Amicus Curiae Brief — Swedenburg v. Kelly, Chairman, New York Division of Alcoholic Beverage Control, State Liquor Authority

@

No. 03-1274

In The

+

JUANITA SWEDENBURG, et al.,

Petitioners,

v.

EDWARD D. KELLY, et ai.,

Respondents.

e

On Writ Of Certiorari To The

United States Court Of Appeals

For The Second Circuit

e

BRIEF OF THE VIRGINIA WINERIES

ASSOCIATION AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

¢

THOMAS A. BOWDEN* ADAM MOSSOFF

20 South Charles Street Assistant Professor of Law

8th Floor, Sun Life Building MICHIGAN STATE UNIVERSITY

Baltimore, MD 21201 COLLEGE OF LAW

(410) 727-4300 417 Law College Building

East Lansing, MI 48824

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DANIEL D. BARNHIZER

Associate Professor of Law

MICHIGAN STATE UNIVERSITY

COLLEGE OF LAW

418 Law College Building

East Lansing, MI 48824

(517) 432-6901

*Counsel of Record

(Additional Counsel Listed On Inside Cover)

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

RANDY E. BARNETT

Austin B. Fletcher

Professor of Law

BOSTON UNIVERSITY

SCHOOL OF LAW

765 Commonwealth Avenue

Boston, MA 02215

(617) 353-3099

JOHN M. CHURCH

Associate Professor of Law

LOUISIANA STATE UNIVERSITY

LAW CENTER

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Baton Rouge, LA 70803

(225) 578-8701

Eric R. CLAEYS

Associate Professor of Law

St. Louis UNIVERSITY

SCHOOL OF LAW

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St. Louis, MO 63108

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RICHARD A. EPSTEIN

James Parker Hall

Distinguished Service

Professor of Law

UNIVERSITY OF CHICAGO

LAW SCHOOL

1111 East 60th Street

Chicago, IL 60637

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SUSAN BETH FARMER

Professor of Law

THE PENN STATE DICKINSON

SCHOOL OF LAW

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Carlisle, PA 17013

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PAUL FINKELMAN

Chapman Distinguished

Professor of Law

UNIVERSITY OF TULSA

COLLEGE OF LAW

3120 E. Fourth Place

Tulsa, OK 74104-2499

(918) 631-3706

LYNNE HENDERSON

Professor of Law

WILLIAM S. BoyD

SCHOOL OF LAW

UNIVERSITY OF NEVADA,

Las VEGAS

4505 Maryland Parkway

Box 451003

Las Vegas, NV 89154

(702) 895-2625

TONI M. MASSARO

Milton O. Riepe Chair

in Constitutional Law

JAMES E. ROGERS

COLLEGE OF LAW

THE UNIVERSITY OF ARIZONA

P.O. Box 210176

Tucson, AZ 85721

(520) 621-1498

EDWARD P. RICHARDS

Harvey A. Peltier

Professor of Law

PAUL M. HEBERT LAW CENTER

LOUISIANA STATE UNIVERSITY

Baton Rouge, LA 70803

(225) 578-7595

KERMIT ROOSEVELT III

Associate Professor of Law

UNIVERSITY OF PENNSYLVANIA

LAW SCHOOL

3400 Chestnut Street

Philadelphia, PA 19104

(215) 746-8755

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...............::cccccccsseseseeeeseeeees iii

INTEREST OF AMICUS CURIAE W.u0000.......cccccceeeeseeeeee 1

SUMMARY OF ARGUMENT. ....0.0........ccccccceecceeeeeeeeneeeee 1

ABURETEIUS occosccscscccsressssseceimneimiemmaeaie 3

I. The Commerce Clause and the Privileges and

II.

III.

Immunities Clause Have a “Mutually Reinforc-

ing Relationship” in Prohibiting Discrimina-

tion Between the States..................cccceceeeeeeeeeeees

The Privileges and Immunities Clause, as the

Commerce Clause, Secures Each Citizen’s

Right to Engage in Interstate Commerce by

Preventing Discrimination Between Citizens of

Cae Doves GbmbeDnccccsscncssscscnninesecseneninmntsissiaias

A. Economic Discrimination Between the

States Was Rampant Under the Articles of

Cane ate, .xccccsssscssiinssasneiiieiamaanmania

B. The Privileges and Immunities Clause and

the Commerce Clause Were Adopted in the

Constitution to Secure Harmony and Non-

discrimination in Interstate Commerce .....

1. The Founders’ Express Intent...............

2. Supreme Court Jurisprudence and

Constitutional Scholarship ...................

In Addition to Violating the Commerce Clause,

New York’s Discriminatory Restraint on Inter-

state Commerce in Wine Violates the Privi-

leges and Immunities Clause .......................0006

A. The Right to Engage in Commerce is Se-

cured Under the Privileges and Immuni-

Chae GRRE D coccssscsssnnsecesenesteneseeiasisetnmeniiin

19

‘i

TABLE OF CONTENTS - Continued

Page

B. The Supreme Court Has Already Invali-

dated Under the Privileges and Immuni-

ties Clause State Regulatory Schemes

Similar to New York’s Discriminatory Re-

straint on Interstate Commerce in Wine... 21

| _______ IEenrn nn een ENE 28

TABLE OF AUTHORITIES

Page

CASES

Austin v. New Hampshire, 420 U.S. 656

STITT iene enema 14, 15, 16, 20, 22

Bacchus Imports, Inc. v. Dias, 468 U.S. 263

REET esnenv Ee nee nome 2, 5, 9, 12, 24

Baldwin v. Fish & Game Comm’n of Montana, 436

| ___ESERESS CREPE Ra terrenaneeneen nan aeear 14, 15, 16

Blake v. McClung, 172 U.S. 239 (1989)............0....0c:cceeeeeees 20

Bridenbaugh v. Freeman-Wilson, 227 F.3d 848 (7th

EES ener Ce ree nO 27

Camps Newfound/Owatonna, Inc. v. Town of

OR, Tiree Cates Ge Ge Piccccvccnenscsinnnesennninsenemanenseses 5

City of Philadelphia v. New Jersey, 437 U.S. 617

RES SESE eee Ona e ee ae eae ne Teen 4

Coryfield v. Coryell, 6 Fed. Cas. 546 (C.C.E.D.

Penn. 1823) (No. 3,230)...................000s0000+ 5, 9, 17, 20, 21

Craig v. Boren, 429 U.S. 190 (1976)..............cccceeeeeeeeeeees 6, 8

Dickerson v. Bailey, 336 F.3d 388 (5th Cir. 2003)....... 18, 24

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824)............. 5,17

Hicklin v. Orbeck, 437 U.S. 518 (1978)................00000. passim

Hillside Dairy Inc. v. Lyons, 539 U.S. 59 (2003).............. 4,5

Hostetter v. Idlewild Liquor Corp., 377 U.S. 324

TTT icinasiscessieeiiii pa eniait batinidideriasienaanseiaiinbaamonniatiummubenies 6, 23, 24

Lemmon v. People, 20 N.Y. 562 (1860)..................000008 12,17

New Energy Co. of Indiana v. Limbach, 486 U.S.

