Twenty-First Amendment--Repeal of Eighteenth Amendment

[[Page 1977]]


                         TWENTY-FIRST AMENDMENT
                               __________

                   REPEAL OF THE EIGHTEENTH AMENDMENT


  Section 1. The eighteenth article of amendment to the Constitution of
the United States is hereby repealed.
  Section 2. 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.
  Section 3. This article shall be inoperative unless it shall have been
ratified as an amendment to the Constitution by conventions in the
several States, as provided in the Constitution, within seven years from
the date of the submission hereof to the States by the Congress.
      Effect of Repeal

        The operative effect of Sec. 1, repealing the Eighteenth
Amendment, is considered in the commentary dealing with that Amendment.

      Scope of Regulatory Power Conferred upon the States

        Discrimination as Between Domestic and Imported Products.--In a
series of interpretive decisions rendered shortly after ratification of
this Amendment, the Court established the proposition that States are
competent to adopt legislation discriminating against imported
intoxicating liquors in favor of those of domestic origin and that such
discrimination offends neither the commerce clause of Article I nor the
equal protection and due process clauses of the Fourteenth Amendment.
Thus, in State Board of Equalization v. Young's Market Co.,\1\ a
California statute was upheld which exacted a $500 annual license fee
for the privilege of importing beer from other States and a $750 fee for
the privilege of manufacturing beer; and in Mahoney v. Triner Corp.,\2\
a Minnesota statute was sustained which prohibited a licensed
manufacturer or

[[Page 1978]]
wholesaler from importing any brand of intoxicating liquor containing
more than 25 percent alcohol by volume and ready for sale without
further processing, unless such brand was registered in the United
States Patent Office. Also validated in Brewing Co. v. Liquor Comm'n\3\
and Finch & Co. v. McKittrick\4\ were retaliation laws enacted by
Michigan and Missouri, respectively, by the terms of which sales in each
of these States of beer manufactured in a State already discriminating
against beer produced in Michigan or Missouri were rendered unlawful.

        \1\299 U.S. 59 (1936).
        \2\304 U.S. 401 (1938).
        \3\305 U.S. 391 (1939).
        \4\305 U.S. 395 (1939).
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        Conceding, in State Board of Equalization v. Young's Market
Co.,\5\ that ``prior to the Twenty-first Amendment it would obviously
have been unconstitutional to have imposed any fee for . . . the
privilege of importation . . . even if the State had exacted an equal
fee for the privilege of transporting domestic beer from its place of
manufacture to the [seller's] place of business,'' the Court proclaimed
that this Amendment ``abrogated the right to import free, so far as
concerns intoxicating liquors.'' Inasmuch as the States were viewed as
having acquired therefrom an unconditioned authority to prohibit totally
the importation of intoxicating beverages, it logically followed that
any discriminatory restriction falling short of total exclusion was
equally valid, notwithstanding the absence of any connection between
such restriction and public health, safety or morals. As to the
contention that the unequal treatment of imported beer would contravene
the equal protection clause, the Court succinctly observed that a
``classification recognized by the Twenty-first Amendment cannot be
deemed forbidden by the Fourteenth.''\6\

        \5\299 U.S. 59, 62 (1936).
        \6\Id. at 63-64. In the three decisions rendered subsequently,
the Court merely restated these conclusions. The contention that
discriminatory regulation of imported liquors violated the due process
clause was summarily rejected in Brewing Co. v. Liquor Comm'n, 305 U.S.
391, 394 (1939).
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        In Seagram & Sons v. Hostetter\7\ a case involving a state
statute regulating the price of intoxicating liquors, the Court upheld
the statute, asserting that the Twenty-first Amendment bestowed upon the
States broad regulatory power over the liquor sales within their
territories.\8\ It was also noted that States are not totally bound by
traditional commerce clause limitations when they restrict the
importation of toxicants destined for use, distribution, or

[[Page 1979]]
consumption within their borders.\9\ In such a situation the Twenty-
first Amendment demands wide latitude for regulation by the State.\10\
The Court added that there was nothing in the Twenty-first Amendment or
any other part of the Constitution that required state laws regulating
the liquor business to be motivated exclusively by a desire to promote
temperance.\11\

