Kentucky court strikes down interstate shipping ban

Sovos | August 28, 2006

A US District Judge in Kentucky struck down the current regulations that allow only Kentucky wineries to ship to Kentucky consumers. Bill Nelson has the full scoop in the WineAmerica News Brief and at their state issues website. As expected, the judge found the discriminatory nature of the Kentucky statutes to be unconstitutional and in violation of the Granholm decision because Kentucky wineries could ship to consumers while out of state wineries were prohibited from doing the same.

However, a new twist to the ongoing Granholm compliance issue emerges from this case. In his opinion, Judge Charles Simpson finds that the “in-person purchasing requirement discriminates, in practical effect, against interstate commerce.” He goes on to say that the onsite requirement is unconstitutional because it amounts to ‘differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.’” His solution is to require that offsite purchases are allowed if onsite purchases are allowed.

The end result of all of this is that licensed in-state and out-of-state wineries that produce less than 50,000 gallons (roughly 21,000 cases) per year can now ship directly to Kentucky residents for both off-site and on-site sales. Of course there will be appeals and much will continue to shake out in Kentucky, but the new twist sets a precedent that could create yet another ripple effect in the realm of wine shipping compliance.

Read the full Opinion here

Read the full Court Order here