Designer Skin LLC v. S & L Vitamins, Inc., et al.
Juanita Swedenburg, et al. v. Edward F. Kelly, et al.
00 Civ. 0778 (S.D.N.Y., September 5, 2000)
Court denies motion brought by defendants to dismiss claim that N.Y. Alcohol and Beverage Control Law ("ABC Law") Sections 102 (1)(a), (c) and (d) is unconstitutional because it violates the Commerce Clause, the Privileges and Immunity Clause and the First Amendment.
Plaintiffs Swedenburg and Lucas are each proprietors of wineries located outside of New York. The remaining plaintiffs are each New York resident consumers of alcoholic beverages.
The plaintiffs contend that the ABC Laws in question prohibit out-of-state wineries from selling wine directly to New York state consumers (via the Internet or otherwise) while permitting in-state wineries to make such sales. Such a ban is effectuated by virtue of the ABC Law's requirement that to make such sales, a party must be licensed to do so, and the statute's alleged prohibition on issuing such licenses to out-of-state wineries such as those run by plaintiffs.
Plaintiffs further contend that a principal purpose of the ABC Law is "economic protectionism, primarily or exclusively for the benefit of [New York] wholesalers." As a result, plaintiffs contend, the ABC Laws violate the Commerce Clause, which prohibits statutes which discriminate against non-residents in favor of local interests.
Plaintiffs also contend that the statute violates their rights under the Privileges and Immunities Clause, by significantly impairing their ability to earn a living selling wines, which is a direct result of the statute's prohibition of their direct sale of wines to the New York consumer.
Lastly, plaintiffs contend that by "subject[ing] to misdemeanor liability any person who advertises out-of-state wines in any manner whatsoever, including over the Internet," the ABC Laws at issue violate plaintiffs' rights under the First Amendment.
Citing several decisions in pending federal cases in which courts have either preliminarily enjoined or granted summary judgment to plaintiffs raising similar Commerce Clause challenges to the alcoholic beverage control laws of other states see e.g. Dickerson v. Bailey, 87 F.Supp. 2d 691 (S.D.Tex. 2000); Kendall-Jackson Winery Ltd. v. Branson, 82 F. Supp.2d 844 (N.D. Ill. 2000) and Bridenbaugh v. O'Bannon, 78 F. Supp.2d 828 (N.D. Ind. 1999), as well as recent Supreme Court decisions which indicate a shift in the interpretation of the Commerce Clause and 21st Amendment, the court denied defendants' motion to dismiss the Commerce Clause claim on the ground that it failed to state a cause of action. Noting that:
Technological advancements facilitate -- as never before -- the commerce between and among the states. [and that] the Internet increasingly is responsible for direct sale and shipment of goods to consumers.
the court concluded that "in view of the allegations in the complaint and in light of these (legal and economic) developments, it would be inappropriate to deny Plaintiffs here the opportunity to adduce evidence in support of their claims."
The court also denied defendants' motions to dismiss the remaining counts of the complaint.
In reaching its decision, the court noted that it was not ruling on the merits of plaintiffs' claims which would occur at a later date.