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Wine shipping: Texas found to discriminate

In a ruling with national implications, a judge declared on Tuesday that a Texas law violated the federal constitution, discriminating against out-of-state wine merchants.

Chief Judge Sidney Fitzwater of US District Court of Northern Texas, in Dallas, said Texas could not prohibit Texans from receiving wine shipped from out-of-state merchants if it allowed in-state merchants to ship wine to them

The plaintiff was Siesta Village Market, a Florida merchant. The defendant was Texas’ state government.

The Speciality Wine Retailers Association, a California-based trade group that supported Siesta’s suit, said the outcome ‘provides wine retailers with the same protection against economic discrimination’ that wineries obtained in a ground-breaking US Supreme Court decision in 2005.

That 2005 ‘seminal case held that no state may discriminate against out-of-state wine shippers’ – that is, wineries – ‘for the purpose of protecting in-state competitors,’ the association said.

Yesterday’s Dallas ruling, the association added, ‘completely rejected the claims by the state of Texas, Texas wine wholesalers, as well as lawmakers and wholesalers in other states’ that the Supreme Court decision did not apply to retailers.

However, the association found bizarre and possibly illegal a segment of Fitzwater’s decision that held that Texas could require out-of-state merchants to buy wines from Texas wholesalers.

Advocates of free trade may champion the Texas ruling in New York and Michigan, where retailer-shipping cases are pending, as well as in Maine, Tennessee and Virginia, where wine-shipping legislation is being contemplated.

About 16 states permit direct wine shipments from out-of-state merchants.

Wholesalers, whose trade association is the Wine and Spirits Wholesalers of America, thought the 2005 Supreme Court decision was not relevant to the Texas case because the Supreme Court also upheld the states’ three-tier systems under which producers sell to wholesalers, who sell to merchants, who sell to the public.

Written by Howard G Goldberg in New York

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