# Petition for Writ of Certiorari — Austin, Nichols & Co. v. Georgia > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1336%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2000 - **Citation:** 531 U.S. 1036 ## Text ) PILED” ~ 00-498 SEP 28 2009) ar a In The E Supreme Court of the United States S AUSTIN, NICHOLS & CO., INCORPORATED; BACARDI IMPORTS, INC.; JIM BEAM BRANDS CO.; BROWN-FORMAN CORPORATION; DAVID SHERMAN CORPORATION; REMY AMERIQUE, INC.; and SOUTHERN WINE & SPIRITS OF AMERICA, INC., d/b/a Shaw Ross International Importers, Petitioners, V. STATE OF GEORGIA; ZELL MILLER, individually and as Governor of the State of Georgia; MARCUS E. COLLINS, individually and as Georgia State Revenue Commissioner; and CLAUDE L. VICKERS, individually and as Deputy Commissioner of the Administration Division of the Department of Administrative Services and as Director of the Fiscal Division of the Department of Administrative Services and as State Treasurer for the State of Georgia, Respondents. S On Petition For Writ Of Certiorari To The Supreme Court Of Georgia e PETITION FOR WRIT OF CERTIORARI + JoHN L. Taytor, Jr. Counsel of Record CeLeste McCoLLouGH MatTHew L. Hess Cuorey, TayLtor & Fei A Professional Corporation The Lenox Building, Suite 1700 3399 Peachtree Road, N.E. Atlanta, Georgia 30326 Telephone: 404/841-3200 COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 OR CALL COLLECT (402) 342-2831 QUESTIONS PRESENTED FOR REVIEW 1. ¢ Is Georgia’s “import” approach - establishing double taxation for alcoholic beverages produced out-of- state, not using “Georgia grown products,” and thereafter “imported” into Georgia (see Ga. L. 1985 at p. 665, § 2, codified at O.C.G.A. § 3-4-60 (sometimes the “1985 Stat- ute”)) - immunized by the Twenty-First Amendment against challenge under the Interstate Commerce Clause (and the Equal Protection Clause) as determined by the Georgia courts in this.case and in Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190 (1987)? ¢ Or does the import approach violate the Interstate Commerce Clause, notwithstanding the Twenty-First Amendment, as determined by the Florida Supreme Court in Ivey v. Bacardi Imports Co., 541 So.2d 1129 (Fla. 1989)? And does the requirement to use local agricultural product violate both the Commerce and Equal Protection Clauses, notwithstanding the Twenty-First Amendment, as determined by the Florida Supreme Court in Division of Alc. Bevs. & Tob. v. McKesson Corp., 524 So.2d 1000 (Fla. 1988) (subsequent history omitted)? Subsidiary questions: la. Typically, a test of congruence is applied: The State proffers a purpose to justify legislation challenged under the Commerce Clause and the reviewing court tests the proffered purpose against the effects of the challenged legislation.-At bottom, this remains an “effect” challenge: Discriminatory effect vitiates the legislation even if the QUESTIONS PRESENTED FOR REVIEW - Continued proffered purpose is genuine. This “effect” test of congru- ence may be preferred, as a prudential matter, when adjudicating a discrimination challenge, but is a direct challenge to discriminatory “purpose” also generally authorized under the Commerce Clause by the language of Bacchus Imports v. Dias, 468 U.S. 263 (1984), and other cases? If generally authorized, is a direct challenge to discriminatory purpose nonetheless foreclosed when the proffered purpose is a declared purpose stated in the legislation itself? May legislative history - events and statements contemporaneous with and part of the legisla- tive consideration and enactment of the statute — be used, not to interpret the meaning of the statute, but to chal- lenge the statute as animated by discriminatory purpose, notwithstanding any guise or subterfuge to the contrary? lb. Ifa direct challenge to discriminatory purpose is not generally authorized under the Commerce Clause, is there an exception when the challenged legislation has, with legislative findings, sought to pre-determine the “effect” as well? Apart from their relation to the availabil- ity of a purpose challenge, do such legislative findings foreclose an “effect” challenge? What level of scrutiny, or deference, should be applied to such legislative findings in a discrimination challenge under the Interstate Com- merce Clause? What level should be applied in nexus, multiple taxation, and tax-to-cost relation challenges under the Interstate Commerce Clause and the Due Pro- cess Clause of the Fourteenth Amendment? QUESTIONS PRESENTED FOR REVIEW - Continued lc. When the State defends with an assertion of Twenty- First Amendment immunity, does this assertion change the tests and level of scrutiny generally applicable to discrimination (as well as nexus, multiple taxation, and tax-to-cost relation) challenges under the Interstate Com- merce Clause and the Due Process Clause of the Four- teenth Amendment under the circumstances outlined above? More particularly, should the courts follow the approach represented, by way of example, by the e the Fifth Circuit’s decision in Cooper v. McBeath, 11 F.3d 547 (Sth Cir.), cert. denied, 512 U.S. 1205 (1994), e the D.C. Circuit’s decision in Milton S. Kronheim & Co. v. District of Colombia, 91 F.3d 193 (D.C. Cir. 1996), cert. denied, 520 U.S. 1186 (1997), whose approach was gener- ally followed in this case, or e the Seventh Circuit’s decision in Bridenbaugh v. Freeman-Wilson, Nos. 00-1044 & 00-1046, 2000 U.S. _ LEXIS 22991 (7th Cir. Sept. 13, 2000)? 2. ¢ Does the Twenty-First Amendment provide any immunity for a violation of the Foreign Commerce Clause as determined by the Georgia courts in this case? ¢ Or is such immunity unavailing as generally determined by General Agreement on Trade and Tariffs (GATT) Panel on United States - Measures Affecting Alcoholic and Malt Beverages in March 1992? iv QUESTIONS PRESENTED FOR REVIEW - Continued Subsidiary questions: 2a. When the challenge is based on the Foreign Com- merce Clause, does this change the tests and level of scrutiny that would otherwise generally apply under the circumstances outlined above? 2b. If the Twenty-First Amendment does provide any level of immunity for a violation of the Foreign Com- merce Clause, does the assertion of this immunity change the tests and level of scrutiny generally applicable under the circumstances outlined above? Vv CORPORATE DISCLOSURE STATEMENT Austin, Nichols & Co., Inc. is a privately held corpo- ration, which is 100% owned by the French corporation, Pernod Ricard S.A., which is publicly traded on the Bourse. Bacardi-Martini U.S.A., Inc. is 100% owned by Bacardi Limited, a Bermudian privately held corporation. Jim Beam Brands Co. is 100% owned by Jim Beam Brands Worldwide, Inc., which is 100% owned by Fortune Brands, Inc., a publicly traded Delaware corporation. Brown-Forman Corporation has no parent or publicly held company owning 10% or more of the corporation’s stock. David Sherman Corporation has no parent or pub- licly held company owning 10% or more of the corpora- tion’s stock. Remy Amerique, Inc. is a privately held corporation, which is 100% owned by the French corporation, Coin- treau S.A., which is 100% owned by Remy-Cointreau, S.A., a French publicly traded company. Southern Wine & Spirits of America, Inc. has no parent or publicly held company owning 10% or more of the corporation’s stock. vi TABLE OF CONTENTS Page OPTIONS ANID ORGS . ccc cccccniscccsesevsees 1 SE SUE 6 sss bSAn dpb oesna¢oseacssadeendeubion 1 g 8.) 