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House Overwhelmingly Passes Scarborough Bill

Dana Nigro
Posted: August 3, 1999

This afternoon, the House of Representatives voted 310 to 112 in favor of a bill that is ultimately expected to create difficulty for consumers who wish to buy wine and other alcoholic beverages via the Internet, phone or mail-order.

In the days leading up to their summer recess, House members tackled the controversial subject of direct shipments of alcohol, ultimately deciding to give states limited access to the federal courts to crack down on interstate shipments that violate state laws. Such legislation has been the focus of a heated battle throughout the year between winery groups and wholesaler organizations.

The 21st Amendment Enforcement Act, sponsored by Rep. Joe Scarborough, R-Fla., has been touted as a way to prevent minors from buying alcohol over the Internet. However, the bill (HR2031) does not contain any provisions specifically referring to sales to minors. Instead, the bill would put the power of the federal government behind state regulations on shipping alcoholic beverages, allowing state attorneys general to seek injunctions in federal court to stop out-of-state companies that violate those laws. "Bootleggers will no longer be able to simply thumb their noses at state laws -- today's vote made that very clear," said Scarborough.

Winery groups, which have been trying to increase the number of states that permit direct shipping, oppose the legislation. "It's a bad bill," said Rep. Mike Thompson, D-Calif., who has been fighting on behalf of the wineries. "Not only does it make it more difficult for small wineries that are trying to get their product to market, it's going to make it more difficult for consumers to purchase premium wines that aren't available in their home areas."

The Scarborough bill has been backed by wine, beer and liquor wholesalers, whose business may be threatened by phone, mail-order or Internet sales of alcoholic beverages. Wholesaler organizations have lobbied on the national and state levels to enact new laws banning interstate direct shipments.

"This is the third time that the Congress has in one form or another voted strongly to support this," said David Dickerson, vice president of public affairs and communications for the Wine and Spirits Wholesalers of America. Prior to today's vote by the full House, the House Judiciary Committee approved the Scarborough bill, while the Senate passed similar legislation in May as an amendment to a juvenile-justice bill.

"It passed the House by an overwhelming margin, after vigorous debate with all the issues presented, so we feel like it was a very educated vote," Dickerson said. "We feel like the representatives thoroughly understand its content and ramifications and voted on the merits of the bill." He pointed out that the bill in no way restricts legal interstate or intrastate sales and shipments of alcohol over the Internet or through other methods.

While disappointed that the Scarborough bill passed, supporters of direct shipping are finding consolation in changes made to the bill. The House Judiciary Committee added amendments to make obtaining a federal injunction more difficult. On the House floor, another amendment was added that stipulates that nothing in the bill can be construed to violate the Commerce Clause in the Constitution. This means that federal courts can't enforce state laws that discriminate against out-of-state sellers solely for the economic protection of in-state businesses. "In order to enter into litigation, you're going to have to show the merits of the law and that it doesn't violate the commerce clause," said Steve Gross, state relations director for the San Francisco-based Wine Institute, a trade organization.

Nonetheless, Gross fears that passage of the bill could encourage more states to pass tougher laws on direct shipping. "What concerns me most about the federal legislation is that it gives the imprint that something is wrong with direct shipping," he said. "This is why the wholesalers went after it, and now they have the ammunition to step up their campaigns at the state level."

The bill is still several steps away from becoming law, and no further action is expected to be taken until after Labor Day, when Congress returns from its summer recess. The legislation could move ahead as either a stand-alone bill or an amendment to the juvenile-justice bill approved by Congress earlier this year.

In the first case, a similar bill -- such as S577, introduced by Sen. Orrin Hatch, R-Utah, earlier this year -- would have to pass the Senate. Any differences in wording between the two bills would have to be ironed out in conference committee; the final version would then have to be approved again by the House and Senate before going on to President Clinton.

In the second case, the juvenile-justice bill has already reached the conference-committee stage. The Senate version includes provisions similar to Scarborough's bill in an amendment sponsored by Rep. Robert Byrd, D-W.Va., but the House did not include any direct-shipping restrictions. Passage of the Scarborough bill makes it more likely that the conference committee will include the Byrd amendment in the final version of the juvenile-justice legislation.

"It's good we did as much as we could on the House floor to mitigate some of the effects on small businesses," said Tricia Geringer, a spokeswoman for Rep. George Radanovich, R-Calif., who also fought the Scarborough bill. "I don't know how many friendly faces this issue will find on the conference committee."

To find out how your representative voted on HR2031, click here.

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

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