PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
               ________________

                     No. 23-2922
                   _______________

   JEAN-PAUL WEG LLC, DBA The Wine Cellarage;
              LARS NEUBOHN,
                                       Appellants
                     v.

        DIRECTOR OF THE NEW JERSEY
 DIVISION OF ALCOHOLIC BEVERAGE CONTROL;
       ATTORNEY GENERAL NEW JERSEY;

FEDWAY ASSOCIATES; ALLIED BEVERAGE GROUP
 LLC; OPICI FAMILY DISTRIBUTING; NEW JERSEY
           LIQUOR STORE ALLIANCE,
                              Intervenor-Defendants
               ________________

     On Appeal from the United States District Court
              for the District of New Jersey
                (D.C. No. 2:19-cv-14716)
       District Judge: Honorable Julien X. Neals
                   ________________

              Argued: September 17, 2024

Before: RESTREPO, PHIPPS and MCKEE, Circuit Judges.
               (Filed: February 28, 2025)

James A. Tanford [ARGUED]
Robert D. Epstein
EPSTEIN SEIF PORTER & BEUTEL LLP
50 S. Meridian St., Suite 505
Indianapolis, IN 46204

Michael J. Cohen
Gary S. Redish
WINNE BANTA HETHERINGTON BASRALIAN & KAHN, P.C.
21 Main Street, Suite 101
Hackensack, NJ 07601
   Counsel for Appellants

Liza B. Fleming [ARGUED]
William C. Kennedy
Phoenix N. Meyers
Daniel M. Vannella
Michael L. Zuckerman
OFFICE OF ATTORNEY GENERAL OF NEW JERSEY
Division of Law
25 Market Street
Hughes Justice Complex
Trenton, NJ 08625
   Counsel for Appellees

Deborah A. Skakel [ARGUED]
BLANK ROME
1271 Avenue of the Americas
New York, NY 10020




                           2
Leon J. Sokol
CULLEN & DYKMAN
433 Hackensack Avenue
Hackensack, NJ 07601

Christopher S. Porrino
Peter M. Slocum
LOWENSTEIN SANDLER
One Lowenstein Drive
Roseland, NJ 07068
   Counsel for Intervenor-Defendants

Mollie G. Hughes
John C. Neiman, Jr.
MAYNARD NEXSEN
1901 6th Avenue N
2400 Regions, Harbert Plaza
Birmingham, AL 35203

William P. Sowers, Jr.
3132 Blithewood Drive
Richmond, VA 23225

Frederick R. Yarger
WHEELER TRIGG O’DONNELL
370 17th Street, Suite 4500
Denver, CO 80202
   Counsel for Amicus Appellees

                   _________________

               OPINION OF THE COURT
                  _________________




                              3
RESTREPO, Circuit Judge

        New Jersey, acting pursuant to the alcohol-regulating
powers reserved for it by the Twenty-first Amendment,
regulates the importation and sale of alcohol through a “three-
tier” system that funnels alcohol sold within the state through
three strictly delineated layers of regulated entities. With
limited exceptions 1, all alcohol sold within the state must be
sold by a producer to a New Jersey wholesaler, sold by that
wholesaler to a New Jersey retailer, then sold by that retailer to
the end customer. Each layer of this system is subject to its
own distinct licensure and inspection requirements.

        As part of its system of alcohol regulation, New Jersey
permits the direct shipping of wine to New Jersey customers
only by wine retailers that have a physical presence in New
Jersey (the “physical presence requirement”) and purchase
their product from New Jersey licensed wholesalers (the
“wholesaler purchase requirement”). Appellants, a New York
wine retailer and its owner, contend that these requirements
trespass into an area reserved for Congress under the
Commerce Clause, under principles referred to as the dormant
Commerce Clause. In doing so, Appellants challenge a core
element of the three-tier system of alcohol regulation: the
ability of a state to require alcohol to flow through its three-tier

1
  Most relevantly here, both in-state and out-of-state wineries
can obtain a license to ship wine directly to New Jersey
consumers. See 

(2). Other exceptions
include an allowance for casinos to purchase directly from
wholesalers, see 

:69I-1.5(e), and
permission for breweries to make on-premises sales directly to
customers, see 

-10b.