8 ty |) nner ereer a 1 STATEMENT OF THE PU ewarcssavctusdseeatinabe 2 A. Georgia’s 1985 Statute Was Enacted, Using the Guise of a So-Called “Import” Approach, in Cir- cumvention of Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984), to Continue the Discriminatory and Protectionist Double Taxation that Has Been Ae FERCS TRICO TS TIT oan se ccca cea secesans B. Since 1985, Georgia Has Consistently Avoided Application of Federal Law.................... I. In the First Challenge to the “Import” Approach, the Georgia Supreme Court Con- strued Plaintiff Heublein’s Challenge as an “Unchallenge” and Summarily Rejected the PION 6. ces vei wun wn cine cas veeSbeusuwses Faced with Incontestable Discrimination in the Legislative History of the 1985 Statute, the Georgia Supreme Court Held the Pre-1985 Statute Unconstitutional, but Made its Hold- eg he Pere ere ee Despite this Court’s Reversal of Prospectivity in Beam, the Georgia Supreme Court Relied upon the Reich “Bait and Switch” to Avoid Se SMO 6 eed cea bake Seaien eer elel 7 Vii TABLE OF CONTENTS - Continued Page 4. The Florida Supreme Court, in Ivey, Refused to Follow the Georgia Supreme Court’s Heublein Decision and Held the “Import” Ruse to Be Unconstitutional................ 9 5. The GATT Panel on United States — Measures Affecting Alcoholic and Malt Beverages Held. Georgia’s 1985 Statute to be a Violation of the RN eS RON 0a £05 PESTS Be oUt ee se kkk 11 C. The Present Case: The Twenty-First Amendment Was Upheld as an Immunity to All Claims .... 12 ARGUMENT AND CITATION OF AUTHORITY.... 15 A. Now that Other States Have Brought Themselves into Compliance with Bacchus, only this Court Can Protect Their Commerce from Georgia’s Willful Hold-Out Discrimination............... 15 B. The Conflict between Georgia and Florida over the “Import” Approach Centers on the Nature of a Challenge to Discriminatory Purpose under the St Sa Sete Re tne ey onan ae 17 C. The Conflict also Points up a Split among the - Circuits over How to Weigh Purpose when Deciding Twenty-First Amendment Immunity .. 20 D. This Case also Presents the Important Question Whether the Twenty-First Amendment Affords Immunity to the States for their Violations of the Foreign Commerce Clause..................... 24 Se cate pe ag EE OE DoE RE 25 Vili TABLE OF AUTHORITIES Page Unitep States CONSTITUTION U.S. Const. amend. XIV, § 1.......... sep ere re te 1, 14 CE. SAE SINE. Es bss on ios whew civ ecieets passim Sk ee ee Oe ee eer reeeerrr ree i, 13, 3 tk Ge Ye eS 8 ee errr rere ree 1, 13 Ss is I nd ribs vn saa tensci ete ssvaceeeusscans 1 STATUTES AND INTERNATIONAL AGREEMENT DD Ui Br is hore e hs oo hk ea 1 a A i ree as 15 Ga. L. 1985 at p. 665, codified at O.C.G.A. § 3-4-60. .passim Gon. L. TORR OR We BI ie on oie noes cnns cick en sieieees 13 General Ageement on Trade and Tariffs eueae- — DECISIONS OF THE Unrtep STATES SUPREME COURT 324 Liquor Corp. v. Duffy, 479 U.S. 335 (1987)........ 21 Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984) ....passim Bayside Fish Flower Co. v. Gentry, 297 U.S. 422 CROUI is «we eRR Ks Wns CEMA ih Se Sie Ia 19 Brown-Forman Distillers Corp. v. New York State Liguor Auth., 476 U.S. 573 (1986)...........+... 6, 2 California Ret. Lig. Deals Ass’n v. Midcal Alum., Inc., a US. 97 (19S) ... 2.225. Pa Ve Kntasndnkasbae ees 14, 21 he 2 pokeatiae) na. ix TABLE OF AUTHORITIES - Continued Page Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 PER AN rs SANGRA baa Can Kanrneadee dace od Cceee 14, 21 Celotex Corp. v. Catrett, 477 U.S. 317 (1986).......... 14 Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 Cecile, CAAA ETO EO Ae aa 20 Container Corp. v. Franchise Tax Bd., 463 U.S. 159 i TPR eP er ee ee ye AWiededapebivarese fuse eis des 25 Crosby v. National Foreign Trade Counsel, 503 U.S. -, Se EE hes 6 op ce bck ca nok ov ces 7 Foster-Fountain Packing Co. v. Haydel, 278 US. 1 RE ERs TE ean eA Re en 19 Freeman v. Hewitt, 329 U.S. 249 (1946)............... 20 Healy v. Beer Inst., Inc., 491 U.S. 324 (1989).......... 15 Hunt v. Washington State Apple Advertising Comme; G52 1.5: S53 (Y977).i ice cc ccc vsccescccs 18 James B. Beam Distilling Co. v. Georgia, 501 U.S. 529 GN 6 bois £6 00 bs 5 2a Oi dav acts uive vtbis Cech 2,9 James B. Beam Distilling Co. v. Georgia, 513 U.S. MNS oo toe FAC ARERd odo Saw du da6e ooo chdksixe 9 Japan Line, Ltd. v. County of Los Angeles, 441 U.S. cle he: ER EEPES REE & go SaDt RR abe LRM Si erly ae a 24 Minnesota v. Clover Leaf Creamery, Co., 449 U.S. 456 PMEE Rak oivadsbnsiatereivaeedss ae eee eAeANS mise 20 North Dakota v. United States, 495 U.S. 423 (1990) ....22 Postal Tel.-Cable Co. v. Borough of Taylor, 192 U.S. 64 NG ihc hd Anes wen h WAN UES wkd 0: dk ae 4% o dé 0's 19 TABLE OF AUTHORITIES - Continued Page Postal Tel.-Cable Co. v. City of Richmond, 249 U.S. Mn MEOOUE cocker ect cusnncnacccecnnekcssesbesestuns 19 Retcn @ Camis, SIS US. BGG CIGPED oa ccccccccscvesscs 9 South-Central Timber Dev., Inc. v. Wunnicke, 467 Da GE GUE 8 wc Sa ciic cadivntsnnnebenduduneens 18, 24 State Board of Equalization v. Young's Market Co., Be Sa OP CEPR hak ctcdnsanvarensasecesenantas 2, 3 Washington v. United States, 460 U.S. 536 (1983)...... 19 West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 Serer ee rrrry rece re rt rrr eT 16 OTHER DECISIONS Age Int'l. Inc. v. Miller, 830 F. Supp. 1484 (N.D. Ga. POU c cs cet ewdtartecevesshedsianshoeteteesetees 12, 15 Bridenbaugh v. Freeman-Wilson,. Nos. 00-1044 & 00-1046, 2000 U.S. App. LEXIS 22991 (7th Cir. BOOS. ED, BROEs c cc tccccdsvetcsnsencncedheesass 23, 24 Cooper v. McBeath. 11 F.3d 547 (5th Cir. 1994)... 14, 20, 21 Dickerson v. Bailey, 87 F. Supp. 2d 691 (S.D. Tex. BOOED: voc nehvesadeceesncseeednsdvteseaseeewet cases 14 Division of Alc. Bevs. & Tob. v. McKesson Corp., 524 BO. BE WORD CFG. TUDE ov ccc cen sescanncrecwawsst 6, 21 GATT Panel on U.S. - Measures Affecting Alcoholic and Malt Beverages (Mar. 16, 1992) ..... 11, 12, 23, 24 Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190 SENT 6GNAD4 4:0 E EAL aO ARES EE PUA D OR EASA CEE EE ES passim Heublein, Inc. v. Department of Alc. Bev. Cont., 237 Woh Sik, SPO: Me FE CROUOW sv ecdccsancdccnsesee’ 21 xi TABLE OF AUTHORITIES - Continued Page Ivey v. Bacardi Imports Co., 541 So. 2d 1129 (Fla. NTA 64606 bbebanacnnentonaunend aklenebnnct passim Indiana Wholesale Wine & Liquor Co. v. State, 662 N.E.2d 950 (Ind. App. 1996) ................... 14, 21 James B. Beam Distilling Co. v. State, 259 Ga. 363, ee EE WE CUED 8 00 045 Vewkeaneenuraselaneees 8 James B. Beam Distilling Co. v. State, 263 Ga. 609, Sr Oe FO SPU bok enc cncnvinassoackcousseeann 9 Kendall-Jackson Win., Ltd. v. Branson, 82 F. Supp. 2d Se GPCEA TE FUND a ved cickcisccencaisceuchweaaas 21 Lau’s Corp. v. Haskins, 621 Ga. 491, 405 S.E.2d 474 i) Ee ey ee Nene 14 Loretto Winery, Ltd. v. Gazara, 601 F. Supp. 850 GREG Bs BOE nv vv su auienecnveawntes hexxegsenke 6, 21 Milton S. Kronheim & Co. v. District of Columbia, 91 en Woe GE. CR, DOU ios oven cv bec incaescad 22, 23 Pete's Brewing Co. v. Whitehead, 19 F. Supp. 2d 1004 SOGR. GN BEUK Cu ktbocndeacedn dc ceased punemen 14, 21 Reich v. Collins, 262 Ga. 625, 422 S.E.2d 846 (1992) ..... 