Granholm v. Heald

Table of Contents – Granholm v.
Heald
Enhanced Case Summary

Notable Case Analysis: Editorial reasoning why this case is important and what the court added or changed about the law
Enhanced Procedural Posture: The underlying procedural posture discussed in greater detail
Explanation of Parties: Identifies the parties and describes their roles and relationships.
Parties’ Arguments: Includes a description of the arguments regarding significant issues
Quick Holding Bullets: Short statements of the court’s holdings in this case
Enhanced Overview: Detailed overview of facts, rationale, and holdings in bulleted, topical breakdown
Dissenting Opinion Overview: Summary of any dissenting opinions
Expanded Headnote Coverage
LexisNexis Headnotes: Existing headnotes provided for ease of comparison with Interpretive Headnotes
Interpretive Headnotes: Additional headnotes requiring editorial refinement to provide concise statements of legal points
Jurisprudential Analysis
Status of the Case: Discussion of prior and subsequent opinions involving the case
Comparative Case Content: Topical research and information about cases that have major holdings in the relevant area of law
Legal Analysis
Related Treatise Content: Summary of several prominent treatises related to the case or its subject matter
Related Law Review Articles: Summary of several prominent law review articles related to the case or its subject matter
Related Bar Association & Journal Articles: Summary of prominent bar association journal articles related to the case or its subject matter
Related Statutory Annotations: List of most related annotations, providing the most relevant cases interpreting the applicable statutes
News
Recent News Coverage of the Case: Excerpts from several articles about the case
Recent News Coverage of the Issue: Excerpts from several articles covering the issues
Recent News Coverage of the Parties: Excerpts from several articles covering the parties
Links to Related LexisNexis™ Content
Briefs and Other Filings Related to This Case
CourtLink Court Records
Corporate Party Links
Case Text
© 2008 LexisNexis™, a division of Reed Elsevier Inc. All rights reserved.

Case in Brief: Granholm v. Heald
Enhanced Case Summary
Notable Case Analysis
In deciding Granholm v. Heald, the United States Supreme Court decided that the dormant Commerce Clause trumped a state's
right to regulate liquor under the Twenty-First Amendment, at least when the state statute was discriminatory. The Court did
analyze local interests asserted by petitioner Michigan State and respondent New York State but quickly questioned their
legitimacy. The Court construed § 2 of the Twenty-First Amendment to restore states’ powers under the Wilson Act and Webb-
Kenyon Act without superseding the Commerce Clause, or any other constitutional provision.
Enhanced Procedural Posture
In one case, respondent Michigan residents, joined by an intervening out-of-state winery, filed an action against petitioner
Michigan officials claiming that the State of Michigan’s direct shipment laws violated the Commerce Clause. Petitioner, an in-state
wholesalers association, intervened in support of the State. A district court sustained the challenged laws, but the United States
Court of Appeals for the Sixth Circuit reversed.
In another case, petitioners, out-of-state wineries and their New York customers, filed an action against respondent New York
officials also seeking a declaration that the State of New York’s direct shipment laws violated the Commerce Clause.
Respondents, New York State liquor wholesalers and retailers’ representatives, intervened in support of the State. A district court
granted petitioners summary judgment, but the United States Court of Appeals for the Second Circuit reversed.
The Supreme Court of the United States consolidated the cases and granted certiorari on the following question: Did a state’s
regulatory scheme that permitted in-state wineries directly to ship alcohol to consumers but restricted the ability of out-of-state
wineries to do so violate the dormant Commerce Clause in light of § 2 of the Twenty-First Amendment?
Explanation of Parties
Petitioners
In the Michigan litigation, Michigan officials were subjected to litigation regarding the State of Michigan’s direct shipment
laws after Michigan residents’ orders for wine from an out-of-state winery could not be filled.
A Michigan wholesalers association intervened in support of the Michigan officials.
Case in Brief Page 1

In the New York litigation, out-of-state wineries were small wineries that relied on direct consumer sales. They were
unable to fill orders from New York State due to the State’s direct shipment laws.
New York customers were unable to receive attempted orders of wine from the out-of-state wineries. They joined the
wineries in an action against State officials challenging the direct shipment laws.
Respondents
In the Michigan litigation, Michigan residents’ attempts to order wine from an out-of-state winery were thwarted by the
State’s direct shipment laws.
The out-of-state winery was unable to ship wine as ordered by Michigan residents. The residents and the winery filed an
action seeking a declaration that the State’s direct shipment laws were unconstitutional.
In the New York litigation, New York State officials were sued by out-of-state wineries and New York customers thereof,
on grounds that the State’s laws regarding direct shipment of wine by out-of-state wineries to in-state customers were
unconstitutional.
New York State liquor wholesalers and retailers’ representatives intervened in support of the State.
For clarity, the Court referred to respondents in the Michigan cases and petitioners in the New York case as the wineries.
The opposing parties were referred to as the States.
Parties’ Arguments
I. Out-of-State Winery Had Same Access to State’s Consumers As In-State Wineries
Respondent New York defended its scheme by arguing that an out-of-state winery had the same access to the State’s
consumers as an in-state winery, as all wine had to be sold through a licensee fully accountable to New York. Link P. Arg.▼
Holding: The New York scheme granted in-state wineries access to the State’s consumers on preferential terms, as out-
of-state wineries were required to have physical presence in New York in order to become a licensee. A suggestion of a
limited exception for direct shipment did nothing to eliminate the discriminatory nature of New York’s scheme. Link P.
Arg.▼
II. Effect of U.S. Const. amend. XXI on States’ Statutes

Petitioner Michigan State and respondent New York State (the States) argued that, although their laws discriminated against
interstate commerce, they were saved by § 2 of the Twenty-First Amendment. Link P. Arg.▼
Holding: The Court noted that the States’ position was inconsistent with prior precedents and the history of the Twenty-
First Amendment. The Court stated that the Twenty-First Amendment did not allow states to regulate the direct shipment
of wine in such a way as to discriminate in favor of in-state producers. Link P. Arg.▼
III. Effect of Webb-Kenyon Act
The States argued that the Webb-Kenyon Act, 27 U.S.C.S. § 122 Shepardize , removed any barrier to discriminatory state liquor
regulations by reversing the prohibition in the Wilson Act, 27 U.S.C.S. § 121 Shepardize , on discriminatory treatment of out-of-
state liquors. Link P. Arg.▼
Holding: The Court found that the States’ reading of the Webb-Kenyon Act conflicted with the Court’s reading thereof in
Clark Distilling Co. v. Western Maryland R. Co., 242 U.S. 311 Shepardize (1917), in which the Court recognized that the
Webb-Kenyon Act simply extended that which was done by the Wilson Act. Neither act displaced the Commerce Clause
cases striking down state laws that discriminated against liquor produced out of state. Link P. Arg.▼
IV. Effect of Bacchus Imports v. Dias
The States, recognizing that Bacchus Imports v. Dias, 468 U.S. 263 Shepardize (1984), was fatal to their position, suggested that
the case should be overruled or limited to its facts. Link P. Arg.▼
Holding: The Court held that Bacchus did not stand alone in recognizing that the Twenty-First Amendment did not give
states complete freedom to regulate where other constitutional principles were at stake. A retreat from Bacchus would
also have undermined other cases that invalidated state liquor regulations under the Commerce Clause. Link P. Arg.▼
V. Effect on Three-Tier System of Liquor Control
The States argued that any decision invalidating their direct shipment laws would call into question the constitutionality of the
three-tier distribution system, pursuant to which separate licenses were required for producers, wholesalers, and retailers. Link
P. Arg.▼
Holding: The Court held that such state policies that treated liquor produced out of state the same as its domestic
equivalent were protected by the Twenty-First Amendment. However, the statutes in this case involved straightforward
attempts to discriminate in favor of local producers, which was contrary to the Commerce Clause. The three-tier system
was not affected by the Court’s holding in this case. Link P. Arg.▼

VI. Whether Internet Purchases of Wine by Minors Was a Problem
The States claimed that allowing direct shipment from out-of-state wineries undermined their ability to police underage drinking
because minors had easy access to credit cards and the Internet and were likely to take advantage of direct wine shipments as
a means of obtaining alcohol illegally. Link P. Arg.▼
Holding: The Court found that the States provided little evidence that Internet purchases of wine by minors was a
problem. Without concrete evidence that direct shipping was likely to increase alcohol consumption by minors, the States’
assertions were unsupported and insufficient to justify discriminatory regulation. Link P. Arg.▼
VII. Effect of Tax Collection
The States argued that their direct shipping schemes facilitated tax collection. Link P. Arg.▼
Holding: The Court found that for Michigan, the tax collection argument was a diversion because Michigan did not rely
on wholesalers to collect taxes on imported wines. The Court further found that licensing and self-reporting provided
adequate safeguards, as could other regulatory systems; therefore, the States’ regulatory objectives could be achieved
without discriminating against interstate commerce. Link P. Arg.▼
VIII. Other Rationales
The States offered a handful of other rationales, including facilitating orderly market conditions, protecting public health and
safety, and ensuring regulatory accountability for upholding their direct shipping schemes. Link P. Arg.▼
Holding: The Court found that all such objectives could be achieved through the alternative of an evenhanded licensing
requirement. The Court also noted that improvements in technology eased the burden of monitoring out-of-state wineries.
Link P. Arg.▼
Quick Holding Bullets
• In order to avoid economic Balkanization, states may not enact laws that burden out-or-state producers or shippers simply to
give a competitive advantage to in-state businesses. Link Quick Holding▼
• The Wilson Act, 27 U.S.C.S. § 121 Shepardize , reaffirmed, and the Webb-Kenyon Act, 27 U.S.C.S. § 122 Shepardize , did not
displace, the line of Commerce Clause cases striking down state laws that discriminated against liquor produced out of state.
Link Quick Holding▼

• The Twenty-First Amendment does not supersede other provisions of the Constitution and does not displace the rule that
states may not give a discriminatory preference to their own producers. Link Quick Holding▼
• Direct shipping schemes that discriminate in favor of local producers are contrary to the Commerce Clause and are not saved
by the Twenty-First Amendment. Link Quick Holding▼
• While § 2 of the Twenty-First Amendment gives the states broad power to regulate liquor, it does not allow banning or severe
limitation of direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers. Link
Quick Holding▼
Enhanced Overview
I. States’ Liquor Distribution Schemes
A. Three-Tier Distribution Scheme
Petitioner Michigan State and respondent New York State (the States) regulated the sale and importation of alcoholic
beverages through a three-tier distribution system, under which separate licenses were required for producers,
wholesalers, and retailers. The three-tier scheme was preserved by a complex set of overlapping state and federal
regulations. The States’ authority to mandate the three-tier scheme arose under U.S. Const. amend. XXI. The States’
systems in this case, however, discriminated against petitioner wineries and respondent wineries by substantially
limiting the direct sale of wine to petitioner customers and respondent residents.
B. Direct-Shipping Statutes
1. Michigan Case
In Michigan, wine producers could sell only to licensed in-state wholesalers under MCL 436.1109(1), 436.1305,
436.1403, and 436.1607(1) (2000), 1990 AC, R. 436.1705, and 2000 AC, R. 436.1719. Wholesalers could then sell
only to in-state retailers under MCL 436.1113(7) and 436.1607(1) (2001). Licensed retailers then sold alcoholic
beverages to consumers at retail locations and, subject to certain restrictions, through home delivery under MCL
436.1111(5) and 436.1203(2)-(4).
Wine producers generally had to distribute their wine through wholesalers. There was an exception for in-state
wineries, which were eligible for “wine maker” licenses allowing direct shipment to in-state consumers under MCL
436.1113(9) (2001), MCL 436.1537(2)-(3) (2004), and 2003 AC, R. 436.1011(7)(b). However, under MCL 436.1109(9)
and 436.1525(1) and 2000 AC, R. 436.1719(5), out-of-state wineries could only get licenses allowing them to sell to

in-state wholesalers. On cross motions for summary judgment, a district court sustained the scheme, but the Sixth
Circuit Court of Appeals reversed.
2. New York Case
New York’s licensing scheme channeled most wine sales through its three-tier system, but it too made exceptions for
in-state wineries. An out-of-state winery could ship directly to New York consumers only if it became a licensed New
York winery, which required establishment of a branch factory, office, or storeroom within the State of New York under
N.Y. Alco. Bev. Cont. Law Ann. § 3(37). A district court granted summary judgment to the wineries against the
scheme, but the Second Circuit Court of Appeals reversed, finding the scheme to be within the ambit of the powers
granted to states by the Twenty-First Amendment.
II. Effect of Commerce Clause and Twenty-First Amendment
A. Commerce Clause Prevented Discrimination against Imported Liquor
The Court noted that in all but the narrowest circumstances state laws violated the Commerce Clause if they mandated
differential treatment of in-state and out-of-state economic interests that gave a competitive advantage to in-state businesses.
Allowing the States to discriminate against the wineries invited a multiplication of preferential trade areas destructive of the
purpose of the Commerce Clause. The Michigan system was obviously discriminatory because the wineries faced a complete
ban on direct shipment. New York’s system granted in-state wineries access to the State’s consumers on preferential terms.
1. Wilson Act Mandated Equality of Treatment under State Laws
The Court explored the history of the Commerce Clause cases, leading up to and including the Wilson Act, 27 U.S.C.S. §
121 Shepardize , in determining the constitutionality of the States’ direct-shipping schemes. The Wilson Act mandated
equality or uniformity of treatment under state laws. The right to regulate did not attach until the liquor ordered through
interstate commerce was in the hands of the customer.
2. Webb-Kenyon Act Forbade Shipment or Transportation Only When Violating States’ Generally Applicable Laws
Governing Receipt, Possession, Sale, or Use
The Webb-Kenyon Act, 27 U.S.C.S. § 122 Shepardize , closed the direct-shipment gap left open by the Wilson Act, allowing
states to forbid shipments of alcohol to consumers for personal use, provided that the states treated in-state and out-of-
state liquor on the same terms. The Court found that the Webb-Kenyon Act did not remove any barrier to discriminatory
state liquor regulations. The Court held that the Wilson Act reaffirmed and that the Webb-Kenyon Act did not displace the
Court’s line of Commerce Clause cases striking down state laws that discriminated against liquor produced out of state.

B. Twenty-First Amendment Did Not Supersede Commerce Clause
The States argued that § 2 of the Twenty-First Amendment granted the authority to discriminate against out-of-state goods.
The Court found that history provided strong support for the view that the section restored to states the powers they had under
the Wilson Act and Webb-Kenyon Act. The Court further found that recent cases confirmed that the Twenty-First Amendment
did not supersede other provisions of the Constitution and did not displace the rule that states could not give discriminatory
preference to their own producers.
1. Twenty-First Amendment Did Not Save State Laws Violative of Other Constitutional Provisions
The Court noted that state laws that violated other provisions of the Constitution were not saved by the Twenty-First
Amendment. This rule was applied in the context of the First Amendment, the Establishment Clause, the Equal Protection
Clause, the Due Process Clause, and the Import-Export Clause.
2. Twenty-First Amendment Did Not Abrogate Commerce Clause Powers with Regard to Liquor
The Court found that the argument that the Twenty-First Amendment somehow operated to repeal the Commerce Clause
for alcoholic beverages had been rejected. The argument had been described as “an absurd oversimplification,” “patently
bizarre,” and “demonstrably incorrect.”
3. State Regulation of Alcohol Limited by Commerce Clause Nondiscrimination Principle

Shepardize
In Bacchus Imports v. Dias, 468 U.S. 263 (1984), the Court foreclosed any contention that § 2 of the Twenty-First
Amendment immunized discriminatory direct-shipment laws from Commerce Clause scrutiny. Recognizing that Bacchus
was fatal to their position, the States suggested that it should be overruled or limited to its facts. The Court declined the
States’ invitation, finding that Bacchus did not stand alone and that other cases would have been undermined in a retreat
from Bacchus. Further, any decision invalidating the States’ schemes did not affect the constitutionality of the three-tier
system in general.
III. Whether States’ Regimes Advanced Legitimate Local Purposes
The determination that the States’ direct-shipment laws were not authorized by the Twenty-First Amendment did not end the
inquiry. The Court had to consider whether either State regime advanced a legitimate local purpose that could not be
adequately served by reasonable nondiscriminatory alternatives.
A. Policing Underage Drinking

The States, aided by several amici, claimed that allowing direct shipment from out-of-state wineries undermined their ability to
police underage drinking. The Court found, however, that, not only was there little evidence in support of the States’
argument, but that there was evidence to the contrary. Minors were less likely to consume wine and were more likely to seek
a more direct means of disobeying the law because of a desire for instant gratification. The States’ argument, therefore, was
not enough to meet the requirement of the “clearest showing” to justify discriminatory regulation. Finally, minors were just as
likely to order from in-state wineries as they were from out-of-state wineries.
B. Ability of States to Collect Tax from Out-of-State Wineries
Increased direct shipping, whether originating in state or out of state, brought with it the potential for tax evasion. With regard
to Michigan, however, the Court found that the tax collection argument was a diversion because Michigan collected taxes
directly from out-of-state wineries on all wine shipped to in-state wholesalers. The Court found that, while New York’s
concerns about tax collection were not wholly illusory, its regulatory objectives could be achieved without discriminating
against interstate commerce. Furthermore, the States benefited from provisions of federal law that supplied incentives for
Shepardize
wineries to comply with state regulations under 27 U.S.C.S. §§ 122a (b), 204.
C. Market Conditions, Public Health and Safety, and Regulatory Accountability
The States offered a handful of other rationales, such as facilitating orderly market conditions, protecting public health and
safety, and ensuring regulatory accountability. The Court found that such objectives could be achieved through the alternative
of an evenhanded licensing requirement. The Court further noted that improvements in technology eased the burden of
monitoring out-of-state wineries, as background checks could be done electronically, and financial records and sales data
could be mailed, faxed, or submitted via e-mail. The States failed to show that nondiscriminatory alternatives would prove
unworkable.
Dissenting Opinion Overview
Dissenting Opinion by Justice Stevens, with whom Justice O’Connor joined.
Link Dissent▼ Justice Stevens argued that Congress had the power to authorize states to place burdens on interstate
commerce. While he conceded that the challenged laws would have been patently invalid under the Commerce Clause if they
regulated sales of an ordinary article of commerce, Justice Stevens noted that ever since the adoption of the Eighteenth and
Twenty-First amendments, the Constitution had placed commerce in alcoholic beverages in a special category. Justice Stevens
further noted that the views of judges who lived through the debates that led to the ratification of those Amendments were entitled
to special deference. Justice Brandeis wrote at the time that construing § 2 of the Twenty-First Amendment as forbidding
discriminatory regulation would have been rewriting the Amendment. Further, as the Twenty-First Amendment was the only
Amendment in history to have been ratified by people in state conventions, it should have been broadly and colloquially
interpreted.

Dissenting Opinion by Justice Thomas, with whom the Chief Justice, Justice Stevens, and Justice O’Connor joined.
Link Dissent▼ In his dissent, Justice Thomas stated that the Court should have followed State Bd. of Equalization of Cal. v.
Young’s Market Co., 299 U.S. 59 Shepardize (1936), and the language of the Webb-Kenyon Act, 27 U.S.C.S. § 122 Shepardize , and the
Twenty-First Amendment. Justice Thomas argued that the Webb-Kenyon Act displaced any negative Commerce Clause barrier to
state regulation of liquor sales to in-state consumers by preventing the immunity characteristic of interstate commerce from being
used to permit the receipt of liquor through such commerce in states contrary to their laws. He further argued that “any law” as
used in the Act meant any law, including “discriminatory” ones like the ones at issue. While he felt that the Act decided the case,
Justice Thomas further argued that the challenged laws were lawful under the plain meaning of the Twenty-First Amendment as
well. Finally, Justice Thomas stated that Bacchus Imports v. Dias, 468 U.S. 263 Shepardize (1984), should have been overruled.
Expanded Headnote Coverage
LexisNexis Headnotes
[HN1] In all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate differential treatment of in-
state and out-of-state economic interests that benefits the former and burdens the latter. States may not enact laws that burden
out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.
[HN2] States cannot require an out-of-state firm to become a resident in order to compete on equal terms.
[HN3] State laws that discriminate against interstate commerce face a virtually per se rule of invalidity.
[HN4] See U.S. Const. amend. XXI, § 2.
[HN5] U.S. Const. amend. XXI, § 2, does not allow states to regulate the direct shipment of wine on terms that discriminate in
favor of in-state producers.
[HN6] The aim of the Twenty-First Amendment is to allow states to maintain an effective and uniform system for controlling liquor
by regulating its transportation, importation, and use. The Amendment does not give states the authority to pass nonuniform laws
in order to discriminate against out-of-state goods.
[HN7] State regulation of alcohol is limited by the nondiscrimination principle of the Commerce Clause. When a state statute
directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests over out-
of-state interests, the U.S. Supreme Court generally strikes down the statute without further inquiry.
[HN8] See Mich. Admin. Code r. 436.1725(2) (1989).

[HN9] The Tax and Trade Bureau has authority to revoke a winery's federal license if it violates state law. Without a federal
license, a winery cannot operate in any state. 27 U.S.C.S. § 204. Shepardize In addition, the Twenty-First Amendment Enforcement
Act gives state attorneys general the power to sue wineries in federal court to enjoin violations of state law. 27 U.S.C.S. § 122a
Shepardize
(b).
[HN10] The Commerce Clause demands more than mere speculation to support discrimination against out-of-state goods. The
burden is on a state to show that the discrimination is demonstrably justified. The U.S. Supreme Court upholds state regulations
that discriminate against interstate commerce only after finding, based on concrete record evidence, that the state's
nondiscriminatory alternatives will prove unworkable.
[HN11] States have broad power to regulate liquor under U.S. Const. amend XXI, § 2. This power, however, does not allow states
to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state
producers. If a state chooses to allow direct shipment of wine, it must do so on evenhanded terms.
Interpretive Headnotes
[IHN1] States can mandate a three-tier distribution scheme in the exercise of their authority under the Twenty-First Amendment.
Link Int. HN▼
[IHN2] The mere fact of nonresidence should not foreclose a producer in one state from access to markets in other states. States
may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.
Link Int. HN▼
[IHN3] State statutes requiring business operations to be performed in the home state that could more efficiently be performed
elsewhere are viewed with particular suspicion. Link Int. HN▼
[IHN4] States are not free to pass laws burdening only out-of-state products. The Commerce Clause prevents states from passing
facially neutral laws that place an impermissible burden on interstate commerce. Link Int. HN▼
[IHN5] The Wilson Act, 27 U.S.C.S. § 121 Shepardize , mandated equality or uniformity of treatment under state laws, and did not
allow a state to provide an unjust preference to its products as against similar products of other states. Link Int. HN▼
[IHN6] The Webb-Kenyon Act, 27 U.S.C.S. § 122 Shepardize , forbids shipment or transportation of out-of-state liquors only where it
runs afoul of the state’s generally applicable laws governing receipt, possession, sale, or use. Link Int. HN▼
[IHN7] State laws that violate other provisions of the Constitution are not saved by the Twenty-First Amendment. Link Int. HN▼

[IHN8] Section 2 of the Twenty-First Amendment does not abrogate Congress’ Commerce Clause powers with regard to liquor.
Link Int. HN▼
[IHN9] The Twenty-First Amendment grants the states virtually complete control over whether to permit importation or sale of
liquor and how to structure the liquor distribution system. States may assume direct control of liquor distribution through state-run
outlets or funnel sales through the three-tier system. Link Int. HN▼
[IHN10] The “clearest showing” is required to justify discriminatory state regulation. Link Int. HN▼
[IHN11] Licensing and self-reporting provide adequate safeguards for wine distributed through the three-tier system, and should
suffice for direct shipments. Link Int. HN▼
Jurisprudential Analysis
Status of the Case
Prior History
Swedenburg v. Kelly, 2000 U.S. Dist. LEXIS 12758 Shepardize (D.N.Y. 2000)
Plaintiffs, proprietors of two out-of-state wineries and three state consumers, filed an action against defendants, New York
State Liquor Authority officials, requesting that the court declare N.Y. Alco. Bev. Cont. Law § 102 Shepardize (1)(a), (c), (d)
unconstitutional, void, and of no effect. The officials’ motion to dismiss the complaint was denied because there was a
sufficient allegation of a cause of action for a violation of the Commerce Clause, the First Amendment, and the Privileges
and Immunities Clause.
Bainbridge v. Bush, 148 F. Supp. 2d 1306 Shepardize (D. Fla. 2001)
A motion for summary judgment by defendant, Florida Attorney General’s office, was granted in an action by plaintiffs,
out-of-state wineries and others, challenging Florida’s direct shipment law, which was enacted to address perceived threat
to public health, safety, and welfare, to state revenue collections, and to the state economy, all of which fell within the
legitimate core concerns of the Twenty-First Amendment.
Swedenburg v. Kelly, 232 F. Supp. 2d 135 Shepardize (D.N.Y. 2002)
A motion by plaintiffs, out-of-state wine producers, for summary judgment was granted upon a finding that the State of
New York’s ban on direct shipment of out-of-state wine violated the Commerce Clause.

