Document: 491 U.S. 324 109 S.Ct. 2491 105 L.Ed.2d 275 John F. HEALY, et al., Appellants,v.The BEER INSTITUTE, al. WINE AND SPIRITS WHOLESALERS OF CONNECTICUT, INC., Appellants, v. The Nos. 88-449, 88-513. Argued March 28, 1989. Decided June 19, Syllabus A Connecticut statute requires out-of-state shippers of beer to affirm that their posted prices for products sold wholesalers are, as the moment posting, no higher than at which those are in bordering States Massachusetts, New York, and Rhode Island. Appellees, a brewers' trade association major producers importers beer, filed suit against state officials District Court challenging under Commerce Clause. court upheld on basis Joseph E. Seagram & Sons, Inc. Hostetter, 384 35, 86 1254, 16 336. Appeals reversed, holding violated Clause by controlling could sell other States, appellants' argument was proper exercise State's regulatory authority Twenty-first Amendment foreclosed Brown-Forman Distillers Corp. York State Liquor Authority, 476 573, 106 2080, 90 552. Held: Connecticut's beer-price-affirmation violates Pp. 335-343. (a) has impermissible practical effect commercial activity wholly outside Connecticut. By virtue its interaction with schemes border-states, take account setting border-state restricts ability offer promotional volume discounts border thereby depriving them whatever competitive advantages they may possess based local market conditions States. Moreover, short-circuiting normal pricing decisions would be carried national scale if when significant group enacted contemporaneous affirmation statutes similar linked in-state lowest price any country. It is precisely such results meant preclude. Brown-Forman, U.S., 579, 581-583, S.Ct., 2084, 2085-2087; cf. CTS Dynamics America, 481 69, 88-89, 107 1637, 1649-1650, 95 67. 335-340. (b) statute, face, also discriminating interstate commerce, since it applies only brewers engaged commerce not solely sales, justified valid purpose unrelated economic protectionism. 340-341. (c) Appellants' reliance authorizing regardless 585, 2087, explicitly held does immunize laws from attack where, here, regulate liquor sales P. 341-342. (d) supra, validate 581-584, n. 6, 2085-2087, strictly limited § scope removed underpinnings analysis. To extent retrospective do facially violate Clause, longer good law, statutes, like have inherent extraterritorial regulating 342-343. 849 F.2d 753 (CA2 1988), affirmed. BLACKMUN, J., delivered opinion Court, BRENNAN, WHITE, MARSHALL, KENNEDY, JJ., joined, Parts I IV SCALIA, joined. an concurring part judgment, post, p. 344. REHNQUIST, C.J., dissenting opinion, STEVENS O'CONNOR, 345. Robert Vacchelli, Newington, Conn., appellants. Jeffrey Ives Glekel, City, appellees. Justice BLACKMUN Court. 1 In these appeals, we called upon decide whether Clause.1 2 * Although appellees challenge amended 1984, this litigation roots 1981 version price-affirmation scheme. Having determined domestic retail consistently three knowledge that, result, residents living areas frequently crossed lines purchase lower prices, tying charged See United Brewers Assn., Healy, 532 F.Supp. 1312, 1314, 1316-1317 (Conn.1982). effort eliminate differential between required (out-of-state shippers)2 post bottle, can, case each brand Id., 1317. These first day following month continue without change rest month. Conn.Gen.Stat.Ann. 30-63(c) (1975 Supp.1982). further oath time posting were remain charge product during effective period. 30-63b(b), quoted F.Supp., 3. calculating offered deducted reported value rebates, discounts, special promotions, or inducements one more States.3 30-63c(b), 4. lowered thus obligated well.4 3 1982, various (a subset instant litigation) Connecticut, unconstitutional relying primarily Court's decision 336 (1966), law. 1325-1326. Appeals, however, reversed. invalid because had prohibiting selling neighboring given below what start explained: "Nothing permits set minimum sale state, well-established principles prohibit occurring territory." 692 275, 282 1982) (Healy ). This summarily 464 909, 104 265, 78 248 (1983). 4 Legislature responded Healy amending current form. now posting. Conn.Gen.Stat. 30-63b(b) (1989).5 legislature added 30-63b(e), provides nothing 30-63b prohibits changing after affirmed posted.6 legislature, did amend 30-63a(b), continued make unlawful covered posting.7 5 wake 1984 amendments, beer) seeking declaratory injunctive relief claiming law different struck down I.8 Assn. 669 543, 544-545 (1987). response appellees' complaint, "Declaratory Ruling" Department Control, interpreting requiring posting—the sixth 547, 9. After ruling stated, imposes restrictions right raise will. Ibid. 6 Appellees argued, beer-affirmation even modified ruling, regulated transactions, constituted protectionism, unduly burdened all violation On cross-motions summary construed Control's resting Seagram, distinguishing subsequent 552 (1986), analogous statute. found constitutional face because, "unlike Brown-Forman," "leaves free states before not, therefore, commerce." 