9 Rice v. Alcoholic Bev. Cont. Apps. Bd., 21 Cal.3d 431, ee re rrT en Pree 14, 21 OPINIONS AND ORDERS The Superior Court of Fulton County, State of Geor- gia, filed a Final Order in this matter, Civil Action File Nos. E-3793 & E-25073, on May 21, 1998. The Georgia Supreme Court passed a minute order in Case No. S00A1357 on June 30, 2000 dismissing the appeal. JURISDICTION The Georgia Supreme Court’s minute order was passed on June 30, 2000. Jurisdiction is conferred upon this Court under 28 U.S.C. § 1257. PROVISIONS INVOLVED This action is a challenge to Georgia’s double taxa- tion for alcoholic beverages produced out-of-state, not using “Georgia grown products,” enacted at Ga. L. 1985 at p. 665, § 2, codified at O.C.G.A. § 3-4-60 (sometimes the “1985 Statute”). The action is based on, among other provisions, the Interstate and Foreign Commerce Clause, U.S. Const. art. I, § 8, cl. 3; the Due Process Clause of the Fourteenth Amendment, U.S. Const. amend. XIV, § 1; the Equal Protection Clause of the Fourteenth Amendment, U.S. Const. amend. XIV, § 1; the Import Export Clause, U.S. Const. art. I, § 10; and the Supremacy Clause, U.S. Const. art. VI, which are set out in the Appendix, and also involves the Twenty-First Amendment, U.S. Const. amend. XXI, and the General Agreement on Trade and Tariffs (GATT). ¢ STATEMENT OF THE CASE A. Georgia’s 1985 Statute Was Enacted, Using the Guise of a So-Called “Import” Approach, in Circumvention of Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984), to Continue the Discrimina- tory and Protectionist Double Taxation that Has Been in Place Since the 1930s. The double-taxing 1985 Statute was enacted in spring of 1985. Georgia had imposed discriminatory double tax- ation (under what is sometimes called the Pre-1985 Stat- ute) for decades. The double taxation of the 1985 Statute is a mere continuation of the double taxation of the Pre-1985 Statute. The Pre-1985 Statute was struck down as a violation of the Commerce Clause. See James B. Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991). The present lawsuit is an effort, the second such effort, to do the same for the 1985 Statute. The crisis for Georgia’s discriminatory taxation scheme began in 1984. Until 1984, a minority of States (Hawaii, Georgia, and Florida among them), relying upon State Board of Equalization v. Young’s Market Co., 299 U.S. 59 (1936), and progeny, favored alcoholic beverages pro- duced within their borders by imposing lighter taxation on those beverages while imposing heavier taxation on alcoholic beverages produced in the other States. In 1984, in Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984), this Court struck down Hawaii's preferential taxation for in- state alcoholic beverages as discriminatory against out- of-state beverages and as simple economic protectionism, all in violation of the Interstate Commerce Clause. The Court did so expressly notwithstanding its earlier Young’s Market decision and progeny.! With the advent of Bacchus, the remaining discriminatory taxation against out-of-state beverages in a minority of jurisdictions fell State by State through repeal, attorney general opinion, or court deci- sion — with the exception of at least two States: Georgia and Florida. In some of these jurisdictions, the State officials took bold action by declining to apply and implement their own State tax statutes in a discriminatory fashion, even in advance of corrective action by the State legislature.2 Georgia officials were not so bold, but they did monitor what was happening in the other affected States in order to consider their options for correcting Georgia’s discrim- ination against out-of-state alcohol products. By early September of 1984, Georgia officials had concluded that the Georgia tax scheme (with its so-called “preferential tax,” preferring in-state product and suppliers over out- 1 See Bacchus, 468 U.S. at 274 & n.13 (“Despite broad language in some of the opinions of this Court written shortly after ratification of the Amendment... ,” citing Young’s Market). ? The legislative discussion in the Georgia House, at the time of the enactment of the 1985 Statute, likewise took note of these developments: “The State of Tennessee, in view of the Bacchus decision, has already reversed itself. The State of Virginia has reversed itself. The State of Florida has reversed itself, and they’ve gone into, they’ve got a court litigation going on in this case down there now.” All references to evidence are supported and explained in the Appendix. of-state product and suppliers) was unconstitutional. Fur- ther, Georgia officials (of the Georgia Revenue Depart- ment, after consulting with the Georgia Law Department) concluded that the unconstitutionality should be cor- rected by equalizing the tax. The tax on in-state liquor and wine would be brought up to and equalized at the level of taxation already imposed upon out-of-state liquor and wine. The Revenue Department proposed an equaliz- ation bill that would, in the words of the Department’s Director of the Alcohol & Tobacco Tax Unit, correct the illegal pre-1985 “preferential tax treatment for in state distillers and vint[nJers,” now clearly unconstitutional in light of “the U. S. Supreme Court Decision in the State of Hawaii case.” In-state distillers and vintners, and their lobbyist lawyers, fiercely resisted equalization. To protect the competitive advantage afforded them by the preferential tax, the in-state lobby devised a guise by which they hoped to continue the same double taxation under another name. Their subterfuge became known as the import approach. Under the import approach, the historic first half of the tax would be applied, as before, to all alcohol products regardless of origin. The historic second half of the tax would be renamed an import tax and applied to all alcohol products “imported” into Georgia. Since the in-state products, by definition, could not be “imported” into Georgia, these products would never become subject to the second tax. Since all out-of-state products must cross over a Georgia border, all out-of- state products would be subject to the second tax. The net effect of the import approach would be that the same discriminatory and protectionist double taxation of the Pre-1985 Statute would go on in precisely the same man- ner — but under a new “import” name. A critical question in the ensuing legislative struggle: Could the tax break be maintained by renaming the sec- ond half of the tax and calling it an import tax: “Is it further true that the import tax, the new tax added, is just a new tax not called an excise tax, but,an import tax, to maintain that base of income that we presently have from the alcohol?” A proponent of the import approach charac- terized the bill as an effort, using “verbiage,” to “shore up” “the existing law that has been in effect in this state since 1937.” Another legislator, more honest, decried the bill as “a PHONEY new import tax called a different name.” The in-state lobby recruited George D. Busbee to the effort, former Governor and, by this time, in private practice at the Atlanta firm of King & Spalding. He urged that, without economic protectionism, Georgia “would [be] put . . . at a competitive disadvantage with the 19 states now providing similar incentives.” Proponents of equalization easily rebutted that contention - if all States complied, there would be no competitive disadvantage for any one of them - and urged compliance with this Court’s Bacchus decision: “I think that all states is