Swedenburg v. Kelly, 358 F.3d 223 Shepardize (2d Cir. 2004)
A finding that the State of New York’s direct shipment law violated the Commerce Clause was reversed based on the
court’s determination that the law was proper within the scope of the Twenty-First Amendment.
Swedenburg v. Kelly, 541 U.S. 1062 Shepardize (2004)
The petition for writ of certiorari to the United States Court of Appeals for the Second Circuit was granted limited to the
following question: Did a State's regulatory scheme that permitted in-state wineries directly to ship alcohol to consumers
but restricted the ability of out-of-state wineries to do so violate the dormant Commerce Clause in light of Section 2 of the
21st Amendment?
The Supreme Court of the United States granted a motion to reorder presentation of oral argument and for divided
argument.
The motion for realignment of the parties and to set a briefing schedule was denied by the United States Supreme Court.
Heald v. Engler, 2001 U.S. Dist. LEXIS 24826 Shepardize (D. Mich. 2001)
A motion for summary judgment by plaintiffs, Michigan residents and an out-of-state winery, was denied, and the motion
for summary judgment by defendants, Michigan's governor, Michigan's attorney general, the chair of Michigan's Liquor
Control Commission, and a beer and wine wholesalers association, was granted. The State of Michigan’s direct shipment
law was a proper regulation of sales of out-of-state wine for purposes of tax collection and reducing underage drinking.
Heald v. Engler, 342 F.3d 517 Shepardize (6th Cir. 2003)
A district court’s finding that the State of Michigan’s direct shipment law was constitutional was reversed. The appeals
court found it to be facially discriminatory and not within the scope of the Twenty-First Amendment because it did not
promote the goals of temperance, raising revenue, or ensuring an orderly market.
Heald v. Engler, 2003 U.S. App. LEXIS 23001 Shepardize (6th Cir. 2003)
The Sixth Circuit Court of Appeals denied two petitions for rehearing en banc because the issues raised in the petitions
were fully considered upon the original submission and decision of the case.

Granholm v. Heald, 543 U.S. 953 Shepardize (2004)
The Supreme court of the United States granted a motion to reorder presentation of oral argument and for divided
argument.
Subsequent History
Heald v. Granholm, 457 F. Supp. 2d 790 Shepardize (D. Mich. 2006)
Plaintiff wineries, which prevailed in their actions against defendant state officials and intervening defendant state
wholesalers association, were not entitled to an award of attorney fees from the association. The association entered the
case to protect its own legitimate interests, and its litigation position was not frivolous, unreasonable, or without
foundation.
Comparative Case Content
Topic: Application of Commerce Clause
Holding that direct shipment law did not violate Commerce Clause where there was no discrimination against
out-of-state wineries:
Shepardize
Cherry Hill Vineyard, LLC v. Baldacci, 2006 U.S. Dist. LEXIS 51657 (D. Me. 2006)
OVERVIEW: A magistrate judge recommended judgment against plaintiffs’ Commerce Clause challenge to
Maine’s prohibition against direct shipment of wine where plaintiffs failed to demonstrate the existence of any
lawful mail order or direct delivery market in Maine in which any winery could participate.
Holding that Residency requirement for liquor license violated dormant Commerce Clause:
Peoples Super Liquor Stores, Inc. v. Jenkins, 432 F. Supp. 2d 200 Shepardize (D. Mass. 2006)
OVERVIEW: Where a liquor retailer claimed that the portion of Mass. Gen. Laws ch. 138, § 15 Shepardize (2005),
which restricted the awarding of liquor licenses based on residency violated the dormant Commerce Clause, U.S.
Const., Art. I, § 8, cl. 3, the state's motion to dismiss was denied because the requirement was not redeemed by
the Twenty-First Amendment.

Holding that Commerce Clause was violated where differential treatment benefited in-state wineries and
burdened out-of-state wineries:
Am. Trucking Ass'ns v. Whitman, 437 F.3d 313 Shepardize (3d Cir. 2006)
OVERVIEW: Trucking regulations that favored instate businesses over those out-of-state businesses that were
neither buying nor selling goods in New Jersey by imposing economic burdens on the out-of-state interests while
not imposing similar burdens on the instate interests, discriminated against interstate commerce and violated the
Commerce Clause.
Action Wholesale Liquors v. Okla. Alcoholic Bev. Laws Enforcement Comm'n, 463 F. Supp. 2d 1294 Shepardize (D. Okla.
2006)
OVERVIEW: Because Okla. Const. art. 28, § 3, Okla. Stat. tit. 37 Shepardize § 518.1 (2001), Okla. Stat. tit. 37
Shepardize
§ 521 (Supp. 2005), and Okla. Stat. tit. 37, § 537 Shepardize (Supp. 2005) preferentially exempted in-state
wineries but not out-of-state wineries from the state's three-tier distribution, the laws violated the Commerce
Clause, U.S. Const., Art. I, § 8, cl. 3.
Costco Wholesale Corp. v. Hoen, 407 F. Supp. 2d 1247 Shepardize (D. Wash. 2005)
OVERVIEW: Wash. Rev. Code §§ 66.24.170 Shepardize (3), .240(2), which allowed in-state wineries and breweries
to "self-distribute" directly to retailers but required out-of-state producers to sell to distributor, violated the
Commerce Clause, U.S. Const. art. I, § 8, cl. 3.
Holding that Pennsylvania’s successor liability statute, 15 Pa.C.S. § 1929, provided court found tort to be article
of commerce, would only be considered to have incidental effects on interstate commerce:
Mauger v. A.W. Chesterton, Inc., 2007 Phila. Ct. Com. Pl. LEXIS 193 (Phila. Com. P. LEXIS 2007)
OVERVIEW: In support of its judgment granting summary judgment to an asbestos manufacturer's successor, a
trial court held that 15 Pa.C.S. § 1929.1 did not violate the federal Commerce or Equal Protection Clauses as the
statute did not treat foreign corporations differently than domestic corporations nor did it alter the direct liability of
any defendant.
Holding that Maine’s real estate taxing statute, which expressly distinguished between entities that served
principally in-state clientele and those that served principally out-of-state clientele, was facially invalid under
Commerce Clause:

Camps Newfound/Owatonna v. Town of Harrison, 520 U.S. 564 Shepardize (1997)
OVERVIEW: A real estate tax on a non-profit camp that served primarily out of state students violated the
Commerce Clause because non-profit camps that served primarily in state students were exempt from paying the
tax.
Quick Holding Bullets:
• Even though petitioner's camp did not make a profit, it was unquestionably engaged in commerce, not
only as a purchaser, but also as a provider of goods and services. It marketed those services, together
with an opportunity to enjoy the natural beauty of an inland lake in Maine, to campers who were attracted
to its facility from all parts of the Nation. The attendance of these campers necessarily generated the
transportation of persons across state lines that had long been recognized as a form of "commerce."
• The services that petitioner provided to its principally out-of-state campers clearly had a substantial effect
on commerce, as did state restrictions on making those services available to nonresidents.
• A State's power to lay and collect taxes, comprehensive and necessary as that power might be, could not
be exerted in a way which involved a discrimination against interstate commerce.
• Discriminatory burdens on interstate commerce imposed by regulation or taxation may also violate the
Commerce Clause.
• The Maine statute facially discriminated against interstate commerce, and was all but per se invalid.
• The Court had no doubt that if petitioner's camp were a profit-making entity, the discriminatory tax
exemption would be impermissible.
• The argument in favor of a categorical exemption for nonprofits from the dormant Commerce Clause was
unpersuasive.
• A tax exemption was not the sort of direct state involvement in the market that fell within the market-
participation doctrine.
Topic: Application of Twenty-First Amendment
Holding that liquor regulation was constitutional under Twenty-First Amendment where not discriminatory:

Hurley v. Minner, 2006 U.S. Dist. LEXIS 69090 Shepardize (D. Del. 2006)
OVERVIEW: Delaware statute requiring out-of-state wineries to ship direct orders through a wholesaler or retailer
was not unconstitutional where in-state wineries were treated the same with respect to direct wine shipments to
state residents.
Holding that Twenty-First Amendment did not give states authority to pass nonuniform laws to discriminate
against out-of-state businesses:
Brooks v. Vassar, 462 F.3d 341 Shepardize (4th Cir. 2006)
OVERVIEW: Because the Twenty-First Amendment granted states virtually complete control over how to
structure the liquor distribution system, and because the dormant Commerce Clause only prevented a state from
enacting regulation that favored in-state producers, Va. Code Ann. § 4.1-310 Shepardize (E)(i) did not violate the
Commerce Clause.
Holding that direct shipment laws not facially discriminatory were constitutional under Twenty-First Amendment:
Cherry Hill Vineyards, LLC v. Hudgins, 2006 U.S. Dist. LEXIS 93266 Shepardize (D. Ky. 2006)
OVERVIEW: An in-person provision in Kentucky’s amended licensing provisions was struck as not narrowly-
tailored to achieve a proper goal. The rest of the provisions were not facially discriminatory, as they applied
equally to in-state and out-of-state wineries.
Legal Analysis
Related Treatise Content
1-1 California Forms of Pleading and Practice--Annotated § 1.10
This treatise mentioned state laws, particularly those in the Granholm v. Heald case, regarding wine distribution governed
by the Commerce Clause.
3-18 California Forms of Pleading and Practice--Annotated § 18.37
This treatise discussed court decisions affecting regulation of alcoholic beverage licensing.
M.L.P. PUBLIC HEALTH AND WELFARE § 91

The State of Michigan could regulate and control the manufacture and sale of intoxicating liquors within its territory, and
the conditions imposed were within the discretion of the people acting through the legislature, so long as the restrictions
were applied to all alike or to all in the same class alike and did not deprive an individual of property without due process
of law or deny him equal protection of the laws.
M.L.P. PUBLIC HEALTH AND WELFARE § 93
Except as it was limited by statute, the Michigan Liquor Control Commission had plenary power to regulate the liquor
traffic.
Reg. Inters. & For. Com. Sec. 13.03
In a supplement to the section, it was noted that a divided Court favored recent cases holding that the dormant Commerce
Clause doctrine’s nondiscrimination principle applied to state regulation of wine, as the Twenty-First Amendment did not
displace the rule that states could not give discriminatory preference to their own producers.
Reg. Inters. & For. Com. Sec. 13.04
After a lengthy review of the history of alcohol regulation and Congress's response to the Court's use of the dormant
Commerce Clause doctrine to invalidate state liquor regulations through the Wilson and Webb-Kenyon Acts, Justice
Kennedy concluded that far from allowing any type of discrimination, the Wilson Act reaffirmed, and the Webb-Kenyon Act
did not displace, the Court's line of cases striking down state laws that discriminated against liquor produced out of state
even though they removed dormant Commerce Clause barriers to facially neutral laws that were held to "directly regulate"
interstate commerce or otherwise burden it.
Related Law Review Articles
Michael A. Chichester, Jr., The Twenty-First Amendment Accommodates the Dormant Commerce Clause: Did the Supreme
Shepardize
Court Awaken a Sleeping Giant with Its Decision in Granholm v. Heald?, 84 U. Det. Mercy L. Rev. 161 (Winter 2007).
The Supreme Court held that the Twenty-First Amendment did not give the states plenary power to discriminate against
out-of-state entities in violation of the Commerce Clause.
Michael A. Pasahow, Constitutional Law: Note, Granholm v. Heald: Shifting the Boundaries of California Reciprocal Wine
Shipping Laws, 21 Berkeley Tech. L.J. 569 Shepardize (2006).

Granholm v. Heald's requirement that states treat all wine equally in deciding whether it can be shipped from its producer
has rendered reciprocity both unconstitutional and largely unnecessary.
Harris Danow, Recent Development: History Turned "Sideways": Granholm v. Heald and the Twenty-First Amendment, 23
Cardozo Arts & Ent LJ 761 Shepardize (2006).
In Granholm v. Heald, discriminatory regulatory practices were found to violate the Interstate Commerce Clause and
therefore deemed unconstitutional. Notwithstanding the positive effects the decision may have for wine lovers, the
decision runs contrary to the meaning, spirit, and history of the Twenty-First Amendment to the United States Constitution.
Matthew B. Millis, Note, Let History Be Our Guide: Using Historical Analogies to Analyze State Response to a Post-Granholm
Era, 81 Ind. L.J. 1097 Shepardize (Summer 2006).
By prohibiting facial discrimination against out-of-state wineries to protect the interests of in-state wineries, the Supreme
Court handed small winery owners a victory. However, this is only one victory in a battle that will continue to rage.
Aaron Nielson, The Supreme Court of the United States, 2004 Term: Good History, Good Law (and by Coincidence Good Policy
Too): Granholm v. Heald, 125 S. Ct. 1885 (2005), 29 Harv. J.L. & Pub. Pol'y 743 Shepardize (Spring 2006).
Although the decision advanced domestic free trade, a sound policy outcome, there might be reasons to fear that the case
was incorrectly decided as a matter of law. Such fears, however, were unnecessary as there was no conflict between the
correct constitutional interpretation and freer trade.
Ryan Eddings, Wine Lovers Win Battle, Could Lose War, 18 Loy. Consumer L. Rev. 115 Shepardize (2005).
The equal treatment that consumers and producers sought when challenging direct shipment laws might also completely
shut them out of new markets altogether.
Nancy Williams, Constitutional Law--The Dormant Commerce Clause and the Twenty-First Amendment--Reconciling the Two
Constitutional Provisions to Allow the Direct Shipment of Wine, 75 Miss. L.J. 619 Shepardize (Winter 2006).
The Supreme Court, in deciding Granholm v. Heald, confronted many prior cases, statutes, and other sources that
proposed a variety of ways to interpret the Twenty-First Amendment, as the majority and two dissenting opinions illustrate.
Nonetheless, the Court determined that a state regulation favoring in-state liquor over out-of-state liquor was
unconstitutional under the dormant Commerce Clause.
Amanda C. Grafstrom, Case Comment, Commerce - Intoxicating Liquors: Wine Lovers Rejoice! Why Vineyards Can Now Ship
Directly to Consumers and Why Everyone Else Should Care, 82 N. Dak. L. Rev. 557 Shepardize (2006).

This comment discussed the Granholm v. Heald decision in detail and analyzed what the effects of the decision would be
nationwide and, more broadly, on e-commerce.
Elizabeth Norton, Note, The Twenty-First Amendment in the Twenty-First Century: Reconsidering State Liquor Controls in Light of
Granholm v. Heald, 67 Ohio St. L.J. 1465 Shepardize (2006).
This note briefly reviewed the history of state liquor controls, prohibition and its repeal, and the progression of the Court's
Twenty-First Amendment jurisprudence. This note acknowledged that under the Granholm v. Heald reasoning, states
could continue to regulate the alcoholic beverage industry in a way unlike the state regulation of most other ordinary
articles of commerce, and it suggested several paths for both Congress and state legislatures that were considering
action in the aftermath of Granholm v. Heald.
Rebekah G. Ballard, Note, "Dormant" No More: The Supreme Court Awakens the Dormant Commerce Clause in Granholm v.
Heald, 41 Wake Forest L. Rev. 303 Shepardize (Spring 2006).
Leading up to the Granholm v. Heald decision, commentators recognized that reconciling the conflict between the
dormant Commerce Clause and the Twenty-First Amendment would be difficult, in light of the historical support for the
view that states were unrestrained in their regulation of importation and transportation of alcohol within their borders, and
the more recent support for the notion that the Commerce Clause would serve as a limit on this authority. In the end, the
seemingly clear textual command of the Twenty-First Amendment did not provide the tiebreaker. The Supreme Court
instead reinforced the central tenet of the dormant commerce clause that states may not enact laws that favor local
economic interests simply to create a competitive advantage, notwithstanding a seeming constitutional grant to do so.
Gregory E. Durkin, Note, What Does Granholm v. Heald Mean for the Future of the Twenty-First Amendment, the Three-Tier
Shepardize
System, and Efficient Alcohol Distribution?, 63 Wash & Lee L. Rev. 1095 (Summer 2006).
This note focused on the implications of Granholm v. Heald for state regulatory systems currently under attack and for
other state systems that were vulnerable to attack. This note argued that despite language in Granholm v. Heald
suggesting that state alcohol regulations were subject to the same Commerce Clause limitations as state laws regulating
other articles of commerce, the Twenty-First Amendment still insulated some nondiscriminatory state laws from
Commerce Clause invalidation.
Matthew Dickson, Note & Comment, All or Nothing: State Reaction in the Wake of Granholm v. Heald, 28 Whittier L. Rev. 491
Shepardize
(Fall 2006).
In order to comply with the Court's decision, states now had a choice of either allowing direct shipment of wine by both in-
state and out-of-state producers on "evenhanded terms," or, conversely, prohibiting all direct shipment to consumers in

favor of the traditional three-tier system of alcohol distribution. In addition to briefly outlining the policy arguments made on
both sides of the debate, this paper analyzed the holding in Granholm v. Heald and asked whether consumers and wine
producers were indeed better off as a whole in light of the changes being implemented by states attempting to comply
with the Court's ruling.
Tania K. M. Lex, Note & Comment, Case Note, Of Wine and War: The Fall of State Twenty-First Amendment Power at the Hands
of the Dormant Commerce Clause - Granholm v. Heald, 32 Wm. Mitchell L. Rev. 1145 Shepardize (2006).
This note argued that the reasoning employed by the majority in Granholm v. Heald defied existing law and led to results
most likely never intended by those who ratified the Twenty-First Amendment. Nevertheless, the result the majority
imposed might be appropriate for modern society. This article concluded by proposing an alternate line of analysis that
had to be undertaken before straying from well-established precedent.
Khalil Nicholas Maalouf, Impediments to Financial Development in the Banking Sector: A Comparison of the Impact of Federalism
in the United States and Germany, 28 Mich. J. Int'l L. 431 Shepardize (Winter 2007).
Related Bar Association & Journal Articles
Shirlene Love, Napa to New York with the Click of a Mouse: The Dormant Commerce Clause and the Direct Shipment of Wine to
Consumers as Discussed in Granholm v. Heald, 26 J. NAALJ 205 Shepardize (Spring 2006).
States maintained the right to mandate specific distribution schemes as they saw fit under the authority of the Twenty-First
Amendment. These regulations, however, could not discriminate between in-state and out-of-state wineries.
Jason Miller, Law That Discriminates against Out-of-State Liquor Makers Rejected, 7 Lawyers J. 2 Shepardize (June 24, 2005).
In a thorough opinion by Justice Kennedy in Granholm v. Heald, a divided United States Supreme Court held that state
liquor laws that discriminated against out-of-state liquor producers violated the Commerce Clause. Moreover, Section 2 of
the 21st Amendment did not save the states' discriminatory regulations.
Drew D. Massey, Dueling Provisions: The 21st Amendment's Subjugation to the Dormant Commerce Clause Doctrine, 7
Transactions 71 Shepardize (Fall 2005).
The Twenty-First Amendment limiting the power of the federal government was slowly eroding away with the aid and
compliance of the Supreme Court. The Supreme Court, however, had modified, altered, and rendered meaningless this
seemingly unambiguous language through the use of the dormant Commerce Clause doctrine.

Paul J. Watford, State Lines: Redefining the Reach of the Commerce Clause May Be One of the Important Legacies of the
Rehnquist Court, 28 Los Angeles Lawyer 24 Shepardize (Nov. 2005).
Jeff Bleich, Anne Voigts, & Michelle Friedland, A Practical Era: The Beginning (or the End) of Pragmatism, 65 Or. St. B. Bull. 19
Shepardize
(Aug./Sept. 2005).
Charles H. Whitebread, Civil High Court Pronouncements, 47 Orange County Lawyer 10 Shepardize (Nov. 2005).
Perry A. Craft & Michael G. Sheppard, Supreme Court Review: What the U.S. Supreme Court's 2004-2005 Decisions Mean to
Tennessee Lawyers, 41 Tenn. B.J. 16 Shepardize (Sept. 2005).
Charles H. Whitebread, Recent Civil Decisions of the United States Supreme Court: The 2004-2005 Term, 42 Court Review 14
Shepardize
(Summer 2005).
Related Statutory Annotations
U.S. Const. art. I, § 8, cl. 3
What Constitutes Commerce; Other Activities and Products; Agriculture, Food, and Beverages; Alcoholic
Beverages
State's regulation of out-of-state wineries could not escape Commerce Clause scrutiny because it had not shown that its
regulatory scheme was closely related to core concern of raising revenue and State could not look to Webb-Kenyon Act
for help. Bainbridge v Turner (2002, CA11 Fla) 311 F3d 1104, Shepardize 16 FLW Fed C 16 (criticized in Swedenburg v Kelly
(2004, CA2 NY) 358 F3d 223 Shepardize ).
Twenty First Amendment does not entirely remove state regulation of alcoholic beverages from ambit of Commerce
clause; question in determining validity of state liquor tax that discriminates against interstate commerce is whether
principles underlying Twenty First Amendment are sufficiently implicated to outweigh Commerce clause principles that
would otherwise be offended. Bacchus Imports v Dias (1984) 468 US 263 Shepardize , 82 L Ed 2d 200 Shepardize , 104 S Ct
3049 Shepardize (criticized in Ala. Alcoholic Bev. Control Bd. v Henri-Duval Winery, L.L.C. (2003, Ala) 890 So 2d 70 Shepardize ).
States' power to regulate importation of intoxicating liquor under U.S. Const. amend XXI, § 2, does not allow states to ban,
or severely limit, direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state
producers in violation of prohibition against discrimination in interstate commerce under U.S. Const. art. I, § 8, cl. 3.
Granholm v Heald (2005, US) 161 L Ed 2d 796 Shepardize , 125 S Ct 1885, Shepardize 18 FLW Fed S 263.
Validity of State Regulation; Particular Matters; Other Particular Matters; Beverages; Alcoholic Beverages

Because of absence of identical restriction on Texas wineries, Texas's statutory prohibition against out-of-state wineries
directly selling and shipping wine to Texas consumers was constitutionally defective under Commerce Clause, and
enjoinment of administrator of Texas Alcoholic Beverage Commission from enforcing challenged provisions was
appropriate remedy. Dickerson v Bailey (2003, CA5 Tex) 336 F3d 388 Shepardize (criticized in Swedenburg v Kelly (2004,
CA2 NY) 358 F3d 223 Shepardize ).
Validity of State Regulation; Particular Matters; Other Particular Matters; Beverages; Alcoholic Beverages; Effect
of 21st Amendment
State law authorizing sale of newly defined wine product in grocery stores if produced exclusively from grapes grown in
state is clearly protectionist measure which violates commerce clause and which cannot be saved by § 2 of Twenty-first
Amendment. Loretto Winery, Ltd. v Duffy (1985, CA2 NY) 761 F2d 140 Shepardize .
Texas Alcoholic Beverage Code's durational residency and citizenship requirements for permit holders amount to simple
economic protectionism and therefore run afoul of commerce clause; 21st Amendment provides no sanctuary for statutes
since state's interest in facilitating background checks of permit applicants by discriminating against nonresidents is not
within amendment's "core concerns." Cooper v McBeath (1994, CA5 Tex) 11 F3d 547 Shepardize , cert den (1994) 512 US
1205 Shepardize , 129 L Ed 2d 810 Shepardize , 114 S Ct 2675 Shepardize .
Validity of State Regulation; Particular Matters; Other Particular Matters; Beverages; Alcoholic Beverages;
Manufacture and Sale
Although 21st Amendment empowered state to regulate alcoholic beverage sales within its borders, provision did not
empower state to favor local liquor industries by erecting barriers to competition in violation of Commerce Clause; hence,
state's three-tier alcohol distribution system which banned direct shipment to customers of alcohol from out-of-state sellers
was unconstitutional because it did not promote 21st Amendment's core goals of temperance, raising revenue, and
ensuring orderly market. Heald v Engler (2003, CA6 Mich) 342 F3d 517 Shepardize , 2003 FED App 308P, reh, en banc, den
(2003, CA6) 2003 US App LEXIS 23001 Shepardize and (criticized in Swedenburg v Kelly (2004, CA2 NY) 358 F3d 223
Shepardize
) and affd (2005, US) 161 L Ed 2d 796 Shepardize , 125 S Ct 1885, Shepardize 18 FLW Fed S 263.
U.S. Const. amend. XXI, § 3
State Power to Regulate Intoxicating Liquors; In General; Generally
Twenty-first Amendment conferred upon state power to forbid all intoxicating liquor importations which do not comply with
conditions which state prescribes; state may adopt lesser degree of regulation than total prohibition. State Bd. of
Equalization v Young's Market Co. (1936) 299 US 59 Shepardize , 81 L Ed 38 Shepardize , 57 S Ct 77 Shepardize , reh den (1936)

299 US 623 Shepardize , 81 L Ed 458 Shepardize , 57 S Ct 229 Shepardize and (ovrld as stated in Bacchus Imports v Dias (1984)
468 US 263 Shepardize , 82 L Ed 2d 200 Shepardize , 104 S Ct 3049 Shepardize ) and (criticized in Granholm v Heald (2005, US)
2005 US LEXIS 4174 Shepardize ).
Twenty-First Amendment requires presumption in favor of validity of state regulation of establishments licensed to sell
intoxicating liquors; wide latitude as to choice of means to accomplish permissible end must be accorded to state agency
which is depository of states' power under Twenty-first Amendment. California v La Rue (1972) 409 US 109 Shepardize , 34 L
Ed 2d 342 Shepardize , 93 S Ct 390 Shepardize , reh den (1973) 410 US 948 Shepardize , 35 L Ed 2d 615 Shepardize , 93 S Ct 1351
Shepardize
and (ovrld in part by 44 Liquormart v Rhode Island (1996) 517 US 484 Shepardize , 134 L Ed 2d 711 Shepardize , 116 S
Ct 1495, Shepardize 96 CDOS 3338, 24 Media L R 1673, 9 FLW Fed S 569) and (ovrld in part as stated in J&B Social Club #
1 v City of Mobile (1996, SD Ala) 966 F Supp 1131 Shepardize ) and (ovrld in part as stated in WFO Corp. v Ohio Liquor
Control Comm'n (1996, Ohio App, Franklin Co) 1996 Ohio App LEXIS 4788 Shepardize ) and (ovrld in part as stated in
Goldrush II v City of Marietta (1997) 267 Ga 683 Shepardize , 482 SE2d 347 Shepardize , 97 Fulton County D R 874 Shepardize ) and
(ovrld as stated in J.L. Spoons, Inc. v City of Brunswick (1998, ND Ohio) 181 FRD 354 Shepardize ) and (ovrld in part as
stated in Purple Orchid v Pennsylvania State Police, Bureau of Liquor Control Enforcement (1998, Pa Cmwlth) 721 A2d
84 Shepardize ) and (ovrld in part as stated in Salt Lake City v Wood (1999, Utah App) 991 P2d 595, 381 Shepardize Utah Adv
Rep 33) and (ovrld in part as stated in El Marocco Club, Inc. v Richardson (2000, RI) 746 A2d 1228 Shepardize ) and
(criticized in Giovani Carandola, Ltd. v Bason (2002, CA4 NC) 303 F3d 507 Shepardize ) and (ovrld in part as stated in Rising
Sun Entm't, Inc. v Bureau of Liquor Control Enforcement (2003, Pa Cmwlth) 829 A2d 1214 Shepardize ).
Although case for upholding state regulation in area covered by Twenty-first Amendment is undoubtedly strengthened by
Amendment, other constitutional provisions are not rendered inapplicable by amendment. White v Fleming (1975, CA7
Wis) 522 F2d 730, Shepardize 11 BNA FEP Cas 619, 10 CCH EPD P 10313.
Analysis of validity of state law regulating liquor does not proceed via traditional route for testing constitutionality of state
statutes, rather courts must proceed from vantage point of presumed state power and then ask whether there are any
limitations to that power, always keeping in mind that where intoxicating liquors are concerned, great deference must be
accorded comprehensive state regulatory scheme; federal laws have prevailed over state regulation of intoxicating liquors
in only 2 circumstances: (1) where state regulation was repugnant to overriding national concern with due process and
equal protection, and (2) where state had sought to invade area of exclusive federal concern such as federally owned
installations, regulation of commerce with foreign nations, and taxation of imports from foreign countries. Castlewood
International Corp. v Simon (1979, CA5 Fla) 596 F2d 638 Shepardize , vacated on other grounds (1980) 446 US 949 Shepardize ,
64 L Ed 2d 806 Shepardize , 100 S Ct 2914 Shepardize .
State law dealing with sale of alcoholic beverages has priority, under Twenty-First Amendment, when in conflict with
federal regulation placing burden on commerce and alcohol which state wishes to avoid, absent federal interest of
sufficient magnitude. Wine Industry of Florida, Inc. v Miller (1980, CA5 Fla) 609 F2d 1167 Shepardize .

