“Improper Conduct”
This vague and completely undefined concept is cited by the New York State Liquor Authority (NYSLA) as the reason it is attempting to revoke the license of a prominent New York wine retailer to to do business in the state. Is the authority of the Chairman of NYSLA to revoke a license on the basis of undefined “improper conduct” by the licensee fertile ground for regulatory mischief on the part of the NYSLA? We think so.
Though not part of the definition of “improper Conduct” and though not illegal in the state of New York, the shipment of wine from a NY retailer to a consumer in another state where the NYSLA Chairman believes it is illegal to be sent is what the NYSLA claims warrants the revocation of a retailer’s license, the shutting down of the business and the laying off of numerous employees.
The NY retailer is Empire Wine and a disciplinary hearing on this issue is set for late January. This hearing comes in the wake of Empire Wine suing the State Liquor Authority for selective prosecution, unconstitutionally interfering with Interstate Commerce and using a vague and outdated regulation to revoke their license.
Of course the primary question that has yet to be answered is Why the NY State Liquor Authority is pursuing this kind of quixotic regulatory attack on Empire Wine. Having been asked why, the NYSLA will only say they won’t reveal the source of a supposed complaint. Furthermore, the NYSLA claims that by shipping out of state to consumers in states where it is allegedly illegal to ship wine, Empire Wine increases their buying power, are able to obtain greater discounts from wholesalers, and therefore put other NY retailers at a disadvantage.
It’s notable that while the issue of shipping wine from a retailer across state lines is grey at best, what isn’t at issue is whether Empire Wine or any other NY wine retailer may sell a bottle of wine to anyone located anywhere in the United States. This may be done all day and all night. It is entirely legal.
The National Association of Wine Retailers position on this matter and on the matter of remote sales and shipping is and has been clear for many years: First, state laws that prohibit the shipment of wine from an out of state retailer into a state where its own local retailers may ship wine is entirely unconstitutional for the very straightforward reasons laid out in the 2005 Granholm v. Heald Supreme Court decision on the issue of direct shipment of wine. No where in that decision did Justice Anthony Kennedy note that the Court’s reasoning or its decision was limited to impacting wineries that ship and any lower court that has assumed this limiting view of Granholm v. Heald simply has it wrong.
Second, in pursuing the revocation of Empire Wine’s license to operate, the New York State Liquor Authority is engaging in an all out attack on New York wine retailers, on consumers nationwide and is doing so in such a way that invites anyone who looks to determine that some sort of vendetta is underway at the NYSLA. Why Empire Wine and no other retailer? Why now? What dealings did the NYSLA have with Empire Wine in the past? What precedent is there for shipping wine to a willing customer in another state being deemed “improper conduct”?
These questions deserve answers. But the most important question that needs answering is what or who prompted the New York State Liquor Authority and its Chairman to launch such a broad attack on the great wine and spirits retailers of New York State?
The National Association of Wine Retailers will support Empire Wine as it battles against this kind of obscene regulatory overreach and every other wine retailer who believes there are limits to the power of state liquor authorities ought to do the same.