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Granholm v. Heald: Good policy, bad law

By Robert S. Sargent, Jr.
web posted May 23, 2005

The Congress shall have power…to regulate commerce…among the several States…U.S. Constitution, Article I, Sec. 8. (1787)

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. 21st Amendment to the Constitution. (1933)

Last Monday, the Supreme Court, in Granholm v. Heald, held that any state (specifically New York and Michigan) that allows in-state, but not out-of-state wineries to sell directly to consumers, "discriminates against interstate commerce." And, "...that discrimination is neither authorized nor permitted by the Twenty-first Amendment."

What does this mean? It means that the laws of states like New York, that allows in-state, but not out-of-state deliveries, are struck down. Unless they strike down their own in-state laws, wine lovers can lick their chops as they contemplate ordering wine over the internet, or going to an out-of-state winery and shipping their favorite wine home. I love it that the three-tier system (producers to wholesalers to retailers) is being challenged. But I hate it that it's being resolved in the courts.

Anthony Kennedy wrote the majority opinion, and he continues to demonstrate his weakness as a Justice. To support his view, Kennedy cites laws that were passed prior to the Amendment (for example, the Webb-Kenyon Act of 1913). Then dismissing State Bd. of Equalization v. Young's Market, which upheld interstate discrimination in 1936, Kennedy wrote: "Cases decided soon after the Twenty-first Amendment's ratification did not take account of the underlying history." I thought Amendments trumped what came before!

All one has to do is read the words: "The Transportation or importation into any state…" Those words specifically address commerce, meaning that the Commerce Clause does not apply when "intoxicating liquors" are the issue.

There were two dissents, one written by Justice Stevens, joined by O'Connor, and one written by Thomas, joined by Stevens, O'Connor, and Rehnquist. Stevens is short and to the point: "Because the New York and Michigan laws regulate the ‘transportation or importation' of ‘intoxicating liquors' for ‘delivery or use therein,' they are exempt from dormant Commerce Clause scrutiny." Stevens argues that "The views of judges who lived through the debates that led to the ratification of those Amendments are entitled to special deference. Foremost among them was Justice Brandeis, whose understanding of a State's right to discriminate in its regulation of out-of-state alcohol could not have been clearer:

‘The plaintiffs ask us to limit (the Amendment's) broad command. They request us to construe the Amendment as saying, in effect: The State may prohibit the importation of intoxicating liquors provided it prohibits the manufacture and sale within its borders; but if it permits such manufacture and sale, it must let imported liquors compete with the domestic on equal terms. To say that, would involve not a construction of the Amendment, but a rewriting of it…'" State Board of Equalization v. Young's Market.

Exactly what Kennedy did: He rewrote it. As Justice Thomas wrote: "The Court begins its opinion by detailing the evils of state laws that restrict the direct shipment of wine… The Court's focus on these effects suggests that it believes that its decision serves this Nation well… The Twenty-first Amendment…took those policy choices away from judges and returned them to the States. Whatever the wisdom of that choice, the Court does this Nation no service by ignoring the textual commands of the Constitution…"

Since we all believe in the Commerce Clause, why aren't Kennedy and his brethren doing us a service by overturning these bad state laws? Because, by dammit, once again the Court has taken away the democratic process. The way that works, of course, is that wine lovers convince their legislatures to change the law, and that's the process that the Court has usurped. To principled Constitutionalists, the process is more precious than any court-ordered policy we may agree with. And, by the way, the process was working. According to a story in Friday's (5/17) Wall Street Journal, "Ten years ago, just four states allowed out-of-state wineries to ship directly to consumers; today, 27 states allow for some form of direct shipping. In 2003 alone, three states – Virginia, South Carolina and North Carolina – introduced legislation that allows for direct shipping. Just last week, the governor of Texas signed a bill that allows direct shipping from wineries to consumers, effective immediately." So now, all those people who worked to bring about this good legislation may as well say, "Why'd we work so hard to convince our legislators to change the law? We don't need democracy; we have a committee of 9 lawyers who'll change the law for us." (One more question: What the heck is Scalia doing joining this majority?)

Robert S. Sargent, Jr. is a senior writer for Enter Stage Right. He can be reached at rssjr@citcom.net.


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