Effect of Commerce Clause
Twenty-first Amendment sanctions right of state to legislate concerning intoxicating liquors brought from without,
unfettered by commerce clause of Constitution (Art I, § 8, cl 3). Ziffrin, Inc. v Reeves (1939) 308 US 132 Shepardize , 84 L Ed
128 Shepardize , 60 S Ct 163 Shepardize (criticized in Granholm v Heald (2005, US) 2005 US LEXIS 4174 Shepardize ); Jones v
State (1939) 198 Ark 354 Shepardize , 129 SW2d 249 Shepardize ; Hardin v Spiers (1941) 202 Ark 804 Shepardize , 152 SW2d 1010
Shepardize
; State v Andre (1936) 101 Mont 366 Shepardize , 54 P2d 566 Shepardize .
Like other provisions of Federal Constitution, Twenty-first Amendment and commerce clause must each be considered in
light of other and in context of issues and interests at stake in any concrete case. Hostetter v Idlewild Bon Voyage Liquor
Corp. (1964) 377 US 324 Shepardize , 12 L Ed 2d 350 Shepardize , 84 S Ct 1293 Shepardize .
State of New York could not prohibit sale at airport of liquor purchased outside of state to departing international travelers
for delivery at their foreign destinations; although state, by virtue of provisions of Twenty-first Amendment, is totally
unconfined by traditional commerce clause limitations when it restricts importation of intoxicants destined for use,
distribution, or consumption within its borders, nevertheless Twenty-first Amendment does not obliterate commerce clause
so far as to empower state to prohibit absolutely passage of liquor through its territory, under supervision of United States
Bureau of Customs, for delivery to consumers in foreign countries; state may not totally prevent transactions carried on
under aegis of law passed by Congress in exercise of its explicit power under Federal Constitution to regulate commerce
with foreign nations. Hostetter v Idlewild Bon Voyage Liquor Corp. (1964) 377 US 324 Shepardize , 12 L Ed 2d 350 Shepardize ,
84 S Ct 1293 Shepardize .
By virtue of Twenty-first Amendment, state is totally unconfined by traditional commerce clause limitations when it restricts
importation of intoxicants destined for use, distribution, or consumption within its borders. Heublein, Inc. v South Carolina
Tax Comm'n (1972) 409 US 275 Shepardize , 34 L Ed 2d 472 Shepardize , 93 S Ct 483 Shepardize ; United States v State Tax Com.
(1973) 412 US 363 Shepardize , 37 L Ed 2d 1 Shepardize , 93 S Ct 2183 Shepardize .
Although Twenty-first Amendment primarily creates exception to normal operation of commerce clause (Art I, § 8, cl 3),
nevertheless Twenty-first Amendment does not pro tanto repeal commerce clause, but merely requires that each
provision be considered in light of the other, and in context of issues and interests at stake in any concrete case. Craig v
Boren (1976) 429 US 190 Shepardize , 50 L Ed 2d 397 Shepardize , 97 S Ct 451 Shepardize , reh den (1977) 429 US 1124 Shepardize ,
51 L Ed 2d 574 Shepardize , 97 S Ct 1161 Shepardize and (ovrld as stated in Wilson v McBeath (1991, WD Tex) 1991 US Dist
LEXIS 21124 Shepardize ) and (criticized in UPS Worldwide Forwarding v United States Postal Serv. (1995, CA3 Del) 66 F3d
621 Shepardize ) and (criticized in North Shore Concrete & Assoc. v City of New York (1998, ED NY) 1998 US Dist LEXIS
6785 Shepardize ).
There is no bright line between federal and state powers over liquor; although the Twenty-first Amendment grants states
virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution

system, and although the states retain substantial discretion to establish other liquor regulations under the Amendment,
those controls may be subject to federal commerce power under the commerce clause of the Constitution (Article I, § 8, cl
3) in appropriate situations, and the reconciliation of competing state and federal interests in such regard can be made
only after careful scrutiny of those concerns in a concrete case. California Retail Liquor Dealers Ass'n v Midcal Aluminum,
Inc. (1980) 445 US 97 Shepardize , 63 L Ed 2d 233 Shepardize , 100 S Ct 937, Shepardize 1980-1 CCH Trade Cases P 63201.
News
Recent News Coverage of the Case
Correy E. Stephenson, Law of the Vine: The Practice of Wine Law, Kan. City Daily Rec. (Kansas City, Mo.), Dec. 6, 2005.
This article discussed the status of states’ wine laws, with specific attention paid to Granholm v. Heald.
Dan & Krista Stockman, Wineries Get Hearing on Ship Ban, Fort Wayne J.-Gazette (Ind.), Nov. 17, 2005.
This article discussed Indiana’s attempt to negate Granholm v. Heald.
Larry Downes, The Commerce Clause Wakes Up, Harvard Bus. Rev., Sept. 2005.
The decision in Granholm v. Heald suggested a Supreme Court that was prepared to use the dormant Commerce Clause
to protect electronic commerce, a growing sector of the economy threatened by a patchwork of state regulations, and the
failure of the federal government to take sufficient action on the global front.
Amy Rinard, Getting a Bigger Glass for Out-of-State Wines, Milwaukee J. Sentinel (Wis.), July 17, 2005.
Jessica Fender, Wineries Say Law Will Hurt Business; Blanco Signs Bill, Promises Protection, The Advocate, July 15, 2005.
Donna Walter, Missouri Law Professors Dissect U.S. Supreme Court's Recent Term, Kan. City Daily Rec. (Kansas City, Mo.), July
14, 2005.
High Court Strikes Down State Limitations on Internet Wine Sales, Computer & Internet Law., July 2005.
Brian Dickerson, Follow Money on Wine Trail, Detroit Free Press, July 1, 2005.
The Supreme Court's Granholm v. Heald Decision: What It Means for Interstate Wine Shipping, Mondaq Bus. Briefing, June 24,
2005.

Brandon Tubbs, Attorney: Wine Laws Assailable State's Vintners Advised of Ruling, Ark. Democrat-Gazette (Little Rock), June 9,
2005.
Morain Michael, Up for Something Different? Buy Out-of-State Wines Online, Thanks to Supreme Court Decision, Des Moines
Register (Iowa), June 8, 2005.
Ron Browning, Wine Lovers Hail High Court Ruling; Impact on Indiana Remains Unclear, Ind. Law., June 1, 2005.
K. Lloyd Billingsley, Toast to the Supreme Court, Wash. Times, May 22, 2005.
Supreme Court; State Wine-Shipping Bans Struck Down Facts on File, World News Dig., May 19, 2005.
Wine Laws Gone Sour; Bans by Florida and Other States Are Behind the Times, Sarasota Herald-Trib. (Fla.), May 19, 2005.
Recent News Coverage of the Issue
Peter Schroeder & Andrew Ackerman, Kentucky Files Davis Case Brief; Nine Market Groups Add Their Support, Bond Buyer, July
23, 2007.
Briefs were filed in a case the Supreme Court consented to hear, challenging state tax laws which imposed income tax
liabilities on bonds from out of state municipalities but not in state municipalities.
As Wine Bills Ferment, Balance Elusive, Ark. Democrat-Gazette (Little Rock), Feb. 28, 2007.
The legislative debate on the future on the state's wine laws began with a committee hearing arguments on whether
lawmakers should revoke Arkansas wineries' special marketing privileges in order to conform to a U.S. Supreme Court
decision.
Raft of Bills Due to Fix Wine Laws Crippled by Court Ruling, Ark. Democrat-Gazette (Little Rock), Feb. 14, 2007.
New legislation could head off litigation pending in state and federal courts between wine and liquor merchants who
sought to protect their franchises from incursion by the out-of-state wineries and oenophiles who could not find boutique
wines in Arkansas liquor stores.
Missouri Laws on Wine-Shipping Challenged, Daily Rec. (St. Louis, Mo./St. Louis Countian), Nov. 29, 2006.
Missouri laws restricting direct shipping of out-of-state wine to Missouri customers only to states with reciprocal
agreements were challenged as unconstitutional. The article discussed how Granholm v. Heald might or might not apply.

Constitutional Objections Raised to California's GHG Plan, EnergyWashington Wk., July 4, 2007.
Arkansas Attorney General Issues Opinion to State Sen. Thompson, US St. News, Mar. 15, 2007.
Wine Sales to Grocers Gets 90-1 House OK, Ark. Democrat-Gazette (Little Rock), Mar. 6, 2007.
Treasurers' Group Urges Supreme Court to Hear Kentucky Case, Bond Buyer, Jan. 23, 2007.
Cheryl Ursin, Less Is More: The Division of Liquor Control of the Ohio Department of Commerce Runs a Lean, Highly Efficient
Control System, StateWays, Jan. 1, 2007.
Family Winemakers Partners with WineCompliancePro to Offer Its Members Direct Shipping Compliance Tools, Bus. Wire, Dec.
20, 2006.
Regulations Have Industry Officials in Oklahoma Whining about Wine, J. Rec. (Oklahoma City, Okla.), Oct. 18, 2006.
Daniel Nasaw, A Black Market for Reds and Whites Wine Aficionados Flout State Law Banning Shipments to Consumers, Ark.
Democrat-Gazette (Little Rock), Oct. 1, 2006.
Jim Small, Out-of-State Winery Challenges Arizona's New Shipping Law, Ariz. Capitol Times, Sept. 29, 2006.
Julie Gallagher, Retailers Sober about Licensing Laws, Supermarket News, Sept. 25, 2006.
Family Winemakers Sues Massachusetts to Overturn Law Limiting Direct Wine Sales by Winery Size; Many Small Wineries
Forced to Choose One Sales Approach, Bus. Wire, Sept. 18, 2006.
Linda Satter, Wine Distribution Battle Opens State-Court Phase, Ark. Democrat-Gazette (Little Rock), Aug. 16, 2006.
Millions of Kids Buy Internet Alcohol, Landmark Survey Reveals; Related Audit Confirms States Loosening Internet Alcohol Sales
Laws with Little Monitoring or Enforcement Online, PR Newswire U.S., Aug. 11, 2006.
Recent News Coverage of the Parties
Tim Martin, Granholm Continues to Protest School Budget Cuts, Associated Press St. & Loc. Wire, Mar. 26, 2007.
This article discussed Gov. Jennifer Granholm asking educators from across Michigan to tell state lawmakers they
opposed proposed spending cuts to schools.

Jeremy W. Steele, Kegs for Cash?, Lansing St. J. (Mich.), Feb. 23, 2007.
This article discussed the potential of raising deposits on beer kegs and the Michigan Beer & Wine Wholesalers
Association’s opinion thereon.
Laurie Daniel, Superior Wines Are Made from Edna Valley Grapes, San Luis Obispo Trib. (Cal.), Feb. 28, 2007.
This article discussed the Domaine Alfred winery in California and its excellent wines.
Jack Berninger, Local Wine Winners, Richmond Times Dispatch (Va.), Nov. 1, 2006.
US Free Trade Receives Blow from Woman Winemaker, Indo-Asian News Service, Sept. 18, 2006.
Larry Walker, Blue Collar Boutiques: Lessons Learned by Five Hard-Working Lodi Wineries, Wines & Vines, Jan. 1, 2007.
Reed Fujii, Wineries Beginning to See Markets Open, The Rec., May 14, 2006.
Michael Doyle, Firm in Wine-Shipment Case Scores $150k Payday, Modesto Bee, Mar. 28, 2006.
Reed Fujii, California Wineries Still Waiting on Flood of Sales, The Rec., Nov. 9, 2005.
Mike Dunne, After Court Ruling, Wineries Say the Glass Is Half-Full, Scripps Howard News Service, May 18, 2005.
Alan Wechsler, $1.6M Deal Halts Liquor Inquiry; Wholesalers Make Payment to Resolve Attorney General's Investigation into
Gifts, Payments to Favored Customers, Times Union (Albany, N.Y.), Aug. 31, 2006.
James Bernstein, In Brief, Newsday (N.Y.), Aug. 2, 2006.
R.B. Stuart, State Tells Wineries to Lay off the Soft Stuff, N.Y. Times, Feb. 5, 2006.
Joe Mahoney, Gov Axes Embattled Liquor Agency Big, Daily News (N.Y.), Nov. 29, 2005.
Chris Christoff, Services Tax Gets Meager Support: More for Tobacco, Alcohol Is All Residents Would Swallow, Detroit Free
Press (Mich.), Mar. 18, 2007.
Links to Related LexisNexis Content

Briefs 1
Briefs 2
Briefs 3
Transcripts
Pleadings Related to This Case
CourtLink Court Records
Corporate Party Links

Granholm v. Heald
544 U.S. 460 Shepardize
JENNIFER M. GRANHOLM, GOVERNOR OF MICHIGAN, et al., Petitioners v. ELEANOR HEALD, et al. MICHIGAN BEER & WINE
WHOLESALERS ASSOCIATION, Petitioner v. ELEANOR HEALD, et al. JUANITA SWEDENBURG, et al., Petitioners v. EDWARD D. KELLY,
CHAIRMAN, NEW YORK DIVISION OF ALCOHOLIC BEVERAGE CONTROL, STATE LIQUOR AUTHORITY, et al.
(03-1116), (03-1120), (03-1274)
SUPREME COURT OF THE UNITED STATES
544 U.S. 460 Shepardize ; 125 S. Ct. 1885 Shepardize ; 161 L. Ed. 2d 796 Shepardize ; 2005 U.S. LEXIS 4174 Shepardize; 73 U.S.L.W. 4321 Shepardize; 18 Fla. L.
Weekly Fed. S 263 Shepardize
December 7, 2004, Argued May 16, 2005, * Decided * Together with No. 03-1120, Michigan Beer & Wine Wholesalers Assn. v. Heald et al.,
also on certiorari to the same court, and No. 03-1274, Swedenburg et al. v. Kelly, Chairman, New York Division of Alcoholic Beverage Control,
State Liquor Authority, et al., on certiorari to the United States Court of Appeals for the Second Circuit.
NOTICE: This preliminary LEXIS version is unedited and subject to

revision. DISPOSITION: Affirmed in part, reversed and remanded in part.
The LEXIS pagination of this document is subject to change pending DECISION: [***796]
release of the final published version. State laws that allowed in-state wineries to sell wine directly to in-
state consumers but barred out-of-state wineries from doing so--or
SUBSEQUENT HISTORY: Motion denied by, Motion to strike made such sales economically impractical--held to violate Federal
denied by, Costs and fees proceeding at Heald v. Granholm, 2006 Constitution's commerce clause (Art I, § 8, cl 3).
U.S. Dist. LEXIS 74646 Shepardize ( E.D. Mich., Sept. 28, 2006)
COUNSEL:
PRIOR HISTORY: ON WRITS OF CERTIORARI TO THE UNITED Clint Bolick argued the cause for petitioners in No. 03-1274.
STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT. ON Thomas L. Casey argued the cause for petitioners in No. 03-1116
WRIT OF CERTIORARI TO THE UNITED STATES COURT OF and in No. 03-1120.
APPEALS FOR THE SECOND CIRCUIT. Swedenburg v. Kelly, 358 Kathleen Sullivan argued the cause for respondents in No. 03-1116
F.3d 223 Shepardize, 2004 U.S. App. LEXIS 2337 Shepardize (2d Cir. N.Y., and No. 03-1120.
2004) Caitlin Halligan argued the cause for respondents in No. 03-1274.
Heald v. Engler, 342 F.3d 517 Shepardize, 2003 U.S. App. LEXIS 17965
Shepardize
(6th Cir.) (6th Cir. Mich., 2003)
Case Text Page 1

JUDGES: Kennedy, J., delivered the opinion of the Court, in which state and federal regulations. For example, both state and federal
Scalia, Souter, Ginsburg, and Breyer, JJ., joined. Stevens, J., filed a laws limit vertical integration between tiers. Id., at 5; 27 USC § 205
Shepardize
dissenting opinion, in which O'Connor, J., joined. Thomas, J., filed a [27 USCS § 205]; see, e.g., Bainbridge v. Turner, 311 F.3d
dissenting opinion, in which Rehnquist, C. J., and Stevens and 1104, 1106 Shepardize (CA11 2002). We have held previously that Link
O'Connor, JJ., joined. Int. HN▲ States can mandate a three-tier distribution scheme in the
exercise of their authority under the Twenty-first Amendment. North
OPINION BY: KENNEDY Dakota v. United States, 495 U.S. 423, 432 Shepardize , 109 L. Ed. 2d
420 Shepardize , 110 S. Ct. 1986 Shepardize (1990); id., at 447, 109 L. Ed.
OPINION: [*465] [***805] [**1891] Justice Kennedy delivered 2d 420, 110 S. Ct. 1986 (Scalia, J., concurring in judgment). As
the opinion of the Court. relevant to today's cases, though, [*467] the three-tier system is, in
These consolidated cases present challenges to state laws broad terms and with refinements to be discussed, mandated by
regulating the sale of wine from out-of-state wineries to consumers in Michigan and New York only for sales from out-of-state wineries. In-
Michigan and New York. The details and mechanics [*466] of the state wineries, by contrast, can obtain a license for direct sales to
two regulatory schemes differ, but the object and effect of the laws consumers. The differential treatment between in-state and out-of-
are the same: to allow in-state wineries to sell wine directly to state wineries constitutes explicit discrimination against interstate
consumers [**1892] in that State but to prohibit out-of-state wineries commerce.
from doing so, or, at the least, to make direct sales impractical from This discrimination substantially limits the direct sale of wine to
an economic standpoint. It is evident that the object and design of consumers, an otherwise emerging and [***806] significant
the Michigan and New York statutes is to grant in-state wineries a business. FTC Report 7. From 1994 to 1999, consumer spending on
competitive advantage over wineries located beyond the States' direct wine shipments doubled, reaching $500 million per year, or
borders. three percent of all wine sales. Id., at 5. The expansion has been
We hold that the laws in both States discriminate against interstate influenced by several related trends. First, the number of small
commerce in violation of the Commerce Clause, Art. I, § 8, cl. 3, and wineries in the United States has significantly increased. By some
that the discrimination is neither authorized nor permitted by the estimates there are over 3,000 wineries in the country, WineAmerica,
Twenty-first Amendment. Accordingly, we affirm the judgment of the The National Association of American Wineries, Wine Facts 2004,
Court of Appeals for the Sixth Circuit, which invalidated the Michigan http://www.americanwineries.org/newsroom/winefacts04.htm , more
laws; and we reverse the judgment of the Court of Appeals for the than three times the number 30 years ago, FTC Report 6. At the
Second Circuit, which upheld the New York laws. same time, the wholesale market has consolidated. Between 1984
I and 2002, the number of licensed wholesalers dropped from 1,600 to
Like many other States, Michigan and New York regulate the sale 600. Riekhof & Sykuta, Regulating Wine by Mail, 27 Regulation, No.
and importation of alcoholic beverages, including wine, through a 3, pp. 30, 31 (Fall 2004), available at
three-tier distribution system. Separate licenses are required for http://www.cato.org/pubs/regulation/regv27n3/v27n3-3.pdf . The
producers, wholesalers, and retailers. See FTC, Possible increasing winery-to-wholesaler ratio means that many small
Anticompetitive Barriers to E-Commerce: Wine 5-7 (July 2003) wineries do not produce enough wine or have sufficient consumer
(hereinafter FTC Report), available at demand for their wine to make it economical for wholesalers to carry
http://www.ftc.gov/os/2003/07/winereport2.pdf (all Internet materials their products. FTC Report 6. This has led many small wineries to
as visited May 11, 2005, and available in Clerk of Court's case file). rely on direct shipping to reach new markets. [**1893] Technological
The three-tier scheme is preserved by a complex set of overlapping improvements, in particular the ability of wineries to sell wine over
Case Text Page 2

the Internet, have helped make direct shipments an attractive sales state, generally may sell only to licensed in-state wholesalers. Mich.
channel. Comp. Laws Ann. §§ 436.1109 Shepardize (1), 436.1305, 436.1403,
Approximately 26 States allow some direct shipping of wine, with 436.1607(1) (West 2000); Mich. Admin. Code Rules 436.1705
various restrictions. Thirteen of these States have reciprocity laws, (1990), 436.1719 (2000). Wholesalers, in turn, may sell only to in-
which allow direct shipment from wineries [*468] outside the State, state retailers. Mich. Comp. Laws Ann. §§ 436.1113 Shepardize (7),
provided the State of origin affords similar nondiscriminatory 436.1607(1) (West 2001). Licensed retailers are the final link in the
treatment. Id., at 7-8. In many parts of the country, however, state chain, selling alcoholic beverages to consumers at retail locations
laws that prohibit or severely restrict direct shipments deprive and, subject to certain restrictions, through home delivery. §§
consumers of access to the direct market. According to the Federal 436.1111(5), 436.1203(2)-(4).
Trade Commission (FTC), "[s]tate bans on interstate direct shipping Under Michigan law, wine producers, as a general matter, must
represent the single largest regulatory barrier to expanded e- distribute their wine through wholesalers. There is, however, an
commerce in wine." Id., at 3. exception for Michigan's approximately 40 in-state wineries, which
The wine producers in the cases before us are small wineries that are eligible for "wine maker" licenses that allow direct shipment to in-
rely on direct consumer sales as an important part of their state consumers. § 436.1113(9) (West 2001); §§ 436.1537(2)-(3)
businesses. Domaine Alfred, one of the plaintiffs in the Michigan suit, (West Supp. 2004); Mich. Admin. Code Rule 436.1011(7)(b) (2003).
is a small winery located in San Luis Obispo, California. It produces The cost of the license varies with the size of the winery. For a small
3,000 cases of wine per year. Domaine Alfred has received requests winery, the license is $25. Mich. Comp. Laws Ann. § 436.1525
Shepardize
for its wine from Michigan consumers but cannot fill the orders (1)(d) (West Supp. 2004). Out-of-state wineries can apply for
because of the State's direct-shipment ban. Even if the winery could a $300 "outside seller of wine" license, but this license only allows
find a Michigan wholesaler to distribute its wine, the wholesaler's them to sell to in-state wholesalers. [**1894] §§ 436.1109(9) (West
markup would render shipment through the three-tier system 2001), 436.1525(1)(e) (West Supp. 2004); Mich. Admin. Code Rule
economically infeasible. 436.1719(5) (2000).
Similarly, Juanita Swedenburg and David Lucas, two of the plaintiffs Some Michigan residents brought suit against various state officials
in the New York suit, operate small wineries in Virginia (the in the United States District Court for the Eastern District of
Swedenburg Estate Vineyard) and California (the Lucas Winery). Michigan. Domaine Alfred, the San Luis Obispo winery, joined in the
Some of their customers are tourists, from other States, who suit. The plaintiffs contended that Michigan's direct-shipment laws
purchase wine while visiting the wineries. If these customers wish to discriminated against interstate commerce in violation of the
obtain Swedenburg or Lucas wines after they return home, they will Commerce Clause. The trade association Michigan Beer & Wine
be unable to do so if they reside in a State with restrictive direct- Wholesalers intervened as a defendant. Both the State and the
shipment laws. For example, Swedenburg and Lucas are unable to wholesalers argued that the ban on direct shipment from out-of-state
fill orders from New York, the Nation's second-largest wine market, wineries is a valid exercise of Michigan's power under § 2 of the
because of the limits that [***807] State imposes on direct wine Twenty-first Amendment.
shipments. [*470] On cross-motions for summary judgment the District Court
A sustained the Michigan scheme. The Court of Appeals for the Sixth
Shepardize
We first address the background of the suit challenging the Michigan Circuit reversed. Heald v. Engler, 342 F.3d 517 (2003).
direct-shipment law. Most alcoholic beverages in Michigan are Relying on Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 Shepardize , 82
distributed through the State's three-tier [*469] system. Producers L. Ed. 2d 200 Shepardize , 104 S. Ct. 3049 Shepardize (1984), the court
or distillers of alcoholic beverages, whether located in state or out of rejected the argument that the Twenty-first Amendment immunizes
Case Text Page 3

