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Florida-based Importer Loses Bid to Sell Directly to California Retailers Without California Importer

by Kerana Todorov
February 24, 2020

 

A Florida-based wine importer has lost his bid in court to be allowed to sell wine directly to California retailers without being required to ship the bottles to a California-based importer.

A California federal judge on Friday dismissed a complaint from Florida-based Orion Wine Imports LLC, a company based in Clearwater, Fla., and its owner and founder, Peter Creighton, against Jacob Applesmith, director of the California Department of Alcoholic Beverage Control.

Chief U.S. District Chief Kimberly Mueller dismissed the matter outright. Orion cannot file another amended complaint. The plaintiffs, who had filed a third amended complaint in September, have indicated they would not intend to seek a further amendment, according to the order filed in U.S. District Court in Sacramento.

Allowing a wine importer to sell wine directly to a California wine shop would be like allowing the retailer to act like an importer without a license, the judge stated.

The case stems from Orion’s attempt in 2018 to strike a deal to sell wine directly to a retail store in Truckee, Calif. Orion and Dean Schaecher, owner of Pour House, discussed an agreement in 2018 to sell wine at Schaecher’s licensed retail wine shop. The two parties reached a deal. However, Orion and Poor House voided their agreement after they concluded that such direct wine sales were not permitted under California law, according to court filings. Neither party was willing to risk violating California law, according to the plaintiff.

Orion, which filed the lawsuit in June 2018, presented a third amended complaint in October. State attorneys sought to have the case dismissed, citing the lack of discrimination.

“California’s three-tier system for regulating the in-state sale alcoholic beverages is non-discriminatory,” attorneys for the director of the California Department of Beverage Control said in November. “(The plaintiffs) may obtain the same importer and wholesale licenses as California residents on the same terms.”

Orion and founder Peter Creighton disputed California’s requirement that all wine entering the state must be sold through a third-party importer or wholesaler, according to court filings.

Attorneys for the California Department of Alcoholic Beverage Control sought to have the complaint dismissed.

The California Beer and Beverage Distributors and Wine and Spirits Wholesalers of California filed a brief in support of the state’s motion to dismiss the complaint.

California’s system is “carefully crafted to address the harms that can arise from the disorderly sale of such products,’ according to the trade associations, referring to the alcoholic beverages. The questions are whether California can implement a three-tier system and whether requiring that alcohol be delivered to a wholesaler at an in-state facility “'furthers' the three-tier system,” according to the brief. “To those questions, the answer is ‘yes.’”

The California State General’s office represented the California Department of Alcoholic Beverage Control.


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