WSWA Applauds Fifth Circuit Decision Upholding States' Rights and the Three-Tier System
Wine & Spirits Wholesalers of America (WSWA) President and CEO Craig Wolf issued a statement applauding yesterday’s unanimous decision by the Fifth Circuit Court of Appeals upholding a Texas law that allows in-state – but not out-of-state – retailers to ship to their consumers.
“This unanimous opinion from one of the most respected circuits in the country clearly and forcefully reinforces WSWA’s view that the landmark 2005 Supreme Court decision in Granholm v. Heald preserved a state’s right to control the distribution of alcohol,” Wolf said. “This decision is a very strong affirmation of state authority under the 21st Amendment to regulate the distribution of beverage alcohol.”
In what is arguably one of the most important post-Granholm cases, the Fifth Circuit stated that Granholm affirms that “the Twenty-first Amendment still gives each State quite broad discretion to regulate alcoholic beverages.” Agreeing with WSWA and those in the beverage alcohol industry who have long asserted that alcohol is different from other products, the court stated that “[t]he dormant Commerce Clause applies, but it applies differently than it does to products whose regulation is not authorized by a specific constitutional amendment.” The court further underscored the power conferred by the 21st Amendment by stating that “regulating alcoholic beverage retailing is largely a State’s prerogative.”
“The Fifth Circuit’s affirmation of the three-tier system and its recognition that Granholm is limited to products and producers mirrors earlier rulings by the Second and Fourth Circuits, and is in line with the interpretation that WSWA and its industry partners have argued in the amicus briefs it has filed in each of these appeals,” Wolf noted. “But while we certainly are pleased with those important and persuasive decisions, the fact is that the battle to deregulate alcohol through litigation continues unabated.”
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