                                 4
system before reaching consumers. Because striking down
New Jersey’s challenged regulations would shake the
foundations of the “unquestionably legitimate” three-tiered
system of alcohol regulation, and because New Jersey has
provided sufficient public health and safety justifications for
its policies, we will affirm. Granholm v. Heald, 

 (2005).

                      I. BACKGROUND

        Jean Paul Weg, LLC, DBA “The Wine Cellarage,” is a
New York LLC that operates a single brick-and-mortar wine
retail store in Bronx, NY, and is owned and operated by Lars
Neubohn. In addition to in-person sales, The Wine Cellarage
offers online wine sales and has at least one customer in New
Jersey. The Wine Cellarage gives customers from New Jersey
the option of either retrieving their online purchases in person
or receiving their purchases through the mail via an
intermediary shipper.

        The Wine Cellarage is unable to directly ship wine to
New Jersey customers because it does not hold a New Jersey
“plenary retail license.” Applicants for a plenary retail license
must be fingerprinted, undergo background checks, and have a
physical location in New Jersey that is subject to on-site
premises inspections. New Jersey does not deny retail licenses
based on the residency of applicants, offering licenses to out-
of-state retailers and residents so long as they operate a store
physically located in New Jersey. Because The Wine
Cellarage does not have a physical location in New Jersey, it is
not currently eligible to receive a plenary retail license.

     In addition to its lack of a plenary retail license, The
Wine Cellarage faces a second impediment to its ability to




                               5
directly ship wine to New Jersey: its product sourcing
practices. The Wine Cellarage sources its wine from private
wine collections and New York licensed wholesalers. Even if
The Wine Cellarage were able to obtain a New Jersey plenary
retail license, it would be unable to sell these out-of-state
products to New Jersey consumers, as New Jersey retailers are
prohibited from “purchas[ing] or obtain[ing] any alcoholic
beverage except from the holder of a New Jersey
manufacturer’s or wholesaler’s license or pursuant to a special
permit first obtained from the Director.” 

(a).

        In a bid to overturn these regulations and begin direct
shipping to New Jersey consumers, The Wine Cellarage,
Neubohn, and several other plaintiffs initiated this action
against James Graziano, the Acting Director of the New Jersey
Division of Alcohol Beverage Control, Gurbir Singh Grewal,
the Attorney General of New Jersey, and Philip D. Murphy, the
Governor of New Jersey, in the United States District Court for
the District of New Jersey. The District Court granted Fedway
Associates, Inc., Allied Beverage Group, LLC, Opici Family
Distributing, and the New Jersey Liquor Store Alliance leave
to intervene as defendants.

        In their latest operative complaint, the Third Amended
Complaint, the Wine Cellarage and Neubohn brought claims
pursuant to 

 for violations of the Commerce
Clause and the Privileges and Immunities Clause. In the Third
Amended Complaint, the Wine Cellarage and Neubohn sought
relief in the form of an order declaring the set of interrelated
New Jersey laws “prohibiting out-of-state wine retailers from
selling, shipping, and delivering wine directly to New Jersey
consumers from their out-of-state locations, unconstitutional
as a violation of the Commerce Clause.” App. 045–46. The




                               6
Third Amended Complaint also sought an “injunction
prohibiting Defendants from enforcing those rules and
regulations against out-of-state wine retailers, and requiring
them to allow out-of-state wine retailers to obtain licenses and
to sell, ship, and deliver wine directly to customers in New
Jersey.” App. 046.

      The parties filed multiple opposing motions for
summary judgment before the District Court. The District
Court denied the Wine Cellarage and Neubohn’s motion for
summary judgment and, after initially denying all but one as
moot, ultimately granted all cross-motions for summary
judgment filed by the defendants.

       Appellants filed a notice of appeal challenging the
District Court’s summary judgment rulings. The sole issue
on appeal is Appellants’ Commerce Clause argument, as
Appellants abandoned their Privileges and Immunities Clause
argument in the District Court and do not pursue any
evidentiary challenges on appeal.