        \7\384 U.S. 35 (1966).
        \8\Id. at 42. See United States v. Frankfort Distilleries, 324
U.S. 293, 299 (1945) and Nippert v. Richmond, 327 U.S. 416, 425 (1946).
        \9\Id. at 384 U.S. 35. See, e.g. Hostetter v. Idlewild Liquor
Corp., 377 U.S. 324, 330 (1964) and State Bd. of Equalization v. Young's
Market Co., 299 U.S. 59 (1936).
        \10\384 U.S. at 35. The Court went on to assert that it was not
deciding then whether the mode of liquor regulation chosen by a State in
such circumstances could ever constitute so grave an interference with a
company's operations elsewhere as to make the regulation invalid under
the commerce clause. Id. at 42-43.
        \11\Id. at 47.
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        Recent cases have undercut the expansive interpretation of state
powers in the Young's Market and Triner Corp. cases. Twenty-first
Amendment and Commerce Clause principles are to be harmonized where
possible. The Court now phrases the question in terms of ``whether the
interests implicated by a state regulation are so closely related to the
powers reserved by the Twenty-first Amendment that the regulation may
prevail, notwithstanding that its requirements directly conflict with
express federal policies.''\12\ ``[T]he central power reserved by Sec. 2
of the Twenty-first Amendment [is] that of exercising `control over
whether to permit importation or sale of liquor and how to structure the
liquor distribution system.'''\13\ Because ``[t]he central purpose of
the [Amendment] was not to empower States to favor local liquor
industries by erecting barriers to competition,'' the ``central tenet''
of the Commerce Clause will control to invalidate ``mere economic
protectionism,'' at least where the state cannot justify its tax or
regulation as ``designed to promote temperance or to carry out any other
purpose of the . . . Amendment.''\14\

        \12\Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 714
(1984).
        \13\467 U.S. at 715 (quoting California Retail Liquor Dealers
Ass'n. v. Midcal Aluminum, Inc., 445 U.S. 97, 110 (1980)).
        \14\Bacchus Imports, Ltd., v. Dias, 468 U.S. 263, 276 (1984).
See also Brown-Forman Distillers Corp. v. New York State Liquor Auth.,
476 U.S. 573 (1986) (attempt to regulate prices of out-of-state sales);
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984) (state's
limited interest in banning wine commercials carried on cable TV while
permitting various other forms of liquor advertisement is outweighed by
federal interest in promoting access to cable TV); and 324 Liquor Corp.
v. Duffy, 479 U.S. 335 (1987) (retail price maintenance in violation of
Sherman Act).
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        Regulation of Transportation and ``Through'' Shipments.--When
passing upon the constitutionality of legislation regulating the
carriage of liquor interstate, a majority of the Justices seemed
disposed to by-pass the Twenty-first Amendment and to resolve the issue
exclusively in terms of the commerce clause and state power. This trend
toward devaluation of the Twenty-first

[[Page 1980]]
Amendment was set in motion by Ziffrin, Inc. v. Reeves\15\ wherein a
Kentucky statute, forbidding the transportation of intoxicating liquors
by carriers other than licensed common carriers, was enforced as to an
Indiana corporation, engaged in delivering liquor obtained from Kentucky
distillers to consignees in Illinois but licensed only as a contract
carrier under the Federal Motor Carriers Act. After acknowledging that
``the Twenty-first Amendment sanctions the right of a State to legislate
concerning intoxicating liquors brought from without, unfettered by the
Commerce Clause,''\16\ the Court then proceeded to found its ruling
largely upon decisions antedating the Amendment which sustained similar
state regulations as a legitimate exercise of the police power not
unduly burdening interstate commerce. In the light of the cases
enumerated in the preceding paragraph, wherein the Twenty-first
Amendment was construed as according a plenary power to the States, such
extended emphasis on the police power and the commerce clause would seem
to have been unnecessary. Thereafter, a total eclipse of the Twenty-
first Amendment was recorded in Duckworth v. Arkansas\17\ and Carter v.
Virginia,\18\ wherein, without even considering that Amendment, a
majority of the Court upheld, as not contravening the commerce clause,
statutes regulating the transport through the State of liquor cargoes
originating and ending outside the regulating State's boundaries.\19\

