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New Jersey Governor Chris Christie recently signed a bill into law legalizing winery direct shipping in the Garden State, but does the new law taunt federal appellate court precedent?
The law allows out-of-state, licensed wineries to directly ship, at most, 12 cases annually to New Jersey residents who are 21-years or older. It is reportedly the 39th state to allow direct shipping.
However, the new law doesn't allow direct shipping from wineries that make over 250,000 gallons of wine annually, which is known as a "capacity cap limit."
Massachusetts tried to put a similar production cap on direct distribution, which was summarily rejected by the First Circuit in 2010. The court found that the 30,000 gallon cap violated the Commerce Clause because it gave Massachusetts’s wineries an advantage over its significantly-burdened out-of-state competitors. Further, the law’s non-facial discrimination was found to be purposeful given its statutory context, legislative history and other factors.
Similarly in New Jersey, the majority of the Garden State’s wineries fall way under the capacity cap limit, but 90 percent of outside competitors would be excluded under the new law, according to Wine Spectator.
It seems the New Jersey legislature is aware of the potential problem but is content to wait until someone challenges it in a court with jurisdiction over it, however. Jersey Senate President Stephen Sweeney reportedly told the Spectator that if “the courts rule the cap is not valid, then we’ll just move forward without the cap.”
It has taken more than two years for New Jersey to finally pass a law authorizing direct wine shipping. Hopefully, the production cap won’t, as Sweeney told the Spectator, “blow up the bill.”