IT nee ehieniinn atantinrmpneniad aeeinalaiaiipmmanmnimmnnnne 4

iv

TABLE OF AUTHORITIES - Continued

Page

Paul v. Virginia, 75 U.S. (8 Wall.) 168 (1868).. 4, 5, 15, 16, 17

Swedenburg v. Kelly, 358 F.3d 223 (2d Cir. 2004) ........ 3, 23

Tangier Sound Watermen’s Ass’n v. Douglas, 541

F. Supp. 1287 (E.D. Vir. 1982)..............ccccccccessssseeeeees 5, 21

Toomer v. Witsell, 334 U.S. 385 (1948).......... 2, 5, 21, 25, 27

United Bldg. & Constr. Trades Council of Camden

County v. City of Camden, 465 U.S. 208 (1982).....passim

United States v. South-Eastern Underwriters Ass’n,

RITES een ne CnnET EE 5

Valle v. Stengel, 176 F.2d 697 (3d Cir. 1949)..................... 21

Ward v. Maryland, 79 U.S. (12 Wall.) 418 (1870)......passim

West Lynn Creamery, Inc. v. Healy, 512 U.S. 186

ITT stlschesidadeciaheesbbin dati mettle init iainiiciintarabad 13

Zobel v. Williams, 457 U.S. 55 (1982) ...............ccccceeeeeeees 5,9

CONSTITUTIONAL PROVISIONS

fe. EST Eer neem 8

I Ti a eaaeearrhanerinmnrmninneneineeiiagans 6

Et ERR ENN reE EE 6

I passim

LEGISLATIVE HISTORY

Cong. Globe, 39th Cong., Ist Sess. 1836 (1866)................ 18

TABLE OF AUTHORITIES -— Continued

OTHER AUTHORITIES

Randy E. Barnett, The Original Meaning of the

Commerce Clause, 68 U. Chi. L. Rev. 101 (2001).......... 17

George F. Carpinello, State Protective Legislation

and Nonresident Corporations: The Privileges

and Immunities Clause as a Treaty of Nondis-

crimination, 73 Iowa L. Rev. 351 (1988) ....................000 7

Thomas M. Cooley, Treatise on Constitutional

ES ee 9,19

Brannon P. Denning, Why the Privileges and

Immunities Clause of Article IV Cannot Replace

the Dormant Commerce Clause, 88 Minn. L. Rev.

roa aria nsescerseshdsinensntasciastinbiianieiuseentenaniapeiieibibieeummmees 7

Julian N. Eule, Laying the Dormant Commerce

Clause to Rest, 91 Yale L. J. 425 (1982) ...................ccc00e 7

M. Farrand, Records of the Federal Convention

a ircieiinceinsiccidatheneacibiiiidicensteiicniiiiaiibaemeiaile te 11, 13, 14, 16

The Federalist (Clinton Rossiter ed., 1961)........... 10, 11, 18

James Kent, Commentaries on American Law (13th

Dwight R. Lee, The Political Economy of the U.S.

Constitution, in The Foundations of American

Constitutional Government 127 (Robert D. Gor-

SD Gi, TP enim 11

David N. Mayer, The Constitutional Thought of

I ED cccctreniennsnmeiinusibininmmeneneen 13

Note, Defining the Scope of the Article Four Privi-

leges and Immunities Clause, 54 U. Cin. L. Rev.

STE TaTITIITITT ccbiceniasinicsireenniigiecninnniansiatebcaennasiinanibiidetiitassbiaesiabeniisiiiibimmasions 7

TABLE OF AUTHORITIES — Continued

Page

Gary J. Simson, Discrimination Against Nonresi-

dents and the Privileges and Immunities Clause

of Article IV, 128 U. Pa. L. Rev. 379 (1979)...........004. 7,16

Douglas G. Smith, The Privileges and Immunities

Clause of Article IV, Section 2: Precursor of Sec- .

tion 1 of the Fourteenth Amendment, 34 San

I Ee 7,19

Joseph Story, A Familiar Exposition of the Consti-

tution of the United States (1840) ...............cccccccceee. 18, 27

Joseph Story, Commentaries on the Constitution of

EET Oe 10

Laurence Tribe, American Constitutional Law (2d

Se ai iiiiieaiserinsinnensennsieiiitttainicialitaianneitaiaiatiaitatilintaaaccsneaaatiias 8

George Washington, Farewell Address, in 4 Annals

ee ee iiciacirecisntincniteiisninninsiitiniainiainidh linia aiittaadaaaad 13

Gordon S. Wood, The Creation of the American

ey, TU CE iniccincrensicsnnnisiitiieaidiiitastuitiiitatas 11

1

INTEREST OF AMICUS CURIAE'

The Virginia Wineries Association is a professional

trade organization that represents the interests of Virginia

wineries and promotes the growth and economic sustain-

ability of the Virginia wine industry. The Association

currently represents as active members 72 of Virginia’s 87

licensed wineries. Its membership comprises sole proprie-

torships, partnerships, and corporations. In representing

its members’ interests, the Association opposes protection-

ist State laws, such as New York’s licensing scheme, that

prohibit its members from competing on an equal footing

with wineries in other States. It supports equal treatment

under State laws of all wineries in interstate commerce —

in Virginia and throughout the nation. Accordingly, it has

a direct stake in the outcome of the instant case.

. —_

SUMMARY OF ARGUMENT

The United States Constitution guarantees citizens

the right to engage in interstate commerce free of dis-

criminatory restraints imposed by protectionist State

regulatory regimes favoring their own residents. While

this Court has granted review under the Commerce

Clause, New York’s protectionist scheme is fully exposed

* Pursuant to Rule 37.6 of the Rules of this Court, Amicus states

that no counsel for a party authored this brief in whole or in part, and

no person or entity other than Amicus and their counsel made mone-

tary contribution to the preparation or submission of this brief. As

Petitioner Swedenburg is a member of the Association, Amicus did not

use membership dues to finance this brief; rather, Amicus solicited

individual contributions from members uninvolved in the litigation.

Pursuant to Rule 37.3, Amicus states that Petitioners and Respondents

have granted consent to file this brief.

as unquestionably unconstitutional only by analyzing it

under the “mutually reinforcing relationship” between the

Commerce Clause and the Privileges and Immunities

Clause of Article IV, § 2. Hicklin v. Orbeck, 437 U.S. 518,

531 (1978). The Founders’ writings, this Court’s jurispru-

dence, and constitutional scholarship confirm that these

two central constitutional provisions share a common

history, function, and even the same textual source in the

Articles of Confederation — evincing that the Commerce

Clause and Privileges and Immunities Clause mutually

reinforce the Constitution’s mandate to secure comity and

nondiscrimination in interstate commerce. Id.

In conjunction with the Commerce Clause’s “negative”

implication, this Court has repeatedly affirmed the right

to practice one’s commercial calling in interstate commerce

as “one of the most fundamental of those privileges pro-

tected by the [Privileges and Immunities] Clause.” United

Bldg. & Constr. Trades Council of Camden County v. City

of Camden, 465 U.S. 208, 219 (1982) (Rehnquist, J.). New

York’s direct-to-consumer licensing scheme violates this

right by exempting in-state wineries from regulation while

denying this same economic benefit to out-of-state winer-

ies. Although New York asserts constitutional immunity

for this interstate discrimination under the Twenty-First

Amendment, this Amendment did not effect a monumental

constitutional revolution by annulling the ubiquitous

constitutional norm of interstate commercial comity.

