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Spirited Fight Over Wine Sales

The Supreme Court will hear arguments in a bitter war between smaller vintners and national liquor wholesalers on interstate commerce rules.

November 07, 2004|Rone Tempest | Times Staff Writer

Other winemakers admit that they simply ignore the state regulations entirely, taking a chance that their operations are too small to catch the eye of state regulators.

"Ten years ago," said Lodi, Calif., winemaker David Lucas, "I used to ship wine to whomever came in."

Lucas said he stopped doing that after an ambitious Florida attorney general conducted a sting operation in 1995 that included ordering wine from California winemakers and prosecuting those who sent it.

Today, Lucas, 62, a former diplomat who bears a striking resemblance to actor Robert Duvall, is on the front line of the Supreme Court challenge to the state-regulated liquor system.

Lucas is something of a contrarian. The entry to his modest winery on the outskirts of Lodi, a San Joaquin Valley wine area known for its high-quality Zinfandels, features signs encouraging customers to "Please Park on the Lawn." Lucas said he had to fight with county authorities over the issue. They wanted him to have a paved parking lot.

Lucas also has battled with local authorities on behalf of smaller wineries over portable toilet requirements and cumbersome environmental rules aimed at much larger agricultural operations. As a result of his efforts, the number of small-scale wineries has proliferated to more than 30 in Lodi, which also is home to the much larger 12-million case Robert Mondavi Woodbridge label.

With an established reputation as a battler, Lucas was approached in 2000 by the Napa-based wine producer lobbying organization Free the Grapes to represent California in a lawsuit in New York state.

Joining with Virginia vintner Juanita Swedenburg and three New York consumers, Lucas challenged New York rules that allow in-state wineries to directly ship their products intrastate but ban out-of-state companies from shipping their products to New York customers.

Lucas and Swedenburg won their case in a U.S. District Court in New York, which ruled that the ban on out-of-state shipping was unconstitutional and discriminatory. The ruling was later overturned by a federal appeals court, which concluded that the 21st Amendment allows a state to restrict alcohol imports.

A conflicting ruling by an Ohio federal appeals court in a Michigan case set the stage for the Supreme Court battle, which is expected to feature arguments by conservative legal lions Kenneth Starr, on behalf of the winemakers, and Robert Bork, representing the New York wholesalers.

A Federalist Society debate on the issue last year between Starr, dean of the Pepperdine Law School and special prosecutor in the Whitewater and Monica Lewinsky inquiries, and Bork, the former U.S. solicitor general whose nomination to the Supreme Court was blocked by the U.S. Senate in 1987, drew an overflow audience at the National Press Club.

A Supreme Court ruling in favor of the winemakers could produce a financial windfall for California wineries. Just opening the New York market alone could increase direct shipping business by 5%, said Napa winemaker Tom Shelton, president of the upscale Joseph Phelps Vineyards in St. Helena, Calif. Freeing up markets also would have a major effect on wine club and Internet sales business.

Lucas, however, sees the Supreme Court test more in the context of a cultural war that dates to the arrival of the pilgrims on American shores.

"The Mayflower was not full of Italians," Lucas said. "Unfortunately, we ended up with a bunch of bloody puritans who have to tell you how to lead your life."

Winemakers like Lucas envision a world that is a little more like Europe, where itinerant wine tasters can wander through wine regions and blithely order home bottles and cases as their palates dictate.

In France, they note wistfully, the local post office even provides special Styrofoam mailing boxes shaped to hold bottles of various sizes -- longer and slimmer for a Bordeaux, rounder and more squat for a Burgundy.

The Wine & Spirits Wholesalers of America, which has built its campaign against the winemakers around the argument that direct shipping will open the door to underage drinking, contends that the European example doesn't work here.

"Europe sounds charming," said spokeswoman Gravois. "But we are not Europe. Likewise, Napa Valley is very unique to America. But what is good for Napa Valley is not necessarily good for Alabama, New York or Florida."

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