The Wall Street Journal-20080118-Wine Sellers Win Round in Texas
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Wine Sellers Win Round in Texas
A federal judge this week struck down Texas laws barring out-of- state retailers from shipping wine directly to Texas consumers, which may pose repercussions for how alcohol is sold across the U.S.
The judge, however, also dealt a blow to backers of direct-to- consumer shipping, ruling Texas could require out-of-state wine retailers to buy their wine from Texas wholesalers. That makes the practical implications of the verdict unclear. The ruling would let consumers order wine on the Internet, for instance. But it isn't clear that out-of-state retailers would go to the trouble of ordering wine from Texas and then shipping it back to customers there.
The ruling by Judge Sidney A. Fitzwater in U.S. District Court in Dallas is the latest to address challenges to the nation's complex system of regulating alcohol sales, which dates to the repeal of Prohibition. The patchwork of state laws has long offered protections to local vendors, but the emergence of Internet commerce and other shifts has sparked changes.
In a landmark 2005 ruling, the Supreme Court struck down state laws that restricted direct sales across state lines by wineries to consumers. Judge Fitzwater's ruling Monday goes further by extending rights to out-of-state retailers. In Texas, in-state retailers have been allowed to ship directly to consumers.
The Texas case pitted wine merchants from California and Florida against Texas regulators. The office of Texas Attorney General Greg Abbott hasn't decided whether to appeal the ruling, a spokesman said.
The wine merchants are likely to appeal the part of the ruling that lets Texas require out-of-state retailers to buy from Texas wholesalers, said Tom Wark, executive director of the Specialty Wine Retailers Association in Sacramento, Calif. The association paid for the lawsuit.
Mr. Wark otherwise embraced the ruling. He said it may influence pending wine-shipping legislation in states such as Maine, Tennessee and Virginia.
Proponents of direct shipping say it gives consumers more choice and lower prices. About 14 states allow direct shipments from out-of-state wine retailers, including Louisiana, Nevada and New Hampshire, Mr. Wark said.
Two other legal cases similar to the one in Texas are pending. A federal district judge upheld New York state law last year, and the wine merchant that brought the suit has appealed. A case challenging Michigan law is pending in a federal district court.
The mixed rulings mean the issue "is ripe for resolution by the Supreme Court," said Richard Blau, a lawyer who specializes in alcohol law with GrayRobinson, a law firm in Tampa, Fla.
The wine cases may have implications for sales of beer and distilled spirits, as well as other consumer products, legal experts said.
