Albany

A popular Capital Region liquor retailer is uncorking a lawsuit against the State Liquor Authority, claiming the regulatory body is overstepping its powers by seeking to shut down the store's sales to out-of-state customers.

Empire Wine, located in the Northway Mall off Central Avenue, plans to file suit today in state Supreme Court in Albany. The action comes seven weeks after the SLA hit Empire with a letter saying it was in violation of a regulation that allows the state entity to revoke, cancel or suspend a liquor license due to "improper conduct by the licensee," in this case shipping wine to customers in 16 states — Pennsylvania to Massachusetts, Louisiana to Arizona — that bar direct sales to consumers.

Empire doesn't dispute shipping the grog, but its lawsuit argues that there is no New York state law or regulation barring the shipment of wine to customers in other states. Moreover, the suit claims that the "Commerce Clause" of the U.S. Constitution gives the federal government and not individual states the power to regulate interstate trade.

"In attempting to prevent Empire from shipping wines to customers in other states, and penalizing Empire for allegedly doing so, SLA is acting without constitutional or statutory authority," says the suit. It also argues that the regulation cited by the SLA is unconstitutionally vague and gives the body "unfettered discretion" to determine what constitutes improper conduct.

SLA spokesman William Crowley said he could not comment on Empire's action, which the authority had not received on Monday, but noted that Empire had been charged with "selling directly to consumers in 16 states where direct sales to consumers are illegal."

Speaking generally, Crowley said although the customer was in another state, the retailer's location in New York places its actions under the jurisdiction of the SLA. He said abundant case law backed up the SLA's contention that such practices fall within the legal definition of "improper conduct," which has also been used to shut down not only retailers, but also bars that fail to meet regulatory standards.

In an interview, Empire owner Brad Junco said the state's action would accomplish nothing more than hindering the New York's ability to compete with retailers in other states for the burgeoning online market.

"The decision they're making would do nothing more than put New York behind," said Junco, who opened Empire in 2007. He said out-of-state online sales amounted to "a few thousand" transactions annually. New York's relatively low excise tax and "unsurpassed" selection, he added, made its online outlets popular resources for wine aficionados.

Empire's website notes that it can't ship to 13 states, including Massachusetts — one of the states cited in SLA's Aug. 1 letter.

All-Star Wine & Spirits in Latham, another large and popular Capital Region retailer, also ships out of state. Its website lists 11 states that can't receive its wares.

All-Star's owner Craig Allen described out-of-state sales as "a real gray area," a forest of shifting laws, permits and enforcement practices that retailers were constantly trying to stay abreast of.

Allen sympathized with Empire, but said the SLA's action against it wasn't unique. "The Liquor Authority, like the NFL, says that even though you're not violating our laws ... if you're violating laws in other states it's still a hit," he said.

The SLA's Crowley could not reveal who had made the initial complaint against Empire. Allen speculated that it must have come from an out-of-state retailer who became aware of Empire's prices.

New York's policies toward mail-order wine sales have an illustrious history. The 2005 U.S. Supreme Court decision Granholm v. Heald found that the Empire State and Michigan couldn't restrict shipped sales from out-of-state wineries while allowing for direct sales from in-state producers.

cseiler@timesunion.com • 518-454-5619