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U.S. Court Rejects Ban in Texas on Some Direct Wine Shipments

June 28, 2003|From Reuters

In a legal victory for winemakers, especially smaller California vintners, a federal court has ruled that a Texas law barring direct shipments of wine to consumers from out-of-state wineries is unconstitutional.

The ruling, issued Thursday by the U.S. Court of Appeals for the 5th Circuit in New Orleans, comes as California's wine industry mounts a major legal campaign to challenge state laws restricting wine shipping across state lines directly to consumers.

About half of U.S. states have barriers to such direct shipping.

The ruling marks the first time a federal appellate court has struck down such a state ban and backed an injunction against enforcing it.

The appellate panel in New Orleans affirmed a lower court's opinion that portions of the Texas Alcoholic Beverage Code violated the commerce clause of the U.S. Constitution.

"This is not even a close call," the court said.

Texas has barred out-of-state wineries from shipping directly to the state's consumers but allows Texas wineries to sell and ship wine directly to them. That amounts to "parochial economic discrimination" to promote sale of wines made in Texas, the court said.

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