Thank you for sharing!

Your article was successfully shared with the contacts you provided.
On Dec. 7, the U.S. Supreme Court heard arguments in two cases that just might lead to the virtual repeal of the 21st Amendment. That would be unfortunate and legally unfounded. The cases center on the ability of the states to prohibit or strictly regulate Internet sales and direct shipment of alcohol by out-of-state producers. Plaintiffs argue that these shipping restrictions-and the exceptions many states make for in-state alcohol producers-violate the dormant commerce clause doctrine, by which courts prohibit states from discriminating against or otherwise unreasonably burdening interstate commerce. In the cases before the court, the 6th U.S. Circuit Court of Appeals had struck down a Michigan law that barred such direct shipment, while the 2d Circuit had upheld a similar New York law. To preserve the 21th Amendment, which conveys to states the power to regulate the alcohol trade, the Supreme Court should reverse the 6th Circuit’s decision and affirm that of the 2d Circuit. No one disputes that, in general, the dormant commerce clause doctrine prevents states from passing protectionist or burdensome laws that disrupt the flow of interstate commerce. However, alcohol is different. Section 2 of the 21st Amendment-the amendment that repealed Prohibition-bars the “transportation or importation into any State” of alcohol “for delivery or use.” By requiring imported alcohol to go from producer to wholesaler to retailer to consumer, and barring the direct sale by producer to consumers, states are merely exercising the power that the plain language of the amendment gives them. Moreover, it is clear that the historical purpose behind Section 2′s language was to disable the dormant commerce clause doctrine, which had been invoked in the 19th century to prevent state regulation of such direct sales. But the plaintiffs at the high court complain that states unfairly favor local producers by permitting in-state direct shipment; they argue that the power given to states by the 21st Amendment does not include the power to distinguish between in-state and out-of-state producers. The problem with this argument is that it was considered and rejected in a series of cases decided by the high court immediately after the ratification of the 21st Amendment. In one of these cases, the court considered a challenge to a hefty fee that California was charging to import beer-a fee not required of those wishing to sell beer produced in-state. In his opinion, Justice Louis D. Brandeis wrote that the 21st Amendment did not bar differential regulation of in-state and out-of-state alcohol, asserting that to hold otherwise “would involve not a construction of the amendment, but a rewriting of it.” These early cases are factually on all fours with the cases now before the court and have never been repudiated. In fact, all subsequent court decisions have emphasized that the state’s power is at a maximum when it is regulating the importation of alcohol for use within the state. Congress has spoken, too There is another powerful argument that the dormant commerce clause doctrine does not apply in these cases. That is, that Congress has the ability legislatively to disable the doctrine, and that is just what Congress did. For example, in 1945, Congress passed the McCarran-Ferguson Act enabling state insurance regulation to proceed free from the restraints of the doctrine. Similar legislation permits states to regulate alcohol. Prior to Prohibition, when the dormant commerce clause doctrine was used to prevent direct shipment of alcohol by rail to consumers in various states, Congress passed the Wilson Act. Unfortunately, the court interpreted its provisions narrowly, causing Congress to pass the Webb-Kenyon Act. That act, like Section 2 of the 21st Amendment, removed the dormant commerce clause doctrine’s constraints on state power where alcohol imports were involved. Recognizing that the Webb-Kenyon Act was upheld by the Supreme Court in a closely decided case, supporters of state autonomy in alcohol regulation sought to prevent the court (or Congress) from changing its mind. They accomplished this goal by constitutionalizing the protections in what became the 21st Amendment. Text, history and doctrine aside, one should be aware of what is at stake in these two litigations. Since the end of Prohibition, most states have embraced an alcohol-distribution system designed to maximize both state control over the industry and the considerable tax revenues derived from alcohol. The success of these lawsuits would mean the beginning of the end for seven decades of state-directed alcohol regulation. It would also mean the judicial repeal of an explicit constitutional delegation of power to states. Not only would a defeat for states here be a defeat for federalism, since it would result in the erosion of a provision designed to empower states, but having the Supreme Court preside over the dismantling of alcohol-control regimes of the several states looks precisely like the sort of judicial activism against which conservatives-including some of whom the plaintiffs have enlisted on their side-regularly inveigh. Brannon P. Denning is an associate professor of law at Samford University’s Cumberland School of Law in Birmingham, Ala.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.