       We have jurisdiction under 

. “We
review the grant or denial of summary judgment de novo,”
Cranbury Brick Yard, LLC v. United States, 

, 708
(3d Cir. 2019), “applying the same standard [the District Court]
must apply,” Huber v. Simon’s Agency, Inc., 

, 144
(3d Cir. 2023) (quoting Ellis v. Westinghouse Elec. Co., LLC,

, 229 (3d Cir. 2021). Accordingly, we must
determine “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a).




                               7
                        II. DISCUSSION

        The Constitution’s Commerce Clause grants Congress
the power “[t]o regulate Commerce . . . among the several
States.” U.S. Const. art. I, § 8, cl. 3. Though the Commerce
Clause does not explicitly curtail the states’ power to regulate
interstate commerce, courts “have sensed a negative
implication in the provision since the early days” of this nation.
Dep’t of Revenue v. Davis, 

 (2008). This
negative implication, referred to as the dormant Commerce
Clause, prohibits states from engaging in undue economic
protectionism. In reviewing a standard dormant Commerce
Clause challenge, first “we ask whether a challenged law
discriminates against interstate commerce.” 

. If a
law discriminates, it is “‘virtually per se invalid,’ . . . and will
survive only if it ‘advances a legitimate local purpose that
cannot be adequately served by reasonable nondiscriminatory
alternatives.’” 

 (quoting Oregon Waste Sys., Inc. v. Dep’t of
Env’t Quality, 

, 99–101 (1994)).

        In the context of state regulation of alcohol, this
relatively straightforward test is complicated by the special
authority over alcohol reserved for states by the Twenty-first
Amendment. Section 2 of the Twenty-first Amendment
(“Section 2”) declares that “[t]he transportation or importation
into any State, Territory, or possession of the United States for
delivery or use therein of intoxicating liquors, in violation of
the laws thereof, is hereby prohibited.” U.S. Const. amend.
XXI, § 2. The Supreme Court has interpreted Section 2 “as
one part of a unified constitutional scheme,” the main “thrust”
of which “is to ‘constitutionaliz[e]’ the basic structure of
federal-state alcohol regulatory authority that prevailed prior to
the adoption of the Eighteenth Amendment.” Tenn. Wine &
Spirits Retailers Ass’n v. Thomas, 

, 519–20




                                 8
(2019) (quoting Craig v. Boren, 

 (1976)).

       The interplay between this grant of authority and the
dormant Commerce Clause’s restrictions is deeply analyzed in
two contemporary Supreme Court cases: Granholm v. Heald,

 (2005), and Tennessee Wine & Spirits Retailers
Ass’n v. Thomas, 

 (2019).

        In Granholm, the Court struck down a set of state laws
that permitted in-state wineries, but not out-of-state wineries,
to ship directly to consumers. Granholm, 

.
These state laws created, in effect, a limited exception from the
three-tier system for in-state wineries but denied the same
benefit to out-of-state wineries.

       The Granholm Court surveyed its prior Twenty-first
Amendment rulings, reaffirming that “the Twenty-first
Amendment does not supersede other provisions of the
Constitution and, in particular, does not displace the rule that
States may not give a discriminatory preference to their own
producers.” 

. The Court summarized three main
features of its prior relevant holdings: (1) “state laws that
violate other provisions of the Constitution are not saved by the
Twenty-first Amendment”; (2) “§ 2 does not abrogate
Congress’ Commerce Clause powers with regard to liquor”;
and (3) “state regulation of alcohol is limited by the
nondiscrimination principle of the Commerce Clause.” Id. at
486–487.

       The Granholm Court assessed the challenged
regulations by first querying whether they were “saved” from
dormant Commerce Clause scrutiny by the Twenty-first
Amendment. Granholm, 

. It concluded that
they were not: though “[s]tate policies are protected under




                               9
the Twenty-first Amendment when they treat liquor produced
out of state the same as its domestic equivalent,” the Court
found the challenged regulations “involve straightforward
attempts to discriminate in favor of local producers.” 

