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New York�A ruling by the 2d U.S. Circuit Court of Appeals upholding a New York state ban on the direct shipment of out-of-state wines to residents has “teed up the issue for the U.S. Supreme Court,” according to the lawyer leading the charge against such bans. “If we didn’t have divided circuits before, we sure do now,” said Clint Bolick of the Institute for Justice, the libertarian legal group that has filed suits nationwide to overturn bans on direct interstate wine shipment. “It’s as ripe for Supreme Court consideration as any case I’ve seen.” The issue points to a conflict within the nation’s highest laws. Such direct interstate shipment bans might appear to be illegal under the U.S. Constitution’s interstate commerce clause, which reserves to Congress the regulation of trade between states. But the 21st Amendment, which ended Prohibition, also gave the states the authority to regulate the sale and distribution of alcoholic beverages. Courts split The 2d Circuit’s recent decision in Swedenburg v. Kelly, No. 02-9511, overturned a November 2002 ruling by Judge Richard M. Berman of the Southern District of New York, who found the state’s direct-shipment ban was an unconstitutional burden on interstate commerce. Other federal appeals courts have taken different views. In August, the 6th Circuit overturned a direct-shipment ban in Michigan. The 4th and 5th circuits have taken similar positions, while the 7th Circuit has upheld Indiana’s ban. The unanimous 2d Circuit opinion, written by Judge Richard C. Wesley, took the view that the 21st Amendment “is unequaled in our constitutional experience-it repeals one constitutional provision and creates an exception to another.” New York’s Alcoholic Beverage Control laws, like those of many other states, require that all alcoholic beverages shipped into the state be first consigned to licensed wholesalers. But licensed wineries within New York state are permitted to sell directly to New Yorkers. Two wineries in California and Virginia, as well as three New York consumers, sued the New York State Liquor Authority, claiming that the primary purpose of the direct-shipment ban was economic protectionism for local wineries and wholesalers. The 2d Circuit found that the state had a legitimate interest in monitoring the flow of alcohol into the state by regulating its physical presence. New York state wineries are licensed by the state and subject to inspection, as are state wholesalers. Out-of-state wineries are not.

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