Saturday, November 29, 2008

Wine Spectator Weighs in on Massachusetts's Direct Shipping Laws

Wine Shipping Restrictions in Massachusetts Ruled Unconstitutional
Both in- and out-of-state wineries may now ship directly to Massachusetts residents; volume caps struck down
Robert Taylor
Wine Spectator
Posted: Tuesday, November 25, 2008

After two years of legal wrangling, a federal judge struck down Massachusetts' direct shipping law this past week, ruling that the law's volume caps were discriminatory. The case could have a far-reaching impact on similar laws in other states.

After the Supreme Court's 2005 Granholm decision ruled that states cannot treat in- and out-of-state wineries differently when it comes to shipping rules, Massachusetts passed House Bill 4498. It was the first winery direct-shipping law to institute volume caps on wineries eligible to ship to residents, and it started a trend among state legislatures across the country. Direct-shipping laws with volume caps appear to treat in-state and out-of-state wineries equally, in compliance with Granholm, but typically prevent the vast majority of California, Oregon and Washington wineries from selling to residents by prohibiting shipping from wineries that produce more than a specified amount of wine each year. The legislature typically sets this volume cap slightly above the production level of the state's largest winery.

In her Nov. 19 Family Winemakers of California vs. Jenkins decision, United States District Court Judge Rya Zobel struck down the law, ruling that the volume caps were discriminatory. Zobel wrote in her decision, "The sequence of events leading up to the passage of [H.B. 4498] and the public comments of the bill's sponsor provide strong support for plaintiffs' assertion that [the bill] was designed to allow in-state wineries to continue direct shipping while forcing the majority of interstate wine to go through the three-tier system, thereby preserving the economic interests of both Massachusetts wholesalers and Massachusetts wineries."

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