all state liquor laws from the strictures of the Commerce Clause, 342 The Court of Appeals for the Second Circuit reversed. 358 F.3d 223
F.3d, at 524 Shepardize , and held the Michigan scheme was Shepardize
(2004). The court "recognize[d] that the physical presence
unconstitutional because the defendants failed to demonstrate the requirement could create substantial dormant Commerce Clause
State could not meet its proffered policy objectives through problems [**1895] if this licensing scheme regulated a commodity
nondiscriminatory means, id., at 527. other than alcohol." Id., at 238 . The court nevertheless sustained
B the New York statutory scheme because, in the court's view, "New
New York's licensing scheme is somewhat different. It channels most York's desire to ensure accountability through presence is aimed at
wine sales through the three-tier system, but it too makes exceptions the regulatory interests directly tied to the importation and
for in-state wineries. As in Michigan, the result is to allow local transportation of alcohol for use in New York," ibid. As such, the New
wineries to make direct sales to consumers in [***808] New York on York direct shipment laws were "within the ambit of the powers
terms not available to out-of-state wineries. Wineries that produce granted to states by the Twenty-first Amendment." Id., at 239.
wine only from New York grapes can apply for a license that allows
direct shipment to in-state consumers. N. Y. Alco. Bev. Cont. Law C
Ann. § 76-a(3) (West Supp. 2005) (hereinafter N. Y. ABC Law). We consolidated these cases and granted certiorari on the following
These licensees are authorized to deliver the wines of other wineries question: "'Does a State's regulatory scheme that permits in-state
as well, § 76-a(6)(a), but only if the wine is made from grapes "at wineries directly to ship alcohol to consumers but restricts the ability
least seventy-five percent the volume of which were grown in New of out-of-state wineries to do so violate the dormant Commerce
York state," § 3(20-a). An out-of-state winery may ship directly to Clause in light of § 2 of the Twenty-first Amendment?'" 541 U.S.
New York consumers only if it becomes a licensed New York winery, 1062 Shepardize , 158 L. Ed. 2d 962 Shepardize , 124 S. Ct. 2389 Shepardize
which requires the establishment of "a branch factory, office or (2004).
storeroom within the state of New York." § 3(37). For ease of exposition, we refer to the respondents from the
Juanita Swedenburg and David Lucas, joined by three of their New Michigan challenge (Nos. 03-1116 and 03-1120) and the petitioners
York customers, brought suit in the Southern District of New York in the New York challenge (No. 03-1274) collectively [*472] as the
against the officials responsible for administering New York's wineries. We refer to their opposing parties--Michigan, New York,
Alcoholic Beverage Control Law seeking, inter alia, a declaration that and the wholesalers and retailers--simply as the States.
the State's limitations on the direct shipment of out-of-state wine [***809] II
violate the Commerce Clause. New York liquor wholesalers and A
representatives [*471] of New York liquor retailers intervened in Time and again this Court has held that, [HN1] in all but the
support of the State. narrowest circumstances, state laws violate the Commerce Clause if
The District Court granted summary judgment to the plaintiffs. 232 F. they mandate "differential treatment of in-state and out-of-state
Supp. 2d 135 Shepardize (2002). The court first determined that, under economic interests that benefits the former and burdens the latter."
established Commerce Clause principles, the New York direct- Oregon Waste Systems, Inc. v. Department of Environmental Quality
Shepardize
shipment scheme discriminates against out-of-state wineries. Id., at of Ore., 511 U.S. 93, 99 , 128 L. Ed. 2d 13 Shepardize , 114 S.
Shepardize
146-147 . The court then rejected the State's Twenty-first Ct. 1345 (1994). See also New Energy Co. of Ind. v.
Amendment argument, finding that the "[d]efendants have not shown Limbach, 486 U.S. 269, 274 Shepardize , 100 L. Ed. 2d 302 Shepardize , 108
that New York's ban on the direct shipment of out-of-state wine, and S. Ct. 1803 Shepardize (1988). This rule is essential to the foundations
particularly the in-state exceptions to the ban, implicate the State's of the Union. Link Int. HN▲ The mere fact of nonresidence should
core concerns under the Twenty-first Amendment." Id., at 148. not foreclose a producer in one State from access to markets in
Case Text Page 4

other States. H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 539 States prohibited direct-shipments of wine. The obvious aim of the
Shepardize
, 93 L. Ed. 865 Shepardize , 69 S. Ct. 657 Shepardize (1949). Link California statute was to open the interstate direct-shipping market
Quick Holding▲ States may not enact laws that burden out-of-state for the State's many wineries. Ibid. The current patchwork of laws--
producers or shippers simply to give a competitive advantage to in- with some States banning direct shipments altogether, others doing
state businesses. This mandate "reflect[s] a central concern of the so only for [***810] out-of-state wines, and still others requiring
Framers that was an immediate reason for calling the Constitutional reciprocity--is essentially the product of an ongoing, low-level trade
Convention: the conviction that in order to succeed, the new Union war. Allowing States to discriminate against out-of-state wine
would have to avoid the tendencies toward economic Balkanization "invite[s] a multiplication of preferential trade areas destructive of the
that had plagued relations among the Colonies and later among the very purpose of the Commerce Clause." Dean Milk Co. v. Madison,
States under the Articles of Confederation." Hughes v. Oklahoma, 340 U.S. 349, 356 Shepardize , 95 L. Ed. 329 Shepardize , 71 S. Ct. 295
441 U.S. 322, 325-326 Shepardize , 60 L. Ed. 2d 250 Shepardize , 99 S. Ct. Shepardize
(1951). See also Baldwin v. G. A. F. Seelig, Inc., 294 U.S.
1727 Shepardize (1979). 511, 521-523 Shepardize , 79 L. Ed. 1032 Shepardize , 55 S. Ct. 497 Shepardize
The rule prohibiting state discrimination against interstate commerce (1935).
follows also from the principle that States should not be compelled to B
negotiate with each other regarding favored or disfavored status for The discriminatory character of the Michigan system is obvious.
their own citizens. States do not need, and may not attempt, to Michigan allows in-state wineries to ship directly to consumers,
negotiate with other States regarding their mutual economic subject only to a licensing requirement. Out-of-state [*474]
interests. Cf. U.S. Const., Art. I, § 10, cl. 3. Rivalries among the wineries, whether licensed or not, face a complete ban on direct
States are thus kept to a minimum, and a proliferation of trade zones shipment. The differential treatment requires all out-of-state wine, but
is prevented. See C & A Carbone, Inc. v. Clarkstown, [*473] 511 not all in-state wine, to pass through an in-state wholesaler and
U.S. 383, 390 Shepardize , 128 L. Ed. 2d 399 Shepardize , 114 S. Ct. 1677 retailer before reaching consumers. These two extra layers of
Shepardize
(1994) (citing The Federalist No. 22, pp. 143-145 (C. overhead increase the cost of out-of-state wines to Michigan
Rossiter ed. 1961) (A. Hamilton); Madison, Vices of the Political consumers. The cost differential, and in some cases the inability to
System of the United States, in 2 Writings of James Madison 362- secure a wholesaler for small shipments, can effectively bar small
363 (G. Hunt ed. 1901)). wineries from the Michigan market.
[**1896] Laws of the type at issue in the instant cases contradict The New York regulatory scheme differs from Michigan's in that it
these principles. They deprive citizens of their right to have access to does not ban direct shipments altogether. Out-of-state wineries are
the markets of other States on equal terms. The perceived necessity instead required to establish a distribution operation in New York in
for reciprocal sale privileges risks generating the trade rivalries and order to gain the privilege of direct shipment. N. Y. ABC Law §§
animosities, the alliances and exclusivity, that the Constitution and, 3(37), 96. This, though, is just an indirect way of subjecting out-of-
in particular, the Commerce Clause were designed to avoid. State state wineries, but not local ones, to the three-tier system. Link P.
laws that protect local wineries have led to the enactment of statutes Arg.▲ New York and those allied with its interests defend the
under which some States condition the right of out-of-state wineries scheme by arguing that an out-of-state winery has the same access
to make direct wine sales to in-state consumers on a reciprocal right to the State's consumers as in-state wineries: All wine must be sold
in the shipping State. California, for example, passed a reciprocity through a licensee fully accountable to New York; it just so happens
law in 1986, retreating from the State's previous regime that allowed that in order to become a licensee, a winery must have a physical
unfettered direct shipments from out-of-state wineries. Riekhof & presence in the State. There is some confusion over the precise
Sykuta, 27 Regulation, No. 3, at 30. Prior to 1986, all but three steps out-of-state wineries must take to gain access to the New York
Case Text Page 5

market, in part because no winery has run the State's regulatory commercial winery license. See §§ 3(37), 76. Unlike farm wineries,
gauntlet. New York's argument, in any event, is unconvincing. however, commercial wineries must obtain a separate certificate
Link P. Arg.▲ The New York scheme grants in-state wineries from the state liquor authority authorizing direct shipments to
access to the State's consumers on preferential terms. The consumers, § 77(2) (West 2000); and, of course, for out-of-state
suggestion of a limited exception for direct shipment from out-of- wineries there is the additional requirement of maintaining a
state wineries does nothing to eliminate the discriminatory nature of distribution operation in New York. New York law also allows in-state
New York's regulations. In-state producers, with the applicable wineries without direct-shipping licenses to distribute their wine
licenses, can [**1897] ship directly to consumers from their wineries. through other wineries that have the [*476] applicable licenses. §
§§ 76-a(3), 76(4) (West Supp. 2005), and § 77(2) (West 2000). Out- 76(5) (West Supp 2005). This is another privilege not afforded out-of-
of-state wineries must open a branch office and warehouse in New state wineries.
York, additional steps that drive up the cost [*475] of their wine. §§ We have no difficulty concluding that New York, like Michigan,
3(37), 96 (West Supp. 2005). See also App. in No. 03-1274, pp. 159- discriminates against interstate commerce through its direct-shipping
160 (Affidavit of Thomas G. McKeon, General Counsel to the New laws.
York State Liquor Authority). For most wineries, the expense of III
establishing a bricks-and-mortar distribution operation in 1 State, let [HN3] State laws that discriminate against interstate commerce face
alone all 50, is prohibitive. It comes as no surprise that not a single "a virtually per se rule of invalidity." Philadelphia v. New Jersey, 437
out-of-state winery has availed itself of New York's direct-shipping U.S. 617, 624 Shepardize , 57 L. Ed. 2d 475 Shepardize , 98 S. Ct. 2531
Shepardize
privilege. Link Int. HN▲ We have "viewed with particular suspicion (1978). The Michigan and New York laws by their own terms
state statutes requiring business operations to be performed in the violate this proscription. Link P. Arg.▲ The two States, however,
home State that could more efficiently be performed [***811] contend their statutes are saved by § 2 of the Twenty-first
elsewhere." Pike v. Bruce Church, Inc., 397 U.S. 137, 145 Shepardize , Amendment, which provides:
25 L. Ed. 2d 174 Shepardize , 90 S. Ct. 844 Shepardize (1970). New York's [HN4] "The transportation or importation into any State, Territory, or
in-state presence requirement runs contrary to our admonition that possession of the United States for delivery or use therein of
[HN2] States cannot require an out-of-state firm "to become a intoxicating liquors, in violation of the laws thereof, is hereby
resident in order to compete on equal terms." Halliburton Oil Well prohibited."
Cementing Co. v. Reily, 373 U.S. 64, 72 Shepardize 10 L. Ed. 2d 202 Link P. Arg.▲ The States' position is inconsistent with our
Shepardize
, 83 S. Ct. 1201 Shepardize (1963). See also Ward v. Maryland, precedents and with the Twenty-first Amendment's history. [HN5]
79 U.S. 418 Shepardize , 12 Wall. 418 Shepardize , 20 L. Ed. 449 Shepardize Section 2 does not allow States to regulate the direct shipment of
(1871). wine on terms that discriminate in favor of in-state producers.
In addition to its restrictive in-state presence requirement, New York A
discriminates against out-of-state wineries in other ways. Out-of- Before 1919, the temperance movement fought to curb the sale of
state wineries that establish the requisite branch office and alcoholic beverages [**1898] one State at a time. The movement
warehouse in New York are still ineligible for a "farm winery" license, made progress, and many States passed laws restricting or
the license that provides the most direct means of shipping to New prohibiting the sale of alcohol. This Court upheld state laws banning
York consumers. N. Y. ABC Law § 76-a(5) ("No licensed farm winery the production and sale of alcoholic beverages, Mugler v. Kansas,
shall manufacture or sell any wine not produced exclusively from 123 U.S. 623 Shepardize , 31 L. Ed. 205 Shepardize , 8 S. Ct. 273 Shepardize
grapes or other fruits or agricultural products grown or produced in (1887), but was less solicitous of laws aimed at imports. In a series
New York state"). Out-of-state wineries may apply only for a of cases before ratification of the Eighteenth Amendment the Court,
Case Text Page 6

relying on [***812] the Commerce Clause, invalidated a number of them in the original packages, any state regulation to the contrary
state liquor regulations. notwithstanding; that is to say, that the goods received by Interstate
These cases advanced two distinct principles. First, the Court held Commerce remain under the shelter of the Interstate Commerce
that the Commerce Clause prevented States from discriminating clause of the Constitution, until by a sale in the original package they
against imported liquor. Scott v. Donald, [*477] 165 U.S. 58 Shepardize , have been commingled with [*478] the general mass of property in
41 L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize (1897); Walling v. the state." 170 U.S., at 444-445
Shepardize
, 42 L. Ed. 1100 Shepardize , 18
Michigan, 116 U.S. 446 Shepardize , 29 L. Ed. 691 Shepardize , 6 S. Ct. 454 S. Ct. 674 Shepardize
.
Shepardize
(1886); Tiernan v. Rinker, 102 U.S. 123 Shepardize , 26 L. Ed. Bowman reserved the question whether a State could ban the sale of
Shepardize
103 (1880). In Walling, for example, the Court invalidated a imported liquor altogether. 125 U.S., at 499-500 Shepardize , 31 L. Ed.
Michigan tax that discriminated against liquor imports by exempting 700 Shepardize , 8 S. Ct. 689 Shepardize . Iowa responded to Bowman by
sales of local products. The Court held that Link Int. HN▲ States doing just that but was thwarted once again. In Leisy, supra , the
were not free to pass laws burdening only out-of-state products: Court held that Iowa could not ban the sale of imported liquor in its
"A discriminating tax imposed by a State operating to the original package.
disadvantage of the products of other States when introduced into Leisy left the States in a bind. They could ban the production of
the first mentioned State, is, in effect, a regulation in restraint of domestic liquor, Mugler, supra , but these laws were ineffective
commerce among the States, and as such is a usurpation of the because out-of-state liquor was immune from any state regulation as
power conferred by the Constitution upon the Congress of the United long as it remained in its original package, Leisy, supra. To resolve
States." 116 U.S., at 455 Shepardize , 29 L. Ed. 691 Shepardize , 6 S. Ct. the matter, Congress passed the Wilson Act (so named for Senator
454 Shepardize . Wilson of Iowa), which empowered [**1899] the States to regulate
Second, the Court held that the Commerce Clause prevented States [***813] imported liquor on the same terms as domestic liquor:
from passing facially neutral laws that placed an impermissible "That all fermented, distilled, or other intoxicating liquors or liquids
burden on interstate commerce. Rhodes v. Iowa, 170 U.S. 412 transported into any State or Territory or remaining therein for use,
Shepardize
, 42 L. Ed. 1088 Shepardize , 18 S. Ct. 664 Shepardize (1898); consumption, sale or storage therein, shall upon arrival in such State
Vance v. W. A. Vandercook Co., 170 U.S. 438 Shepardize , 42 L. Ed. or Territory be subject to the operation and effect of the laws of such
1100 Shepardize , 18 S. Ct. 674 Shepardize (1898); Leisy v. Hardin, 135 State or Territory enacted in the exercise of its police powers, to the
U.S. 100 Shepardize , 34 L. Ed. 128 Shepardize , 10 S. Ct. 681 Shepardize , 12 same extent and in the same manner as though such liquids or
Ky. L. Rptr. 123 (1890); Bowman v. Chicago & Northwestern R. Co., liquors had been produced in such State or Territory, and shall not
125 U.S. 465 Shepardize , 31 L. Ed. 700 Shepardize , 8 S. Ct. 689 Shepardize be exempt therefrom by reason of being introduced therein in original
(1888). For example, in Bowman v. Chicago & Northwestern R. Co., packages or otherwise." Ch 728, 26 Stat 313 (codified at 27 USC §
125 U.S. 465 Shepardize , 31 L. Ed. 700 Shepardize , 8 S. Ct. 689 Shepardize 121 Shepardize [27 USCS § 121]).
(1888), the Court struck down an Iowa statute that required all liquor By its own terms, the Wilson Act did not allow States to discriminate
importers to have a permit. Bowman and its progeny rested in part against out-of-state liquor; rather, it allowed States to regulate
on the since-rejected original-package doctrine. Under this doctrine imported liquor only "to the same extent and in the same manner" as
goods shipped in interstate commerce were immune from state domestic liquor.
regulation while in their original package. As the Court explained in The Court confirmed this interpretation in Scott, supra . Scott
Vance, involved a constitutional challenge to South Carolina's dispensary
"the power to ship merchandise from one State into another carries law, 1895 SC Acts p. 721, which required that [*479] all liquor sales
with it, as an incident, the right in the receiver of the goods to sell be channeled through the state liquor commissioner. 165 U.S., at 92
Case Text Page 7

Shepardize
, 41 L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize . The statute the law by which the discrimination was brought about." 170 U.S., at
discriminated against out-of-state manufacturers in two primary 442 Shepardize , 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize . Second,
ways. First, § 15 required the commissioner to "purchase his "in so far as the law then in question forbade the sending . . . of
supplies from the brewers and distillers in this State when their intoxicating liquors for the use of the person to whom it was shipped,
product reaches the standard required by this Act: Provided, Such the statute was repugnant to [the Commerce Clause]." [**1900]
supplies can be purchased as cheaply from such brewers and Ibid. (citing Scott, 165 U.S. 58 Shepardize , 41 L. Ed. 632 Shepardize , 17 S.
distillers in this State as elsewhere." 1895 SC Acts p. 732. Second, § Ct. 265 Shepardize ). See also 170 U.S., at 443 Shepardize , 42 L. Ed. 1100
Shepardize
23 of the statute limited the State's markup on locally produced , 18 S. Ct. 674 Shepardize (distinguishing between the
wines to a 10-percent profit but provided "no such limitation of provisions at issue in Scott "which were held to operate a
charge in the case of imported wines." 165 U.S., at 93 Shepardize , 41 discrimination" and those which barred direct shipment for personal
L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize . Based on these use).
discriminatory provisions, the Court rejected the argument that the This second holding, that consumers had the right to receive
South Carolina dispensary law was authorized by the Wilson Act. Id., alcoholic beverages shipped in interstate commerce for personal
at 100, 41 L. Ed. 632, 17 S. Ct. 265 . It explained that the Wilson Act use, was only implicit in Scott. 165 U.S., at 78, 99-100 Shepardize , 41
was "not intended to confer upon any State the power to discriminate L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize . The Court expanded on
injuriously against the products of other States in articles whose this point, however, not only in Vance but again in Rhodes. Rhodes
manufacture and use are not forbidden, and which are therefore the construed the Wilson Act narrowly to avoid interference with this
subjects of legitimate commerce." Ibid. To the contrary, the Court right. The Act, the Court said, authorized States to regulate only the
said, Link Int. HN▲ the Wilson Act mandated "equality or uniformity resale of imported liquor, not direct shipment to consumers for
of treatment under state laws," ibid. , and did not allow South personal use. 170 U.S., at 421 Shepardize , 42 L. Ed. 1088 Shepardize , 18
Carolina to provide "an unjust preference" to its products "as against S. Ct. 664 Shepardize . Without a clear indication from Congress that it
similar products of the other States," id., at 101, 41 L. Ed. 632, 17 S. intended to allow States to ban such shipments, the Rhodes Court
Ct. 265. The dissent also understood the validity of the dispensary read the words "upon arrival" in the Wilson Act as authorizing "the
law to turn in large part on §§ 15 and 23, but argued that even if power of the State to attach to an interstate commerce shipment,"
these provisions were discriminatory the correct remedy was to only after its arrival at the point of destination and delivery there to
sever them from the rest of the Act. Id., at 104-106, 41 L. Ed. 632, 17 the consignee." Id., at 426, 42 L. Ed. 1088, 18 S. Ct. 664. See also
S. Ct. 265 (opinion of Brown, J.). id., at 424, 42 L. Ed 1088, 18 S. Ct. 664; Bridenbaugh v. Freeman-
Although the Wilson Act increased the States' authority to police Wilson, 227 F.3d 848, 852 Shepardize (CA7 2000). The Court
liquor imports, it did not solve all their problems. In Vance and interpreted the Wilson Act to overturn Leisy but leave Bowman
Rhodes--two cases decided soon after Scott--the Court made clear intact. Rhodes, supra, at 423-424, 42 L. Ed. 1088 Shepardize , 18 S. Ct.
that the Wilson Act did not authorize States to prohibit direct 664 Shepardize . The right to regulate did not attach until the liquor was
shipments for personal use. In Vance, the Court characterized Scott in the hands of the customer. As a result, the mail-order liquor trade
as embodying two distinct holdings: First, the South Carolina continued to thrive. Rogers, Interstate Commerce in Intoxicating
dispensary law "amount[ed] to an [***814] unjust discrimination Liquors Before the Webb-Kenyon Act, 4 Va. L. Rev. 353, 364-365
against liquors, the [*480] products of other States." 170 U.S., at (1917).
442 Shepardize , 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize . This [*481] After considering a series of bills in response to the Court's
aspect of the Scott holding, which confirmed the Wilson Act's reading of the Wilson Act, Congress responded to the direct-
nondiscrimination principle, was based "on particular provisions of shipment loophole in 1913 by enacting the Webb-Kenyon Act, 37
Case Text Page 8

Stat 699, 27 U.S.C. § 122 Shepardize [27 USCS § 122]. See Rogers, regulatory advantage, i.e. its immunity characteristic, afforded
supra, at 363-370. The Act, entitled "An Act Divesting intoxicating imported liquor under Bowman and Rhodes.
liquors of their interstate character in certain cases," provides: Link P. Arg.▲ Michigan and New York now argue the Webb-
"That the shipment or transportation . . . of any spirituous, vinous, Kenyon Act went even further and removed any barrier to
malted, fermented, or other intoxicating liquor of any kind, from one discriminatory state liquor regulations. We do not agree. First, Link P.
State . . . into any other State . . . which said spirituous, vinous, Arg.▲ this reading of the Webb-Kenyon Act conflicts with that given
malted, fermented, or other intoxicating liquor is intended, by any the statute in Clark Distilling. Clark Distilling recognized that the
person interested therein, to be received, possessed, sold, or in any Webb-Kenyon Act extended the Wilson Act to allow the States to
manner used, either in the original package or otherwise, in violation intercept liquor shipments before those shipments reached the
of any law of such State . . . is hereby prohibited." 37 Stat, at 699- consignee. The States' contention that the Webb-Kenyon Act also
700. reversed the Wilson Act's prohibition on discriminatory treatment of
The constitutionality of the Webb-Kenyon Act itself was in doubt. out-of-state liquors cannot be reconciled with Clark Distilling's
Vance and Rhodes implied that any law authorizing the States to description of the Webb-Kenyon Act's purpose--"simply to extend
regulate direct shipments for personal [***815] use would be an that which was done by the Wilson Act." 242 U.S., at 324 Shepardize ,
unlawful delegation of Congress' Commerce Clause powers. Indeed, 61 L. Ed. 326 Shepardize , 37 S. Ct. 180 Shepardize . See also McCormick
President Taft, acting on the advice of Attorney General & Co. v. Brown, 286 U.S. 131, 140-141 Shepardize , 76 L. Ed. 1017
Shepardize
Wickersham, vetoed the Act for this specific reason. S. Rep. No. , 52 S. Ct. 522 Shepardize (1932).
Shepardize
103, 63 Cong., 1st Sess., 3-6 (1913); 30 Op. Atty. Gen. 88 The statute's text does not compel a different result. Link Int. HN▲
(1913). Congress overrode the veto and in Clark Distilling Co. v. The Webb-Kenyon Act readily can be construed as forbidding
Western Maryland R. Co., 242 U.S. 311 Shepardize , 61 L. Ed. 326 "shipment or transportation" only where it runs afoul of the State's
Shepardize
, 37 S. Ct. 180 Shepardize (1917), a divided Court upheld the generally applicable laws governing receipt, possession, sale, or
Webb-Kenyon Act against a constitutional challenge. use. Cf. id., at 141, 76 L. Ed. 1017 Shepardize , 52 S. Ct. 522 Shepardize
The Court construed the Act to close the direct-shipment gap left (noting that the Act authorized enforcement of "valid" state laws). At
open by the Wilson Act. States were now empowered to forbid the very least, the Webb-Kenyon Act expresses no clear
shipments of alcohol to consumers for personal use, provided that congressional intent to depart from the principle, unexceptional at the
the States treated in-state and out-of-state liquor on the same terms. time the Act was passed and still applicable today, Hillside Dairy Inc.
Id., at 321-322, 61 L. Ed. 326, 37 S. Ct. 180 (noting that the West v. Lyons, 539 U.S. 59, 66 Shepardize , 156 L. Ed. 2d 54 Shepardize , 123 S.
Virginia law at issue in Clark Distilling "forbade the shipment into or Ct. 2142 Shepardize (2003), that discrimination against out-of-state
transportation of liquor in the State whether from inside or out"). The goods is disfavored. Cf. Western & [*483] Southern Life Ins. Co. v.
Court understood that [*482] the Webb-Kenyon Act "was enacted State Bd. of Equalization of Cal., 451 U.S. 648, 652-653 Shepardize , 68
simply to extend that [**1901] which was done by the Wilson Act." L. Ed. 2d 514 Shepardize , 101 S. Ct. 2070 Shepardize (1981) (holding that
Id., at 324, 61 L. Ed. 326, 37 S. Ct. 180. The Act's purpose "was to the McCarran-Ferguson Act, 15 U.S.C. § 1011 Shepardize et seq. [15
prevent the immunity characteristic of interstate commerce from USCS §§ 1011et et seq.], removed [***816] all dormant Commerce
being used to permit the receipt of liquor through such commerce in Clause scrutiny of state insurance laws; 15 USC § 1011 Shepardize [15
States contrary to their laws, and thus in effect afford a means by USCS § 1011] provides: "Congress declares that the continued
subterfuge and indirection to set such laws at naught." Ibid. The regulation and taxation by the several States of the business of
Court thus recognized that the Act was an attempt to eliminate the insurance is in the public interest, and that silence on the part of
Case Text Page 9

