The US Supreme Court heard arguments Tuesday on whether or not consumers should be permitted to shop for wine via the Internet and have it delivered directly to their doors. Hundreds of millions of dollars in state taxes and distributors' commissions are at stake, so the notion is being fought vigorously by states and industry lobbyists.
There are two apparently contradictory passages in the US Constitution that the Supremes will have to reconcile. One is the Twenty-First Amendment, which says 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."
Now, this does seem to say that states can regulate booze sales with impunity; but there is another item, in Article I, Section 9, often called the "Commerce Clause," which says that:
"No tax or duty shall be laid on articles exported from any state. No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another."
Which for ages has been understood to say that states cannot discriminate against each other at all in regulating commerce.
So, while the Twenty-First Amendment insists that booze regulation is a state matter, the Commerce Clause rather insists that a state can't have two sets of regs, one for its own producers, and one for the rest of the country.
The Supremes were not sympathetic to state arguments suggesting that the Twenty-First Amendment somehow overrides the Commerce Clause.
Additionally, the states took a shot at the old 'save-the-children' con, warning that kids would soon be partying with $80 bottles of wine bought on line, instead of the usual cocktails of Ever Clear and Kool-Aid. However, since many states allow home delivery of booze from local outfits, this argument lost a good deal of its weight.
The Court will be reluctant to do much violence to either the Twenty-First Amendment or the Commerce Clause, as it prefers to gut the Constitution only when individual liberties interfere with law-and-order or commercial interests. Thus a likely outcome would be a ruling whereby the states are permitted to regulate booze as before; but, when a state permits local direct delivery to consumers, it would have to extend the same privileges to out-of-state outfits. ®