State wine shipment laws nullified
on May 16, 2005 at 10:02 am
Ruling 5-4, the Supreme Court on Monday struck down two states’ laws that forbid wineries located out of state to ship wine directly to customers in those states — a decision that is expected to increase the sales of wines over the Internet by small, boutique wineries. The exact number of states with laws similar to those nullified Monday is unclear, although there have been indications that the outcome could affect as many as 20 states.
The Court said there was now a “patchwork of laws,” with some states banning direct shipments altogher, others doing so only for out-of-state wines, and still others requiring reciprocity.” This array of laws, it added, “is essentially the product of an ongoing, low-level trade war.”
The decision — the only ruling on the merits Monday — specifically nullified laws in Michigan and New York. “It is evident that the object and design of the Michigan and New York statutes is to grant in-state wineries a competitive advantage over wineries located beyond the states’ borders,” since those laws allow in-state wineries to deliver their goods directly toconsumers, Justice Anthony M. Kennedy wrote for the majority. “This discrimination substantially limits the direct sale of wine to consumers, an otherwise emerging and significant business.”
That discrimination, the Court held, “is neither authorized nor permitted by the Twenty-first Amendment,” which gives states authority to limit the import of liquor. The Court thus rejected the view of the Second Circuit, in the New York case, that the grant of authority to the States by the Twenty-first Amendment “should not be subordinated to the dormant Commerce Clause inquiry when the two provisions conflict, as they do here.” (The Second Circuit’s view was echoed Monday by the four dissenters, in an opinion written by Justice Clarence Thomas. The dissenters accused the majority of seizing back a power over state liquor controls that the Court itself had rejected in 1936.)
Canvassing the history of state regulation of liquor before the Amendment was passed and after, the Court concluded that the Amendment “does not supersede other provisions of the Constitution and, in particular, does not displace the rule that states may not give a discriminatory preference to their own producers.” Reviewing recent cases, the Court said: “The argument that the Twenty-first Amendment has somehow operated to ‘repeal’ the Commerce Clause for alcoholic beverages has been rejected.”
Explicitly reaffirming its 1984 decision in Bacchus Imports v. Dias, against state discriminatioin against out-of-state liquor, the Court commented: “Bacchus does not stand alone in recognizing that the Twenty-first Amendment did not give the states complete freedom to regulate where other constitutional principles are at stake.”
Justice Kennedy’s opinion tartly reminded the states that the Court, “time and again,” had ruled that, “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.”
In soaring rhetoric, Kennedy said that preserving cross-country access to consumers was “essential to the foundations of the Union,” citing the Federalist Papers, and the work of James Madison. The opinion said that it was a “central concern” of those who wrote the Constitution in the beginning to preserve economic access without individual state trade barriers. Indeed, this was “an immediate reason for calling the Constitutional Convention…In order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation.”
Kennedy’s citation to history in the founding era contrasted with the personal recollection of the Court’s oldest member, 85-year-old John Paul Stevens. He wrote a separate dissenting opinion, joined by Justice Sandra Day O’Connor, recalling the mood of the country at the time the Twenty-first Amendment was adopted, when there was widespread condemnation of “demon rum.” Stevens suggested that the Court’s current reading of the Amendment could be traced to the view of “younger generations” that alcohol is just an ordinary article of commerce, and not a true social menace. To counter Kennedy’s reliance upon Madison, Stevens offered a quotation from Justice Louis Brandeis, expressing the view of “judges who lived through the debates that led to ratification” of the Twenty-first Amendment and the Prohibition Amendment (the 18th) that it repealed.
The ruling came in the consolidated cases of Granholm v. Heald (03-1116), Michigan Beer & Wine Wholesalers v. Heald (03-1120), and Swedenburg v. Kelly (03-1274).
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In orders issued Monday, the Court agreed to decide whether Congress had the authority to take away states’ Eleventh Amendment immunity to private damage lawsuits that claim violations of the American with Disabilities Act in providing public services (Title II of ADA) – at least when the ADA claim involves disabled prison inmates.
It is unclear whether the Court, in deciding the issue at its next Term, will go beyond the prison context in reviewing the Eleventh Amendment issue. The Court will decide the issue in two consolidated cases, U.S. v. Georgia (04-1203( and Goodman v. Georgia (04-1236).
In a second case granted review, Arbaugh v. Y & H Corp. (04-944), the Court agreed to clarify the legal meaning of the provision in Title VII of the civil rights act that limits its application to employers with 15 or more employees. The issue is whether that limitation determines whether a federal court has jurisdiction over a Title VII lawsuit, or whether it only involves an element of the merits of a particular lawsuit — such as whether a valid claim for legal relief has been made.
The Fifth Circuit ruled that the provision is jurisdictional in nature, thus barring from federal courts entirely a case in which the employer is found to have fewer than 15 employees. The circuit courts are split on the issue.
The appeal in the Arbaugh case said that the inter-circuit conflict over the number of employees and its impact on court jurisdiction affects not only Title VII, but also the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family and Medical Leave Act. There also has been a somewhat similar dispute among lower courts on aspects of ERISA, according to the petition.
Among the Court’s other orders, it told the Florida state courts to reconsider a ruling that it violates the Fourth Amendment for police without a warrant to use a drug-sniffing dog to detect odors at the front door of a private home. The case was Florida v. Rabb (04-914), which the Court ordered reviewed anew under its ruling in Illinois v. Caballes allowing the use of drug-sniffing dogs to check out cars during traffic stops.
The Court also sent back to lower courts a significant post-Booker test case on whether that decision curbing the federal Sentencing Guideslines is to apply to all cases that were not yet final at the time of the decision (Nunez v. U.S., 04-1094).
Among the more interesting cases denied review on Monday were an attempt to revive claims against the city of Tulsa over the 1921 race riots there that leveled the black community (Alexander v. Oklahoma, 04-1198), and a test by Baltimore officials of a parent’s right to refuse to tell authorities the whereabouts of a missing child who has been abused or neglected (Baltimore City Department of Social Services v. Teresa B., 04-1054).
