GRANHOLM, GOVERNOR OF MICHIGAN, et al. v. HEALD et al.

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Syllabus
GRANHOLM, GOVERNOR OF MICHIGAN, et al. v.
HEALD et al.
certiorari to the united states court of appeals for
the sixth circuit
No. 03–1116. Argued December 7, 2004—Decided May 16, 2005*
Michigan and New York regulate the sale and importation of wine through
three-tier systems requiring separate licenses for producers, wholesal-
ers, and retailers. These schemes allow in-state, but not out-of-state,
wineries to make direct sales to consumers. This differential treatment
explicitly discriminates against interstate commerce by limiting the
emerging and significant direct-sale business. Influenced by an in-
creasing number of small wineries and a decreasing number of wine
wholesalers, direct sales have grown because small wineries may not
produce enough wine or have sufficient consumer demand for their wine
to make it economical for wholesalers to carry their products. In
Nos. 03–1116 and 03–1120, Michigan residents, joined by an interven-
ing out-of-state winery, sued Michigan officials, claiming that the
State’s laws violate the Commerce Clause. The State and an interven-
ing in-state wholesalers association responded that the direct-shipment
ban was a valid exercise of Michigan’s power under the Twenty-first
Amendment. The District Court sustained the scheme, but the Sixth
Circuit reversed, rejecting the argument that the Twenty-first Amend-
ment immunizes state liquor laws from Commerce Clause strictures
and holding that there was no showing that the State could not meet
its proffered policy objectives through nondiscriminatory means. In
No. 03–1274, out-of-state wineries and their New York customers filed
suit against state officials, seeking, inter alia, a declaration that the
State’s direct-shipment laws violate the Commerce Clause. State liq-
uor wholesalers and retailers’ representatives intervened in support of
the State. The District Court granted the plaintiffs summary judg-
ment, but the Second Circuit reversed, holding that New York’s laws
fell within the ambit of its powers under the Twenty-first Amendment.
Here, respondents in the Michigan cases and petitioners in the New
*Together with No. 03–1120, Michigan Beer & Wine Wholesalers Assn.
v. Heald et al., also on certiorari to the same court, and No. 03–1274,
Swedenburg et al. v. Kelly, Chairman, New York Division of Alcoholic
Beverage Control, State Liquor Authority, et al., on certiorari to the
United States Court of Appeals for the Second Circuit.

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York case are referred to as the wineries, while the opposing parties
are referred to as the States.
Held: Both States’ laws discriminate against interstate commerce in vio-
lation of the Commerce Clause, and that discrimination is neither au-
thorized nor permitted by the Twenty-first Amendment. Pp. 472–493.
(a) This Court has long held that, in all but the narrowest circum-
stances, state laws violate the Commerce Clause if they mandate “differ-
ential treatment of in-state and out-of-state economic interests that ben-
efits the former and burdens the latter.” Oregon Waste Systems, Inc.
v. Department of Environmental Quality of Ore., 511 U. S. 93, 99.
Laws such as those at issue contradict the principles underlying this
rule by depriving citizens of their right to have access to other States’
markets on equal terms. The Michigan system’s discriminatory charac-
ter is obvious. It allows in-state wineries to ship directly to consumers,
subject only to a licensing requirement, but out-of-state wineries, even
if licensed, must go through a wholesaler and retailer. The resulting
price differential, plus the possible inability to secure a wholesaler for
small shipments, can effectively bar small wineries from Michigan’s mar-
ket. New York’s scheme also grants in-state wineries access to state
consumers on preferential terms. It allows in-state wineries to ship
directly to consumers, but requires an out-of-state winery to open a
New York branch office and warehouse, which drives up its costs. Out-
of-state wineries are also ineligible for a “farm winery” license, which
provides the most direct means of shipping to New York consumers.
Pp. 472–476.
(b) Section 2 of the Twenty-first Amendment does not allow States
to regulate direct shipment of wine on terms that discriminate in favor
of in-state producers. The States’ position is inconsistent with this
Court’s precedents and the Amendment’s history. Pp. 476–489.
