The Journal Gazette, 600 W. Main St., Fort Wayne IN

INDIANAPOLIS – For more than 20 years, Cap n’ Cork liquor stores in Fort Wayne have shipped wine using a third-party delivery company to area customers who have joined wine clubs.

Until May.

That’s when the Indiana State Excise Police showed up and cited Cap n’ Cork for violating its alcohol permit. State law prohibits home delivery of alcohol by liquor stores unless they use their own employees.

And now Andy Lebamoff, co-owner of Cap n’ Cork, has filed suit, challenging the law as unconstitutional and claiming another law allowing wineries to ship using a third-party common carrier is discriminatory.

“It’s a good business. We collect sales tax for Indiana,” he said, noting $110,000 a year in taxes from the practice. “We’re just looking for fairness.”

Lebamoff claims he received permission from the then-Alcoholic Beverage Commission in the 1980s. He said the wine comes from an out-of-state retailer to an in-state wholesaler. Then it is sent to Cap n’ Cork for delivery by UPS.

Even the chairman of a legislative study committee on alcohol issues recently admitted at a hearing that he has received wine from Cap n’ Cork by UPS after joining a wine club while visiting Napa Valley in California.

But the Indiana State Excise Police said they received a complaint about the practice and began an investigation. The excise police have cited one other liquor store in the state for similar shipping violations.

“There is no record at the ATC of Cap n’ Cork receiving permission to ship their product via common carrier,” said Jennifer Fults, spokeswoman for the excise police. “The scope of a package store permit would prohibit them from doing so.”

Lebamoff complains that he was caught in a sting by the Wine and Spirits Distributors of Indiana in what has essentially become a turf war.

Jim Purucker, Wine and Spirits executive director, laughs at the accusation of a sting. After all, he is the one who made the complaint, and he said he had no idea a Fort Wayne liquor store would become involved.

It started when he received a direct-mail solicitation from a California retailer to join the NRA Wine Club. He signed up as a lark, expecting the club to follow the law and deny him shipping.

He said the shipment is illegal for several reasons.

First, a retailer does not have shipping privileges under Indiana law. And second, while wineries have limited direct-shipping rights, the customer must first have a face-to-face transaction with the winery.

To Purucker’s surprise, he was accepted into the club, and a box of wine from Cap n’ Cork showed up on his porch by way of UPS.

So he reported it to the Alcohol and Tobacco Commission.

In the meantime, Purucker joined a Wall Street Journal Wine Club and another box of wine from Cap n’ Cork arrived.

“There isn’t anybody who has checked my ID in the whole situation,” he said. “At the end of the day, we’re a conservative state, and we’ve decided … that we want to make sure there are as few leaks in the system as possible.”

But the owners of Cap n’ Cork feel the restrictions unfairly limit their ability to operate. Lebamoff said Cap n’ Cork has an aggressive Internet advertising initiative and can’t use its own employees to deliver to customers hundreds of miles away.

The lawsuit was originally filed in Marion Superior Court on behalf of Lebamoff Enterprises and two central Indiana Cap n’ Cork customers who want wine shipped to their home.

The suit came days after the state won another wine-shipping battle upholding the state’s face-to-face transaction requirement for wineries.

It has since been moved to federal court, and Cap n’ Cork attorney Robert Epstein is preparing a motion for summary judgment – akin to a dismissal of the case.

He claims the state restrictions violate the Commerce Clause of the U.S. Constitution and discriminate against liquor stores in favor of wineries.

“This is an archaic state,” Epstein said. “Thirty-five states allow direct shipment of wine without hassle. But not here.”

nkelly@jg.net