A Forceful Voice For Consumers

Posted by Tom Wark on Oct 2, 2008

Michigan Consumers should be smiling. A Federal District Court Judge in that state ruled on Tuesday that the state’s law that bars consumers from buying and having wine shipped to them from out-of-state retailers violated the U.S. Constitution and enjoined the State from enforcing laws that prevent such shipments.

The decision was a forceful one. Judge Donna Hood made no bones about it:

"the State’s argument that the Twenty First Amendment gives it the authority to regulate alcohol coming into the state and that the three-tier system it has designed for regulatory purposes is appropriate is flawed. While the Heald court did state that the three-tier system was an appropriate use of state power, it did not approve of a system that discriminates against out-of-state interests. The Supreme Court made clear in Heald that a state’s power under the Twenty First Amendment is not above the Commerce Clause nondiscrimination requirement."

….

"In the present case, the State does not meet its burden of showing, through “clear record evidence,” that alternatives to an outright ban on wine shipments from out-of-state retailers are unworkable. The State does not suggest any alternatives for regulating wine from out-of-state retailers nor make any showing that such an alternative is unworkable. The State also entertains no discussion about how it regulates wine shipped directly from out-of-state wineries and why the same procedures would be unworkable in regulating shipments from out-of-state retailers. The State puts forth most of the same “sweeping assertions” that were rejected in Heald as its justification for discriminating against out-of-state retailers."

I heard about this ruling immediately after coming out of a hearing in Olympia, Washington on Tuesday concerning how the three-tier system might be refined. At that hearing the issue of retailer to consumer direct shipping was discussed. Washington is one of those states that allows its in-state retailers to ship to Washington residents but prohibits Washington consumers from having wine shipped to them from out-of-state retailers. I told the Joint Senate/House Committee on behalf of the Specialty Wine Retailers Association and its membership that this kind of law does not serve the people of Washington, nor does it serve the state. I wish I’d known about this decision then, rather than having to blog about it after the fact at Wine Without Borders.

It’s unlikely this commonsense argument along with this latest decision will sway many people in the wine industry and in the regulatory community that cling to the notion that the Granholm v. Heald Supreme Court decision only applies to wineries and that these anti-consumer laws need to stay in effect so that well-funded cliques within the three tier system can continue to screw consumers for their own monetary interests.

So be it. The fight will go on. But consumers, as especially Michigan residents, should take a moment to celebrate.