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Healy v. Beer Inst.

Supreme Court of the United States

March 28, 1989, Argued ; June 19, 1989, Decided 1

No. 88-449

Opinion

 [*326]  [***281]  [**2494]    JUSTICE BLACKMUN delivered the opinion of the Court.

 The State of Connecticut requires out-of-state shippers of beer to affirm that their posted prices for products sold to Connecticut wholesalers are, as of the moment of posting, no higher than the prices at which those products are sold in the bordering States of Massachusetts, New York, and Rhode Island. In these appeals, we are called upon to decide whether Connecticut's beer-price-affirmation statute violates the Commerce Clause. 3

 [****6]  I

Although appellees challenge Connecticut's beer-price-affirmation statute as amended in 1984, this litigation has its roots in the 1981 version of Connecticut's price-affirmation scheme. Having determined that the domestic retail price of beer was consistently higher than the price of beer in the three bordering States, and with the knowledge that, as a result, Connecticut residents living in border areas frequently crossed state lines to purchase beer at lower prices, Connecticut enacted a price-affirmation statute tying Connecticut beer prices to the prices charged in the border States.  See United States Brewers Assn., Inc. v. Healy, 532 F. Supp. 1312, 1314, 1316-1317 (Conn. 1982). In an effort to eliminate the  [***282]  price differential between Connecticut and the border States, Connecticut required that brewers and importers (out-of-state shippers) 4 [****8]  post bottle, can, and case prices for  [*327]  each brand of beer to be sold in Connecticut. Id., at 1317. These posted prices would take effect on the first day of the following month and would continue without change for the rest of that month. Conn. Gen.  [****7]  Stat. Ann. § 30-63(c) (1975 and Supp. 1982).  The 1981 statute further required that out-of-state shippers affirm under oath at the time of posting that their posted prices were and would remain no higher than the lowest prices they would charge for each beer product in the border States during the effective period. § 30-63b(b), quoted in 532 F. Supp., at 1314, n. 3. Moreover, in calculating the lowest price offered in the border States, the statute deducted from the reported price the value of any rebates, discounts, special promotions, or other inducements that the out-of-state shippers offered in one or more of the border States. 5 § 30-63c(b), quoted in 532 F. Supp., at 1314, n. 4. To the extent that such inducements lowered border-state prices, the statute thus obligated out-of-state shippers to lower their Connecticut prices as well. 6

 [**2495]  In 1982, a brewers' trade association and various beer producers and importers (a subset of the appellees in the instant litigation) filed suit in the United States District Court for the District of Connecticut, challenging the 1981 statute as  [*328]  unconstitutional under the Commerce Clause. The District Court, relying primarily on this Court's decision in Joseph E. Seagram & Sons, Inc. v. Hostetter, 384 U.S. 35 (1966), upheld the 1981 law. United States Brewers Assn., Inc. v. Healy, 532 F. Supp., at 1325-1326. The Court of Appeals, however, reversed.  It held that the 1981 Connecticut statute was facially [****9]  invalid under the Commerce Clause because it had the practical effect of prohibiting out-of-state shippers from selling beer in any neighboring State in a given month at a price below what it had posted in Connecticut at the start of that month. The court explained: ] "Nothing in the Twenty-first Amendment permits Connecticut to set the minimum prices for the sale of beer in any other state, and well-established Commerce Clause principles prohibit the state from controlling the prices set for sales occurring wholly outside its territory." United States Brewers Assn., Inc. v. Healy, 692 F. 2d 275, 282 (CA2 1982) (Healy I).  This Court  [***283]  summarily affirmed. 464 U.S. 909 (1983).

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491 U.S. 324 *; 109 S. Ct. 2491 **; 105 L. Ed. 2d 275 ***; 1989 U.S. LEXIS 3041 ****; 57 U.S.L.W. 4748

HEALY ET AL. v. THE BEER INSTITUTE ET AL.

Prior History:  [****1]  APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.

Disposition:  849 F. 2d 753, affirmed.

CORE TERMS

prices, Commerce, brewers, out-of-state, affirmation, beer, shippers, regulation, liquor, border state, posting, interstate commerce, wholesalers, milk, Twenty-first Amendment, bordering, importers, extraterritorial effect, retrospective, lowest price, strike down, discounts, producers, manufacturer, consumers, facially, Appeals, effects, bottle, practical effect

Constitutional Law, Congressional Duties & Powers, Commerce Clause, General Overview, Prohibition, Antitrust & Trade Law, Public Enforcement, State Civil Actions, Business & Corporate Compliance, Transportation Law, Interstate Commerce, State Powers, Governments, State & Territorial Governments, Boundaries, Transportation Law, Balancing Tests, Bill of Rights, Fundamental Freedoms, Legislation, Effect & Operation, Retrospective Operation, Prospective Operation