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Law School Case Brief

Granholm v. Heald - 544 U.S. 460, 125 S. Ct. 1885 (2005)

Rule:

In all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter. States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.

Facts:

The state laws allowed in-state wineries to make direct sales to customers but effectively permitted out-of-state wineries to make sales only through wholesalers and retailers at greater expense. The wineries contended that the regulatory schemes discriminated against interstate commerce, but the officials argued that the schemes were necessary to prevent underage persons from purchasing wine and to promote the collection of taxes. 

Issue:

Were the state laws allowing in-state wineries to make direct sales to customers but effectively permitting out-of-state wineries to make sales only through wholesalers and retailers at a greater expense valid?

Answer:

No.

Conclusion:

The U.S. Supreme Court held that the state laws discriminated against interstate commerce and that the discrimination was neither authorized nor permitted by U.S. Const. amend XXI, § 2. The constitutional authority of the state to regulate the importation of intoxicating liquors was limited by the requirement under U.S. Const. art. I, § 8, cl. 3, that such regulation could not discriminate against the out-of-state wineries in favor of in-state wineries. Further, reasonable nondiscriminatory alternatives were available to address the purchase of wine by minors and the states' ability to collect taxes, and the officials failed to show any legitimate local purpose that could not have been advanced by evenhanded requirements.

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