(1) This Court invalidated many state liquor regulations before the
Eighteenth Amendment’s ratification, finding either that the Commerce
Clause prevented States from discriminating against imported liquor,
Scott v. Donald, 165 U. S. 58, or that States could not pass facially neu-
tral laws that placed an impermissible burden on interstate commerce,
Bowman v. Chicago & Northwestern R. Co., 125 U. S. 465. While
States could ban domestic liquor production, Mugler v. Kansas, 123 U. S.
623, such laws were ineffective because they could not regulate im-
ported liquor in its original package, Leisy v. Hardin, 135 U. S. 100. To
resolve this matter, Congress passed the Wilson Act, which empowered
the States to regulate imported liquor on the same terms as domestic
liquor. After this Court narrowly construed the Act to permit regula-
tion of the resale of imported liquor, not its direct shipment to consum-

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462 GRANHOLM v. HEALD
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ers, Rhodes v. Iowa, 170 U. S. 412, Congress passed the Webb-Kenyon
Act to close the direct-shipment loophole, see Clark Distilling Co. v.
Western Maryland R. Co., 242 U. S. 311. The States argue that the
Webb-Kenyon Act went further, removing any barrier to discriminatory
state liquor regulations, but that reading conflicts with Clark Distill-
ing’s description of the Webb-Kenyon Act’s purpose, which was simply
to extend the Wilson Act. Nor does the statute’s text compel a differ-
ent response. At the very least, it expresses no clear congressional
intent to depart from the principle disfavoring discrimination against
out-of-state goods. Last, and most importantly, the Webb-Kenyon Act
did not purport to repeal the Wilson Act, which expressly precludes
state discrimination. The Wilson Act reaffirmed, and the Webb-
Kenyon Act did not displace, the Court’s Commerce Clause cases strik-
ing down state laws that discriminated against out-of-state liquor.
States were required to regulate domestic and imported liquor on equal
terms. Pp. 476–484.
(2) A brief respite from these legal battles brought on by the Eight-
eenth Amendment’s ratification ended with the Twenty-first Amend-
ment. The States contend that § 2 of the Twenty-first Amendment
transfers to States the authority to discriminate against out-of-state
goods, but the pre-Amendment history recited here provides strong sup-
port for the view that § 2 only restored to the States the powers they
had under the Wilson and Webb-Kenyon Acts. The Twenty-first
Amendment’s aim was to allow States to maintain an effective and uni-
form system for controlling liquor by regulating its transportation, im-
portation, and use. It did not give States the authority to pass nonuni-
form laws in order to discriminate against out-of-state goods, a privilege
they never enjoyed. Cases decided soon after the Twenty-first Amend-
ment’s ratification did not take account of the underlying history and
were inconsistent with this view, e. g., State Bd. of Equalization of Cal.
v. Young’s Market Co., 299 U. S. 59, but the Court’s reluctance to con-
sider this history did not reflect a consensus that such evidence was
irrelevant or that prior history was unsupportive of the principle that
the Amendment did not authorize discrimination against out-of-state
liquor. More recent cases confirm that the Twenty-first Amendment
does not supersede other provisions of the Constitution and, in particu-
lar, does not displace the rule that States may not give a discriminatory
preference to their own producers. Pp. 484–486.
(3) This Court has held, in the modern § 2 cases, (1) that state laws
violating other provisions of the Constitution are not saved by the
Twenty-first Amendment, e. g., 44 Liquormart, Inc. v. Rhode Island, 517
U. S. 484, (2) that § 2 does not abrogate Congress’ Commerce Clause
powers with regard to liquor, e. g., Capital Cities Cable, Inc. v. Crisp,

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467 U. S. 691, and (3) as most relevant here, that state regulation of
alcohol is limited by the Commerce Clause’s nondiscrimination principle,
e. g., Bacchus Imports, Ltd. v. Dias, 468 U. S. 263, 276. Bacchus, which
dealt with a Hawaii excise tax exempting some in-state alcoholic bever-
ages, provides a particularly telling example of this last proposition, and
this Court declines the States’ suggestion to overrule or limit that case.
