Dormant Commerce Clause--indeed!

The Specialty Wine Retailers Association (SWRA) is engaged in a battle with the Wine and Spirits Wholesalers of America (WSWA) and rightly so. SWRA is unhappy that WSWA enjoys such protections in states to preclude retailers from shipping wine to consumers who live in other states.

The problem with the battle is that WSWA, sadly, has the 21st Amendment to the U.S. Constitution on its side, at least that’s how the courts see it--all the way to the Supreme Court.

In 2005, when the Supremes issued a ruling that supposedly opened wine shipping across state lines, the ruling was so narrow that whether or not it benefits consumers remains an open debate. But then, neither the 21st Amendment nor individual state’s alcohol control boards are trying to benefit consumers.

The 21st Amendment is protecting state’s rights: in this case, the right to regulate what our still Calvinist culture believes is an evil. In turn, the state alcohol control boards are protecting their excise tax revenue—even though they may claim otherwise: the NY State alcohol control laws are supposedly in place to protect against organized crime.

Irony of irony: the money organized crime made during Prohibition is now being made by many state legislatures, and perhaps a few WSWA members just to keep everything in the family.

The proof that SWRA is engaged in a futile effort came with the Supreme Court 2005 decision. The decisions simply stated that States cannot block out of state commerce to protect in state commerce. That’s all it said.

The ruling said nothing about setting limits to how expensive or how cumbersome states can make the commerce. And, the ruling said nothing about licensing restrictions. Ever since the ruling, expensive and licensing restrictions have been the main weapons in those states that choose to circumvent unfettered commerce.

A few weeks ago, NY State’s 2nd Circuit Court of Appeal held that it is not unconstitutional for the state to block wine shipments from out-of-state retailers direct to consumers—and what was the reasoning of the court?

Judge Wesley referenced the Dormant Commerce Clause of the Constitution that bars states from blocking interstate commerce through protective measures.

According to Law.com, here’s what the judge said:

“The commerce clause normally prohibits states from passing laws that discriminate against out-of-state economic interests unless those laws ‘advance a legitimate local purpose that can not be adequately served by reasonable nondiscrimanatory alternatives.’

“However, the Supreme Court has made it clear that the 21st Amendment alters Dormant Commerce Clause analysis of state laws governing the importation of alcoholic beverages.”

The judge refers to precedent and he also refers to Justice Kennedy’s notes in the 2005 case where he explicitly stated that the narrow ruling would not have an effect on the states' right to restrict alcohol sales—Kennedy went on to reason his statement by making the Calvinist view concerning the special evil that alcohol represents.

In order for SWRA and for consumers to win this battle, it would take an amendment to the 21st Amendment to the Constitution. That would take an act of Congress, something I’m afraid is about as likely to happen in my lifetime as the possibility of real and valuable health care reform.

In fact, the alcohol and health care reform issues are related. In each case, lawmakers are beholden to an industry and in each case, lawmakers have told the citizenry to go fuck itself.

Law.com

Copyright Thomas Pellechia
July 2009. All rights reserved.