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« Al-Newsweek: Flying Under a False Flag? | Main | Gay Marriage: Catch the Fever! »
May 16, 2005

The Supreme Court Fights For Your Right To Party

...with out-of-state wine purchases:

Wine lovers may buy directly from out-of-state vineyards, the Supreme Court ruled Monday, striking down laws banning a practice that has flourished because of the Internet and growing popularity of winery tours.

The 5-4 decision overturns laws in New York and Michigan, which supporters said were aimed at protecting local wineries and limiting underage drinkers from purchasing wine without showing proof of age. In all, 24 states have laws barring interstate shipments.

The court said the state bans are discriminatory and anticompetitive.

"States have broad power to regulate liquor," Justice Anthony Kennedy wrote for the majority. "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 shipments of wine, it must do so on evenhanded terms," he wrote in an opinion joined by Justices Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

Antonin F'n' Scalia. Seriously, this guy is right on just about every issue.

I'm wondering about the conservative/statist judges who disagreed. Rehnquist, the normally sensible Thomas... Guys? You're supporting restraint of interstate trade? On what possible conservative grounds?

Surely not because "Demon Wine" threatens the fabric of society.

Thanks to Ogre Gunner.

Perhaps Thomas Has a Point Update: DaveJ scolds me for assuming that laissez-faire economics and libertarianism ought to trump clear Constitutional authority.

Thomas argues here, in a dissent to the decision, that the 21st Amendment affords states the right to "regulate" alcohol sales.

Well, yes, but... another part of the Constitution would seem to forbid economic barriers to interstate trade.

So does that part of the 21st Amendment cancel out the Commerce Clause? Or should it be read as applying to intrastate restrictions on the sale of alcohol (remember, counties and states are still permitted, if they wish, to be "dry," i.e., forbid alcohol sales entirely) which must yet comport with the Commerce Clause -- e.g., pass whatever laws you like about booze, but you still can't descriminate against out-of-state booze in favor of homegrown hooch?

Read it and decide for yourselves. If you care to, of course.


posted by Ace at 01:25 PM
Comments



HUGE win for IJ (Institute for Justice)

Great job, Clint and Chip.

Those guys are great over at IJ.

Posted by: hobgoblin on May 16, 2005 01:30 PM

How crazy have things gotten that they need the Supreme Court to rule on this?
It seems wrong from the word go.

Posted by: Zorachus on May 16, 2005 01:31 PM

I'd hate to think that I'd be prohibited from buying your favorite New York wine in my all out effort to lure you to California. Hey a girl's gotta have her fantasies, right?

Posted by: Da Goddess on May 16, 2005 01:34 PM

V Sattui is a fantastic winery with decent prices, and unless you're lucky you can only get it online.

http://www.vsattui.com/

Later,
bbeck

Posted by: bbeck on May 16, 2005 01:39 PM

This is huge news here in Oregon, where we have tons of small, high-quality wineries that don't produce enough volume for the distributors on those states that restricted interstate sales.

Posted by: Brian B on May 16, 2005 01:45 PM

Discriminatory and anti-competitive?

If that's a sufficient reason to strike down legislation, then when are they going to get around to dealing with price controls, production and export quotas, unions, every import tax ever invented, the artificial limit on the annual number of medical school graduates, the Federal Reserve, government-sponsored monopolies as in utilities, every single subsidy ever paid ...

Ending anti-competitive government measures is a great idea, but not quite the rule of law in America.

Posted by: Phinn on May 16, 2005 01:47 PM

As a homebrewer myself, I can't wait until the day I can sell you a bottle of my latest concoction!

Hair of the Cat Brewery presents it's latest brew "I can't believe it's not infected" IPA.

Posted by: Sharp as a Marble on May 16, 2005 01:49 PM

oh, c'mon Phinn. You know all about the dormant commerce clause.

not quite the rule of law in America?

The whole purpose of the Constitution (and the Articles of Confederation before that) was to remove these trade barriers between the states. The states can't keep out the goods of other states. That's why we're a union of states

Posted by: hobgoblin on May 16, 2005 02:01 PM

"Rehnquist, the normally sensible Thomas... Guys? You're supporting restraint of interstate trade? On what possible conservative grounds?"

On the grounds of the plain language of the 21st Amendment and (particularly in Thomas's dissent) the Webb-Kenyon Act. While I'm usually on the same side as the IJ, doctrinaire libertarianism and the actual laws of the United States simply aren't always the same thing.

Posted by: Dave J on May 16, 2005 02:08 PM

I'm thrilled that people like Kennedy & Co. are finally realizing that economic regulations like these are "anti-competitive."

I hope that they will begin to see that every economic measure that impairs the free market is anti-competitive.

The only thing government can do to improve the economy is to make the market more free. If they can see this when it comes to interstate wine sales, why can't they see it when it comes to trade barriers? Or subsidies? Or bail-outs, or ....

Every transaction has two parties. Quite often, one of those parties will complain about the price of X being too high (if they are on the buying side) or too low (if they are on the selling side). Here, it was domestic wine producers complaining that the price of out-of-state wine was too low, which meant that they had to lower their prices to compete.

