How Laws are Made, Ohio Version
- posted by Jim Leitzel @ 10:16 PM

In mid-2005, when the Supreme Court ruled that states could not discriminate against out-of-state wine producers in setting their rules for direct shipments to consumers, Vice Squad member Michael noted that the required unification might not lead to liberalization of direct shipment laws -- states could unify their rules (that is, end discrimination against out-of-state producers) by attaching to in-state producers the same burdens they had previously imposed only upon the out-of-state vintners. Ohio has taken a different tack, however, one that makes an end run around the law. Only small vineyards are allowed to make direct shipments to consumers. Why lo and behold, what do you know, all of Ohio's in-state wine makers are small enough to qualify to make direct shipments! Too bad that those big California wineries don't make the grade, but hey, this is evenhanded legislation.

I think that this law will have a hard time surviving judicial review. The fig leaf covering the unconstitutionality is that Ohio's definition of a small winery used a production quota that wasn't just any arbitrary number that protected all of the in-state producers. Rather, Ohio pulled the quota from the federal tax code, from a provision that offers a tax break to small vineyards. But the intent of this Ohio law is so obviously discriminatory -- the protective intent is admitted by one of the supporters, who says it was viewed as a 'jobs bill' -- that a federal court should have little trouble seeing through or around the fig leaf.

Details of how such a bill could become a law -- not for the squeamish -- are here. Thanks to Jonathan Adler of the Volokh Conspiracy for commentary and the pointer.

Labels: alcohol, federalism, free trade, licensing, Supreme Court