A federal judge in Manhattan on November 12 ruled that New York's laws prohibiting the out-of-state shipment of wine directly to consumers in that state are unconstitutional.  Nevertheless, the judge stopped short of striking down the restrictions, instead choosing to wait and hear arguments on December 5 about remedies to the constitutional problem.

The judge held that the Empire State's alcoholic beverage laws erected a barrier against interstate commerce and provided "an impermissible economic benefit and protection to only in-state interests" by discriminating against out-of-state wineries.

"There is direct evidence that the direct shipping ban was designed to protect New York state businesses from out-of-state competition," the judge noted in his opinion.

New York laws require alcoholic beverages be distributed only through licensed wholesalers, who sell to retailers, who, in turn, sell to state residents.  However, wine produced in-state is exempted from the distribution laws through an exception that allows local wineries to sell and ship directly to New York residents.

The judge noted that one solution could be to strike down the interstate shipping ban, while another could be to eliminate the exception for in-state wineries so that all wine, whether produced in New York or not, would be subject to the same shipping restrictions.

If the judge ends the direct shipment ban, New York consumers will gain the right to buy wine directly from producers in California and elsewhere and have that wine shipped directly to their homes.  Such direct wine purchases have become more popular as online commerce has developed.

To learn more about the challenge, click here.