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AG Nessel files suit against out-of-state wineries, retailer over wine shipments

BY Thursday, May 06, 2021 04:49pm

Michigan Attorney General Dana Nessel has filed lawsuits against two out-of-state wineries and one wine retailer for allegedly shipping wine into Michigan illegally.

The lawsuits, filed Wednesday in the U.S. District Court for the Western District of Michigan, allege New York City wine retailer Taste Wine LLC, Castello di Amorosa of California’s Napa Valley, and Grants Pass, Ore-based Schmidt Family Vineyards LLC violated the 21st Amendment Enforcement Act. The federal law allows states to enforce their liquor laws in federal courts. 

Michigan Attorney General Dana Nessel COURTESY PHOTO

In all three cases, the wine merchants were allegedly caught shipping wine into Michigan without the necessary licensing. The AG’s Office also claims that the state issued the companies cease and desist letters, but all three allegedly continued shipments into Michigan despite the initial warnings.

Out-of-state wine shipments have been a contentious legal issue in Michigan for more than 15 years, dating back to a 2005 U.S. Supreme Court ruling that deemed it unconstitutional to bar out-of-state wineries from shipping into Michigan and New York while allowing the same privileges for in-state wineries.

More recently, in May 2020, a three-judge panel of the Sixth Circuit U.S. Court of Appeals ruled that Michigan laws that excluded out-of-state retailers from shipping into the state were constitutional. The U.S. Supreme Court upheld the decision earlier this year.

In Michigan’s cases against Taste Wine and Schmidt Family Vineyards, investigators from the Michigan Liquor Control Commission (MLCC) placed orders through the merchants’ respective websites and successfully had their purchases shipped to Michigan locations. The lawsuits claim that the defendants shipped wines before and after receiving a cease and desist letter.

In the case of Castello di Amorosa, MLCC investigators initially reviewed a common carrier report concerning shipments of alcohol submitted to the agency by the U.S. Postal Service in 2018. The reports showed 621 shipments to Michigan, the state claims in court filings. After issuing a cease and desist letter, an additional common carrier report that covered January through June of 2020 showed continued shipments. Investigators placed an online order and successfully received their shipment, according to the state.

The defendants face up to $25,000 per violation plus reimbursement of investigative expenses and attorney fees. 

“We applaud Attorney General Dana Nessel for her aggressive approach to stopping out-of-state retailers from illegally shipping wine into Michigan,” Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association, said in a statement. “Her efforts send a clear message to out-of-state retailers that have been skirting state law, putting Michigan consumers at risk and cheating the state out of much-needed tax revenue: It is time to stop violating Michigan law or you will be caught, and you will be prosecuted to the fullest extent of the law.”

MLCC Chair Pat Gagliardi called the suits "an important deterrent against other companies violating the state's liquor laws and jeopardizing the health, safety and welfare of Michiganders."

Nessel’s office could not immediately be reached for comment.

The recent cases follow similar legal action in October 2020 in the U.S. District Court for the Eastern District of Michigan. At the request of the MLCC, Nessel filed 21st Amendment Enforcement Act lawsuits against two California entities — Go to Gifts Inc., which does business as The BroBasket, and Napa Valley-based Vinter’s Collective LLC — for allegedly shipping wine and beer directly to Michigan consumers from outside of the state.

“Our state’s liquor laws were drafted to protect the health, safety and welfare of Michiganders, and my office will use its authority to aggressively enforce those regulations,” Nessel said in a statement at the time.

Read 18201 times Last modified on Friday, 07 May 2021 11:52