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Thursday, December 25, 2008
Courts - 6th Circuit strikes down down Kentucky's direct-selling restrictions
Michael Doyle of McClatchy Newspapers reported Dec. 24th:
WASHINGTON -- A 2005 Supreme Court opinion is the gift that keeps on giving for California winemakers hoping to sell directly to customers in other states.See also this Oct. 25th ILB entry where the 6th Circuit found a Tenessee wine law unconstitutional.It also has been proof that the law of unintended consequences lives on, however.
Continuing their legal winning streak, winemakers won an opportunity Wednesday to open up the Kentucky market. A federal appellate panel upheld a trial court's decision striking down Kentucky's direct-selling restrictions.
"The in-person purchase requirement in portions of Kentucky's statutory scheme discriminated against interstate commerce by limiting the ability of out-of-state small farm wineries to sell and ship wine to Kentucky consumers," the Cincinnati-based 6th U.S. Circuit Court of Appeals ruled.
The Kentucky law in question permitted out-of-state wineries to ship directly only to customers who purchased the wine in person. Wineries that violated the law faced criminal penalties. * * *
"For a year and a half after the Supreme Court decision, it was like Valhalla," said Scott Miller, a winemaker in California's El Dorado County. "We saw a dramatic increase in out-of-state sales. But now, we have absolutely no cohesiveness in what we can and cannot do."
Miller, the owner of Single Leaf Vineyards in the small Sierra Nevada foothills town of Somerset, said different laws had been proliferating in different states since 2005. He called the result "an absolute zoo" that has complicated business for "mom and pop" wineries such as his own.
San Francisco-based attorney Tracy Genesen, for instance, noted that the 7th U.S. Circuit Court of Appeals, covering Midwestern states, recently upheld the same kind of in-person purchase requirements that the 6th Circuit judges deemed unconstitutional. The conflicting rulings governing Kentucky and Indiana could set the stage for a return to the Supreme Court, Genesen suggested.
Genesen, who's with the firm Kirkland & Ellis, won a separate case last month on behalf of the Family Winemakers of California striking down a Massachusetts law. It restricted the size of wineries that could ship directly to consumers, a tactic akin to what other states have tried.
"We've had wholesalers and some regulators acting in tandem to erect roadblocks to direct shipping," Genesen said. [Emphasis added by ILB]
[More] Here is a link to the 17-page, Dec. 24th opinion of the 6th Circuit in the case of Cherry Hill Vineyards v. Lilly. (Note that James Alexander Tanford, INDIANA UNIVERSITY SCHOOL OF LAW, Bloomington, Indiana, appeared for Appellees.)
Posted by Marcia Oddi on December 25, 2008 01:00 PM
Posted to Courts in general