Will Illinois House Bill 429, passed in early August, stand up in a court of law?
We’re probably going to find out, since the Specialty Wine Retailers Association, based in Sacramento, Calif., has indicated that it may sue to have the new law struck down.
The bill bans direct-to-consumer shipments of wine by out-of-state retailers (such as the wine clubs of Vinesse) to Illinois residents. Consumers have been permitted to order and receive such shipments since 1992, and the new law flies in the face of the Supreme Court ruling that was supposed to strike down protectionist laws.
“The bottom line is that residents of (Illinois) will have less access to wine than they have had until now. This bill is blatantly anti-consumer and anti-constitutional,” said Tom Wark, Executive Director of the SWRA. “There is no legal, state or consumer interest that is protected by stripping consumers of their long-held right to purchase wine from out-of-state retailers.”
Added Wark: “Lessening consumer choice and inviting an inevitable lawsuit seems a poor trade-off for the chance to pass protectionist legislation on behalf of the state’s alcohol distribution industry. Consumers across the state have been telling their legislators this for the better part of a month.”
Here are excerpts from the 2005 Granholm v. Heald Supreme Court decision that Illinois lawmakers apparently chose to ignore in passing HB 429:
“This court has long held that, in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate ‘differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.’ States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.
“The Twenty-first Amendment does not supercede other provisions of the Constitution and, in particular, does not displace the rule that States may not give a discriminatory preference to their own producers. If a state chooses to allow direct shipment of wine, it must do so on evenhanded terms.”
Some observers say that an amendment to the bill, allowing the state of Illinois to collect sales tax on out-of-state wine shipments from retailers, would not be opposed by such shippers.
“Our opinion is that the alcohol distributors of Illinois have taken control of Illinois alcohol policy,” Wark added. “HB 429 does nothing but benefit a very large group of very well-monied special interests who have contributed more than $5.4 million to politicians since 2000.”
