The brouhaha involving direct shipments of wine from vintner to consumer took a weird turn last week, when the 4th Circuit Court of Appeals ruled North Carolina's ban of direct shipments from out-of-state wineries to Tar Heel consumers violated the Constitution's Commerce Clause, which assigns the regulation of interstate commerce to Congress rather than the states. This is the argument the Institute for Justice and boutique wineries across the country have made successfully at the District Court level in several instances. (The main issues are spelled out in editorials I wrote here, here and here.)
So what's the problem? The 4th Circuit said that NC's ban would withstand constitutional muster if the state outlawed all direct shipments, even those from in-state wineries to their customers. This is the worst of all worlds, and even the wineries who seek protection from out-of-state competition are asking the appellate court for a rehearing. As the manager of Biltmore Estates in Asheville said, the decision would criminalize commerce that's now legal, which isn't the remedy the vintners sought initially. Still, if the ruling stands, and other circuits follow suit, this could sound a death knell for wine clubs nationwide.