The decision to invalidate the instant direct-shipment laws also does not
call into question their three-tier systems’ constitutionality, see North
Dakota v. United States, 495 U. S. 423, 432. State policies are protected
under the Twenty-first Amendment when they treat liquor produced out
of state the same as its domestic equivalent. In contrast, the instant
cases involve straightforward attempts to discriminate in favor of local
producers. Pp. 486–489.
(c) Concluding that the States’ direct-shipment laws are not author-
ized by the Twenty-first Amendment does not end the inquiry, for this
Court must still consider whether either State’s regime “advances a
legitimate local purpose that cannot be adequately served by reasonable
nondiscriminatory alternatives,” New Energy Co. of Ind. v. Limbach,
486 U. S. 269, 278. The States provide little evidence for their claim
that purchasing wine over the Internet by minors is a problem. The
26 States now permitting direct shipments report no such problem, and
the States can minimize any risk with less restrictive steps, such as
requiring an adult signature on delivery. The States’ tax evasion justi-
fication is also insufficient. Increased direct shipment, whether in or
out of state, brings the potential for tax evasion. However, this argu-
ment is a diversion with regard to Michigan, which does not rely on
in-state wholesalers to collect taxes on out-of-state wines. New York’s
tax collection objectives can be achieved without discriminating against
interstate commerce, e. g., by requiring a permit as a condition of direct
shipping, which is what it does for in-state wineries. Both States also
benefit from federal laws that supply incentives for wineries to comply
with state regulations. Other rationales—facilitating orderly market
conditions, protecting public health and safety, and ensuring regulatory
accountability—can also be achieved through the alternative of an even-
handed licensing requirement. Pp. 489–493.
Nos. 03–1116 and 03–1120, 342 F. 3d 517, affirmed; No. 03–1274, 358 F. 3d
223, reversed and remanded.
Kennedy, J., delivered the opinion of the Court, in which Scalia, Sou-
ter, Ginsburg, and Breyer, JJ., joined. Stevens, J., filed a dissenting
opinion, in which O’Connor, J., joined, post, p. 493. Thomas, J., filed a
dissenting opinion, in which Rehnquist, C. J., and Stevens and O’Con-
nor, JJ., joined, post, p. 497.

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464 GRANHOLM v. HEALD
Counsel
Clint Bolick argued the cause for petitioners in
No. 03–1274. With him on the briefs were William H. Mel-
lor, Steven M. Simpson, and Lance J. Gotko. Kathleen M.
Sullivan argued the cause for respondents in Nos. 03–1116
and 03–1120. With her on the brief were James A. Tanford,
Robert D. Epstein, and Kenneth W. Starr.
Thomas L. Casey, Solicitor General of Michigan, argued
the cause for petitioners in Nos. 03–1116 and 03–1120. With
him on the briefs in No. 03–1116 were Michael A. Cox, Attor-
ney General, and Donald S. McGehee, Assistant Attorney
General. Anthony S. Kogut, John A. Yeager, Curtis R.
Hadley, Louis R. Cohen, C. Boyden Gray, and Todd Zubler
filed a brief for petitioner in No. 03–1120. Caitlin J. Halli-
gan, Solicitor General of New York, argued the cause for
respondents in No. 03–1274. With her on the brief for the
state respondents were Eliot Spitzer, Attorney General,
Daniel Smirlock, Deputy Solicitor General, and Gregory
Klass and Shaifali Puri, Assistant Solicitors General.
