The First Circuit Court of Appeals upheld a lower court's ruling that Rhode Island's requirement that licensed retailers purchase bev/al only from licensed in-state wholesalers.  But it also found the lower court didn't sufficiently examine the state's evidence defending the in-state retailer requirement as well as the ban on common carrier delivery.

The district  court had held that requiring retailers to establish a physical presence in the state was allowed under the 21st Amendment because the physical-presence requirement was essential to the state's three-tier system and thus necessary to promote the health and safety of Rhode Islanders.  But the district court didn't examine evidence to determine how effective that requirment was to promote public health and safety.  The court also upheld, on similar grounds, the requirement that licensed retailers purchase alcohol only from licensed in-state wholesalers.

On appeal, the First Circuit Court of Appeals noted the trial court held Rhode Island's requirement that licensed retailers purchase alcohol from licensed in-state retailers only was constitutional.  

Turning to the next issue,  the question of whether Rhode Island's requirement that retailers maintain a physical presence in the state and that retail licenses can be issued only to Rhode Island residents, the appeals court held "a discriminatory aspect of a
state's version of the three-tier system cannot be given a judicial   seal of approval premised either on the virtues of three-tier systems generally or on the basis of a theoretical benefit to public health and safety associated with the challenged regulation" without solid proof and sent the case back to the district court for further proceedings.