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Tuesday, August 12, 2008

Ind. Decisions - More on: "Love the wine? You must visit the vine"

The decision of the 7th Circuit August 7th in the case of Baude v. Heath (see ILB entries here and here) was the subject of a story yesterday in the Wine Spectator, reported by Robert Taylor. Some quotes:

After one year of unrestricted direct-shipping privileges, Indiana residents are again being required to fill out an age-verification form in person at any winery from which they wish to receive wine shipments.

This past week, the U.S. 7th Court of Appeals in Chicago reinstated the face-to-face clause in Indiana, ruling that the unrestricted sales made it easier for minors to obtain alcohol.

Indiana residents have been on a roller coaster ride when it comes to direct shipment of wine—and it isn't over yet. Following the Supreme Court's Granholm decision in 2005, Indiana lawmakers needed to enact new legislation specifically granting Indiana wineries the right to ship wine to in-state residents (something they'd been doing for nearly 30 years). In 2006, they passed a bill requiring Indiana residents to fill out an age-verification form, in person, at any winery (in-state or out-of-state) from which they wished to order wine. The 2006 law also virtually excluded all out-of-state wineries from shipping to residents by prohibiting wineries with wholesale privileges in their home states from receiving an Indiana wine-shipping permit. (California, Oregon and Washington all grant wholesale privileges to their wineries.)

In late August 2007, a federal judge ruled Indiana's wine shipping laws to be unconstitutional, and abolished the face-to-face verification requirement as well as the wholesale restriction on obtaining wine-shipping permits. The court declared that the burden of traveling across the country to have wine shipped directly to a resident provided an unfair advantage for Indiana's in-state wineries (who were nevertheless also hurt by the face-to-face requirement), a violation of the Constitution's commerce clause. "Forcing nearly all out-of-state wineries to use a wholesaler or come to Indiana to sell gives in-state wineries a distinct competitive advantage," the court wrote. "Indeed, virtually the entire direct shipping market is limited to in-state wineries."

But a three-judge panel disagreed with the 2007 ruling, reinstating the face-to-face verification provision in a decision handed down on Aug. 7 (arguments were heard Feb. 22). "It is important to remember that we are dealing with effects on the margin," the court's ruling explained. "Make it easier for minors to get wine by phone or Internet, and sales to minors will increase."

Later in the story, this point:
The appeals court's decision to reinstate face-to-face age verification may have been influenced by a U.S. Supreme Court ruling earlier this year. In Rowe vs. New Hampshire Motor Transport Association, the court ruled unanimously this past February that states did not have the right to require shipping companies to conduct age verifications for deliveries of tobacco products.
The story notes: "Many legal analysts believe the court would rule similarly on wine sales were they to be challenged."

See ILB entries on Rowe here and here.

Posted by Marcia Oddi on August 12, 2008 06:18 AM
Posted to Ind. (7th Cir.) Decisions