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Saturday, August 23, 2008

Ind. Law - "Wine-shipping rules still not settled"

I've been looking forward to the Fort Wayne Journal Gazette's Dan and Krista Stockman's take on the recent 7th Circuit ruling in Baude v. Heath. It does not disappoint. Read it here. Here is a "taste", in the section about the state’s desire for a face-to-face transaction requirement:

The wine lovers who brought the case argued the requirement amounted to unfair treatment of out-of-state wineries because the cost of traveling increases with the distance from Indiana. So while it’s relatively easy for someone in Fort Wayne to visit Satek Winery in Fremont, it’s much harder and more expensive for him to visit a winery in Napa before he can have wine shipped.

Here’s where the court’s thinking seems to go beyond the letter of the law and into the land of leaps of logic.

Because Indiana’s wineries are spread throughout the state, the court said, it’s not easy to visit many at once. California wineries, though, are close together.

“A connoisseur might well find it easier to visit and sign up at 30 California wineries than at 30 Indiana wineries,” the decision said. “So although it may be more costly for a person living in Indianapolis to satisfy the face-to-face requirement at five Oregon wineries than at five Indiana wineries, it is not necessarily substantially more expensive (per winery) to sign up at a larger number of west-coast wineries than at an equivalent number of Indiana wine producers.”

Talk about trying to twist logic to fit the outcome you want. We calculate that driving to 30 Indiana wineries would cost about $180 in gas at $4 a gallon, plus $300 for three days in hotels and $270 for meals on the road. That’s $750 for 30 wineries.

The cheapest flight we could find from Fort Wayne to Napa was $497 each (that’s with two stops), so you’ve already spent more and you haven’t gotten a hotel room or eaten yet. Driving there is even worse: $818 in gas, nine nights in hotels (just for the drive there and back) and $800 in food while driving. You’re looking at nearly $2,500 and haven’t rented a room in Napa or eaten in a restaurant there.

But even if it is more expensive, the court said, that’s not outweighed by the reduction in underage drinking the face-to-face requirement might make. Note the word might : Despite evidence showing that Internet age-verification techniques were six times more effective than face-to-face transactions, the court said the evidence it might not be very effective does not outweigh Indiana’s desire to keep alcohol away from minors, and overturned the lower court’s decision.

Pamela A. MacLean of The National Law Journal also has an article, dated August 25th, about the 7th Circuit opinion. It concludes:
Indiana revised its law in 2006 to require state residents to go to individual wineries, wherever they are in the country, to fill out an age-verification form. Prior to that, wineries had to ship to wholesale merchants and could not ship direct to consumers.

The legal burden in a facial challenge to the age verification requirement falls to the plaintiffs to show that wineries and consumers are disadvantaged by the requirement, Baude v. Heath, 07-3338.

The plaintiffs argued that while the Indiana law treated all vintners the same, as a practical matter, Indiana wineries had a competitive advantage because of the travel distance to fill out forms in California, Oregon and Washington wineries.

Easterbrook noted that while it was not much burden to sign age-verification forms in Michigan, Illinois, Kentucky or Ohio wineries, the plaintiffs have "their hearts set" on the boutique wines of California, Oregon and Washington.

He rejected the claim that Indiana consumers faced more of a burden traveling to California's Napa Valley to fill out the forms than to the various wineries scattered around Indiana.

"Indiana thinks that in-person verification with photo ID helps to reduce cheating on legal rules, for both buying wine and voting (and perhaps other subjects,)" wrote Easterbrook, citing the Supreme Court ruling that allowed voter ID checks earlier this year. [ILB - Crawford v. Marion County Election Bd.] If voter photo ID requirements can withstand a first amendment challenge, "it would be awfully hard to take judicial notice that in-person verification with photo ID has no effect on wine fraud and therefore flunks the interstate commerce clause," he said.

He said it is hard to know just how effective the ID checks are in thwarting teen drinking. Minors who "can get beer locally may not want to pay for costly, upmarket wine plus shipping charges," he speculated.

The court upheld the in-person age-verification terms of the 2006 law.

[Emphasis added by ILB]

Posted by Marcia Oddi on August 23, 2008 12:08 PM
Posted to Ind. (7th Cir.) Decisions