New York’s protectionist licensing scheme exemplifies

the “economic Balkanization” proscribed by this Court in

Bacchus Imports, Inc. v. Dias, 468 U.S. 263, 276 (1984),

and constitutes interstate discrimination that offends the

“substantial equality” between the citizens of the several

States. Toomer v. Witsell, 334 U.S. 385, 396 (1948). Thus,

3

this Court should reverse the Second Circuit and hold New

York’s direct-to-consumer licensing scheme for in-state

wineries unconstitutional under the Commerce Clause

and, alternatively, under the Privileges and Immunities

Clause.”

¢

ARGUMENT

I. The Commerce Clause and the Privileges and

Immunities Clause Have a “Mutually Reinforc-

ing Relationship” in Prohibiting Discrimina-

tion Between the States.

The United States Constitution guarantees citizens

the right to engage in interstate commerce free of dis-

criminatory and protectionist State regulatory regimes

favoring their own residents.

New York’s discriminatory licensing regime exempts

in-state wineries from its three-tiered system regulating

alcoholic beverages by permitting them to ship wine

directly to New York consumers. These direct-shipment

licenses are denied to out-of-state wineries, unless they

establish a physical presence in the State and thereby

become de facto New York residents. See Swedenburg uv.

Kelly, 358 F.3d 223, 237-38 (2d Cir. 2004) (describing the

discriminatory nature and effect of New York’s licensing

regime). A State statute that extends a regulatory exemp-

tion and economic benefit solely on the basis of the recipi-

ent’s in-state residency is an invalid “law that overtly

? Although Amicus is filing its brief in this Court’s review of

Swedenburg v. Kelly, No. 03-1274, its analysis applies equally to this

Court's review of Granholm v. Heald, No. 03-1116.

4

blocks the flow of interstate commerce at a State’s border.”

City of Philadelphia v. New Jersey, 437 U.S. 617, 624

(1978). This Court has repeatedly held such statutes to be

“simple economic protectionism” proscribed by “a virtually

per se rule of invalidity.” Id. See also New Energy Co. of

Indiana v. Limbach, 486 U.S. 269, 273-74 (1988) (applying

long-standing constitutional rule that “regulatory meas-

ures designed to benefit in-state economic interests by

burdening out-of-state competitors” are prohibited under

the “‘negative’ aspect of the Commerce Clause”).

While this Court has granted review on the Commerce

Clause issue, a complete analysis of that question requires

an understanding of the “mutually reinforcing relation-

ship” between the Commerce Clause and the Privileges

and Immunities Clause of Article IV, §2.° Hicklin v.

* Amicus recognizes that corporations are not entitled to the

protections of fundamental rights secured to citizens of the several

States under the Privileges and Immunities Clause. Paul v. Virginia, 75

U.S. 168, 177 (1868) (noting that the “term citizens ... applies only to

natural persons, ... not to artificial persons created by the legisla-

ture”). New York’s prohibition against out-of-state wine producers

shipping to in-state consumers, however, does not distinguish between

individual or corporate citizens, and thus it apries with equal (uncon-

stitutional) force to an individual] or partnership producing wine, as it

does to a corporation. In a recent Privileges and Immunities case, then-

Associate Justice Rehnquist recognized that “a state may not save its

discriminatory regulations by simply hiding its out-of-state discrimina-

tion behind a veil of in-state discrimination.” United Bldg. & Constr.

Trades Council of Camden County v. City of Camden, 465 U.S. 208, 221

n.10 (1982). The converse holds true as well: A State may not smuggle

past the Constitution impermissible discrimination against out-of-state

citizens by including in this discrimination specific types of out-of-state

citizens unprotected under the Privileges and Immunities Clause. Cf.

Hillside Dairy Inc. v. Lyons, 539 U.S. 59, 66-67 (2003) (holding that

state laws lacking any express classification based on individual

citizenship may be scrutinized under the Privileges and Immunities

(Continued on following page)

5

Orbeck, 437 U.S. 518, 531 (1978). It is no coincidence that

Supreme Court cases addressing economically discrimina-

tory regulations by the States implicate both the Com-

merce Clause and the Privileges and Immunities Clause.

See, e.g., Hillside Dairy Inc: v. Lyons, 539 U.S. 59 (2003);

Camps New {ound/Owatonna, Inc. v. Town of Harrison,

520 U.S. 564, 570 n.4 (1997); United Bldg. & Constr.

Trades Council of Camden County v. City of Camden, 465

U.S. 208 (1982); Zobel v. Williams, 457 U.S. 55, 66 (1982)

(Brennan, J., concurring); Toomer v. Witsell, 334 U.S. 385

(1948); Ward v. Maryland, 79 U.S. (12 Wall.) 418 (1870);

Paul v. Virginia, 75 U.S. (8 Wall.) 168 (1868), overruled on

other grounds, United States v. South-Eastern Underwrit-

ers Ass'n, 322 U.S. 533 (1944); Gibbons v. Ogden, 22 U.S.

(9 Wheat.) 1, 68-69 (1824); Corfield v. Coryell, 6 Fed. Cas.

546 (C.C.E.D. Penn. 1823) (No. 3,230) (Washington, Circuit

Justice). Even in cases involving only the Privilege and

Immunities Clause, this Court has often relied on and

“dr[awn] from the reasoning of several Commerce clause

cases.” Tangier Sound Watermen’s Ass’n v. Douglas, 541

F. Supp. 1287, 1300 (E.D. Vir. 1982) (citing cases). See also

Hicklin, 437 U.S. at 531-32 (relying on Commerce Ciause

cases to assess Privileges and Immunities claim although

“appellants raise no Commerce Clause challenge”).

The omnipresence of these two constitutional provi-

sions in challenges to economic discrimination between the

States exposes the “fatal defect” in New York’s argument.

Bacchus Imports, Inc. v. Dias, 468 U.S. 263, 276 (1984). The

Privileges and Immunities Clause reinforces the Com-

merce Clause in securing comity ard nondiscrimination in

Clause if the statute’s terms “are but proxies for differential treatment

against out-of-state residents”).

6

interstate commerce. See Ward, 79 U.S. (12 Wall.) at 430

(holding that the Privileges and Immunities Clause

“plainly and unmistakably secures and protects the right

of a citizen of one State to pass into any other State of the

Union for the purpose of engaging in lawful commerce,

trade or business”). Thus, New York’s argument that the

Twenty-First Amendment immunizes it from constitu-

tional scrutiny under the Commerce Clause also implies

immunity from the Privileges and Immunities Clause. But

to claim that palpable discrimination is immunized from

constitutional scrutiny is anathema.‘ Cf. Craig v. Boren,

429 U.S. 190, 205 (1976) (holding that the Twenty-First

Amendment does not shield discriminatory State regula-

tions of alcohol from scrutiny under the Equal Protection

Clause). See also Hostetter v. Idlewild Liquor Corp., 377

U.S. 324, 331-32 (1964) (rejecting as “an absurd oversim-

plication,” “patently bizarre,” and “demonstrably incor-

rect,” a State’s claim “that the Twenty-first Amendment has

somehow operated to ‘repeal’ the Commerce Clause wher-

ever the regulation of intoxicating liquors is concerned”).

This Court has long recognized “the mutually reinforc-

ing relationship between the Privileges and Immunities

Clause of Art. IV, §2, and the Commerce Clause - a

relationship that stems from their common origin in the

Fourth Article of the Articles of Confederation and their

shared vision of federalism.” Hicklin, 437 U.S. at 531-32.

