Listing category: "Litigation"

What the Tennessee Wine & Spirits Ruling Means for DtC Wine Shipping

Supreme Court Rules Against Tennessee’s Discriminatory Residency Requirements After months of waiting by the beverage alcohol industry, the United States Supreme Court published its ruling in Tennessee Wine & Spirits Retailers Ass’n v. Thomas on June 26, 2019. The 7-2 opinion, written by Justice Samuel Alito, clearly and definitively struck down a rule in Tennessee […]

Supreme Court Hears Oral Arguments in Tennessee Residency Case

Ever since the U.S. Supreme Court agreed last fall to review Tennessee Wine & Spirits Retailers Association v. Blair (originally v. Byrd, but personnel adjustments in Tennessee have resulted in a name change), speculation on its implications has taken over the beverage alcohol industry. To be sure, any time the highest court hears a case, […]

A Year to Remember — 2016 Regulations in Review

For better or for worse, 2016 is nearing its end. So what better time to look back and review all that’s happened in beverage alcohol regulations than now? Twelve months ago, we predicted a calm year with limited change ahead. Today we know how foolhardy that prediction was. In 2016, no fewer than four states […]

New Guidance From West Virginia on Required Shipment Charts

West Virginia Direct Shipment Charts Wine Institute has received new guidance from the West Virginia Alcohol Beverage Control Administration (WVABCA) that will make it easier for members shipping wine into WV to comply with the law. WV statute has always mandated the inclusion of Blood Alcohol and Fetal Alcohol Syndrome Charts in each shipment of […]

TTB Takes Big Steps to Remove Burdens on Product Approval

The Tax and Trade Bureau (TTB) has been on a roll recently to reduce regulatory burdens for beverage alcohol suppliers. On September 23, they announced changes to COLAs Online, including a redesign to the appellation and formula sections, and the removal of the alcohol content, net contents, wine vintage, and fax number fields. These fixes […]

Trademark Issues on the Rise

The beverage alcohol industry has seen a growing number of lawsuits over the last few years. We’ve seen two general forms of these: class action lawsuits concerning product classification and brand trademark lawsuits between companies. These lawsuits are proving to be time consuming, expensive, and a real hangover for those involved.

Qui Tam Troubles Continue in Illinois

A new round of Qui Tam lawsuits regarding tax on shipping charges in Illinois has been filed against numerous wineries and wine retailers. For more information on tax on shipping in Illinois, please see our December blog post, which we’ve updated periodically with additional links and information in the “Resources” section, including a posting from […]

Will Massachusetts Lawmakers Finally Act?

In January of 2010, the United States Court of Appeals for the First Circuit affirmed the judgment of the District Court in the case of Family Winemakers of California v. Jenkins. This ruling struck down the 30,000 gallon capacity cap, which excluded 98% of domestic wines from shipment to Massachusetts. Although this represented a big […]

Sonoma County Updates, and a Cordial Invitation

Today, we would like to remind you of two things: one is a law that will affect our friends in Sonoma County this year, and the other is a cordial invitation to an industry event in the area on May 30th! Sonoma County has seen great growth over the past few years, especially in 2012. According […]

What to Look for in Wine Compliance in the Coming Year

As we like to do at the beginning of each year, we once again look into our crystal ball and offer you some informed prognostications as to what the world of wine direct shipping might have in store for the coming year. While we don’t see any negative trends impacting the compliance world in the […]

New Jersey Poised to Open Up For Direct Shipping

Late Monday night, in the final action of a marathon legislative session that closed out the year, the New Jersey Assembly passed S3172, a bill that, among other things, opens up the state for direct-to-consumer shipments. If signed by Governor Chris Christie as expected, it will allow wineries producing up to 250,000 gallons of wine […]

The Meaning of Silence

Last Monday the U.S. Supreme Court declined review of the 2010 Court of Appeals decision in Wine Country Gift Baskets.com v. Steen, a Texas case refusing to apply Granholm’s antidiscrimination principle to wine sales by out-of-state non-producing retailers. (Previous blog posts have referred to the case as the Texas Siesta Village suit, using its original […]

Glimmer of Hope in Challenging On-Site Requirements

On December 17th, the US Court of Appeals for the 3rd Circuit (Delaware, New Jersey and Pennsylvania) rendered its decision in Freeman v. Corzine (formerly known as Freeman v. Fischer and Freeman v. Governor of New Jersey). The case applies Granholm to several aspects of New Jersey law, which banned direct shipment by all wineries, […]

