Huber Winery v. Wilcher: The Commerce Clause, State Regulations and the Free Trade of Wine

Appearing in Vol. 1 No. 1 of KJEANRL this comment was written by Editor-In-Chief Bill Brammell, with the abstract written by staff member, Addison Schreck.

“Huber Winery v. Wilcher: The Commerce Clause, State Regulations and the Free Trade of Wine” tracks the District Court of the Western District of Kentucky as they consider the constitutionality of a collection of Kentucky State statutes which were intended to promote the state’s dwindling wine industry. All but one of the statutes was deemed invalid, each due to its violation of the commerce clause.

Prior to the decision “farm” wineries as well as “small wineries”, as defined under Kentucky law, enjoyed an exception from the three-tier distribution system utilized in Kentucky. The three-tier system prohibits the sale of wine directly to retailers, requiring the purchase to be conducted through an intermediary. The delineation of what constituted a “farm” or “small” winery was specific to Kentucky law and therefore excluded all out of state wineries, regardless of their size. As a remedy the court determined that the benefits previously enjoyed by the aforementioned group would be extended to out of state wineries as well.

Also invalidated was the In-Person Purchasing Requirement, which had previously required a Kentucky resident to personally visit any out-of-state winery from which they intended to have wine shipped directly to their home. This was found to clearly interfere with interstate commerce since the mail order business of wineries in distant states was clearly impeded by this limitation on their consumer base.

The final statute and the only one at bar to be found constitutionally permissible by the court was the Restaurant Wine Licensing Statute, which requires restaurants to purchase wines only from licensed wholesalers. The court found the statute to be permissible because it is evenhanded in its prohibition in that it does not favor in-state wineries.

The presence of this precedent makes it even more apparent that states wishing to foster cottage industries may be compelled to explore other options such as reciprocal agreements with other states, tax breaks and alternative marketing strategies. Huber Winery v. Wilcher serves as a warning to states attempting to pass legislation that would kindle in-state industries, as effective yet constitutionally permissible means of doing so are remarkably difficult to come by.