Document: 468 U.S. 263 104 S.Ct. 3049 82 L.Ed.2d 200 [TIQ!]] BACCHUS IMPORTS, LTD. et al.v.Herbert H. DIAS, Director of Taxation the State Hawaii, al. No. 82-1565. Supreme Court United States Argued Jan. 11, 1984. Decided June 29, Syllabus Hawaii imposes a 20% excise tax on sales liquor at wholesale. But to encourage development Hawaiian industry, okolehao, brandy distilled from root an indigenous shrub and fruit wine manufactured in are exempted tax. Appellant wholesalers, who sell retailers wholesale price plus tax, brought action Tax Appeal seeking refund taxes paid under protest alleging that is unconstitutional because it violates, inter alia, Commerce Clause. The court rejected this constitutional claim, affirmed, holding did not illegally discriminate against interstate commerce incidence wholesalers ultimate burden borne by consumers Hawaii. Held: 1. Appellants have standing challenge Court. Although they may pass their customers, liable for must return whether or customers pay bills. Moreover, even if passed on, increases as compared beverages, appellants entitled litigate has had adverse competitive impact business. P. 267. 2. exemption okolehao violates Clause, both purpose effect discriminating favor local products. Pp. 268-273. (a) Neither fact beverages constitute only small part total nor do present "competitive threat" other liquors dispositive question competition exists between exempt foreign but goes extent such competition. On facts, cannot be said no exists. 268-269. (b) As long there some nonexempt products outside State, discriminatory effect. Clause limits manner which legitimately compete trade, process discriminatorily any State. Here, properly concluded was improper discrimination merely Nor does propriety economic protectionism hinge upon characterizing industry "thriving" "struggling." And irrelevant inquiry legislature's motivation desire aid makers locally produced rather than harm out-of-state producers. 270-273. 3. saved Twenty-first Amendment. central tenet supported clear concern Amendment combating evils unrestricted traffic liquor. empower erecting barriers 274-276. 4. This will address issues whether, despite unconstitutionality refunds customers. These were addressed state courts, federal intertwined with law, resolution necessitate more record so far been made. 276-277. 65 Haw. 566, 656 P.2d 724, reversed remanded. Frank Easterbrook, Chicago, Ill., appellants. William David Dexter, Olympia, Wash., appellees. Justice WHITE delivered opinion 1 constitutionality imposed Specifically issue exemptions certain alcoholic beverages. upheld challenges based Equal Protection Import-Export In re Bacchus Imports, Ltd., 724 (1982). We noted probable jurisdiction sub nom. Ltd. v. Freitas,, 462 1130, 103 3109, 77 1365 (1983), now reverse. 2 * originally enacted 1939 defray costs police governmental services Legislature increased due consumption At its inception statute contained exemptions. However, legislature sought May 17, 1971, until 20, 1981, 1976, 30, 1981.1 Haw.Rev.Stat. §§ 244-4(6), (7) (Supp.1983). Okolehao ti plant, supra, 569, n. 7, P.2d, 727, 7. during relevant time pineapple wine. Id., 570, 8, 8. Locally sake liqueurs 3 Appellants—Bacchus Eagle Distributors, Inc.—are licensed retailers.2 They § 244-4, one-half percent 237-13 Pursuant 40-35 (Supp.1983), authorizes taxpayer commence recovery disputed sums, initiated proceedings all paid.3 Their complaint alleged Clause4 Clause5 Constitution. approximately $45 million, representing them years question.6 4 claims. appeal, affirmed decision equal protection well. It held rationally related State's legitimate interest promoting domestic therefore violate 573, 730. further violation uses liquor, abroad, sister States, itself. 578-579, 732-733. found evidence applied selectively discourage imports inconsistent policy substantial indirect demand imported Ibid. Turning challenge, "incidence . Hawaii." 581, 734. II 5 presents claim made below shown injury claimed are, however, attempt so, Furthermore, completely successfully surely plainly Court.7 III 6 A cardinal rule jurisprudence "[n]o consistent 'impose discriminates providing direct commercial advantage business.' " Boston Stock Exchange Comm'n, 429 318, 329, 97 599, 607, 50 514 (1977) (quoting Northwestern Portland Cement Co. Minnesota, 358 450, 458, 79 357, 362, 421 (1959). Despite here seems clearly face bestowing wine, argues—and held—that discrimination. A. 7 Much argument centers contention sold wholesalers.8 relies statistics showing constituted well one Hawaii.9 also statement "[w]e believe we can safely assume these pose threat elsewhere consumed Hawaii," 582, 21, 735, court's comment "good reason neither elsewhere." 