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The Supreme Court on Tuesday appeared hostile toward state barriers that impede interstate wine sales, likely foreshadowing a win for small wineries in their long battle against the system that controls sales of alcoholic beverages nationwide. In a series of consolidated cases from Michigan and New York in which wineries pressed for the legal right to sell wine across state lines using the mail and the Internet, the Court was confronted with a classic clash between two seemingly irreconcilable constitutional doctrines: the so-called dormant commerce clause, which bars state trade barriers even in areas of commerce in which Congress has not legislated, and the Prohibition-ending 21st Amendment, which gave states broad power to regulate the importation of alcohol. Before the hour-long arguments began, few experts were willing to guess which part of the Constitution would hold sway. But as the questioning of four skilled advocates developed, it seemed at nearly every turn that the justices were placing the commerce clause above the 21st Amendment in their hierarchy of valued doctrines. New York Solicitor General Caitlin Halligan, who was defending that state’s ban on direct shipment of wine by out-of-state wineries, came under especially heavy attack. At one point, she almost pleaded with the Court to recognize that the case “goes to what is at the core of the 21st Amendment,” which she said represented “a consensus in this country that alcohol is unique.” Justice Anthony Kennedy countered, “This case goes to the very core of the commerce clause.” Most of the justices also seemed skeptical of the states’ main policy defense for allowing states to prevent direct shipment of wines: that it would make it easier to control sales to minors and to collect tax revenues for the states because the transactions would not occur over the Internet or through the mail. Justices noted that even those states that bar sales from out-of-state wineries permit in-state wineries to sell directly to consumers, which would pose the same risk of sales to minors. When Halligan acknowledged that states cannot prevent sales to minors “100 percent,” Justice Antonin Scalia shot back, “You can’t prevent it at all.” Justice David Souter repeatedly suggested that, through the Internet and other modern technologies, states could also solve the problems of revenue and licensing. “I am thrilled the way it unfolded,” said wine industry lawyer James Seff of Pillsbury Winthrop, who authored a brief for the Wine Institute, representing 800 California wineries. “At the end of the day, I think the anti-discrimination notions of the dormant commerce clause outweighed the jurisprudence of the 21st Amendment.” The Court was filled Tuesday with top lawyers who had been hired by powerful groups on both sides — the wineries, as well as liquor wholesalers and distributors, who fear that the traditional three-tiered regime of liquor sales will be toppled if the wineries carry the day. Also spotted in the audience: actress Bo Derek, who accompanied a friend who owns a California winery. Arguing for the wineries was Clint Bolick, of the libertarian group Institute for Justice, and Kathleen Sullivan, former Stanford Law School dean. Bolick began with an appeal for unrestricted trade, describing the current system of alcohol sales as the “distributors’ oligopoly” that has no justification except “economic protectionism.” But he stopped short of saying that the entire system must fall, stating that as long as states do not discriminate against out-of-state businesses, they might be able to defend other aspects of the current licensing and regulation system. “Nothing requires you to take on the three-tiered system,” added Sullivan, referring to the post-Prohibition producer-wholesaler-retailer process that governs alcohol sales. She forcefully urged the Court not to allow the current system to trump the anti-discrimination principles of the commerce clause. In addition to New York’s Halligan, Michigan Solicitor General Thomas Casey also defended state prohibitions, asserting that it is impossible for states to effectively regulate out-of-state wineries. In-state licensees can be punished, he argued, although Souter said there was little evidence that actually happened. Justice Sandra Day O’Connor also said out-of-state wineries could be required to obtain licenses to sell within a given state, giving states some leverage over producers. More fundamentally, Casey said, “the purpose of the 21st Amendment was to remove alcohol from the commerce clause as a constitutional matter.” The U.S. Court of Appeals for the 6th Circuit struck down Michigan’s ban, while the U.S. Court of Appeals for the 2nd Circuit upheld New York’s prohibition against out-of-state sales. Virginia winery owner Juanita Swedenburg, who challenged the New York ban, was in the audience. Justices laughed when her lawyer, Bolick, invited the justices to “drive out to Middleburg” and sample her wines.

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