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Consumers and Wineries Sue Virginia Over Direct-Shipping Laws

Dana Nigro
Posted: December 22, 1999

Following in the footsteps of Indiana and Texas consumers, two Virginia wine lovers -- backed by the nonprofit Coalition for Free Trade -- are suing their home state to challenge the constitutionality of Virginia laws that prohibit adults from buying wine from out-of-state businesses.

For the first time in a case of this kind, the consumers -- Clint Bolick and Robin Heatwole -- are being joined by three wineries: Dry Comal Creek Winery of Texas, Oregon's Hood River Vineyards and Miura Vineyards in California. The plaintiffs argue that by preventing consumers from ordering the wineries' bottlings, Virginia is violating the commerce clause of the U.S. Constitution, which promotes free trade among the states and prevents them from enacting protective or discriminatory regulations.

"I just want the freedom to be able to do business that any other American business has," said Emmanuel Kemiji, founder of Miura, a small new winery that doesn't have a national distributor and relies on direct sales to customers who have tried its wines in restaurants. "That's why I decided to get involved. The future of my company depends on it."

The case, which was filed last month in U.S. District Court in Richmond, Va., is part of a broader effort by the San Francisco-based Coalition for Free Trade to ensure that consumers have the right to purchase wine from throughout the United States. The organization provides research support for consumer lawsuits trying to change state restrictions on direct shipments of alcohol. Earlier this year, the coalition helped three Texas consumers file a lawsuit, which is currently awaiting a judge's ruling.

Virginia law currently bans out-of-state businesses, such as wineries and retailers, from shipping alcoholic beverages directly to consumers; the statutes also prohibit residents from ordering alcohol for personal use from out-of-state businesses. Any violation is a misdemeanor. Virginia wineries, wine clubs and retailers, however, can ship directly to in-state residents.

The lawsuit, filed by attorney Matthew Hale of Hale & Hall of Williamsburg, Va., is trying to prevent the state from enforcing those laws. The director and commissioners of the Virginia Department of Alcoholic Beverage Control are named as defendants.

The suit argues that "the statutes' blanket prohibition against interstate direct shipments serves the illegitimate economic purpose of providing protection against interstate competition to distributors and wholesalers, retailers and farm wineries located in the Commonwealth."

In a recent Indiana case based on a similar argument, a group of consumers won a ruling determining that their state's ban on direct shipments is unconstitutional. In that case, U.S. District Judge Allen Sharp said that states cannot necessarily rely on the 21st Amendment -- which repealed Prohibition and gave states the right to control the transportation or importation of alcoholic beverages across their borders -- for defense of their shipping bans. Sharp agreed with recent lower court cases that have found that "temperance is the core purpose of the 21st Amendment," not the favoring of local liquor industries by erecting barriers to competition.

In light of the pending Texas and Virginia cases, the Coalition for Free Trade's general counsel, William Kinzler, was pleased with the Indiana consumer victory and the judge's "unequivocal" opinion. He added, "It's hard to say if it will have an effect on other cases, because I suspect [Indiana] will end up appealing, but it certainly doesn't hurt."

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To learn more about the issue of direct shipping, read our feature package The Wine Wars.

For recent news about other court cases:

  • Dec. 14, 1999
    Home-Delivery Victory in Indiana

  • Oct. 7, 1999
    Virginia Collector Let Off the Hook for Private Sale

  • Aug. 11, 1999
    Virginia Collector Arrested for Selling Bottle From Own Cellar

  • June 4, 1999
    Texas Narrowly Avoids Felony Bill on Interstate Wine Shipments

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