Supreme Court, Wine, and the Future of Direct Shipping

Tomorrow is the day many of us who champion the cause of small, quality-minded winemakers have been waiting nearly a decade for: The Supreme Court of the United States will weigh in on the issue of direct shipping.

My reading of the issues at hand convinces me that those state statutes under consideration that allow in-state wineries to ship direct but prohibit out of state wineries to do so will be struck down as unconstitutional. However, this ruling will not be the end of the battle.

At issue in these cases is whether a state’s discriminatory laws, though clearly violating the (dormant) commerce clause in the Constitution can nevertheless stand on the grounds that the 21st Amendment allows states nearly unfettered rights to regulate commerce in alcoholic beverages within its boarders.

Most recent decisions have stated that states CAN erect these barriers to trade as long as they promote one of the core concerns of the 21st Amendment (temperance, revenue enhancement or orderly markets) and so long as it can be shown that there are no other reasonable non-discriminatory alternatives.

Neither of the two statues at issue in the Supreme Court case meets this test. The laws were erected with no other concern than economic protectionim or there are far less discriminatory schemes to achieve the goals of temperance, creating an orderly market or enhancing revenue for the state. More importantly, it is reasonable to assume that the Supreme Court will uphold this test.

Unfortunately, a positive ruling would not put an immediate end to the direct shipping controversy. States that currently have shipping restrictions will need to assure that these restrictions are in harmony with the Supreme Court’s ruling on discriminatory laws. This seems like a pretty easy task: Ban all direct shipping, whether from in-state or out-of-state wineries. No discrimination, no problem.

Look to those states that have powerful wholesaler/distributor lobbys; states in which wholesalers contribute buckets of money to state legislative and gubernatorial candidates. These are the state that are likely to pursue new lawas that outlaw ALL direct shipping.

But I’m getting ahead of myself here. It will be a great victory for wine lovers and advocates of free trade, and for those of us who ship samples to wine writers, if the Supreme Court gives us the ruling we’ve looked forward to for these many years.

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