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Judge Refuses to Throw Out Winemakers' Suit Against N.Y.

Commerce: Complaint contends the state violates the Constitution by barring out-of-state vintners from shipping wine to customers.

September 06, 2000|From Bloomberg News

A federal judge Tuesday refused to dismiss a lawsuit that alleges New York State illegally bars direct-to-customer shipment of wine from California and other out-of-state producers.

Wine industry officials are closely watching the case because 30 states restrict the direct sale of wine, and New York is the second-largest wine-consuming state after California.

The American Vintners Assn., which represents about 600 of the nation's 1,600 mostly small wine producers, has long sought the repeal of the restrictive Depression-era laws.

A trade group that represents wholesalers has said the laws permit states to license merchants and ensure that consumers comply with state sales tax laws.

The lawsuit, filed Feb. 3, alleges that the New York State Liquor Authority violates the U.S. Constitution's commerce clause by barring out-of-state winemakers from obtaining licenses to distribute alcoholic beverages directly to New Yorkers.

U.S. District Judge Richard M. Berman in Manhattan refused a request by the authority and five importers to dismiss the complaint by winemakers David Lucas of California and Juanita Swedenburg of Virginia.

"It would be inappropriate to dismiss the claims of plaintiffs Swedenburg and Lucas at this stage," Berman wrote in a 23-page opinion.

Swedenburg joined three New York consumers in alleging that the state laws run afoul of the Constitution's commerce clause.

The complaint also alleges that the state's ban on direct shipment and advertising of wine violates their First Amendment protections.

Berman ruled that he is "unwilling to decide the First Amendment questions without a more thoroughly developed record."

An attorney for the liquor authority, Thomas McKeon, declined to comment, saying he had not read the decision.

Attorney Deborah Simpson of the Institute for Justice in Washington, which filed the suit, could not be reached for comment.

Last year, Congress approved legislation that gave states broad new powers to use federal courts to enforce local laws restricting interstate alcohol trade.

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