Congress shall not be construed to impose any barrier to the B
regulation or taxation of such business by the several States"). The ratification of the Eighteenth Amendment in 1919 provided a
Last, and most importantly, the Webb-Kenyon Act did not purport to brief respite from the legal battles over the validity of state liquor
repeal the Wilson Act, which expressly precludes States from regulations. With the ratification of the Twenty-first Amendment 14
discriminating. If Congress' aim in passing the Webb-Kenyon Act years later, however, nationwide Prohibition came to an end. Section
was to authorize States to discriminate against out-of-state goods 1 of the Twenty-first Amendment repealed the Eighteenth
then its first step would have been to repeal the Wilson Act. It did not Amendment. Section 2 of the Twenty-first Amendment is at issue
do so. There is no inconsistency between the Wilson Act and the here.
Webb-Kenyon Act sufficient to warrant an inference that the latter Michigan and New York say the provision grants to the States the
repealed the former. See Washington v. Miller, 235 U.S. 422, 428 authority to discriminate against out-of-state goods. The history we
Shepardize
, 59 L. Ed. 295 Shepardize , 35 S. Ct. 119 Shepardize (1914) (noting have recited does not support this position. To the contrary, it
that implied repeals are disfavored). Indeed, this Court has twice provides [***817] strong support for the view that § 2 restored to the
noted that the Wilson Act remains in effect today. Hostetter v. States the powers they had under the Wilson and Webb-Kenyon
Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 333 Shepardize , n. 11, Acts. "The wording of § 2 of the Twenty-first Amendment closely
12 L. Ed. 2d 350 Shepardize, 84 S. Ct. 1293 Shepardize (1964); follows the Webb-Kenyon and Wilson Acts, expressing the framers'
Department of Revenue v. James B. Beam Distilling Co., 377 U.S. clear intention of constitutionalizing the Commerce Clause
341, 345 Shepardize , n. 7 , 12 L. Ed. 2d 362 Shepardize , 84 S. Ct. 1247 framework established under those statutes." Craig v. Boren, 429
Shepardize
(1964). See 27 USC § 121 Shepardize [27 USCS § 121]. U.S. 190, 205-206 Shepardize , 50 L. Ed. 2d 397 Shepardize , 97 S. Ct. 451
Shepardize
Link Quick Holding▲ The Wilson Act reaffirmed, and the Webb- (1976) (footnote omitted).
Kenyon Act did not displace, the [**1902] Court's line of Commerce [HN6] The aim of the Twenty-first Amendment was to allow States to
Clause cases striking down state laws that discriminated against maintain an effective and uniform system for controlling liquor by
liquor produced out of state. The rule of Tiernan, Walling, and Scott regulating its transportation, importation, and use. The Amendment
remained in effect: States were required to regulate domestic and did not give States the authority to pass nonuniform laws in order to
imported liquor on equal terms. "[T]he intent of . . . the Webb-Kenyon discriminate against [*485] out-of-state goods, a privilege they had
Act . . . was to take from intoxicating liquor the protection of the not enjoyed at any earlier time.
interstate commerce laws in so far as necessary to deny them an Some of the cases decided soon after ratification of the Twenty-first
advantage over the intoxicating liquors produced in the state into Amendment did not take account of this history and were
which they were brought, yet, [the Act does not] show an intent or inconsistent with this view. In State Bd. of Equalization of Cal. v.
purpose to [*484] so abdicate control over interstate commerce as Young's Market Co., 299 U.S. 59, 62 Shepardize , 81 L. Ed. 38 Shepardize ,
to permit discrimination against the intoxicating liquor brought into 57 S. Ct. 77 Shepardize (1936), for example, the Court rejected the
one state from another." Pacific Fruit & Produce Co. v. Martin, 16 F. argument that the Amendment did not authorize discrimination:
Supp. 34, 39-40 Shepardize (WD Wash. 1936). See also Friedman, "The plaintiffs ask us to limit this broad command [of § 2]. They
Constitutional Law: State Regulation of Importation of Intoxicating request us to construe the Amendment as saying, in effect: The
Liquor Under Twenty-first Amendment, 21 Cornell L. Q. 504, 509 State may prohibit the importation of intoxicating liquors provided it
(1936) ("The cases under the Webb-Kenyon Act uphold state prohibits the manufacture and sale within its borders; but if it permits
prohibition and regulation in the exercise of the police power yet they such manufacture and sale, it must let imported liquors compete with
clearly forbid laws which discriminate arbitrarily and unreasonably the domestic on equal terms. To say that, would involve not a
against liquor produced outside of the state" (footnote omitted)). construction of the Amendment, but a rewriting of it."
Case Text Page 10

The Scope of Federal Power Over Alcoholic Beverages Since the
[**1903] Twenty-first Amendment, 8 Geo. Wash. L. Rev. 819, 822-828
The Court reaffirmed the States' broad powers under § 2 in a series (1940); Note, 55 Yale L. J. 815, 819-820 (1946).
of cases, see Mahoney v. Joseph Triner Corp., 304 U.S. 401 Our more recent cases, furthermore, confirm that Link Quick
Shepardize
, 82 L. Ed. 1424 Shepardize , 58 S. Ct. 952 Shepardize (1938); Holding▲ the Twenty-first Amendment does not supersede other
Indianapolis Brewing Co. v. Liquor Control Comm'n, 305 U.S. 391 provisions of the Constitution and, in particular, does not displace the
Shepardize
, 83 L. Ed. 243 Shepardize , 59 S. Ct. 254 Shepardize (1939); rule that States may not give a discriminatory preference to their own
Ziffrin, Inc. v. Reeves, 308 U.S. 132 Shepardize, 84 L. Ed. 128 Shepardize , producers.
60 S. Ct. 163 Shepardize (1939); Joseph S. Finch & Co. v. McKittrick, C
305 U.S. 395 Shepardize , 83 L. Ed. 246 Shepardize , 59 S. Ct. 256 Shepardize The modern § 2 cases fall into three categories.
Shepardize
(1939), and unsurprisingly many States used the authority First, Link Int. HN▲ the Court has held that state laws that violate
bestowed on them by the Court to expand trade barriers. T. Green, other provisions of the Constitution are not saved by the Twenty-first
Liquor Trade Barriers: Obstructions to Interstate Commerce in Wine, Amendment. The Court has applied this rule in the context of the
Beer, and Distilled Spirits 4, and App. I (1940) (stating in the wake of First Amendment, 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484
Shepardize
Young's Market that "[r]ivalries and reprisals have thus flared up"). , 134 L. Ed. 2d 711 Shepardize , 116 S. Ct. 1495 Shepardize (1996);
It is unclear whether the broad language in Young's Market was the Establishment Clause, Larkin v. Grendel's Den, Inc., 459 U.S.
necessary to the result because the Court also stated that "the case 116 Shepardize , 74 L. Ed. 2d 297 Shepardize , 103 S. Ct. 505 Shepardize
[did] not present a question of discrimination prohibited by the (1982); the Equal Protection Clause, Craig, supra, at 204-209, 50 L
commerce clause." 299 U.S., at 62 Shepardize , 81 L. Ed 38 Shepardize , 57 Ed 2d 397 Shepardize , 97 S Ct 451 Shepardize ; the Due Process Clause,
S. Ct. 77 Shepardize . The Court also declined, contrary to the approach Wisconsin v. Constantineau, 400 U.S. 433 Shepardize , [*487] 27 L. Ed.
we take today, to consider the history underlying the Twenty-first 2d 515 Shepardize , 91 S. Ct. 507 Shepardize (1971); and the Import-Export
Amendment. Id., at 63-64, 81 L. Ed. 38, 57 S. Ct. 77. This reluctance Clause, Department of Revenue v. James B. Beam Distilling Co.,
did not, however, reflect [*486] a consensus that such evidence 377 U.S. 341 Shepardize , 12 L. Ed. 2d 362 Shepardize , 84 S. Ct. 1247
Shepardize
was irrelevant or that prior history was unsupportive of the principle (1964).
that the Amendment did not authorize discrimination against out-of- Second, Link Int. HN▲ the Court has held that § 2 does not
state liquors. There was ample opinion to the contrary. See, e.g., abrogate Congress' Commerce Clause powers with regard to liquor.
Young's Market Co. v. State Bd. of Equalization of Cal., 12 F. Supp. [**1904] Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 Shepardize ,
140 Shepardize (SD Cal. 1935), rev'd, 299 U.S. 59 Shepardize , 81 L. Ed. 81 L. Ed. 2d 580 Shepardize , 104 S. Ct. 2694 Shepardize (1984); California
38 Shepardize , 57 S. Ct. 77 Shepardize (1936); Pacific Fruit & Produce Co. Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97
Shepardize
v. Martin, supra, [***818] at 39; Joseph Triner Corp. v. Arundel, 11 , 63 L. Ed. 2d 233 Shepardize , 100 S. Ct. 937 Shepardize (1980).
F. Supp. 145, 146-147 (Minn. 1935); Friedman, supra, at 511-512; The argument that "the Twenty-first Amendment has somehow
Note, Recent Cases, Twenty-first Amendment --Commerce Clause, operated to 'repeal' the Commerce Clause" for alcoholic beverages
85 U. Pa. L. Rev. 322, 323 (1937); W. Hamilton, Price and Price has been rejected. Hostetter v. Idlewild Bon Voyage Liquor Corp.,
Policies 426 (1938); Note, Legislation, Liquor Control, 38 Colum. L. 377 U.S., at 331-332 Shepardize , 12 L. Ed. 2d 350 Shepardize , 84 S. Ct.
Rev. 644, 658 (1938); Wiser & Arledge, Does the Repeal Empower a 1293 Shepardize . Though the Court's language in Hostetter may have
State to Erect Tariff Barriers and Disregard the Equal Protection come uncommonly close to hyperbole in describing this argument as
Clause in Legislating on Intoxicating Liquors in Interstate "an absurd oversimplification," "patently bizarre," and "demonstrably
Commerce? 7 Geo. Wash. L. Rev. 402, 407-409 (1939); de Ganahl, incorrect," ibid. , the basic point was sound.
Case Text Page 11

Finally, and most relevant to the issue at hand, the Court has held Link P. Arg.▲ Recognizing that Bacchus is fatal to their position,
that [HN7] state regulation of alcohol is limited by the the States suggest it should be overruled or limited to its facts. Link
nondiscrimination principle of the Commerce Clause. Bacchus P. Arg.▲ As the foregoing analysis makes clear, we decline their
Imports v. Dias, 468 U.S., at 276 Shepardize , 82 L. Ed. 2d 200 Shepardize , invitation. Furthermore, Bacchus does not stand alone in recognizing
104 S. Ct. 3049 Shepardize ; Brown-Forman Distillers Corp. v. New York that the Twenty-first Amendment did not give the States complete
State Liquor Authority, 476 U.S. 573 Shepardize , 90 L. Ed. 2d 552 freedom to regulate where other constitutional principles are at
Shepardize
, 106 S. Ct. 2080 Shepardize (1986); Healy v. Beer Institute, 491 stake. A retreat from Bacchus would also undermine Brown-Forman
U.S. 324 Shepardize , 105 L. Ed. 2d 275 Shepardize , 109 S. Ct. 2491 and Healy. These cases invalidated state liquor regulations under
Shepardize
(1989). "When a state statute directly regulates or the Commerce Clause. Indeed, Healy explicitly relied on the
discriminates against interstate commerce, or when its effect is to discriminatory character of the Connecticut price affirmation statute.
favor in-state economic interests over out-of-state interests, we have 491 U.S., at 340-341 Shepardize , 105 L. Ed. 2d 275 Shepardize , 109 S. Ct.
generally struck down the statute without further inquiry." [***819] 2491 Shepardize . Brown-Forman and Healy lend significant support to
Brown-Forman, supra, at 579, 90 L. Ed. 2d 552 Shepardize , 106 S. Ct. the conclusion that the Twenty-first Amendment does not immunize
2080 Shepardize . all laws from Commerce Clause challenge.
Bacchus provides a particularly telling example of this proposition. At Link P. Arg.▲ The States argue that any decision invalidating their
issue was an excise tax enacted by Hawaii that exempted certain direct-shipment laws would call into question the constitutionality
alcoholic beverages produced in that State. The Court rejected the [**1905] of the three-tier system. This does not follow from our
argument that Hawaii's discrimination against out-of-state liquor was holding. Link P. Arg.▲ " Link Int. HN▲ The Twenty-first
authorized by the Twenty-first Amendment. 468 U.S., at 274-276 Amendment grants the States virtually complete control over whether
Shepardize
, 82 L. Ed. 2d 200 Shepardize , 104 S. Ct. 3049 Shepardize . "The to permit importation or sale of liquor and how to structure the liquor
central purpose of the [Amendment] was not to empower States to distribution system." Midcal, supra, at 110, 63 L. Ed. 2d 233 Shepardize
favor local liquor industries by erecting barriers to competition." Id., , 100 S. Ct. 937 Shepardize . A State which chooses to ban the sale and
at 276, 82 L. Ed. 2d 200, 104 S. Ct. 3049. Despite attempts to consumption of alcohol [*489] altogether could bar its importation;
distinguish it in the instant cases, Bacchus forecloses any contention and, as our history shows, it would have to do so to make its laws
that § 2 of the Twenty-first Amendment [*488] immunizes effective. States may also assume direct control of liquor distribution
discriminatory direct-shipment laws from Commerce Clause scrutiny. through state-run outlets or funnel sales through the three-tier
See also Brown-Forman, supra, at 576, 90 L. Ed. 2d 552 Shepardize , system. We have previously recognized that the three-tier system
106 S. Ct. 2080 Shepardize (invalidating a New York price affirmation itself is "unquestionably legitimate." North Dakota v. United States,
statute that required producers to limit the price of liquor based on 495 U.S., at 432 Shepardize , 109 L. Ed. 2d 420 Shepardize , 110 S. Ct.
the lowest price they offered out of state); Healy, 491 U.S., at 328 1986. Shepardize [***820] See also id., at 447, 109 L. Ed. 2d 420, 110
Shepardize
, 105 L. Ed. 2d 275 Shepardize , 109 S. Ct. 2491 Shepardize S. Ct. 1986 (Scalia, J., concurring in judgment) ("The Twenty-first
(invalidating a similar Connecticut statute); id., at 344, 105 L. Ed. 2d Amendment . . . empowers North Dakota to require that all liquor
275, 109 S. Ct. 2491 (Scalia, J., concurring in part and concurring in sold for use in the State be purchased from a licensed in-state
judgment) ("The Connecticut statute's invalidity is fully established by wholesaler"). State policies are protected under the Twenty-first
its facial discrimination against interstate commerce . . . . This is so Amendment when they treat liquor produced out of state the same
despite the fact that the law regulates the sale of alcoholic as its domestic equivalent. Link Quick Holding▲ The instant cases,
beverages, since its discriminatory character eliminates the immunity in contrast, involve straightforward attempts to discriminate in favor
afforded by the Twenty-first Amendment").
Case Text Page 12

of local producers. The discrimination is contrary to the Commerce 393 Shepardize , 128 L. Ed. 2d 399 Shepardize , 114 S. Ct. 1677 Shepardize ,
Clause and is not saved by the Twenty-first Amendment. this is not enough.
IV Even were we to credit the States' largely unsupported claim that
Our determination that the Michigan and New York direct-shipment direct shipping [**1906] of wine increases the risk of underage
laws are not authorized by the Twenty-first Amendment does not end drinking, this would not justify regulations limiting only out-of-state
the inquiry. We still must consider whether either State regime direct shipments. As the wineries point out, minors are just as likely
"advances a legitimate local purpose that cannot be adequately to order wine from in-state producers as from out-of-state ones.
served by reasonable nondiscriminatory alternatives." New Energy Michigan, for example, already allows its licensed retailers (over
Co. of Ind., 486 U.S., at 278 Shepardize , 100 L. Ed. 2d 302 Shepardize , 7,000 of them) to deliver alcohol directly to consumers. Michigan
108 S. Ct. 1803 Shepardize . The States offer two primary justifications counters that it has greater regulatory control over in-state producers
for restricting direct shipments from out-of-state wineries: keeping than over out-of-state [***821] wineries. This does not justify
alcohol out of the hands of minors and facilitating tax collection. We Michigan's discriminatory ban on direct shipping. Out-of-state
consider each in turn. wineries face the loss of state and federal licenses if they fail to
Link P. Arg.▲ The States, aided by several amici, claim that comply with state law. This provides strong incentives not to sell
allowing direct shipment from out-of-state wineries undermines their alcohol to minors. In addition, the States can take less restrictive
ability to police underage drinking. Minors, the States argue, have steps to minimize the risk that minors [*491] will order wine by mail.
easy access to credit cards and the Internet and are likely to take For example, the Model Direct Shipping Bill developed by the
advantage of direct wine shipments as a means of obtaining alcohol National Conference of State Legislatures requires an adult
illegally. signature on delivery and a label so instructing on each package.
[*490] Link P. Arg.▲ The States provide little evidence that the Link P. Arg.▲ The States' tax-collection justification is also
purchase of wine over the Internet by minors is a problem. Indeed, insufficient. Increased direct shipping, whether originating in state or
there is some evidence to the contrary. A recent study by the staff of out of state, brings with it the potential for tax evasion. Link P. Arg.▲
the FTC found that the 26 States currently allowing direct shipments With regard to Michigan, however, the tax-collection argument is a
report no problems with minors' increased access to wine. FTC diversion. That is because Michigan, unlike many other States, does
Report 34. This is not surprising for several reasons. First, minors not rely on wholesalers to collect taxes on wines imported from out-
are less likely to consume wine, as opposed to beer, wine coolers, of-state. Instead, Michigan collects taxes directly from out-of-state
and hard liquor. Id., at 12. Second, minors who decide to disobey the wineries on all wine shipped to in-state wholesalers. [HN8] Mich.
law have more direct means of doing so. Third, direct shipping is an Admin. Code Rule 436.1725(2) (1989) ("Each outside seller of wine
imperfect avenue of obtaining alcohol for minors who, in the words of shall submit . . . a wine tax report of all wine sold, delivered, or
the past president of the National Conference of State Liquor imported into this state during the preceding calendar month"). Link
Administrators, "'want instant gratification.'" Id., at 33, and n 137 Int. HN▲ If licensing and self-reporting provide adequate
(explaining why minors rarely buy alcohol via the mail or the safeguards for wine distributed through the three-tier system, there is
Internet). Without concrete evidence that direct shipping of wine is no reason to believe they will not suffice for direct shipments.
likely to increase alcohol consumption by minors, we are left with the New York and its supporting parties also advance a tax-collection
States' unsupported assertions. Link Int. HN▲ Under our justification for the State's direct-shipment laws. While their concerns
precedents, which require the "clearest showing" to justify are not wholly illusory, their regulatory objectives can be achieved
discriminatory state regulation, C & A Carbone, Inc., 511 U.S., at without discriminating against interstate commerce. In particular,
New York could protect itself against lost tax revenue by requiring a
Case Text Page 13

permit as a condition of direct shipping. This is the approach taken more than mere speculation to support discrimination against out-of-
by New York for in-state wineries. The State offers no reason to state goods. The "burden is on the State to show that 'the
believe the system would prove ineffective for out-of-state wineries. discrimination is demonstrably justified,'" Chemical Waste
Shepardize
Licensees could be required to submit regular sales reports and to Management, Inc. v. Hunt, 504 U.S. 334, 344 , 119 L. Ed. 2d
Shepardize Shepardize
remit taxes. Indeed, various States use this approach for taxing 121 , 112 S. Ct. 2009 1992) (emphasis in original).
direct interstate wine shipments, e.g., N. H. Rev. Stat. Ann. § 178.27 The Court has [*493] upheld state regulations that discriminate
Shepardize
(Lexis Supp. 2004), and report no problems with tax against interstate commerce only after finding, based on concrete
collection. See FTC Report 38-40. This is also the procedure record evidence, that a State's nondiscriminatory alternatives will
sanctioned by the National Conference of State Legislatures in their prove unworkable. See, e.g., Maine v. Taylor, 477 U.S. 131, 141-
Model Direct [*492] Shipping Bill. See, e.g., S. C. Code Ann. § 61- 144 Shepardize , 91 L. Ed. 2d 110 Shepardize , 106 S. Ct. 2440 Shepardize
4-747 Shepardize (C) (West Supp. 2004). (1986). Michigan and New York have not satisfied this exacting
Michigan and New York benefit, furthermore, from provisions of standard.
federal law that supply incentives for wineries to comply with state V
regulations. [HN9] The Tax and Trade Bureau (formerly the Bureau [HN11] Link Quick Holding▲ States have broad power to regulate
of Alcohol, Tobacco, and Firearms) has authority to revoke a liquor under § 2 of the Twenty-first Amendment. This power,
winery's federal license if it violates state law. BATF Industry Circular however, does not allow States to ban, or severely limit, the direct
96-3 (1997). Without a federal license, a winery cannot operate in shipment of out-of-state wine while simultaneously authorizing direct
any State. See 27 USC § 204 Shepardize [27 USCS § 204]. In addition shipment by in-state producers. If a State chooses to allow direct
the Twenty-first Amendment Enforcement Act gives state attorneys shipment of wine, it must do so on evenhanded terms. Without
general the power to sue wineries in federal court to enjoin violations demonstrating the need for discrimination, New York and Michigan
of state law. § 122a(b). have enacted regulations that disadvantage out-of-state wine
These federal remedies, when combined with state licensing producers. Under our Commerce Clause jurisprudence, these
regimes, adequately protect States from lost tax revenue. The States regulations cannot stand.
have not shown that tax evasion from out-of-state wineries poses We affirm the judgment of the Court of Appeals for the Sixth Circuit;
such a [**1907] unique [***822] threat that it justifies their and we reverse the judgment of the Court of Appeals for the Second
discriminatory regimes. Circuit and remand the case for further proceedings consistent with
Link P. Arg.▲ Michigan and New York offer a handful of other our opinion.
rationales, such as facilitating orderly market conditions, protecting It is so ordered.
public health and safety, and ensuring regulatory accountability. Link
P. Arg.▲ These objectives can also be achieved through the DISSENT BY: STEVENS; THOMAS
alternative of an evenhanded licensing requirement. FTC Report 40-
41. Finally, it should be noted that improvements in technology have DISSENT: Justice Stevens, with whom Justice O'Connor joins,
eased the burden of monitoring out-of-state wineries. Background dissenting.
checks can be done electronically. Financial records and sales data Link Dissent▲ Congress' power to regulate commerce among the
can be mailed, faxed, or submitted via e-mail. States includes the power to authorize the States to place burdens
In summary, the States provide little concrete evidence for the on interstate commerce. Prudential Ins. Co. v. Benjamin, 328 U.S.
sweeping assertion that they cannot police direct shipments by out- 408 Shepardize , 90 L. Ed. 1342 Shepardize , 66 S. Ct. 1142 Shepardize (1946).
of-state wineries. [HN10] Our Commerce Clause cases demand Absent such congressional approval, a state law may violate the
Case Text Page 14

unwritten rules described as the "dormant Commerce Clause" either gave the States the option to maintain equally comprehensive
by imposing an undue burden on both out-of-state and local prohibitions in their respective jurisdictions.
producers engaged in interstate activities or by treating out-of-state
producers less favorably than their local competitors. See, e.g., Pike n1 In the words of Justice Jackson: "The people of the United States
v. Bruce Church, Inc., 397 U.S. 137 Shepardize , 25 L. Ed. 2d 174 knew that liquor is a lawlessness unto itself. They determined that it
Shepardize
, 90 S. Ct. 844 Shepardize (1970); Philadelphia [***823] v. should be governed by a specific and particular Constitutional
[*494] New Jersey, 437 U.S. 617 Shepardize , 57 L. Ed. 2d 475 Shepardize provision. They did not leave it to the courts to devise special
, 98 S. Ct. 2531 Shepardize (1978). A state law totally prohibiting the distortions of the general rules as to interstate commerce to curb
sale of an ordinary article of commerce might impose an even more liquor's 'tendency to get out of legal bounds.' It was their
serious burden on interstate commerce. If Congress may unsatisfactory experience with that method that resulted in giving
nevertheless authorize the States to enact such laws, surely the liquor an exclusive place in constitutional law as a commodity whose
people may do so through the process of amending our Constitution. transportation is governed by a special, constitutional provision."
Shepardize
[**1908] The New York and Michigan laws challenged in these Duckworth v. Arkansas, 314 U.S. 390, 398-399 , 86 L. Ed.
cases would be patently invalid under well settled dormant 294 , 62 S. Ct. 311 (1941) (opinion concurring in
Commerce Clause principles if they regulated sales of an ordinary result).
article of commerce rather than wine. But ever since the adoption of
the Eighteenth Amendment and the Twenty-first Amendment, our The views of judges who lived through the debates that led to the
Constitution has placed commerce in alcoholic beverages in a ratification of those Amendments are entitled to special deference.
special category. Section 2 of the Twenty-first Amendment expressly Foremost among them was Justice Brandeis, whose understanding
provides that "[t]he transportation or importation into any State, of a State's right to discriminate in its regulation of out-of-state
Territory, or possession of the United States for delivery or use alcohol could not have been clearer:
therein of intoxicating liquors, in violation of the laws thereof, is "The plaintiffs ask us to limit [§ 2's] broad command. They request us
hereby prohibited." to construe the Amendment as saying, in effect: The State may
Today many Americans, particularly those members of the younger prohibit the importation of intoxicating liquors provided it prohibits the
generations who make policy decisions, regard alcohol as an manufacture and sale within its borders; but if it permits such
ordinary article of commerce, subject to substantially the same manufacture and sale, it must [***824] let imported liquors compete
market and legal controls as other consumer products. That was with the domestic on equal terms. To say that, would involve not a
definitely not the view of the generations that made policy in 1919 construction of the Amendment, but a rewriting of it. . . . Can it be
when the Eighteenth Amendment was ratified or in 1933 when it was doubted that a State might establish a state monopoly of the
repealed by the Twenty-first Amendment. n1 On the contrary, the manufacture and sale of beer, and either prohibit all competing
moral condemnation of the use of alcohol as a beverage represented importations, or discourage importation by laying a heavy impost, or
[*495] not merely the convictions of our religious leaders, but the channelize desired importations by confining them to a single
views of a sufficiently large majority of the population to warrant the consignee?" State Bd. of Equalization of Cal. v. Young's Market Co.,
rare exercise of the power to amend the Constitution on two 299 U.S. 59, 62-63 Shepardize , 81 L. Ed. 38 Shepardize , 57 S. Ct. 77
Shepardize
occasions. The Eighteenth Amendment entirely prohibited commerce (1936). n2
in "intoxicating liquors" for beverage purposes throughout the United
States and the territories subject to its jurisdiction. While § 1 of the n2 According to Justice Black, who participated in the passage of the
Twenty-first Amendment repealed the nationwide prohibition, § 2 Twenty-first Amendment in the Senate, § 2 was intended to return
Case Text Page 15

