Halting the Momentum for HR 5034
H.R. 5034, the bill written and sponsored by the National Beer Wholesalers Association and supported by the Wine & Spirit Wholesales Association, has yet to receive a hearing in the House Judiciary Committee. And despite it having 136 Co-sponsors in the House of Representatives, there is yet to be introduced a companion bill in the Senate.
What has appeared to happen to this legislation that, if passed, would give states the unassailable right to pass discriminatory bans on wine shipping and producer self-distribution, is that it is losing momentum as word of its onerous and wholesaler protection qualities spread. Critical in spreading the word of H.R. 5034's destructive
marketplace qualities have been the various organizations both within
and without the alcohol industry that have publicly opposed the bill.s.
The list below of public statements of opposition to H.R. 5034, along with much more information about the bill can be found at http://www.stophr5034.org.
STATEMENTS OF OPPOSITION TO H.R. 5034
Specialty Wine Retailers Association
Specialty Wine Retailers Condemn Distributor Bid to Ban Wine Shipping
National Association of Manufacturers
Letter to Leadership of House Judiciary Committee Asking Opposition to H.R. 5034
The California State Legislature
The California State Legislature has approved Senate Joint Resolution 34, urging Congress to oppose H.R. 5034.
42 Free Market Public Policy Groups Coalition Letter
A Coalition Letter signed by 42 Free Market public policy organizations opposing H.R. 5034
America’s Alcohol Producers
In a joint statement
by the Beer Institute, Wine Institute, Wine America, Brewers
Association and Distilled Spirits Council of the United States asking
Congress to oppose H.R. 5034
Kentucky Distillers Association
Kentucky Bourbon Producers issue letter to Congress denouncing H.R. 5034 and describing how it would harm the bourbon industry.
Wine Institute/Wine America
Joint statement representing more than 6,000 U.S Wineries Opposing H.R. 5034
Oregon Winegrowers Association
Oregon Winegrowers Association Strongly Opposes H.R. 5034_
The American Wine Society
The Board of Directors of the largest and oldest American wine education organization opposes H.R. 5034
Brewers Association
Brewers Association, organization of over 1000 American Brewers, issues position statement opposing H.R. 5034 for its “lack of protection for the legitimate concerns of America’s smaller brewers.”
Distilled Spirits Council of the United States
Controversial State-Based Alcohol Regulation Bill Will Undermine Longstanding Framework of Alcohol Control
The California Wine Institute
Beer Wholesaler Proposal Promotes Discriminatory State Laws, Hurts Wineries, Breweries, Distilleries and Consumers
Wine America
Wine America H.R. 5034 Statement
Free The Grapes
Stop The Monopoly Power Grab
Family Winemakers of California
Family Winemakers of California Oppose H.R. 5034
Napa Valley Vintners
Urgent Challenges Coming Before Congress
Washington Wine Institute
WWI Opposes H.R. 5034
Family Wineries of Washington State
Family Wineries Strongly Opposes H.R. 5034
Illinois Wine Consumer Coalition
Illinois Wine Consumer Organization Opposes Anti-Wine Shipping Legislation
In Congress, Representatives Mike Thompson and George Radanovich have come out squarely opposed to H.R. 5034.
In light of Granholm, it is so interesting to see this bill come alive in the House. Based on my knowledge of constitutional law, much of the Court’s interpretation of issues relevant to the commerce clause (specifically things like state regulation of interstate business) has been pendent on the composition of the Court at the time of the decision. Throughout the last 100 or so years, the Commerce Clause has seen radically different interpretations contingent upon both the political composition of the Court and policy issues at the time. The 2010 Court composition, although facially different, is not so politically diverse from that of the 2005 Court that decided Granholm. It is unlikely, in my opinion, that the Court’s reading of the issues in Granholm would be distinctly different five years later.
That being said, IF HR 5034 does indeed pass into law, I am of the opinion that its likelihood of prolonged success as a law would be slim; I can certainly foresee a large suit brought in federal court (probably by wineries themselves) disputing the constitutionality of 5034’s passage into law and I can just as easily foresee a similarly-structured Granholm Court denying its consittutionality as per the commerce clause.
