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Judge: Wine shipping law unconstitutional

Michael W. Hoskins
January 1, 2007
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Indiana's law prohibiting out-of-state wineries from shipping to Hoosier customers without face-to-face contact is unconstitutional, a federal judge in Indianapolis has ruled.

U.S. District Judge John D. Tinder issued a 71-page decision http://www.insd.uscourts.gov/News/Baude.pdf, and a separate four-page judgment http://www.insd.uscourts.gov/News/BaudeJudgment.pdf and injunction late Wednesday in Patrick L. Baude et al. v. David L. Heath and Wine and Sprits Wholesalers of Indiana, No. 1:05-cv-0735-JDT-TAB.

At issue in this case was whether state statute involving direct wine shipment violated the out-of-state wineries rights by barring them from newly created direct wine seller permits. The law went into effect in March 2006, and this federal suit came the following month.

Plaintiffs include a major Michigan winery, Chateau Grand Traverse, and five consumers. They challenged the law, part of which mandated they have at least one face-to-face transaction to allow the winery to verify the customer's age. The winery contended the rules discriminated against out-of-state wineries by preventing them from competing in the direct-sale market, and the consumers argued they were barred from obtaining many wines because of the impracticality of traveling outside the state or to complete the in-person requirement.

Defendant Heath, commissioner of the Indiana Alcohol and Tobacco Commission, contended the laws do not discriminate and are needed to prevent the sale of alcohol to minors - the state's interest in protecting its youth outweighs any incidental burdens on interstate commerce.

Judge Tinder disagreed, noting that the requirement creates a trade barrier for wineries by requiring them to set up shop in Indiana or limit their potential market to buyers willing to travel to them.

This is not the first time wine connoisseurs have challenged Indiana's authority to regulate direct shipments of wine into the state. The 7th Circuit Court of Appeals in Chicago dealt a blow to wine lovers in 2000 with a ruling that the state could prohibit direct shipments, but since that case of Bridenbaugh v. Freeman-Wilson, 227 F.3d 848, 854 (7th Cir. 2000), the U.S. Supreme Court has weighed in to change the legal landscape.

In 2005, the court ruled in the Michigan case of Granholm v. Heald, 544 W.S. 460, 493 (2005) that states could not discriminate against out-of-state-wineries by prohibiting them from shipping directly to consumers if the state laws allowed in-state wineries to do so. The court ruled the repealed 21st Amendment on Prohibition did not override the requirements of the Commerce Clause in regulating interstate commerce of goods.

Relying on that high court ruling, Judge Tinder based his determination and granted the injunction enjoining the Alcohol and Tobacco Commission from enforcing the rule.

"This court's decision is likely to be of immediate interest only to those out-of-state wineries with an existing base of Indiana customers or wine connoisseurs who may have the means to persuade out-of-state firms to undertake the effort," he wrote. "Indiana wineries will not need to change any of their current business practices. Indeed, there is little likelihood that much will change before the General Assembly meets again."
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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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