SW Legal studies in Business

Part of Interstate Wine Sale Restriction Constitutional, Part Unconstitutional
Description

Appeals court held that the portion of an Indiana law regulating out-of-state shipment of wine that requires proof of age of the buyer is constitutional as it is minimal burden; the part of the law that effectively prohibits out-of-state buyers from buying directly from a winery is an unconstitutional burden on commerce.

Topic Constitutional Law
Key Words

Commerce Clause; Interstate Wine Sales

C A S E   S U M M A R Y
Facts

Wineries inside and outside of Indiana may ship to customers if (a) there is one face-to-face meeting at which the buyer’s age can be verified and (b) the vintner is not allowed to sell to retailers in any state as its own wholesaler. Wine buyers sued to contest the constitutionality of the statute, contending it violated the Commerce Clause. The district court enjoined enforcement of the law. The state appealed.

Decision

Affirmed in part and reversed in part. A state law that discriminates explicitly is almost always invalid under the Commerce Clause. When a statute regulates even-handedly to accomplish a legitimate public interest and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on commerce is clearly excessive in relation to the local benefits. The face-to-face meeting clause, which requires any consumer who wanted to receive direct shipments of wine to visit the winery once and supply proof of name, age, address and phone number is not unconstitutional. It will reduce the number of shipments that go to minors, as intended by the state for all alcohol purchases. The wholesale clause, which provides that a winery may not sell direct to consumers if it does not hold a license to wholesale alcoholic beverages imposes a needless burden on interstate commerce. In effect, this prevented direct shipment by wineries since alcohol producers do not hold wholesale licenses. This discriminated against out-of-state buyers compared to access in-state buyers had to Indiana wine.

Citation

Baude v. Heath, 538 F.3d 608 (7th Cir., 2008)

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