Miguel A. Estrada, Mark A. Perry, Howard Graff, Victo-
ria A. Kummer, Robert M. Heller, J. Warren Mangan, and
Alan J. Gardner filed a brief for the private respondents.†
†Briefs of amici curiae urging reversal in No. 03–1116 were filed for
the State of Ohio et al. by Jim Petro, Attorney General of Ohio, Douglas
R. Cole, State Solicitor, Stephen P. Carney, Senior Deputy Solicitor, and
Peter M. Thomas, Assistant Solicitor, and by the Attorneys General for
their respective jurisdictions as follows: Troy King of Alabama, Mike
Beebe of Arkansas, Richard Blumenthal of Connecticut, M. Jane Brady
of Delaware, Robert J. Spagnoletti of the District of Columbia, Charlie
Crist of Florida, Thurbert E. Baker of Georgia, Mark J. Bennett of Hawaii,
Lisa Madigan of Illinois, Steve Carter of Indiana, Phill Kline of Kansas,
Gregory D. Stumbo of Kentucky, Charles C. Foti, Jr., of Louisiana, G. Ste-
ven Rowe of Maine, J. Joseph Curran, Jr., of Maryland, Thomas F. Reilly
of Massachusetts, Mike Hatch of Minnesota, Jim Hood of Mississippi, Jere-
miah W. (Jay) Nixon of Missouri, Mike McGrath of Montana, Jon Bru-
ning of Nebraska, Brian Sandoval of Nevada, Peter C. Harvey of New
Jersey, Wayne Stenehjem of North Dakota, Gerald J. Pappert of Pennsyl-
vania, Patrick Lynch of Rhode Island, Lawrence E. Long of South Dakota,
Paul G. Summers of Tennessee, Greg Abbott of Texas, Mark L. Shurtleff
of Utah, William H. Sorrell of Vermont, and Peggy A. Lautenschlager of

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465 Cite as: 544 U. S. 460 (2005)
Opinion of the Court
Justice Kennedy delivered the opinion of the Court.
These consolidated cases present challenges to state laws
regulating the sale of wine from out-of-state wineries to con-
sumers in Michigan and New York. The details and me-
Wisconsin; in Nos. 03–1116 and 03–1120 for the Michigan Association of
Secondary School Principals et al. by Eric J. Eggan and Irene M. Mead;
and in No. 03–1274 for the Virginia Wineries Association by Thomas A.
Bowden, Randy E. Barnett, Richard A. Epstein, and Susan Beth Farmer.
Briefs of amici curiae urging affirmance in No. 03–1116 were filed for
the State of California et al. by Bill Lockyer, Attorney General of Califor-
nia, and Manuel M. Medeiros, Solicitor General, Christine O. Gregoire,
Attorney General of Washington, and Narda Pierce, Solicitor General, Pa-
tricia A. Madrid, Attorney General of New Mexico, Hardy Myers, Attor-
ney General of Oregon, and Darrell V. McGraw, Jr., Attorney General of
West Virginia; and for the Wine Institute by James M. Seff and Kevin M.
Fong; and in No. 03–1274 for the Beer Institute by Steven G. Brody and
James K. Goldfarb.
Briefs of amici curiae urging affirmance in Nos. 03–1116 and 03–1120
were filed for Members of the United States Congress by John L. Ober-
dorfer and Roy T. Englert, Jr.; for the American Homeowners Alliance
et al. by Paul Bender, Michael R. Klipper, Christopher A. Mohr, and
Steven J. Metalitz; for the Cargo Airline Association by Drew S. Days
III, Beth S. Brinkmann, Seth M. Galanter, Paul T. Friedman, Ruth N.
Borenstein, and Stephen A. Alterman; for the DKT Liberty Project by
William H. Hohengarten and Julia M. Carpenter; for the Goldwater Insti-
tute by Mark Brnovich; for Napa Valley Vintners et al. by Carter G. Phil-
lips and Mark E. Haddad; for WineAmerica, Inc., et al. by Robert P.
Mahnke, Susan Estrich, and James N. Czaban; and for George A. Akerlof
et al. by Stuart Banner.
Briefs of amici curiae urging affirmance in No. 03–1274 and reversal in
Nos. 03–1116 and 03–1120 were filed in all cases for the Illinois Alcoholism
and Drug Dependence Association by Claudette P. Miller; and for the
Wine and Spirits Wholesalers of America et al. by H. Bartow Farr III,
Viet D. Dinh, and M. Craig Wolf; James M. Goldberg filed a brief in all
cases for the National Alcohol Beverage Control Association et al. as amici
curiae urging reversal in Nos. 03–1116 and 03–1120.