        \15\308 U.S. 132 (1939).
        \16\Id. at 138.
        \17\314 U.S. 390 (1941).
        \18\321 U.S. 131 (1944). See also Cartlidge v. Raincey, 168 F.2d
841 (5th Cir. 1948), cert. denied, 335 U.S. 885 (1948).
        \19\Arkansas required a permit for the transportation of liquor
across its territory, but granted the same upon application and payment
of a nominal fee. Virginia required carriers engaged in similar through-
shipments to use the most direct route, carry a bill of lading
describing that route, and post a $1000 bond conditioned on lawful
transportation; and also stipulated that the true consignee be named in
the bill of lading and be one having the legal right to receive the
shipment at destination.
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        Regulation of Imports Destined for a Federal Area.--Intoxicating
beverages brought into a State for ultimate delivery at a National Park
located therein but over which the United States retained exclusive
jurisdiction has been construed as not constituting ``transportation
. . . into [a] State for delivery and use therein'' within the meaning
of Sec. 2 of the Amendment. The importation having had as its objective
delivery and use in a federal area over which the State retained no
jurisdiction, the increased powers which the State acquired from the
Twenty-first Amendment were declared to be inapplicable. California
therefore could not extend the importation license and other regulatory
requirements of its Al

[[Page 1981]]
coholic Beverage Control Act to a retail liquor dealer doing business in
the Park.\20\ On the other hand, a state may apply nondiscriminatory
liquor regulations to sales at federal enclaves under concurrent federal
and state jurisdiction, and may require that liquor sold at such federal
enclaves be labelled as being restricted for use only within the
enclave.\21\

        \20\Collins v. Yosemite Park Co., 304 U.S. 518, 537-38 (1938).
The principle was reaffirmed in United States v. Mississippi Tax Comm'n,
412 U.S. 363 (1973), holding that Mississippi could not apply its tax
regulations to liquor sold to military officers' clubs and other
nonappropriated fund activities located on bases within the State and
over which the United States had obtained exclusive jurisdiction.
``Absent an appropriate express reservation . . . the Twenty-first
Amendment confers no power on a State to regulate--whether by licensing,
taxation, or otherwise--the importation of distilled spirits into
territory over which the United States exercises exclusive
jurisdiction.'' Id. 375. Nor may states tax importation of liquor for
sale at bases over which the United States exercises concurrent
jurisdiction only. United States v. Mississippi Tax Comm'n, 421 U.S. 599
(1975).
        \21\North Dakota v. United States, 495 U.S. 423 (1990) (also
upholding application to federal enclaves of a uniform requirement that
shipments into the state be reported to state officials).
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        Foreign Imports, Exports; Taxation, Regulation.--The Twenty-
first Amendment did not repeal the export-import clause, Art. I,
Sec. 10, cl. 2, nor obliterate the commerce clause, Art. I, Sec. 8, cl.
3. Accordingly, a State cannot tax imported Scotch whiskey while it
remains ``in unbroken packages in the hands of the original importer and
prior to [his] resale or use'' thereof.\22\ Likewise, New York is
precluded from terminating the business of an airport dealer who, under
sanction of federal customs laws, acquired ``tax-free liquors for
export'' from out-of-state sources for resale exclusively to airline
passengers, with delivery deferred until the latter arrive at foreign
destinations.\23\ Similarly, a state ``affirmation law'' prohibiting
wholesalers from charging lower prices on out-of-state sales than those
already approved for in-state sales is invalid as a direct regulation of
interstate commerce. ``The Commerce Clause operates with full force
whenever one State attempts to regulate the transportation and sale of
alcoholic beverages destined for distribution and consumption in a
foreign country . . . or another State.''\24\

        \22\Department of Revenue v. Beam Distillers, 377 U.S. 341
(1964). The Court distinguished Gordon v. Texas, 355 U.S. 369 (1958) and
De Bary v. Louisiana, 227 U.S. 108 (1913).
        \23\Hostetter v. Idlewild Liquor Corp., 377 U.S. 324 (1964).
        \24\Brown-Forman Distillers Corp. v. New York State Liquor
Auth., 476 U.S. 573, 585 (1986) (citation omitted). Accord, Healy v.
Beer Institute, 491 U.S. 324 (1989).
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        Effect of Section 2 upon Other Constitutional Provisions.--
Nothwithstanding the 1936 assertion that ``[a] classification recognized
by the Twenty-first Amendment cannot be deemed forbidden by the
Fourteenth,''\25\ the Court has now in a series of

