For years local New Jersey wineries have enjoyed advantages over their out of state counter parts when selling wine to locals and when dealing with their competition. That appears to have been changed by a ruling of the United States Court of Appeals for the Third Circuit. In Freeman v. Corzine the Court held in an opinion filed December 17, 2010 that New Jersey Alcoholic Beverage Control laws permitting only in-state wineries to sell directly to retailers and consumers in facially discriminatory in violation of the dormant Commerce Clause. See New Jersey Statute 33:1-10(2a) and (2b). The provision allowing in-state, but not out-of-state, wineries to sell directly to retailers without using a wholesaler is discriminatory.

The Court declared another New Jersey ABC law in violation of the dormant Commerce Clause which prohibited the importation for personal use of more than a gallon of out of state wine unless the importing individual secured a special permit from the New Jersey ABC. See New Jersey Statute 33:1-2(a). The reciprocity provision of New Jersey Statute 33:1-2(a) is also facially discriminatory against interstate commerce. The reciprocity provision of the law provides: “no person shall transport into this State or receive from without this State into this State, alcoholic beverages where the alcoholic beverages are transported or received from a state which prohibits the transportation into that state of alcoholic beverages purchased or otherwise obtained in the State of New Jersey.” New Jersey Statute 33:1-2(a).

“The reciprocity requirement prevents certain wine, in this case, wine from specified jurisdictions- from entering the state outside the strictures of the three-tier system, while local winemakers are free to sell as much wine as they can directly to New Jersey residents.” Freeman v. Corzine.

The Court also held that a New Jersey ban on the direct shipping of wine was constitutional. The direct shipping ban was where the plaintiffs lost, because they did not use any evidence (statistical or otherwise) to support their assertions. The direct shipping ban was even handed in that it forced all wine sellers, in-state and out-of-state, to move their goods through one channel.

The Court’s holding should have major implications for New Jersey wine sellers and customers throughout New Jersey, and may end up allowing New Jersey consumers a more diverse array of wines to choose from. The case was remanded to the District Court for a determination of the proper remedy.

If you or anyone you know has a question regarding New Jersey ABC laws and regulations, or any other issues dealing with liquor licenses in New Jersey, call the New Jersey ABC attorneys of Villani & DeLuca, P.C.

Call (732) 540-1233.

Freeman v. Corzine, U.S. Court of Appeals for the Third Circuit, Nos. 08-3268 and 08-3302, argued February 1, 2010; Opinion of the Court filed December 17, 2010.

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