Justices May Favor Direct Wine Sales
WASHINGTON — Small producers of fine wines may have made a sale in the U.S. Supreme Court on Tuesday, as the justices signaled that they were inclined to strike down state laws prohibiting people from buying wines directly from out-of-state vineyards.
That would not only give boutique wineries in California and around the country a way to expand their markets, but might also unravel decades-old laws that regulate the marketing of beer, wine and liquor in the United States.
"This is great news," said Tom Shelton, chief executive of Joseph Phelps Vineyards in St. Helena, Calif. "At the end of the day, our goal is to ship unimpeded to consumers
When Prohibition was repealed in 1933 with the 21st Amendment to the Constitution, states were given the power to regulate the sale of alcohol. They adopted an array of rules, with most saying only licensed wholesalers could import beer, wine or spirits. That has vexed small vintners that have trouble making deals with the major wholesalers that prefer contracting with large-volume clients.
The system of state control came under attack Tuesday by lawyers for one small winery in Lodi, Calif., and another in Virginia. They argued to the high court that the Constitution's protection for the free flow of interstate commerce gave those wineries a right to ship directly to customers in states such as New York and Michigan.
Clint Bolick, representing a family-owned winery in Virginia, said the Constitution forbade states from discriminating in favor of their own businesses and industries.
"The state here is engaged in economic protectionism," said Bolick, counsel for the libertarian Institute for Justice, a Washington public interest law firm.
The states that restrict direct sales have argued that prohibiting out-of-state shipments limits drinking by minors. But Stanford University law professor Kathleen Sullivan pointed out that although Michigan and New York barred out-of-state vineyards from doing business directly with their residents, they permitted in-state vineyards to ship wine directly to people's homes.
That double standard "belies the notion that protecting underage drinkers" is the true reason behind their laws, said Sullivan, who represented Lodi winemaker David Lucas.