going to come down to have an equal tax rate so that they can comply with the commerce clause that is deemed by the Supreme Court of this land.” Mr. Busbee would have nothing of it: “[DJ]o not let U.S. Supreme Court change State public policy.” ° John Linder, now U.S. Representative. (All emphasis herein is supplied unless otherwise indicated.) Proponents of the import approach won the day with yet more economic protectionism. They built into their bill a second protection requiring that producers use “Georgia grown products” to qualify for the tax break (while imposing double taxation on all those producers, and their goods, who use agricultural products of out-of- state origin). See Ga. L. 1985 at p. 665, § 2, codified at O.C.G.A. § 3-4-60(3). With this second protection,* propo- nents of the import approach could appeal to rural legis- lators: “[T]he measure that I’m now bringing before you... will give the favorable tax preference to the agri- cultural products of this state.” At the end of the legisla- tive proceedings that gave rise to the 1985 Statute, there was this striking admission: What I’m telling you is that there is a piece of legislation in the Governor’s office that provides the tax benefits to our own people and our own agricultural products, both with respect to alcohol tax on distilled spirits and on domestically produced wine. 4 Such a requirement has been held to constitute an independent violation of the Commerce Clause. See Loretto Winery, Ltd. v. Gazara, 601 F. Supp. 850, 858-59 (S.D.N.Y.), modified on other grounds, 761 F.2d 140 (2d Cir. 1985); see also, e.g., Bacchus, 468 U.S. at 268-73; Division of Alc. Bevs. & Tob. v. McKesson Corp., 524 So. 2d 1000, 1006-09 (Fla. 1988) (subsequent history omitted) (similar content requirement under Florida law held to violate both Commerce and Equal Protection Clauses). 7 B. Since 1985, Georgia Has Consistently Avoided Application of Federal Law. 1. In the First Challenge to the “Import” Approach, the Georgia Supreme Court Con- strued Plaintiff Heublein’s Challenge as an -“Unchallenge” and Summarily Rejected the Appeal. The first challenge to the import approach came in Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190, appeal dismissed, 483 U.S. 1013 (1987). Without benefit of discov- ery, Heublein was a facial challenge. Counsel for the plain- tiff, in oral argument before the trial court, concentrated the challenge on discriminatory effect,5 stating in a rhe- torical flourish that “ ‘we are not sitting here and chal- lenging what the state says their purpose was in adopting this legislation. This is not a factual case. What we are saying is whatever you feel your reason was, it doesn’t fly in light of the Commerce Clause.’ ” See Heublein, 256 Ga. 578, 351 S.E.2d at 195-96. The Georgia Supreme Court seized upon this statement in the trial court transcript and ruled, summarily rejecting the appeal, that the plain- tiff had left purpose “unchallenged.” Id. 351 S.E.2d at 196. ° Counsel presumably sought to avoid complications in challenging legislative “intent” and lacked the evidentiary basis to do so in any event. He no doubt also wanted to avoid the expense of developing legislative history. See Crosby v. National Foreign Trade Council, 530 U.S. -, 120 S. Ct. 2288, 2304 (2000) (Scalia, J., concurring). A facial challenge based upon discriminatory effect is, moreover, a time-honored tradition, often encouraged by the cases so as to avoid the embarrassments of a direct challenge to purpose. See infra. 2. Faced with Incontestable Discrimination in the Legislative History of the 1985 Statute, the Georgia Supreme Court Held the Pre-1985 Stat- ute Unconstitutional, but Made its Holding Pro- spective Only. The next challenge was to the Pre-1985 Statute. Lim- ited discovery turned up evidence surrounding the enact- ment of the 1985 Statute, the statute under challenge here, so compelling that the trial court struck down the prede- cessor statute: This Court further holds that the purpose of O.C.G.A. § 3-4-60, as it existed during the years in question, was economic protectionism, i.e., to benefit local business and local industry. This purpose is indicated by the legislative history .... The protectionist purpose of the statute is further indicated by the exhibits “A-3” through “A-13” produced by the plaintiff in opposition to the defendants’ Motion for Summary Judg- ment and produced to plaintiffs by the defen- dants pursuant to this Court’s Order of December 3, 1987{ ]. The Georgia Supreme Court affirmed “that the purpose and effect of the statute was economic protectionism,” James B. Beam Distilling Co. v. State, 259 Ga. 363, 382 S.E.2d 95, 96 (1989), but avoided application of Federal law by making the ruling prospective only. Even without its skirting prospectivity ruling, this Beam decision would not have brought Georgia into compliance with Federal law: The Pre-1985 Statute no longer existed, and its suc- cessor in double taxation, the 1985 Statute, had already been upheld in Heublein, ironically for the reason that “purpose” was “unchallenged.” 3. Despite this Court’s Reversal of Prospec- tivity in Beam, the Georgia Supreme Court Relied upon the Reich “Bait and Switch” to Avoid Federal Law. This Court reversed prospectivity. James B. Beam Dis- tilling, 501 U.S. 529 (1991). After remand, the Georgia Supreme Court, anticipating and discussing the Beam case, established new procedural bars in the notorious Federal pensioners’ case, Reich v. Collins, 262 Ga. 625, 422 S.E.2d 846 (1992), which were then applied in the Beam case to avoid, once again, the application of Federal law. See James B. Beam Distilling Co. v. State, 263 Ga. 609, 437 S.E.2d 782 (1993). This Court, reversing in Reich, branded the Georgia Supreme Court’s newly created procedural bars a “ ‘bait and switch,’ “Reich v. Collins, 513 U.S.106, 111 (1994) (tendential quotation marks in original), but it was too late for the Beam case. See James B. Beam Distilling Co. v. Georgia, 513 U.S. 1056 (1994) (denying cert.) 4. The Florida Supreme Court, in Ivey, Refused to Follow the Georgia Supreme Court’s Heublein Decision and Held the “Import” Ruse to Be Unconstitutional. Florida, like Georgia, had resisted Bacchus. When the Georgia Supreme Court rejected the Heublein challenge to the new import approach, the Florida legislature followed suit and enacted an import approach statute of its own, specifically “modeled after Georgia’s import tax on alco- holic beverages.” Ivey v. Bacardi Imports Co., 541 So. 2d 1129, 1137 & n.5 (Fla. 1989). The Florida Supreme Court 10 ~— declined to follow the Georgia Supreme Court’s Heublein decision, however: . The tax scheme at issue was modeled after Georgia’s import tax on alcoholic beverages which was recently upheld by the Georgia Supreme Court in Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190 appeal dismissed, 483 U.S. 1013, 107 S. Ct. 3253, 97 L. Ed. 2d 753 (1987). In Heublein, the court employed the balancing approach set forth in Bacchus to uphold a dis- criminatory import tax on distilled spirits and wines, because “the unchallenged purpose of the import tax implicate[d] central concerns of the Twenty-first Amendment, i.e., defraying the increased costs of regulating the importation into this state of intoxicating liquors.” The import tax which was upheld in Heublein was based on legislative findings similar to those set forth in section 9. However, unlike the plaintiffs in the instant case, the plaintiffs in Heublein did not challenge the Georgia general assembly’s stated purpose for the import tax. They simply conceded the existence of the Twenty-first amendment concerns and argued that whatever the underlying purpose, ” ‘it doesn’t fly in light of the Commerce Clause.’ ” Id. at 1137 (citation and footnotes omitted). The Florida Supreme Court, squarely presented with the challenge that was said not to have been made in Heublein, went on to consider the merits of the challenge and rejected the import approach as “unconstitutional.” Id. at 1137-40. Georgia now stands alone in its reliance upon the import approach to justify differential taxation on in-state and out-of-state alcoholic beverages. 11 5. The GATT Panel on United States - Mea- sures Affecting Alcoholic and Malt Bever- ages Held Georgia’s 1985 Statute to be a Violation of the GATT. At the same time, perhaps spurred on by the Bacchus decision’s upholding of the principle of nondiscrimina- tion in interstate commerce, even as applied to alcoholic beverages, Canada moved to uphold this principle in international commerce and challenged, under the Gen- eral Agreement on Trade and Tariffs (GATT), numerous discriminatory and protectionist provisions enacted by United States political subdivisions, including the very Georgia statute under challenge here. The resulting deci- sion of the GATT Panel on United States — Measures Affecting Alcoholic and Malt Beverages (Mar. 16, 1992), which only dealt with measures affecting wine and malt beverages, specifically condemned the Georgia statute’s double taxation, as it applies to out-of-state wine, as a violation of the GATT.® © The Panel decision found in part: 5.20 The Panel next examined the claim by Canada that the lower excise tax rate or the tax exemption provided by the states of Alabama, Georgia, Iowa, Nebraska and New Mexico to wine based upon the in-state or domestic origin of the product was contrary to Articles III:1 and III:2. The Panel recalled the United States arguments that the lower excise tax rates and tax exemptions in the states of Alabama, Georgia, Nebraska and New Mexico were allowable as subsidies under Article III:8(b), and that the state of Iowa applied the same tax rate to wine from all sources sold at wholesale. For the same reasons as those enunciated with respect to the federal excise tax 12 C. The Present Case: The Twenty-First Amend- ment Was Upheld as an Immunity to All Claims. Chastened by the 1991 loss on prospectivity in Beam (but before the ultimately successful “bait and switch” in 1994), Georgia again contemplated equalization. What emerged from the 1992 Georgia legislative session, how- ever, was procedural manipulation - a newly shortened 90-day statute of limitations, a denial of interest, a useless credit, among other things. See Age Int'l, Inc. v. Miller, 830 F. Supp. 1484, 1489 (N.D. Ga. 1993), aff'd, 37 F.3d 637 (11th on beer, the Panel found that the application of differential state excise tax rates in the states of Alabama, ‘Georgia, lowa, Nebraska and New Mexico based upon the origin of the wine, which discriminates against imported wine in favour of the domestic like product, is inconsistent with Article III:2, first sentence. Also, for the same reasons enunciated earlier, the Panel found that the state tax measures in issue are not allowable as subsidies under Article III:8(b). GATT Panel Decision { 5.20 (emphasis in part omitted). The Panel concluded that (e) the provision by the states of Alabama, Georgia, Nebraska and New Mexico of lower excise tax rates on wine based upon its in-state or domestic origin, which lower rates are not available to imported wine, is inconsistent with Article III:2, first sentence, and is not covered by Article III:8(b). Id. J 6.1(e). After initially defending Georgia’s discriminatory practices before the Panel, once the adverse decision was rendered, the United States, through its Ambassador Rufus Yerxa, decided not to oppose formal adoption of the Panel’s report. 13 Cir. 1994). The new 90-day limitations period prompted the instant lawsuit. Petitioners filed their administrative applications with the Georgia Revenue Department, as prescribed by statute, and when “the Department took no action on the applications” (as Respondents later admit- ted and as U.S. District Court found, see id. at 1496-97), Petitioners filed their “suit” on the 88th day - barely “within 90 days after the effective date” as the 1992 procedural limitations had commanded, on pain of losing the claims altogether.” Acutely aware of the Heublein whipsaw, Petitioners launched a much expanded challenge - facial and applied, potential and actual - to the 1985 Statute, assert- ing every available Interstate Commerce Clause claim, attacking both discriminatory purpose and/or effect and making nexus, multiple taxation, and tax-to-cost relation claims as well. Petitioners brought additional claims under the Foreign Commerce Clause, the Import Export 7 (d) With regard to taxes paid and stamps purchased prior to the effective date of this Act and with regard to which an application for credit or claim for refund has been filed prior to the effective date of this Act, the law which was in effect at the time the application for credit or claim for refund was filed shall apply, provided that no interest shall be allowed on any such payments, and provided, further, that if a suit for refund or credit has not been filed prior to the effective date of this Act with regard to any such application or claim, any suit for recovery of a credit pertaining to such a claim or application must be filed within 90 days after the effective date of this Act. See Ga. L. 1992, p. 1458, § 5(d). 14 Clause, the Due Process Clause, and the Equal Protection Clause, among others. Opposing motion for summary judgment,® Petitioners exhaustively supported all of these claims with extensive evidentiary materials and legal analysis. The trial court solicited proposed orders on floppy, and with almost no modification, Respondents’ floppy became Fulton Superior Court’s Final Order. Skip- ping over Petitioners’ extensive showing (in disregard of the teachings of this Court and others’), the Final Order § Under a State law regime indistinguishable from Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Compare Lau’s Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). 9 Numerous decisions confirm that a court must “turn first before assessing the impact of the Twenty-first Amendment to consider whether the [state] statute does in fact conflict with federal law.” Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 698 (1984); accord California Ret. Liq. Deals. Ass'n v. Midcal Alum., Inc., 445 U.S. 97 (1980); Bacchus, 468 U.S. 263; Cooper v. McBeath, 11 F.3d 547, 552-54 (Sth Cir.) (first conducting a “traditional Commerce Clause” analysis), cert. denied, 512 U.S. 1205 (1994); Dickerson v. Bailey, 87 F. Supp. 2d 691, 707 (S.D. Tex. 2000) (“In applying the two-tier balancing test to challenged liquor statutes to determine whether they discriminate against out-of- state interests and, if so, whether they are ‘saved’ by the twenty- first amendment”); Rice v. Alcoholic Bev. Cont. Apps. Bd., 21 Cal. 3d 431, 439, 579 P.2d 476, 482 (1978) (“Our first inquiry”); Indiana Wholesale Wine & Liquor Co. v. State, 662 N.E.2d 950, 964 (Ind. App. 1996) (“If the operation of the Twenty-first Amendment is to ‘save’ state regulation otherwise invalid under the ‘negative’ Commerce Clause, one must a fortiori conclude that the state regulation is constitutionally infirm before considering the extent to which the Twenty-first Amendment ‘saves’ the regulation from invalidity” (citation omitted), in part vacated on other grounds, Indiana W.W.