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Wine Spectator: New York Retailer Charged With Illegally Shipping Wine to Out-of-State Consumers

September 23, 2014

The New York State Liquor Authority (NYSLA) has charged Albany wine retailer Empire Wine with 16 counts of improperly shipping wine to out-of-state customers, a source at the store has confirmed. In a document obtained by Wine Spectator, the NYSLA accuses Empire Wine of improper conduct for shipping wine to customers in 16 states, including California, Illinois, Louisiana, Massachusetts, Ohio, Pennsylvania and Virginia. In response, Empire Wine has filed a lawsuit in state court, alleging that the NYSLA has no jurisdiction over out-of-state wine sales and that its charges against Empire violate the U.S. Constitution’s Commerce Clause.

The Commerce Clause bars states from restricting interstate trade, and was cited in the U.S. Supreme Court’s landmark Granholm decision that declared it illegal for states to discriminate between in-state and out-of-state wineries when it came to direct-to-consumer wine sales. Retailer direct shipping proponents have long argued that the Granholm decision should apply to retailers as well, but most states, including New York, still operate under a system that permits in-state retailer-to-consumer wine shipping but forbids out-of-state retailers from doing the same.

Sources close to the case confirmed that Empire rejected a no-contest plea agreement offered by the NYSLA that would have included a $100,000 fine and an agreement to no longer sell wine to out-of-state customers. “The SLA’s statutory and constitutional authority is limited to the regulation of alcoholic beverages within New York; only the federal government has the ability to regulate commerce between states,” said Empire Wine’s owners, in a statement dated Sept. 23. “Despite this fact, the SLA has made a bizarre and unprecedented attempt to penalize Empire for having allegedly shipped its products, including many New York wines, to customers in other states.”

The NYSLA, under chairman Dennis Rosen since 2009, has spearheaded the first multi-state effort to rein in illegal interstate shipping. Before learning of the lawsuit filed yesterday by Empire Wine, Rosen, who was recently appointed to a second term as chairman by Gov. Andrew Cuomo, advised unhappy wine sellers and consumers to take it up with the legislature. “If someone thinks we’re wrong, the proper route is to comply with the law and mobilize to seek legislation to change it, and that hasn’t happened in New York.”

 

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