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The Supreme Court held 5/16/05 that two state laws that discriminate against out-of-state wineries violate the Commerce Clause and are neither authorized nor permitted by the Twenty-First Amendment. The Michigan and New York laws at issue allow in-state wineries to sell directly to consumers while requiring out-of-state wineries to distribute their wine through wholesalers - a requirement that, in many cases, has in practice foreclosed access to these States' domestic markets by small out-of-state wineries. State laws that "mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter" are subject to a "virtually per se rule of invalidity," under which the law is unconstitutional absent "a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives." The Court held that discrimination against out-of-state economic interests is not saved by the States' power to regulate the distribution of alcohol as granted by Section 2 of the Twenty-First Amendment. Section 2 was written "to allow States to maintain an effective and uniform system for controlling liquor by regulating its transportation, importation and use[,] ... not to [grant] the authority to pass nonuniform laws in order to discriminate against out-of-state goods." This decision is important to any business that distributes products across state lines, and especially important for producers and distributors of alcoholic beverages. Case numbers: Nos. 03-1116, 03-1120, 03-1274

Decisions below: 342 F.3d 517 (6th Cir. 2003); 358 F.3d 223 (2d Cir. 2003).