Contemporary scholarship on the purpose of the Privileges

* The Founders’ express intent favoring national uniformity in

interstate commerce and nondiscrimination between the States is

omnipresent in the Constitution, regardless of whether it is implied in

the grants of power to Congress in Article I, § 8, or is expressly enu-

merated in Article I, § 10, and in Article IV.

7

and Immunities Clause in Article IV, §2 confirms this

“mutually reinforcing relationship” with the Commerce

Clause.® Id. These two central constitutional provisions —

an express restraint on State power with a concurrent

grant of power to the national government — serve the

Founders’ express policy of national uniformity and nondis-

crimination in all commercial relations between the

* See, e.g., Douglas G. Smith, The Privileges and Immunities

Clause of Article IV, Section 2: Precursor of Section 1 of the Fourteenth

Amendment, 34 San Diego L. Rev. 809, 854 (1997) (recognizing that “the

purpose the [Privileges and Immunities] Clause was to effect greater

commercial union among the citizens of all of the states”); George F.

Carpinello, State Protective Legislation and Nonresident Corporations:

The Privileges and Immunities Clause as a Treaty of Nondiscrimination,

73 Iowa L. Rev. 351, 353 (1988) (suggesting that “the privileges and

immunities clause was meant to act as an agreement or treaty, among

the states, not to discriminate against trade or business enterprises on

the basis of out-of-state residence”); Note, Defining the Scope of the

Article Four Privileges and Immunities Clause, 54 U. Cin. L. Rev. 883,

884 (1986) (recognizing that “the privileges and immunities clause and

the Commerce clause. ... were meant to interdict state discrimination

against nonresidents that would divide the union to the detriment of

the common good”); Julian N. Eule, Laying the Dormant Commerce

Clause to Rest, 91 Yale L. J. 425, 446-47 (1982) (favoring the Privileges

and Immunities Clause’s “express commands” against “the problem of

commercial isolationism” over the dormant Commerce Clause doctrine,

which is derived from “the silences of Article I”); Gary J. Simson,

Discrimination Against Nonresidents and the Privileges and Immuni-

ties Clause of Article IV, 128 U. Pa. L. Rev. 379, 384 (1979) (noting that

“the privileges and immunities clause ... was drafted with interstate

harmony and cooperation in mind”). One recent article unintentionally

affirms the “mutually reinforcing 'relationship” between the Commerce

Clause and the Privileges and Immunities Clause by explaining how

one clause cannot do all of the work of the other. See Brannon P.

Denning, Why the Privileges and Immunities Clause of Article IV

Cannot Replace the Dormant Commerce Clause, 88 Minn. L. Rev. 384

(2003) (discussing some of the doctrinal differences, such as in the

protection of corporations, between the Commerce Clause and the

Privileges and Immunities Clause).

8

States. As the following sections make clear, they share

the same history, textual source, and function.

It is true that “a constitutional adjustment in the

allocation of authority between the federal and state

governments” resulted with the enactment of § 2 of the

Twenty-First Amendment, which permits States to control

importation of alcoholic beverages into their respective

jurisdictions. Laurence Tribe, American Constitutional

Law 475 (2d ed. 1988). But New York may not exploit this

express grant of power in the Twenty-First Amendment as

a pretext for discrimination. Jd. at 477-78 (“the amend-

ment does not give blanket power to the states”). See

Craig, 429 U.S. at 204 (holding that the Twenty-First

Amendment is not a safe harbor from judicial scrutiny

under the Equal Protection Clause of “invidious ... dis-

crimination”). New York’s discriminatory licensing scheme

is not only unsupported by the text and history of § 2 of the

Twenty-First Amendment,” it is adverse to the Founders’

* New York proffers a self-serving myth of unbridled State power in

the regulation and control of the “importation ... of intoxicating

liquors,” U.S. Const. amend. XXI, § 2. If § 2 were intended to annul the

far-reaching and well-ensconced constitutional norm of nondiscrimina-

tion and interstate comity, it would have expressly stated that a State’s

control of the “importation of intoxicating liquors is valid regardless of

any discrimination imposed by a State under this provision.” Section 2

does not say anything of the sort.

When placed in its proper historical context, § 2 of the Twenty-First

Amendment simply preserves for a State the power to regulate or

prohibit all manufacture, sale, and consumption of alcohol within its

jurisdiction, ensuring that out-of-state producers and merchants have

to play by the same rules as their in-state counterparts. Commerce

Clause and Privileges and Immunities Clause jurisprudence required

this express grant of power to the States, as the States who wished to

go “dry” in the late nineteenth century found their efforts frustrated by

these constitutional provisions. As Thomas Cooley reports, a State that

wished “altogether to prohibit the manufacture and sale of intoxicating

(Continued on following page)

9

primary concern that the Constitution snuff out the

interstate discrimination running riot under the Articles of

Confederation. Zobel, 457 U.S. at 72 (O’Connor, J., concur-

ring) (noting that discrimination against out-of-state

residents “conflicts with the constitutional purpose of

maintaining a Union rather than a mere ‘league of

States’”) (quoting Paul, 75 U.S. (8 Wall.) at 180).

II. The Privileges and Immunities Clause, as the

Commerce Clause, Secures Each Citizen’s

Right to Engage in Interstate Commerce by

Preventing Discrimination Between Citizens of

the Several States.

A. Economic Discrimination Between the

States Was Rampant Under the Articles of

Confederation.

The Constitutie~ endardization of interstate com-

merce arose from v... .ailure of the Articles of Confederation

drinks as a beverage” often found its attempt to do so “assailed as

violating express provisions in the national Constitution, and also as

subversive of fundamental rights, and therefore not within the grant of

legislative power [to the States].” Thomas M. Cooley, A Treatise on

Constitutional Limitations 718 (5th ed. 1883) (emphases added). See

Corfield, 6 Fed. Cas. at 551 (describing the rights protected under the

Privileges and Immunities Clause as those “which are, in their nature,

fundamental”). But Cooley recognized that such regulations are

permissible if “[t]hey are looked upon as police regulations established

by the legislature for the prevention of intemperance, pauperism, and

crime, and for the abatement of nuisances.” Jd. at 720. In other words,

§ 2 of the Twenty-First Amendment secures for the States the right to

restrain within their respective jurisdictions all intrastate and inter-

state traffic in alcoholic beverages under their inherent police power io

prevent intemperance, crime, and the other evils that this Court has

recognized as the “core concerns” of the Twenty-First Amendment.

Bacchus Imports, Ltd., 468 U.S. at 276.

10

to promote a unified and peaceful economic union. Under

the Articles, the national government lacked meaningful

authority to enforce its mandates, and despite aspirational

provisions promoting interstate commercial comity, States

adopted their own parochial monetary, manufacturing,

and commercial regulations.

The result was economic bedlam. Justice Story, for

instance, reports that under the Articles of Confederation,

“[mJeasures of a commercial nature, which were adopted

in one state from a sense of its own interests, would be

often countervailed or rejected by other states from similar

motives.” 1 Joseph Story, Commentaries on the Constitu-

tion of the United States 239 (1833). “Such a state of things

gave rise to serious dissensions among the states them-

selves. The difference in regulations was a perpetual

source of irritation and jealousy.... and thus state ani-

mosities and local prejudices were fostered to a high

degree. .. .” Id. at 240. See also The Federalist No. 7, at 63

(Alexander Hamilton) (Clinton Rossiter ed., 1961) (noting

that “regulations of trade by which particular States might

endeavor to secure exclusive benefits to their own citi-

zens. ... naturally lead to outrages, and these to reprisals

and wars”).

