The Sow and the Grape: A Tale of Commercial Woe

Two legal cases depict the sharp point of commercial restrictions

After considerable deliberation, the Texas Legislature, determining they don’t want their state to be complicit in immoral and unethical restrictions on property owners’ rights, bars the sale of wine from any state that places onerous restrictions on how farmers may use their land. The upshot is that in order for California wine to be sold in Texas, Napa and other California winegrowing regions must rescind the onerous land-use restrictions they place on grape growers, particularly on the hillsides in Napa Valley.

Or, alternatively, California passes a law that prohibits the sale of any pork in their state that was raised by keeping piglet-bearing sows in pens that are smaller than the size California law deems ethical.

The constitutionality of the latter example is what the Supreme Court considered in oral arguments last Tuesday when they heard the case of National Pork Producers v Ross. Throughout the oral arguments, the justices asked attorneys arguing the case to consider a number of hypothetical examples of states instituting sales bans on products to satisfy moral considerations and wondered if those morality-based sales ban violated the Commerce Clause of the Constitution (and particularly the dormant Commerce Clause) which bars states from passing laws that unjustifiably interfere with interstate commerce.

Most attorneys don’t deal with issues that implicate the Commerce Clause. When they hear the words “Dormant Commerce Clause” they tend to cringe as they think back to law school and remember the lectures on this somewhat obscure part of Constitutional Law.

Given the unusual grant of power the 21st Amendment gives to states to regulate alcohol, it was no surprise to hear the attorneys arguing the case and the justices questioning them mention past alcohol cases as they discussed the case on Tuesday.

Click to listen to the oral arguments in National Pork Produces v Ross.

Recently, B-21 Wines, a retailer from Florida, appealed to the Supreme Court to hear its Dormant Commerce Clause case against the State of North Carolina. North Carolina allows its own wine retailers to use common carriers to ship wine to North Carolina residents. However, it also bans out-of-state retailers from shipping wine to those same residents. This is a different kind of dormant Commerce Clause case than the National Pork Producers’ case against California. The wine shipping case involves “facial” discrimination. The National Pork Producers case does not. Yet they both implicate the dormant Commerce Clause and turn on somewhat different questions.

In deciding against B-21 wines, the Fourth Circuit Court Appeals ruled that because the Supreme Court had earlier said (in passing) that the three-tier system of alcohol distribution is “unquestionably legitimate” and because the court accepts North Carolina’s assertion that the three-tier system protects the health and safety of North Carolina residents, the ban on out-of-state retailer shipping ban is constitutional in lieu of the power granted the states by he 21st Amendment to regulate alcohol.

B-21 is asking that the Supreme Court to take the case first in order to rule on a disagreement among different Circuit Courts over how to handle the kind of assertion North Carolina makes regarding the three-tier system protecting the health and safety of the state’s residents. The Seventh Circuit Court of Appeals, in an earlier shipping case, ruled that the state must present evidence demonstrating its assertions of the necessity of a discriminatory law to protect the health and safety of residents of Illinois. They base this on the Supreme Court’s own determination that “concrete evidence” must accompany assertions of a law’s necessity.

Additionally, B-21 argues that the Fourth Circuit Court of Appeals in the North Carolina case ignored the Supreme Court’s rulings in earlier cases that 1) a state may not require an out-of-state business to relocate to a state in order to do business (North Carolina says B-21 is not banned from shipping, but rather all they need to do is move to the state and open a store)m and 2) the Fourth Circuit Court of Appeals, says retailer B-21, ignored the Supreme Court’s declaration that the constitutionality of the individual parts of a state’s alcohol regulatory system must be judged on their own and appart from the system as a whole.

The Supreme Court has turned down similar appeals before and it is a long shot that they will agree to take this case. But they might. If they do, the numerous states that have unconstitutional bans on wine shipments from out-of-state retailers will be ruled unconstitutional.

I don’t know how the National Pork Producers case will go. No one does. I do know there are at least two votes to uphold the California law banning sale of pork that resulted from sows raised in pens smaller than the state thinks is ethical. My own hope is that upon hearing arguments surrounding the Commerce Clause as related to the National Pork Producers case, the justices will be inclined to indulge further in Dormant Commerce Clause debates, rather than cringe upon seeing the B-21 Wines case come before them.