Direct shipment of wine

[mattdavis11]

This is going to keep being a continually growing PIMA. (Pain in my a**) What are your thoughts?

1 month 1 day until I really have to get back to work. Link here

http://www.texassafetynetwork.org/news/more/121004.php

Article below.


US Supreme Court Hears Important Direct Shipment Case

A State’s Ability to Regulate Alcohol Debated in Supreme Court

Past issues of the TSN Network News have consistently highlighted the Texas’ safeguards on alcoholic beverage distribution and consumption, which state regulators and law enforcement enforce by regulating Texas’ three-tier alcoholic beverage system. Texas’ three-tier system is essential to preventing underage drinking, collecting state and local taxes from alcohol sales, and ensuring other alcohol safeguards are protected.

Direct shipment refers to the ability of any company—winery, Internet company, retailer—to sell alcohol directly to a consumer, typically through the Internet or phone catalogue purchases. Currently, 24 states outlaw direct shipment from out-of-state sources, and related lawsuits have been brought in many district and circuit courts throughout the country, with varied rulings. In Texas, the Fifth Circuit Court of Appeals upheld a lower court’s ruling that our ban against out-of-state Internet sales of wine was illegal because it prohibited free trade between states, leaving Texas without any rules or regulations associated with Internet sales of wine.

The nationwide build-up surrounding direct shipment has ultimately led to review by the U.S. Supreme Court, which heard oral arguments on the issue on Tuesday, December 7. Essentially, the case pits two legal arguments against each other: the right of individual states to regulate alcohol as outlined by the 21st Amendment versus the dormant “commerce clause,” which prohibits states from adopting any legislation that would discriminate against products from another state. The Supreme Court’s decision in this case is not only expected to affect alcohol sales, but could also affect any product that states regulate—cars, contacts, prescription drugs, and more—as the fundamental question of what level of safeguards an individual state can apply.

The Parties Involved in the Supreme Court Case

Juanita Swedenburg, a Virginia vintner in her 70s, sued the state of New York for forbidding her from shipping her wines directly to customers in that state. On similar grounds, a group of wine journalists, wine connoisseurs and a small vintner in California sued the state of Michigan. Both groups have brought their cases to the U.S. Supreme Court to argue that a state ban on Internet sales/direct shipment is a violation of the dormant Commerce Clause of the U.S. Constitution, which forbids states from adopting laws that discriminate against out-of-state businesses. Both Michigan and New York state authorities argue that their states’ ban on Internet sales/direct shipment from out-of-state vendors is legal, based on the state’s right to regulate alcohol granted to them under the 21st Amendment of the U.S. Constitution.

In addition to the 21st Amendment argument, New York and Michigan also argue that alcohol, unlike most other commodities, should continue to be regulated by the states, particularly to ensure that:

Minors do not use the Internet or catalogue sales to access alcohol; and,
State and local tax revenues from alcohol sales are collected.
These states argue that the three-tier system, which is used by almost every state in the country except those that rely on local government to distribute alcohol, is the best means for ensuring both of these safeguards are enforced.

Click here to learn more about the three-tier system on the TSN Web site.

Constitutional Conflict

The obvious conflict between the two constitutional elements must now be resolved by the Supreme Court justices, eight of whom participated in Tuesday’s oral arguments. Chief Justice William Rehnquist, absent for cancer treatment, is also expected to weigh in on final decision, which is expected in July 2005.

Observers expect the ruling to be one of the following:

Support the state’s rights to regulate alcohol and dismiss any challenges to that right;
Issue a narrow ruling that specifically overturns any state law that protects in-state wineries; or,
Issue a broad ruling that endorses a free interstate alcohol market, including not only wines, but beer and liquors as well, which would mean that anyone seeking to sell alcohol into another state could do so freely through the Internet or telephone catalogue sales. In the words of Justice Kennedy during the oral arguments, that would have a “sweeping effect.”

[concentric]

The sellers of wine normally require you to file some sort of age-statement, so I really don't see what the issue is, other than revenue generation for the states.

You guys in TX are missing out! I get wine shipped to my door.

[Neilk]

But I also heard that In-State shipments of wine are perfectly legal in those states, so the argument that it is to protect minors is BS. It's the distributors that they are trying to protect.

Why not levy a nation-wide mail order tax on alcohol that goes to the state where the alcohol is being shipped? That would solve the tax problem, but oh wait... the liquor distributors wouldn't approve of that either.

[Neilk]

Matt,

I see from your profile that you are a legislative aide, so I assume you work for a Texas legislator. Can you please tell us how much money your boss has received in contributions from local liquor distributors?

[mattdavis11]

Not only that Neil, the three teir system would soon come tumbling down, IMHO. TABC (Texas Alcohol and Beverage Commission) is up for sunset, meaning a bill has to pass to keep the agency alive.

[mattdavis11]

I don't, I work for a lobby firm. The money goes the opposite way. Some times the 2 x 4 does too. Eventually, they learn.

[john70t]

"The Supreme Court’s decision in this case is not only expected to affect alcohol sales, but could also affect any product that states regulate—cars, contacts, prescription drugs, and more—as the fundamental question of what level of safeguards an individual state can apply."

This will be an interesting case for states-rights, but even then I doubt it will be applied equally.

[Halm]

Procon, Which winery do you use? There is one in Gilroy that won't fill out the required paperwork for me.