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US Wine: the Shipping News

We look at the state of play and the latest developments in the difficult world of interstate wine shipping.

By W. Blake Gray | Posted Saturday, 05-Sep-2020

Last year, the US Supreme Court ruled that states cannot discriminate against out-of-state wine and liquor shops. States cannot have laws that allow local stores, but not out-of-state stores, to ship wines to customers.

But the United States today is not really a country where the rule of law works anymore. As evidence, 17 states still have such laws on the books, according to the National Association of Wine Retailers – meaning that though residents should be able to order wine from any shop in the United States, they are limited to their local offerings.

Three of the largest such states – Illinois, Michigan and New York – have proposed legislation that would fix the situation. Usually, though, the only way to force states to follow federal law is by suing them, and that’s exactly what’s happening. Currently there are lawsuits against discriminatory wine shipping laws in nine states.

Because every state is different, here is a quick state-by-state guide to the current status of ordering wine and spirits from retail shops on the internet. Keep in mind that the US Supreme Court did NOT say last year in Tennessee Wine & Spirits Retailers Association v. Thomas that states must allow shipping by retailers; just that they must have the same rules for all stores, in-state and out.

The state of play

Alabama: No shipping, not even direct from wineries. What did you expect here?

Alaska: Order from anywhere!

Arizona: Out-of-state shipping allowed only by small wineries and distillers. In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet).

Arkansas: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet).

California: Order from anywhere! We like wine!

Colorado: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet).

Connecticut: Order from anywhere!

Delaware: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet).

District of Columbia: Order from anywhere!

Florida: Order from anywhere! Florida’s laws against out-of-state wineries shipping were ruled unconstitutional in a lawsuit in 2005. However, nobody thought to ask whether that ruling applied to out-of-state retailers until 2019. Florida’s Division of Alcoholic Beverages & Tobacco ruled that it did and was promptly sued by a local wholesaler that wanted to maintain a monopoly. The wholesaler lost in state court, which means Florida consumers won.

Georgia: Just last month the state passed HB879, allowing local stores and restaurants to deliver to residents. Local delivery is not the same as shipping, but we’ll see if Georgia decides to open up further. Right now, you can’t order wine or liquor to be shipped.

Hawaii: You can have wine shipped from a winery but not from a retailer, in-state or not.

Idaho: Order from anywhere! (BTW Idaho wines are pretty good.)

Illinois: Currently you can order from in-state stores but not out-of-state. There’s a lawsuit: Lebamoff Enterprises v. O’Connell. A district judge originally dismissed the lawsuit, but was set straight on the issue by the Seventh Circuit Court of Appeals. Now the case is back in the district court, where it seems Lebamoff – owners of the Cap n’ Cork chain of stores in Indiana – must prevail, based on the appeals court’s ruling. But, see Michigan (below). SB3830 would allow Illinois residents to order up to 12 cases a year from retailers; it awaits a committee hearing. If SB3830 passes, the lawsuit is likely moot.

Indiana (home of litigious Cap n’ Cork): Surprisingly, it has its own discriminatory rule against out-of-state retailers. And in a perfect plot twist, Chicago Wine Co has filed a lawsuit against Indiana. The suit is in the very early stages.

Iowa: Local shops can deliver but the delivery must be made by an employee of the licensee. Iowans can order wine directly from out-of-state wineries.

Kansas: Locals can order wine directly from wineries but not from retailers, in-state or out.

Kentucky: Allows in-state stores to deliver but not out-of-state. There’s a lawsuit filed by Tannins, an Indiana retailer. Briefs have been filed. It’s possible that the judge will save everyone a lot of time and money by issuing a summary judgment for Tannins, but don’t count on it because Kentucky is in the same Sixth Circuit for appeals as Michigan (see below). I feel sorry for the Kentucky federal district judge: there’s no way to ignore a more powerful higher court.

Louisiana: Order from anywhere! Laissez les bon temps rouler.

