A federal district court has rejected a New York retailers claim that New Jersey's alcohol beverage System violates the 21st Amendment. It is a valid exercise of the state's power under the 21st Amendment. "Whether in-state or out-of-state retailer, the New Jersey System requires all wine retailers abide" by the same licensing requirements, and to sell wine through the New Jersey System.
The court also found the New Jersey System advances the legitimate local purpose of promoting health and safety that cannot be adequately served by reasonable nondiscriminatory alternatives.
The state's physical presence requirement allows the state to conduct its regulatory oversight of alcoholic beverage activity within the state to protect public health, safety and welfare. Unannounced inspections have uncovered undisclosed interests in licensed premises, including by organized crime, allowed state investigators to inspect the licensee's records, which has resulted in the uncovering of large sums of unaccounted for cash, unlawful acquisition of bev/al from prohibited sources, facilitates product recalls.
The court also noted that the state cannot rely upon other states to assist in its investigations. In 2018, the New York State Liquor Authority had refused to provide the investigation reports related to a fine against Wegman to enable the New Jersey ABC to determine if a similar investigation was justified in New Jersey.
The court found that both in-state and out-of-state retailers are eligible for plenary retail licenses and must me the same requirements, obtain the same licenses and be subje ct to the same inspections, audits and instigations.