- The Washington Times - Wednesday, November 13, 2002

A federal judge in New York ruled yesterday that a state law banning out-of-state wineries from directly shipping their products to New York consumers is unconstitutional.
The ruling in favor of a Virginia winery is expected to give businesses in 29 other states which have similar bans greater freedom to directly ship wine to out-of-state customers.
The case was brought by Swendenburg Estate Vineyards, a Middleburg, Va., winery that makes about 2,500 cases of boutique wines each year.
Judge Richard M. Berman found the law discriminated against out-of-state wineries since in-state competitors are allowed to ship directly to in-state residents.
The New York law requires imported alcoholic beverages to be sold solely through licensed retailers in an effort to collect appropriate taxes for the state.
Judge Berman said the New York law "constitutes a cut-and-dry example of direct discrimination against interstate commerce."
"That the New York direct-shipping ban on out-of-state wine burdens interstate commerce and is discriminatory on its face is clear from the very wording, let alone the impact of exemptions favoring in-state wineries," he said.
Juanita Swendenburg, owner of the vineyard, said the victory was "more for consumers than it was for our business."
"We wouldn't go out of business by not shipping to New York, but we want to be able to send our small wines to New York residents so they can compare that wine with their New York wines," she said.
The vineyard makes 95 percent of its winesales from visitors, 65 percent of whom are out-of-towners, Mrs. Swendenburg said.
Steve Simpson, an attorney with the Institute for Justice, a nonprofit advocacy organization for consumers' rights, who represented Mrs. Swendenberg, said the ruling likely will mean more wins in similar cases in other states.
"This decision is clearly going to be a big influence for judges when the issue comes up in other states," Mr. Simpson said. "The movement for the wine consumer and winery is really gaining some momentum now."
Virginia courts are hearing cases questioning its alcohol-shipping laws, but no cases have been decided.
A spokesman from the state Department of Alcohol Beverage Control did not return calls yesterday.
Steve Taylor, deputy director for Maryland's Alcohol and Tobacco Tax Division, said the ruling might affect the state's restrictive wine-shipping laws, but not immediately.
"No one has yet challenged the state about the law," which requires that all wine and spirits in Maryland be sold through a licensed retailer, including wine from Maryland wineries, Mr. Taylor said.
The state offers permits for out-of-state wineries to sell through retailers, but no winery has applied for it because of the complexity of Maryland law, he added.
The shipping laws around the Washington area have hurt wine collectors like Robert Gammon, a physics professor at the University of Maryland who used to spend $4,500 a year collecting boutique or specialty wines through an online wine-of-the-month club.
"I got a letter from the comptroller's office last year telling me that I could go to jail for not paying the state taxes," Mr. Gammon said. "I had to stop and I really miss not getting all those interesting specialty wines" that often cost him $200 a bottle.
Kevin Atticks, another Maryland wine aficionado and founder of the wine-advocacy group www.shipmywine.com, called the ruling a "success for wine lovers, especially those in Maryland."
Judge Berman said the outcome of the ruling won't be decided until Dec. 5, when he will hold a legal conference.

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