Court strikes down wine shipping ban Justices say states cannot bar direct purchases only from out-of-state vineyards

WASHINGTON – Wine lovers may buy directly from out-of-state vineyards, the Supreme Court ruled Monday, striking down laws banning a practice that has flourished because of the Internet and growing popularity of winery tours.

The 5-4 decision overturns laws in New York and Michigan, which supporters said were aimed at protecting local wineries and limiting underage drinkers from purchasing wine without showing proof of age. In all, 24 states, including Maine, have laws barring interstate shipments.

The court said the state bans are discriminatory and anticompetitive.

“States have broad power to regulate liquor,” Justice Anthony Kennedy wrote for the majority. “This power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers.”

“If a state chooses to allow direct shipments of wine, it must do so on evenhanded terms,” he wrote in an opinion joined by Justices Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

The ruling means that legislatures in the 24 states barring out-of-state shipments will have to review their laws to make sure in-state and out-of-state wineries are treated equally. As a result, states could choose to allow wineries to sell to consumers directly, but could also bar all wineries from doing so.

The wine industry is booming, with an estimated $21.6 billion in sales and tourists flocking to wineries for tastings and tours. The recent hit movie “Sideways” took a lighthearted look at California’s love affair with the grape.

While wineries have proliferated, there also has been consolidation. Smaller wineries say they can’t compete with huge companies unless they can sell directly to customers over the Internet or by allowing visitors to their wineries to ship bottles home.

In Maine, state law now prohibits all wine shipments to people’s homes – whether they are from in-state or out-of-state wineries. Therefore, the court ruling will have no effect in Maine, according to Chuck Dow of the Attorney General’s Office.

But Kathe Bartlett of Bartlett Maine Estate Winery in Gouldsboro hopes it will help the state’s wineries. She said she routinely gets inquiries from out-of-staters wanting to order wine, but has to turn them down because she doesn’t want to deal with the hodgepodge of laws that vary from state to state.

“This could be a wonderful things for everybody in this business,” she said.

The Supreme Court case centered on the 21st Amendment, which ended Prohibition in 1933 and granted states authority to regulate alcohol sales. Nearly half the states subsequently passed laws requiring outside wineries to sell their products through licensed wholesalers within the state, allowing state governments to collect millions in alcohol taxes.

But the Constitution also prohibits states from passing laws that discriminate against out-of-state businesses. That led to a challenge to the Michigan and New York laws.

In a dissent, Justice Clarence Thomas argued the ruling needlessly overturns long-established regulations aimed partly at protecting minors. State regulators under the 21st Amendment have clear authority to regulate alcohol as they see fit, he wrote.

“The court does this nation no service by ignoring the textual commands of the Constitution and acts of Congress,” Thomas wrote. He was joined by Chief Justice William H. Rehnquist and Justices Sandra Day O’Connor and John Paul Stevens.

While the ruling only involves wine sales, industry groups expect that it will soon apply to beer and other alcoholic beverages currently regulated through state-licensed wholesalers and retailers.

Wine lovers immediately cheered the ruling.

“This is the best day for wine lovers since the invention of the corkscrew,” said Clint Bolick, counsel for the Institute for Justice, which represented local wineries in the dispute. “It demonstrates that in the era of the Internet, the court will vindicate the principles of free trade that made this country great.”

Juanita Swedenburg, the Middleburg, Va., vintner who sued to overturn New York’s laws, called the ruling “a boon for America’s wine-loving consumers who like to have various wines from throughout the nation.”

But Nida Samona, chairwoman of the Michigan Liquor Control Commission, said the decision was a setback for Michigan’s efforts to battle underage drinking. She said her commission will urge lawmakers to bar direct shipments for both local and out-of-state wineries.