge

16

Jones explained, is that only the defendant on whomobligations are imposed—here, the Commission—hasstanding to contest those obligations. See Pet. App.23a (Jones, J., dissenting) (citing Diamond v.Charles, 476 U.S. 54, 64-65 (1986)). She agreed thatthere may be an exception where the State is boundby an injunction and the private party has a right ofaction against the State. Id. at 24a. But the privateright of action here authorizes only “a suit to enforcethe code’s provisions against another private party”;it does not “allow a permittee to sue the Commissionfor affirmative enforcement of state law.” Id. at 25a-26a (emphasis added). Given that, Judge Joneswould have held that Petitioner’s claimed injurieswere not redressable “because any judgment inTPSA’s favor cannot remove the injunction againstthe Commissioner.” Id. at 26a.

The petition, unsurprisingly, tries to wave awaythe standing dispute. It echoes the majority’s rea-soning: Petitioner’s injuries are redressable becauseits members have a private right to enforce theCode’s residency requirements, and the “injunctionmakes it practically impossible” to do so. Pet. 18.But the petition uses the word “practically” for areason. As Judge Jones pointed out, Petitioner is notin fact enjoined from exercising its right to sue toenforce the residency requirement in state court.Pet. App. 26a (Jones, J., dissenting). Petitioner, inother words, cannot attempt to dissolve an injunctionthat does not enjoin it from doing anything.

The Seventh Circuit case that the petition cites,Kendall-Jackson Winery, Ltd. v. Branson, 212 F.3d995 (7th Cir. 2000), underscores the problem withPetitioner’s redressability theory. See Pet. 19. InKendall-Jackson, a state alcohol commission failed to

17

appeal an injunction issued against it. 212 F.3d at996-997. Private litigants appealed the adversedecision, but the Seventh Circuit held that theirinjuries were not redressable. See id. at 998-999. Asthe petition correctly notes, the Seventh Circuitqualified its decision by observing that the situationmight have been different if the statute had “cre-ate[d] a private right of action.” Id. at 998; see Pet.19. A later Seventh Circuit decision, however, clari-fied that “a key element of that speculation is thatthe private party could bring a suit against theagency or governmental actor.” Cabral v. City ofEvansville, Ind., 759 F.3d 639, 644 (7th Cir. 2014).As Judge Jones’s dissent explained, Section 109.53 ofthe Code does not create a private right of actionagainst the Commission itself. See Pet. App. 25a-26a(Jones, J., dissenting).

For those reasons, the dissent was right: Petitionerdoes not have standing to seek Rule 60(b) relief. Butat the very least, the substantial question regardingPetitioner’s standing poses a serious obstacle to thisCourt’s review. It would require the Court to evalu-ate an unusual jurisdictional question on whichPetitioner did not seek certiorari. And, should theCourt side with Judge Jones’s dissent, it wouldpreclude consideration of the question that thepetition actually tries to present.

B. Any Decision On The Twenty-firstAmendment Would Not Change The Out-come Below.

A second impediment to the Court’s review is thatany decision on the question presented will not affectthe judgment below. The Fifth Circuit provided aclear alternative ground for denying Rule 60(b)

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relief: Petitioner’s “fail[ure] to address the districtcourt’s holding that Texas’s residency requirementviolates the Privileges and Immunities Clause.” Pet.App. 21a. That means that—regardless of whateverthis Court might say about the Commerce Clauseand the Twenty-first Amendment—the Fifth Circuitproperly rejected Petitioner’s Rule 60(b)(5) motion.

The petition tries to dodge this conspicuous obsta-cle by attacking the District Court’s 1991 Privilegesand Immunities holding on its merits. It argues thatthe Privileges and Immunities Clause does notprotect the right to sell liquor, that Respondents arecorporations that cannot invoke the Clause, and thatGranholm’s Twenty-first Amendment teachingsapply in this context, too. Pet. 19-21. There are twoproblems with those arguments, apart from theirsubstance. First, Petitioner argues only that theoriginal District Court decision was wrong; it doesnot argue that there has been a significant change indecisional law since. It is unclear, for example, whythe fact that the current Respondents are corpora-tions (see Pet. 20) means that the injunction issuedin favor of Cooper and Wilson is now inequitable.And Petitioner makes no attempt whatsoever toconnect those dots, as Rule 60(b)(5) requires.

Second, even if the petition had identified appro-priate grounds for Rule 60(b) relief on the Privilegesand Immunities holding, it is far too late. The FifthCircuit did not decide the merits of the Privilegesand Immunities question. Instead, it held thatPetitioner had “impermissibly attempted to shift theburden of proof to [Respondents].” Pet. App. 22a.Having failed to mount a sufficient challenge to thealternative Privileges and Immunities holding beforethe Fifth Circuit, Petitioner cannot do so for the first

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time here. This Court is one of “review, not of firstview,” Cutter v. Wilkinson, 544 U.S. 709, 718 n.7(2005), and it generally declines to consider ques-tions that are not “pressed or passed upon below.”Illinois v. Gates, 462 U.S. 213, 217-224 (1983).

The Fifth Circuit’s alternative forfeiture holdingfully supports its denial of Rule 60(b) relief. There isno compelling reason for this Court to consider thequestion presented here.

C. The State’s Absence Diminishes TheCase’s Importance.

Finally, this case lacks the usual indicia of im-portance that justify the Court’s review.

For starters, the Fifth Circuit’s original decision inCooper has been the status quo for over two decades.Petitioner claims that “review is urgently needed”(Pet. 2), but nothing about this case is urgent. Evenafter Granholm was decided in 2005, nine yearspassed before Petitioner filed its Rule 60(b)(5) motionarguing that Granholm had dramatically changedthe legal landscape. Only after the Eighth Circuit’sfavorable Southern Wine decision in 2013 did Peti-tioner move into action. That delay militates againstthis Court’s review. It also militates against Peti-tioner on the merits: It is a Herculean task to explainwhy a decades-old injunction is “no longer equitable”in light of a decade-old Supreme Court decision. Fed.R. Civ. P. 60(b)(5).

More to the point, the Commission’s absence sug-gests that this particular case and this particularlaw are no longer important to the State itself. It isultimately the Commission whose behavior is limitedby the longstanding injunction, and the Texas Legis-lature whose Code goes unenforced. Yet the State is

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nowhere to be found. In light of the State’s decisionnot to participate in the Rule 60(b) proceedings,Petitioner’s claim that the judgment below comes “atthe expense of state sovereignty” (Pet. 17) ringshollow. The State is in the best position to defendstate sovereignty and to articulate the state intereststhat justify its laws. The Court should await a casethat the State deems worthy of its participation.

CONCLUSIONThe petition for a writ of certiorari should be

denied.

Respectfully submitted,

NEAL KUMAR KATYALCounsel of Record

SEAN MAROTTAMORGAN L. GOODSPEEDHOGAN LOVELLS US LLP555 Thirteenth Street, N.W.Washington, D.C. 20004(202) 637-5600neal.katyal@hoganlovells.com

Counsel for RespondentSouthern Glazer’s Wine andSpirits of Texas II, LLC

OCTOBER 2016