Washington, DC  – President Clinton signed into law the “Trafficking Victims Protection Act of 2000,” which includes Senator Orrin Hatch’s (R-Utah) S. 577, the “21^st Amendment Enforcement Act,” as amended by Senator Dianne Feinstein (D-Calif.).

S. 577 allows state Attorneys General federal court jurisdiction to pursue potential civil injunctive relief for alleged violations of state law regulating the importation or transportation of alcohol.  Those news reports that initially claimed that S. 577 will “halt Internet sales of wine” are clearly in error.  Quite to the contrary, the legal framework already in place allowing consumers to receive interstate shipments in 20 states and intrastate shipments in 30 states will remain intact.  The new law does not provide for either civil damages or criminal penalties and will not adversely affect businesses currently making legal shipments. 

With the passage of S. 577, including the Feinstein amendment, Congress and the President for the first time have recognized that the powers vested in the states by the 21^st Amendment are not absolute.  This mirrors the last 35 years of Supreme Court interpretation of limited state power under the 21^st Amendment, requiring the courts to balance state authority under the 21^st Amendment with other constitutional rights such as the commerce clause, the due process clause, and the First Amendment.  Therefore, in order to gain injunctive relief, a state Attorney General must prove that state law has been violated, and that the law is a valid exercise of power under the 21^st Amendment and not inconsistent with any other provision of the Constitution.  The President’s signature does not grant states any additional power nor endorse any state alcohol laws.

In fact, political closure at the federal level of this highly controversial issue provides an additional incentive for Wine Institute to continue working vigorously at the state level to open the remaining states to allow limited direct shipments of wine to adult citizens.  Just as he first stated in May, 1999, at the Wine & Spirits Wholesalers of America (WSWA) annual convention in Boston, Wine Institute President & CEO John De Luca once again makes a direct call to WSWA, “We invite the wholesaler community to work with our organization and consumer groups to craft creative solutions state-by-state as we have since 1985.”

S. 577 may well prove beneficial in future litigation, as it is clear that certain state alcohol laws are discriminatory and anti-competitive.  These laws protect the wholesalers, and harm consumer choice and hundreds of small wineries that are locked out of the 65-year-old distribution system.  State laws that encroach on interstate commerce, or other constitutionally guaranteed rights, are being challenged by wineries and consumers in New York, Texas, Florida, Virginia, Indiana, Michigan and North Carolina. 

De Luca praised the many members of Congress, especially Senator Feinstein and House Judiciary Committee Chairman Henry Hyde (R-Ill.), for the legal procedural safeguards included in the final version of S. 577.  Their Congressional Record statements are available at www.wineinstitute.org in the What’s New? section.

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