Granholm v. Heald
Encyclopedia
Granholm v. Heald, 544 U.S. 460
(2005), was a court case decided by the Supreme Court of the United States
in a 5-4 decision that ruled that laws in New York
and Michigan
that permitted in-state wineries
to ship wine
directly to consumers, but prohibited out-of-state wineries from doing the same, were unconstitutional. The case was unusual because the arguments centered on the rarely invoked 21st Amendment
to the Constitution
, ratified in 1933, which ended Prohibition
in the United States.
in 2003), direct sales were thought to be an opportunity for growth. Laws in some unspecified eight states varied, but typically a winery could distribute wine only by selling it to a wholesaler in the state. The wholesaler could then distribute the wine to retailers or sell directly to consumers. This made the large wholesalers very powerful in the wine industry; if wholesalers in New York decided not to purchase wine from a particular winery, then that winery would be completely shut out of the New York market.
doctrine, inferred from the Constitution's Article I
, against Section Two of the 21st Amendment
.
Section Two of the 21st Amendment reads:
The Commerce Clause
of Article One of the Constitution grants Congress the power:
In turn, the Dormant Commerce Clause
(or "DCC") has been inferred from the Commerce Clause. The DCC is a doctrine, evolved over many decisions of the U.S. Supreme Court
, that the states do not have the power to enact anticompetitive laws that discriminate against sellers in other states.
Eleanor Heald, a wine collector, and eleven other plaintiffs, argued that Michigan's Liquor Control Code violated the DCC by making it a misdemeanor for an out-of-state winery to ship wine directly to a Michigan resident. (In-state wineries were allowed to do so.) The same argument was made in a separate case against the government of the state of New York by Juanita Swedenburg and other owners of out-of-state wineries.
In these two cases, the state governments of Michigan and New York had argued that Section 2 of the 21st Amendment granted them carte blanche to regulate liquor. One of their justifications for the laws was that by regulating out-of-state wineries in this way, they might be able to hinder the shipment of alcohol to underage minors; this would serve a valid state purpose.
The government of New York had won in the federal Second Circuit Court
, and the government of Michigan had lost in the Sixth Circuit
. The cases were consolidated and heard together by the U.S. Supreme Court.
In a 5-4 decision, the Supreme Court decided the states' laws were unconstitutional. The context of the 21st Amendment, they wrote, was to return to the status quo that existed before Prohibition, making it clear that the states had the power to regulate alcohol however they wished, including banning alcoholic beverages entirely within the state if desired. Before Prohibition, the states did not have the power to violate the Dormant Commerce Clause, and the 21st Amendment was not intended to grant them this power.
New York governor George Pataki
unveiled a bill that would limit each winery's direct sales to consumers to two cases per month per consumer. As a Wall Street Journal editorial noted, two cases per month is a relatively large amount of wine for a consumer, but the measure was intended to reduce competition for New York alcohol distributors.
Since the ruling, many more states have allowed direct shipping from wineries. According to the Wine Institute (a public policy advocacy association of California wineries) 37 states permit at least some form of direct shipping from wineries to consumers (as of July 2010). Different states have enacted different regulations. An editorial article on the commercial wine selling web site Appelation America says that many of the conditions in these regulations are either so complex or so expensive as to discourage wineries from complying.
In March 2011, a bill was introduced in the U.S. House of Representatives that would explicitly allow states to regulate alcohol products from outside of the state differently than those produced within the state.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(2005), was a court case decided by the Supreme Court of the United States
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
in a 5-4 decision that ruled that laws in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
and Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
that permitted in-state wineries
Winery
A winery is a building or property that produces wine, or a business involved in the production of wine, such as a wine company. Some wine companies own many wineries. Besides wine making equipment, larger wineries may also feature warehouses, bottling lines, laboratories, and large expanses of...
to ship wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
directly to consumers, but prohibited out-of-state wineries from doing the same, were unconstitutional. The case was unusual because the arguments centered on the rarely invoked 21st Amendment
Twenty-first Amendment to the United States Constitution
The Twenty-first Amendment to the United States Constitution repealed the Eighteenth Amendment to the United States Constitution, which had mandated nationwide Prohibition...
to the Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
, ratified in 1933, which ended Prohibition
Prohibition
Prohibition of alcohol, often referred to simply as prohibition, is the practice of prohibiting the manufacture, transportation, import, export, sale, and consumption of alcohol and alcoholic beverages. The term can also apply to the periods in the histories of the countries during which the...
in the United States.
Background
Granholm v. Heald was the conclusion of an eight-year fight by small wineries against these laws. Although direct shipments to consumers constituted only about 2% of wine sales in the United States (whose total sales were $21.6 billion1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
in 2003), direct sales were thought to be an opportunity for growth. Laws in some unspecified eight states varied, but typically a winery could distribute wine only by selling it to a wholesaler in the state. The wholesaler could then distribute the wine to retailers or sell directly to consumers. This made the large wholesalers very powerful in the wine industry; if wholesalers in New York decided not to purchase wine from a particular winery, then that winery would be completely shut out of the New York market.
