Published April 11, 2003 in issue #0010 of The Hook

BY LISA PROVENCE

Daniel Ortiz's wine-loving friends were having a problem getting their boutique wines in from out-of-state.

"You can't bring it in from California or D.C. only four or five bottles, and they have to be on your person," says the UVA law professor. "Any more than that is breaking the law."

Through an increasingly influential network of wine friends, Ortiz met attorney Matthew Hale, and soon the two were challenging Virginia's law prohibiting direct shipment of out-of-state wine to consumers. And on March 29, a federal judge ruled that not only was the wine and beer ban unconstitutional, but guess what so is the Alcoholic Beverage Control stores' policy of Virginia-only wines sales.

Ortiz says the challenge to ABC stores was for wine sales only, not spirits, but some analysts, including Attorney General Jerry Kilgore's spokesman, Timothy Murtaugh, think the ruling may affect Virginia's whole ABC monopoly of liquor sales.

As quoted in the Washington Post, Murtaugh believes the ruling "could have meant the end of state-owned liquor stores... possibly the beginning of the end for the [ABC] agency as a whole."

One of the plaintiffs in the case, Clint Bolick, says Judge Richard L. Williams listed a number of statutes he found to be unconstitutional. "The ABC monopoly wasn't in the sights of this lawsuit, but the judge seemed very interested in those aspects," says Bolick.

Bolick signed up as a plaintiff because of his passion for wine. He studied law at the University of California at Davis a university "better known for its wine school than its law school" and when he moved to Virginia, "I was dismayed to learn I wouldn't be able to get some of my favorite wines," he says.

The state's ban on direct shipping of wine led Bolick to "engage in blatant acts of civil disobedience" in obtaining desired wines, he confesses.

A co-founder of the Institute of Justice, which George Will describes as "a merry band of libertarian litigators in Washington who fight for economic rights where menaced," Bolick has filed a similar lawsuit in New York on behalf of Virginia vintner Juanita Swedenburg, whom he met when wine tasting.

Swedenburg can't sell any of her annual 2000 cases of wine through the mail, either. Indeed, 30 states forbid direct sales of wine, a ban Bolick thinks will end up before the U.S. Supreme Court within the next two years.

Currently there are also challenges to direct shipment prohibitions in North Carolina, Florida, Michigan, and Illinois.

Although the Virginia case is the first time Bolick has ever been a plaintiff, he won't mind if his name is on the Supreme Court case that finally overturns prohibitions against interstate shipping of wine.

Three small wineries joined Bolick and Robin Heatwole as plaintiffs in the case: Hood River Vineyards in Oregon, Miura Vineyards in Napa and Dry Comal Creek in Texas.

When Franklin Houser, owner of Dry Comal Creek, wanted to ship some of his wine to some lawyer friends in Virginia (Houser calls himself "a recovering lawyer"), he discovered he couldn't. Through an organization called Free the Grape, Houser ended up a plaintiff in the suit.

So why not just ship his wine through a distributor as the law demands? "A wholesaler won't touch me," says Houser. With an annual production of 4000 cases, "I'm too small." Houser couldn't even ship within Texas until last September.

If the Supreme Court overturned state prohibitions on wine sales, Houser would have 50 states to ship to, not just Virginia. "It would allow me to build my business," he says.

Local winemaker Tony Champ at White Hall Vineyards also would benefit if he could ship out of state, which customers frequently request. "We don't," says Champ. "Kentucky and Florida make it a felony."

If Virginia allowed direct shipping from out of state, there would be 13 reciprocal states Champ could ship to.

As for the distributors' opposition to direct shipping, Champ thinks it wouldn't really affect their monopoly. "The big vineyards are still going to go through wholesalers," he says. "The small vineyards that the distributors don't carry anyway are the only ones affected."

Judge Williams almost immediately issued a stay to his decision while it goes to the 4th U.S. Circuit Court of Appeals. Bolick thinks the odds for success are good, despite the 4th Circuit being "normally one of the more conservative courts," because it's an issue that crosses ideological lines.

As for gutting Virginia's liquor monopoly, UVA's Ortiz is less optimistic. "That's going to happen politically if it happens at all," he says. "This ruling may give the issue a little nudge."

Since the decision was handed down, Ortiz has gotten a flurry of calls from the press and from victims of Virginia's wine prohibition.

"One poor woman called this morning who bought a case of wine on her honeymoon in Spain that's been sitting in a warehouse for months," he says. To reclaim her wine, the woman has to get a wholesaler to take it, but because a wholesaler can't sell it directly to a consumer, a retailer would have to be involved to the tune of $400.

Maybe the 4th Circuit judge who hears the appeal will be a wine lover.

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