NY Wine - Release: 4-11-2002

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Small Wineries & Wine Consumers Ask Federal Court To End Direct Sales Ban

WEB RELEASE: April 11, 2002
CONTACT:
John Kramer
(703) 682-9320
[Economic Liberty]    


Washington, D.C.-On Wednesday, April 17, 2002, at 9 a.m., a federal court in Manhattan will hear arguments in a case with nationwide ramifications for interstate commerce and Internet free speech. The hearing follows two recent victories in North Carolina and Virginia where federal courts declared bans on direct shipments of wine across state lines to be unconstitutional.

Small wineries from Virginia and California as well as wine consumers from New York State represented by the Institute for Justice seek the repeal of New York’s ban on the direct shipment of out-of-state wines to consumers. (New York, like 26 other states, requires out-of-state wineries to ship through a wholesaler to reach consumers within its borders while no such restriction applies to wineries within New York State.) The plaintiffs also want the court to strike down related restrictions on online advertising of wine sales.

U.S. District Court Judge Richard Berman will preside over arguments at the U.S. Courthouse in New York City at 40 Center Street, Courtroom 706, 7th Floor. The proceedings are open to the public and to the media.

In Swedenburg v. Kelly, the Institute for Justice argues that the direct shipping ban violates the Commerce Clause and the Privileges and Immunities Clause of the U.S. Constitution, which forbid protectionist trade barriers. The lawsuit further argues that a related ban on advertising of wine sales across state lines violates the First Amendment. Four large liquor wholesalers have intervened in the case to defend the ban.

"New York’s ban is naked economic protectionism; wholesalers are using government power to keep out competition," said Steve Simpson, an Institute for Justice attorney. "Wholesalers won’t carry most small wineries so shipping directly to consumers is the only way for small wineries to do business with consumers who want their wine."

Previously, the State and wholesalers urged the Court to dismiss the lawsuit, but the Court entirely rejected their arguments. Allowing the case to move forward, Judge Berman observed, "Technological advancements facilitate—as never before—the commerce between and among states." He found that laws that promote "mere economic protectionism" would violate the federal constitution.

"We welcome the chance to prove our case," declared Clint Bolick, vice president for the Institute for Justice. "We will demonstrate that the ban on direct wine shipments benefits powerful special interest groups to the detriment of consumers in New York and across America."

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