20. volume beverages;10 instead, go settled need know how unequal before concluding unconstitutionally discriminates." Maryland Louisiana, 451 725, 760, 101 2114, 2136, 68 576 (1981). 8 position belied purported justification first place. order foster industries encouraging product. Surely way might produce result drinkers give up consume less customary drinks differential permit. Similarly, nondrinkers, maturing young, attracted low prices stipulated facts case, unwilling conclude nonexempted liquors. B 9 contends flexible approach, taking into account practical relative commerce, employed case (1) objectives credibly advanced, (2) patent (3) incidental. See Philadelphia New Jersey, 437 617, 624, 98 2531, 2535, 57 475 (1978). hand, acknowledges where simple effected legislation, stricter invalidity erected. Minnesota Clover Leaf Creamery Co., 449 456, 471, 715, 66 659 (1981); Lewis BT Investment Managers, Inc., 447 27, 36-37, 100 2009, 2015-2016, 64 702 (1980). 10 finding legislation constitutes "economic protectionism" basis either purpose, see Hunt Washington Apple Advertising 432 333, 352-353, 2434, 2446-2447, 53 383 (1977), effect, supra. U.S., 15, S.Ct., 15. Examination sufficient demonstrate lack entitlement approach permitting balance benefits commerce. Pike Bruce Church, 397 137, 142, 90 844, 847, 25 174 (1970). described enacting follows: 11 "The exempting 'ti okolehao' 'alcohol tax' 'encourage promote establishment new industry,' S.L.H. 1960, c. 26; Sen.Stand.Comm.Rep. 87, 1960 Senate Journal, 224, 'fruit grown State' intended 'to help' stimulating 'the industry.' S.L.H.1976, 39; 408-76, 1976 1056." Haw., 573-574, 12 Thus, guess motivation, undisputed industry. Likewise, discriminatory, applies though apply Consequently, non-exempt 13 No disputes enact laws pursuant powers stands limitation means constitutionally seek achieve goal. One fundamental purposes "was insure legislation." Welton Missouri, 91 275, 280, 23 L.Ed. 347 (1876). Welton, struck down Missouri "discriminat[ed] goods, wares, merchandise growth, product, manufacture those states countries. ." 277. Walling Michigan, 116 446, 455, 454, 457, 29 691 (1886), law imposing sale declaring: 14 "A operating disadvantage when introduced mentioned is, regulation restraint among usurpation power conferred Constitution Congress States." 15 I.M. Darnell & Son Memphis, 208 113, 28 247, 52 413 (1908). More recently, York higher transfers stock occurring involving within observed share element our free-trade transactions businesses over businesses. "in business operations performed State." 337, 610. apparent erred 16 attempts put aside Court's cases invalidated statutes protectionist purposes. 727; 2015-2016. would distinguish involved "to enhance thriving enterprises expense competitors." Brief Appellee Dias 30. Hawaii's attempt, subsidize nonexistent (pineapple wine) financially troubled (okolehao) peculiar 33. perceive principle supporting distinction struggling circumstances, cites authority proposed distinction. event, every sense phrase. "build [their] oppressive burdens Guy Baltimore, 434, 443, 743 (1880). Were otherwise, "the trade country [would be] mercy regulations, having object secure exclusive citizens particular 442. prohibit "multiplication preferential areas" adopted. Dean Milk Madison, 340 349, 356, 71 295, 299, 95 329 (1951). allowed State's—or Court's—characterization 17 find unpersuasive intent products, rather, industry." 40. If accept justification, little occasion ever discriminatory. Virtually allocates unequally; each viewed conferring benefit party detriment other, absolute sense. determination depend focuses benefited burdened party. nature, requires comparison two classifications, could always impose party, confer other. beverage 18 violated products.11 IV 19 argues ordinary principles, Constitution.12 Section provides: transportation importation Territory, possession delivery use therein intoxicating liquors, thereof, hereby prohibited." 20 broad language opinions written shortly after ratification Amendment,13 recently recognized obscurity legislative history California Retail Liquor Dealers Assn. Midcal Aluminum, 445 97, 107, 10, 937, 944, 63 233 consensus concerning meaning provision apparent. Indeed, Senator Blaine, sponsor resolution, appears espoused varying interpretations. reporting view Judiciary Committee, he restore control affecting 76 Cong.Rec. 4143 (1933). expressed narrower view: "So assure so-called dry write permanently prohibition along line." 4141. 