Michael D. Madigan, Katherine E. Becker, Stephen M. Diamond, and
Paul R. Romain filed a brief as amicus curiae for the National Beer
Wholesalers Association in Nos. 03–1116 and 03–1120 urging reversal in
both cases and affirmance in No. 03–1274.
Robert S. Getman filed a brief for Millbrook Vineyards & Winery as
amicus curiae in No. 03–1274.

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Opinion of the Court
chanics of the two regulatory schemes differ, but the object
and effect of the laws are the same: to allow in-state wineries
to sell wine directly to consumers in that State but to pro-
hibit out-of-state wineries from doing so, or, at the least, to
make direct sales impractical from an economic standpoint.
It is evident that the object and design of the Michigan and
New York statutes is to grant in-state wineries a competitive
advantage over wineries located beyond the States’ borders.
We hold that the laws in both States discriminate against
interstate commerce in violation of the Commerce Clause,
Art. I, § 8, cl. 3, and that the discrimination is neither author-
ized nor permitted by the Twenty-first Amendment. Ac-
cordingly, we affirm the judgment of the Court of Appeals
for the Sixth Circuit, which invalidated the Michigan laws;
and we reverse the judgment of the Court of Appeals for the
Second Circuit, which upheld the New York laws.
I
Like many other States, Michigan and New York regulate
the sale and importation of alcoholic beverages, including
wine, through a three-tier distribution system. Separate li-
censes are required for producers, wholesalers, and retailers.
See FTC, Possible Anticompetitive Barriers to E-Commerce:
Wine 5–7 (July 2003) (hereinafter FTC Report), available at
http://www.ftc.gov/os/2003/07/winereport2.pdf (all Internet
materials as visited May 11, 2005, and available in Clerk of
Court’s case file). The three-tier scheme is preserved by a
complex set of overlapping state and federal regulations.
For example, both state and federal laws limit vertical inte-
gration between tiers. Id., at 5; 27 U. S. C. § 205; see, e. g.,
Bainbridge v. Turner, 311 F. 3d 1104, 1106 (CA11 2002). We
have held previously that States can mandate a three-tier
distribution scheme in the exercise of their authority under
the Twenty-first Amendment. North Dakota v. United
States, 495 U. S. 423, 432 (1990); id., at 447 (Scalia, J., con-
curring in judgment). As relevant to today’s cases, though,

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the three-tier system is, in broad terms and with refinements
to be discussed, mandated by Michigan and New York only
for sales from out-of-state wineries. In-state wineries, by
contrast, can obtain a license for direct sales to consumers.
The differential treatment between in-state and out-of-state
wineries constitutes explicit discrimination against inter-
state commerce.
This discrimination substantially limits the direct sale of
wine to consumers, an otherwise emerging and significant
business. FTC Report 7. From 1994 to 1999, consumer
spending on direct wine shipments doubled, reaching $500
million per year, or three percent of all wine sales. Id.,
at 5. The expansion has been influenced by several related
trends. First, the number of small wineries in the United
States has significantly increased. By some estimates there
are over 3,000 wineries in the country, WineAmerica,
The National Association of American Wineries, Wine
Facts 2004, http://www.americanwineries.org/newsroom/
winefacts04.htm, more than three times the number 30 years
ago, FTC Report 6. At the same time, the wholesale market
has consolidated. Between 1984 and 2002, the number of
licensed wholesalers dropped from 1,600 to 600. Riekhof &
Sykuta, Regulating Wine by Mail, 27 Regulation, No. 3,
pp. 30, 31 (Fall 2004), available at http://www.cato.org/pubs/
regulation/regv27n3/v27n3-3.pdf. The increasing winery-
to-wholesaler ratio means that many small wineries do not
produce enough wine or have sufficient consumer demand for
their wine to make it economical for wholesalers to carry
their products. FTC Report 6. This has led many small
wineries to rely on direct shipping to reach new markets.
