Good History, Good Law (And by Coincidence Good Policy Too: Granholm V. Heald‪.‬

With the rise of the Internet has come the lucrative practice of online wine selling. Although in nearly every state over-the-counter alcohol sales are, by law, channeled through elaborate multi-tiered distribution schemes, many states have enacted less restrictive laws for online sales, making possible direct sales to consumers. (1) In passing these laws, many states did more than liberalize a producer's ability to sell alcohol online; states placed out-of-state producers in less advantageous positions than in-state producers. Last Term, in Granholm v. Heald, the Court held that the dormant Commerce Clause's antidiscrimination principle prohibits a state from treating in-state wine merchants more favorably than out-of-state sellers, the Twenty-First Amendment notwithstanding. (2) Although the decision advanced domestic free trade, a sound policy outcome, there may be reasons to fear that the case was incorrectly decided as a matter of law. Such fears, however, are unnecessary, as there is no conflict between the correct constitutional interpretation and freer trade. Prior to Granholm, the circuits split in addressing discriminatory regulations of alcohol sales, with some striking down the laws as violating the dormant Commerce Clause's anti-discrimination principle, and others exempting these laws under Section Two of the Twenty-First Amendment. (3) The U.S. Supreme Court consolidated two of these circuit decisions and granted certiorari. The question before the Supreme Court in Granholm was thus whether Section Two gives States the power to discriminate against out-of-state wine merchants. The first case came from Michigan, where "approximately 40 in-state wineries ... [were] eligible for 'wine maker' licenses that allow[ed] direct shipment to in-state consumers" while "[o]ut-of-state wineries [could] apply for a $300 "outside seller of wine' license, but this license only allow[ed] them to sell to in-state wholesalers." (4) This meant, in effect, that out-of-state wineries were forbidden to ship directly to consumers in Michigan. The Sixth Circuit held that this regime was unconstitutional. (5)