The New York State Liquor Authority's prosecution of an Albany wine retailer for shipping to out-of-state customers has been postponed for now. At the first hearing on the charges, on Jan. 23, the state agency presented evidence that Empire Wine sold to customers in 16 states. But when Empire Wine's lawyers attempted to call two New York State Liquor Authority (NYSLA) employees to testify, the agency refused to produce them, and the administrative judge overseeing the hearing said she lacked the jurisdiction to enforce subpoenas. She adjourned the proceedings for now.

Created after Prohibition, the NYSLA is an independent agency that regulates and oversees alcohol sales. The Authority charged Empire Wine with 16 counts of improperly shipping wine to out-of-state customers last year. In response, Empire Wine filed a lawsuit in state court, alleging that the NYSLA has no jurisdiction over out-of-state wine sales, its charges violate the U.S. Constitution’s Commerce Clause and that the NYSLA rule that Empire is purported to have violated is "unconstitutionally vague." That suit won't proceed, however, until the NYSLA's case is decided.

Administrative Judge Nancy Butler, an employee of the NYSLA, oversaw the Jan. 23 hearing and told Empire Wine's lawyers they would need to petition the state supreme court to force the NYSLA employees to testify. She scheduled a phone conference to discuss the case with both sides on Feb. 23.

"Anyone who watched the entire spectacle in Albany today saw a government regulator unable to produce evidence of wrongdoing while demonstrating a clear overreach of their authority,” said Brad Junco, Empire Wine's owner. “We are quite confident that when the the dust has settled from this unprecedented and unconstitutional case, Empire Wine will be absolved of any wrongdoing and will be able to continue to provide outstanding service to our customers."

The hearing was held in a small conference room at the NYSLA’s Albany office. The Authority presented more than a dozen exhibits as evidence, including a legal document from one of the states Empire Wine is charged with improperly shipping wine to that had no signature. Empire Wine attorney Will Nolan objected to most of the exhibits, but in each case Judge Butler overruled him.

The NYSLA lawyers then called their only witness, the Authority's investigator on this case. "We asked him what he was initially investigating [at Empire Wine] and he could not recall," Nolan told Wine Spectator. "There was a lot of 'I don't remember.'"

Multiple sources have alleged that the charges brought against Empire Wine were in retaliation for the retailer’s refusal to cooperate in an investigation of distributor the Winebow Group, which was fined in 2013 for offering preferential discounts to select retailers.

With the NYSLA’s case presented, Nolan called Empire Wine’s first witness, NYSLA director of enforcement Noel Colon. Despite being in the building, the NYSLA refused to present him, or the other NYSLA employee Empire Wine had subpoenaed, compelling Judge Butler to suspend the proceedings. "These are crucial witnesses for us," said Nolan. "The Authority should be compelled to provide us with testimony as to what its policy [on interstate wine sales] was, how it's changed, and what it is now." The NYSLA did not respond to requests for comment on the case.

The Commerce Clause bars states from restricting interstate trade, and was cited in the U.S. Supreme Court’s landmark Granholm decision that declared it illegal for states to discriminate between in-state and out-of-state wineries when it came to direct-to-consumer wine sales.

Retailer direct shipping proponents have long argued that the Granholm decision should apply to retailers as well, but most states, including New York, still operate under a system that permits in-state retailer-to-consumer wine shipping but forbids out-of-state retailers from doing same.

Across the country, state and federal authorities have for the most part turned a blind eye to interstate wine sales in the past. While legislators, wholesalers, wineries, retailers and consumers have battled fiercely over the legality of interstate direct wine sales in the courts and legislatures, actual enforcement of these laws has until recently been relatively nonexistent.

With the proceedings adjourned until at least Feb. 23, Empire Wine will continue with business as usual. Sources close to the case believe that the longer judgment is delayed, the more likely it is the NYSLA may be willing to compromise. NYSLA Chairman Dennis Rosen brought these charges and earlier this month he was appointed by Gov. Andrew Cuomo to a new post as Medicaid Inspector General.