Granholm V. Heald - Arguments

Arguments

The court case, which was a consolidation of two separate lawsuits, pitted the Dormant Commerce Clause doctrine, inferred from the Constitution's Article I, against Section Two of the 21st Amendment. Section Two of the 21st Amendment reads:

The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

The Commerce Clause of Article One of the Constitution grants Congress the power:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.

In turn, the Dormant Commerce Clause (or "DCC") has been inferred from the Commerce Clause. The DCC is a doctrine, evolved over many decisions of the U.S. Supreme Court, that the states do not have the power to enact anticompetitive laws that discriminate against sellers in other states. Eleanor Heald, a wine collector, and eleven other plaintiffs, argued that Michigan's Liquor Control Code violated the DCC by making it a misdemeanor for an out-of-state winery to ship wine directly to a Michigan resident. (In-state wineries were allowed to do so.) The same argument was made in a separate case against the government of the state of New York by Juanita Swedenburg and other owners of out-of-state wineries.

In these two cases, the state governments of Michigan and New York had argued that Section 2 of the 21st Amendment granted them carte blanche to regulate liquor. One of their justifications for the laws was that by regulating out-of-state wineries in this way, they might be able to hinder the shipment of alcohol to underage minors; this would serve a valid state purpose.

The government of New York had won in the federal Second Circuit Court, and the government of Michigan had lost in the Sixth Circuit. The cases were consolidated and heard together by the U.S. Supreme Court.

In a 5-4 decision, the Supreme Court decided the states' laws were unconstitutional. The context of the 21st Amendment, they wrote, was to return to the status quo that existed before Prohibition, making it clear that the states had the power to regulate alcohol however they wished, including banning alcoholic beverages entirely within the state if desired. Before Prohibition, the states did not have the power to violate the Dormant Commerce Clause, and the 21st Amendment was not intended to grant them this power.