FC: WSJ editorial on wine lawsuit and court win, by J.Riley

[Declan McCullagh <declan () well com>]

*********

From: "Riley, Jason" <Jason.Riley () wsj com>
To: "'Declan McCullagh'" <declan () well com>
Subject: RE: Judge lets case proceed against New York anti-booze law
Date: Fri, 8 Sep 2000 14:49:06 -0400

Here it is:

September 8, 2000

The Wall Street Journal
Wine War Update
New York, like 29 other states, doesn't allow out-of-state wineries to ship
their products directly to consumers, a practice the Internet has made
popular. The laws date to the end of Prohibition and originally were
intended to prevent mob infiltration of liquor distribution. Now they serve
a less lofty end: protecting the middleman status of wholesalers, which
results in, among other things, higher prices and fewer selections at your
local wine shop. Oh, and they just might violate the Commerce Clause of the
Constitution as well.

Consequently, a federal judge in New York this week refused the request of
defendants -- who include the state liquor authority and four large
wholesalers -- to dismiss a lawsuit challenging the state's restrictions on
direct wine sales. The case can now proceed to trial. In his preliminary
ruling, Judge Richard Berman said the New Economy justifies re-examining the
issue.

"Technological advancements facilitate -- as never before -- the commerce
between and among states," Judge Berman wrote in his decision. "The Internet
increasingly is responsible for direct sale and shipment of goods to
consumers."

The ruling also notes that the 21st Amendment, which ended Prohibition and
gave states regulatory powers in this area, was not intended to "empower
states to favor local liquor industries by erecting barriers" to
competition. It then mentions the successful challenges of similar laws in
other states. Perhaps Judge Berman will use one such recent ruling in Texas
as a guidepost. In February, U.S. District Court Judge Melinda Harmon found
Texas's laws prohibiting direct shipments of alcohol to be discriminatory,
protectionist and, finally, in violation of the Commerce Clause. Judge
Berman's New York ruling may be preliminary but steps in the right
direction.




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