553. 7 As I, (even interpreted ruling), predecessor, First, foremost, statute's "purposeful schemes" means cannot, matter, factoring effects future options. re Beer Institute, 753, 760-761 1988) II Second, unconstitutionally restricted 760. Furthermore, rejected Amendment. F.2d, 761. 8 We noted probable jurisdiction. 488 954, 389, 102 378 (1988). 9 deciding appeal, engage our fourth expedition into area statutes. explored territory where numerous challenges liquor-label owners agents " 'the bottle . price' "anywhere preceding month." 39-40, 1257-1258, quoting ruled mere fact geared policies Amendment's broad grant insist retailers "be low elsewhere country." 43, 1260. appellant alleged created serious discriminatory business considered injuries too conjectural support facial suggested purported assessed clearly presented. 10 Eighteen years Second Circuit's judgment then, another two later, granted plenary review supra. issue every distiller producer within same particular affirmation. 576, 2083. Appellant "promotional allowances" purchasing products. allow operate rebate scheme and, moreover, purposes allowances York. Because York's deem wholesalers, argued company Hobson's choice lowering violating discontinuing altogether. This, alleged, amounted regulation 579-582, 2084-2086. 11 agreed, reaffirming elaborating established view "practical effect" borders began reviewing past decisions, starting Baldwin G.A.F. Seelig, Inc., 294 511, 55 497, 79 L.Ed. 1032 (1935). Seelig milk purchased banned resale been price. Vermont dairy farmers produced cost farmers, advantage enjoyed equalizing sources. Writing Cardozo pronounced permit "to establish wage use states, bar unless observed." 528, 503. Relying concluded: "While seek consumers, consumers surrender possess." 580, 2085; see Schwegmann Brothers Giant Super Markets Louisiana Milk Comm'n, 365 1144, 1152-1156 (MD La.1973), aff'd, 416 922, 94 1920, 40 279 (1974). drawing discussed approval. There, noted, earlier essentially identical "made impossible brewer so long Connecticut." 581-582, 2085-2086.9 12 Applying principles, concluded effect: "Once pr ces relevant Forcing merchant approval undertaking transaction directly regulates 582, 2086 (footnote omitted). might borders, residents, prohibited 'project[ing] legislation [other States] paid' 583, 2086, 521, 499. Despite language find prospect speculative. majority "Pollyannaish" dissent's suggestion flexible application administrative bodies obviate problem proliferation greatly multiplied likelihood distillers subject blatantly inconsistent obligations.10 13 squarely Amendment, bans importation possession intoxicating liquors "in thereof," saved invalidation acknowledged vested considerable alcohol, Clause's proscription alcohol 2088. Accordingly, conclusion conclusively resolved 14 tension Seagram. cases were, observed, factually distinguishable: retrospective, previous month, while prospective, mandating But refused give retrospective/prospective distinction significance, well Nonetheless, presented declined evaluate Seagram's validity. 584, 6.11 III 15 light history, must assess constitutionality neither prospective nor but rather "contemporaneous." explained above, being guiding assessment, made lear relied, reflect Constitution's concern both maintenance union unfettered state-imposed limitations commerce12 autonomy individual respective spheres.13 Taken together, concerning stand propositions: "Commerce precludes takes place State," Edgar MITE Corp., 457 624, 642-643, 2629, 2640-2641, 73 269 (1982) (plurality opinion); specifically, adopt establishing "a states," 502. controls boundaries exceeds limits enacting reach intended legislature. critical inquiry control conduct beyond State. 2084. Third, evaluated considering consequences itself, how challenged interact legitimate regimes arise one, many every, adopted legislation. Generally speaking, protects arising projection regime jurisdiction Cf. 67 And, dictates force another. 2086.14 17 When applied result clear. correctly undeniable boundary conjunction beer-pricing throughout country, create just kind competing interlocking 18 Massachusetts (which link prices) prices. 