New Jersey Wineries Seek to Intervene in Federal Case Addressing New Jersey’s Direct Shipping Laws

On December 17, 2010, the United States Court of Appeals for the Third Circuit, in the case  of Freeman vs. Corzine,  held that New Jersey state provisions which allow an in-state winery, but not an out-of-state winery, to sell directly to consumers from their winery premises or at six salesrooms apart from their premises, and to sell directly to retailers, violate the dormant Commerce Clause and unjustifiably discriminate against out-of-state wineries that are not permitted to exercise these privileges. 

However, the court also held that New Jersey’s ban on direct shipping, which applies equally to both in state and out of state wineries, is constitutional.  The Court of Appeals sent the case back to the federal district court for the court to determine the proper remedy.  The District Court was therefore given the choice between permitting both in-state and out-of-state wineries to sell directly to retailers and consumers from winery premises within the state, or to prevent all wineries from exercising such privileges. 

New Jersey wineries, which are predominantly small wineries that do not have access to traditional wholesaler distribution channels and who depend heavily on the ability to sell directly to consumers and retailers, have now elected to intervene in the litigation to help protect the rights of in-state wineries.  While the details of the New Jersey winery position remains to be seen, they will likely argue for the allowance of direct shipment by both in-state and out-of-state wineries.  If agreed to by the District Court, such a decision could result in the opening up of New Jersey to direct shipping in the very near future.

For more information on direct shipping issues contact Bahaneh Hobel at [email protected]

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