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By Bill Altreuter

Interesting (albeit irritating) liquor law decision out of the Second Circuit: Arnold's Wines Inc. v. Boyle. The plaintiffs are a wine retailer in Indiana who would like to sell directly to New York consumers and two New York residents who would like to be able to buy and receive wine directly from out-of-state retailers. No dice say judges Walker, Calabresi, and Wesley. New York's three-tier licensing structure for the sale and distribution of alcoholic beverages established after the passage of the Twenty-first Amendment allows only in-state and out-of-state wineries to ship directly to consumers. All other out-of-state producers and sellers must ship to state-licensed wholesalers within the three-tier system. The purpose of the three-tier system was to preclude the existence of a "tied" system between producers and retailers, which was thought to enable organized crime to dominate the industry. The 21st Amendment and the Commerce Clause are "in tension" the Second Circuit says, but Granholm v. Heald established the test for determining the constitutionality of state liquor regulations, and this one is legit. "If the state measure discriminates in favor of in-state producers or products, the regulatory regime is not automatically saved by the Twenty-first Amendment.... Rather, if the court finds the law discriminatory, it will only be upheld if it reasonably advances legitimate state interests 'that cannot be adequately served by reasonable nondiscriminatory alternatives,'" because it treats in-state and out-of-state liquor the same way, and does not discriminate against out-of-state products or producers.

I love liquor law. It's as complicated as any drinking game ever devised. I'm sure someone has, but you could write an interesting history of the United States by focusing on alcohol, from the Triangle Trade to today.

Full post as published by Outside Counsel on July 08, 2009 (boomark / email).