        In reaching this conclusion, the Court specifically
disavowed the argument that this holding “would call into
question the constitutionality of the three-tier system.” 

. The Court noted that it had “previously recognized that
the three-tier system itself is ‘unquestionably legitimate,’” 

at 489 (quoting North Dakota v. United States, 

 (1990)), and had “held previously that States can mandate
a three-tier distribution scheme in the exercise of their
authority under the Twenty-first Amendment,” 

 at 466
(citing North Dakota, 

). 2

       Having held that the Twenty-first Amendment did not
shield the challenged regulations, the Court proceeded to
“consider whether either state regime ‘advances a legitimate
local purpose that cannot be adequately served by reasonable
nondiscriminatory alternatives.’” 

 at 489 (quoting New
Energy Co. v. Limbach, 

 (1988)). The states
advanced two main purported purposes for their challenged
regulations: “keeping alcohol out of the hands of minors and


2
  The Granholm Court also cited favorably to Justice Scalia’s
concurrence in North Dakota v. United States, wherein he
concluded that “The Twenty-first Amendment . . . empowers
North Dakota to require that all liquor sold for use in the State
be purchased from a licensed in-state wholesaler.” 

 at 489
(quoting North Dakota, 

 (Scalia, J., concurring
in judgment)).




                               10
facilitating tax collection.” 

.

       The Court found these justifications to be pretextual and
backed by “little concrete evidence.” 

. Protecting
minors was no reason for treating out-of-state wineries
differently, as shipments from both in-state and out-of-state
wineries posed the same limited risk of facilitating sales to
minors. 

. The states’ tax rationale did not justify the
differential treatment either, since the existing system of
“licensing and self-reporting” already used for out-of-state
wineries’ sales to wholesalers could be employed with equal
efficacy for direct-to-consumer sales. 

. Because the
challenged regulations were discriminatory and lacked
adequate justification, the Court declared them
unconstitutional. 

.

        Fourteen years later, the Court again revisited its
Twenty-first Amendment jurisprudence in Tennessee Wine &
Spirits Retailers Ass’n v. Thomas, 

 (2019), where
it struck down a two-year residency requirement that
Tennessee had imposed on retail liquor store license
applicants. The Tennessee Wine Court concluded that Section
2 “allows each State leeway to enact the measures that its
citizens believe are appropriate to address the public health and
safety effects of alcohol use and to serve other legitimate
interests, but it does not license the States to adopt protectionist
measures with no demonstrable connection to those interests.”

.

       In keeping with this purpose, the Court held that
“because of § 2, we engage in a different inquiry” from a
standard dormant Commerce Clause analysis when a state’s
alcohol regulation is challenged. Id. at 539. This “different
inquiry,” as laid out by the Tennessee Wine Court, involves two




                                11
main steps. First, courts determine whether the challenged
regulation “discriminates on its face against nonresidents.” Id.
Second, courts “ask whether the challenged requirement can be
justified as a public health or safety measure or on some other
legitimate nonprotectionist ground.” Id. At this second step,
the Court reiterated Granholm’s directive that “‘mere
speculation’ or ‘unsupported assertions’ are insufficient to
sustain a law that would otherwise violate the Commerce
Clause.” Id. (quoting Granholm, 

).

        The Tennessee Wine Court also further clarified
“Granholm’s discussion of the three-tiered model.” 

.
The Court explained that though “Granholm spoke
approvingly of that basic model, it did not suggest that § 2
sanctions every discriminatory feature that a State may
incorporate into its three-tiered scheme.” Id. The Court found
that Tennessee’s durational residency requirement was “not an
essential feature of a three-tiered scheme” and therefore could
be struck down without challenging the legitimacy of the three-
tier system itself. Id.