[[Page 1982]]
cases acknowledged that Sec. 2 of the Twenty-first Amendment did not
repeal provisions of the Constitution adopted before ratification of the
Twenty-first, save for the severe cabining of commerce clause
application to the liquor traffic, but it has formulated no consistent
rationale for a determination of the effect of the later provision upon
earlier ones. In Craig v. Boren,\26\ the Court invalidated a state law
that prescribed different minimum drinking ages for men and women as
violating the equal protection clause. To the State's Twenty-first
Amendment argument, the Court replied that the Amendment ``primarily
created an exception to the normal operation of the Commerce Clause''
and that its ``relevance . . . to other constitutional provisions'' is
doubtful. ```Neither the text nor the history of the Twenty-first
Amendment suggests that it qualifies individual rights protected by the
Bill of Rights and the Fourteenth Amendment where the sale or use of
liquor is concerned.'''\27\ The square holding on this point is ``that
the operation of the Twenty-first Amendment does not alter the
application of the equal protection standards that would otherwise
govern this case.''\28\ Other decisions reach the same result but
without discussing the application of the Amendment.\29\ Similarly, a
state ``may not exercise its power under the Twenty-first Amendment in a
way which impinges upon the Establishment Clause of the First
Amendment.''\30\

        \25\State Bd. of Equalization v. Young's Market Co., 299 U.S.
59, 64 (1936). In Craig v. Boren, 429 U.S. 190, 206-07 (1976), this case
and others like it are distinguished as involving the importation of
intoxicants into a State, an area of increased state regulatory power,
and as involving purely economic regulation traditionally meriting only
restrained review. Neither distinguishing element, of course, addresses
the precise language quoted. For consideration of equal protection
analysis in an analogous situation, the statutory exemption of state
insurance regulations from commerce clause purview, see Western &
Southern Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 655-
74 (1981).
        \26\429 U.S. 190 (1976).
        \27\Id. at 206 (quoting P. Brest, Processes of Constitutional
Decisionmaking--Cases and Materials 258 (1975).
        \28\Id. at 209-10.
        \29\E.g., Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 178-97
(1972) (invalidating a state liquor regulation as an equal protection
denial in a racial context); Wisconsin v. Constantineau, 400 U.S. 433
(1971) (invalidating a state law authorizing the posting of someone as
an ``excessive drinker'' and thus barring him from buying liquor, as
reconstrued in Paul v. Davis, 424 U.S. 693, 707-09 (1976)).
        \30\Larkin v. Grendel's Den, Inc., 459 U.S. 116, 122 n.5 (1982).
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        That these cases do not draw a bright line between the commerce
clause and other constitutional provisions is evident from California v.
LaRue.\31\ There, the Court sustained the facial constitutionality of
regulations barring a lengthy list of actual or simulated sexual
activities and motion picture portrayals of these activities in
establishments licensed to sell liquor by the drink. In an action
attacking the validity of the regulations as applied to ban nude dancing
in bars, the Court considered at some length the material

[[Page 1983]]
adduced at the public hearings which resulted in the rules demonstrating
the anti-social consequences of the activities in the bars. It conceded
that the regulations reached expression that would not be deemed legally
obscene under prevailing standards and reached expressive conduct that
would not be prohibitable under prevailing standards,\32\ but the Court
thought that the constitutional protection of conduct that partakes
``more of gross sexuality than of communication'' was outweighed by the
State's interest in maintaining order and decency. Moreover, the Court
continued, the second section of the Twenty-first Amendment gave an
``added presumption in favor of the validity'' of the regulations as
applied to prohibit questioned activities in places serving liquor by
the drink.\33\

