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Can states ban certain wine parcels?
The Christian Science Monitor ^ | December 7 | Warren Richey

Posted on 12/07/2004 11:56:44 AM PST by MissouriConservative

WASHINGTON - When Prohibition was repealed in 1933, state governments were granted an extraordinary power - the authority to ban alcohol within their borders.

It is a power that no state, acting alone, had possessed under the US Constitution until passage of the 21st Amendment.

Now, more than 70 years later, that authority is at the center of a US Supreme Court battle that could change the face of the liquor industry, opening the door for widespread direct-to-customer sales over the Internet.

At issue is the scope of state power to regulate alcohol. Tuesday, the high court takes up three consolidated cases examining whether Michigan and New York have the authority to enforce state regulations that favor in-state wine producers.

If the dispute involved any other legal product - from cheese to washing machines - clearly the answer would be no. The US Constitution's commerce clause establishes and protects a national common market, mandating free interstate trade.

But because of the fallout from America's failed 13-year experiment in temperance, alcohol retains a special status within the Constitution. That is why the 50 states have 50 different ways of regulating alcohol.

Although the 21st Amendment gives the states that power, it isn't clear how far the power extends.

On one side are Michigan, New York, and 33 other states arguing that the 21st Amendment gives them near total control over alcohol - including the authority to enforce regulations that may create certain hardships for out-of-state producers.

On the other side are producers, potential consumers, and free-trade advocates. They acknowledge the state power to regulate alcohol, but they say that power must be wielded on an evenhanded basis so that whatever restrictions or benefits apply to in-state producers must also restrict or benefit out-of-state producers.

"States can prohibit [alcohol] altogether or permit it on whatever terms they wish. The one thing they cannot do, in our view, is discriminate based on the [out-of-state] origin of the product," says Clint Bolick, a lawyer with the Institute for Justice, which is representing a group of out-of-state wine producers.

The affected states disagree. "Nothing in the text of the 21st Amendment limits the states in how they may choose to set up their regulatory framework to deal with the transportation, importation, and distribution of alcoholic beverages," says Michigan Solicitor General Thomas Casey in his brief to the court.

How a majority of justices resolve the issue could be worth billions of dollars to the liquor industry. If the high court strikes down state restrictions that discriminate against out-of-state producers, it would probably mean lower prices and more selection for consumers.

But it could also make it easier for minors to obtain alcoholic beverages. Some states say that a ruling against them would make it harder to police the liquor industry and collect taxes on alcohol sales.

Lower federal courts have split over the issue. Federal appeals courts based in New York and Chicago have permitted states to enforce their regulations as written. Appeals courts based in Cincinnati, New Orleans, and Richmond, Va., have barred regulations they view as discriminatory.

The New York and Michigan cases involve challenges by out-of-state wine producers. The producers want to be able to sell and ship their wine directly to consumers in New York and Michigan. But both states prohibit direct shipments by out-of-state wineries, requiring that such shipments first pass through the hands of an in-state licensed dealer.

Out-of-state wineries say the required double shipments they face raise the price of their product and amount to a protectionist effort to favor in-state wineries.

Michigan and New York reply that their state's regulation of the liquor industry depends in part on industry members maintaining a physical presence within the state. If there are violations, state officials know where they can go to enforce the law quickly and efficiently.

Not all states require a physical presence. Roughly half of states permit direct shipments from out-of-state producers to customers. Twenty-four states prohibit it, according to briefs filed in the case.

Mr. Bolick says that states have a wide range of regulatory tools other than requiring liquor producers to open new business operations in each state, a requirement that disadvantages small, family-run wineries. "States may condition the right to engage in business on a permit so that if a winery disobeyed the law, it could lose the right to operate in that state," he says.

The last time the Supreme Court confronted a similar case was 1984. The justices ruled 5 to 3, striking down a discriminatory tax scheme in Hawaii involving imported alcoholic beverages. But only three members of that court remain on the high court, and all three were in dissent.

Justice John Paul Stevens said in his dissent that the court was misreading a 1936 precedent that had broadly construed state power under the 21st Amendment. "If the state has the constitutional power (under the 21st Amendment) to create a total local monopoly - thereby imposing the most severe form of discrimination on competing products originating from elsewhere - I believe it may also engage in a less extreme form of discrimination that merely provides a special benefit ... for locally produced alcoholic beverages," Justice Stevens wrote in the dissent.