H.R. 5034 Update: Revision Reignites Debate, Important Hearing Set for Wednesday

When H.R. 5034 (also known as the Comprehensive Alcohol Regulatory Effectiveness, or “CARE” Act) was introduced on April 15, 2010, the opposition responded quickly and forcefully. Supplier organizations were united in their opposition to the bill, referring to it as the “wholesalers monopoly protection bill”. Even the California State Legislature issued a resolution, SJR 34, […]

Massachusetts Remains Elusive for Direct Shippers

On 1/14/10 the First Circuit Court of Appeals in Boston ruled in favor the plaintiff in the Massachusetts FWC v. Jenkins litigation. The ruling affirmed the lower court’s order that struck down the capacity caps and wholesaler exclusions which are included in the Massachusetts direct-to-consumer shipping statute and prevented over half of the wineries in […]

Comprehensive Alcohol Regulatory Effectiveness (CARE) Act of 2010 Introduced

As expected, the Congressional subcommittee hearing on Legal Issues Concerning State Alcohol Regulation has been followed by a House bill. H.R. 5034 was introduced yesterday by Representative Bill Delahunt (D-Mass.) with support from the National Beer Wholesalers Association (NBWA). The bill is also called the "CARE" (Comprehensive Alcohol Regulatory Effectiveness) Act of 2010, and Wine […]

Massachusetts will not appeal Family Winemakers decision

Massachusetts Attorney General Martha Coakley will not appeal a January Federal Appeals Court decision upholding an earlier District Court decision which overturned the 2005 direct shipping law.  In January, the 1st U.S. Circuit Court of Appeals upheld the 2008 district court ruling that found that the state law governing direct-to-consumer shipments by wineries was unconstitutional. […]

Possible Effects of Recent Congressional Hearing on Direct Shipping

You may have seen reports about a recent U.S. Congressional subcommittee hearing on “Legal Issues Concerning State Alcohol Regulation.” The hearing was important for anyone concerned about direct-to-consumer wine shipping since a primary question was whether federal courts should be stripped of their authority to strike down state alcohol laws that discriminate against out-of-state businesses—the […]

Notes on Wine Distribution v.32

The latest version of “Notes on Wine Distribution”, by R. Corbin Houchins, is now available. Release 32 includes updates on legislation, litigation and general discussions on available distribution channels for wine. This release includes substantial changes, including new sections on age and identity, facial neutrality, and logistical support services, as well as updates to state […]

Siesta's Over

On January 26th, the Fifth Circuit Court of Appeals ended the puzzling status of interstate retailing in Texas created by the lower court’s decision in Siesta Village Market. The district court had ruled that out-of-state retailers had a Commerce Clause right to sell wine to Texas consumers, but only wine that had been purchased from […]

High Fives in the First Circuit

Justified jubilation greeted the 14 January 2010 decision of the United States Court of Appeals for the First Circuit, which affirmed the federal district court decision of 19 November 2008 in Family Winemakers of California v. Jenkins, invalidating the Massachusetts “volume cap.” (see previous post “Huge win for wineries, but can I ship to Massachusetts […]

Huge win for wineries, but can I ship to Massachusetts now?

First Circuit affirms District Court decision On Thursday, January 14th, the United States Court of Appeals for the First Circuit affirmed the judgment of the District Court in the case of Family Winemakers of California v. Jenkins. The appellatte decision represents a major victory for wineries and may be the end of the case that […]

Up in the Air

On September 30, a federal district judge in a New Mexico suit brought by US Airways to free it from state regulation of beverage service ruled that the 21st Amendment prevents the federal government from preempting state regulation of alcoholic beverage service aboard federally regulated carriers. The decision leaves New Mexico regulators free to treat […]

Washington State Approval No Longer Required for Wine Labels

In an action supported by Washington Wine Institute, the Washington State Liquor Control Board adopted a new policy on wine label approval. Effective August 19, 2009, the WSLCB will accept the federal Certificate of Label Approval (COLA) as label approval for beer and wine to be sold in the state of Washington. Producers will no […]

Has the Price Posting Bunny Run Down?

