The Supreme Court this week denied the petition for writ of certiorari filed by the plaintiffs in Wine Country Gift Baskets.com v. Steen, a case that centers on Texas’ direct shipping laws. The plaintiffs, a coalition of non-Texas wine retailers and Texas consumers, had hoped that the Supreme Court would bring a definitive end to the ongoing interstate commerce war over the direct shipment of wine.

 

This case originated as a challenge to a Texas law that allows Texas wine retailers to ship wine directly to Texans, while prohibiting out-of-state retailers from doing the same. A Federal District Court in Texas declared the Texas law unconstitutional. Central to their holding was the Supreme Court’s assertion in the 2005 case, Granholm v. Heald, that, “in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” The Fifth Circuit Court of Appeals’ decision, which came down in January of last year, overturned the District Court. The Fifth Circuit did not identify any compelling justification for allowing such discriminatory treatment; rather, the Appeals Court held that the Twenty-first Amendment, which repealed Prohibition, categorically immunized the Texas law from Commerce Clause scrutiny. The Retailers argued that the Fifth Circuit incorrectly interpreted Granholm, which held that a state may not discriminate against out-of-state wine producers with respect to its direct shipment laws. The Fifth Circuit held that Granholm did not indicate that states cannot discriminate against interstate wine retailers.

 

Today only 13 states and the District of Columbia allow consumers to have wine shipped them from out-of-state wine retailers while 37 states allow such transactions by wine producers, thereby severely limiting access to wine by American consumers. Wine retailer association representatives argue that if this view is upheld, “millions of wine consumers across the country will fall victim to protectionist state laws and hundreds of thousands of wine retailers will see their protection from state based discrimination promised by the Commerce Clause of the Constitution stripped from them.” The Supreme Court did not issue a statement as to why they denied certiorari.


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