WASHINGTON, Dec 7 (AFP) - Wine, the Internet and the notion of free interstate trade were before the US Supreme Court Tuesday in a case closely watched for its implications on e-commerce, viticulture and the regulation of alcohol sales.
The highest US court was hearing oral arguments in an effort to resolve a dispute involving two apparently conflicting elements of the US Constitution that affect wine sales from one state to another.
The constitution`s "commerce clause" prohibits states from erecting barriers to interstate trade. But at the same time, the 21st Amendment to the constitution, which repealed Prohibition in 1933, gave states the authority to regulate alcohol sales.
The patchwork of state laws has up to now prevented wineries and merchants from shipping directly to consumers who order over the Internet. About half of the states ban such sales if they come from a location in another state.
A ruling in the case is expected next year, with justices seeking to resolve the matter in the wake of conflicting court rulings in lower courts.
"There are 3,000-plus wineries across the United States, and this case is important to them as well as to consumers," said Kenneth Starr, the former special prosecutor who is lead attorney for the Coalition for Free Trade, one of the groups supporting direct shipments to consumers.
Starr, speaking outside the court after arguments before the justices, criticized laws that allow in-state winemakers rights to sell and ship while denying the same privileges to those in other states.
"It`s insulting, it`s wrong, it`s discriminatory," said Starr, who argued that the laws are aimed at protecting wholesalers, who have a "powerful oligopoly."
"The winery `outside the gates` is forbidden to engage in precisely the same commercial activity permitted `within the city walls,`" Starr wrote in his brief.
The state of Michigan, where one of the cases was filed, argued that the court cannot deny states the authority to regulate wine and alcohol sales.
"If we lose, the whole system of alcohol regulation in this country is in jeopardy," said Thomas Casey, lead attorney for the state.
"The legal issue is all about discrimination," said Wine Institute President Robert Koch, who argued that a favorable ruling would help some 3,000 small, family-owned wineries break the monopoly held by state-licensed wholesalers.
"The case has nothing to do with the serious issue of underage drinking. This is a false argument that the wholesalers are using to protect their monopoly," said Koch, whose group represents some 800 California wineries and related businesses.
"Congress unequivocally recognized the states` authority to control and confine the distribution of alcoholic beverages to licensed sellers who have themselves been determined to be responsible and accountable," Michigan Attorney General Michael Cox said in a legal brief.
12/07/2004 17:28 GMT - AFP