Double jeopardy Q: What is the common link between Ralph Reed, the Commerce Clause and the 21st amendment to the Const. (that repealed Prohibition)?
Time called. Wine, something some of you may have enjoyed with the turkey and dressing today. How so?
Next month, the U.S. Supreme Court will hear arguments involving a clash between the constitution's commerce clause, which empowers the federal government to regulate interstate trade, and the Twenty-First Amendment, passed by Congress in 1933 to repeal Prohibition and authorize states to regulate alcohol within their borders.
The lifting of Prohibition led to a three-tier system to regulate alcohol. Producers sell only to state-licensed wholesalers, who in turn sold only to licensed retailers, who controlled and monitored sales to consumers.
The market began to change during the 1990s with expansion of the Internet, the increasing popularity of wine and the explosive growth of new wineries, particularly small ones that benefited most from Internet sales.
Many small vineyards broke from the standard distribution system by using independent freight carriers to send wine to customers in other states. These vineyards technically were breaking the law but in the early years of the Internet, no one paid much attention.
But beginning in 1996, local wholesalesrs worked with state legislators to win enactment of laws in Florida, Indiana, Utah and five other states that generally make it a felony to ship wine directly to consumers in those states. That's a death penalty for a winery, because state laws require felons to forfeit their alcohol licenses.
The Wine & Spirits Wholesalers, whose political-action committee raised $1 million this year, didn't stop there. In 2000, the group lobbied Congress to pass the Twenty-First Amendment Enforcement Act, which permits state attorneys general to bring cases against wineries in federal courts. The bill became law.
And how does Ralph Reed, former executive director of the Christian Coalition, come into the picture?
Mr. Reed, who now runs a public-relations firm with offices in Washington and Atlanta, was hired by the wholesalers. Even the normally abstemious National Association of Evangelicals is backing the wholesalers, united in their opposition to underage drinking.
The wholesalers asked Mr. Reed to generate letters to lawmakers from "family-oriented" people with religious backgrounds who would write about their concerns about underage consumers buying alcohol over the Internet. In a written statement, Mr. Reed's office said his group "strongly favors enforcing existing restrictions on minors purchasing alcohol."
Juanita Duggan, president and chief executive officer of the wholesalers group, says her members worry that the Internet makes it easier for youngsters to obtain alcohol. The group has a Web site, pointclickdrink.com, depicting, in quick sequence, two teenagers ordering alcohol on a laptop, a driver delivering a package, and a raucous party. "It shouldn't be that easy," the Web site says.
Small wineries say the wholesalers are interested merely in crushing competition, and scoff at the idea that teenagers would order an expensive bottle of wine on the Internet and wait seven days for delivery.
And the story gets even better. Who has been brought in on behalf of the small wineries? Former President Bill Clinton?
No, not even close. Former Whitewater prosecutor Kenneth Starr. Mr. Starr, currently the dean and professor of law at Pepperdine University School of Law, was brought into the case as an expert by the Coalition for Free Trade, a group of wineries that wants to overturn the prohibition of direct wine shipments to consumers.
He has filed a brief in support of the wineries (as an advocate of free markets).
And now you know. Stay tuned.
(11-24-04 wsj.)
P.S. To you lawyer-types out there. Think about it. The outcome of this case potentially could affect more than just the wine-and-cheese set, because other state laws restrict all sorts of Internet commerce. For example, some states require mortgage lenders to maintain a brick-and-mortar presence to do business in the state.
Just what America needs -- more lawsuits.
Next month, the U.S. Supreme Court will hear arguments involving a clash between the constitution's commerce clause, which empowers the federal government to regulate interstate trade, and the Twenty-First Amendment, passed by Congress in 1933 to repeal Prohibition and authorize states to regulate alcohol within their borders.
The lifting of Prohibition led to a three-tier system to regulate alcohol. Producers sell only to state-licensed wholesalers, who in turn sold only to licensed retailers, who controlled and monitored sales to consumers.
The market began to change during the 1990s with expansion of the Internet, the increasing popularity of wine and the explosive growth of new wineries, particularly small ones that benefited most from Internet sales.
Many small vineyards broke from the standard distribution system by using independent freight carriers to send wine to customers in other states. These vineyards technically were breaking the law but in the early years of the Internet, no one paid much attention.
But beginning in 1996, local wholesalesrs worked with state legislators to win enactment of laws in Florida, Indiana, Utah and five other states that generally make it a felony to ship wine directly to consumers in those states. That's a death penalty for a winery, because state laws require felons to forfeit their alcohol licenses.
The Wine & Spirits Wholesalers, whose political-action committee raised $1 million this year, didn't stop there. In 2000, the group lobbied Congress to pass the Twenty-First Amendment Enforcement Act, which permits state attorneys general to bring cases against wineries in federal courts. The bill became law.
And how does Ralph Reed, former executive director of the Christian Coalition, come into the picture?
Mr. Reed, who now runs a public-relations firm with offices in Washington and Atlanta, was hired by the wholesalers. Even the normally abstemious National Association of Evangelicals is backing the wholesalers, united in their opposition to underage drinking.
The wholesalers asked Mr. Reed to generate letters to lawmakers from "family-oriented" people with religious backgrounds who would write about their concerns about underage consumers buying alcohol over the Internet. In a written statement, Mr. Reed's office said his group "strongly favors enforcing existing restrictions on minors purchasing alcohol."
Juanita Duggan, president and chief executive officer of the wholesalers group, says her members worry that the Internet makes it easier for youngsters to obtain alcohol. The group has a Web site, pointclickdrink.com, depicting, in quick sequence, two teenagers ordering alcohol on a laptop, a driver delivering a package, and a raucous party. "It shouldn't be that easy," the Web site says.
Small wineries say the wholesalers are interested merely in crushing competition, and scoff at the idea that teenagers would order an expensive bottle of wine on the Internet and wait seven days for delivery.
And the story gets even better. Who has been brought in on behalf of the small wineries? Former President Bill Clinton?
No, not even close. Former Whitewater prosecutor Kenneth Starr. Mr. Starr, currently the dean and professor of law at Pepperdine University School of Law, was brought into the case as an expert by the Coalition for Free Trade, a group of wineries that wants to overturn the prohibition of direct wine shipments to consumers.
He has filed a brief in support of the wineries (as an advocate of free markets).
And now you know. Stay tuned.
(11-24-04 wsj.)
P.S. To you lawyer-types out there. Think about it. The outcome of this case potentially could affect more than just the wine-and-cheese set, because other state laws restrict all sorts of Internet commerce. For example, some states require mortgage lenders to maintain a brick-and-mortar presence to do business in the state.
Just what America needs -- more lawsuits.
posted by Sid Cottingham | 11:38 PM
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