"That is the burden we have to overcome," Bolick says when asked about Stevens's dissent. "We hope those justices will honor that 1984 precedent even though they disagreed with it."


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Extended News; News/Current Events; Philosophy; US: Michigan; US: New York
KEYWORDS: alcohol; interstatetrade; liquor; statesrights; supremecourt; wine
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1 posted on 12/07/2004 11:56:45 AM PST by MissouriConservative
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To: MissouriConservative

"But it could also make it easier for minors to obtain alcoholic beverages. Some states say that a ruling against them would make it harder to police the liquor industry and collect taxes on alcohol sales."

That's a red herring. It's not going to become any harder to police the liquor industry. Although it may become harder to tax it, and that's why they're upset enough to bring up the old "Won't somebody think of the children?" card.


2 posted on 12/07/2004 12:06:00 PM PST by Ohiomedina (Art is long, life short; judgment difficult, opportunity transient.)
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To: MissouriConservative
The 21st Amendment is one of those things that only a SC justice deep into senility and near brain death would propose using federal power to restrict or limit.

After all, the 2st "trumps" the USSC itself inasmuch as it's really written into the Constitution, whereas the court may be dealt with legislatively.

3 posted on 12/07/2004 12:06:33 PM PST by muawiyah
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To: RhoTheta; Orgiveme

Relevant discussion ping!


4 posted on 12/07/2004 12:06:51 PM PST by Egon (Government is a guard-dog to be fed, not a cow to be milked.)
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To: MissouriConservative
Background - At issue are two sides

Side 1 believes that the "commerce clause" of the Constitution is supreme and that only Congress can regulate trade between the states.

Side 2 Refers to the 21st amendment, in particular, Section 2 and interprets this to mean the a State is allowed to set regulations governing the importation of alcohol to that state.

"Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.


Section 2. The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited. "

I must say that Section 2 does seem to strip away from Congress the right to regulated this area of commerce.
5 posted on 12/07/2004 12:07:58 PM PST by taxcontrol (People are entitled to their opinion - no matter how wrong it is.)
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To: taxcontrol

That's the way I'm reading it, too. I would love to buy wine via the Internet -- but it appears from the wording of amendment 21 that the states get to decide that.


6 posted on 12/07/2004 12:13:03 PM PST by ellery (Concentrated power has always been the enemy of liberty. - Ronald Reagan)
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To: Ohiomedina

"Although it may become harder to tax it..."

That is one of the keys here, taxing. But also coming into play is certain states protecting small liquor producers within the state itself that cannot compete if the state opens up to "big liquor."

It's simply state protectionism....and protectionism is never a good thing....it keeps prices artificially high and limits consumer choices.


7 posted on 12/07/2004 12:14:21 PM PST by MissouriConservative (A government which robs Peter to pay Paul can always depend on the support of Paul)
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To: MissouriConservative

"But also coming into play is certain states protecting small liquor producers within the state itself that cannot compete if the state opens up to "big liquor." "

Ah yes, that hadn't occured to me. I also have never been a supporter of protectionism, but when I consider the many local breweries in my area it strikes me that I would be very sad if they died at the hands of Budweiser, which would also limit consumer choice.

(I hope this isn't confusingly written, coffee has fused my neurons together and damaged my motor cortex;it's really a miracle I can do anything other than shiver like a scared poodle right now.)


8 posted on 12/07/2004 12:23:14 PM PST by Ohiomedina (Art is long, life short; judgment difficult, opportunity transient.)
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To: Ohiomedina

"but when I consider the many local breweries in my area it strikes me that I would be very sad if they died at the hands of Budweiser."

There are several micro-breweries within a few miles of my home and it would be bad if they died off....but as far as I know, Missouri does not have any sort of restrictions like New York or Michigan does. In fact, Missouri (St. Louis) is home to Anheiser Bush.

There has to be some balance here that New York or Michigan cannot find or don't want to find.


