6th Circuit Reluctantly Backs Tenn. Wine Law

CINCINNATI (CN) - A Tennessee law that prevents wine lovers from having wine shipped directly to their houses unconstitutionally favors in-state wineries, the 6th Circuit ruled. But the judges refused to strike the law because doing so would hurt in-state wineries without benefiting out-of-state wineries.

The court reluctantly agreed to uphold the Grape and Wine Law, a statute challenged by a group of Tennessee oenophiles and an Indiana winery. They claimed its ban on direct winery-to-consumer sales stifles competition and robs consumers of their imbibing options.

The lawsuit fell under the framework of a Supreme Court decision invalidating wine-related laws in Michigan and New York.

The district court drew a distinction between the cases: The Michigan and New York wine laws allowed only in-state wineries to ship wine directly to consumers, while the Tennessee law bans all direct sales, regardless of where the wines are made. The lower court concluded that the law did not effectively discriminate against interstate commerce, and that any distinctions would have a negligible effect.

The appeals court agreed that the Tennessee restrictions differ from those struck down by the Supreme Court, but said the lower court's reasoning was flawed.

First, Judge Alan Norris rejected the notion that a law can "regulate evenhandedly" simply because its clear facial discrimination has a minor effect.

Second, the district court should have paid greater attention to the intent of the law, rather than its practical effect. "(I)t appears that the very purpose behind the Grape and Wine Law was to discriminate in favor of in-state wineries, especially those that use grapes grown in-state," Norris wrote.

Despite the "constitutional infirmeries," the appeals court chose not to strike the law, because doing so would hurt in-state wineries, which aren't parties to the case, and would not benefit out-of-state wineries.

Instead, the court remanded for further consideration, instructing the state to explain how its facially discriminatory wine law serves a legitimate local purpose and to explore other non-discriminatory options. "If the state is unable to do so," Norris wrote, "the (district) court should devise a remedy that treats in-state and out-of-state wineries equally."

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