Washington State Winery Challenges Calif. B2B Law

The suit against the California ABC challenges the constitutionality of California law that allows licensed wineries in the state to sell wine products directly California retailers without the burden and expense of going through a wholesaler while requiring out-of-state wineries to use a California wholesaler.

It's the latest in a series of lawsuits that alleged the law violates the dormant commerce clause of the U.S. Constitution as decided in the seminal 2005 Supreme Court decision Granholm v Heald, which struck down New York and Michigan laws that similarly favored in-state wineries over out-of-state wineries. 

But in Granholm, the U.S. Supreme Court said the 21st Amendment was "unquestionably constitutional."

The Washington State suit has the backing of the National Association of Wine Retailers. “State laws only serving protectionist and discriminatory purposes deserve to be struck down as a matter of law and marketplace fairness,” said Tom Wark, executive director, NAWR.

“The required use of a wholesaler by out-of-state wineries but not in-state wineries is a relic of the 1930’s post-Prohibition world, stifles economic development, hampers the ability of retailers to access worthy products from out of state, denies consumers access to legal products, and unjustifiably props up the financial and political interests of California middlemen wholesalers.”