       This Circuit last addressed the interplay between the
dormant Commerce Clause and the Twenty-first Amendment
in Freeman v. Corzine, 

 (3d Cir. 2010)—a case
decided nearly a decade before Tennessee Wine, and therefore
without the benefit of the further clarity provided by the Court
therein. In Freeman, this Court relied on Granholm and
employed a form of “heightened scrutiny,” 

 at 158 (quoting
Am. Trucking Ass’ns v. Whitman, 

 (3d Cir.
2006)), that upholds discriminatory alcohol regulations only if
they “serve[] local purposes that would not be as well served




                              12
by non-discriminatory legislation,” id. at 161. 3 The District
Court, relying in large part on Freeman, applied this same
standard to this case.

       Today, with the benefit of Tennessee Wine’s additional
guidance, we hold that Tennessee Wine compels us to apply a
different standard. Tennessee Wine clarified that it is not a
standard dormant Commerce Clause inquiry that controls when
a state’s alcohol regulations are challenged, but instead a
“different inquiry” that asks of discriminatory regulations
“whether the challenged requirement can be justified as a
public health or safety measure or on some other legitimate
nonprotectionist ground.” Tenn. Wine, 588 U.S. at 539.
Accordingly, in keeping with this controlling standard, we first
assess whether New Jersey’s challenged regulations
discriminate against nonresidents.

          A. New     Jersey’s    Challenged    Regulations
             Discriminate against Nonresidents

        The District Court relied on the test used in Freeman to
evaluate whether New Jersey’s statutory scheme is
discriminatory, querying whether New Jersey law
“discriminates against interstate commerce on its face or in
effect.” App. 024 (quoting Freeman¸ 

). The
District Court found that New Jersey’s scheme was not facially
discriminatory “because it requires that in-state and out-of-
state wine retailers sell and deliver wine through the New

3
  The Freeman Court also followed Granholm in reiterating
that a “three-tier system . . . is ‘unquestionably legitimate.’”
Freeman, 

 (quoting Granholm, 

).




                              13
Jersey System.” App. 024. However, the District Court found
that New Jersey’s regulatory system “may be discriminatory”
in effect because the in-state physical location requirement and
mandate to purchase from New Jersey wholesalers are
“additional steps that drive up the cost” of out-of-state
retailers’ products. App. 025 (quoting Granholm¸ 

).

        Appellants contend that the combination of New Jersey
laws that “allows in-state retailers to engage in online sales and
home deliveries of wine but prohibits out-of-state retailers
from doing so” is straightforwardly discriminatory against out-
of-state economic interests. Appellants’ Br. at 20. Appellants
liken this case to Granholm, wherein the Court found a
requirement that “[o]ut-of-state wineries must open a branch
office and warehouse in New York” to become eligible for
direct-shipping introduced “additional steps that drive up the
cost of their wine,” was prohibitively expensive, and “runs
contrary to our admonition that States cannot require an out-
of-state firm ‘to become a resident in order to compete on equal
terms.’” Granholm, 544 U.S. at 474–475 (quoting Halliburton
Oil Well Cementing Co. v. Reily¸ 

 (1963)).

       Appellees respond that New Jersey’s statutory scheme
is even-handed, with in-state and out-of-state retailers
subjected to the same physical location and wholesaler
purchasing requirements. Appellees point to a line of post-
Granholm decisions in other circuits that found in-state
presence requirements to be nondiscriminatory when
employed in furtherance of a three-tier system. See, e.g.,
Sarasota Wine Mkt., LLC v. Schmitt, 

, 1183–84
(8th Cir. 2021) (finding that “retailer or wholesaler residency
or physical presence requirements, or the mandate to purchase
only from in-state wholesalers . . . are likely to impose greater




                               14
costs than would otherwise be incurred by an out-of-state
retailer selling to [in-state] consumers” but are non-
discriminatory because they “impose[] the same licensing
requirements on in-state and out-of-state retailers.”).

       Appellees also attempt to differentiate Granholm,
writing:

       Unlike in Granholm, where requiring “all out-of-
       state wine, but not all in-state wine, to pass
       through an in-state wholesaler and retailer before
       reaching consumers” served to “increase the cost
       of out-of-state wines to Michigan consumers,”
       the relevant costs for opening an alcohol store in
       New Jersey are the same whether the would-be
       seller lives in Jersey City or Juneau.