"'absolute control' of liquor traffic to the States, free of all restrictions My understanding (and recollection) of the historical context
which the Commerce Clause might before that time have imposed." reinforces my conviction that the text of § 2 should be "broadly and
Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 338 colloquially interpreted." Carter v. Virginia, 321 U.S. 131, 141
Shepardize
, 12 L. Ed. 2d 350 Shepardize , 84 S. Ct. 1293 Shepardize (1964) Shepardize
, 88 L. Ed. 605 Shepardize , 64 S. Ct. 464 Shepardize (1944)
(dissenting opinion). (Frankfurter, J., concurring). n5 Indeed, [*497] the fact that the
Twenty-first Amendment was the only Amendment in our history to
[**1909] [*496] In the years following the ratification of the Twenty- have been ratified by the people in state conventions, rather than by
first Amendment, States adopted manifold laws regulating commerce state legislatures, provides further reason to give its terms their
in alcohol, and many of these laws were discriminatory. n3 So-called ordinary meaning. Because the New York and Michigan laws
"dry states" entirely prohibited such commerce; others prohibited the regulate the "transportation or importation" of "intoxicating liquors" for
sale of alcohol on Sundays; others permitted the sale of beer and "delivery or [***825] use therein," they are exempt from dormant
wine but not hard liquor; most created either state monopolies or Commerce Clause scrutiny.
distribution systems that gave discriminatory preferences to local
retailers and distributors. The notion that discriminatory state laws n5 As he added in that case, "since Virginia derives the power to
violated the unwritten prohibition against balkanizing the American legislate as she did from the Twenty-first Amendment, the
economy--while persuasive in contemporary times when alcohol is Commerce Clause does not come into play." Carter v. Virginia, 321
viewed as an ordinary article of commerce--would have seemed U.S., at 143 Shepardize , 88 L. Ed. 605 Shepardize , 64 S. Ct. 464 Shepardize .
strange indeed to the millions of Americans who condemned the use
of the "demon rum" in the 1920's and 1930's. Indeed, they expressly As Justice Thomas has demonstrated, the text of the Twenty-first
authorized the "balkanization" that today's decision condemns. Amendment is a far more reliable guide to its meaning than the
Today's decision may represent sound economic policy and may be unwritten rules that the majority enforces today. I therefore join his
consistent with the policy choices of the contemporaries of Adam persuasive and comprehensive dissenting opinion.
Smith who drafted our original Constitution; n4 it is not, however,
consistent with the policy choices made by those who amended our Link Dissent▲ Justice Thomas, with whom The Chief Justice,
Constitution in 1919 and 1933. Justice Stevens, and Justice O'Connor join, dissenting.
A century ago, this Court repeatedly invalidated, as inconsistent with
n3 See generally Green, Interstate Barriers in the Alcoholic the negative Commerce Clause, state liquor legislation that
Beverage Field, 7 Law & Contemp. Prob. 717 (1940); post, at ____ prevented out-of-state businesses from shipping liquor directly to a
- ____, 161 L. Ed. 2d, at 838-839 (Thomas, J., dissenting). State's residents. The Webb-Kenyon Act and the Twenty-first
Amendment cut off this intrusive review, as their text and history
Shepardize
n4 Cf. Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 169 , make [**1910] clear and as this Court's early cases on the Twenty-
64 L. Ed. 834 Shepardize , 40 S. Ct. 438 Shepardize (1920) (Holmes, J., first Amendment recognized. The Court today seizes back this
dissenting) ("I cannot for a moment believe that apart from the power, based primarily on a historical argument that this Court
Eighteenth Amendment special constitutional principles exist against decisively rejected long ago in State Bd. of Equalization of Cal. v.
Shepardize
special drink. The fathers of the Constitution so far as I know Young's Market Co., 299 U.S. 59, 64 , 81 L. Ed. 38 Shepardize ,
Shepardize
approved it"). 57 S. Ct. 77 (1936). Because I would follow Young's Market
and the language of both the statute that Congress enacted and the
Amendment that the Nation ratified, rather than the Court's
Case Text Page 16

questionable reading of history and the "negative implications" of the thereof, which said spiritous, vinous, malted, fermented, or other
Commerce Clause, I respectfully dissent. intoxicating liquor is intended, by any person interested therein, to be
I received, possessed, sold, or in any manner used, either in the
The Court devotes much attention to the Twenty-first Amendment, original package or otherwise, in violation of any law of such State,
yet little to the terms of the Webb-Kenyon Act. This is a mistake, Territory, or District of the United States, or place noncontiguous to
because that Act's language displaces any [*498] negative but subject to the jurisdiction thereof, is prohibited." 27 USC § 122
Shepardize
Commerce Clause barrier to state regulation of liquor sales to in- [27 USCS § 122].
state consumers.
A [*499] The Michigan and New York direct-shipment laws are within
The Webb-Kenyon Act immunizes from negative Commerce Clause the Webb-Kenyon Act's terms and therefore do not run afoul of the
review the state liquor laws that the Court holds are unconstitutional. negative Commerce Clause. Those laws restrict out-of-state wineries
The Act "prohibit[s]" any "shipment or transportation" of alcoholic from shipping and selling wine directly to Michigan and New York
beverages "into any State" when those beverages are "intended, by consumers. Ante, at ____ - ____, 161 L. Ed. 2d, at 807. Any winery
any person interested therein, to be received, possessed, sold, or in that ships wine directly to a Michigan or New York consumer in
any manner used . . . in violation of any law of such State." n1 State violation of those state-law restrictions is a "person interested
laws that regulate liquor imports in the manner described by the Act therein" "intend[ing]" to "s[ell]" wine "in violation of" Michigan and
are exempt from judicial scrutiny under the negative Commerce New York law, and thus comes within the terms of the Webb-Kenyon
Clause, as this Court has long held. See McCormick & Co. v. Act.
Shepardize
Brown, 286 U.S. 131, 139-140 , 76 L. Ed. 1017 Shepardize , 52 This construction of the Webb-Kenyon Act is no innovation. The
Shepardize
S. Ct. 522 (1932); Clark Distilling Co. v. Western Maryland Court adopted [**1911] this reading of the Act in McCormick & Co.
R. Co., 242 U.S. 311, 324 Shepardize , 61 L. Ed. 326, [***826] 37 S. Ct. v Brown, supra, and Congress approved it shortly thereafter in 1935
180 Shepardize (1917); Seaboard Air Line R. Co. v. North Carolina, 245 when it reenacted the Act without alteration, 49 Stat 877; see, e.g.,
U.S. 298, 303-304 Shepardize , 62 L. Ed. 299 Shepardize , 38 S. Ct. 96 Keene Corp. v. United States, 508 U.S. 200, 212-213
Shepardize
, 124
Shepardize Shepardize Shepardize
(1917). The Webb-Kenyon Act's language, in other words, L. Ed. 2d 118 , 113 S. Ct. 2035 (1993) (applying
"prevent[s] the immunity characteristic of interstate commerce from presumption that reenacted statute incorporates settled judicial
being used to permit the receipt of liquor through such commerce in construction). McCormick considered a state law that prohibited out-
States contrary to their laws." Clark Distilling, supra, at 324, 61 L. of-state manufacturers (as well as in-state manufacturers) from
Ed. 326 Shepardize , 37 S. Ct. 180 Shepardize . shipping liquor to a licensed in-state dealer without first obtaining a
wholesaler permit. The Court held that by shipping liquor into the
n1 The Webb-Kenyon Act provides: "The shipment or transportation, State without a license, the out-of-state manufacturer "[fell] directly
in any manner or by any means whatsoever, of any spiritous, vinous, within the terms of" the Webb-Kenyon Act, thus violating it. 286 U.S.,
malted, fermented, or other intoxicating liquor of any kind from one at 143 Shepardize , 76 L. Ed. 1017 Shepardize , 52 S. Ct. 522 Shepardize ; see
State, Territory, or District of the United States, or place also Rainier Brewing Co. v. Great Northern Pacific S. S. Co., 259
noncontiguous to but subject to the jurisdiction thereof, into any other U.S. 150, 152-153 Shepardize , 66 L. Ed. 868 Shepardize , 42 S. Ct. 436
Shepardize
State, Territory, or District of the United States, or place (1922) (holding that under the Webb-Kenyon Act, beer
noncontiguous to but subject to the jurisdiction thereof, or from any importers must "carry" beer into the State "in the manner allowed by
foreign country into any State, Territory, or District of the United the laws of that State"). While the law at issue in McCormick did not
States, or place noncontiguous to but subject to the jurisdiction discriminate against out-of-state products, the construction of the
Case Text Page 17

Webb-Kenyon Act it adopted applies equally to state laws that so mention "discrimination," much less discrimination against out-of-
discriminate. If an out-of-state manufacturer shipping liquor to an in- state liquor products. Instead, it prohibits the interstate shipment of
state distributor without a license "s[ells]" liquor "in violation of any liquor into a State "in violation of any law of such State." 27 USC §
law of such State" within the meaning of Webb-Kenyon, as 122 Shepardize [27 USCS § 122]. "[A]ny law of such State" means any
McCormick held, an out-of-state winery directly shipping wine to law, including a "discriminatory" one.
consumers in violation of even a discriminatory [*500] state law The Court's distinction between discrimination against manufacturers
does so as well. The Michigan and New York laws are and discrimination against wholesalers is [*501] equally [**1912]
indistinguishable in relevant part from the state law upheld in unjustified. There is no warrant in the Act's text for treating regulated
McCormick. n2 entities differently depending on their place in the distribution chain:
The Act applies in undifferentiated fashion to "any person interested
n2 The Court notes that McCormick held that the Webb-Kenyon Act therein." A wine manufacturer shipping wine directly to a consumer is
only authorized "valid" laws, the suggestion being that McCormick's an interested party, just as an out-of-state liquor wholesaler is. n3
holding applies only to nondiscriminatory (and hence "valid" laws).
Shepardize
Ante, at ____, 161 L. Ed. 2d, at 815-816 . The Court takes n3 The Court also states that the "Webb-Kenyon Act expresses no
this word out of context. By "valid" laws, McCormick meant laws not clear congressional intent to depart from the principle . . . that
pre-empted by the National Prohibition Act, rather than laws that discrimination against out-of-state goods is disfavored." Ante, at
Shepardize
treated in-state and out-of-state products equally. See 286 US, at ____, 161 L. Ed. 2d, at 815 . That is not correct. It is settled
143-144 Shepardize , 76 L Ed 1017 Shepardize , 52 S Ct 522 Shepardize that the Webb-Kenyon Act explicitly abrogates negative Commerce
(finding the legislation "valid" because the National Prohibition Act Clause review of state laws that fall within its terms. See supra, at
did not pre-empt it). ____, 161 L. Ed. 2d, at 826 Shepardize . There is no reason to require
another clear statement for each sort of law to which it might apply.
The Court answers that the Webb-Kenyon Act's text "readily can be The only question is whether, fairly read, the Webb-Kenyon Act
construed as forbidding 'shipment or transportation' only where it covers Michigan's and New York's direct-shipment laws. As I have
runs [***827] afoul of the States' generally applicable laws explained, it does.
governing receipt, possession, sale, or use." Ante, at ____, 161 L.
Ed. 2d, at 815 Shepardize . What the Court means by "generally The contrast between the language of the Webb-Kenyon Act and its
applicable" laws is unclear, for the Court concedes that the Webb- predecessor, the Wilson Act, casts still more doubt on the Court's
Kenyon Act allows States to pass laws discriminating against out-of- reading. The Wilson Act provided that liquor shipped into a State was
state wholesalers. See ante, at ____, ____ - ____, 161 L. Ed. 2d, at "subject to the operation and effect of the laws of such State . . . to
816-817, 819-820. By "generally applicable [state] laws," therefore, the same extent and in the same manner as though such liquids or
the Court apparently means all state laws except for those that liquors had been produced in such State or Territory." § 121. Even if
"discriminate" against out-of-state liquor products. See ante, at ____ this language does not authorize States to discriminate against out-
- ____, ____ - ____, 161 L. Ed. 2d, at 815-816, 819-820. of-state liquor products, see ante, at ____, 161 L. Ed. 2d, at 813
Shepardize
The Court leaves unexplained how this ad hoc exception follows , the Webb-Kenyon Act has no comparable language
from the Act's text. The Act's language leaves no room for this addressing discrimination. The contrast is telling. It shows that the
exception. The Act does not condition a State's ability to regulate the Webb-Kenyon Act encompasses laws that discriminate against both
receipt, possession, and use of liquor free from negative Commerce out-of-state wholesalers and out-of-state manufacturers.
Clause immunity on the character of the state law. It does not
Case Text Page 18

In support of its conclusion that the Webb-Kenyon Act did not completely immunizing all state laws regulating liquor imports from
authorize States to discriminate, the Court relies heavily on Clark negative Commerce Clause restraints. n4
Distilling Co. v. Western Maryland R. Co., 242 U.S. 311 Shepardize , 61
L. Ed. 326 Shepardize , 37 S. Ct. 180 Shepardize (1917). Ante, at ____ - n4 The Court also opines that, quite apart from the Webb-Kenyon
____, 161 L. Ed. 2d, at 814-815. Its reliance is misplaced. Clark Act, the Wilson Act "expressly precludes States from discriminating."
Distilling held that the Webb-Kenyon [***828] Act authorized a Ante, at ____, 161 L. Ed. 2d, at 816 Shepardize . It does not. The Wilson
nondiscriminatory state law, 242 U.S., at 321-322 Shepardize , 61 L. Ed. Act "precludes" States from nothing. Instead, it authorizes them to
326 Shepardize , 37 S. Ct. 180 Shepardize , and so had no direct occasion to regulate liquor free of negative Commerce Clause restraints by
pass on whether the Act also authorized discriminatory laws. Nothing "subject[ing]" imported liquor "to the operation" of state law, taking
in it implicitly [*502] decided that unsettled question in the manner state law as it finds it. 27 USC § 121 Shepardize [27 USCS § 121]. Even
the Court suggests. if, as the Court suggests, the Wilson Act does not authorize States to
To the extent that it is relevant, Clark Distilling supports the view that discriminate, ante, at ____, 161 L. Ed. 2d, at 813 Shepardize , the
the Webb-Kenyon Act authorized States to discriminate. Contrary to Webb-Kenyon Act extends that authorization to cover discriminatory
the Court's suggestion, Clark Distilling did not say (on pages 321, state laws. The only question here is the scope of the broader, more
322 or elsewhere, 61 L. Ed. 326 Shepardize , 37 S. Ct. 180 Shepardize ) inclusive Webb-Kenyon Act. The Court's argument therefore adds
that the Webb-Kenyon Act "empowered [States] to forbid shipments nothing to the analysis.
of alcohol to consumers for personal use, provided that [they] treated
in-state and out-of-state liquor on the same terms." Ante, at ____, [*503] B
161 L. Ed. 2d, at 815 Shepardize . Instead, Clark Distilling construed the Straying from the Webb-Kenyon Act's text, the Court speculates that
Webb-Kenyon Act to "extend that which was done by the Wilson Act" Congress intended the Act merely to overrule a discrete line of this
in that its "purpose was to prevent the immunity characteristic of Court's negative Commerce Clause cases invalidating
interstate commerce from being used to permit the receipt of liquor "nondiscriminatory" state liquor regulation laws, including Vance v.
Shepardize
through such commerce in States contrary to their laws." 242 U.S., W. A. Vandercook Co., 170 U.S. 438 , 42 L. Ed. 1100
at 324 Shepardize , 61 L. Ed. 326 Shepardize , 37 S. Ct. 180 Shepardize . The Shepardize
, 18 S. Ct. 674 Shepardize
(1898), and Rhodes v. Iowa, 170
Court takes this passage only to refer to "nondiscriminatory" state U.S. 412 Shepardize , 42 L. Ed. 1088 Shepardize , 18 S. Ct. 664 Shepardize
laws, ante, at ____, 161 L. Ed. 2d, at 815 Shepardize , but this is not (1898). Ante, at ____ - ____, 161 L. Ed. 2d, at 813-816. According to
correct. The passage the Court cites implies that the Webb-Kenyon the majority, ante, at ____ - ____, 161 L. Ed. 2d, at 816 Shepardize , the
Act also abrogated the nondiscrimination principle of the negative Webb-Kenyon Act left untouched this Court's cases preventing
Commerce Clause, since that principle flows from the "immunity States from regulating liquor in "discriminatory" fashion. See, e.g.,
characteristic of interstate commerce," no less than any other Scott v. Donald, 165 U.S. 58, [***829] Shepardize 41 L. Ed. 632
Shepardize
negative Commerce Clause doctrine. In other words, Clark Distilling , 17 S. Ct. 265 Shepardize (1897) (Scott); Walling v. Michigan,
recognized that the Webb-Kenyon Act took "the protection of 116 U.S. 446 Shepardize , 29 L. Ed. 691 Shepardize, 6 S. Ct. 454 Shepardize
interstate commerce away from all receipt and possession of liquor (1886); and Tiernan v. Rinker, 102 U.S. 123 Shepardize, 26 L. Ed. 103
prohibited by state law." 242 U.S., at 325 Shepardize , 61 L. Ed. 326 Shepardize
(1880). The plain language of the Webb-Kenyon Act makes
Shepardize
, 37 S. Ct. 180 Shepardize (emphasis added). Clark Distilling the Court's guesswork about Congress' intent unnecessary. But even
thus [**1913] confirms what the text of the Webb-Kenyon Act makes taken on its own terms, the majority's historical argument is
clear: The Webb-Kenyon Act "extended" the Wilson Act by unpersuasive. History reveals that the Webb-Kenyon Act overturned
not only Vance and Rhodes, but also Scott and therefore its
Case Text Page 19

"nondiscrimination" principle. The origins of the Webb-Kenyon Act officials for damages, as well as an injunction allowing him to import
are in this Court's decision in Leisy v. Hardin, 135 U.S. 100 Shepardize , liquor directly from out-of-state shippers for his own personal use.
34 L. Ed. 128 Shepardize , 10 S. Ct. 681 Shepardize , 12 Ky. L. Rptr. 123 Scott, supra, at 69-70, 41 L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize ;
Shepardize
(1890). Leisy held that States were prohibited from Donald, supra, at 109-110, 41 L. Ed. 648 Shepardize , 17 S. Ct. 262
Shepardize
regulating the resale of alcohol imported from outside the State so .
long as the liquor stayed in its "original packag[e]." Id., at 124-125, The Court held that South Carolina's ban on the direct shipment of
34 L. Ed. 128, 10 S. Ct. 681. This rule made it more difficult for liquor unconstitutionally interfered with the right of out-of-state
States to prohibit the in-state consumption of liquor. Even if a State entities to ship liquor directly to consumers for their personal use,
banned the domestic production of liquor altogether, Leisy left it entitling Donald to damages and injunctive relief. Scott, supra, at 78
Shepardize
powerless to stop the flow of liquor from outside its borders. , 99-100, 41 L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize ;
Congress reacted swiftly by enacting the Wilson Act in August of Donald, supra, at 114, 41 L. Ed. 648 Shepardize , 17 S. Ct. [***830] 262;
1890. The Wilson Act authorized States to regulate liquor "upon see also Vance, supra, at 452, 42 L. Ed. 1100 Shepardize , 18 S. Ct.
arrival in such State" whether "in original packages [*504] or 674 Shepardize (describing the "ruling" of Scott to be that a State could
otherwise," 27 USC § 121 Shepardize [27 USCS § 121], and therefore not "forbid the [*505] shipment into the State from other States of
subjected imports to state jurisdiction "upon arrival within the intoxicating liquors for the use of a resident"). The Court reasoned
jurisdiction of the State." Rhodes, supra, at 433, 42 L. Ed. 1088 that the ban on importation, "in effect, discriminate[d] between
Shepardize
, 18 S. Ct. 664 Shepardize (Gray, J., dissenting). The Wilson Act interstate and domestic commerce in commodities to make and use
accordingly abrogated Leisy and similar decisions by subjecting which are admitted to be lawful." Scott, 165 U.S., at 100 Shepardize , 41
liquor imports to the operation of state law once the liquor came L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize . The Court reserved the
within a State's geographic borders. question whether a state monopoly system that allowed consumers
Rather than holding that the Wilson Act meant what it said, three to import liquor directly was constitutional; for the Court, it "suffic[ed]"
decisions of this Court construed the Act to be a virtual nullity. The that South Carolina's ban on imports "discriminate[d] against the
first was Scott , supra. South Carolina had decided to regulate traffic bringing of such articles in, and importing them from other States."
in liquor by monopolizing the sale and distribution of liquor. All liquor, Id., at 101, 41 L. Ed. 632, 17 S. Ct. 265. The Court's excuse for
whether produced in or out of the State, could be sold to consumers holding that the Wilson Act did not save the State's ban on
in the State only by the state commissioner of alcohol. [**1914] Id., importation was the same as the Court's excuse today: that the
at 66-68, n. 1, 92, 41 L. Ed. 632 Shepardize , 17 S. Ct. 265 Shepardize . The Wilson Act did not authorize "discriminatory" state legislation. Ibid.
law thus prohibited out-of-state manufacturers and wholesalers, as On this basis, the Court affirmed Donald's damages award. Ibid.
well as their in-state counterparts, from shipping liquor directly to In response to Scott, Senator Tillman of South Carolina quickly
consumers. introduced the first version of what became the Webb-Kenyon Act.
The appellee, Donald, was a citizen of South Carolina who had His bill explicitly attempted to reverse the Scott decision. The Senate
ordered liquor directly from out-of-state shippers for his own personal Report on the bill noted that "[t]he effect of [Scott was] to throw down
use, rather than through the state monopoly system as South all the barriers erected by the State law, in which she is protected by
Carolina law required. Id., at 59, 41 L. Ed. 632, 17 S. Ct. 265; see the Wilson bill, and allow the untrammeled importation of liquor into
also Scott v. Donald, 165 U.S. 107, 108-109 Shepardize , 41 L. Ed. 648 the State upon the simple claim that it is for private use." S. Rep. No.
Shepardize
, 17 S. Ct. 262 Shepardize (1897) (Donald). South Carolina 151, 55th Cong., 1st Sess., 5 (1897). The Report also addressed
officials seized the liquor he ordered after it had crossed South Scott's holding that South Carolina's ban on importation was
Carolina lines, but before he had received it. Donald sued the "discriminatory" and adopted the Scott dissenter's view that the ban
Case Text Page 20

on importation effected "no discrimination against citizens of other State and of the resident in the State to receive for his own use." Id.,
States." S. Rep. No. 151, at 5. The bill accordingly would have at 455, 42 L. Ed. 1100, 18 S. Ct. 674. The Court derived the right to
amended the Wilson Act to grant States "absolute control of . . . direct importation primarily from the "ruling" of Scott that a State
liquors or liquids within their borders, by whomsoever produced and could not "forbid the shipment [*507] into the State from other
for whatever use imported." 30 Cong. Rec. 2612 (1897). The bill States of intoxicating liquors for the use of a resident." 170 U.S., at
passed in the Senate without debate. It failed in the House, perhaps 452 Shepardize , 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize .
because the House Judiciary Committee [*506] added an Second, the Court held that, apart from its ban on direct shipments of
amendment that barred discrimination against the products of other liquor to consumers, South Carolina's monopoly over liquor
States, leaving Scott intact. H. R. Rep. No. 667, 55th Cong., 2d distribution was otherwise constitutional. Id., at 450-452, 42 L. Ed.
Sess., 1 (1898). 1100, 18 S. Ct. 674. It rejected the argument that this monopoly
Meanwhile, the Court continued to narrow the reach of the Wilson system was unconstitutionally discriminatory. In particular, the Court
Act. In Rhodes and Vance, the Court even more broadly stripped reasoned that the monopoly system was not discriminatory because
States of their control [**1915] over liquor regulation. Rhodes did so Scott had held (a holding that Rhodes had fortified) that South
by holding that the phrase "upon arrival in such State" in the Wilson Carolina consumers had a constitutional right to import liquor for their
Act meant that state law could regulate imports only after their own personal use, even if a State otherwise monopolized the sale
Shepardize
delivery to a consignee within the State. 170 U.S., at 421 , 42 and distribution of liquor. n5 A monopoly system, the Court implied,
L. Ed. 1088 , 18 S. Ct. 664 (internal quotation marks was nondiscriminatory under the rule of Scott only if it also allowed
omitted). This meant that States could regulate imported liquor, even consumers to import liquor from out-of-state shippers for their own
when in its original package, but only after it had been delivered to personal use. Three Justices in Vance dissented from that holding,
the eventual consignee. Rhodes, in other words, read the Wilson Act on the ground that such a state monopoly system constituted
to overturn Leisy, but not Bowman v. Chicago & Northwestern R. unconstitutional discrimination under, among other cases, Scott and
Co., 125 U.S. 465 Shepardize , 31 L. Ed. 700 Shepardize , 8 S. Ct. 689 Walling v. Michigan, 116 U.S. 446
Shepardize
, 29 L. Ed. 691 Shepardize , 6
(1888), which had recognized a constitutional right to import S. Ct. 454 (1886). 170 U.S., at 462-468 Shepardize , 42 L. Ed.
Shepardize
liquor in its original package free from state regulation until it reached 1100 , 18 S. Ct. 674 Shepardize (opinion of Shiras, J., joined by
its consignee. Rhodes, supra, at 423, 42 L. Ed. 1088 Shepardize , 18 S. Fuller, C. J., and McKenna, J.).
Ct. 664 Shepardize . Like Leisy , then, Rhodes seriously hampered the
[***831] ability of States to intercept liquor at their borders. n5 See Vance v. W. A. Vandercook Co., 170 U.S. 438, 451-452
Shepardize
Vance involved the constitutionality of a law very similar to the law , 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize (1898) ("But
struck down in Scott. After its loss in Scott, South Carolina amended the weight of [the argument that the state monopoly system is
its ban on importation. Rather than flatly banning imports unless they discriminatory] is overcome when it is considered that the Interstate
went through the state monopoly system, the new law allowed out- Commerce clause of the Constitution guarantees the right to ship
of-state wholesalers and manufacturers to ship liquor directly to merchandise from one State into another, and protects it until the
consumers, but only if the consumer showed that the liquor passed a termination of the shipment by delivery at the place of consignment,
state-administered test of its purity. Vance, 170 U.S., at 454-455 and this right is wholly unaffected by the act of Congress [i.e., the
Shepardize
, 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize . Wilson Act] which allows state authority to attach to the original
Vance had two distinct holdings. First, the Court struck down this package before sale but only after delivery. Scott v Donald, supra;
condition on the direct importation of liquor as an impermissible Rhodes v Iowa").
burden on "the constitutional right of the non-resident to ship into the
Case Text Page 21

