The Third Circuit Gives Out-of-Staters Something to Wine About

On February 28, 2025, the Third Circuit upheld a New Jersey law that bars the sale of out-of-state wine to New Jersey consumers without a license.

The state law in question allows only sellers with a physical presence in New Jersey to ship wine directly to New Jersey consumers. In its precedential opinion, the Third Circuit explained that the New Jersey law is upheld through the 21st Amendment to the United States Constitution.

The 21st Amendment is most commonly known for repealing Prohibition. Less notably, it also reserves the states’ right to regulate alcohol transportation within their borders by prohibiting the transportation or importation of alcohol into any state if doing so would violate state law.

Now, why is this important? This ruling matters because it has several potential benefits for New Jersey consumers and liquor distributors alike.

The court emphasized that in addition to its constitutional legs, New Jersey’s law is also valid on public health and product control grounds by allowing states to better identify sources of contamination and more efficiently institute recalls.

The court also discussed the physical presence requirement’s role in protecting consumers from fraudulent product sales by more conveniently facilitating investigations into questionable sellers. Lastly, this ruling also protects the rights of New Jersey liquor distributors from competition from out-of-state distributors.

Although out-of-state wine retailers are likely not pleased, it’s hopeful that this ruling will better protect the health and well-being of New Jersey consumers.