Decision on Massachusetts wine law could change the wine world

A Federal Appeals Court has ruled that the current law in Massachusetts limiting wine shipments directly to consumers from out of state is unconstitutional.

A Massachusetts law that sharply restricts out-of-state winemakers from shipping their products directly to consumers in the state is unconstitutional, a federal appeals court ruled.

Thursday’s decision by the 1st Circuit Court of Appeals to uphold a lower court ruling could open the door for connoisseurs in Massachusetts to purchase more of their favorite wines online or by mail order from domestic producers.

The law, approved by the Legislature in 2006 over the veto of then-Gov. Mitt Romney, created a multi-tiered system in which wineries that produce more than 30,000 gallons a year must decide whether to sell retail in Massachusetts through an in-state wholesaler or apply for a license to ship wines directly to consumers. They cannot, however, do both.

The cap does not affect any of the nearly three dozen wineries based in Massachusetts, all of which are small and produce under the 30,000-gallon limit.

“We hold that (the law) violates the Commerce Clause because the effect of its particular gallonage cap is to change the competitive balance between in-state and out-of-state wineries in a way that benefits Massachusetts’s wineries and significantly burdens out-of-state competitors,” the appellate court wrote in its decision.

It seems to me this could have far-reaching effects in several states, as it isn’t much of a jump to go from this decision to any restrictions on wine shipments. There’s some confusion in the Constitution, the Commerce Clause and 14th amendment would make you lean towards agreeing that limiting interstate wine shipments is unconstitutional. On the other hand, the 21st amendment appears to give pretty broad power to the states, although the U.S. Supreme Court ruled in Granholm vs Heald that power was not as broad as one might think, and did not override the Commerce Clause.

As a wine lover, I certainly hope this trend continues, and that the 15 states that ban direct shipments will soon have to reconsider their limits on our right to buy goods across state lines in the United States.

Crossposted at The Grand Crew

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About Paul Stagg

Husband, lifter, MBA in Baltimore, MD. Will post about Powerlifting, politics, Classical Liberalism, Economics, building wealth, self improvement, productivity, heavy music, wine, food, beer, and almost anything else. View all posts by Paul Stagg

3 responses to “Decision on Massachusetts wine law could change the wine world

  • Tom

    The court opinion for this decision is very interesting and explains many of the associated issues of direct wine shipping and the 3-tier system. The court indicates that had the MA law been enacted along the lines of the model law upon the adopted by the National Conference of State Legislatures in 1997, there would not be an issue with the MA law. This year as in years past, a Direct Wine Shipping bill will be introduced in MD that is modeled on the fair NCSL law that preserves wholesaler interests with that of the wine consumer by limiting direct shipments to a case a month.

  • Paul Stagg

    I don’t want to be mean to wholesalers, but my freedom to have a legal product shipped over state lines to my house isn’t trumped, EVER, by someone elses’ “interests”. Having a case limit is better than nothing, but is still a gross violation of my rights.

    I have little confidence in the MD legislature to get this right, and we’ll have to rely on the courts to recognize that our individual rights are more important than protecting the liquor wholesalers from competition.

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