        \31\409 U.S. 109 (1972).
        \32\Cf. Schad v. Borough of Mount Ephraim, 452 U.S. 61 (1981)
(ban on live nude dancing in Borough); Doran v. Salem Inn, 422 U.S. 922
(1975) (ban on nude dancing in ``any public place'' applied to topless
dancing in bars).
        \33\409 U.S. at 114-19. In Doran v. Salem Inn, 422 U.S. 922,
932-33 (1975), the Court described its holding in LaRue more broadly,
saying that ``we concluded that the broad powers of the States to
regulate the sale of liquor, conferred by the Twenty-first Amendment,
outweighed any First Amendment interest in nude dancing and that a State
could therefore ban such dancing as part of its liquor license control
program.''
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        A much broader ruling was forthcoming when the Court considered
the constitutionality of a state regulation banning topless dancing in
bars. ``Pursuant to its power to regulate the sale of liquor within its
boundaries, it has banned topless dancing in establishments granted a
license to serve liquor. The State's power to ban the sale of alcoholic
beverages entirely includes the lesser power to ban the sale of liquor
on premises where topless dancing occurs.''\34\ This recurrence to the
greater-includes-the-lesser-power argument, relatively rare in recent
years,\35\ would if it were broadly applied give the States in the area
of regulation of alcoholic beverages a review-free discretion of unknown
scope.

        \34\New York State Liquor Auth. v. Bellanca, 452 U.S. 714, 717
(1981).
        \35\For a rejection of the argument in another context,
contemporaneously with Bellanca, see Western & Southern Life Ins. Co. v.
State Bd. of Equalization, 451 U.S. 648, 657-68 (1981). And for
utilization of the argument in the commercial speech context, see
Posadas de Puerto Rico Associates v. Tourism Co. of Puerto Rico, 478
U.S. 328, 345-46 (1986). But see Capital Cities Cable, Inc. v. Crisp,
467 U.S. 691 (1984), not addressing the commercial speech issue but
holding state regulation of liquor advertisements on cable TV to be
preempted, in spite of the Twenty-first Amendment, by federal policies
promoting access to cable TV).
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      Effect on Federal Regulation

        The Twenty-first Amendment of itself did not, it was held, bar a
prosecution under the Sherman Antitrust Act of producers, wholesalers,
and retailers charged with conspiring to fix and maintain retail prices
of alcoholic beverages in Colorado.\36\ In a concur

[[Page 1984]]
ring opinion, supported by Justice Roberts, Justice Frankfurter took the
position that if the State of Colorado had in fact ``authorized the
transactions here complained of, the Sherman Law could not override such
exercise of state power. . . . [Since] the Sherman Law . . . can have no
greater potency than the Commerce Clause itself, it must equally yield
to state power drawn from the Twenty-first Amendment.''\37\

        \36\United States v. Frankfurt Distilleries, 324 U.S. 293, 297-
99 (1945).
        \37\Id. at 301-02. For application of federal laws, see William
Jameson & Co. v. Morgenthau, 307 U.S. 171 (1939); Kiefer-Stewart Co. v.
Joseph E. Seagram & Sons, 340 U.S. 211 (1951); Schwegmann Bros. v.
Calvert Corp., 341 U.S. 384 (1951); Joseph E. Seagram & Sons v.
Hostetter, 384 U.S. 35 (1966); Burke v. Ford, 389 U.S. 320 (1967).
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        Following a review of the cases in this area, the Court has
observed ``that there is no bright line between federal and state powers
over liquor. The Twenty-first Amendment grants the States virtually
complete control over whether to permit importation or sale of liquor
and how to structure the liquor distribution system. Although States
retain substantial discretion to establish other liquor regulations,
those controls may be subject to the federal commerce power in
appropriate situations. The competing state and federal interests can be
reconciled only after careful scrutiny of those concerns in a `concrete
case.'''\38\ Invalidating under the Sherman Act a state fair trade
scheme imposing a resale price maintenance policy for wine, the Court
balanced the federal interest in free enterprise expressed through the
antitrust laws against the asserted state interests in promoting
temperance and orderly marketing conditions. Since the state courts had
found the policy under attack promoted neither interest signficantly,
the Supreme Court experienced no difficulty in concluding that the
federal interest prevailed. Whether more substantial state interests or
means more suited to promoting the state interests would survive attack
under federal legislation must await further litigation.

        \38\California Retail Liquor Dealers Ass'n v. Midcal Aluminum,
445 U.S. 97, 110 (1980).
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        Congress may condition receipt of federal highway funds on a
state's agreeing to raise the minimum drinking age to 21, the Twenty-
first Amendment not constituting an ``independent constitutional bar''
to this sort of spending power exercise even though Congress may lack
the power to achieve its purpose directly.\39\

        \39\South Dakota v. Dole, 483 U.S. 203, 210 (1987).