Maine: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet). Residents can order direct from wineries.

Maryland: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet). Residents can order direct from wineries.

Massachusetts: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet). Residents can order direct from wineries.

The battleground state

Michigan: The state that lost the landmark Granholm v Heald decision in 2005 that opened the country to direct shipping by wineries still has messed-up laws that might be back in the Supreme Court soon, but this time it’s a federal judge’s fault. Lebamoff (the Cap n’ Cork owners) sued the state just as it did Illinois, and the federal district judge in Michigan ruled in Lebamoff’s favor. But even after the 2019 Supreme Court ruling in the Tennessee case, the Sixth Circuit Court of Appeals went rogue and declared that Michigan’s discriminatory law IS constitutional. That ruling was appealed to the US Supreme Court, which might not want to take on another alcohol case so soon. But surely the seven justices who signed Joseph Alito’s ruling won’t like their verdict being tossed aside by a lower court. That’s not how US law is supposed to work! It’s more evidence that the rule of law doesn’t mean what it used to – a sobering thought. Michigan has bills in both its state House and state Senate to fix its laws, and could end the court case if one of them passes. More importantly for Ann Arbor and Detroit residents, the legislature could finally allow you to order wine from Cap n’ Cork.

Minnesota: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet). Residents can order direct from wineries.

Mississippi: Y’all want to do what, now? Order alcohol online? On the internet? That’s too dangerous. Please stick to safer internet activities in Mississippi, like watching porn or creating conspiracy theories.

Rain, snow, heat and gloom of night might not hinder deliveries, but state laws certainly do.


© Shutterstock
|
Rain, snow, heat and gloom of night might not hinder deliveries, but state laws certainly do.

Missouri: Missouri used to allow out-of-state retailers to ship, but changed its laws to allow only in-state shipping. Florida retailer Sarasota Wine Market sued and the federal district court dismissed the lawsuit, but Sarasota Wine appealed to the Eighth Circuit Court of Appeals. Since that appeal was filed, the Supreme Court made its ruling in Tennessee, which should mean that Sarasota Wine will win its appeal, but, see Michigan. Oral arguments at the Eighth Circuit are scheduled for Sept. 24.

Montana: Wine producers can ship to residents but not retailers, in or out of state.

Nebraska: Order from anywhere! Enjoy a nice bottle with some Cornhuskers footb… oops, sorry. Well, enjoy a nice bottle.

Nevada: Order from anywhere! We expect nothing less from the state conservatives go to party and then claim they were on a religious retreat.

New Hampshire: Order from anywhere!

New Jersey: The Garden State has some funny laws; for example, you are not legally allowed to pump your own gas at a gas station. New Jersey allows in-state retailers to ship but not out-of-state, which must be an irritation with all those great retail shops in New York. In fact, The Wine Cellarage, a shop in the Bronx, sued. The case is moving at the speed of a barista in a Newark Starbucks, so don’t count on change soon.

New York: One of the country’s biggest shippers of wine has a law discriminating against out-of-state retailers that survived a lawsuit before last year’s Supreme Court ruling. Hypocrites. But AB8899 would allow out-of-state retailers to ship to New Yorkers. It’s currently awaiting a committee hearing.

North Carolina: The state has a classic discriminatory law against out-of-state retailers. There’s a lawsuit, filed by Florida retailer B-21 Wines. The case is in the early stages.

North Dakota: Order from anywhere! Winter is cold enough already.

Ohio: State attorney general Dave Yost recently decided that out-of-state retailers shipping wines to Cleveland and Columbus is a problem. The state has a classic discriminatory shipping law, and Yost grandstanded on the issue that out-of-state retailers aren’t paying Ohio taxes. Of course there’s no legal way for them to do so. Yost sued four out-of-state retailers; meanwhile, other out-of-state retailers sued about the discriminatory law. The lawsuits were consolidated, so it’s very early stages on this one.