For the fourth time in the same case, TFWS, Inc. v. Franchot, a federal Court of Appeals has told the state of Maryland and its wholesaler-package store cohort that their price posting system conflicts with the Sherman Act, the nation’s premier antitrust law. As a federal enactment, the Sherman Act preempts inconsistent state law, pursuant […]

Still Looking for Granholm’s Limits

Anyone hoping the intermediate appellate court reversed in Granholm had become pro-commerce would have been disappointed by the July 1st decision of the Second Circuit in Arnold’s Wines, Inc. v. Boyle. At issue was whether a state permitting its local retail licensees to ship directly to consumers might constitutionally deny out-of-state retail licensees equivalent access. […]

Release Thirty-One of "Notes on Wine Distribution"

R. Corbin Houchins’s latest “Notes on Wine Distribution” are now available. Release 31 includes updates on legislation, litigation and general discussions on available distribution channels for wine. In addition to country-wide topics such as “Direct Shipment by Retailers” and “A Limitation of Litigation”, distribution practices are also outlined on a state-by-state basis. Numerous states have […]

On-Site Requirements: Still Standing in the Heartland

Last August, the Seventh Circuit Court of Appeals in Baude v. Heath invalidated an Indiana statute that made most out-of-state wineries ineligible for the “direct wine seller’s permit,” which the law would have limited to in-state wineries and to wineries in the few states that do not grant them local wholesaling privileges. However, the opinion […]

When Will The Wine Industry Rebound?

Amidst lagging wine sales in 2008 and a sluggish economy, Silicon Valley Bank Wine Division founder Rob McMillan outlines critical issues facing the wine industry and growing economic and market trends in his “2009-2010 State of the Wine Industry” report. “Wine businesses across the board are being pushed to new limits in the current environment,” […]

Massachusetts Still Question Mark for 30K-Gallon Wineries

On January 16, 2009, the state filed its notice of appeal in the 2006 Granholm-based federal suit, Family Winemakers of California v. Jenkins. The District Court had entered judgment on December 18, 2008, enjoining enforcement of a statute that prevents direct shipment by 30,000-gallon-or-more wineries that sell through Massachusetts wholesalers (a category exclusively out-of-state), while […]

Michigan Levels Down on Wine Retailers

In just five legislative days, Michigan House Bill 6644 was introduced, edited, voted upon, and enrolled. In a disappointing turn of events, the Michigan Senate passed HB 6644, with substitutions, by a count of 36 Yeas and just 2 Nays on December 18, 2008. The bill then returned to the House for a final vote […]

Kentucky On-Site Requirement Invalidated, but Questions Remain

On December 24th, the US Court of Appeals for the Sixth Circuit affirmed, in the Cherry Hill case, the judgment of the district court, invalidating the on-site purchase requirement. The district court ruled, pursuant to the Supreme Court’s decision in Granholm v. Heald, 544 U.S. 460 (2005), that the in-person purchase requirement in portions of […]

Up and Running (So Far)

Happily for the plaintiffs, Judge Zobel’s final judgment in Family Winemakers of California v. Jenkins took the path that seemed most likely from the tone and content of her memorandum and order of 19 November 2008 and leveled up. The judgment entered 18 December 2008 orders the state “to permit wineries of all sizes to […]

Wine Distribution Notes – Release 30

Release 30 of Notes on Wine Distribution by R. Corbin Houchins is now available for viewing or downloading. The Notes provide thoughtful insight on the state of direct shipping rules and valuable information on current litigation and legislation for each of the United States (plus DC), with changes from the preceding release indicated by highlighted […]

An Unfortunate Direct Shipping License Clarification in Texas

Wineries applying for a Texas Direct Wine Shipper’s Permit or renewing their existing permit must now pay a surcharge of $160 in addition to the $75 annual permit fee. Currently the Direct Shipper’s permit is renewed annually. However, beginning January 1, 2009 all Direct Shipper licenses will be valid for two years. Applicants will have […]

A Battle Well-Picked and Well-Fought

David does best when he can choose the right Goliath. The Massachusetts volume cap on direct shipment, invalidated last week in Family Winemakers of Calif. v. Jenkins, was a good choice to challenge for at least three reasons. First, there was gold in the legislative record: a sponsor described the bill as “giving an inherent […]

Family Winemakers Court Win is Big for the Industry

On November 19th, 2008, Judge Rya W. Zobel, in the case of Family Winemakers of California v. Jenkins, allowed the plaintiffs’ motion for summary judgment, concluding that Massachusetts General Laws chapter 138, section 19F: … has a discriminatory effect on interstate commerce because as a practical matter it prevents the direct shipment of 98% of […]