759. become Mass.Gen.Laws 138:25B (1986). Five days brewers, order will charging January 1, posts his February he hopes March. Not ceiling brewer's also, requirements locked entire (absent leave) though occurred 6. Thus, nominally "contemporaneous" "prospectively" alteration More generally, end incorporation concluded, "[a] can undertake realities either both, ties states." words, effect, condemned preventing prevailing conditions. 19 180 days, N.Y.Alco.Bev.Cont.Law 55-b(2) (McKinney 1987), treats reduction price, locking discounted full discount. 20 permitted Island, deter volume-discounted regular 21 With respect indist nguishable Brown-Forman. forgo implementation competitive-pricing markets imported specifically reaffirmed deprive businesses "whatever possess" market. 2085. this. 22 appears starker recalled enact indeed, Nation. Suppose, example, Connecticut's. Under circumstances, January, determine knowing maximum region true February, State, region—and "current" Put differently, supplier capped almost surely well, permanently both. Nor "price gridlock" regions. potential regional mechanism goods reserved Federal Government accomplished piecemeal through 23 second respect: discriminates commerce. followed consistent practice striking discriminate see, e.g., Energy Co. Indiana Limbach, 486 269, 108 1803, 100 302 (1988); Sporhase Nebraska ex rel. Douglas, 458 941, 3456, 1254 (1982); Lewis BT Investment Managers, 447 27, 2009, 64 702 (1980), discrimination demonstrably factor Maine Taylor, 477 131, 2440, 91 110 plain terms, is, who least manufacturer shipper choose Stat treatment establishes substantial disincentive companies doing penalizing perceive neutral justification patent discrimination. claimed designed ensure possible consumers. While advanced by, exempting engaging regulations imposed region. V A. 24 Appellants advance basic arguments defense statute: first, sanctions commerce; second, analysis stated merely argument. 2087. Here, finding disposes issue. similarly overrule B 25 important, legal rested reasoning: gives wide latitude field regulation; although some extreme instances, controlled boundaries, claim. 42-43, 1259-1260. holds unequivocally cannot irrespective issue, found, experience proliferated effects. Indeed, leaves intact former felt compulsion, raising question, address shared laws. 26 interest removing lingering uncertainty about validity avoiding liquor-price affirmation, recognize today Brown-Forman: af irmation Retrospective specified past, nonaffirmation conditions, States—market irrelevant absent binding Every certain chosen permissible affirmation.15 For reasons 27 28 ordered. judgment. 29 join disposition opinion. invalidity fully commerce—through imposition exclusively surrounding States—and inability law's asserted goal consumer achieved nondiscriminatory manner.* 276-277, 279-280, 1808-1810, 1811, despite alcoholic beverages, character eliminates immunity afforded Bacchus Imports, Ltd. Dias, 468 263, 275-276, 3049, 3057-3058, 82 200 (1984). Since operated fashion, agree today's us case. ante, 343. 30 refrain, applying expansive finds seems me rationale unnecessary questionable, reality require sellers Island difficulty innumerable affect States—even rudimentary regulation. simply provided retailed above $10 Sellers portions requirement, requirement substantially cause purchasers drive stay home. impact example severe present cases, think jurisprudence should degenerate disputes over degree effect. case, principle dubious decline endorse it. 31 Chief whom O'CONNOR join, dissenting. 32 (1935), cheaply sale. Today doctrine invalidate sets wrong matter economics law: quite reason greater milk. 33 passed City metropolitan equal brought sale, up natural otherwise obtained costs production rightly sort "set barrier traffic customs duties, differential, laid thing transported." 500. Control Board Eisenberg Farm Products, 306 346, 59 83 752 (1939), decided four Baldwin, regulation, distinguished "this enactment aimed attempting paid sister state." 353, 531. 34 atute here markedly Baldwin. motive favor there brewers. Ante, 327, 2. Its unchallenged here—is obtain drinkers erect tariff exclude beer; drink all, wishes inhabitants treated favorably interstate. There "tariff wall" States; bother. sufficient saying 35 Neither parties points concrete evidence much less constitutionally one. assumed "competitive advantages" 339. equally laws, history unusually high 276 (1982), justifiable remedy imperfection supracompetitive expresses goes say constitutes "regulating" "controlling" borders. 