State Appellees’ Br. at 30–31 (cleaned up) (quoting Granholm,

). Appellees’ endeavor to distinguish the facts
of this case from Granholm is unavailing. In Granholm, the
Court rejected the similar argument that “an out-of-state
winery has the same access to the State’s consumers as in-state
wineries: All wine must be sold through a licensee fully
accountable to New York; it just so happens that in order to
become a licensee, a winery must have a physical presence in
the State.” Granholm, 

. The Granholm Court
found this argument “unconvincing,” holding that the physical
presence requirement imposed a disproportionate financial
burden on existing out-of-state wineries, which must bear the
expense of “open[ing] a branch office and warehouse in New
York” to become a licensee. 

.

      The same conclusion is compelled here. New Jersey’s
physical presence requirement forces existing out-of-state




                              15
retailers to bear the expense of opening a New Jersey location,
while New Jersey’s wholesaler purchase requirement compels
existing retailers to bear the expense of reconfiguring their
product-sourcing processes. Accordingly, New Jersey’s
challenged regulations impose a heightened financial burden
on existing out-of-state retailers and therefore are
discriminatory in effect. Accordingly, we next address
whether the challenged regulations “can be justified as a public
health or safety measure or on some other legitimate
nonprotectionist ground.” Tenn. Wine, 588 U.S. at 539.

          B. New Jersey’s Challenged Regulations Can Be
             Justified on Legitimate Nonprotectionist
             Grounds

        After finding that New Jersey’s challenged laws may
have discriminated against out-of-state economic interests, the
District Court turned to the question of whether the laws were
justified by a legitimate local purpose. The District Court
found New Jersey’s physical presence requirement justified by
the state’s public health interest in ensuring that all “alcohol
sold to New Jersey consumers passes through New Jersey’s
three-tier system” and facilitating random site visits to ensure
compliance with New Jersey’s regulations. App. 026 (quoting
Sapolnick Decl. ¶¶ 10–11). The District Court likewise found
New Jersey’s wholesaler purchase requirement to be justified
by the state’s public health interest in quickly identifying
sources of contamination and facilitating product recalls.

       The District Court found these benefits to be adequately
supported by concrete evidence in the form of three
declarations: one submitted by Deputy Attorney General
Andrew R. Sapolnick; one submitted by Executive Vice
President of Allied Beverage Group, LLC, Robert Harmelin;




                              16
and one submitted by Executive Vice President of Fedway
Associates, Inc., Robert D. Sansone. These declarations
described real-world examples of successful product recalls
and unannounced inspections that revealed illicit activity,
which the District Court found sufficiently concrete and
compelling to justify the challenged regulations. The District
Court also found the challenged regulations justified because
“[t]he licensing, physical presence, and wholesaler wine
purchase requirements go [to] the root of the New Jersey
System.” App. 028.

        Appellants contend that the concerns reflected in the
Sapolnick, Harmelin, and Sansone declarations are overblown
and not concretely evidenced. Appellants argue that the
purported risks of direct-shipping out-of-state wine have not
been borne out in reality: jurisdictions that allow direct
shipping from retailers “have not experienced any significant
alcohol-related public health or safety problems,” Appellants’
Br. at 39, and “New Jersey has been allowing out-of-state
wineries to ship to consumers for more than a decade” with “no
evidence that it has caused any problems,” id. at 40. Appellants
further contend that New Jersey’s policy goals could be
fulfilled with a simple nondiscriminatory alternative: “a
licensing system requiring out-of-state retailers to get a permit
and abide by [New Jersey’s] regulations.” Appellants’ Br. at
42.

        As for the District Court’s finding that the challenged
regulations “go [to] the root of the New Jersey System,” App.
028, Appellants assert that New Jersey has “abandoned” the
three-tier system as to wine, Appellants’ Br. at 29, by
permitting wineries to sell wine directly to consumers without
any requirement that it pass through a wholesaler. Appellants
further argue that the challenged regulations could not be an




                               17
essential feature of the three-tier system because “sixteen
[states] have not required [a physical presence] for retail sales
and shipping by out-of-state wine stores.” Appellants’ Reply
at 7.