In Ward v. Maryland, this Court recounted this history

in ascertaining the origin of the Privileges and Immunities

Clause. Justice Clifford noted that “[i]nequality of burden,

. as well as the want of uniformity in commercial regula-

tions, was one of the grievances of the citizens under the

Confederation; and the new Constitution was adopted,

among other things, to remedy those defects in the prior

system.” 79 U.S. (12 Wall.) 418 at 431. Justice Clifford

continued: “(T]he framers of the Constitution intended to

remove those great evils” in adopting provisions forbidding

11

Congress or the States “to make any discrimination in

enacting commercial or revenue regulations.” /d.

B. The Privileges and Immunities Clause and

the Commerce Clause Were Adopted in the

Constitution to Secure Harmony and Non-

discrimination in Interstate Commerce.

Interstate economic discrimination created the politi-

cal crisis that led to the 1787 Federal Convention, and to a

new Constitution intended to redress this economic and

political chaos.’ See Gordon S. Wood, The Creation of the

American Republic, 1776-1787, at 463-67 (1969) (describ-

ing how State economic regulations created a fundamental

political crisis); 3 M. Farrand, Records of the Federal

Convention 642-43 (1911) (reporting Benjamin Franklin’s

support for the new Constitution because “our States are

on the point of separation, only to meet hereafter for the

purpose of cutting one another’s throats”). As Justice

Denio of the New York Court of Appeals declared in the

" The Federal Convention was actually born of a meeting in 1786

between five States looking “to discuss ways to reduce trade barriers

between the states. At this meeting the call was made for a larger

meeting in Philadelphia in the following year to discuss more general

problems with the Articles of Confederation.” Dwight R. Lee, The

Political Economy of the U.S. Constitution, in The Foundations of

American Constitutional Government 127, 129-30 (Robert D. Gor-

goglione ed., 1996) (emphasis added).

It is, therefore, unsurprising that commerce and its political

implications is a recurring theme in The Federalist. See, e.g., The

Federalist No. 4, at 46-47 (John Jay); The Federalist No. 6, at 56-60

(Alexander Hamilton); The Federalist No. 7, at 62-63 (Alexander

Hamilton); The Federalist No. 11, at 84-91 (Alexander Hamilton); The

Federalist No. 12, at 91-96 (Alexander Hamilton); The Federalist No.

22, at 143-452 (Alexander Hamilton); The Federalist No. 42, at 267-69

(James Madison).

12

preeminent Privileges and Immunities case, Lemmon v.

People: “The Constitution organized a still more intimate

Union, constituting the States, for all external purposes,

and for certain enumerated domestic objects, a single

nation.” 20 N.Y. 562, 608 (1860).

1. The Founders’ Express Intent.

This history is often called upon to explain the basis

and function of the Commerce Clause, which, as aptly

described in Bacchus Imports, Inc. v. Dias, was adopted to

“prevent economic Balkanization” among the States. 468

U.S. at 276. This is not a modern insight. The Founders

believed the primary function of the Commerce Clause

was to restrain State power to impose discriminatory

regulations on interstate commerce.’ James Madison

wrote that this central provision of the Constitution

* As noted, securing unrestrained interstate commerce is a

fundamental constitutional norm. George Washington emphasized the

intimate connection between free-flowing interstate commerce and the

preservation of the union in his famous 1797 Farewell Address: “The

name of American, which belongs to you in your national capacity, must

always exalt the just pride of patriotism, more than any other appella-

tion derived from local discriminations.... [E]very portion of our

country finds the most commanding motives for carefully guarding and

preserving the union of the whole. The North, in an unrestrained

intercourse with the South, protected by the equal laws of a common

government, finds, in the productions of the latter, great additional

resources of maritime and commercial enterprise, and precious

materials of manufacturing industry. The South, in the same inter-

course, benefiting by the agency of the North, sees its agriculture grow,

and its commerce expand. The East, in like intercourse with the West,

already finds ... a valuable vent for the commodities it brings from

abroad, or manufactures at home. The West derives from the East

supplies requisite to its growth and comfort.” George Washington,

(Continued on following page)

13

grew out of the abuse of the power by the import-

ing States in taxing the non-importing, and was

intended as a negative and preventive provision

against injustice among the States themselves,

rather than as a power to be used for the positive

purposes of the General Government, in which

alone, however, the remedial power could be

lodged.”

3 M. Farrand, Records of the Federal Convention at 478.

See also West Lynn Creamery, Inc. v. Healy, 512 U.S. 186,

193 n.9 (1994) (quoting same except for last clause).

Importantly, the same historical catalyst underlying

the Commerce Clause also led to the adoption of the

Farewell Address, in 4 Annals of Cong. 2871-72 (1797) (emphases

added).

* Such sentiments were not unique to Madison. In the debate over

a draft version of the Commerce Clause, General Charles Cotesworth

Pinckney recognized that prejudices between the States abounded, but

in “considering ... the interest the weak Southn. States had in being

united with the strong Eastern States, he thought it proper that no

fetters should be imposed on the [federal] power of making commercial

regulations.” 2 M. Farrand, Records of the Federal Convention at 449-

50. Earlier in the Convention, in response to Roger Sherman’s claim

that “[t}he States will never give up all power over trade,” id. at 361,

Madison steadfastly maintained that “we aught to be governed by

national and permanent views” on the subject of both foreign and

interstate trade. Jd. James Wilson concurred, acknowledging that in

“favoring the general power over exports therefore, he opposed the

particular interest of his State.” Jd. at 362. While not a delegate at the

Federal Convention, Thomas Jefferson, a strong State rights advocate,

wrote as early as 1785 that he supported efforts to “take the commerce

of the states out of the hands of the states, and to place it under the

superintendence of Congress.” David N. Mayer, The Constitutional

Thought of Thomas Jefferson 92 (1994) (quoting letters to Richard Price

and James Monroe). Jefferson believed the principal defect in the

Articles was its failure to provide Congress with the authority to

regulate commerce. /d at 91.

14

Privileges and Immunities Clause. In criticizing the New

Jersey Plan — an early draft constitution - Madison

highlighted the problem of interstate discrimination as a

justification for robust national protection of citizens’

privileges in interstate transactions:

Will it prevent trespasses of the States on each

other? Of these enough has been already seen.

He instanced Acts of Virga. & Maryland which

give a preference to their own citizens in cases

where the Citizens (of other States) are entitled

to equality of privileges by the Articles of Con-

federation.

Austin v. New Hampshire, 420 U.S. 656, 661 n.5 (1975)

(quoting 1 M. Farrand, Records of the Federal Convention

at 317). Whether the Founders called discrimination

between the States an “injustice” or a “trespass,” the goal

of the resulting constitutional provisions, particularly the

Commerce Clause and the Privileges and Immunities

Clause, was the same: Discrimination in interstate com-

merce on the basis of citizenship or residency” was strictly

forbidden.

Beyond their genesis in the same historical problem,

the Commerce Clause and the Privileges and Immunities

Clause also shared the same textual source in the unavail-

ing Articles of Confederation. See Baldwin v. Fish & Game

Comm’n of Montana, 436 U.S. 371, 379-80 (1978) (noting

that “[t]le Privileges and Immunities Clause originally

was not isolated from the Commerce Clause,” and that in

“the Articles of Confederation, where both Clauses have

* “Citizen” and “resident” are synonymous for purposes of the

Privileges and Immunities Clause. Austin, 420 U.S. at 663 n.8.