Road-Trippin’: Self-Distribution in Oklahoma May Be Too Far Out of the Way for Some

On November 4, 2008, Oklahoma voters passed State Question 743 (SQ 743) by approximately a four to one margin. The referendum opened self-distribution for in-state and out-of-state wineries to distribute to retailers and restaurants in the state of Oklahoma, with some restrictions. Self-distribution in Oklahoma is now more accessible to wineries across the country. In-state […]

Appeals Court Calls for More Facts in Challenge to Tennessee On-site Law

The October 24th decision of the Sixth Circuit Court of Appeals in Jelovsek v. Bredesen has been widely reported as upholding face-to-face on-site purchase requirements for winery sales to consumers. There is, however, an interesting disconnect between what the district court said when it dismissed the complaint and what the appellate court said in partly […]

Hold the Toasts in Michigan

On October 6th, 2008, the judgment in Siesta Village Markets LLC v. Granholm was stayed by agreement of the parties, to give the state time to appeal and, if the appeal is taken, to leave the current law in force for the duration of the appellate process. It seems almost certain the defendants will appeal. […]

Granholm, the Sequel

On September 30, 2008, a federal district court ordered Michigan to give out-of-state retailers access to Michigan consumers to whom local retailers could sell wine. The reasoning in Siesta Village Market LLC v. Granholm closely parallels that of the landmark Supreme Court decision, Granholm v. Heald, in effect rendering Governor Jennifer Granholm a serial violator […]

Indiana Still Standing on Their Face

On September 11th, the 7th Circuit Court of Appeal said that they will not rehear an appeal concerning the original opinion of the Court in Indiana. The denial to rehear the case confirms that currently it is legally within the power of the State of Indiana to require wineries to ship wine to Indiana consumers […]

A Little Knowledge Is Not Enough: Evidentiary Burdens In On-Site Cases

The August 7th decision of the Court of Appeals for the Seventh Circuit in Baude v. Heath has been characterized as a loss in the fight against on-site purchase requirements. Indeed, the opinion leaves Indiana’s initial personal visit requirement in place. That is not, however, the whole story. It’s important to keep in mind in […]

7th Circuit Reverses Indiana Face to Face Ban

The 7th Circuit Court of Appeals made an important decision yesterday regarding face-to-face transactions when shipping wine directly to Indiana consumers. After Indiana initially passed its direct shipping laws to comply with Granholm, the face-to-face requirement was successfully challenged in August of 2007. However, yesterday’s decision will eventually reverse the face-to-face clause. None of the […]

Woman of the Hour – Tracy Genesen

Tracy Genesen of Kirkland & Ellis, LLP is one of the prominent forces currently driving legal change in the wine industry and was the keynote speaker at ShipCompliant’s 2008 Users Conference a few weeks ago. Genesen’s speech analogized her role in the industry to a “court of last resort” when legislative means are unsuccessful in […]

Family Winemakers of California Making Headway in Massachusetts

On May 29, 2008, Family Winemakers of California filed a motion for summary judgment in Family Winemakers of California v. Jenkins, now before the federal district court for Massachusetts. The suit alleges that section 19F, the Massachusetts law that permits direct-to-consumer wine shipping, is unconstitutional because it “unequivocally discriminates against interstate commerce in both purpose […]

An Accident On The Way To Court

The February 26, 2008 decision by an Arizona federal district court in Black Star Farms LLC v. Oliver supports an in-person purchase requirement, one of the principal legislative attacks on the level-field principle enunciated in Granholm. In-person purchase as a precondition to direct shipment solves a fundamental political problem for the middle tier. Although Granholm […]

Tennessee Wholesalers – Crossing the Line?

