By David L. Hudson, Jr.

Two out-of-state wineries and three New York consumers have challenged New York State laws that prohibit the direct sale and advertising of alcoholic beverages by out-of-state suppliers to New York residents.

The plaintiffs, who call the New York laws the "Direct Shipment and Advertising Ban," allege that the laws violate the Interstate Commerce Clause, the Privileges and Immunities Clause, and the First Amendment. They allege that their "civil rights action ... seek[s] to vindicate economic liberty, consumer freedom, and freedom of speech."

New York law bans direct wine shipments from out-of-state wineries: "No alcoholic beverages shall be shipped into the state unless the same shall be consigned to a person duly li-censed hereunder to traffic in alcoholic beverages."

Another New York law states: "No person shall send or cause to be sent into the state any letter, postcard, circular, newspaper ... price list, or publication of any kind containing an advertisement or a solicitation of any order for any alcoholic beverages ... unless such person shall be duly licensed hereunder to traffic in alcoholic beverages."

In Swedenburg v. Kelly, the plaintiffs allege that "the Direct Shipment and Advertising Ban, on its face, prohibits in the most sweeping terms truthful information and advertising about wine, including but not limited to commercial speech."

The lawsuit states that the two wine producers would advertise and provide information about their wines to New York residents by mail, the Internet, and other means. The law-suit also contends that the three plaintiff-consumers wish to receive information, such as price listings, from out-of-state wineries.

The plaintiffs include Joshua Swedenburg, a Virginia winery owner, David Lucas, a California winery owner, and three New York wine consumers. The lawsuit contends that in January 2000 the three consumer-plaintiffs ordered wines from one or more of the plaintiff wineries but were denied because of the Direct Shipment and Advertising Ban.

The plaintiffs are represented by the Institute for Justice, a Washington, D.C., public interest law firm. The Institute contends that the law represents "pure economic protectionism" and unlawfully discriminates against out-of-state wineries.

Numerous wine wholesalers have intervened in the lawsuit to support the laws. They argue that the laws further the goals of temperance and of preventing the sale of alcohol to minors.

On its Web site, the Institute for Justice writes in "Uncorking Freedom" that "the real motivation behind the prohibition laws is not temperance, but protectionism."

The beneficiaries of these economic protectionist measures, the Institute says, are New York wine wholesalers who profit as those "duly licensed to traffic in alcoholic beverages."

New York officials may cite the Twenty-first Amendment, which repealed Prohibition, as justification for granting the states broad leeway to regulate alcohol. The Twenty-first Amendment provides that "the transportation or importation into any State ... for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited."

However, in 44 Liquormart the U.S. Supreme Court in 1996 struck down a state ban on liquor price ads, writing: "The Twenty-first Amendment cannot save Rhode Island's price advertising ban because that Amendment does not qualify the First Amendment's prohibition against laws abridging the freedom of speech."

The Institute for Justice contends that the case has "major Internet ramifications." It says that "if states are allowed to protect parochial economic interests by stifling consumer information, the vast promise of the Internet will be stifled."

The lawsuit was filed Feb. 3, 2000. Both parties have filed dispositive motions, which will be heard before the U.S. District Court for the Southern District of New York on July 21.

44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996).