Supreme Court will hear interstate wine cases
The U.S. Supreme Court has agreed to rule on appeals from New York and Michigan on the issue of whether states can prevent out-of-state wineries from shipping directly to consumers.
The high court granted certiorari to two Michigan cases, “Granholm v. Heald” (No. 03-1116) and “Michigan Beer and Wine Wholesalers Association v. Heald” (No. 03-1120), that will be consolidated for a single argument for the court to hear this fall.
Eleanor Heald, a wine critic from Troy, Mich., and her husband, Ray, sued in federal court to challenge a Michigan state statute that kept them from ordering wine samples from vineyards outside of Michigan. A U.S. court of appeals ruled in favor of the Healds and voided Michigan’s law on grounds that it discriminated against out-of-state producers. Michigan subsequently appealed to the Supreme Court.
In New York, a U.S. appeals court rejected a suit by David Lucas, a California winemaker, against New York’s ban on shipping California wine into New York. The court told the winemaker he could either sell his wine through a licensed New York wholesaler, or open his own distribution office in the state.
That case was appealed by the Institute for Justice, a public-interest law firm, on behalf of Lucas; Juanita Swedenburg, a winemaker in Virginia, and three wine consumers in New York. It appears on the Supreme Court’s docket as “Swedenburg v. Kelly” (No. 03-1274).
A decision favoring state laws could allow states to erect “serious barriers to e-commerce in general,” said Clint Bolick, strategic litigation counsel for the Institute for Justice.
Direct sales from wineries account for $200 million out of $18 billion spent by consumers last year on wine. The National Conference of State Liquor Administrators estimates that states are losing millions of dollars in tax revenues when consumers buy interstate wine. Ohio and 35 other states have filed a brief supporting Michigan’s appeal to the Supreme Court.
The Federal Trade Commission determined in 2003 that consumers could save as much as 21 percent if they could buy wine over the Internet instead of from retail stores.