21 entirely remove ambit For example, Hostetter Idlewild Bon Voyage Corp., 377 324, 331-332, 84 1293, 1297-1298, 350 (1964), stated: 22 "To draw conclusion somehow operated 'repeal' wherever concerned would, absurd oversimplification." "[b]oth parts same [and] considered light context interests stake concrete case." 332, 1298. 109, 945, Court, noting recent emphasized greater degree earlier cases, mode analysis "pragmatic effort harmonize powers." thus principles underlying sufficiently implicated outweigh otherwise offended. Or asked slightly different way, "whether closely reserved prevail, notwithstanding requirements directly conflict express policies." Capital Cities Cable, Inc. Crisp, 467 691, 714, 2694, 2708, 81 580 (1984). 24 Approaching light, convinced stand. Doubts about scope Amendment's authorization notwithstanding, thing certain: beyond doubt itself furthers strong preventing Balkanization. South-Central Timber Development, Wunnicke, 82, 2237, (1984); Hughes Oklahoma, 441 322, 99 1727, 60 250 (1979); Baldwin G.A.F. Seelig, 294 511, 55 497, 1032 (1935). mere deference combat perceived justify ground designed temperance carry out Amendment, instead reject belated V challenged adjudged should collected force, since bear separate addition legally obligated time. Relying Jefferson Electric Mfg. 291 386, 54 78 859 (1934), interpretation statute, asserts parties bearing illegal least arguably, legal obligation assert, bills refunded them. worked entitles refund. 26 issues, essentially remedy imposition discriminated courts. Also, with, consideration obviated by, law.14 required all, case. reluctant, therefore, instance. Accordingly, reverse judgment remand opinion. 27 So ordered. BRENNAN took STEVENS, whom REHNQUIST O'CONNOR, join, dissenting. 30 Four filed complaints challenging exception, expired, years.1 actually sells wine,2 apparently four engage various sell. amounting price; presumably wholesalers' 31 Today holds "entitled business." Ante, I am skeptical ability prove harmed partly reimbursed free take selling themselves. Even minimal proved, possibility multimillion-dollar claiming. My skepticism economics not, my dissent. affirm squarely foreclosed Constitution.3 32 outset, critical importance proper understanding significance litigation note raise. First, exercise Art. I, cl. 3, confers regulate several placed simply Hence, continuing applicability previously industry.4 analysis, assume, arguendo, left unimpaired.5 33 impaired passes through State,6 destined terminate enclave State.7 violation,8 persons, opposed goods,9 State.10 34 market falls given second section expressly mentions "delivery therein."11 35 Prior adoption Amendments special respecting resulting Clause.12 effectively prevented unilaterally banning state, Leisy Hardin, 135 100, 681, 128 (1890), Congress, acting plenary them, congressional power. Clark Distilling Western R. 242 311, 37 180, 61 326 (1917). Eighteenth ratified 1919, prohibited manufacture, sale, purposes, concurrent enforce States.13 1933, repealed revert status prior Amendments; 36 immediately unconfined limitations goods provisions, Ziffrin, Reeves, 308 132, 163, (1939); Finch McKittrick, 305 395, 59 256, 83 246 Indianapolis Brewing Control 391, 254, 243 Mahoney Joseph Triner 304 401, 58 952, 1424 (1938); Board Equalization Young's Market 299 59, 77, 38 (1936), consistently reaffirmed repeatedly acknowledging nature see, e.g., 712, 2707, Craig Boren, 190, 206-207, 451, 461-462, (1976); Heublein, South Carolina 409 283-284, 93 483, 488-489, 472 (1972); LaRue, 114-115, 390, 394-395, 342 Seagram Sons Hostetter, 384 35, 42, 86 1254, 1259, 336 (1966); 330, 1297, (1964); Nippert Richmond, 327 416, 425, 586, 590, 760 (1946); Frankfort Distilleries, 324 293, 661, 664, 89 951 (1945). essence, places locally. read text sort burden. Brandeis' seminal decided. 39 Market, license fee privilege importing beer place California. After obviously explained enables establish monopoly prevent Because reasoning covers merits quotation length: 40 'prohibited' 'transportation importation' 'in thereof,' abrogated right import free, concerns words used apt forbid importations comply conditions prescribes. plaintiffs ask us limit command. request construe saying, effect: provided prohibits borders; permits let terms. To say that, involve construction rewriting it. 41 argue except protecting public health, safety morals; importer's end. adopt lesser prohibition. Can doubted beer, competing importations, laying heavy impost, channelize desired confining single consignee? Compare Slaughter-House Cases, Wall. 36, 394; Vance W.A. Vandercook (No. 1), 170 438, 447, 674, 677, 42 1100. There prohibit, limit, establishes trade. permit while prohibiting hard absolutely. exclude without exclusion, subject article fee?" 62-63, 78-79. implies qualified passage quoted ante, Stewart proposition divested regulatory already noted, involves 279 4, Brandeis course implied totally liquors—a characterized "patently bizarre." 