Oklahoma: Residents can order wine from producers, but until March they were unable to get delivery from any retailer, in-state or out. In March, the state liquor commission temporarily allowed alcohol delivery because of the pandemic. Not surprisingly, it’s a popular change and the legislature might make it permanent. Because it’s not yet a law, just an administrative ruling, it’s too soon to see how out-of-state stores will be treated. Even an administrative ruling can be challenged, but it’s not a large alcohol market so I wouldn’t expect a lawsuit right away.

Oregon: Order from anywhere! (Though you are surrounded by great wine already.)

Pennsylvania: The state owns all the liquor stores (though wine and beer can now be sold in some grocery stores). Residents can now order wines shipped to their homes from the state monopoly. Is there a lawsuit in this? Personally I doubt it, as the state can claim isn’t allowing any “stores” to ship, just its own monopoly. But a creative lawyer could file one. And it is a big market.

Rhode Island: Bad laws here. Residents can’t even order wine directly from producers, and while in-state stores are allowed to ship, out-of-state stores can’t, even though the state line is never more than about 25 meters away. But a lawsuit has been filed, so Rhode Islanders might eventually get a decent wine selection with their precious calamari instead of whatever bottom-shelf vodka the local shops have.

South Carolina: In-state retailers allowed to ship to residents, but not out-of-state. No current lawsuit (yet). Residents can order direct from wineries.

South Dakota: Wine producers can ship but not retailers, in or out of state.

Back to the drawing board

Tennessee: Tennessee’s attorney general recognized that the state’s discriminatory residency requirements for retail shop owners were unconstitutional. Last year’s Supreme Court case happened because in-state retailers who wanted an advantage sued the state, demanding that the laws be enforced. The state itself consistently did not want to enforce its own laws. With its liquor laws upended by the Supreme Court ruling, Tennessee needs to rewrite them. Currently it looks like in-state retailers can ship and out-of-state retailers cannot. This is not a Michigan situation, however, with a state that repeatedly refuses to accept the commerce clause of the US Constitution. I expect Tennessee, with its legislature’s hand forced, will write equitable new laws. You never know, though: attorneys general as a group are much better versed in constitutional law than state legislators. That said, the home of Jack Daniel’s would be an unusual place for politicians to make outrageous claims about the dangers of whiskey.

Texas: It’s an enormous market and typically pugnacious. Texas used to allow its own retailers to ship statewide. After being sued for the discriminatory practice, the state changed its laws during the lawsuit to allow retailers only to ship to residents in the county where the shop is. This allows Texas retailers to maintain little monopoly fiefdoms. Freedom is just for corporations in the Lone Star state.

Utah: Like Pennsylvania, Utah runs all of the state’s liquor stores. It’s a much smaller market and currently does not allow delivery, even by out-of-state wineries. Like Pennsylvania, it could liberalize its laws somewhat and might be able to get away with allowing only state stores to deliver.

Vermont: Wine producers can ship to residents but not retailers, in or out of state.

Virginia: Out-of-state retail shops can ship to Virginia residents; however, they are supposed to get a letter from whoever represents the brand in the state. Many shops don’t want to deal with this, which is why Virginia residents will not see as many potential options for ordering wine. (If you live close to DC, just go there; the selection and prices are better.)

Washington: One of the nation’s best wine-producing states has long had protectionist laws. The state ran its own liquor stores for decades until a privatization law passed in 2011. Currently it allows in-state stores to ship but not out-of-state stores. Washington lost a costly lawsuit to Costco 15 years ago that struck down a protectionist structure that prevented stores from buying directly from wineries. One would think a similar lawsuit might find the state willing to change its laws regarding out-of-state retailers, but such a lawsuit has not yet been filed.

West Virginia: Order from anywhere! Party in your cousins’ car. Not while driving. Not while driving!

Wisconsin: Wine producers can ship to residents but not retailers, in or out of state.

Wyoming: Order from anywhere! Rodeo cowboys need their Bourbon.

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