There are a couple of direct shipping bills in the Tennessee legislature that would allow Tennessee consumers to order wine from any winery or retailer in the country, with some of the regular restrictions. This would be a big deal, considering direct shipments into Tennessee have not been allowed from any state in recent history. […]

Kill the Bill: Maryland and Direct Wine Shipping

Maryland continues to be one of six states in which direct shipping is completely prohibited. In a previous post we reported that HB1260 and SB616 were favorable direct shipping bills in Maryland’s current legislative session. Both of these bills died in committee. If passed, they would have allowed permitted wineries and retailers to ship directly […]

Wine Distribution Notes – Release 26

Release 26 of Notes on Wine Distribution by R. Corbin Houchins is now available for viewing. These notes are a great resource for keeping up to date with developing trends in direct shipping and direct distribution. As always, you can find the most recent version of these notes at the ShipCompliant Blog by clicking on […]

Another Rowe to Hoe

There’s been a lot of silliness lately about the Maine cigarette case, with some observers declaring that the recent Supreme Court opinion in Rowe v. New Hampshire Motor Transport Ass’n prevents states from regulating carrier deliveries of interstate wine shipments. Whether honest mistake or disinformation, that assertion might seem plausible from a superficial reading of […]

Costco Asks Court of Appeals to Think Again

On February 19, 2008, Costco Wholesale filed a petition for rehearing in the Ninth Circuit Court of Appeals, asking the original panel to reconsider a three-judge panel’s decision of January 29th, which upheld the ruling of a federal district court in Seattle that Washington’s price posting requirement is invalid under federal antitrust law, but reinstated […]

Six Veils Out of Seven: Retailer Shipments Under Granholm

On January 14, 2008, a district court in Texas rendered a mostly pro-trade decision in Siesta Village Market, LLC v. Perry that clarified much, but danced around the hottest issue, leaving the final veil in place. The case upholds the basic Specialty Wine Retailers contention that a state that allows its retailers to deliver to […]

Dulling the Cutting Edge

Yesterday’s decision of the Ninth Circuit Court of Appeals rejected almost everything about the trial court’s decision in Costco Wholesale Corp. v. Hoen that was innovative under federal antitrust law, turning the case into an expression of conservative deference to state law. Appellate judges did not even throw Costco the scrap of a favorable word […]

A setback for Costco

A three-judge panel of the United States Court of Appeals for the Ninth Circuit ruled yesterday in the case of Costco Wholesale Corp. v. Hoen. The panel largely reversed the April, 2006 decision that declared much of Washington’s three-tier system to be unconstitutional. Although the court did agree with Costco that the “post and hold” […]

Retailers win one, lose one in Texas court

Judge Sidney Fitzwater of the U.S. District Court for the Northern District of Texas handed down a very important decision on Monday. In the Siesta Village Market Opinion, Judge Fitzwater said the following The court concludes that Texas’ ban on the sale and shipment of wine by out-of-state retailers to Texas residents is unconstitutional, but […]

Is the retail to consumer shipping battle headed to the Supreme Court?

The issue of direct shipments by retailers to consumers has become a very hot topic of late. As of today, retailers can ship to less than half of the number of states to which producing wineries can ship. The Specialty Wine Retailers Association is fighting hard with both legislative efforts and litigation to open more […]

Wrong, but Not Surprising: A Loss in Extending Granholm to Shipments by Retailers

The recent decision in Arnold’s Wines, Inc. v. Boyle, Docket No. 06 Civ. 3357 (Southern District of NY, Sept. 9, 2007), which upholds New York’s requirement that retailers be located within the state to sell and ship to New York residents, illustrates the difficulty of separating dictum from holding in the Granholm case. (See the […]

Free the Grapes!: New Illinois Law to Expand Consumer Choice for Winery-to-Consumer Shipments from 5 to 50 States, But Corks Out-of-State Retailers

From Free the Grapes!: Illinois Governor Rod Blagojevich yesterday signed House Bill 429 which goes into effect June 1, 2008. The new law dramatically expands consumer choice for winery-to-consumer purchases made by Illinois wine consumers. Under the new law, wineries in all 50 states may purchase a permit to ship. Under the old law, wineries […]

Discrimination Against Out-Of-State Retailers After Granholm

Imminent revision of Illinois direct shipment law is producing much heated comment about retailer shipping rights, some trenchant and some off the mark, but all of significance beyond one state. Illinois House Bill 429, sent to the governor for signature on August 8th, conforms to the all but universally held belief that Granholm condemns treating […]

Parts of Indiana law declared unconstitutional. Can I ship there now?