15

their source, the two concepts were together in the fourth

Article”). The fourth article in the Articles of Confedera-

tion contained both the Commerce Clause and the Privi-

leges and Immunities Clause, further evidencing the

Founders’ intent that these two clauses jointly serve “to

secure and perpetuate mutual friendship and intercourse

among the people of the different States in this Union.” Id.

at 379 n.17 (quoting fourth article in the Articles of Con-

federation).

More importantly for illustrating the textual founda-

tion of the “mutually reinforcing relationship” between the

Commerce Clause and the Privileges and Immunities

Clause, Hicklin, 437 U.S. at 531, the portion of the fourth

article of the Articles of Confederation that was trans-

formed into the Commerce Clause was itself framed in

terms of the Privileges of Immunities Clause: “[T]he

people of each State shall have free ingress and regress to

and from any other State and shall enjoy therein all the

privileges of trade and commerce... .” Baldwin, 436 U.S.

at 379 n.17 (emphasis added). The “norm of comity”

between the States secured by the Privileges and Immuni-

ties Clause, Austin, 420 U.S. at 660, applies to all inter-

state transactions — including commerce. See Paul, 73 U.S.

(8 Wall.) at 180 (observing that it “was undoubtedly the

object of the [Privileges and Immunities] clause in ques-

tion to place the citizens of each State upon the same

footing with citizens of other States”).

‘The splitting of the fourth article in the Articles of

Confederation into separate clauses in the Constitution

reflects only the Founder’s desire for precision and clarity.

16

The division is in form, not substance.” As the Commerce

Clause language is an express grant of power to Congress

and the Privileges and Immunities Clause language is an

express limitation on State power, the Founders separated

them accordingly. Buldwin, 436 U.S. at 379-80. Cf United

Bldg. & Constr. Trades Council of Camden County, 465

U.S. at 220 (Rehnquist, J.) (distinguishing “implied re-

straint” of the Commerce Clause and “direct restraint” in

the Privileges and Immunities Clause). In this way, these

two clauses better secure the goal of the Constitution in

both proscribing economic discrimination between the

States and promoting interstate harmony.

2. Supreme Court Jurisprudence and Con-

stitutional Scholarship.

This Court expressly recognized the “mutually rein-

forcing relationship” between the Commerce Clause and

the Privileges and Immunities Clause, Hicklin, 437 U.S. at

531, in the seminal 1868 case, Paul v. Virginia. There,

Justice Field cited with approval New York Court of

Appeals Justice Denio’s opinion that the Privileges and

Immunities Clause was intended “to secure a community

" Charles Pinckney stated at the Federal Convention: “The 4th

article, respecting the extending [of] the rights of the Citizens of each

State, throughout the United States ... is formed exactly upon the

principles of the 4th article of the present Confederation.” 3 M. Far-

rand, Records of the Federal Convention at 112. See also Austin, 420

U.S. at 661 ‘noting that the “[flourth article carried over into the comity

article of the Constitution in briefer form but with no change of

substance or intent”). Pinckney is “generally recognized as the author of

the Constitution’s privileges and immunities clause.” Simson, Discrimi-

nation Against Nonresidents and the Privileges and Immunities Clause

of Article IV, at 383.

17

of intercourse.”” Lemmon, 20 N.Y. at 607 (referencing the

precursor to Art. IV, § 2, in the fourth article of the Articles

of Confederation). See also Paul, 75 U.S. (8 Wall.) at 180

(citing Lemmon for the proposition that “no provision in

the Constitution has tended so strongly to constitute the

citizens of the United States one people as this”). As

Justice Field further explained: The Privileges and Immu-

nity Clause “inhibits discriminating legislation against

[citizens of] other States,” and that “without some provi-

sion of the kind ... the Republic would have constituted

little more than a league of States; ii would not have

constituted the Union which now exists.” Paul, 75 U.S. (8

Wall.) at 180.

Justice Field’s construction of the Privileges and

Immunities Clause was not novel. Justice Washington

presaged Justice Field’s view of the Privileges and Immu-

nities Clause more than forty years earlier in the equally

famous case, Corfield v. Coryell, observing that Article IV,

§ 2, “was manifestly calculated (to use the expression of

the preamble of the corresponding provision in the old

articles of confederation) ‘the better to secure and perpetu-

ate mutual friendship and intercourse among the people of

the different states of the Union.’” 6 Fed. Cas. at 552

(emphasis added). See also Lemmon, 20 N.Y. at 627 (Wright,

J.) (explaining that the Privileges and Immunities Clause

“was intended to guard against a State discriminating in

* In the eighteenth and nineteenth centuries, the term “inter-

course” was sometimes used as a synonym for “commerce.” See Gibbons,

22 U.S. (9 Wheat.) at 189 (noting that “[clommerce, undoubtedly, is

traffic, but it ‘s something more: it is intercourse”). See also Randy E.

Barnett, The Original Meaning of the Commerce Clause, 68 U. Chi. L.

Rev. 101, 113 (2001) (quoting Samuel Johnson’s 1785 Dictionary of the

English Language).

18

favor of its own citizens”). And Alexander Hamilton

praised the Privileges and Immunities Clause in Federal-

ist No. 80 as “the esteemed basis of the Union” because it

secured “the inviolable maintenance of that equality of

privileges and immunities to which the citizens of the

Union will be entitled.” The Federalist No. 80, at 478. As

one Congressman in 1866 declared with poetic flourish:

The Privileges and Immunities Clause in Article IV, § 2, is

“the palladium of equal fundamental civil rights for all

citizens.” Dickerson v. Bailey, 336 F.3d 388, 403 n.67 (5th

Cir. 2003) (quoting Cong. Globe, 39th Cong., Ist Sess. 1836

(1866) (statement of Rep. Lawrence)).

Nineteenth-century constitutional scholars likewise

shared in this common understanding of the purpose of

the Privileges and Immunities Clause as securing nondis-

crimination in interstate commerce. Justice Story believed

that, but for the Privileges and Immunities Clause, “the

States would be at liberty to make laws, giving preferences

of rights and offices, and even privileges in trade and

business, to those, who were Natives, over all other per-

sons, who belonged to other States.” Joseph Story, A

Familiar Exposition of the Constitution of the United

States 291 (1840) (emphasis added). Such “invidious

discriminations between citizens of different States. ...

would have a tendency to generate jealousy and discon-

tents, [being] injurious to the harmony of all the States.”

Id. at 291-92 (emphasis added). Chancellor Kent reported

that the Privileges and Immunities Clause guarantees “if

[citizens] remove from one state to another; they are

entitled to the privileges that persons of the same descrip-

tion are entitled to in the state to which the removal is

made, and to none other.” 2 James Kent, Comnientaries on

American Law 72 (13th ed. 1884). Finally, Thomas Cooley

explained that many constitutional “provisions have for

19

their object to prevent discrimination by the several States

against citizens and public authority and proceedings of

other States,” including the “provision[] that the citizens of

each State shall be entitled to all the privileges and immu-

nities of citizens in the several States.” Thomas M. Cooley,

Treatise on Constitutional Limitations 21-23 (5th ed.

1883).”

