This article was published in The 30 Second Wine Advisor on Monday, May 16, 2005.

Supreme Court rules on wine shipping

States in the U.S. may not ban the shipment of wine directly to consumers if the state's laws permit in-state wineries to do so, the Supreme Court ruled in a closely split decision announced this morning. In short, everyone may ship or nobody may ship, but it's unconstitutional to grant preference to in-state shippers.

But wine lovers who live in states that do not now permit consumers to buy wine directly from out of state sources should not count on being able to jump online and start ordering wine.

In a debate that saw two core Constitutional principles in conflict, the court's 5-4 decision saw interstate commerce barely edge federalism (states' rights).

Supporters of wine shipping were quick to declare the decision a great victory. The Institute for Justice, a Washington, D.C. group that had represented one of the plaintiffs in the two cases before the court, said the decision had "huge implications for interstate and electronic commerce." Institute attorney Clint Bolick added, "This is the best day for wine-lovers since the invention of the corkscrew. ... This opens up interstate markets just like our Founding Fathers envisioned. They wanted us to be one nation when it comes to trade - not 50 states. This is a boon for America's wine-loving consumers who like to have various wines from throughout the nation."

More measured voices in the wine-loving community, however, noted that little is likely to change for many Americans, particularly in the short term. The opinion addresses only the 24 states whose current laws permit in-state wineries to ship wine to consumers while forbidding out-of-state producers to do so. But many states do not permit shipping wine to consumers at all, and the court's ruling does not change that.

Justice Anthony Kennedy, who wrote the majority opinion, wrote, "States have broad power to regulate liquor ... This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers. If a state chooses to allow direct shipments of wine, it must do so on evenhanded terms."

This language makes it as easy for states to ban all direct-to-consumer sales - as New Jersey, for instance, did just last year rather than permit interstate shipping to its residents. It's safe to assume that the Wine and Spirits Wholesalers of America, the wealthy lobby group that represents distributors and that has led the battle against interstate shipping, will now turn its ample resources to fighting for overall shipping bans.

In addition to Justice Kennedy, Justices Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer voted with the majority. In dissent were Chief Justice William Rehnquist and Justices John Paul Stevens, Sandra Day O'Connor and Clarence Thomas.

The decision focused only on wine shipping, but observers presume that its language clears the way for similar legislation governing beer and liquor shipment.

At the risk of saying "I told you so," I can't help but recall having written this analysis in the April 8 Wine Advisor: "Look for a ruling that states with laws like New York and Michigan must eliminate disparities between the laws governing shipping for in-state and out-of-state merchants ... a problem that those states could as easily resolve by denying all direct wine sales to consumers (as many states already do) as by permitting all such sales."

If legal language doesn't put you off, here's a link that bypasses media analysis and goes direct to primary sources: The Supreme Court's opinion on the shipping cases is already online here, in Adobe Acrobat (PDF) format:

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