&L. Co., Inc. v. State, 695 N.E.2d 99 (Ind. 1998); see also Ivey, 541 So. 2d at 1136; Pete’s Brewing Co. v. Whitehead, 19 F. Supp. 2d 1004, 1017 (W.D. Mo. 1998). 15 effectively upheld the Twenty-First Amendment as an immunity to all of Petitioners’ claims.!° The Georgia Supreme Court summarily dismissed Petitioners’ appeal without opinion. ¢ ARGUMENT AND CITATION OF AUTHORITY A. Now that Other States Have Brought Them- selves into Compliance with Bacchus, only this Court Can Protect Their Commerce from Geor- gia’s Willful Hold-Out Discrimination. Even if classic circumstances, see Sup. Ct. R. 10(a), (b) & (c), were not present, prudential considerations would strongly favor review on certiorari. When Bacchus was rendered, as many as 19 other States had various forms of discriminatory taxation in violation of the Federal Consti- tution. Because the violations involve State taxes, they cannot be reviewed in the lower Federal courts. See Age Int'l, 830 F. Supp. at 1502 (dismissing “on jurisdictional grounds” under the Tax Injunction Act, 28 U.S.C. § 1341). Short of eventual action by this Court, it is left to each State to sort out its own compliance with the Federal Constitution. The argument against compliance is always the same, as it was here: Former Governor Busbee urged 10 In contravention of established precedent as to some three of Petitioners’ claims (the nexus, multiple taxation, and tax-to-cost relation claims — sometimes called direct regulation challenges). See Healy v. Beer Inst., Inc., 491 US. 324, 334-35 (1989) (plurality opinion) (citing Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 585 (1986) (holding supported by five Justices)). 16 that the double taxation be retained because, without protectionism, Georgia “would [be] put . . . at a competi- tive disadvantage with the 19 states now providing simi- lar incentives.” The argument is, of course, fallacious. The Commerce Clause establishes a “unitary national mar- ket,” in effect a free trade zone, among the several States. See West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994). Just as it required Georgia to resist Mr. Busbee’s impor- tuning for special “incentives” and special “competitive” advantages for “local industries,” the Commerce Clause requires all other States to do the same. If 19 other States did provide protectionist incentives, those incentives would have to go as well. And they did fall, with Georgia and Florida as hold- outs, clinging to the import approach. The Florida Supreme Court could easily have followed Georgia's Heublein decision to uphold Florida’s import statute (specifically “modeled after Georgia’s import tax on alco- holic beverages,” Ivey, 541 So. 2d at 1137). But the Ivey court, in a remarkable tribute to the confidence the framers of the Tax Injunction Act showed in establishing this unusual system of self-review, took on the import approach and unanimously condemned its own State’s statute as “unconstitutional.” Id. at 1137-40. Two High State courts have now passed on the constitutionality of the import approach and reached diametrically opposed results. No other Federal court can resolve, or even con- sider, this conflict. If Georgia’s import approach is allowed to stand, unreviewed, in this closely watched industry, it could well lead to a new proliferation of “import” exceptions. Even if none of this were true, espe- cially when other States have brought themselves into 17 compliance, Georgia should not be allowed to profit, to the disadvantage of other States, from its hold-out posi- tion and from its studied refusal at each step of the way to apply Federal law. After more than a decade of litiga- tion, multiple court challenges in State and Federal court, and repeated legislative initiatives, there is no other recourse for Petitioners or the other compliant States. B. The Conflict between Georgia and Florida over the “Import” Approach Centers on the Nature of a Challenge to Discriminatory Purpose under the Commerce Clause. “Purpose” often stands at the disputed intersection of the Twenty-First Amendment and the Commerce Clause. Courts have searched for the “central purpose of the provision,” e.g., Bacchus, 468 U.S. at 276, and of course, discriminatory “purpose” often forms the basis of challenge under the Commerce Clause, e.g., id. at 270. Even conceding that the term may have differing mean- ings in each context,!! intersection, and even collision, is unavoidable: Is the “purpose” of the legislature within the “purpose,” or reserved power, of the Amendment? The watchword of Bacchus and other cases in negotiating this intersection is pragmatic harmonization. See id. at 275. This effort assumes that the legislative “purpose” has "! Referring, in the one case, to the purposes or, perhaps better said, powers set out in the text of the Amendment, intended by its framers, and otherwise implied by the structure of the Constitution and, in the other case, to the purposes of the enacter or implementer of the challenged legislation. 18 already been established.!? Complicating the inquiry into purpose is the great temptation, as in all Commerce Clause cases, for the State legislature to discriminate against unrepresented outside interests and to dissemble about doing so - precisely so as to preserve the discrimi- natory measure against challenge. See generally South- Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 92 (1984). Even without the overlay of the Twenty-First Amend- ment, the ways in which a plaintiff may establish, and challenge, purpose in a Commerce Clause case are highly disputed. The cases frequently avoid implications arising from evidence of purposive discrimination by declining to reach the issue and resolving the case instead on “effect” grounds. E.g., Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 352-53 (1977). Presuma- bly, this avoidance is to be preferred as a prudential matter when the plaintiff’s claim will be sustained in any event on another basis. But has this technique crystalized, as held below, into the exclusive means to challenge purpose? If direct challenge to purpose remains a viable Commerce Clause claim, is it nonetheless foreclosed, as held below, when the purpose proffered by the State is a declared purpose stated in the legislation itself?!5 Even if 12 An issue that arguably did not arise in Bacchus because the purpose was said to be “undisputed.” See Bacchus, 468 U.S. at 271. 