Courting Freedom for Vintners

February 2005

Courting Freedom for Vintners

By Steve Simpson

IJ’s Strategic Litigation Counsel Clint Bolick and client Juanita Swedenburg answer questions from the media following IJ’s argument before the U.S. Supreme Court.

“Only one group was there because of what they believed in, not what they were being paid for, that’s the Institute for Justice. And it showed.”

–Lew Parker, Virginia vintnerLoudon (VA) Times-Mirror

After years of litigation, Institute for Justice clients Juanita Swedenburg and David Lucas finally had their day in court. On December 7, 2004, IJ presented its case to the U.S. Supreme Court on behalf of the award-winning vintners in Swedenburg v. Kelly. The constitutional issue in question was whether the States’ power to regulate alcohol under the 21st Amendment permits them to discriminate against out-of-state wineries by allowing only in-state wineries to ship directly to consumers. The basic moral issues were those of fundamental fairness and equal treatment under law.

Clint Bolick, IJ’s strategic litigation counsel, who divided argument with former Stanford Law School dean Kathleen Sullivan representing the Michigan wineries and consumers, captured the essence of the case succinctly in his opening remarks:

“For 124 years, as State power over alcohol has ebbed and flowed, one principle has remained virtually constant: that States may regulate alcohol by one set of rules, not by two. New York and Michigan consigned out-of-state wine, and only out-of-state wine, to the three tier system, foreclosing the market to thousands of small, family-run wineries and their customers for the benefit of a liquor distributor oligopoly. Discrimination is the core concern of the Commerce Clause, and it sends a powerful signal that the State is engaged, not in legitimate regulation, but in economic protectionism.”

While the Justices vigorously questioned both sides, they seemed particularly skeptical of the States’ claim that section two of the 21st Amendment abolished the principle of non-discrimination on which the Commerce Clause was based, allowing the States to engage in blatant protectionism. They also seemed dubious that the States need to discriminate against out-of-state wineries—by, for instance, requiring an in-state warehouse and business office as a condition of doing business there—in order to regulate wine effectively.

Summing up, Clint once again crystallized the issue before the Court: “Our clients cannot compete with the liquor distributors in the political marketplace. They can, however, compete in the economic marketplace. The Commerce Clause protects that right, that level playing field. The 21st Amendment was never intended to take it away.”

It is always difficult to predict the outcome of a U.S. Supreme Court case based on oral argument, but we think Linda Greenhouse’s article in The New York Times described very well the feeling in the courtroom when the argument was over. She wrote, “If the Supreme Court argument Tuesday on interstate wine sales proves to be a reliable roadmap to the eventual decision, consumers who want to order wine directly from out-of-state wineries will soon be able to do so with the court’s blessing.”

We certainly hope she is right.Steve Simpson is an IJ senior attorney.