The case is Wine Country Gift Baskets vs. Steen. It’s a follow-up to the landmark Granholm vs. Heald, which decided that states could not discriminate against producers of wine. That is, if a state allowed in-state wineries to ship directly to consumers, the state could not prohibit out-of-state wineries from shipping directly to consumers.
Wine Country, which is based largely on Granholm, asserts that states can’t discriminate against retailers of alcoholic beverages and must allow out-of-state retailers equal access to in-state markets. If the courts buy that argument, it will be a dramatic expansion of previous interpretations of the Commerce Clause — and, it’s fair to say, a big boon to wine drinkers in constricted markets like, for example, Kentucky.
As the case sits now, the Fifth Circuit Court of Appeals has decided that it is not discriminatory for Texas to require all alcoholic beverage retailers — whether in-state or out-of-state — to be licensed by the state and to buy their merchandise from Texas-licensed wholesalers. The decision did not question the “unquestionably legitimate” three-tiered distribution system.
According to a press release by interested bystander the Specialty Wine Retailers:
If this view is upheld, millions of wine consumers across the country will fall victim to protectionist state laws and hundreds of thousands of wine retailers will see their protection from state based discrimination promised by the Commerce Clause of the Constitution stripped from them.
Not to be an old poo or anything, but the status quo is that retailers can’t, generally, sell and ship across state lines. Upholding that status quo will not strip anyone of anything. It will merely perpetuate a system that decreases consumer choice.
The plaintiffs — “a group of out-of-state wine retailers and Texas wine consumers” – are seeking a reversal of the Fifth District’s ruling. They contend that the permissible goals (under the Commerce Clause) of state alcohol regulation — the promotion of temperance, collection of taxes, and establishment of an orderly market — can be accomplished through less burdensome means.
They may be right about that, but if I were betting I’d bet that they’re going to get creamed.
Keep in mind, however, that great fortunes have been amassed betting the opposite of whatever I think is likely to happen.