Earlier this year, we discussed the “new vintage” of wine litigation that was taking place across the country. As background, since the 2005 Granholm decision, the wine wholesale lobby has recognized that they must pick their battles, and therefore concede the ability for wineries to ship directly to consumers in most states. Recognizing they would […]

Free the Grapes! Legislation and Litigation Update

From Jeremy Benson at Free the Grapes! : Free the Grapes! Media Update August 2007 Now that we’re at the end of most state legislative sessions, we thought it timely to provide an update on direct-to-consumer (DTC) wine direct shipping as of month-end July 2007. Here are some highlights, followed by a more detailed description. […]

Buckeye Budget Bill Could Affect Direct Shipping

The Ohio Senate unanimously passed HB 119, which would move Ohio towards becoming compliant with Granholm. HB 119 creates a permit system for wineries seeking to ship directly to consumers in Ohio. As reported by the Dayton Daily News, the direct shipping provision was inserted by the Senate as an amendment to the proposed 2008-09 […]

Why Can't I Have a Boston Wine Party?

The current lawsuit Family Winemakers of California v. Jenkins challenges an important aspect of the Massachusetts law regarding direct to consumer shipment of wine by out of state wineries. Recent articles have mentioned that the production limits adopted by Massachusetts act as a method of protecting in state wineries from interstate commerce and restrict the […]

Direct-to-Consumer Shipping — Not Quite the Green Light for Every State

Appellation America released a great article about direct shipping as we celebrate the second anniversary of the Granholm v. Heald ruling. The article was actually written by Eleanor and Ray Heald, the couple that originally sued the state of Michigan to overturn their discriminatory direct shipping laws. The appeal made it all the way to […]

Free The Grapes! legislative update

Free the Grapes! recently provided an update on direct to consumer shipping legislation and litigation for 2007. As you can see below, many changes are likely to come this year. LEGISLATIVE UPDATE Wine Institute provided the following summary of direct shipping legislation around the country. Alaska –House Bill 34 (Ledoux) would specifically allow in-state wineries […]

Tea Leaves & One Fact

Some historians say the origin of foretelling the future from tea leaves is an ancient Greek practice of reading wine sediment patterns in the drinking vessels. Wine-related or not, the lawyer’s pastime of seeking clues to future judicial decisions from what judges say during oral argument is about equally reliable. Nonetheless, it’s difficult to resist […]

"New Vintage" of Wine Litigation

There’s an excellent article on law.com titled “New Vintage of Wine Litigation is Fermenting”. The article summarizes the “next wave” of wine lawsuits that will continue to shake up the landscape of direct shipping. New suits and amended complaints filed in the past year are attacking requirements that consumers must purchase wine in person, with […]

Results from Federal District Court in Kentucky

It was pretty good, though it could have been better. Yesterday, Judge Charles R. Simpson III reaffirmed his analysis of last August in the Cherry Hill case, finding that on-site only requirements in the direct shipment law effective on January 1 are unenforceable because they unduly burden interstate commerce relative to in-state direct shipments. The […]

Kentucky Court Opinion and Judgment Posted

The US District Court in Kentucky ruled yesterday on the lawsuit filed by Cherry Hill Vineyards, challenging provisions in Kentucky’s recent direct shipping legislation. Here are links to the court’s opinion [Huber Memorandum Opinion.pdf (324 KB)] and judgment [Huber Order and Judgment.pdf (239 KB)]. An excerpt from the opinion: The court has evaluated the new […]

Terroir II: Another Word Soon from the Court that Decided All Wines Aren’t Alike

A new ruling is expected before the end of the year in the Granholm-based lawsuit that challenges the states’ and wholesalers’ “on-site only” strategy for resisting direct shipment. That line of defense argues it’s equal treatment to restrict all wineries, near and far, to the same limitation of in-person orders (which seems true in the […]

Important ruling in Kentucky expected by year-end

U.S. District Judge Charles R. Simpson III is expected to give a very important important ruling in Kentucky by the end of the year, according to the Louisville Courier-Journal. The ruling will help decide the fate of the Kentucky law that was set to take effect on January 1st. The new law would allow for […]

Costco appeal on fast track

The case is moving along very rapidly, the Ninth Circuit Court of Appeals having taken the initiative in a November 30, 2006 order by designating the appeal as expedited and setting a very prompt date for argument (March 2007). The defendants’ motion before the Court of Appeals for an indefinite stay was denied, but can […]

The second wave of the Granholm tsunami

Two states now have court cases that illustrate the second wave of the Granholm tsunami. Explicit discrimination in favor of local wineries relative to out-of-state wineries is, in theory at least, already washed away. We now see another crest on the horizon, aspiring to wipe out de facto discrimination –where the formal text of the […]