9 posted on 12/07/2004 12:27:00 PM PST by MissouriConservative (A government which robs Peter to pay Paul can always depend on the support of Paul)
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To: MissouriConservative
SOME OLD VINTAGE LIBERAL WINES


10 posted on 12/07/2004 12:28:34 PM PST by drpix
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To: MissouriConservative
"There has to be some balance here that New York or Michigan cannot find or don't want to find."

True. Although I'm not sure a bureaucrat could find balance if it walked up and punched him.
11 posted on 12/07/2004 12:31:49 PM PST by Ohiomedina (Art is long, life short; judgment difficult, opportunity transient.)
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To: MissouriConservative
I went to the UPS store to mail some (unwrapped) bottles of liquor to some business associates to celebrate a very good year. The clerks started a discussion of whether it was legal to mail them to the two states that I wanted to mail them to.

I knew this discussion would come up, and I was prepared. I told them that I wasn't selling the bottles, but giving them as gifts, so they weren't regulated by interstate commerce rules (no commerce, no rule, right?). I'm sure the argument went right over their heads, but they let me ship them anyway, which is good, because if they hadn't, I would have merely gone home and wrapped them myself, then shipped them anyway.

12 posted on 12/07/2004 12:32:48 PM PST by Hardastarboard
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To: MissouriConservative

I just ran into this problem yesterday when trying to order wine as a gift to send to North Carolina.

Received the following message...





By law, we only ship wine to adults 21 or older in the following states: CA, CO, HI, ID, IL, IA, MO, NH, NV, NM, OR, WA, WV, and WI. Adult signature is required upon delivery.


13 posted on 12/07/2004 12:38:30 PM PST by WestCoastGal (76 DAYS UNTIL DAYTONA--"You win some, lose some, and wreck some". Earnhardt Sr.)
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To: MissouriConservative
It is a power that no state, acting alone, had possessed under the US Constitution

Kinda sorta backwards. The Constitution limits Federal Gov't. Or would if anybody paid attention to it.

14 posted on 12/07/2004 12:40:36 PM PST by RightWhale (Destroy the dark; restore the light)
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To: drpix

Who is the guy between lenin and castro?


15 posted on 12/07/2004 12:41:44 PM PST by sam_paine (X .................................)
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To: Hardastarboard

I found this on a website that sells liquor and then you can have it shipped as a gift to anyone....except

"States We Cannot Ship To
There are several states that we cannot ship either beer or wine to including: AK, HI, KY, MA, MI, UT or other areas where prohibited by law. Many states require the direct shipment of alcohol to be bulk transported into the state where a wholesaler can take possession of it and then it is distributed by a local shipper to a retail customer which is why many organizations are not set up to ship alcohol into certain states."

The laws, I guess, are very confusing. I'm glad you got your package shipped.


16 posted on 12/07/2004 12:42:02 PM PST by MissouriConservative (A government which robs Peter to pay Paul can always depend on the support of Paul)
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To: RightWhale

"Or would if anybody paid attention to it."

No one pays attention to this

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Since the Constitution does not prohibit it....then guess what?....It's a state's right. I don't know why it's so hard for people to understand this....I guess it's like you said....no one is paying attention.


17 posted on 12/07/2004 12:45:41 PM PST by MissouriConservative (A government which robs Peter to pay Paul can always depend on the support of Paul)
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To: sam_paine

I'm not sure, but I think it may be the WWII General -Zukhov - who beat the Germans on the eastern front. Unless he's just another Ted Kennedy campaign aide.


18 posted on 12/07/2004 12:57:12 PM PST by drpix
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To: MissouriConservative
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Since the Constitution does not prohibit it....then guess what?....It's a state's right. I don't know why it's so hard for people to understand this....I guess it's like you said....no one is paying attention.

What do you make of Article VI?

"This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding."

19 posted on 12/07/2004 2:30:59 PM PST by Beemnseven
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To: Beemnseven

Well, since the 10th Amendment is in the Constitution, and the Constitution does not expressly prohibit states from doing it, then I'd say nothing is out of whack.

In fact, the 21st Amendment gives the states great latitude to do what it wants where liquor is concerned, so add that to the above paragraph and it is pretty cut and dry.


20 posted on 12/07/2004 3:14:31 PM PST by MissouriConservative (A government which robs Peter to pay Paul can always depend on the support of Paul)
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