Wine, Protectionism and the Commerce Clause

Slate has a great article summing up the cases: Granholm v. Heald, No. 03-1116, Michigan Beer & Wine Wholesalers Association v. Heald, No. 03-1120 and Swedenburg v. Kelly, No. 03-1274 which the Supreme Court heard Tuesday:

Michigan and New York allow their respective in-state wineries to ship their wines directly to customers. Both states make it virtually impossible for out-of-state vineyards to do the same. So, that was the interesting part. The states justify their tough-on-wine stance by stating that wine is different from other products that properly move about freely in interstate commerce. And they find textual justification for this idea in the 21st Amendment, which provides that "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." The 21st Amendment effectively repealed Prohibition in 1933, and for a time the courts treated it as though it gave the states power to regulate any and all alcohol, for any and all reasons, unencumbered by the commerce clause or any other discernible legal doctrine.

The commerce clause, or more precisely today, the unwritten or "dormant" part of the commerce clause, is a fuzzy little doctrine that bars states from enacting protectionist, discriminatory measures against interstate commercial activity. That was the deadly boring part. Things liven up again when you understand that this case comes down to two weird constitutional doctrines duking it out for world dominance and that everything will turn on whether you read the 21st Amendment as more compelling than the commerce clause or less so.

The Fall 04 issue of Regulation Magazine has an article about a study which concludes:

At the heart of the debate is a simple question: Do state restrictions on direct interstate shipment stem from public welfare concerns or economic interests?Our study suggests economic interests in both the private and public sectors are the principal drivers of restrictions on direct interstate shipping of wine. Those results have immediate consequence for the legal battles raging across the country contesting the constitutionality of direct shipment laws. To the extent that public welfare interests are required by courts to justify states’ restrictions on interstate commerce, our results cast a shadow of doubt on public interest arguments in the instance of direct shipment of wine. They also raise questions about similar restrictions on direct interstate shipping of other alcohol products, particularly specialty microbrew beers that face similar distribution hurdles.

In otherwords, this is state-vs.-state protectionism, plain and simple. Hopefully when they announce their decision in July the Supreme Court will conclude the same.