Rhodes and Vance swept more broadly than Scott. Rhodes held that Cong., 3d Sess., 1 (1913). Thus, the bill targeted Scott's notion (as
States [**1916] lacked power to regulate imported liquor before it applied by Vance) that imports destined for personal use were
reached the consignee, regardless of whether the liquor was [*509] exempt from state regulation. There was no mention of an
intended for the consignee's personal use, see supra, at ____, 161 exception for "discriminatory" state laws, though such an amendment
L. Ed. 2d, at 830 Shepardize ; it did not, as the Court implies, simply to an earlier version of the Webb-Kenyon Act had been proposed
Shepardize
repeat Scott's holding that consumers had a right to import liquor for before, see supra, at ____, 161 L. Ed. 2d, at 830 ; the idea
their own personal use. Ante, at ____, 161 L Ed 2d, at 814 Shepardize . was that imports were subject to state law once within a State's
Rhodes' holding, [*508] for example, made it easier for bootleggers geographic borders, regardless of the law's character. In fact,
to circumvent state prohibitions on the resale of imported liquor, proponents of the final version of the bill defeated proposed
because [***832] it enabled them to order large quantities of liquor amendments that would have restrained States from restricting
directly from out-of-state interests. For its part, Vance held that the imports destined for personal use, and thereby would have left Scott
right to import for personal use recognized in Scott applied even if intact. Hamm 215; 49 Cong. Rec. 2921 (1913); see also H. R. Rep.
the State conditioned the right to import directly on compliance with No. 2337, 58th Cong., 2d Sess., 2-3 (1904) (prior unenacted version
regulatory conditions (e.g., a state-administered purity test). Those drawing exception for shipments for in-state personal use).
broader holdings, consequently, spurred more vigorous In contrast to those unenacted amendments, the Webb-Kenyon Act
congressional attempts to return control of liquor regulation to the reversed Scott, Rhodes, and Vance by forbidding the importation of
States. See R. Hamm, Shaping the Eighteenth Amendment 206-212 liquor "intended to be received, possessed, sold or in any manner
(1995) (hereinafter Hamm); Rogers, Interstate Commerce in used . . . in violation of any law of such state"--regardless of the
Intoxicating Liquors Before the Webb-Kenyon Act, 4 Va. L. Rev. nature of the state law or the imported liquor's intended use. See
Shepardize
353, 364-365 (1917). The legislative debate in subsequent years Seaboard Air Line R. Co., 245 U.S., at 304 , 62 L. Ed. 299
accordingly focused on their effect. That may be what misleads the , 38 S. Ct. 96 (noting that the Webb-Kenyon Act
majority into believing that the Webb-Kenyon Act took aim only at allowed States to regulate "irrespective of any personal right in a
Rhodes and Vance. consignee there to have and consume liquor"). That is why, just four
Yet early versions of the Webb-Kenyon Act, not to mention the Act years after [**1917] its enactment, this Court described [***833]
itself, also overturned Scott's holding that banning the direct the Webb-Kenyon Act as removing "the protection of interstate
shipment of liquor for personal use was unconstitutionally commerce away from all receipt and possession of liquor prohibited
discriminatory. Like Senator Tillman's initial bill, other early versions by state law." Clark Distilling, 242 U.S., at 325 Shepardize , 61 L. Ed.
of the Webb-Kenyon Act took aim at Scott, Rhodes, and Vance. 326 Shepardize , 37 S. Ct. 180 Shepardize (emphasis added).
They made clear that out-of-state liquor was subject to state law The foregoing historical account belies the majority's claim that the
immediately upon entering the State's territorial boundaries, even if Webb-Kenyon Act left Scott untouched. The Court reasons that the
intended for personal use. See Hamm 206, 208. Webb-Kenyon Act overturned only those decisions that "'in effect
The version that eventually became the Webb-Kenyon Act was afford[ed] a means by subterfuge and indirection to set [state liquor
likewise designed to overturn the holdings of all three cases, and laws] at naught,'" ante, at ____, 161 L. Ed. 2d, at 815 Shepardize
thus to reverse Scott's "nondiscrimination" principle. The House (quoting Clark Distilling, supra, at 324, 61 L. Ed. 326 Shepardize , 37 S.
Report says that the bill was "intended to withdraw the protecting Ct. 180 Shepardize ), a description the Court takes to cover Rhodes and
hand of interstate commerce from intoxicating liquors transported Vance, but not Scott. However, Scott's holding, by precluding state
into a State or Territory and intended to be used therein in violation monopoly systems from prohibiting direct shipments of liquor to
of the law of such State or Territory." H. R. Rep. No. 1461, 62d consumers, [*510] "set [state liquor laws] at naught" just as Rhodes
Case Text Page 22

and Vance did. The Court concedes that the Webb-Kenyon Act Wilson Act to repudiate Leisy but not Bowman, see supra, at ____,
"close[d] the direct-shipment gap" and that Scott recognized a 161 L. Ed. 2d, at 830, [***834] Shepardize the majority reads the Webb-
constitutional right for consumers to import liquor directly for their Kenyon Act to repudiate Rhodes but not Scott, committing an
own personal use. Ante, at ____, ____, 161 L. Ed. 2d, at 813-814, analogous error. I would not so construe the Webb-Kenyon Act. C
815 Shepardize . These concessions cannot be squared with Court's The majority disagrees with this historical account primarily by
simultaneous suggestion, ante, at ____ - ____, 161 L. Ed. 2d, at disputing my reading of Scott. It reads Scott to have held two things:
814-816 Shepardize , that the Webb-Kenyon Act left Scott untouched. first, that certain discriminatory provisions of South Carolina's
The only way to overturn Scott's direct-shipment holding was to monopoly system were not authorized by the Wilson Act, and
abrogate its premise that South Carolina's monopoly system was therefore were unconstitutional; [**1918] and second, that Donald
unconstitutionally discriminatory, as Senator Tillman recognized from had a constitutional right to import liquor directly from out-of-state
the start. See supra, at ____ - ____, 161 L. Ed. 2d, at 829-830 shippers. Ante, at ____ - ____, 161 L. Ed. 2d, at 813-814. This
Shepardize
. Reversing Scott's holding that a State could not ban direct recharacterization of Scott (together with its mischaracterization of
Shepardize
shipments of liquor to consumers was a core concern of the Webb- Rhodes' holding, see supra, at ____, 161 L. Ed. 2d, at 830 )
Kenyon Act. is the basis for the Court's contention that the Webb-Kenyon Act only
Repudiating Scott's nondiscrimination holding was also essential to overruled Scott's second holding, leaving the first untouched. Ante,
ensuring the constitutionality of state liquor licensing schemes and at ____ - ____, 161 L. Ed. 2d, at 814-816.
state monopolies on the sale and distribution of liquor. This is so The Court misreads Scott. Scott had only one holding: that the state
because the constitutionality of these state systems remained in monopoly system unconstitutionally discriminated against Donald by
some doubt even after Vance. As explained, Vance upheld South allowing him to purchase liquor from in-state stores, but not directly
Carolina's monopoly system (stripped of its ban on direct shipments) from out-of-state interests. The issue of direct importation was
as "nondiscriminatory" only because that system had preserved the squarely at issue in Scott, not simply "implicit." Ante, at ____, 161 L.
constitutional right established in Scott and Rhodes to send and Ed. 2d, at 814 Shepardize . This was the only basis, after all, for affirming
receive direct shipments of liquor free of state interference. Supra, at Donald's damages award for interference with his ability to import
Shepardize
____ - ____, 161 L. Ed. 2d, at 831 . The Court admits that goods directly from outside the State. Scott's reasoning that the
the Webb-Kenyon Act abolished that right. Ante, at ____, 161 L. Ed. South Carolina law was unconstitutionally discriminatory was the
2d, at 815 Shepardize . Had the Webb-Kenyon Act done so without also basis for affirming that award, not a separate and distinct holding.
allowing the States to discriminate, Vance's reasoning implied that While South Carolina law also allowed the state alcohol administrator
the Court was likely to strike down state monopoly systems, and to discriminate against out-of-state liquor when purchasing liquor for
therefore probably licensing schemes as well, as unduly sale through the monopoly system, ante, at ____, 161 L. Ed. 2d, at
"discriminatory." See 170 U.S., at 451 Shepardize , 42 L. Ed. 1100 813 Shepardize , any constitutional defect with those [*512] portions of
Shepardize
, 18 S. Ct. 674 Shepardize (equating a state monopoly scheme the law would have been at most grounds for allowing Donald to
with a private licensing scheme). The only way to stave off that purchase out-of-state liquor through the state monopoly system, as
holding, and so to preserve States' ability to regulate liquor traffic, the dissent argued (and as the majority strains to characterize Scott's
was to overturn Scott's "nondiscrimination" reasoning. Faced with a actual holding, ante, at ____, 161 L. Ed. 2d, at 813 Shepardize ). See
Judiciary that had narrowly construed the Wilson Act, see supra, at 165 U.S., at 104-106 Shepardize , 41 L. Ed. 623 Shepardize , 17 S. Ct. 265
____ - ____, 161 L. Ed. 2d, at 829-831 Shepardize , [*511] Congress Shepardize
(Brown, J., dissenting). But Scott rejected that view and held
drafted the Webb-Kenyon Act to authorize all state regulation of that the broader discrimination effected by the law was grounds for
importation, whether or not "discriminatory." Just as Rhodes read the allowing Donald to import liquor directly himself, bypassing the
Case Text Page 23

monopoly system entirely. Scott's holding therefore rested on a of liquor per month for his own personal use. 106 S. C., at 107-108
Shepardize
conclusion that a ban on direct importation was "discrimination" , 90 S. E., at 403 Shepardize . Though out-of-state liquor had
under the negative Commerce Clause. That conclusion was natural equal access to the state run liquor dispensaries, see generally 2 S.
for Justice Shiras, the author of Scott , whose view apparently was C. Crim. Code §§ 794-878 (1912) (providing for otherwise
that all state monopoly systems, even ones that seem nondiscriminatory state-run monopoly system), the court held that
nondiscriminatory to our modern eyes, were unconstitutionally this system unconstitutionally discriminated against out-of-state
discriminatory. See Vance, supra, at 465, 467, 42 L. Ed. 1100 liquor because it allowed consumers to purchase only a limited
Shepardize
, 18 S. Ct. 674 Shepardize (Shiras, J., dissenting) (citing the quantity of liquor via direct shipments, yet unlimited amounts from
nondiscrimination cases Walling v. Michigan, 116 U.S. 446 Shepardize , state stores. The court noted that "there was no limit to the quantity
29 L. Ed. 691 Shepardize , 6 S. Ct. 454 Shepardize (1886), and Minnesota which a citizen who patronized the dispensaries might buy and keep
v. Barber, 136 U.S. 313 Shepardize , 34 L. Ed. 455 Shepardize , 10 S. Ct. in his possession for personal use," whereas the law limited direct-
862 Shepardize (1890)). The Court's narrower understanding of shipment purchases to a specific quantity each month. 106 S. C., at
"discrimination" is anachronistic. 108 Shepardize , 90 S. E., at 403 Shepardize . This, the court reasoned,
Vance confirms this reading of Scott. Vance correctly characterized "was therefore clearly a discrimination made in favor of liquors
Scott as establishing a right for consumers to receive shipments of bought from the dispensaries," and so was unconstitutionally
liquor directly from out-of-state sources. [***835] 170 U.S., at 452 discriminatory under the rule of Scott. 106 S. C., at 108 Shepardize , 90
Shepardize
, 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 Shepardize . It also S. E., at 403-404 Shepardize . The court thus recognized that Scott's
characterized Scott's reasoning as resting on the discriminatory reasoning implied that a state monopoly system was
character of the state law. 170 U.S., at 449 Shepardize , 42 L. Ed. 1100 unconstitutionally discriminatory unless it allowed consumers to
Shepardize
, 18 S. Ct. 674 Shepardize . These two descriptions, taken purchase liquor directly from out-of-state shippers on the same terms
together, suggest that the discriminatory character of the law was the as they could purchase liquor from the state monopoly system.
basis for Scott's holding that Donald had a constitutional right to Brennan refutes the Court's characterization of Scott. It shows that
receive liquor directly, instead of a separate holding. Moreover, the South Carolina system at issue in Scott was "discriminatory"
Vance also implied that a monopoly system that did not allow because it banned direct importation, not because its provisions
consumers to receive liquor directly was unconstitutionally authorized the state alcohol administrator to prefer local products.
discriminatory. See supra, at ____ - ____, 161 L. Ed. 2d, at 831 Even the Court concedes that the Webb-Kenyon Act abrogated the
Shepardize
. That suggestion supports the idea that Scott considered a right to direct importation [*514] recognized in Scott. See ante, at
ban on such direct shipments to be discriminatory. ____, ____, 161 L. Ed. 2d, at 813-814, 815. It follows that the Act
Brennen v. Southern Express Co., 106 S. C. 102 Shepardize , 90 S. E. also overturned the nondiscrimination reasoning that was the
402 Shepardize (1916), likewise bolsters that Scott considered South foundation of that right.
Carolina's ban on direct importation to be unconstitutionally In sum, the Webb-Kenyon Act authorizes the discriminatory state
discriminatory, [*513] quite apart from the provisions that laws before the Court today.
authorized the state administrator of alcohol to prefer local products [***836] II
over out-of-state ones. See ante, at ____, 161 L. Ed. 2d, at 813 There is no need to interpret the Twenty-first Amendment, because
Shepardize
(describing discriminatory [**1919] provisions). In Brennen, the Webb-Kenyon Act resolves these cases. However, the state laws
the court considered the constitutionality of a state monopoly system the Court strikes down are lawful under the plain meaning of § 2 of
that channeled all liquor through state dispensaries by banning direct the Twenty-first Amendment, as this Court's case law in the wake of
shipments, but that allowed a consumer to import directly one gallon
Case Text Page 24

Shepardize
the Amendment and the contemporaneous practice of the States Young's Market Co., 299 U.S. 59 , 81 L. Ed. 38 Shepardize , 57
Shepardize
reinforce. S. Ct. 77 (1936), this Court considered the constitutionality
A of a California law that facially discriminated against beer importers
Section 2 of the Twenty-first Amendment provides: "The and, by extension, out-of-state producers. The California law
transportation or importation into any State, Territory, or possession required wholesalers to pay a special $500 license fee to import
of the United States for delivery or use therein of intoxicating liquors, beer, in addition to the $50 fee California charged for wholesalers to
in violation of the laws thereof, is hereby prohibited." As the Court distribute beer generally. Id., at 60-61, 81 L. Ed. 38 Shepardize , 57 S.
notes, ante, at ____, 161 L. Ed. 2d, at 816-817 Shepardize , this Ct. 77 Shepardize . California law thus discriminated against out-of-state
language tracked the Webb-Kenyon Act by authorizing state beer by charging wholesalers of imported beer 11 times the fee
regulation that would otherwise conflict with the negative Commerce charged to wholesalers of domestic beer.
Clause. To remove any doubt regarding its broad scope, the [***837] Young's Market held that this explicit discrimination against
Amendment simplified the language of the Webb-Kenyon Act and out-of-state beer products came within the terms of the Twenty-first
made clear that States could regulate importation destined for in- Amendment, and therefore did not run afoul of the negative
state delivery free of negative Commerce Clause restraints. Though Commerce Clause. The Court reasoned that the Twenty-first
the Twenty-first Amendment mirrors the basic terminology of the Amendment's words are "apt to confer upon the State the power to
Webb-Kenyon Act, its language is broader, authorizing States to forbid all importations which do not comply with the conditions which
regulate all "transportation or importation" that runs afoul of state it prescribes." Id., at 62, 81 L. Ed. 38, 57 S. Ct. 77. The Court
law. The broader language even more naturally encompasses rejected the argument that a State "must let imported liquors
discriminatory state laws. Its terms suggest, for example, that a State compete with the domestic on equal terms," [*516] declaring that
may ban imports [**1920] entirely while leaving in-state liquor "[t]o say that, would involve not a construction of the Amendment,
unregulated, for they do not condition the State's ability to prohibit but a rewriting of it." Ibid.It recognized that a State could adopt a
imports on the manner in which state law treats domestic products. "discriminatory" regulation of out-of-state manufacturers as an
[*515] The state laws at issue in these cases fall within § 2's broad incident to a "lesser degree of regulation than total prohibition," for
terms. They prohibit wine manufacturers from "transport[ing] or example, by imposing "a state monopoly of the manufacture and sale
import[ing]" wine directly to consumers in New York and Michigan of beer," or by "channel[ing] desired importations by confining them
"for delivery or use therein." Michigan law does so by requiring all to a single consignee." Id., at 63, 81 L. Ed. 38, 57 S. Ct. 77. And far
out-of-state wine manufacturers to distribute wine through licensed from "not consider[ing]" the historical argument that forms the core of
in-state wholesalers. Ante, at ____, 161 L. Ed. 2d, at 807 . New York the majority's reasoning, ante, at ____, 161 L. Ed. 2d, at 817
Shepardize
law does so by prohibiting out-of-state wineries from shipping wine , Young's Market expressly rejected its relevance:
directly to consumers unless they establish an in-state physical "The plaintiffs argue that limitation of the broad language of the
presence, something that in-state wineries naturally have. Ante, at Twenty-first Amendment is sanctioned by its history; and by the
____ - ____, ____ - ____, 161 L. Ed. 2d, at 807, 810-811. The decisions of this Court on the Wilson Act, the Webb-Kenyon Act and
Twenty-first Amendment prohibits out-of-state wineries from shipping the Reed Amendment. As we think the language of the Amendment
wine into Michigan and New York in violation of these laws. In is clear, we do not discuss these matters." 299 U.S., at 63-64
Shepardize
holding that the Constitution prohibits Michigan's and New York's , 81 L. Ed. 38 Shepardize , 57 S. Ct. 77 Shepardize (footnote
laws, the majority turns the Amendment's text on its head. omitted).
The majority's holding is also at odds with this Court's early Twenty- The plaintiffs in Young's Market advanced virtually the same
first Amendment case law. In State Bd. of Equalization of Cal. v. historical argument the Court today accepts. Brief for Appellees, O.
Case Text Page 25

T. 1936, No. 22, pp 57-75. Young's Market properly reasoned that regarding whether state monopoly and licensing schemes violated
the text of our Constitution is the best guide to its meaning. That the Commerce Clause, as the majority properly acknowledges. Ante,
logic requires sustaining the state laws that the Court invalidates. at ____ - ____, 161 L. Ed. 2d, at 819-820; see also supra, at ____,
Young's Market was no outlier. The next Term, the Court upheld a 161 L. Ed. 2d, at 833 Shepardize . Accordingly, in response to the end of
Minnesota [**1921] law that prohibited the importation of 50-proof Prohibition, States that made liquor legal imposed either state
liquor, concluding that "discrimination against imported liquor is monopoly systems, or licensing schemes strictly circumscribing the
permissible." Mahoney v. Joseph Triner Corp., 304 U.S. 401, 403 ability of private interests to sell and distribute liquor within state
Shepardize
, 82 L. Ed. 1424 Shepardize , 58 S. Ct. 952 Shepardize (1938). One borders. Skilton, State Power Under the Twenty-First Amendment, 7
Term after that, the Court upheld two state laws that prohibited the Brooklyn L. Rev. 342, 345-346 (1938); L. Harrison & E. Laine, After
importation of liquor from States that discriminated against domestic Repeal: A Study of Liquor Control Administration 43 (1936).
liquor. See Indianapolis Brewing Co. v. Liquor Control Comm'n, 305 These liquor regulation schemes discriminated against out-of-state
U.S. 391, 394 Shepardize , 83 L. Ed. 243 Shepardize , 59 S. Ct. 254 Shepardize economic interests, just as Michigan's and New York's direct-
(1939) (noting that the Twenty-first Amendment permitted States to shipment laws do. State monopolies that did not permit direct
"discriminat[e] between domestic and imported intoxicating liquors"); shipments to consumers, for example, were [*518] thought to
[*517] Joseph S. Finch & Co. v. McKittrick, 305 U.S. 395, 398 discriminate against out-of-state wholesalers and retailers by
Shepardize
, 83 L. Ed. 246 Shepardize , 59 S. Ct. 256 Shepardize (1939). In favoring in-state products. See Vance, 170 U.S., at 451-452
Shepardize
,
sum, the Court recognized from the start that "[t]he Twenty-first 42 L. Ed. 1100 , 18 S. Ct. 674 ; supra, at ____ -
Amendment sanctions the right of a State to legislate concerning ____, 161 L. Ed. 2d, at 831 Shepardize . Private licensing schemes
intoxicating liquors brought from without, unfettered by the discriminated as well, often by requiring in-state residency or
Commerce Clause." Ziffrin, Inc. v. Reeves, 308 U.S. 132, 138 physical presence as a condition of obtaining licenses. n6 Even
Shepardize
, 84 L. Ed. 128 Shepardize , 60 S. Ct. 163 Shepardize (1939); today, the requirement that liquor pass through a licensed [**1922]
accord, Duckworth v. Arkansas, 314 U.S. 390, 398-399 Shepardize , 86 in-state wholesaler is a core component of the three-tier system. As
L. Ed. 294 Shepardize , 62 S. Ct. 311 Shepardize (1941) (Jackson, J., the Court concedes, each of [***839] these schemes is within the
concurring in result); Carter v. Virginia, 321 U.S. 131, 138-139 ambit of the Twenty-first Amendment, even though each
Shepardize
, 88 L. Ed. 605 Shepardize , 64 S. Ct. 464 Shepardize (1944) (Black, discriminates against out-of-state interests. Ante, at ____ - ____,
J., concurring); id., at 139-143, 88 L. Ed. 605, 64 S. Ct. 464 ____ - ____, 161 L. Ed. 2d, at 805-806, 819-820.
(Frankfurter, J., concurring) . The majority gives short shrift to these
persuasive contemporaneous constructions [***838] of the Twenty- n6 See Note, Economic Localism in State Alcoholic Beverage Laws-
first Amendment, as Justice Stevens properly stresses. Ante, at ____ Experience Under the Twenty-First Amendment, 72 Harv. L. Rev.
- ____, 161 L. Ed. 2d, at 823-824 Shepardize (dissenting opinion). 1145, 1148-1149, and n. 25 (1959) (hereinafter Economic Localism);
B see also 3 Colo. Stat. Ann., ch. 89, § 4(a) (1935) (residency
Shepardize
The widespread, unquestioned acceptance of the three-tier system requirement); 17 Fla. Stat. Ann. § 561.24 (1941) (prohibiting
of liquor regulation, see ante, at ____ - ____, 161 L. Ed. 2d, at 805- out-of-state manufacturers from being distributors); Ill. Rev. Stat., ch.
806, and the contemporaneous practice of the States following the 43, § 120 (Smith-Hurd 1937) (residency requirement); Ind. Stat. Ann.
ratification of the Twenty-first Amendment confirm that the § 3730 Shepardize (c) (1934) (residency requirement); 1 Md. Ann. Code,
Amendment freed the States from negative Commerce Clause Art. 2B, § 13 (1939) (residency requirement); 4B Ann. Laws of
restraints on discriminatory regulation. Like the Webb-Kenyon Act, Mass., ch. 138, §§ 18 Shepardize , 18A (1965) (residency requirements);
the Twenty-first Amendment was designed to remove any doubt 5 Comp. Laws Mich. § 9209-32 (Supp. 1935) (residency
Case Text Page 26

