Family Winemakers Summary Judgment Motion Asks for Freedom to Ship
Small Wineries Damaged by Massachusetts Discriminatory Production Cap
SACRAMENTO, Calif.--(BUSINESS WIRE)--Painting a picture of discriminatory purpose and effect, a summary judgment motion filed by Family Winemakers of California on May 29, 2008 in Family Winemakers v. Jenkins, asked for injunctive relief from Massachusetts law that prevents out-of-state wineries from shipping directly to consumers. “Small producers have proven to the court that Section 19F of Massachusetts law harms interstate commerce by excluding 98% of all wine made in America from direct sales and suppresses consumer choice. Out-of-state producers making more than 30,000 gallons of wine shouldn’t be forced to choose between selling directly to consumers or selling only through the wholesale channel,” said Paul Kronenberg, FWC President. “Wineries want the court to invalidate key sections of Massachusetts law and level up so that all producers, regardless of size, can compete in the Massachusetts market on their terms.”
“Section 19F not only is infected with a discriminatory purpose to protect in-state interests, it likewise has discriminatory effects. Subjecting 98% of wine produced in the United States to Section 19F(a)’s regulatory regime imposes three detrimental burdens on interstate commerce – lost sales, loss of consumer choice, and decreased competition.”
The motion asserts that Section 19F replaces Massachusetts laws that this Court previously declared to be unconstitutional with a subtler but equally unconstitutional form of discrimination. Rather than limiting wine shipping rights through express residency requirements, Section 19F limits wine shipping rights based on wineries’ total annual production of wine from winegrapes and existing relationships with Massachusetts-licensed wholesalers. In purpose and effect, the limits imposed by this capacity cap (and those in other states) fall solely upon out-of-state wineries, whereas Massachusetts wineries continue to enjoy unfettered access to the Massachusetts market.
The motion comes only two weeks after the third anniversary of the landmark Granholm v. Heald decision. “It is a poignant reminder that the basic principles that formed this nation are what bind the union together. Commerce across state borders, free from undue restraint, was a foundational principle of the framers of the Constitution,” noted Kenneth W. Starr, former Solicitor General and an attorney with Kirkland & Ellis. Starr coordinated the legal victory in Granholm.
Tracy Genesen, lead Kirkland & Ellis attorney on the case, argues that “Section 19F not only is infected with a discriminatory purpose to protect in-state interests, it likewise has discriminatory effects. Subjecting 98% of wine produced in the United States to Section 19F(a)’s regulatory regime imposes three detrimental burdens on interstate commerce – lost sales, loss of consumer choice, and decreased competition.”
Oral argument in the case is set for July 29.
Family Winemakers of California is a statewide trade association representing over 750 small and growing wineries, vineyards and supporting businesses. It was founded in 1991 to advocate the rights and interests of its members to freely produce, market and sell their products. The association played a key role in funding and pursuing direct shipping relief through the courts that resulted in the 2005 Granholm decision.