Ind. wine dealer challenges Illinois law barring importation of alcoholic beverages

By John Breslin | Nov 9, 2016

SPRINGFIELD, Ill. (Legal Newsline) - Illinois officials aren't commenting on a challenge to the laws barring retailers from importing wine and other alcoholic beverages into the state.

The legal challenge, by an Indiana wine dealer and two Illinois residents, was filed just days after Gov. Bruce Rauner signed a new law stiffening penalties for retailers involved in the importation of liquor.

Questioned about the law, and the reasons for it being on the books, state Attorney General Lisa Madigan’s office directed questions to the Illinois Liquor Control Commission, which also didn't have much to say..

“The Illinois Liquor Control Commission is reviewing the case and withholds further comment at this time while the matter makes its way through judicial proceedings,” Terry Horstman, a commission spokesman, told Legal Newsline.

Wine dealer Lebamoff Enterprises, Joseph Doust and Irwin Berkley, both of Cook County, in their lawsuit accuse Illinois government officials of discrimination by blocking what can be sold to consumers in the state.

The suit was filed Sept. 1 in the U.S. District Court for the Northern District of Illinois. It names Rauner, Madigan, Illinois Liquor Control Commission Chairwoman Constance Beard and liquor board executive director U-Jong Choe.

Under current Illinois law, wine retailers in the state can obtain an “off-premises license” from the state “and deliver wine directly to Illinois consumers any wine that it has in its inventory.”

But only retailers based in Illinois can obtain such a license. The complaint states that treating interstate sales, shipment and delivery differently than intra-state transactions is a “statutory scheme” that “discriminates against out-of-state wine retailers” and violates the federal Commerce Clause.

The plaintiffs argue the limitations violate federal laws on interstate commerce applicable to retailers and customers.

Rauner, on Aug. 26, signed a law stiffening penalties for those importing wine into the state. It can now be prosecuted as a Class 4 felony, which carries a potential one- to three-year prison sentence.

The law also raises licensing fees across the board for manufacturers, wholesalers and retailers. While retailers cannot import into the state, wineries are allowed to do so if licensed. 

Representatives of the Wine and Spirits Distributors of Illinois - a trade group funded by the state's two largest wholesalers, Breakthru Beverage Group and Southern Wine & Spirits - have said the bill will bring in more revenue that will help the state's oversight of bootleggers and "bad actors" of e-commerce.

"(The bill) protects the health and safety of Illinois consumers by promoting compliance with state law. It also gives the Illinois Liquor Control Commission the resources it needs to prevent out-of-state suppliers from taking advantage of a loophole that allowed them to directly ship wine into Illinois without paying taxes," Karin Lijana Matura, executive director of Wine and Spirits Distributors of Illinois, said in a statement following the signing of the bill, according to a Chicago Tribune report.

But opponents of the law argue the state is missing out on "millions of dollars" in tax revenue and licensing fees.

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