December 8, 2004, 12:00 AM

Supreme Court hears initial arguments regarding state bans on Internet wine

The Supreme Court heard initial arguments Tuesday regarding state laws in Michigan and New York that ban interstate sales of wines through the Internet.

Paul Demery

Managing Editor, B2B E-commerce

 

The Supreme Court heard initial arguments Tuesday regarding state laws in Michigan and New York that ban interstate sales of wines through the Internet.

David Sloane, president of Wine America, an organization of small winemakers that opposes the bans, said the Court raised skepticism regarding arguments made by lawyers for New York and Michigan, who contended that states have the right under the 21st Amendment to restrict the importation of alcohol as well as the authority to prevent sales of alcohol to minors and to force the collection of sales tax on alcohol sales from out-of-state shippers. Internet direct-to-consumer sales enable online wine sellers to circumvent such restrictions, the states argued.

But justices countered that the bans conflicted with interstate commerce laws, which are regulated by Congress, that prohibit states to discriminate against one another, Sloane says. Attorneys for wine groups opposed to the bans also noted that Michigan and New York each allow direct shipments to consumers within their states.

Sloane notes that there are more than 3,700 wineries in the U.S., up from 2,400 four years ago.

 

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