A Case of Sour Grapes

Supreme Court justices might be hearing a lot today about the ills of underage drinking in a case that has nothing to do with the issue, so they’d be wise to interrupt early and often during oral argument.

Attorneys representing the states of New York and Michigan, backed by alcohol wholesalers seeking to retain their profitable licenses to act as middlemen, will try to convince the court that their bans on online wine sales from out-of-state wineries are meant to keep kids from drinking. That’s a cynical defense for protectionist laws that violate the Constitution. States cannot interfere with the right of Americans to participate in the national marketplace.

Americans can buy pretty much what they want online, but half of the 50 states still won’t let residents buy a case of wine online from an out-of-state winery and have it shipped to their doorsteps. One of the parties challenging the constitutionality of the state laws is Terry Speizer, a California winemaker who was unable to send a single bottle of his wine to Michigan wine critics.

It’s true that the Constitution’s 21st Amendment, which ended Prohibition in 1933, gave states significant leeway in regulating the sale of alcohol. But slamming the door on out-of-state wineries hardly solves the states’ ostensible problems -- a concern with underage drinking and with tax collection. Shippers in most cases already require an adult signature when delivering wine, and states that do allow free trade in wine have had little trouble collecting taxes.

Tellingly, many of the “direct shipment” prohibitions are blatantly discriminatory, applying only to out-of-state sellers. This is what makes these laws a classic violation of the Constitution’s interstate commerce clause. Ninety percent of American households can order wine online from in-state wineries because most states, including New York, allow it. How do lawyers for that state hope to defend this discrimination? Will they try to argue that only the allure of an out-of-state Merlot compels kids to reach for a parental credit card and start clicking?

There’s a simple solution to the tax issue. The National Conference of State Legislatures years ago crafted a model law that governs the shipment of wine across state lines. It dictates that taxes be paid, and it’s already on the books in some states. Wineries also need permits to operate. In any event, wine sales pose no unique Internet taxation issues -- separate, say, from a book sale.

The Supreme Court should strike down these laws that restrict consumer choice and push up prices so that consumers can enjoy the fruit of the vine, regardless of where it’s grown or how it’s ordered.