Want to fight H.R. 5034?
Do this:
1. Google: “Tom Wark”, then on the right, you’ll see a paid link to www[dot]hr5034[dot]org – click on it. (Don’t wast your time reading their propaganda).
2. Repeat several times a day
3. Tell your friends to do likewise.
For every time you click on that paid Google ad, you waste 5 cents of the National Beer Wholesalers Association’s money.
Lindsey,
Upon what basis do you see a court overturning H.R. 5034?
Tom,
The text of the Commerce Clause (“[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;”) is exceptionally broad and, in today’s highly advanced society, grants the United States Congress an almost unlimited power and is perhaps the greatest amount of authority under any other article (or clause) or amendment of the Constitution. From a very liberal reading of the clause, one can arguably say that Congress can, essentially, regulate anything; in the 21st century, after all, what is not “commerce” in a society so contingent upon Internet interactions and transactions? Even the slightest, simplest item or sale is deemed commerce. From a historical perspective, the Clause has been the most widely interpreted portion of the Constitution.
Whereas the “purpose” of HR 5034 recognizes that alcoholic beverages are different from other consumer products — and whereas this is certainly true — the interstate shipment of said products still directly affects interstate commerce, regulation of such which is specifically enumerated in congressional powers and not those of the state. “Congress has introduced H.R. 5034, the CARE Act, to address . . . concerns by clarifying that states have the primary authority to regulate alcohol.” Essentially, this bill creates a state-regulatory alcoholic beverage system of a product that directly affects interstate commerce (in terms of interstate winery sales) that no where in the Constitution grants states the ability to do so. (If, however, this bill were a federally-regulated alcoholic beverage system, that would be an entirely different analysis.)
I also find the arguments in support of this bill (i.e. that alcohol is a “different” consumer product and thus warranted under state regulation and that states need to control underage drinking/crime) unconvincing. Michigan and New York attempted to argue this in Granholm and successively failed. If this is the purported reasoning as per Congress’ passage of HR 5034, I do not feel a slightly more leftist post-Granholm Court would be swayed. (Given the composition is not extremely offset by the membership of Justice Kagan.)
Lindsey,
I don’t think 5034 creates any specific state regulatory system. Rather, it has congress relinquishing its right to regulate interstate commerce in the area of alcohol sales and distribution.
I don’t see how 5034 is unconstitutional. Just really bad public policy.
Sorry, I should have been a little clearer. You are correct that HR 5034 does not create a specific state regulatory system; it gives states the authority to create one (or several). I think my biggest problem with HR 5034 is that it allows states to create a regulatory scheme that substantially affects interstate commerce, which under a strict interpretation of the Constitution, I do not find to be constitutional. Prior SCOTUS opinions (especially in the latter years — i.e. Gonzales v. Raich and compare to United States v. Lopez) have supported this. I recognize that it would be a federal statute and that it would also be one that comes with prior history (i.e. 21st Amendment), but I do not see a policy difference in states’ interest in the regulation of alcoholic beverage versus states’ interest in the regulation of illegal drugs (as in Gonzales v. Raich).
And yes, definitely bad policy.
Thank you for this post, we have been active on this issue and feel strongly. Recently interviewed by CNN at our winery, clip is here for your reference:
http://boxwoodwinery.blogspot.com/2010/07/boxwood-on-cnn-broadcast-clip.html
I finally got this back from my congressional rep:
Dear Mr. xxx:
Thank you for contacting me about H.R. 5034, the Comprehensive Alcohol Regulatory Effectiveness (CARE) Act introduced by Representative Bill Delahunt [D-MA-10] on April 15, 2010. I appreciate you taking the time to share your concerns with me.
H.R. 5034 seeks to ensure that each state has the authority to control the sale of alcohol. It prohibits unjustified discrimination against out of state producers in favor of in state producers. The CARE Act reinforces the intent of the 21st Amendment while allowing for individuals to challenge the constitutionality of state regulations.
