Supreme Court Rejects Double Standard for Internet Alcohol Sales

Thirty-six states joined Michigan late last year in asking the nation's highest court to reaffirm a state's right to regulate the sale and distribution of alcohol. With the popularity of e-commerce, online alcohol sales greatly expanded direct sales to consumers-which had previously been limited to phone and mail orders. Rapid growth in the size of the direct-sale market raised a variety of concerns, from the loss of state excise tax revenue to potential access for underage youth.

The Supreme Court ruled on May 16, 2005, that states which allow local wineries to ship directly to state residents must also permit out-of-state wineries to ship to their residents.

The decision pleases winemakers, especially small wineries. "This is the best day for wine-lovers since the invention of the corkscrew," said Clint Bolick of the Institute for Justice, which argued for a winery in the case.

But opponents to direct sales vowed to pass state legislation that would eliminate all Internet sales. "This decision puts the ability to protect our communities and youth back in the hands of the Michigan citizens," said Betty Mercer, director of the Coalition for a Safe and Responsible Michigan. "It is the intention of the Coalition to continue to support efforts to keep our communities safe from the unregulated sale of alcohol."

An unusual coalition of alcohol wholesalers, state attorneys general, and prevention specialists had come together to support the Supreme Court's review of the lower court decisions that overturned state bans on direct shipment. The vintners that originally challenged the state laws argued that prohibiting out-of-state direct sales unconstitutionally restrains interstate commerce. However, states that prohibit out-of-state sales directly to consumers claim that they are within their rights because the 21 st Amendment to the Constitution allows them to regulate the sale of alcohol within their borders.