Why Can’t You Buy Wine Online?
The Constitution gives Congress the power to regulate interstate commerce. But many states restrict shipments of wine and other liquors from out of state. Find out about this surprising legacy of Prohibition.
Today’s topic: Interstate liquor sales–or, why can’t you buy wine online?
And now, your daily dose of legalese: This article does not create an attorney-client relationship with any reader. In other words, although I am a lawyer, I’m not your lawyer. In fact, we barely know each other. If you need personalized legal advice, contact an attorney in your community.
Why Can’t You Buy Wine Online?
Elliott writes in from California to report that he was recently shopping for wine online and was surprised to see that only certain states allow wine to be shipped to their residents. “I’m perplexed,” he writes, “because Article I . . . of the Constitution gives Congress the power to regulate [interstate commerc. Did Congress cede this power to the states, or did it choose not to exercise it?”
Great question, Elliott–I raise my glass to you! It is true that states have the power to regulate–and even prohibit–shipments of wine and other alcoholic beverages to their residents. However, as I’ll explain in a minute, this is a hotly-contested area of law involving two somewhat conflicting parts of the Constitution.
Congress Has the Power to Regulate Interstate Trade
As Elliott points out, Article I, Section 8 of the Constitution, known as the “Commerce Clause” gives Congress the power to regulate interstate trade. The Constitution also prohibits the States from imposing protectionist tariffs on goods imported from other States.
Strictly speaking; however, the Constitution does not prohibit States from erecting barriers other than tariffs. But based on the Constitution’s general intent to establish free trade among the states, the Supreme Court has long held that even when Congress has not exercised its power to regulate interstate commerce, States may not enact protectionist legislation. This vintage doctrine is known as the “Dormant Commerce Clause.”
Why Can Some States Prohibit Out-of-State Wine Shipments?
The 21st Amendment put an end to Prohibition, but gave states the power to regulate alcohol shipments.
The big wrinkle in all this is–you guess it–alcohol. The 21st Amendment to the Constitution, ratified in 1933, ended Prohibition, but it also allowed individual states to regulate the shipment of alcohol into their territories. What makes this power controversial is that some states have used it to enact laws that discriminate against out-of-state businesses, such as wineries and wine merchants.
States Cannot Discriminate Against Out of State Wineries
In the 2005 case of Granholm v. Heald, the Supreme Court struck down laws in New York and Michigan that allowed local wineries to sell directly to consumers, but imposed restrictions on out-of-state wineries. The Court held that, under the 21st Amendment, States have the power to regulate wine sales, but that the Dormant Commerce Clause requires them to do so in a non-discriminatory fashion.
In other words, if you prohibit shipments from some wineries, you have to prohibit shipments from all of them. And indeed, there are some states, such as Maryland, that forbid any winery, in-state or out-of-state, to ship directly to its residents.
Will You One Day Be Able to Buy Wine Online?
The Granholm decision applied only to direct sales by wineries; it did not address sales by retailers, like the online merchant Elliot writes about. According to press reports, most states continue to have restrictions on direct shipments of wine by retailers. Supporters of these restrictions argue that they are necessary to prevent alcohol abuse and underage drinking. Opponents argue that such laws favor the powerful liquor wholesalers at the expense of consumers.
This controversy may be headed to the Supreme Court. The Fifth Circuit Court of Appeals recently upheld a Texas law that bars out-of-state retailers from shipping wine directly to consumers. The plaintiffs in that case argue that the decision is inconsistent with the principles in Granholm, and they are seeking an appeal to the High Court.
Meanwhile, over on Capitol Hill, some members of Congress have sponsored legislation designed to strengthen the power of States to regulate wine shipments to their residents. One way or another, it looks like the battle over interstate alcohol sales will continue to ferment, as it were, over the coming year. Bottoms Up!
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About the Author
Adam Freedman is a lawyer and a regular contributor to Point of Law and Ricochet. Freedman’s legal commentary has been featured in The New York Times, the Minneapolis Star-Tribune, and on Public Radio. He holds degrees from Yale, Oxford, and the University of Chicago. He is the author of The Naked Constitution (2012).