Forty state attorneys general recently wrote to Congress asking for legislation to end the erosion of state alcohol laws. In response, I have joined as a co-sponsor of H.R. 5034. It is important to remember that this bill does not place federal regulations on alcohol; by contrast, it places more authority in the states.
Again, thank you for sharing your concerns, and I hope you will find this information helpful. Please do not hesitate to contact us with any other concerns or questions you may have. You can reach us by phone at (202) 225-2676, or by e-mail through our website at http://jordan.house.gov.
Sincerely,
Jim Jordan
Member of Congress
———————–
My response:
Mr. Jordan –
Only took you a few months to get back to me, not bad Mr. Jordan! That makes you only 90% terrible.
Unfortunately, your asinine response to my inquiry reflects very poorly on your (or more accurately your unpaid intern’s) intelligence and respect for your constitutency.. that satisfies the other 10% with a lot of terribleness to spare.
It would behoove you to do more research as to the effects of HR 5034 instead of blindly following the lead of AGs. Although your campaign is probably backed by alcohol wholesalers, so I’m asking basically for a wall to knock itself over.
So, Mr or Miss unpaid intern who is reading this, perhaps you’re interested, so I’ll continue even though I’m wasting my time. As a currently unemployed J.D. who just took the bar, I have a lot of time on my hands.
I don’t know how familiar you are with the Dormant Commerce Clause, its application in the Granholm case, and its mechanics, but your statement that HR 5034 “prohibits unjustified discrimination” against out of state commerce is inherently dishonest and misleading. What you don’t state is that the required justification is minimal; anything basically will pass muster.
Furthermore, you state that HR 5034 will “end the erosion of state alcohol laws.” This is also ridiculous. If you aren’t aware, laws which are unconstitutional can and should be challenged in a court of law. HR 5034 would bar court challenges of state alcohol laws, even if they violate the Dormant Commerce Clause of the Constitution (which rules state discrimination against out of state commerce as per se invalid unless the law is necessary to achieve a legitimate health or safety objective and there are no reasonable alternative means), only if there is some token justification stated.
This legislation would allow states, such as Ohio, to deny Ohioans the right to purchase wine and other spirits from out of state purveyors. It is purely discriminatory. Some have stated that such laws prohibiting the shipping of wine to consumers are necessary to prevent the consumption of alcohol by minors. This is obviously a ridiculous argument. No kids trying to get drunk order booze online, let alone direct from wineries. The less restrictive alternative means to achieve this end are innumerable.
Here are numerous arguments against HR 5034
http://fermentation.typepad.com/fermentation/2010/08/halting-the-momentum-for-hr-5034.html
Here is another piece pointing out the hypocrisy of the “erosion-prevention” argument as it is proffered by alcohol wholesalers
http://fermentation.typepad.com/fermentation/2010/08/alcohol-wholesalers-are-responsible-for-wine-shipping-lawsuits.html
Advocates of free market principles oppose this legislation
http://fermentation.typepad.com/fermentation/2010/07/free-market-advocates-stand-up-for-free-trade-in-wine.html
Another piece by the Fermentation Blog eviscerating the lies and misinformation put forth on the HR 5034 website
http://fermentation.typepad.com/fermentation/2010/07/with-so-much-at-stake-for-americas-alcohol-wholesalers-and-their-protected-monopoly-status-that-props-up-unearned-profits-it.html
More information is available through basic google searching, and on http://www.freethegrapes.org/
I hope you, Johnny or Jane Intern, take some time to peruse these links and read about actually what is happening beside this bill, and go forth to report your findings to Mr. Jordan. Maybe if i had $10K for his campaign he would listen to me, and I would still be able to order fine artisanal wine produced out of state. If this goes through, wineries in Ohio (of which there are many if you didn’t know), and all over the country will be crushed by the inability to move their product across state lines, in direct contravention of the purpose of the Dormant Commerce Clause. And for what? To protect the monopoly of Alcohol wholesalers.
Thanks for your time,
Nick xxxxxxxxxxxxx, J.D.
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