       Appellants’ arguments are not convincing, and we hold
that New Jersey’s challenged regulations are justified both on
public health and safety grounds and as an essential feature of
New Jersey’s three-tier system.

                  a. Public Health and Safety

        We find that the declarations submitted by Appellees
are sufficient concrete evidence of the challenged regulations’
public health and safety justifications.        The Sapolnick
Declaration provides evidence that New Jersey’s wholesaler
purchase requirement furthers New Jersey’s goal of quickly
identifying product tampering and contamination: because all
products must pass through licensed wholesalers, New Jersey
is “able to track particular products back through the
distribution system to identify the source of contamination, to
facilitate product recalls and to take other prompt action.”
Sapolnick Decl., App. 479 ¶ 13. The Sansone and Harmelin
Declarations provided further evidence of this efficacy,
detailing several instances in which wholesalers were able to
efficiently segregate products that had quality control
problems, preventing defective products from reaching
consumers.

        The Sapolnick Declaration also evidenced the benefits
of New Jersey’s physical presence requirement, which
facilitates inspections and investigations that produced 611
referrals for prosecution in 2020 alone. These investigations
have uncovered undisclosed interests in retail licenses held by




                               18
disqualified   persons,    inaccurate     financial   records,
unaccounted-for cash, prohibited sales of alcohol, and sales of
fraudulent products.

        Additionally, the Sapolnick Declaration reported that
because “[New Jersey’s Division of Alcoholic Beverage
Control]’s jurisdiction is limited to New Jersey, it has no
practical means by which to conduct warrantless searches and
seizures of evidence and property located outside of New
Jersey.” Id. at App. 483 ¶ 24. If out-of-state retailers were
allowed to ship directly to New Jersey customers, New Jersey
regulators “would have to rely upon the willingness of out-of-
state agencies to conduct the on-site inspections and
investigations,” id., placing New Jersey in a tenuous position
because “[i]n the past, the New York State Liquor Authority .
. . has refused to assist [New Jersey’s Division of Alcoholic
Beverage Control] in regulatory oversight of its licensees,” id.
at App. 484 ¶ 26.

        Taken together, these three declarations provide
historical evidence of the efficacy of New Jersey’s wholesaler
purchase requirement in facilitating product quality control and
of New Jersey’s physical presence requirement in facilitating
investigations that protect consumers from fraudulent and
prohibited sales of products. The declarations are sufficiently
concrete evidence, and not “mere speculation” or “unsupported
assertions,” that New Jersey’s “challenged requirement[s] can
be justified as a public health or safety measure.” Tenn. Wine,
588 U.S. at 539 (quoting Granholm, 

).

       In this regard, New Jersey’s regulations sharply diverge
from those challenged in Granholm. Granholm concerned a
limited loophole created for in-state wineries that was denied
without basis to out-of-state equivalents. Granholm, 

at 492. New Jersey’s challenged policies, in contrast, are key
elements of its regulatory framework backed by concrete
evidence of efficacy. Though each concerned the shipment of
wine, New Jersey’s regulations differ vastly in scope and effect
from the Granholm regulations, compelling a different
outcome here.

       Appellants’ contention that other states have succeeded
in permitting wine shipments from out-of-state retailers does
not disrupt this analysis: different states are permitted “leeway
in choosing the alcohol-related public health and safety
measures that its citizens find desirable.” Tenn. Wine, 588 U.S.
at 510. That different states purportedly have not experienced
problems with their own desired policy choices does not strip
New Jersey of its ability to select policies it can justify with
concrete evidence of efficacy.