requirement); 1 Mo. Rev. Stat. § 4906 Shepardize (1939) (citizenship products. See Harrison & Laine, supra, at 194-195. Like the
requirement); Neb. Comp. Stat., ch. 53, Art. 3, § 53-328 (1929 and California law upheld in Young's Market, 10 States charged
Cum. Supp. 1935) (residency requirement); § 53-317 (physical wholesalers who dealt in imports greater licensing fees. Economic
presence requirement); 1 Nev. Comp. Laws § 3690.05 (Supp. 1931- Localism 1150; Crabb, State Power Over Liquor Under the Twenty-
1941) (residency and physical presence requirements); 2 Rev. Stat. First Amendment, 12 U. Det. L. J. 11, 27 (1948); Green 13. Many
of N. J. § 33:1-25 (1937) (citizenship and residency requirements); States also passed antiretaliation statutes limiting or banning imports
N. C. Code Ann. § 3411(103)(1 1/2) (1939) (residency requirement); from other States that themselves discriminated against out-of-state
1 N. D. Rev. Code § 5-0202 (1943) (citizenship and residency liquor. Economic Localism 1152; Green 14. All told, at least 41
requirements); Ohio Code Ann. § 6064-17 Shepardize (1936) (residency States had some sort of law [*520] that discriminated against out-
and physical presence requirements); R. I. Gen. Laws, ch. 163 of-state products, many if not most of which (contrary to the Court's
, § 4 (1938) (residency requirement); 1 S. D. Code § 5.0204 suggestion, [**1923] ante, at ____, 161 L. Ed. 2d, at 817 )
Shepardize
(1939) (residency requirement); Vt. Rev. Stat., Tit. 28, ch. predated Young's Market and its progeny. See, e.g., Green App. I.
271, § 6156 (1947) (residency requirement); 8 Rev. Stat. Wash. § This contemporaneous state practice refutes the Court's assertion,
7306-23G (Supp. 1940) (physical presence requirement); § 7306-27 ante, at ____ - ____, ____, 161 L. Ed. 2d, at 816-817, 819 Shepardize ,
(citizenship and residency requirements); Wis. Stat. § 176.05 Shepardize that the Twenty-first Amendment allowed States to discriminate
(9) (1937) (citizenship and residency requirements); Wyo. Rev. Stat. against out-of-state wholesalers and retailers, but not against out-of-
Ann. § 59-104 (Supp. 1940) (citizenship and residency state products.
requirements).
N7 See also, e.g., Ill. Rev. Stat., ch. 43, § 115(h) (Smith-Hurd 1937)
Many States had laws that discriminated against out-of-state (special license for growers of locally grown grapes); Comp. Laws
products in addition to out-of-state wholesalers and retailers. See Mich. § 9209-55 (Supp. 1935) (exemption from malt tax for in-state
Kallenbach, Interstate Commerce in Intoxicating [*519] Liquors manufacturers); Nev. Comp. Laws § 3690.15 (Supp. 1931-1941)
Under the Twenty-First Amendment, 14 Temp. L. Q. 474, 483-484 (special importer's fees; lower license fees for manufacturers and
(1940); T. Green, Liquor Trade Barriers: Obstructions to Interstate wholesalers who deal in in-state products); N. M. Stat. Ann. § 72-806
Shepardize
Commerce in Wine, Beer, and Distilled Spirits 12-19, and App. I (Supp. 1938) (licensing exemption for in-state wineries); R. I.
(1940) (hereinafter Green). n7 For example, 21 States required that Gen. Laws Ann., ch. 167, § 8 (1938) (authorizing state agency to
producers who had no physical presence within the State first obtain impose retaliatory tax); Utah Rev. Stat. § 46-8-3 (Supp. 1939)
a special license or certificate before doing business within the State, (requiring state commission to prefer locally grown products).
thus subjecting them to two layers of licensing fees. Id., at 12.
Thirteen States charged lower licensing fees for wine manufacturers Rather than credit the lay consensus this state practice reflects, the
who used locally grown grapes. Id., at 13. Arkansas went so far as to Court relies instead on scattered academic and judicial commentary
create a blanket exception to its licensing scheme for locally arguing that the Twenty-first Amendment did not permit States to
produced wine. See 2 Pope's Digest of Stat. of Ark. §§ 14099, enact discriminatory liquor legislation. Ante, at ____, 161 L. Ed. 2d,
14105, 14113 (1937). Eight States taxed out-of-state liquor products at 817 Shepardize . Most of the commentators and judges the Court cites
at greater rates than in-state products. Green 13. Twenty-nine States did not adopt the construction of the Amendment the Court
exempted exports from excise taxes that were applicable to imports. embraces. For example, some argued that the Twenty-first
Id., at 14 . At least 10 States (plus the District of Columbia) imposed Amendment [***840] only allowed States to enact nondiscriminatory
special licensing requirements on solicitors of out-of-state liquor prohibition laws--i.e., to allow "dry states to remain dry." See Note,
Case Text Page 27

55 Yale L. J. 815, 816-817 (1946); de Ganahl, The Scope of Federal understand. The pre-Twenty-first Amendment "nondiscrimination"
Power Over Alcoholic Beverages Since the Twenty-First principle enshrined in this Court's negative Commerce Clause cases
Amendment, 8 Geo. Wash. L. Rev. 819, 822-823 (1940); Friedman, could not have prohibited discrimination against the producers of out-
Constitutional Law: State Regulation of Importation of Intoxicating of-state goods, while permitting discrimination against out-of-state
Liquor Under the Twenty-First Amendment, 21 Cornell L. Q. 504, services like wholesaling and retailing. See Lewis v. BT Investment
511-512 (1936); Recent Cases, Constitutional Law--Twenty-first Managers, Inc., 447 U.S. 27, 42 Shepardize , 64 L. Ed. 2d 702 Shepardize ,
Amendment, 85 U. Pa. L. Rev. 322, 323 (1937); W. Hamilton, Price 100 S. Ct. 2009 Shepardize (1980) (invalidating state law that
and Price Policies 426 (1938). The Court, by contrast, concedes that discriminated against banks, bank holding companies, and trust
a State could have a discriminatory licensing or monopoly scheme. companies with out-of-state business operations); [**1924]
Ante, at ____ - ____, 161 L. Ed. 2d, at 819-820. The Court must Memphis Steam Laundry Cleaner, Inc. v. Stone, 342 U.S. 389, 394-
concede this, given that state practice shows that the Twenty-first 395 Shepardize , 96 L. Ed. 436 Shepardize , 72 S. Ct. 424 Shepardize (1952)
Amendment authorized such practices, and given that the Webb- (invalidating tax that discriminated against solicitors for out-of-state-
Kenyon Act allowed States to enforce their own licensing laws, even licensed businesses). Discrimination against out-of-state wholesalers
if they did not prohibit the use and consumption of liquor entirely. and retailers also risks allowing "economic [***841] protectionism."
Others apparently defended the position that the Twenty-first The Court's [*522] concession that the Twenty-first Amendment
Amendment did no more than prevent Congress from permitting the allowed States to require all liquor traffic to pass through in-state
direct importation of liquor into a State, leaving [*521] the wholesalers and retailers shows that States may also have direct-
Constitution untouched. See Joseph Triner Corp. v. Arundel, 11 F. shipment laws that discriminate against out-of-state wineries.
Supp. 145, 146-147 Shepardize (Minn. 1935); Young's Market Co. v. III
State Bd. of Equalization of Cal., 12 F. Supp. 140, 142 Shepardize (SD Though the majority dismisses this Court's early Twenty-first
Cal. 1935), rev'd, 299 U.S. 59 Shepardize , 81 L. Ed. 38 Shepardize , 57 S. Amendment case law, it relies on the reasoning, if not the holdings,
Ct. 77 Shepardize (1936). Still others did not state a clear view on the of our more recent Twenty-first Amendment cases. Ante, at ____ -
scope of the Twenty-first Amendment. See generally Legislation, ____, 161 L. Ed. 2d, at 818-820. But the Court's later cases do not
Liquor Control, 38 Colum. L. Rev. 644 (1938); Wiser & Arledge, require the result the majority reaches. Moreover, I would resolve
Does the Repeal Amendment Empower a State to Erect Tariff any conflict in this Court's precedents in favor of those cases most
Barriers and Disregard the Equal Protection Clause in Legislating on contemporaneous with the ratification of the Twenty-first
Intoxicating Liquors in Interstate Commerce?, 7 Geo. Wash. L. Rev. Amendment.
402 (1939) (arguing that the Twenty-first Amendment did not repeal A
the Equal Protection Clause). Instead of following this confused The test set forth in this Court's more recent Twenty-first Amendment
mishmash of elite opinion--the same sort of elite opinion that drove cases shows that Michigan's and New York's direct-shipment laws
the expansive interpretation of the negative Commerce Clause that are constitutional. In Bacchus Imports, Ltd. v. Dias, 468 U.S. 263
Shepardize
prompted the Twenty-first Amendment --I would credit the uniform , 82 L. Ed. 2d 200 Shepardize , 104 S. Ct. 3049 Shepardize (1984),
practice of the States whose people ratified the Twenty-first this Court established a standard for determining when a
Shepardize
Amendment. See ante, at ____, 161 L. Ed. 2d, at 824-825 discriminatory state liquor regulation is permissible under the
(Stevens, J., dissenting). Twenty-first Amendment. At issue in Bacchus was a Hawaii statute
The majority's reliance on the difference between discrimination that imposed a 20 percent excise tax on liquor, but exempted certain
against manufacturers (and therefore, their products) and locally produced products from the tax. The Court held that the
discrimination against wholesalers and retailers is difficult to Twenty-first Amendment did not save the discriminatory tax. The
Case Text Page 28

Court reasoned that the Twenty-first Amendment did not permit state do Michigan's and New York's direct-shipment laws. The same
laws that constituted "mere economic protectionism," because the justifications for requiring wholesalers and retailers to be in-state
Twenty-first Amendment's "central purpose . . . was not to empower businesses equally apply to Michigan's and New York's direct-
States to favor local liquor industries by erecting barriers to shipment laws. For example, States require liquor to be shipped
competition." Id., at 276, 82 L. Ed. 2d 200, 104 S. Ct. 3049. The through in-state wholesalers because it is easier to regulate in-state
Court noted that the State did "not seek to justify its tax on the wholesalers and retailers. State officials can better enforce their
ground that it was designed to promote temperance or to carry out regulations by inspecting the premises and attaching the property of
any other purpose of the Twenty-first Amendment, but instead in-state entities; "[p]resence ensures accountability." 358 F.3d
acknowledg[ed] that the purpose was 'to promote a local industry.'" [*524] 223, 237 (CA2 2004). It is therefore understandable that the
Ibid. (quoting [*523] Brief for Appellee Dias, O. T. 1983, No. 82- framers of the Twenty-first Amendment and the Webb-Kenyon Act
1565, p 40). The Court therefore struck down the tax, "because [it] would have wanted to free States to discriminate between in-state
violate[d] a central tenet of the Commerce Clause but [was] not and out-of-state wholesalers and retailers, especially in the absence
supported by any clear concern of the Twenty-first Amendment." of the modern technological improvements and federal enforcement
468 U.S., at 276 Shepardize , 82 L. Ed. 2d 200 Shepardize Shepardize , 104 S. mechanisms that the Court argues now make regulating liquor
Ct. 3049 Shepardize ; accord, Brown-Forman Distillers Corp. v. New easier. Ante, at ____ - ____, 161 L. Ed. 2d, at 821-822. Michigan's
York State Liquor Authority, 476 U.S. 573, 584-585 Shepardize , 90 L. and New York's laws simply allow some in-state wineries to act as
Ed. 2d 552 Shepardize , 106 S. Ct. 2080 Shepardize (1986) ("[O]ur task . . . their own wholesalers and retailers in limited circumstances. If
is to reconcile the interests protected by the" Twenty-first allowing a State to require all wholesalers and retailers to be in-state
Amendment and the negative Commerce Clause). companies is a core concern of the Twenty-first Amendment, so is
Michigan's and New York's direct-shipment laws are constitutional allowing a State to select only in-state manufacturers to ship directly
under Bacchus. Allowing States to regulate the direct shipment of to consumers, and therefore act, in effect, as their own wholesalers
liquor was of "clear concern" to the framers of the Webb-Kenyon Act and retailers.
and the Twenty-first Amendment. Bacchus, supra, at 276, 82 L. Ed. B
2d 200 Shepardize , 104 S. Ct. 3049 Shepardize . The driving force behind The Court places much weight upon the authority of Bacchus. Ante,
the passage of the Webb-Kenyon Act was a desire to reverse this at ____ - ____, 161 L. Ed. 2d, at 819. This is odd, because the Court
Court's decisions that had precluded States from regulating the direct does not even mention, let alone apply, the "core concerns" test that
shipment of liquor by out-of-state interests. See supra, at ____ - Bacchus established. The Court instead sub silentio casts aside that
____, 161 L. Ed. 2d, at 832-834 Shepardize . The laws struck down in test, employing otherwise-applicable negative Commerce Clause
Scott v. Donald, 165 U.S. 58 Shepardize , 41 L. Ed. 632 Shepardize , 17 S. scrutiny and giving no weight to the Twenty-first Amendment and the
Ct. 265 Shepardize (1897), and [***842] Vance v. W. A. Vandercook Webb-Kenyon Act. Ante, at ____ - ____, ____ - ____, 161 L Ed 2d,
Co., 170 U.S. 438 Shepardize , 42 L. Ed. 1100 Shepardize , 18 S. Ct. 674 at 809-811, 820-822. The Court therefore at least implicitly
Shepardize
(1898), required out-of-state manufacturers to ship liquor acknowledges the unprincipled nature of the test Bacchus
through the State's liquor regulation scheme--exactly what [**1925] established and the grave departure Bacchus was from this Court's
Shepardize
the Michigan and New York schemes do. By contrast, there is little precedents. See 468 U.S., at 278-287 , 82 L. Ed 2d 200
evidence that purely protectionist tax exemptions like those at issue , 104 S. Ct. 3049 (Stevens, J., dissenting); James
in Bacchus were of any concern to the framers of the Act and the B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 554-557 Shepardize ,
Amendment. Moreover, if the three-tier liquor regulation system falls 115 L. Ed. 2d 481 Shepardize , 111 S. Ct. 2439 Shepardize (1991)
within the "core concerns" of the Twenty-first Amendment, then so (O'Connor, J., dissenting). Bacchus should be overruled, not fortified
Case Text Page 29

with a textually and historically unjustified "nondiscrimination against laws regulating imports into States, then, Michigan's and New York's
products" test. Bacchus' reasoning is unpersuasive. It swept aside laws easily pass muster under this Court's cases.
the weighty authority of this Court's early Twenty-first Amendment [*526] Nevertheless, in support of Bacchus' holding that "state
case law, see 468 U.S., at 281-282 Shepardize , 82 L. Ed. 2d 200 regulation of alcohol is limited by the nondiscrimination principle of
Shepardize
, 104 S. Ct. 3049 Shepardize (Stevens, J., dissenting), because the Commerce Clause," the Court cites Brown-Forman Distillers
Shepardize
the Bacchus Court thought it "'an absurd [*525] oversimplification'" Corp. v. New York State Liquor Authority, 476 U.S. 573 , 90
to [***843] conclude that "'the Twenty-first Amendment has L. Ed. 2d 552 , 106 S. Ct. 2080 (1986), and Healy v.
somehow operated to "repeal" the Commerce Clause,'" id., at 275, Beer Institute, 491 U.S. 324 Shepardize , 105 L. Ed. 2d 275 Shepardize , 109
82 L. Ed. 2d 200, 104 S. Ct. 3049 (quoting Hostetter v. Idlewild Bon S. Ct. 2491 Shepardize (1989). Ante, at ____ - ____, 161 L. Ed. 2d, at
Voyage Liquor Corp., 377 U.S. 324, 331-332, 12 L. Ed. 2d 350, 84 S. 819-820. At issue in those cases was the constitutionality of
Ct. 1293 (1964)). The Twenty-first Amendment did not impliedly protectionist legislation that controlled the price of liquor in other
repeal the Commerce Clause, but that does not justify Bacchus' States. Brown-Forman, supra, at 582-583, 90 L. Ed. 2d 552 Shepardize ,
narrowing of the Twenty-first Amendment to its "core concerns." 106 S. Ct. 2080 Shepardize ; Healy, supra, at 337-338, 105 L. Ed. 2d
The Twenty-first Amendment's text has more modest effect than 275 Shepardize , 109 S. Ct. 2491 Shepardize . In invalidating such a statute,
Bacchus supposed. Though its terms are broader than the Webb- Brown-Forman found that the Twenty-first Amendment, by its terms,
Kenyon Act, the Twenty-first Amendment [**1926] also parallels the gives "New York only the authority to control sales of liquor in New
Act's structure. In particular, the Twenty-first Amendment provides York, and confers no authority to control sales in other States." 476
that any importation into a State contrary to state law violates the U.S., at 585 Shepardize , 90 L. Ed. 2d 552 Shepardize , 106 S. Ct. 2080
Shepardize
Constitution, just as the Webb-Kenyon Act provides that any such ; see also Healy, supra, at 342-343, 105 L. Ed. 2d 275
Shepardize
importation contrary to state law violates federal law. Its use of those , 109 S. Ct. 2491 Shepardize (following Brown-Forman's
same terms of art shows that just as the Webb-Kenyon Act repealed construction). Brown-Forman and Healy are beside the point in these
liquor's negative Commerce Clause immunity, the Twenty-first cases. Brown-Forman did not involve a facially discriminatory law.
Amendment likewise insulates state liquor laws from negative See 476 U.S., at 579 Shepardize , 90 L. Ed. 2d 552 Shepardize , 106 S. Ct
Commerce Clause scrutiny. Authorizing States to regulate liquor 2080 Shepardize . And unlike [***844] Healy, there is no claim here that
importation free from negative Commerce Clause restraints is a far the Michigan and New York laws do anything but regulate within their
cry from precluding Congress from regulating in that field at all. See own borders, thereby interfering with the ability of other States to
Shepardize
Bacchus, supra, at 279 , n. 5, 82 L. Ed. 2d 200 , 104 S. Ct. exercise their own Twenty-first Amendment power.
Shepardize
3049 (Stevens, J., dissenting). Moreover, Bacchus' concern Equally inapposite are the cases the Court cites concerning state
that the Twenty-first Amendment repealed the Commerce Clause is laws that violate other provisions of the Constitution or Acts of
no excuse for ignoring the independent force of the Webb-Kenyon Congress. Ante, at ____ - ____, 161 L. Ed. 2d, at 818-819 Shepardize .
Act, which equally divested discriminatory state liquor laws of Cases involving the relation between the Twenty-first Amendment
Commerce Clause immunity. and Congress' affirmative Commerce Clause power are irrelevant to
Stripped of Bacchus, the Court's holding is bereft of support in our whether the Twenty-first Amendment protects state power against
cases. Bacchus is the only decision of this Court holding that the the negative implications of the Commerce Clause. See James B.
Twenty-first Amendment does not authorize the in-state regulation of Beam, supra, at 556, 115 L. Ed. 2d 481 Shepardize , 111 S. Ct. 2439
Shepardize
imported liquor free of the negative Commerce Clause. Given the (O'Connor, J., dissenting); Bacchus, supra, at 279, 82 L.
uniformity of our early case law supporting even discriminatory state Ed. 2d 200 Shepardize , 104 S. Ct. 3049, and n 5 Shepardize (Stevens, J.,
dissenting). Similarly, my interpretation of the Twenty-first
Case Text Page 30

Amendment would not free States to regulate liquor unhampered by wisdom of that choice, the Court does this Nation no service by
other constitutional restraints, like the First Amendment and the ignoring the textual commands of the Constitution and Acts of
Equal Protection Clause. As this Court explained in Craig v. Boren, Congress. The Twenty-first Amendment and the Webb-Kenyon Act
429 U.S. 190, 205-207 Shepardize , 50 L. Ed. 2d 397 Shepardize , 97 S. Ct. displaced the negative Commerce Clause as applied to regulation of
451 Shepardize (1976), the text and [**1927] history of the Twenty-first liquor imports into a State. They require sustaining the
Amendment [*527] demonstrate that it displaces liquor's negative constitutionality of Michigan's and New York's direct-shipment laws. I
Commerce Clause immunity, not other constitutional provisions. respectfully dissent.
IV
The Court begins its opinion by detailing the evils of state laws that REFERENCES:
restrict the direct shipment of wine. Ante, at ____ - ____, 161 L. Ed. 15A Am Jur 2d, Commerce § 24; 45 Am Jur 2d Intoxicating Liquors
2d, at 805-806. It stresses, for example, the Federal Trade §§ 42, 141
Commission's opinion that allowing the direct shipment of wine would USCS, Constitution, Art I, § 8, cl 3; Amendment 21
enhance consumer welfare. FTC, Possible Anticompetitive Barriers L Ed Digest, Commerce § 209; Intoxicating Liquors §§ 9.3, 13
to E-Commerce: Wine 3-5 (July 2003), available at L Ed Index, Intoxicating Liquors
http://www.ftc.gov/os/2003/07/winereport2.pdf (as visited May 12, Annotation References
2005, and available in Clerk of Court's case file). The Court's focus Supreme Court's views as to extent of states' regulatory powers
on these effects suggests that it believes that its decision serves this concerning or affecting intoxicating liquors, under Federal
Shepardize
Nation well. I am sure that the judges who repeatedly invalidated Constitution's Twenty-First Amendment. 134 L Ed 2d 1015 .
state liquor legislation, even in the face of clear congressional State regulation or taxation of alcoholic beverages as violating
direction to the contrary, thought the same. See supra, at ____ - commerce clause of Federal Constitution--Supreme Court cases. 90
Shepardize
____, 161 L. Ed. 2d, at 828-831 . The Twenty-first L Ed 2d 1109 Shepardize .
Amendment and the Webb-Kenyon Act took those policy choices Interplay between Twenty-first Amendment and Commerce Clause
away from judges and returned them to the States. Whatever the concerning state regulation of intoxicating liquors. 116 ALR5th 149.
Case Text Page 31

Granholm v. Heald

Enviado por

Dados do documento

Descrição original:

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Granholm v. Heald

Enviado por

Direitos autorais:

Formatos disponíveis

Table of Contents – Granholm v.

Enhanced Case Summary

© 2008 LexisNexis™, a division of Reed Elsevier Inc. All rights reserved.

Enhanced Case Summary

Notable Case Analysis

Enhanced Procedural Posture

A Michigan wholesalers association intervened in support of the Michigan officials.

Case in Brief Page 1

I. Out-of-State Winery Had Same Access to State’s Consumers As In-State Wineries

II. Effect of U.S. Const. amend. XXI on States’ Statutes

Case in Brief Page 2

III. Effect of Webb-Kenyon Act

IV. Effect of Bacchus Imports v. Dias

V. Effect on Three-Tier System of Liquor Control

Case in Brief Page 3

VII. Effect of Tax Collection

VIII. Other Rationales

Quick Holding Bullets

Case in Brief Page 4

I. States’ Liquor Distribution Schemes

A. Three-Tier Distribution Scheme

Case in Brief Page 5

2. New York Case

II. Effect of Commerce Clause and Twenty-First Amendment

A. Commerce Clause Prevented Discrimination against Imported Liquor

1. Wilson Act Mandated Equality of Treatment under State Laws

Case in Brief Page 6

3. State Regulation of Alcohol Limited by Commerce Clause Nondiscrimination Principle

III. Whether States’ Regimes Advanced Legitimate Local Purposes

A. Policing Underage Drinking

Case in Brief Page 7

B. Ability of States to Collect Tax from Out-of-State Wineries

C. Market Conditions, Public Health and Safety, and Regulatory Accountability

Dissenting Opinion Overview

Dissenting Opinion by Justice Stevens, with whom Justice O’Connor joined.

Case in Brief Page 8

Expanded Headnote Coverage

[HN4] See U.S. Const. amend. XXI, § 2.

[HN8] See Mich. Admin. Code r. 436.1725(2) (1989).

Case in Brief Page 9

Case in Brief Page 10

Status of the Case

Bainbridge v. Bush, 148 F. Supp. 2d 1306 Shepardize (D. Fla. 2001)

Swedenburg v. Kelly, 232 F. Supp. 2d 135 Shepardize (D.N.Y. 2002)

Case in Brief Page 11

Swedenburg v. Kelly, 541 U.S. 1062 Shepardize (2004)

Swedenburg v. Kelly, 543 U.S. 954 Shepardize (2004)

Swedenburg v. Kelly, 542 U.S. 935 Shepardize (2004)

Heald v. Engler, 342 F.3d 517 Shepardize (6th Cir. 2003)

Case in Brief Page 12

Heald v. Granholm, 457 F. Supp. 2d 790 Shepardize (D. Mich. 2006)

Comparative Case Content

Topic: Application of Commerce Clause

Case in Brief Page 13

Case in Brief Page 14

Quick Holding Bullets:

Topic: Application of Twenty-First Amendment

Case in Brief Page 15

Brooks v. Vassar, 462 F.3d 341 Shepardize (4th Cir. 2006)

Related Treatise Content

1-1 California Forms of Pleading and Practice--Annotated § 1.10

3-18 California Forms of Pleading and Practice--Annotated § 18.37

M.L.P. PUBLIC HEALTH AND WELFARE § 91