While sec 2 allows each State leeway to enact the measures that its citizens believe are appropriate to address the public health and safety effects of alcohol use and to serve other legitimate
interests, . . . it does not license the States to adopt protectionist measures with no demonstrable connection to those interests."
I am no lawyer, nor smart, but I read this as curbing state powers not only in discriminating against non state players, but also for consumers to be able to ship into the state. Is this a narrow decision or a wide one?
Section 2 gives the States regulatory authority that they would not otherwise enjoy, but as we pointed out in Granholm, “mere speculation” or “unsupported assertions” are insufficient to sustain a law that would otherwise violate the Commerce Clause. 544 U. S., at 490, 492. Where the predominant effect of a law
is protectionism, not the protection of public health or safety, it is not shielded by §2. The provision at issue here expressly discriminates against nonresidents and has at best a highly attenuated relationship to public health or safety"
My very quick and superficial take is that the fight over interstate shipment is going to be about whether there is a legitimate health and safety interest in states prohibiting importation of alcohol from out of state retailers. The good news for consumers is that the Tennessee wholesalers and retailers provided numerous putative reasons for the residency requirement, including needed to vet the moral character of licensees, and Alito soundly rejected those rationales.
In the context of the current Court, which tends to be very narrow gauge in its holdings, I would characterize this decision as about as wide as one could reasonably hope for.
I have to run and I want to read this more carefully, but on first read, this looks like as close to a home run as you are ever going to get out of the S Ct. The state retains the right to regulate interstate commerce for safety and health reasons, but the scrutiny such regulation gets is pretty close to strict scrutiny. The state must show that a discriminatory regulation is necessary and narrowly tailored to accomplishing that goal, and that non-discriminatory means weren’t available. As we know, the excuses offered by the industry for restricting interstate shipping fall well short of that goal.
WE WIN!
The “highly attenuated” language from Alito is very helpful. He is saying that there must be real substance to the purported health and safety interest. It can’t be manufactured to conceal an otherwise protectionist intent.
This will go a long way for out of state shippers
“As for the dormant Commerce Clause, the developments leading to the adoption of the Twenty-first Amendment have convinced us that the aim of §2 was not to give States a free hand to restrict the importation of alcohol for purely protectionist purposes”
Here is the passage people will want to cite in arguing that Granholm must now be read to cover retail sales as well as winery sales:
The Association and the dissent point out that Granholm repeatedly spoke of discrimination against out-of-state products and producers, but there is an obvious explanation: The state laws at issue in Granholm discriminated against out-of-state producers. See 883 F.3d, at 621. And Granholm never said that its reading of history or its Commerce Clause analysis was limited to discrimination against products or producers. On the contrary, the Court stated that the Clause prohibits state discrimination against all “‘out-of-state economic interests,’” Granholm, 544 U.S., at 472 (emphasis added), and noted that the direct-shipment laws in question “contradict[ed]” dormant Commerce Clause principles because they “deprive[d] citizens of their right to have access to the markets of other States on equal terms.” Id., at 473 (emphasis added). Granholm also described its analysis as consistent with the rule set forth in Bacchus, Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573 (1986), and Healy that “‘[w]hen a state statute directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests over out-of-state interests, we have generally struck down the statute without further inquiry.’” Granholm, supra, at 487 (quoting Brown-Forman, supra, at 579; emphasis added).
I have always thought there were two outs for the states to comply with any decision to allow unrestricted shipping, and still restrict.
- Refuse to allow any shipping period. All wine must be picked up at the store.
- If there are any fees for selling retail within the state, they could charge out of state retailers the same fees.
Sadly, the “public health” argument reigns supreme in Texas, will not be affected by the decision…directly…and so I will still lack the ability to receive wine from a retail shop in California. I do wonder if this is a stepping stone to a later ruling precluding selective bans on shipping. I still don’t know how Texas can allow direct shipping of wine from California, but not shipping of wine from a California retailer. Oh well. Good for Tennessee.
Alito’s language suggesting the need for a “not attenuated” link between public health and outside sale restrictions is favorable. Maybe Texan wine geeks can sponsor K&L to bring a suit against Texas’s ABC.
more litigation
The ‘dormant’ Commerce Clause is defined by milk, wine and garbage.
I am not saying I think this is appropriate, but I could see states saying the “legitimate purpose” is to protect consumers from unscrupulous merchants, e.g. Premier Cru.
I thought this graf from Gorsuch’s dissent was interesting, in that he hints at the sort of litigation (with less-than-predictable outcomes) that will likely be engendered as a result of today’s decision:
What are lower courts supposed to make of this? How much public health and safety benefit must there be to overcome this Court’s worries about protectionism “predominat[ing]”? Does reducing competition in the liquor market, raising prices, and thus reducing demand still count as a public health benefit, as many States have long supposed? And if residency requirements are problematic, what about simple physical presence laws? After all, can’t States “thoroughly investigate applicants” for liquor licenses without requiring them to have a brick-and-mortar store in the State? … The Court offers lower courts no more guidance than to proclaim delphically that “each variation must be judged based on its own features.”
(emphasis added)
That seems HUGE
Unfortunately, despite the broad language in the reasoning, I think the holding is very narrow (and Keith’s prediction of more litigation is accurate). For one thing, the decision does not overturn licensing per se, only discriminatory licensing unrelated to public-health concerns. So it does not necessary say that out-of-state retailers not licensed in a particular state can sell alcohol to a resident of that state.
The Federal Trade Commission already exists, meaning that state bodies are redundant at best, and protectionist at worst.
I do also wonder if the states’ interest in blocking this kind of sales is not as strong following the out-of-state tax decision. They get to collect their money.