Lawsuit filed in Tennessee

Add Tennessee to the list of at least nine states that have ongoing direct to consumer litigation. A “wine enthusiast” recently filed a lawsuit in Tennessee to challenge the laws prohibiting the direct shipment of wine to consumers. Tennessee currently is a felony state that allows for a one gallon federal onsite provision, but otherwise […]

Virtual wineries taken to court

Last week the California Department of Alcoholic Beverage Control took three “virtual” wineries to court stating that they violated the provisions of their licenses by pouring wine for consumers at a wine festival. So called virtual wineries typically hold two licenses in combination, a type 17 which is a wholesale license and a type 20, […]

More on the Family Winemakers lawsuit

Tom Wark from Fermentation posted a lengthy comment in response to Doug Caskey’s thoughts on the Family Winemakers lawsuit. This was another great response, so I wanted to post it to make sure everyone reads it. Doug: First, anyone accusing you of being a traitor to the wine industry simply doesn’t know you or doesn’t […]

Terroir in Court

For the first time in post-Granholm legal maneuvering, a court has recognized the geographic distinctiveness of wine as a factor in applying the “level playing field” requirement. Kentucky is one of about eight states that responded to Granholm by authorizing only on-site sales. The argument by the wholesalers and their allies in favor of that […]

A response to the Family Winemakers lawsuit

Doug Caskey, from the Colorado Wine Industry Development Board, responded to our post about the lawsuit in Massachusetts with a lengthy comment. I wanted to republish it in a new post because it is well worth reading. At the risk of sounding like a traitor to the cause of wine, free trade and the American […]

Kentucky appeals court ruling

The State of Kentucky yesterday appealed the court ruling in August that struck down the interstate shipping ban in Kentucky. The State disagreed with the court’s finding that the in-person requirement for purchasing wine is unconstitutional. Thanks to the folks at Stoll Keenon Ogden for the tip and the insight. Their article was used a […]

Family Winemakers sues Massachusetts over capacity cap

In the previous post, we mention that a group sued Arizona over the discriminatory nature of their 20,000 gallon capacity cap. Now, the Family Winemakers of California, a group representing over 740 small and medium sized wineries, is suing the State of Massachusetts for the same reason. Paul Kronenberg, President of Family Winemakers, said the […]

Kentucky court strikes down interstate shipping ban

A US District Judge in Kentucky struck down the current regulations that allow only Kentucky wineries to ship to Kentucky consumers. Bill Nelson has the full scoop in the WineAmerica News Brief and at their state issues website. As expected, the judge found the discriminatory nature of the Kentucky statutes to be unconstitutional and in […]

Costco-Granholm battle lines forming in Ohio

Ohio wineries selling to state residents operate under a mandatory 33.3% markup system, whether distributing directly or through a wholesaler. Under past law, wineries outside the state could not sell to Ohio consumers at all. To comply with Granholm, the state accepted a consent decree permitting consumers to purchase directly from out-of-state wineries, beginning in […]

New laws take effect in four states on July 1st

Hello again, back in the swing of things after a nice two week break. We’ve seen some big developments in the world of wine direct shipping over the last two weeks that we’ll look at in more detail over the next few weeks. July 1st is a huge day for direct shippers as new laws […]

Dropping the Second Shoe

Recent lawsuits in California, following the preliminary consent decree in Texas, bring home the second major implication of Granholm. The Supreme Court opinion of May 2005 told us that a state may not allow its own wineries to sell directly to consumers if it excludes out-of-state wineries. Its first implication �that states allowing their own […]

Sinking the Playing Field

Recent reports that state ABC stores in Virginia are running low on Virginia wines illustrate an interesting ripple effect of the direct shipment litigation. (See http://www.roanoke.com/business/wb/wb/xp-68853.) By now nearly everyone has gotten the message that Granholm is neutral on freeing trade in wine, requiring only that states apply economically equivalent conditions to in-state and out-of-state […]

Rethinking Demon Rum

Several observers have noted the generational nature of Granholm�s 5-4 split in the Supreme Court. Roughly, the judges divide between those do not remember the advents of Prohibition and Repeal, but have witnessed the growing acceptance of table wines, particularly relatively costly wines from the burgeoning small producer sector; the dissenters recall vividly the lawlessness […]

