Reference no: EM131657052

Question: During the 14 years it was in effect until its repeal in 1933, the 18th Amendment to the U.S. Constitution called for Prohibition, a nationwide outlawing of alcoholic beverage production and distribution. The repeal of Prohibition was accomplished by § 1 of the 21st Amendment. In its § 2, however, the 21st Amendment preserved an ability on the part of the individual states to regulate alcohol distribution by providing that "[t]he 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." As did the laws of many states, Michigan law on alcoholic beverage distribution set up a three tiered system under which, as a general rule, alcoholicbeverage producers could sell only to licensed instate wholesalers. Wholesalers were allowed to sell only to licensed in-state retailers, which then could sell to consumers. Michigan law, however, included an exception to the three-tier system for the approximately 40 wineries located in that state. The in-state wineries were eligible for licenses that allowed direct shipment to in-state consumers. Out-of-state wineries could apply for an "outside seller of wine" license, but such a license allowed those wineries to sell only to in-state wholesalers and not directly to consumers. New York law channeled alcohol sales through a similar three-tiered system, subject to exceptions for in-state wineries. These exceptions allowed in-state wineries to make direct sales to New York consumers on terms not available to outof-state wineries. Out-of-state wineries were allowed to ship directly to New York consumers only if they became licensed New York wineries-a process that required the establishment of a branch factory, office, or storeroom within New York. In separate cases filed in federal district courts in Michigan and New York, residents of Michigan and New York who wished to receive direct shipments of wine from out-of-state wineries sued appropriate state officials. The plaintiffs in each case contended that the direct-shipment laws of the relevant state (Michigan or New York) discriminated against interstate commerce in violation of the U.S. Constitution's Commerce Clause. In each case, the defendants argued that the ban on direct shipment from out-of-state wineries was a valid exercise of the relevant state's power under § 2 of the 21st Amendment. Because the cases led to inconsistent decisions of federal courts of appeal on the questions presented, the U.S. Supreme Court granted certiorari in both cases and consolidated them for decision. Did the Michigan and New York direct-shipment laws violate the Commerce Clause? Were the states' bans on direct shipment from out-of-state wineries valid exercises of the states' power under § 2 of the 21st Amendment?