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Some states prohibit motor carriers, like UPS and FedEx, from delivering wine. There are, of course, ways to get around these wine delivery laws. A shipping business in our city has a sign that says, "We can't ship wine, but we can ship 'olive oil,' (wink, wink.)" The only problem is that shipping "olive oil, (wink, wink)" may violate state laws.
Instead of skirting an Indiana wine delivery law, Cap N' Cork, a chain of Fort Wayne retail liquor stores, challenged the law directly in federal court. This week, the Seventh Circuit Court of Appeals ruled against the Cap N', finding that the law was valid under the 21st Amendment.
Indiana law prohibits alcohol retailers from shipping their wares through motor carriers. Instead, a wine dealer must use its own employees to fulfill delivery orders. Drivers employed by liquor retailers to be trained in, and tested on, Indiana's alcohol laws and the recognition of phony IDs.
Cap N' Cork challenged the Indiana wine delivery law on two grounds. First, it argued that the law is preempted by the Federal Aviation Administration Authorization Act, which provides that a state "may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier." Second, it claimed that the wine delivery ban unduly burdens interstate commerce. The Seventh Circuit Court of Appeals ruled against Cap N' Cork on both arguments.
The court rejected the company's preemption argument because the Indiana wine delivery ban regulates the type of cargo that a motor carrier can deliver, but not the actual motor carrier. Furthermore, the court found that Indiana's interests in regulating the manner in which wine is sold and eliminating delivery to underage drinkers were within the core powers the 21st Amendment confers on the states, thus the law was valid under the amendment.
The Seventh Circuit also found the interstate commerce burden claim lacking, noting "the case comes down to a complaint that state law is preventing Cap N' Cork from enlarging its sales area to encompass parts of Indiana remote from Fort Wayne. If true that is an effect on intrastate commerce, not interstate commerce. No effect on interstate commerce has been shown."
For now, the Indiana wine delivery law will remain in place. However, the Seventh Circuit acknowledged that the law might not survive a challenge from a motor carrier asking the state to allow it to opt into the same training requirement imposed on drivers employed by wine retailers.
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