13 If a direct challenge to purpose is still viable, then there is the question what evidence may be used to support such a challenge. If the plaintiff is confined to the formally enacted text of the legislation (on the principle, largely from cases concerning statutory interpretation, that only the agreed text 19 the precedents to the contrary,!4 from another era, are not to be sustained, should an exception be made for the circumstances in this case where the legislature has sup- plied advance findings to pre-determine “effect” as well? Without such an exception, a legislature can make bullet- proof its discrimination against the commerce of other States. Apart from their relation to the availability of a purpose challenge, do such legislative findings foreclose can be said to represent the will of all legislators), then a carefully crafted declared purpose and legislative findings (however counterfactual), all of which are by definition part of the formal text, may be easily used, as here, to pre-empt such a challenge. Application of this principle in a Commerce Clause setting leaves enforcement of the Clause to the political branches of a single State where, however, there is no “ ‘political check,’ ” Washington v. United States, 460 U.S. 536, 545 (1983) (tendential quotation marks), representing the interests of the remaining 49 States. 14 Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1, 10 (1928) (“One challenging the validity of the state enactment on the grounds that it is repugnant to the commerce clause is not necessarily bound by the legislative declarations of purpose”); Bayside Fish Flour Co. v. Gentry, 297 U.S. 422, 426-27 (1936) (reconfirming that, in Foster-Fountain, the “ostensible purpose of the act was to conserve the raw shells for local use. The bill and affidavits in support of it, however, demonstrated, we held, that this purpose was feigned, and that the real purpose” was otherwise); Postal Tel.-Cable Co. v. Borough of Taylor, 192 U.S. 64, 73 (1904) (under Commerce Clause, “Courts are not to be deceived by the mere phraseology in which an ordinance may be couched when it appears conclusively that it was passed for an unlawful purpose and not for the one stated therein” (quoting syllabus)); Postal Tel.-Cable Co. v. City of Richmond, 249 U.S: 252, 259-60 (1919) (under Commerce Clause, plaintiff may Prove that “the tax is a disguised attempt to tax interstate commerce”). 20 an “effect” challenge? What level of scrutiny should be applied to such legislative findings under the- Interstate Commerce Clause?}5 C. The Conflict also Points up a Split among the Circuits over How to Weigh Purpose when Deciding Twenty-First Amendment Immunity. This case presents the further issue how purpose, however established, is to be weighed when assessing an assertion of Twenty-First Amendment immunity. Here, there is a Circuit split as well as a High State court split. In Cooper v. McBeath, 11 F.3d 547 (5th Cir.), cert. denied, 512 U.S. 1205 (1994), the Fifth Circuit first con- ducted what it called a “traditional Commerce Clause” analysis, see Cooper, 11 F.3d at 554, and concluded that portions of the Texas Alcoholic Beverage Code were in violation of the Clause, see id. at 552-54, before taking up the Texas defendants’ “alternative argument [that,] even if the statutes violate traditional Commerce Clause princi- ples, the Twenty-first Amendment imbues the States with carte blanche authority to manage the flow of alcohol within their borders,” see id. at 554. This alternative argu- ment was ultimately rejected because “The core concerns underlying the Twenty-first Amendment are not entitled to greater weight than the principle of nondiscrimination 15 Despite various formulations, see, e.g., Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 288 n.15 (1977) (“careful scrutiny”); Freeman v. Hewit, 329 U.S. 249, 253 (1946) (“carefully scrutinized”), an arguably still unresolved issue as applied to legislative findings. See Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 476 n.2 (1981) (per Powell, J.) 21 animating the Commerce Clause.” See id. at 555. Ivey and McKesson, the Florida Supreme Court decisions rejecting the import approach and the local agricultural content requirement, may be aligned with Cooper on this issue. See Ivey, 541 So. 2d at 1135-40; McKesson, 524 So. 2d at 1009.16 16 See generally 324 Liquor Corp. v. Duffy, 479 U.S. 335, 351-52 (1987) (legislature’s bare “statement” of purpose, without evidentiary support, would not suffice for 21st Amendment immunity); Capital Cities, 467 U.S. at 714-16 (examining record for purpose state law “designed principally to further” and district court findings on actual effect to assess “nature” and “substantiality” of stated 21st Amendment interests); Midcal, 445 U.S. at 110-14 (“careful scrutiny” to stated 21st Amendment purposes and whether there was a cause-and-effect “correlation” “supported by the evidence”); Kendall-Jackson Win., Ltd. v. Branson, 82 F. Supp. 2d 844, 865-67 (N.D. Ill. 2000) (whether “advances” 21st Amendment interest; “how ... discrimination . . . advances this objective”; “discrimination has not been shown to advance any legitimate purpose”); Pete’s, 19 F. Supp. 2d at 1018-20 (whether “evidence” shows that State law “promotes” 21st Amendment purpose; “as a matter of fact” no such “purpose” or “effect”; whether “accomplishes any of these objectives”; “advance is so insubstantial that it is clearly outweighed by important federal objectives”); Indiana Wholesale, 662 N.E.2d at 969-71 (looking for a “showing that [State law] here serves its purported interests”; finding asserted “premise” to be “unsubstantiated”); Loretto, 601 F. Supp. at 862-64 (examining whether State law in fact advanced 21st Amendment interest); Rice, 21 Cal. 3d at 451-59, 579 P2d at 490-95 (examining evidence and legislative history to determine “what policies are furthered by” State statute at issue; “whether [provisions] clearly vindicate those policies,” including whether they “do” in fact “promote” “declared purpose”); Heublein, Inc. v. Department of Alc. Bev. Cont., 237 Va. 192, 198-99, 376 S.E.2d 77, 80 (1989) (examining “legislative background” to find purpose of economic protectionism even in absence of any such “avowed 22 In Kronheim, the D.C. Circuit treated the plaintiff's showing of discrimination and the defendant's proffered justification as presenting a case of “mixed motive.” Mil- ton S. Kronheim & Co. v. District of Colombia, 91 F.3d 193, 203 (D.C. Cir. 1996), cert. denied, 520 U.S. 1186 (1997). In such a case, according to the Kronheim court, the Twenty- First Amendment concern, called an untainted motive, is given all weight, to the exclusion of the “tainted motive.” Id. at 203-04. In the present case, the Georgia legislature purported to “find[ ]” that the cost of regulating and administering the manufacture, distribution, and sale of alcohol, distilled spirits, table wines, and dessert wines consumed ‘in this state is greater for imported alcohol, distilled spirits, table wines, and dessert wines than it is for alcohol, distilled spirits, table wines, and dessert wines produced within this state. See Ga. L. 1985 at p. 665, § 1; see also Heublein, 256 Ga. 578, 351 S.E.2d at 195. Petitioners demonstrated that the find- ing was false, on its face and otherwise.!” The Ivey court likewise disputed the counterpart legislative finding in that case: purpose”; whether State law “will promote” asserted 21st Amendment purpose); see also North Dakota v. United States, 495 U.S. 423, 432-33 & n.5 (1990) (both four-Justice plurality and four-Justice partial dissent examine evidence to assess substantiality of stated 21st Amendment interests and whether State law was necessary to bring about desired result). 