In sum, given their common source in the fourth article

in the Articles of Confederation and their common purpose

as a remedy to the interstate economic strife plaguing the

nation under the Articles, the Commerce Clause and the

Privileges and Immunities Clause are both intended to

enforce the constitutional norm that the States are forbid-

den from discriminating against citizens in interstate

commerce. Regardless whether a State is restrained either

by conceding to an exclusive grant of power to the national

government or by accepting a restraint imposed on it that it

must respect each citizen’s equal rights, the policy is the

same — interstate comity and nondiscrimination.

III. In Addition to Violating the Commerce Clause,

New York’s Discriminatory Restraint on Inter-

state Commerce in Wine Violates the Privileges

and Immunities Clause.

Analysis under the Privileges and Immunities Clause

consists of a two-step inquiry: (1) Does a State law burden

* One modern commentator notes that Justice Cooley expressly

maintained that the Privileges and Immunities Clause and the

Commerce Clause “were designed to facilitate commerce among the

states.” Smith, The Privileges and Immunities Clause of Article IV,

Section 2, at 839 n.81 (discussing Cooley’s analysis of the Supreme

Court’s decision in Ward v. Maryland, 79 U.S. (12 Wall.) 418 (1870)).

20

or infringe a privilege and immunity that is secured under

Article IV, § 2; and (2) if so, does the State have a “sub-

stantial reason” for the discriminatory treatment and does

“the degree of discrimination bear|] a close relation” to

this reason. United Bldg. & Constr. Trades Council of

Camden County, 465 U.S. at 218, 222 (quoting Toomer,

334 U.S. at 396). Given the purpose of the Privileges and

Immunities Clause to protect fundamental rights, Cor-

field, 6 Fed. Cas. at 551 (describing the rights protected

under the Privileges and Immunities Clause as those

“which are, in their nature, fundamental”), the second

prong is “substantially more rigorous” than review of State

laws in other areas of constitutional law. Austin, 420 U.S.

at 662-63.

A. The Right to Engage in Commerce is Secured

Under the Privileges and Immunities Clause.

Despite some ambiguity on the fullest reach of the

Privileges and Immunities Clause, this Court has consis-

tently recognized that this provision secures the right to

pursue one’s trade in interstate commerce. As then-Associate

Justice Rehnquist explained in United Bldg. & Constr.

Trades Council of Camden County v. City of Camden: “Cer-

tainly, the pursuit of a common calling is one of the most

fundamental of those privileges protected by the Clause.

Many, if not most, of our cases expounding the Privileges and

Immunities Clause have dealt with this basic and essential

activity.” 465 U.S. at 219 (citations omitted).

* This Court has never provided a definitive list or precise

definition of the specific “privileges and immunities” secured under

Article IV, § 2. Blake v. McClung, 172 U.S. 239, 248 (1898).

21

In Corfield v. Coryell, the first decision addressing ta2

Privileges and Immunities Clause by a Supreme Court

Justice (riding circuit), Justice Washington identified in a

nonexclusive list, “[t]he right of a citizen of one state to pass

through, or to reside in any other state, for purposes of trade,

agriculture, professional pursuits, or otherwise,” 6 Fed. Cas.

at 552. And in the preeminent twentieth-century case,

Toomer v. Witsell, Justice Frankfurter summarized the

Court’s decisions, stating that “they bar a State from ...

discriminating against citizens of other States in the pursuit

of ordinary livelihoods in competition with local citizens.” 334

U.S. at 408 (Frankfurter, J., concurring). See also Ward, 79

U.S. (12 Wall.) at 430 (holding that the Privileges and

Immunities Clause “plainly and unmistakably secures and

protects the right of a citizen of one State to pass into any

other State of the Union for the purpose of engaging in

lawful commerce, trade or business”); Valle v. Stengel, 176

F.2d 697, 703 (3d Cir. 1949) (stating that “[i]t is clear that the

Supreme Court has held that the words ‘Privileges and

Immunities’ of Article IV, Section 2, protect the right of a

citizen to engage in lawful commerce, trade or business

without molestation or harassment”); Tangier Sound Water-

men’s Ass’n, 541 F. Supp. at 1298 (recognizing that the Court

consistently strikes down discriminatory State statutes that

“involve[] a person’s ‘commercial livelihood’ ”).

B. The Supreme Court Has Already Invali-

dated Under the Privileges and Immunities

Clause State Regulatory Schemes Similar

to New York’s Discriminatory Restraint on

Interstate Commerce in Wine.

This Court’s 1870 decision in Ward v. Maryland

speaks directly to the unconstitutionality of New York's

22

present-day discriminatory scheme. There, Maryland

imposed a graduated license fee on traders working in the

State based on the size of a trader’s stock. Plaintiffs

challenged the licensing statute as “repugnant” to both the

Commerce Clause and the Privileges and Immunities

Clause as it burdened out-of-state traders who wished to

sell their goods in Maryland. Ward, 79 U.S. (12 Wall.) at

425. Such traders naturally had a larger stock than in-

state traders, particularly those who sold liquors. Jd. at

426. Thus, under Maryland’s licensing statute, they would

always pay a higher license fee than their in-state com-

petitors, thereby undermining their ability to compete

with in-state traders. The Ward Court held that it was

unnecessary to reach the Commerce Clause claim, id. at

428-49, as the licensing statute was indeed “repugnant” to

the Privileges and Immunities Clause. Jd. at 429. Al-

though there was no express discriminatory language in

the licensing scheme, the Court inferred its palpable

purpose in “that the statute in question does discriminate

in favor of the citizens of the State.” Jd. at 426. See Austin,

420 U.S. at 663 (discussing Ward as an example of the

Court’s “heightened concern for the integrity of the Privi-

leges and Immunities Clause”).

The Ward decision is directly relevant to the instant

case for two reasons. First, this Court explicitly rejected

the same alleged justification proffered today by New

York. Maryland’s Attorney General argued before the

Ward Court that “[t]here is nothing in the law which

prohibits or restrains non-resident merchants, manufac-

turers, or traders or their agents, from bringing their

goods here and selling them ... as residents of the

State.” 79 U.S. (12 Wall.) at 422. Similarly, the Second

Circuit approved New York’s direct-shipment licensing

23

scheme in the instant case because it did not prohibit out-

of-state wine producers from becoming de facto New York

residents. See Swedenburg, 358 F.3d at 237 (describing the

requirement of New York’s direct shipment statute that

“(all wineries, whether in-state or out-of-state, are per-

mitted to obtain a license as long as the winery establishes

a physical presence in the state”) (emphasis added). The

Ward Court rejected Maryland’s excuse, recognizing its

licensing scheme as invalid interstate discrimination

under the Privileges and Immunities Clause. This Court

should reject New York’s identical attempt today to acquit

itself of its constitutional obligations to respect its sister

States and their citizens. Cf. Hicklin, 437 U.S. at 524-25

(recounting the facts and holding of Ward as “strongly

support[ing)” the Petitioners’ successful Privilege and

Immunities claim).

Nor can New York argue that the Twenty-First

Amendment effected a wide-ranging and momentous

constitutional transformation, prohibiting judicial scrutiny

of interstate discrimination on alcohol imports. In essence,

New York would have this Court accept that the Twenty-

First Amendment has pro tanto repealed every clause of

the Constitution proscribing interstate discrimination

with respect to alcoholic beverages. Thus, New York

asserts that this Court must turn a blind eye to its inter-

state economic discrimination, no matter how egregious,

because the subject matter is somehow related to alcohol.

