Press Release: Family Winemakers of California hails circuit court ruling that Massachusetts's wine shipping law is discriminatory
Sacramento, California— Wineries of all sizes across the nation have convinced the U.S. 1st Circuit Court of Appeals through overwhelming evidence that Massachusetts' s direct shipping law is discriminatory both in purpose and effect. Wine consumers in Massachusetts are able to choose which wines they want after the January 14 court ruling that allows wineries of all production sizes to ship directly to adult residents.
The appellate decision in Family Winemakers of California v. Jenkins to uphold Judge Rya Zobel’s district court ruling enjoins the state from enforcing its law that prohibits wineries producing more than 30,000 gallons from shipping if they have wholesaler agreements. “We know consumers and wineries have been waiting since 2006 for this day," said Jim Gullett, chair of Family Winemakers of California (FWC) and owner of Vino Noceto in Plymouth, California. "This case was extremely important because it acknowledges that post-Granholm discriminatory laws like production caps cannot pass legal muster. We're gratified the court affirms the statute’s unconstitutionality.”
Family Winemakers, as lead plaintiff, filed the case in September 2006 with the help of the Coalition for Free Trade. Both FWC and CFT have played instrumental roles in direct shipping litigation reform since 1999.
The challenged statute replaced Massachusetts’s law that was discriminatory on its face. Section 19F limited wine shipping rights based on wineries’ total annual production of wine and existing relationships with Massachusetts-licensed wholesalers, which was an effort to create a law that appeared neutral, but was inherently discriminatory. In purpose and effect, the limits imposed by these capacity caps fell solely upon out-of-state wineries, since Massachusetts’s wineries continued to enjoy unfettered access to the Massachusetts market. "The appeals court did its own analysis of the statute and the record submitted at trial court. It concluded ‘that Section 19F altered the competitive balance to favor Massachusetts’s wineries and disfavor out-of-state competition by design.’ The decision allows access to the whole wine market for Massachusetts consumers,” said Paul Kronenberg, FWC President. “Protectionist state laws run counter to the concept of free trade within the nation.”
The decision is an important guidepost in a string of cases that wrestle with laws designed to frustrate a common national economic union. “Freedom to conduct commerce across state boundaries without undue restrictions was a fundamental principle of the framers of the Constitution,” notes Kenneth W. Starr, former Solicitor General and an attorney with Kirkland & Ellis. Starr coordinated the landmark legal victory in Granholm v. Heald, and oversaw the strategy in Family Winemakers of California v. Jenkins.
Tracy Genesen, lead attorney with Kirkland & Ellis on the case, argued that the district court was correct in invalidating economic protectionism. “Today’s decision is a milestone for wineries and consumers in breaking down barriers to discriminatory interstate commerce. The 1st Circuit Court of Appeals concluded that the Twenty-first Amendment does not grant states the authority to enact facially neutral but discriminatory wine laws that would otherwise violate the Commerce Clause,” she noted.
While the doors are now open for wine shipments the ruling may prompt the Massachusetts Legislature to finally enact a model direct shipping law.
Family Winemakers of California is a statewide trade association representing over 650 small and growing wineries, vineyards and supporting businesses. It was founded in 1991 to advocate the rights and interests of its members to freely produce, market and sell their products, and to preserved the broad diversity of the California wine industry.