Judge Strikes Down NY Wine Law

A U.S. District Court judge ruled yesterday that a New York state law prohibiting out-of-state wineries from shipping to New York consumers is unconstitutional.

The New York law, similar to laws in 29 other states, requires that imported liquors be distributed only through licensed wholesalers and retailers to ensure accountability and responsibility and that taxes are paid. But Judge Richard Berman said the law interferes with interstate commerce.

“That the New York direct shipping ban on out-of-state wine burdens interstate commerce and is discriminatory on its face is clear from the very wording, let alone the impact of the exemptions favoring in-state wineries,” he said, adding that the law “constitutes a cut and dry example of direct discrimination against interstate commerce.”

His decision resulted from a lawsuit in February 2000 by Juanita Swedenburg of Swedenburg Estate Vineyards, Middleburg, VA; David Lucas of Lucas Winery, Lodi, CA; and New York residents Patrick Fitzgerald, Cortes DeRussy and Robin Brooks-Rigolosi against New York's State Liquor Authority. The Coalition for Free Trade and attorney Clint Bolick of the Washington-based Institute for Justice coordinated the plaintiffs' case.

The judge also found the law discriminatory because New York lets in-state wineries ship directly to New York consumers, and rejected arguments by the state that the law is needed to regulate liquor sales and keep alcohol away from minors.

A hearing deciding what remedy the court will order is set for Dec. 5. Berman could end the interstate shipping ban, or he could bar intra-state shipping to level the playing field, insiders said. He also could throw out the state's three-tier system for selling alcoholic beverages, dating from the end of Prohibition, which says producers lawfully may sell only to wholesalers, who sell to retailers who, in turn, sell to consumers.

The decision is similar to rulings this year in Florida, North Carolina and Virginia. It also follows a favorable ruling for direct wine sellers Nov. 4. In that case, the 11th Circuit Court of Appeals ruled that Florida must show why its felony prohibition on interstate direct-to-consumer wine shipments is required for it to collect taxes from out-of-state wineries when these same laws do not apply to in-state wineries.

In addition, a Justice Department appropriations bill, signed into law Nov. 2 by President Bush, permits people physically visiting an out-of-state winery to have wine shipped to them at home.

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