So, they ask for the government to employ thugs, er, "regulators", to keep the competitors' products out of their customers' hands. It is just one of about 1000 different forms of the classic barrier-to-entry mechanism.

Posted by: Phinn on May 16, 2005 02:15 PM

I just like it 'cause now I can do my own little bit to stick it to NY's legislature. Considering the telephone poles they stick up our asses, its only fair.

This just brings us one step closer to our ultimate dream of never having to leave our La-Z-Boy recliner/toliet.

Posted by: Iblis on May 16, 2005 02:24 PM

Of course, NY might decide to bar all direct shipment of wine.

Posted by: someone on May 16, 2005 03:02 PM

Bite your keyboard "someone"!

Posted by: Iblis on May 16, 2005 03:10 PM

Besides the liqour store/distributor lobby, I am sure that States were resisting this due to the fact that they will be unable to collect the sin and sales tax from the direct/online sales.

Posted by: Joel V on May 16, 2005 03:43 PM

My money's on the complete Ban.

The problem here was treating out-of-state and in-state differently.

Posted by: Ryan on May 16, 2005 03:43 PM

Some state is bound to try a complete ban. The Constitution doesn't guard against extraordinarily bad ideas. It should, but it doesn't.

Of course, the core motivation behind Nazi Germany's economic policies was total self-sufficiency. Same for the USSR. It's what prompted them to invade other countries -- so they could control all of the industries and resources in those territories -- and ban all imports that might compete with domestic producers.

Keeping out imports (on the state or inter-national level) is a recipe for disaster.

Posted by: Phinn on May 16, 2005 03:55 PM

Just wanted to give you an idea of how much is on the line in combined sin (excise) taxes. I live on the border with Mexico. I can buy a bottle of Scotch in Mexico for $12.00 that costs $30.00 on this side. Same bottle, the differnce being that Mexico does not have sin taxes on alcohol.

Posted by: Joel V. on May 16, 2005 04:05 PM

Now THERE is an idea. A sin tax!!!!

OMG!! Think of how much money we would make off the democrats!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

There goes the deficit!!!!! We would be running in black in no time.

Posted by: Rightwingsparkle on May 16, 2005 04:10 PM

"Well, yes, but... another part of the Constitution would seem to forbid economic barriers to interstate trade."

You mean the Dormant Commerce Clause? But as Thomas points out, that operates only in the absence of congressional action, because it's implied from Congress's express authority to regulate interstate commerce. But Congress has acted in this field, and Congress can authorize the states to act in restraint of interstate commerce in ways that they would not be able to otherwise. Is doing that a good idea? No, I certainly don't think so--certainly not in this context, anyway, nor ina any other that comes to mind--but it's not the Court's place to rule on the wisdom of the law.

It's this statutory emphasis that I think makes Thomas's dissent stronger than Stevens's, but Stevens raises equally valid points, and the two dissents compliment each other. Stevens focuses more on the 21st Amendment itself, the history behind its adoption, and early cases applying it. Obviously the Commerce Clause and the 21st Amendment don't ALWAYS conflict, but when they do, the canon of construction is that when two laws of equal force can't be reconciled, 1) the later in time governs and 2) the specific controls over the general. All of that weighs heavily in favor of states being able to discriminate against out-of-state sales of alcohol in ways that they typically could not regarding anything else. And again, I think for states to do so is stupid, but not unconstitutional.

Posted by: Dave J on May 16, 2005 04:40 PM

If the 21st Amendment doesn't over-rule the Commerce clause, wouldn't that suggest that the First Amendment would still over-rule (and potentially negate) any "flag burning Amendment, should one ever pass?

Posted by: skippystalin on May 16, 2005 07:33 PM

The circuitous logic of this decision might sort of seem that way, skippystalin--at least in situations where one could conceivably construe them to not be in conflict. Another canon of construction is that one is supposed to read the law in pari materia, i.e., all its parts together, so as to avoid internal conflicts whenever possible. Unlike many statutes and, indeed, many state constitutions as well, the federal constitution does not ever use a "knockout clause" expressly subordinating some of its provisions to others in cases of conflict, e.g., "notwithstanding the provisions of section XYZ..." This makes for more elegant language, but it also sets up situations like this one.

Posted by: Dave J on May 16, 2005 07:56 PM

Todd Zywicki at Volokh is way ahead of all of you. See this paper and especially this post. The short version: The 21st amendement was intended to bring the nation back to the status quo, not to invalidate all rights we would otherwise have in the area of liquor. Just as a state couldn't pass a law banning only black people or Catholics from buying wine, they can't violate the other areas of the constitution either.

Posted by: Cory on May 16, 2005 10:16 PM

Bad link, Cory, though I'll look for it over there, anyway. But if the sole purpose of the 21st Amendment was restore the status quo prior to prohibition, only Section 1 (repealing the 18th Amendment) would have been necessary.

Posted by: Dave J on May 17, 2005 12:10 AM
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