The U.S. Supreme Court yesterday agreed to hear a case brought by a Middleburg winery that could determine whether consumers can buy wine directly from an out-of-state supplier.
The issue has energized small wineries in Virginia and elsewhere that say state laws banning such shipments discriminate against them and deprive consumers of choice.
The court will examine laws in Michigan and New York that ban out-of-state vineyards from selling directly to customers by phone, catalogue or the Internet but allow such sales by in-state wineries. Overall, about half of all states forbid wine shipments directly to consumers across state lines, according to Free the Grapes, a group fighting for the repeal of such legislation.
"These cases are about economic survival for our nation's small family-owned wineries," said Tracy Genesen, legal director for the Coalition for Free Trade, a nonprofit organization also seeking repeal of the bans.
States that prohibit out-of-state sales directly to consumers argue that they are within their rights because the 21st Amendment to the Constitution allows them to regulate the sale of alcohol within their borders. They say requiring wine to be sold through distributors and retailers helps prevent sales to minors and aids tax enforcement.
But Kenneth Starr, counsel to the Coalition for Free Trade, said in a conference call with reporters that state bans on direct wine sales hinder interstate commerce in violation of the Constitution.
"Is that really what the 21st Amendment was intended to permit? We don't think so," Starr said.
A patchwork of laws and regulations govern where out-of-state vintners can sell their products. Maryland, for instance, has made it a felony for wine to be shipped from other states directly to consumers. The District allows direct sales to consumers in limited quantities. In March 2002, a U.S. District Court judge struck down Virginia's ban.
The U.S. Court of Appeals for the 2nd Circuit upheld in February the New York ban, under which in-state wineries can ship directly to New York consumers but out-of-state wineries must establish a "physical presence" in New York before being allowed to do so.
The New York suit was brought by Juanita Swedenburg, who runs the Swedenburg Winery in Middleburg. She has called the state's ban on the direct shipment of alcohol an affront to the founding fathers and has said it undermined her business.
The Michigan case, meanwhile, stems from a 6th Circuit U.S. Court of Appeals ruling in August that the state's prohibition of direct, interstate shipments was unconstitutional, overturning a lower court ruling.
In Virginia, the country's fifth-largest producer of wine, vintners are eager for the repeal of such bans. Lewis Parker, vice president of the Virginia Wineries Association, said there was no reason to prohibit out-of-state vineyards to sell their product directly while allowing such sales by in-state wineries.
"It is a dichotomy that is without justification," he said.
Parker, owner of Willowcroft Farm Vineyards southwest of Leesburg, said it was "preposterous" for defenders of such bans to suggest that their repeal would give minors wide access to wine sold online or by telephone. The purchase of wine by minors has not been an issue in states that permit out-of-state sales directly to consumers, he said.
The Supreme Court is expected to hear arguments in the case in December.