You asked if the recent decision by the United States District Court for Southern New York stating that New York's ban on the direct shipment of wine is unconstitutional means that Connecticut's law is also unconstitutional.

SUMMARY

The federal district court decision concerning the New York State law does not mean that Connecticut' s law is unconstitutional. The decision applies only to New York's law.

The New York case is one of four cases currently being litigated that concern the direct shipment of wine by manufacturers to consumers in another state. All involve a state's power to control the importation of liquor relative to Congress's power to regulate interstate commerce. All four district courts have ruled that these states do not have the power to prohibit the direct shipment of wine into their states by out-of-state manufacturers. In all four states, in-state wine manufacturers are allowed to ship directly to consumers. In one case, a circuit court has overruled the district court.

Connecticut's law is similar to the law in the other four states, but there are some differences as well. Like the other four states, Connecticut's law establishes a three-tier system of liquor sales (manufacturer, wholesaler, and retailer) and allows in-state farm wineries to operate on all three tiers. Thus, in-state wineries can sell directly to consumers. Unlike the other states, Connecticut does not completely prohibit out-of-state farm wineries from shipping directly to Connecticut consumers.

THE DECISION'S EFFECT ON CONNECTICUT LAW

The decision does not automatically invalidate Connecticut's law concerning the direct shipment of wine by out-of-state wineries to Connecticut consumers. The decision applies only to New York's law. Further, Connecticut's law, which has some fundamental similarities with New York's, also has some important differences. If the law were challenged, the differences may lead a court to conclude that Connecticut's law is constitutional.

There is a considerable amount of litigation involving the direct shipment of wine. The New York court noted in its decision that the case was one of four in which federal district courts considered challenges to a state's ban on the direct shipment of wine. In all four, the central legal issue was the tension between the federal Commerce Clause in the federal constitution, which gives Congress the power to regulate interstate commerce, and the Twenty-first Amendment, which gives states the power to regulate the importation and distribution of alcoholic beverages. In the three other cases, district courts decided that the state ban on the direct shipment of wine was unconstitutional. (Bridenbaugh v. O'Bannon, 78 F. Supp. 2d 828; Dickerson v. Bailey, 87 F. Supp 2d 691; and Kendall-Jackson Winery, Ltd. v. Branson, 82 F. Supp. 2d 844). In one, the decision was overturned on appeal to circuit court (Bridenbaugh v. Freeman-Wilson, 227 F. 3d 848). Presumably, there will be more litigation in this area.

SWEDENBURG ET AL V. KELLY ET AL (00 CIV. 0778)

The court concluded that New York's ban on the direct shipment of wine to consumers by out-of-state wineries is unconstitutional. The decision is not the district court's final action on the dispute. In the decision, the court concluded that New York's law was unconstitutional and discussed two possible remedies. One, the state could eliminate the statutory provision that allows instate wineries to ship directly to consumers. Two, the state could allow out-of-state wineries to ship to New York consumers. The court asked the parties to attend a conference on December 5, 2002, to confer on whether consensus could be reached on possible remedies.

CONNECTICUT'S LAWS RELATING TO THE DIRECT SHIPMENT OF WINE

Three Tier-System and Farm Wineries

Connecticut, like New York, establishes a three-tier system of liquor sales (CGS §§ 30-74, 30-16 & 30-17). Manufacturers are allowed to sell to wholesalers that, in turn, sell to retailers for sales to consumers. Connecticut, like New York, makes an exception to the rule for farm wineries. Farm wineries are allowed to manufacture, bottle, and store wine; to sell their wine and wine manufactured by other Connecticut farm wineries to wholesalers and retailers; and to sell directly to consumers for on or off premises consumption (CGS § 30-16(e), as amended by PA 02-25).

Importing Wine for Personal Use

Connecticut allows individuals to import wine or other kinds of liquor into the state from elsewhere in the United States for personal use without obtaining any special permits (CGS § 12-436). This ability is limited to five gallons within a 60-day period. Further, the law provides that a consumer does not have to be personally present when making the purchase (PA 01-92). This means that the wine could be ordered over the telephone or through the Internet.

The consumer must pay the Alcoholic Beverage Tax on the imported wine by completing two Department of Revenue Services forms (DRS Form BT-100 & DRS Form S&BT) and paying the tax to DRS.

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