Washington, D.C.-In a resounding victory for small wineries and wine consumers, the Honorable Richard Berman of the U.S. District Court for the Southern District of New York today issued an injunction prohibiting the State of New York from enforcing its ban on direct shipments of wine to consumers by out-of-state wineries.
The judge wrote, “Defendants are enjoined from enforcing N.Y. Alco. and Bev. Cont. Law 102(1)(c) and (d) in manner that would prohibit (i) the winery plaintiffs from shipping their wine to New York consumers on the same terms and conditions applicable to New York wineries and (ii) the consumer plaintiffs from receiving wines shipped directly to them from out-of-state wineries on the same terms and conditions applicable to consumers of New York wineries.”
The judgment went on to state, “Defendants are further enjoined from enforcing N.Y. Alco. and Bev. Cont. Law 102(a) against the winery plaintiffs in a manner that would prevent them from conveying lawful information to New York consumers on the same terms and conditions applicable to New York wineries.” The judge then stayed his judgment pending an appeal to the U.S. Court of Appeals for the Second Circuit, or, if no appeal is taken, until expiration of the time for taking such an appeal.
Clint Bolick, vice president for the Institute for Justice, which litigated the case, said, “The wholesaler monopoly that stands between small wineries and consumers is crumbling. This is the most important win yet in the national effort to strike down government-imposed trade barriers because the wholesalers mounted their strongest stand to preserve their monopoly in New York.” New York is the nation’s second-largest wine market.
On November 12, Judge Berman declared that the State’s ban on direct shipments by out-of-state wineries violated the Commerce Clause of the U.S. Constitution. In today’s ruling, the court rejected arguments by the State of New York and the wholesalers seeking to end direct shipments by in-state wineries, instead ordering that the State allow shipments by out-of-state wineries. The injunction will be stayed pending an expected appeal to the U.S. Court of Appeals for the Second Circuit.
“Judge Berman’s decision is well-reasoned and should stand up on appeal,” said Steve Simpson, an IJ attorney who helped argue the case. “In the meantime, the state legislature should act to end this anti-competitive ban once and for all, which would make further judicial action unnecessary.”