In a case with significant implications for e-commerce, the Supreme Court today ruled that states cannot discriminate against out-of-state wine sellers.
Internet-related quotes in the opinion:
Technological improvements, in particular the ability of wineries to sell wine over the Internet, have helped make direct shipments an attractive sales channel.
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Minors, the States argue, have easy access to credit cards and the Internet and are likely to take advantage of direct wine shipments as a means of obtaining alcohol illegally. The States provide little evidence that the purchase of wine over the Internet by minors is a problem. Indeed, there is some evidence to the contrary.
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Third, direct shipping is an imperfect avenue of obtaining alcohol for minors who, in the words of the past president of the National Conference of State Liquor Administrators, “ ‘want instant gratification.’ ” Id., at 33, and n. 137 (explaining why minors rarely buy alcohol via the mail or the Internet).
Here is the Bloomberg story summarizing the decision:
Wine-Shipping Limits Overturned by U.S. High Court
May 16 (Bloomberg) -- The U.S. Supreme Court ruled that states can't discriminate in favor of their own wineries, overturning laws that barred out-of-state winemakers from shipping directly to customers in Michigan and New York.
The justices, voting 5-4, today said the traditional state authority over alcohol sales must yield to the constitutional requirements that states not engage in protectionism.
``If a state chooses to allow direct shipment of wine, it must do so on evenhanded terms,'' Justice Anthony M. Kennedy wrote for the court in Washington.
The ruling may invalidate laws in as many as 24 states imposing similar restrictions, typically by requiring out-of-state producers to ship their wines through wholesale distributors. It's a defeat for wholesalers, who argued in favor of the measures.
Chief Justice William Rehnquist and Justices John Paul Stevens, Sandra Day O'Connor and Clarence Thomas dissented.
Customers and wineries challenged the laws, saying they stifled legitimate sales at a time when the Internet is making it easier to order other types of products directly from the producer.
New York and Michigan officials argued that requiring wine to be sold through distributors and retailers aids tax enforcement and helps prevent sales to minors.
The U.S. wine market totaled $21.6 billion in 2003, with 627 million gallons shipped from all sources, according to the Wine Institute, a San Francisco-based association of California wineries. More than 3,000 wineries do business in the U.S., twice as many as 30 years ago.
The cases are Granholm v. Heald, 03-1116, Michigan Beer & Wine Wholesalers v. Heald, 03-1120, and Swedenburg v. Kelly, 03- 1274.