Supreme Court Dispatches

In Vino Gravitas

The Supreme Court has a sobering look at interstate wines.

Today’s case before the Supreme Court looks incredibly interesting at first glance. After a drink, it looks unbearably boring. Weirdly, after three more drinks, it starts to look interesting again. Like that guy at the Sigma Nu Party sophomore year. Still, one’s tempted to remind all the wine-o-philes who have shown up today that this case is going to be about the dormant “commerce clause.” The words “impudent little Zinfandel” will trip off nobody’s tongue today.

Michigan and New York allow their respective in-state wineries to ship their wines directly to customers. Both states make it virtually impossible for out-of-state vineyards to do the same. So, that was the interesting part. The states justify their tough-on-wine stance by stating that wine is different from other products that properly move about freely in interstate commerce. And they find textual justification for this idea in the 21st Amendment, which provides 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.” The 21st Amendment effectively repealed Prohibition in 1933, and for a time the courts treated it as though it gave the states power to regulate any and all alcohol, for any and all reasons, unencumbered by the commerce clause or any other discernible legal doctrine.

The commerce clause, or more precisely today, the unwritten or “dormant” part of the commerce clause, is a fuzzy little doctrine that bars states from enacting protectionist, discriminatory measures against interstate commercial activity. That was the deadly boring part. Things liven up again when you understand that this case comes down to two weird constitutional doctrines duking it out for world dominance and that everything will turn on whether you read the 21st Amendment as more compelling than the commerce clause or less so.

There’s an odd classist undertone to this case: At first blush, it sounds like it’s about fancy lawyers fighting for the right of Donald Trump and his Manhattan buddies to mail-order trillion-dollar California wines made by young virgins from orchid stamens. But swish it around in your mouth for a minute, close your eyes, and really breathe: This case is about Michigan and New York justifying good old-fashioned protectionism and being lucky enough to have a quirky constitutional basis for doing so.    

Today the court is being asked to reconcile the commerce clause with the 21st Amendment and to bring some clarity to wildly divergent appeals-court analyses. (The 2nd Circuit sided with New York and upheld the state restrictions; the 6th Circuit struck down Michigan’s laws as unconstitutionally protectionist.) Clint Bolick, representing out-of-state wineries and New Yorkers wanting to order fancy wines off the Internet, tells the court that there is one constant principle at work here: “[T]he states can regulate alcohol by one set of rules, but not two.” He suggests that the 21st Amendment didn’t give states the “plenary power” to flatten the antidiscrimination principle of the dormant commerce clause. The 21st Amendment, he says, “was intended to restore to the states the police powers [they] had before Prohibition … and discrimination was emphatically not part of any police power.”

Justice Anthony Kennedy points out that states have a legitimate interest in collecting state excise taxes, and Bolick replies that 26 states allow regulated direct shipment of wine from out-of-state wineries and yet manage to collect taxes.

Justice David Souter asks how state authorities can audit wine producers if they cannot “drop in and monitor” them, suggesting “it’s one thing to do that in-state, but another across the country.” Bolick responds that the state’s elaborate three-tier regulatory system for out-of-state wineries doesn’t allow for auditors to just drop in and monitor sales, either. Justice Ruth Bader Ginsburg asks why only wine is regulated in this fashion and not beer or other alcoholic beverages. Bolick says this proves the wine is being banned for purely self-interested and economic reasons that have little to do with police power of dangerous beverages.

Kathleen Sullivan, former dean of Stanford Law School and former constitutional law instructor to this short, pregnant, wine-loving reporter, represents the Michiganders who want to buy out-of-state wine. When Kennedy tells her that her request of the court is “sweeping,” she replies that the state’s position in this case is the sweeping one. They insist that “any state alcohol regulation is valid so long as there is any conceivable rationale. … If Michigan wanted to ban all California wines under this theory, [it] could.” Sullivan is the woman who taught me that to win a case you need to frame it right. From the outset, she is framing this as a case about the centrality of non-discrimination. Wine rules are all very sweet, but really, this is about the Constitution.

