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Contributors
Gary M. Galles - Contributor
Mr.
Galles is a professor of economics at Pepperdine University.
[go to Galles index]
 Parsing
the 21st Amendment
SCOTUS and interstate wine…
[Gary M. Galles] 12/7/04
The basis
of law is language. That is why parsing the language of the
Constitution is crucial to jurisprudence. This issue will be
on prominent display before
the Supreme Court December 7, when Granholm v. Heald will be heard, concerning
whether states can apply discriminatory restrictions on direct shipments
from out-of-state wineries, when shipments are allowed from in-state wineries.
The case pits the
21st Amendment (“The transportation
or delivery into any state…for delivery or use therein
of intoxicating liquors, in violation of the laws thereof, is
hereby prohibited.”) against the Constitution’s commerce
clause, which gives the federal government the sole power to
regulate interstate commerce. And the practical consequences
are large, as elimination of such restrictions would create a
far more competitive market for wine, benefiting both consumers
and producers.
The case hinges on
what “in violation of the laws thereof” modifies
in the 21st Amendment. The reason is that in the Supreme Court’s
initial 21st Amendment ruling (the Young’s Market case
in 1936), it interpreted that clause as modifying “the
transportation or delivery into any state,” giving states
virtual carte blanche to restrict importation of liquor in any
way they choose. But this reading, which wine distributors and
in-state wineries are relying on to maintain protectionist restrictions
on interstate wine competition, effectively over-rules the federal
government’s Constitutional authority to regulate interstate
commerce.
The conflict between
these two parts of the Constitution is more apparent than real,
however. The legislative history of
the 21st Amendment clearly reveals that it was intended to preserve
a state’s right to remain “dry” if it chose,
against out-of-state as well as in-state liquor suppliers, following
the repeal of prohibition. It did not grant states an exception
to the federal commerce power for liquor. It did not rewrite
the commerce clause, which was so important that the court noted,
in Gibbons v. Ogden (1824), that “If there was any one
object riding over every other in the adoption of the constitution,
it was to keep the commercial intercourse among the states free
from all invidious and partial restraints.” The commerce
clause was not even mentioned.
That brings us back
to parsing the 21st Amendment. Both its history and the principle
of interpreting two parts of the same
document as consistent rather than contradictory, when possible
(especially when the clause to be silently “overturned” is
a core part of the highest law of the land) indicates that the
Supreme Court’s reading in Young’s Market was incorrect.
It did not give states unbounded power to restrict “the
transportation or delivery into any state” from outside
sources. Instead, it referred to the states’ powers to
impose laws on “the delivery or use therein of intoxicating
liquors,” which it applied to out-of-state suppliers on
the same terms as in-state suppliers.
This reading is far
from strained. It reflects the Wilson Act (1890), still in
force, which the Supreme Court in Scott v. Donald (1897) said: ”was not intended to confer upon any state
the power to discriminate injuriously against the products of
other states in articles whose manufacture and use are not forbidden… equality
or uniformity of treatment under state laws was intended.” The
Webb-Kenyon Act (1913), which the relevant part of the 21st Amendment
was modeled after, then prohibited alcohol “shipment or
transportation…to be received, possessed, sold, or in any
manner used…in violation of any law of such State.” Further,
to avoid any misinterpretation, it was re-passed in 1935, after
the 21st Amendment was adopted.
Wine drinkers and
wineries could gain a great deal in Granholm, as documented
by a 2003 FTC study of the high cost of current
restrictions. But the ruling will hinge on how the court parses
the 21st Amendment. One can only hope the court corrects its
earlier misreading in Young’s Market. It would be a shame
for a misplaced modifier to continue twisting the commerce clause
and denying Americans the benefits of interstate wine competition. tOR
copyright
2004 Gary M. Galles
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