A Starr Advocate for Small Wineries
By Nina Sovich

(FORTUNE Small Business) – Ken Starr, of Whitewater fame, is getting into the wine business. The Coalition for Free Trade--an organization of wine growers for which Starr acts as an advisor--has sued Arizona, Florida, New Jersey, New York, and Ohio. At issue: rules on the books in those and 19 other states that forbid the direct sale of alcohol across state lines, requiring wineries to court a distributor--which can cost 30% per bottle--rather than selling directly via phone or the Internet. "We have to hire a broker," says Richard Steltzner, a Napa Valley wine grower, "and travel all over the country paying homage to the distributors."

The cases pit the commerce clause of the Constitution--which forbids states from restricting interstate commerce--against the 21st Amendment, which repealed Prohibition but allowed states to regulate liquor distribution. Florida's and New York's courts should reach decisions soon. North Carolina, Texas, and Virginia responded to earlier suits by discarding their laws this year. Small wineries are toasting the suits as victories against corporate interests. But Smoke Wallin, the head of Indianapolis-based distributor National Wine & Spirits, contends the movement is just a pretense for huge wineries to bypass distributors and absorb the markup. Sour grapes, maybe? --NINA SOVICH