17 For instance, there is no cost whatsoever, let alone “greater” cost, associated with “regulating and administering the manufacture [of] imported alcohol” because Georgia does not ever regulate or administer the manufacture of beverages produced out-of-state. See also Appendix at Q63-Q81. 23 Further, the premise that the costs of regulating and administering imported alcoholic beverages are greater than those for domestic alcoholic beverages is erroneous. It is clear from the record that it actually costs less on a per gallon basis to regulate and administer imported alcoholic bev- erages than it does to regulate and administer alcoholic beverages manufactured in state. Ivey, 541 So. 2d at 1138. Respondents in the instant case responded that, even if the “per gallon” or per liter cost is less for out-of-state beverages, the legislative finding was nonetheless literally true because the total cost of regulat- ing out-of-state beverages is greater - for the simple reason that the total volume of out-of-state beverages is greater. Further, the purpose of defraying, through dou- ble taxation, this total cost (even though far in excess of the total cost and in a discriminatory manner) was said to be within the purpose of the Twenty-First Amendment. Finally, as applied in this case, the Kronheim approach meant that this asserted Twenty-First Amendment pur- pose — however insubstantial, specious, and inherently discriminatory - would prevail over blatant discrimina- tion. The Seventh Circuit has recently proposed an alto- gether different approach in Bridenbaugh v. Freeman- Wilson, Nos. 00-1044 & 00-1046, 2000 U.S. App. LEXIS 22991 (7th Cir. Sept. 13, 2000). Eschewing all analysis of purpose as “unilluminating,” the Bridenbaugh court in effect declined to “follow the Supreme Court” and devel- oped instead a test of “functional discrimination,” said to be derived from “the text and history of the Constitu- tion.” Bridenbaugh, 2000 U.S. App. LEXIS 22991, at 10-11, 17. The Bridenbaugh court understood the Brown-Forman 24 and Bacchus cases as applying “an unconstitutional-con- ditions approach” to Twenty-First Amendment immunity. Id. at 16. Under its functional discrimination test (argua- bly a test of pure effect), the court examined whether the State had “used its power to impose a discriminatory condition on importation, one that favors [in-state] sources of alcoholic beverages over sources in other states.” Id. at 17. D. This Case also Presents the Important Question Whether the Twenty-First Amendment Affords Immunity to the States for their Viclations of the Foreign Commerce Clause. As noted, a GATT Panel determined in March 1992 that Georgia’s 1985 Statute - with its double taxation for beverages (not using “Georgia grown products”), not only of other-state, but also of foreign origin, see Ga. L. 1985 at p. 665, § 2, codified at O.C.G.A. § 3-4-60 - violates the principle of nondiscrimination in international law. Because the United States defended with the Twenty-First Amendment, the Panel addressed whether the Amend- ment afforded immunity for this violation and concluded that it did not. See, e.g., GATT Panel Decision {{ 5.45 to 5.48. In the present case, by contrast, Twenty-First Amendment immunity was upheld as to Petitioners’ For- _ eign Commerce Clause claims. The question is thus pre- sented whether, in light of the structure of the Federal Constitution and the “more rigorous and searching scrutiny” afforded such claims,’® the Twenty-First 18 South-Central, 467 U.S. at 100; accord Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 446 (1979) (“more extensive 25 Amendment provides any immunity to the States for their violations of the Foreign Commerce Clause. * CONCLUSION This case presents a direct conflict, between Georgia and Florida, over the viability of the “import” approach after Bacchus. The conflict also points up a split among the Circuits over Twenty-First Amendment immunity. The case also presents the important question whether the Twenty-First Amendment affords immunity to the States for their violations of the Foreign Commerce Clause. More important than all of these issues, after more than a decade of litigation, multiple court chal- lenges in State and Federal court, and repeated legislative initiatives, there is no other recourse for Petitioners or the 49 other States to bring Georgia into compliance after Bacchus. Respectfully submitted, JouNn L. Taytor, Jr. Counsel of ‘Record CeLeste McCoLioucH MattHew L. Hess Cuorey, Taytor & Fen A Professional Corporation The Lenox Building, Suite 1700 3399 Peachtree Road, N.E. Atlanta, Georgia 30326 Telephone: 404/841-3200 constitutional inquiry is required”); Container Corp. v. Franchise Tax Bd., 463 U.S. 159, 185 (1983) (“additional scrutiny required”), / Se Puy’ : 4 ay i es - 4 . PP Ls et ay ia t mri ‘ , ay 7 A ; ee aes eed No. ¢ In The Supreme Court of the United States 7 AUSTIN, NICHOLS & CO., INCORPORATED; BACARDI IMPORTS, INC.; JIM BEAM BRANDS CO.: BROWN-FORMAN CORPORATION; DAVID SHERMAN CORPORATION; REMY AMERIQUE, INC.:; and SOUTHERN WINE & SPIRITS OF AMERICA, INC., d/b/a Shaw Ross International Importers, Petitioners, Vv. STATE OF GEORGIA; ZELL MILLER, individually and as Governor of the State of Georgia; MARCUS E. COLLINS, individually and as Georgia State Revenue Commissioner; and CLAUDE L. VICKERS, individually and as Deputy Commissioner of the Administration Division of the Department of Administrative Services and as Director of the Fiscal Division of the Department of Administrative Services and as State Treasurer for the State of Georgia, Respondents. ¢ On Petition For Writ Of Certiorari To The Supreme Court Of Georgia + APPENDIX TO PETITION FOR WRIT OF CERTIORARI * i TABLE OF CONTENTS Page VOLUME | - Final Order (filed May 21, 1998) in Civil Action File Nos. E-3793 & E-25073 by the Superior Court of Fulton County, State of Georgia............. Minute Order (dated June 30, 2000) in Case No. S00A1357 by the Georgia Supreme Court....... Order (filed Mar. 1, 1994) in Civil Action File No. E-3793 by the Superior Court of Fulton County, Co Order (filed April 7, 1993) in Civil Action File No. E-3793 by the Superior Court of Fulton County, State of Georgia ...................... Order (filed July 28, 1995) in Civil Action File Nos. E-3793 & E-25073 by the Superior Court of Fulton County, State of Georgia................ Order (filed June 17, 1997) in Civil Action File Nos. E-3793 & E-25073 by the Superior Court of Fulton County, State of Georgia................ Order on Defendants’ Motion to Quash Sub- poena (filed June 17, 1997) in Civil Action File Nos. E-3793 & E-25073 by the Superior Court of Fulton County, State of Georgia ............... Interstate and Foreign Commerce Clause, Article i ee le... Due Process Clause of the Fourteenth Amend- ment, Amendment XIV, Section 1............... Equal Protection Clause of the Fourteenth Amendment, Amendment XIV, Section 1........ Import Export Clause, Article I, Section 10, oe eS Al Bl Cl D1 El Fl il TABLE OF CONTENTS - Continued Page L. Supremacy Clause, Article VI.................. L1 Mi. Amondianmat AX ow. ses ccccsccsecccvacsetacves Mi N. Complaint in Civil Action File No. E-3793 in the Superior Court of Fulton County, State of Geor- GPR. sv cavcvsnvenctssesasaeebascanesaeheunesenes Exhibit A to Appendix N: Refund Statute, OMIA, © QBBDe «5 on kev cicnntesscasscanace Exhibit B to Appendix N: 1992 Act.......... Exhibit C to Appendix N: Administrative Applicetiam .... 0 s