337, 342. personal forecast strategies distributors obligations Certainly distributor considers offering discount obligation so. And arbitrary, doctrine, strike together plan somewhat farther advance, 337-338, prefer totally unregulated economy. 36 "[T]he question [the State] done restrict freedom action subjecting financial burdens. repercussions judicial significance domain Constitution forbids." Osborn Ozlin, 310 53, 62, 60 758, 761, 84 1074 (1940). 1260, (1966). 37 am convinced alternative rationale, "facially discriminates" 340. acknowledges, 2, pointed Consequently, strikes entities apparently exist. Amerada Hess Director, Jersey Division Taxation, 490 66, 77-78, 1617, 1623-1624, 58 (1989) (absence oil reserves allays tax disallowance deduction related production). know actions danger appeared. power taken hypothetical circumstance develop 38 All foregoing assumption commodity. concedes, theory, otherwise: "The transportation delivery therein liquors, thereof, hereby prohibited." 39 Less ago confers "virtually complete structure distribution system." California Retail Dealers Association Midcal Aluminum, 445 97, 110, 937, 940, 63 233 (1980). "special power" liquor, id., 108, 944, coexist Congress' "[t]his confirmed exception operation Clause." Craig Boren, 429 190, 206, 97 451, 461, 50 397 (1976). barely pays lipservice additional beverages Neglecting consider increased especially disturbing perceived proscriptive flow affirmative legislative nadir. Even most restrictive efforts favorable reached described perverse. extends protection never extended producers. reverse Appeals. states: Congress shall Power among several ." Const., Art. 8, cl. recognized encompasses implicit "dormant" limitation affecting See, Hughes Oklahoma, 441 322, 326, 99 1727, 1731, 250 (1979); H.P. Hood Du Mond, 525, 534-535, 69 657, 663-664, 93 865 (1949). industry divided marketing levels: (1) importers, (2) (3) retailers. Participants tier license below, consuming public. generally wholesaler carries importer (because currently brewery own, referred collectively "out-of-state shippers"), resell geographic licenses. 545-546 (Conn.1987); 1317 differentials differing taxes costs. 30-63c(b) (1989). package configuration Conn.Pub. Acts 332, provides: "At keg barrel section 30-63, holder shipper's permit, authorized representative manufacturer, file department written certifying per keg, fractional unit permittees item sold, shipped, transported addition, provide App. 157. 30-63b(e) "This permittee Columbia, agency owns operates outlets calendar posting." 30-63a(b) part: "No ship, transport deliver then responsible enforcing liquor-wholesalers entered intervenor. cited third decision, which, length there, significantly illuminates contours prohibition Illinois Business Takeover Act, takeover target having connection registered Secretary mandated evaluation. empowered deny registration tender inequity fraud. plurality infirm "directly transactions across lines, Illinois." 641, 2640. observed contacts, complied with, prevent interstate-securities stock single company's shareholders resident Illinois. legislation, others empowered, "and securities generated offers thoroughly stifled." 642, 2641. 'practical effect[s],' intention, 'exceed[ed] power.' Shaffer Heitner, 433 186, 197, 2569, 2576, 53 683 (1977). At including Of these, 18, known "control" distributed consumed subscribed standard contract guarantee anywhere Twenty challenge. 2082-2083, 1. One Member concurred separately advocate overruled "relic past." 586, "framed theory peoples sink swim run prosperity salvation division." 523, 500, noted: substantive courts. 'any attempt "directly" assert persons property offend exceed 643, 2641, 2576. general two-tiered approach analyzing summarized "When interests interests, inquiry. When, indirect evenhandedly, examined burden benefits." 2084 (citations consideration determining extraterritori l overall Our distillation prior involving extraterritoriality restatement specific concerns shaped Recent scholarship confirms: "[B]oth [prospective retrospective] types firms jointly demand marginal curves state. transmitted process." Pustay Zardkoohi, An Economic Analysis Price Affirmation Laws: Do They Burden Interstate Commerce?, 48 La.L.Rev. 649, 673-674 dissent argues sells Post, 348. far plaintiff show benefits business, flatly kindred contention prevail benefit minimal, 1809, little sense showing exists benefited. impose person Fourteenth permitting Aleuts vote y mail Aleut citizens capable benefiting

Category: 7