Federal Court Overturns State Law Mandating Winemakers Use MN Grapes

Minnesota craft breweries can use hops from anywhere they want to make beer–and they do. But a law on the books to protect Minnesota grape producers from competition has long prohibited Minnesota wineries from essentially doing the same thing by limiting how many grapes they can bring in from out of state–until now.

A constitutional challenge was brought on behalf of two local vineyards by the Minnesota office of the Institute for Justice, which touted a federal judge’s overturning of the protectionist law as a victory for the free market.

“This is a huge win for the future of the wine industry and small wineries in Minnesota,” said Nan Bailly, owner of Alexis Bailly Vineyard. “We are finally free to make the wines we want to make, not the wine dictated by the state legislature.”

U.S. Federal Judge Wilhelmina Wright ruled in no uncertain terms that the law violated the Interstate Commerce Clause of the U.S. Constitution.

The judge stated that “the Act’s in-state requirement expressly favors and benefits in-state economic interests” and that “the Act’s in-state requirement is discriminatory on its face.” Because of that discrimination there was a heavy burden on  Minnesota to justify itself, something it didn’t even try to do: “There is no suggestion in the record or the parties’ arguments that the Act’s in-state requirement serves any interest other than favoring Minnesota’s economic interests over similar out-of-state economic interests.”

“The U.S. Constitution was crafted to guarantee free trade among the states,” said Institute for Justice (IJ) Senior Attorney Anthony Sanders. “Minnesota violated this founding ideal by restricting the grapes that wineries can purchase from other states. This is a vindication of our client’s rights and also of that founding ideal of free trade.”

The decision has implications far beyond Minnesota’s flourishing wine industry, due to similar laws on the books in other states.

The victory is the first ruling to find a law like this unconstitutional. Given the number of states that use the same protectionist barriers, it has major implications across the country. Those states—including New York, Pennsylvania, Illinois and others—may now have to face similar challenges to the one here. And given how clear the Minnesota judge’s ruling was, those states will be hard-pressed to continue justifying their restrictions on free trade in wine products.