        Appellants’ proposed nondiscriminatory alternative of
“a licensing system requiring out-of-state retailers to get a
permit and abide by [New Jersey’s] regulations” likewise does
not dictate a different outcome. Appellants’ Br. at 42. As an
initial matter, we agree with the Fourth Circuit’s holding in B-
21 Wines, Inc. v. Bauer that the relevance of nondiscriminatory
alternatives is of lessened importance under the Tennessee
Wine test than in a standard dormant Commerce Clause
analysis. See 

, 225–26 (4th Cir. 2022) (“Although
consideration of nondiscriminatory alternatives could have
some relevance to [the inquiry as to a law’s justification on
public health grounds], it does not transform the applicable
framework into the test that ordinarily applies to a dormant
Commerce Clause challenge when the Twenty-first
Amendment is not implicated.”). Regardless, the Sapolnick
Declaration’s account of New Jersey’s limited enforcement
jurisdiction and the uncertainty of securing assistance from




                               20
other states’ regulators undercuts Appellants’ proposed
alternative. Though New Jersey could demand that out-of-
state licensees abide by its regulations, the Sapolnick
Declaration establishes that New Jersey would have no certain
ability to enforce these regulatory mandates outside of the
state.

                  b. New Jersey’s Challenged Regulations are
                     Essential Features of the Three-Tier
                     System

        New Jersey’s challenged regulations are also
independently justified as essential features of its three-tier
system. The Supreme Court has repeatedly reiterated “that the
three-tier system itself is ‘unquestionably legitimate.’”
Granholm, 

 (quoting North Dakota, 

). Though the Tennessee Wine Court notes that Section
2 does not “sanction[] every discriminatory feature that a State
may incorporate into its three-tiered scheme,” it suggests that
“essential features” of the three-tier system pass constitutional
muster. Tenn. Wine, 588 U.S. at 535. This logic is sound: if
the system itself is constitutional, then the core features that
define the system are also constitutional.

       Contrary to Appellants’ contentions, New Jersey has
not “abandoned” its three-tier system as to wine. Appellants’
Br. at 29. The direct-shipping exception New Jersey has
created for wineries is limited, does not apply to retailers, and
does not negate the existence of a three-tier system for non-
wineries. See, e.g., B-21 Wines, 36 F.4th at 226 (“[W]e have
no reason to rule today that the limited statutory exception
made available by North Carolina to in-state and out-of-state
wineries means that the State has abandoned its three-tier
system.”). New Jersey maintains a robust three-tier system as




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to wine retailers, as is well within the state’s powers under the
Twenty-first Amendment.

         Perhaps the most foundational element of a three-tier
system is a state’s ability to prohibit the sale of alcohol that has
not passed through its three-tier system. As several other
circuits have recently held, permitting out-of-state retailers to
sell alcohol from outside of a state’s three-tier system creates a
regulatory hole large enough to shake the foundations of the
three-tier model. See, e.g., id. at 228 (“[T]he Retail Wine
Importation Bar is an integral part of North Carolina’s three-
tier system. To begin with, the Bar directly relates to North
Carolina’s ability to separate producers, wholesalers, and
retailers. . . . [T]he direct shipping of alcoholic beverages to
North Carolina consumers by out-of-state retailers would
completely exempt those out-of-state retailers from the three-
tier requirement.”); Lebamoff Enters. Inc. v. Whitmer, 

, 872 (6th Cir. 2020) (“[T]here is nothing unusual about the
three-tier system, about prohibiting direct deliveries from out
of state to avoid it, or about allowing in-state retailers to deliver
alcohol within the State. Opening up the State to direct
deliveries from out-of-state retailers necessarily means
opening it up to alcohol that passes through out-of-state
wholesalers or for that matter no wholesaler at all. . . . If
successful, Lebamoff’s challenge would create a sizeable hole
in the three-tier system.”).

       Because New Jersey’s wholesaler purchase requirement
is fundamental to the state’s ability to ensure alcohol passes
through each tier of its system, and because New Jersey’s
physical presence requirement is key to enforcing its system by
keeping retailers within its investigators’ jurisdiction, both
challenged regulations are essential features of the three-tier
system itself. As essential features, these regulations are




                                 22
unquestionably legitimate and constitutional.

                     III. CONCLUSION

       For the reasons set forth above, we will affirm the
District Court’s summary judgment rulings.




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