Johnson City Resident Seeking to Overturn Tennessee's Wine Import Ban.
Tennessee is one of only six states that outlaws direct sales between citizens and out-of-state winemakers. As it stands, an out-of-state firm can only sell its alcoholic beverages to licensed Tennessee wholesalers who must then sell the beverages to a licensed Tennessee retailer. Each step in this chain is taxed by the State.
Rick Jelovsek of Johnson City has filed suit in Federal Court for the Eastern District of Tennessee to change all that.
Jelovsek’s lawsuit, which has been joined with a companion lawsuit filed by an out-of-state winery, alleges that the wine import ban is in violation of the Commerce Clause of the US Constitution in that “the laws favor, protect and provide economic advantage and monopoly to in-state wholesalers, retailers and wineries and discriminate against out-of-state vendors.”
The State has countered that, under the 21st Amendment, it has broad authority to regulate the manufacture and sale of alcoholic beverages within Tennessee’s borders, so long as it exercises that authority in an even-handed manner.
On this point however, District Judge Ronnie Greer has already taken issue with the State’s position, stating that "these provisions on their face appear to give favor to an in-state producer of wine in the sale of wine directly to consumers…All of this arguably serves to limit competition in the wine industry in this state, limiting choice in the selection of wines, limiting competition, and potentially driving up prices."
On Tuesday, U.S. District Magistrate Judge Dennis Inman allowed the Wine and Spirits Wholesalers of Tennessee to join in defending the lawsuit, finding that it had a substantial legal interest at stake.
A trial date has not been set, but Tennessee’s resident oenophile’s (wine lovers) are sure to be following this one closely.
Read the full story from KnoxNews here.