Arguments
The court case, which was a consolidation of two separate lawsuits, pitted the Dormant Commerce ClauseDormant Commerce Clause
The "Dormant" Commerce Clause, also known as the "Negative" Commerce Clause, is a legal doctrine that courts in the United States have inferred from the Commerce Clause in Article I of the United States Constitution...
doctrine, inferred from the Constitution's Article I
Article One of the United States Constitution
Article One of the United States Constitution describes the powers of Congress, the legislative branch of the federal government. The Article establishes the powers of and limitations on the Congress, consisting of a House of Representatives composed of Representatives, with each state gaining or...
, against Section Two of the 21st Amendment
Twenty-first Amendment to the United States Constitution
The Twenty-first Amendment to the United States Constitution repealed the Eighteenth Amendment to the United States Constitution, which had mandated nationwide Prohibition...
.
Section Two of the 21st Amendment reads:
- 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 Commerce Clause
Commerce Clause
The Commerce Clause is an enumerated power listed in the United States Constitution . The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to...
of Article One of the Constitution grants Congress the power:
- To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.
In turn, the Dormant Commerce Clause
Dormant Commerce Clause
The "Dormant" Commerce Clause, also known as the "Negative" Commerce Clause, is a legal doctrine that courts in the United States have inferred from the Commerce Clause in Article I of the United States Constitution...
(or "DCC") has been inferred from the Commerce Clause. The DCC is a doctrine, evolved over many decisions of the U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
, that the states do not have the power to enact anticompetitive laws that discriminate against sellers in other states.
Eleanor Heald, a wine collector, and eleven other plaintiffs, argued that Michigan's Liquor Control Code violated the DCC by making it a misdemeanor for an out-of-state winery to ship wine directly to a Michigan resident. (In-state wineries were allowed to do so.) The same argument was made in a separate case against the government of the state of New York by Juanita Swedenburg and other owners of out-of-state wineries.
In these two cases, the state governments of Michigan and New York had argued that Section 2 of the 21st Amendment granted them carte blanche to regulate liquor. One of their justifications for the laws was that by regulating out-of-state wineries in this way, they might be able to hinder the shipment of alcohol to underage minors; this would serve a valid state purpose.
The government of New York had won in the federal Second Circuit Court
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
, and the government of Michigan had lost in the Sixth Circuit
United States Court of Appeals for the Sixth Circuit
The United States Court of Appeals for the Sixth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* Eastern District of Kentucky* Western District of Kentucky...
. The cases were consolidated and heard together by the U.S. Supreme Court.
In a 5-4 decision, the Supreme Court decided the states' laws were unconstitutional. The context of the 21st Amendment, they wrote, was to return to the status quo that existed before Prohibition, making it clear that the states had the power to regulate alcohol however they wished, including banning alcoholic beverages entirely within the state if desired. Before Prohibition, the states did not have the power to violate the Dormant Commerce Clause, and the 21st Amendment was not intended to grant them this power.
Consequences
Michigan's liquor control board announced it would recommend to the state government that it ban all direct wine sales to consumers, joining the 15 other states currently banning all such sales.New York governor George Pataki
George Pataki
George Elmer Pataki is an American politician who was the 53rd Governor of New York. A member of the Republican Party, Pataki served three consecutive four-year terms from January 1, 1995 until December 31, 2006.- Early life :...
unveiled a bill that would limit each winery's direct sales to consumers to two cases per month per consumer. As a Wall Street Journal editorial noted, two cases per month is a relatively large amount of wine for a consumer, but the measure was intended to reduce competition for New York alcohol distributors.
Since the ruling, many more states have allowed direct shipping from wineries. According to the Wine Institute (a public policy advocacy association of California wineries) 37 states permit at least some form of direct shipping from wineries to consumers (as of July 2010). Different states have enacted different regulations. An editorial article on the commercial wine selling web site Appelation America says that many of the conditions in these regulations are either so complex or so expensive as to discourage wineries from complying.
In March 2011, a bill was introduced in the U.S. House of Representatives that would explicitly allow states to regulate alcohol products from outside of the state differently than those produced within the state.
See also
- List of United States Supreme Court cases, volume 544
- List of United States Supreme Court cases
- Twenty-first Amendment to the United States ConstitutionTwenty-first Amendment to the United States ConstitutionThe Twenty-first Amendment to the United States Constitution repealed the Eighteenth Amendment to the United States Constitution, which had mandated nationwide Prohibition...
External links
- Web page on the case, including evidence and briefs, by Alex Tanford, an attorney involved in the litigation
- Article on the case (while it was still underway) from the Medill School of Journalism
- Law Journal article published prior to the Supreme Court argument