See Swedenburg, 358 F.3d at 238 (recognizing that “the

physical presence requirement could create substantial

dormant Commerce Clause problems if this licensing

scheme regulated a commodity other than alcohol”).

This Court’s Twenty-First Amendment jurisprudence

forecloses this argument. First, in Hostetter v. Idlewild

24

Liquor Corp., this Court labeled as “an absurd oversimplifi-

cation,” “bizarre,” and “demonstrably incorrect,” a State’s

argument that “the Twenty-first Amendment has somehow

operated to ‘repeal’ the Commerce Clause wherever the

regulation of intoxicating liquor is concerned.” 377 U.S at

331-32. Second, and more recently, this Court held that

states may control imports of alcoholic beverages only

when such controls serve one of the “core concerns” of the

Twenty-First Amendment, such as temperance. Bacchus

Imports, Ltd., 468 U.S. at 276. See also Dickerson, 336

F.3d at 404 (reviewing Supreme Court and Fifth Circuit

cases applying the “core concerns” test under the Twenty-

First Amendment). The reason for the Hostetter Court’s

strong language and the Bacchus Court’s express recogni-

tion of temperance as the “core concern” of the Twenty-

First Amendment is straightforward: This Court recog-

nized the implications of unbridled State power to dis-

criminate in interstate commerce in alcoholic beverages.

Such a construction of the Twenty-First Amendment

fundamentally conflicts with the Commerce Clause, the

Privileges and Immunities Clause, and the very concern of

the Founders about interstate discrimination that gave

birth to the Constitution.

The second reason why this Court should look to Ward

as determinative is that Justice Bradley's concurrence in

Ward reiterates the “mutually reinforcing relationship”

between the Commerce Clause and the Privileges and

Immunities Clause. Hicklin, 437 U.S. at 531. As noted

above, Justice Clifford’s opinion for the Court recognized

that there was a Commerce Clause problem with Mary-

land’s discriminatory licensing scheme, but he did not

consider it necessary to reach this issue as the Privileges

and Immunities claim was dispositive. Justice Bradley,

25

though, felt it necessary to emphasize in a brief concur-

rence that Maryland’s scheme was indeed “in violation of

the commercial clause of the Constitution, which confers

upon Congress the power to regulate commerce among the

several States.” Ward, 79 U.S. (12 Wall.) at 432 (Bradley,

J., concurring). Directly paralleling New York’s require-

ment for out-of-state citizens and wineries today, Justice

Bradley summarized the constitutional defect in Mary-

land’s licensing statute: “Such a law would effectually

prevent the manufactures of the manufacturing States

from selling their goods in other States unless they estab-

lished commercial houses therein, or sold to resident

merchants who chose to send them orders.” Jd. Justice

Bradley thus confirmed that Maryland’s scheme violated

both the Commerce Clause and the Privileges and Immu-

nities Clause by imposing discriminatory and protectionist

restraints on interstate commerce. The same must be said

of New York’s discriminatory prohibition here — particu-

larly since New York permits in-state residents to engage

in commercial activity prohibited to out-of-state residents.

See United Bldg. & Constr. Trades Council of Camden

County, 465 U.S. at 208 (citing Ward, among numerous

other cases, for the proposition that the Privileges and

Immunities Clause protects a citizen’s “basic and essential

activity” in the “pursuit of a common calling”).

Finally, the non-deferential scrutiny applied in Toomer

uv. Witsell should likewise be applied to New York’s licens-

ing scheme today. Similar to New York’s arguments before

the Second Circuit, South Carolina claimed in Toomer a

valid constitutional purpose in enacting a statute that

discriminated against out-of-state citizens. Toomer, 334

U.S. at 398 (noting South Carolina’s “argument assumes

26

that any means adopted to attain valid objectives neces-

sarily squares with the privileges and immunities clause”).

See Swedenburg, 358 F.3d at 237-38 (accepting New York’s

assertion that its prohibition against direct-to-consumer

imports is necessary to ensure “accountability” in alcohol

distribution in the State). As in Ward, the Toomer Court

rejected South Carolina’s purported justification for

discrimination: “We would be closing our eyes to reality,

we believe, if we concluded that there was a reasonable

relationship between the danger presented by non-

citizens, as a class, and the severe discrimination prac-

ticed upon them.” Toomer, 334 U.S. at 399.

Toomer reminds the States that their statutes are not

entitled to deferential review under the Privileges and

Immunities Clause, as permitting the States to discrimi-

nate against the right to engage in interstate commerce

would undermine one of the primary justifications for the

Constitution. As this Court recognized in Austin v. New

Hampshire, given “the individual’s right to nondiscrimina-

tory treatment” and “the structural balance essential to

the concept of federalism” inherent in the Privileges and

Immunities Clause, the standard of review is “substan-

tially more rigorous” than in other constitutional areas,

such as reviewing an exercise of a State’s power to tax.

Austin, 420 U.S. at 662-63 (emphasis added).

Thus, under §2 of the Twenty-First Amendment’s

grant of power to New York to control imports of alcoholic

beverages, this Court should demand that New York

adduce evidence that its discrimination against out-of-

state citizens’ right to trade with New York consumers

“bears a close relation,” Toomer, 334 U.S. at 396, to the

“core concerns” of the Twenty-First Amendment. Bacchus

Imports, Ltd., 468 U.S. at 276. New York failed to — and

27

cannot — produce such evidence, and its conclusory asser-

tion of “accountability” fails its burden under the Privi-

leges and Immunities Clause. This Court again should

refuse to close its eyes to the reality of New York’s direct-

to-consumer licensing statute, recognizing the “severe

discrimination” imposed on out-of-state citizens seeking to

engage in their right to practice their commercial calling.

Toomer, 334 U.S. at 399.

Section 2 of the Twenty-First Amendment grants New

York the power to ban all imports of alcohol as an essential

element of an in-state prohibition against commerce in

and consumption of alcoholic beverages, but it may not use

this grant of power as a pretext for discrimination. Cf.

Bridenbaugh v. Freeman-Wilson, 227 F.3d 848, 853 (7th

Cir. 2000) (Easterbrook, J.) (incorrectly rejecting the “core

concerns” test as not reflecting the original intent of the

Twenty-First Amendment, but still recognizing that

Indiana may not “use[] its power to impose a discrimina-

tory condition on importation, one that favors Indiana

sources of alcoholic beverages over sources in other

_ states”). New York’s prohibition against direct-to-consumer

imports of wine should be invalidated as “repugnant” to

the Commerce Clause, Ward, 79 U.S. (12 Wall.) at 429, and

as an “invidious discrimination” that offends a fundamen-

tal privilege secured under the Privileges and Immunities

Clause. Story, A Familiar Exposition of the Constitution at

291. The constitutional norm favoring “substantial equal-

ity” between the citizens of the several States, Toomer, 334

U.S. at 396, as expressed in the “mutually reinforcing

relationship,” Hicklin, 437 U.S. at 531, between the

Commerce Clause and the Privileges and Immunities

Clause demands nc tess.

28

CONCLUSION

For these reasons, Amicus urges this Honorable Court

to reverse the decision below.

Respectfully submitted,

THOMAS A. BOWDEN ADAM MOSSOFF

Counsel of Record DANIEL D. BARNHIZER

20 South Charles Street MICHIGAN STATE UNIVERSITY

8th Floor, Sun Life Building COLLEGE OF LAW

Baltimore, MD 21201 417 Law College Building

(410) 727-4300 East Lansing, MI 48824

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