Happy Holidays from On Reserve! This is quite a belated post, but a legal one nonetheless, that we felt to be incredibly exciting and interesting for both the wine and legal industries. About a month ago, a group of wine retailers petitioned to the Supreme Court for a writ of certiorari to review the case of Wine Country Gift Baskets v. Steen. The petition was written on behalf of the wine retailer petitioners by Tracy Genesen and Ken Starr of the law firm Kirkland and Ellis. “The case involves critical Constitutional issues of concern to wine retailers across the country and to the foundations of Internet Commerce.” (See Wine Retailers Appeal to the Supreme Court Over Discrimination in Wine Shipping.) “At issue in the case of Wine Country Gift Baskets v. Steen, decided in the Fifth Circuit Court of Appeals, is whether, notwithstanding the 2005 Granholm v. Heald decision that determined States may not discriminate against out-of-state wine producers, the Twenty-first Amendment overrides the Commerce Clause and allows States to discriminate against out-of-state wine stores. The Specialty Wine Retailers petitioning the Supreme Court contend that the Fifth Circuit, as well as the Second Circuit, has turned the Granholm decision upside down.” (Id.) (Emphasis added.) Consequently, the Fifth Circuit interpreted the Granholm decision to allow discrimination against interstate wine retailers. The group of wine retailers hopes that SCOTUS will review the continual discrepancy of interstate trade over direct shipment of wine.
Although SCOTUS held in the 2005 case of Granholm v. Heald that states cannot discriminate against in-state and out-of-state wine producers with respect to direct shipment of wine, the opinion did not explicitly indicate that states could not discriminate against out-of-state retailers. There are subsequent federal court cases that deal with this issue, some with holdings that commentators find conflicting with Granholm. (For further information, see prior On Reserve posts including The Alcoholic Beverage Legal Environment Post-Granholm and Granholm v. Heald and the Wine Industry.) If SCOTUS grants cert to the wine retailers petitioning for this case, the Supreme Court’s insight will be particularly interesting in light of HR 5034.
Read more about the petition to the Supreme Court by the wine retailers at Wine Retailers Appeal to the Supreme Court Over Discrimination in Wine Shipping and Why the Supreme Court Was Asked to Hear Retailer Wine Shipping Case.
For more information on wine or alcohol law, direct shipping, or three-tier distribution, please contact Lindsey Zahn.
DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.