Granholm v. Heald

544 U.S. 460 (2005)

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Nature of the Case

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Facts

New York and Michigan, regulate the sale and importation of alcoholic beverages, including wine, through a three-tier distribution system. Separate licenses are required for producers, wholesalers, and retailers. Each D in their own way allows in-state wineries to sell wine directly to consumers in that State but prohibits out-of-state wineries from doing so, or, at the least, to make direct sales impractical from an economic standpoint. This discrimination substantially limits the direct sale of wine to consumers, an otherwise emerging and significant business. Approximately 26 States allow some direct shipping of wine, with various restrictions. Thirteen of these States have reciprocity laws, which allow direct shipment from wineries outside the State, provided the State of origin affords similar nondiscriminatory treatment. Many states prohibit or severely restrict direct shipments depriving consumers of access to the direct market. Ps are small wineries that rely on direct consumer sales as an important part of their businesses. Ps, Michigan residents, sued D claiming that its direct-shipment laws discriminated against interstate commerce in violation of the Federal Constitution's commerce clause (Art I, § 8, cl 3). The District Court granted summary judgment to D. The Court of Appeals reversed and remanded, concluded that (1) the Constitution's Twenty-first Amendment--prohibiting the transportation or importation of intoxicating liquors into any state in violation of that state's laws--did not immunize all state liquor laws from the strictures of the commerce clause; and (2) the Michigan scheme was unconstitutional, because the defendants had failed to demonstrate that the state could not meet its proffered policy objectives through nondiscriminatory means. Ps, New York residents, sued D seeking a declaration that New York's direct-shipment laws violated the commerce clause. The District Court granted Ps summary judgment. The Court of Appeals for the Second Circuit reversed and concluded that New York's laws fell within the ambit of the state's powers under the Twenty-First Amendment. The Supreme Court, having consolidated these cases and granted certiorari.