43 actual predicated reflected Collins Yosemite Park Curry 518, 1009, 1502 (1938). Referring Collins, explained: 44 "There shipment her territory distribution national park. "for therein" ' 'The Park, distinct sovereignty.' Id. [304 U.S.], 538 [58 1018]. ruling later 'that Amendment.' Carter Virginia, 321 131, 137 [64 464, 468, 88 605]." 1298.14 45 day decided Kentucky Export-Import Department Revenue James B. Beam 341, 1247, 362 (1964). today, final paragraph confirms then think repudiating rationale Market. wrote: 46 "We regulate, intoxicants, distribution, use, borders. doubt, either, Kentucky's control, taxation intoxicants imported. All decide today explicit precise Constitution, lay impost abroad." 346, 1250. 47 days ago, stated liquor" borders "core power" 713, observing: 48 'This decisions confirmed primarily created exception normal operation Clause.' [Section] reserves absent invalid Clause." 2707 (citation omitted). 49 matter pure power, me words, unlikely lobby persuade create beverage. monopoly—thereby most severe form originating extreme provides benefit, perhaps subsidy exemption, contrary "obscurity history" 274. What ignores argued "limitation language" "sanctioned history," observing "clear," determined unnecessary consider history, 63-64, 78-79—the considers unclear. now, according force diminished "central competition." 276. follows, "state liquor." novel Amendment.15 "deference," purposes";16 is. 51 respectfully An expired 1965. Haw.Sess.Laws, ch. 26, During pendency litigation, similar rum period 1986. Two taxpayers—Foremost-McKesson, Paradise Beverages, Inc.—were consolidated suit appeal appellees Rule 10.4. clarity, appellee referred collectively "wholesalers." assessment. sent letter dated 1979, protesting payment December 1977 1979. protested July 1979; appellant August 31, 1974 and, September 6, Foremost-McKesson, 728, Article 2, part: "No shall, Consent Imposts Duties Imports Exports. shall [t]o Nations, States. Distributors $10,744,047, App. 7; $75,060.22, id., 13; Foremost-McKesson $26 19; $8,716,727.23, Record 1862, p. 27. avoid severable invalidate entire presented proceed basis. "severance" relieve inflicted taxed not. seriously defend in-state taxpayers violation. Our make offensive taxpayers. (1908), percentage steadily .2221% .7739% 1981. A-1. assumption "a whatsoever understand argue. disposition issue, arguments disclaimed reliance cite motion dismiss affirm. Apparently prepared brief became "clear" saves 36. 62, 78, it." went observe, high "serve policing traffic." 63, 79. 403, 953, (1938) ("since clause applicable liquor"). Cf. (1976). be, discrimination, full mandated law. Court; two, nominally Rules, 266, briefs reversal. noted: "Paradise 'beneficiary' HRS 244.4 nevertheless maintains probably relatively insubstantial." 9, recognizes, insulates invalidation us, below. add specific well, (1938), wholly lacking merit, generally (1980); 282, 488, (1972). operates grant Congress' broader inherently hence permissible impermissible acted. Cooley Wardens, How. 996 (1852). Given dual character incongruous delegated unimpaired inherent removed respect supra; 605 (1944). Mississippi 412 363, 2183, (1973); Wisconsin Constantineau, 400 433, 507, 515 (1971). compare Brewers Assn., Rodriguez, 465 1093, 1581, 80 115 (1984) (summarily dismissing N.M. 216, 668 1093) Healy 464 909, 265, 248 (1983) aff'g 692 F.2d 275 (CA2 1982)). infra, 281. See, Hill, 420, 143, 337 (1919); (1917); Rahrer, 140 545, 865, 572 (1891); (1890); Bowman Chicago 125 465, 689, 700 (1888); (1886); License 504, 256 (1847), overruled, National Prohibition 253 350, 486, 947 (1920). added: like accommodation leads York, country. unlawful diversion internal District emphasized, 'measures aimed York.' [Idlewild Corp. Epstein], 212 F.Supp. [376], 386 [1962]. Rather, carried aegis nations. do." 333-334, 1298-1299. explicitly (rejecting "State morals ."), subsequent 47, 1262 ("[N] othing regulating motivated exclusively temperance"). makes judicial evaluation legislators, regard unsound adjudication issues. reminiscent repudiated era assertions objective problem. Coal 298 238, 56 855, 1160 (1936); Schechter Poultry 295 495, 837, 1570 (1935); Railroad Retirement Alton 758, 1468 fall own weight, what be. immediate growth distilleries, result—or indeed, objective—may matured. suggest, vague balancing purposes" govern careful thorough serious claim.

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