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Law Firm Petitions Supreme Court to Review NY Wine Shipment Ruling

The Institute for Justice filed a petition with the U.S. Supreme Court yesterday asking it to review a recent 2nd U.S. Circuit Court of Appeals ruling upholding a New York state law banning out-of-state wineries from shipping wine directly to New York consumers.

The decision, made by the appeals court in February, overturned a 2002 ruling by a lower court judge who said the ban interfered with interstate commerce. The appeals court ruled that the state's ban on direct shipment is permitted by the Constitution's 21st Amendment, which ended Prohibition and granted authority to the states to regulate the sale of alcoholic beverages.

The case originally was brought by Swedenburg Estate Vineyards in Middleburg, VA, a small winery that produces about 2,500 cases annually, including via online orders. The institute, a Washington-based public-interest law firm, brought the case on behalf of Swedenberg and another small vineyard in California and several New York consumers.

“This case presents a clash between economic protectionism and consumer freedom,” said Clint Bolick, vice president of the institute and lead counsel in the New York case.

The institute's clients say the ban violates the Commerce Clause and the Privileges and Immunities Clause of the Constitution, which protect freedom of commerce and enterprise.

Appeals courts have split on the issue. Circuit courts in North Carolina, Texas and Michigan struck down direct shipment bans while an appeals court in Indiana joined with the New York court in upholding them. An appeals court in Florida overturned a district court decision upholding a ban and remanded the case for further consideration.

Because the New York ruling conflicts with the decision striking down Michigan's direct wine shipment ban, which also is pending before the Supreme Court, the odds that the court will review one or both cases are higher than usual, according to the institute.

Currently, 24 states ban direct interstate wine shipments while 26 allow them. The latter number has grown in recent years due to lawsuits and legislative change. This year, New York Gov. George Pataki has urged legislation to allow direct interstate shipping. The effort has attracted bipartisan support. Several states, including New York, permit direct shipping by in-state wineries but forbid it by wineries in other states.

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