Justice Stephen Breyer asks her to explain how she plans to revive the, well, dormant, dormant commerce clause cases, and Sullivan responds that the court has spent 40 years harmonizing the 21st Amendment with the rest of the Constitution. Just as the states can’t ban wines from wineries owned by only blacks or Jews since that would violate the equal protection principle, so, too, must it honor the antidiscrimination principle enshrined in the commerce clause.

Sullivan says Michigan can’t even show that its basis for treating out-of-state wineries is reasonable. Michigan says it needs these different sets of rules to protect minors, “but that is belied by the fact that they allow 40 Michigan wineries to ship directly to the homes of residents.” Not that anyone really thinks minors order their wine on the Internet. They get it at the Chevron, like I do. Sullivan adds that out-of-state audits are hardly impossible; in order for out-of-state wineries to be licensed, they must agree to submit to state jurisdiction. She tells Souter that in his “home state of New Hampshire” wineries are asked to “submit monthly records and samples.”

“But maybe you’re getting ripped off,” replies Souter.

Thomas L. Casey is Michigan’s solicitor general, and he immediately runs headlong into the immovable wall that is Sandra Day “Never Overturn” O’Connor. O’Connor is bothered by a 1984 caseBacchus Imports v. Dias—in which the court ruled, 5-3, that a Hawaiian attempt to boost that state’s own fruit wine market by taxing out-of-state wines was not a legitimate application of the 21st Amendment. “Bacchus cuts against you to some extent,” says O’Connor. Meaning, in her view, to the extent it makes Casey lose.

Before Casey can attempt to distinguish Bacchus,Kennedy jumps in to say that it’s not enough that that case “involved pineapple wine.” Ginsburg quotes language from Bacchus stating that “one thing is certain: the central purpose of the 21st Amendment was not to empower states to favor local liquor industries by erecting barriers to competition.” She adds, I believe, the words “pineapple whatever” to that quote.

Caitlin Halligan is the solicitor general from New York, and Kennedy pinions her with the same question he’d asked of Casey. “Do you take the position that the state can permit only its own wines for mere protectionist reasons?” Halligan points out that this question isn’t presented here. She says that what New York is attempting to regulate “goes to the core of the 21st Amendment.” Kennedy adds that it also “goes to the core of the commerce clause,” which still precludes discrimination.

Justice Antonin Scalia says that New York needs a “good reason” to treat out-of-staters differently, and Halligan responds that there is a good reason: New York needs an in-state presence to enforce its laws. Souter points out that this is circular: They have to be reasonable laws to require enforcement. Souter inquires whether there is more to this auditing thing than inspecting the winery’s books.

“There is more than that,” says Halligan. “You need to go onto the premises and count if the wine bottles match the records.” Souter asks whether the lower-court record indicates that this even happens with in-state wineries. Halligan says not really. New York seems to want to reserve the right to monitor out-of-state wineries in a way it can’t be bothered to monitor its in-state ones. “Isn’t that the end of the issue?” asks Souter.

Ginsburg wonders how the New York rule, requiring that every out-of-state winery must establish a costly New York office, helps New York inspectors “count bottles” anyhow. Souter tries to understand whether out-of-state wineries would have to ship exclusively from their in-state offices. “New York hasn’t issued these regulations yet,” replies Halligan.

Every piece about these consolidated cases starts with the reporter going off to some exotic mom-and-pop winery in some state that isn’t Michigan and proceeding to get loaded with the mom-or-pop vintner, who is desolate about their inability to sell $4,000 Shiraz over the Internet. Stupidly, I completely forgot to write that story. Nevertheless, in his rebuttal Clint Bolick tells the whole amassed court to “drive out to Middleburg,” Va., and visit Juanita Swedenburg’s little operation, where she evidently picks the grapes, answers the phones, and works the cash register. Maybe a little Supreme Court field trip is in order. I call shotgun.