Lawsuit Over Texas Wine Debated in 5th Circuit Court of Appeals

 

A Dallas case to determine whether Texans can cut out the middleman and buy wine directly from out-of-state stores pits consumers' rights against the state and wholesalers that would suffer a loss of business.

Arguments before the 5th U.S. Circuit Court of Appeals later this month will be closely watched by wine connoisseurs, wholesalers, retailers and legislators because similar lawsuits are springing up all over the country, and the issue is likely to end up in the U.S. Supreme Court.

Siesta Village Market vs. Steen is "all about consumer choice, consumer access and all about consumers being able to do price comparisons," said Tracy Genesen, a San Francisco attorney representing a group of Texas consumers and out-of-state wine retailers.

"Shouldn't a San Antonio consumer be able to price shop? Be able to look on the Internet and say 'I can get this wine from somebody in California – darn it, I should have the right to do that.' ... This is America – that's what's at stake."

Under current laws, Texans can buy wine directly from out-of-state wineries but not from out-of-state stores. Like most states, Texas uses a three-tier system in which producers of alcohol, except the wineries, generally must do business through in-state wholesalers, who must sell to in-state retailers, who sell to Texas consumers.