Preliminary injunction in Texas is a temporary truce

The recent preliminary injunction entered by agreement in Wine Country Gift Baskets.com v. Steen is only a temporary truce. Both sides are reportedly preparing for a contest over the final judgment, while the delivery companies and potential retailer-shippers attempt to figure out what the requirement that shipments be by �a carrier permitted by Texas Alc. […]

Washington Liquor Control Board to appeal Costco ruling

The Washington State Liquor Control Board announced yesterday it will appeal the ruling issued by Judge Marsha Pechman. The state will likely file its appeal in the next few weeks and will claim that the 21st Amendment should trump the Sherman Antitrust Act. In other words, the state should have the right to create monopolies, […]

The broader effects of Costco

I. Discrimination against Direct Distribution from Outside the State There seems little doubt that Costco�s reading of Granholm will survive appeal. Nothing appeared in the Costco record to distinguish direct shipment of beer and wine to retailers from direct shipment of wine to consumers. Most states with wine industries allow local wineries some form of […]

Costco ruling – Findings of Fact and Conclusions of Law

We added the Findings of Fact and Conclusions of Law from the Costco v. Hoen case to our Document Library. Here are a few key passages from the document (emphasis added) The Sherman Act reflects a strong federal policy in favor of competition. At the same time, the Twenty-first Amendment provides each state with broad […]

The role of retailers

Pending court cases in Washington and Texas will set precedent throughout the country for determining the role of retailers in the world of wine shipping. Before digging in, let’s start with a terminology summary: Direct Shipment: The direct shipment of wine from wineries (suppliers) to end consumers. Wineries may ship via common carrier (UPS and […]

Great News from the State of Minnesota

Minnesota has lifted their ban on internet wine sales and advertisements. A Consent Order was entered on April 3, 2006, in the case of Kimberly Crockett, et al vs. Michael Campion, Commissioner of Minnesota Department of Public Safety, et al, wherein it was declared that the plaintiff and other wineries have the right under the […]

Court cases left and right

We’ve seen a lot of activity over the past two weeks in the court room that will have some big impacts on the direct shipping landscape. We’re going to take a look at recent activity in Washington, Texas, Minnesota, and Maryland in the next few days.

Costco case will challenge the three-tier system

From the Washington Times: The potentially most important challenge to the three-tier system comes from neither consumers nor wineries. It instead is being issued by a corporate entity with the political muscle to match the wholesale lobby — the biggest wine retailer of all, Costco Wholesale Corp. This article is worth reading.

Florida officially opens

In a letter to the Wine Institute yesterday, Simone Marstiller, Secretary of Florida�s Department of Business and Professional Regulation, announced that out-of-state wineries can officially make wine shipments into the state of Florida. In August, a U.S. District Court Judge ruled in the case of Bainbridge, et al. v. Turner that Florida’s wine shipping laws […]

Costco case could set precedent for Arizona

Interesting editorial explaining why Arizona is watching the Costco case in Washington closely.

Delaware lawyer and Pennsylvania winery sue over wine law

A federal lawsuit seeks to ease the direct shipping restrictions in Delaware. Currently, Delaware prohibits out of state wineries from shipping directly to consumers.

Costco wins key ruling in Washington

From the Seattle Post-Intelligencer: “A federal judge said in two separate rulings Wednesday that Washington’s system for distributing beer and wine violates the Constitution and the Sherman Act.” We will keep a close eye on this case as it will likely have a big impact on wine shipping in Washington and other states as well. […]

Pennsylvania judge strikes down out-of-state wine sales law

From law.com: “A federal judge has struck down a Pennsylvania law that prohibits out-of-state wineries from making direct sales to Pennsylvania consumers, hotels and restaurants after rejecting an argument that the law’s constitutional defect could be cured by extending the prohibition to in-state wineries.”

Federal judge allows out of state shipments in Michigan

Michigan wine lovers won a big victory Tuesday when a federal judge in Detroit ruled that out-of-state wineries can ship directly to Michigan consumers — a privilege once accorded only to Michigan producers.

Granholm v. Heald

On May 16th, 2005, the Supreme Court of the United States issued a landmark decision in the case of Granholm, Governor of Michigan, Et Al, v. Heald Et. Al.. We will discuss this case at length in this blog, but let’s start with the basics. You can see the official Supreme Court decision here, but […]