Technological improvements, in particular the ability of win-
eries to sell wine over the Internet, have helped make direct
shipments an attractive sales channel.
Approximately 26 States allow some direct shipping of
wine, with various restrictions. Thirteen of these States
have reciprocity laws, which allow direct shipment from win-

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Opinion of the Court
eries outside the State, provided the State of origin affords
similar nondiscriminatory treatment. Id., at 7–8. In many
parts of the country, however, state laws that prohibit or
severely restrict direct shipments deprive consumers of ac-
cess to the direct market. According to the Federal Trade
Commission (FTC), “[s]tate bans on interstate direct ship-
ping represent the single largest regulatory barrier to ex-
panded e-commerce in wine.” Id., at 3.
The wine producers in the cases before us are small winer-
ies that rely on direct consumer sales as an important part
of their businesses. Domaine Alfred, one of the plaintiffs in
the Michigan suit, is a small winery located in San Luis
Obispo, California. It produces 3,000 cases of wine per year.
Domaine Alfred has received requests for its wine from
Michigan consumers but cannot fill the orders because of the
State’s direct-shipment ban. Even if the winery could find
a Michigan wholesaler to distribute its wine, the wholesaler’s
markup would render shipment through the three-tier sys-
tem economically infeasible.
Similarly, Juanita Swedenburg and David Lucas, two of
the plaintiffs in the New York suit, operate small wineries
in Virginia (the Swedenburg Estate Vineyard) and California
(the Lucas Winery). Some of their customers are tourists,
from other States, who purchase wine while visiting the win-
eries. If these customers wish to obtain Swedenburg or
Lucas wines after they return home, they will be unable to
do so if they reside in a State with restrictive direct-
shipment laws. For example, Swedenburg and Lucas are
unable to fill orders from New York, the Nation’s second-
largest wine market, because of the limits that State imposes
on direct wine shipments.
A
We first address the background of the suit challenging
the Michigan direct-shipment law. Most alcoholic beverages
in Michigan are distributed through the State’s three-tier

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system. Producers or distillers of alcoholic beverages,
whether located in state or out of state, generally may sell
only to licensed in-state wholesalers. Mich. Comp. Laws
Ann. §§ 436.1109(1), 436.1305, 436.1403, 436.1607(1) (West
2000); Mich. Admin. Code Rules 436.1705 (1990), 436.1719
(2000). Wholesalers, in turn, may sell only to in-state retail-
ers. Mich. Comp. Laws Ann. §§ 436.1113(7), 436.1607(1)
(West 2001). Licensed retailers are the final link in the
chain, selling alcoholic beverages to consumers at retail loca-
tions and, subject to certain restrictions, through home de-
livery. §§ 436.1111(5), 436.1203(2)–(4).
Under Michigan law, wine producers, as a general matter,
must distribute their wine through wholesalers. There is,
however, an exception for Michigan’s approximately 40
in-state wineries, which are eligible for “wine maker” li-
censes that allow direct shipment to in-state consumers.
§ 436.1113(9) (West 2001); §§ 436.1537(2)–(3) (West Supp.
2004); Mich. Admin. Code Rule 436.1011(7)(b) (2003). The
cost of the license varies with the size of the winery. For a
small winery, the license is $25. Mich. Comp. Laws Ann.
§ 436.1525(1)(d) (West Supp. 2004). Out-of-state wineries
can apply for a $300 “outside seller of wine” license, but this
license only allows them to sell to in-state wholesalers.
§§ 436.1109(9) (West 2001), 436.1525(1)(e) (West Supp. 2004);
Mich. Admin. Code Rule 436.1719(5) (2000).
Some Michigan residents brought suit against various
state officials in the United States District Court for the
Eastern District of Michigan. Domaine Alfred, the San
Luis Obispo winery, joined in the suit. The plaintiffs con-
tended that Michigan’s direct-shipment laws discriminated
against interstate commerce in violation of the Commerce
Clause. The trade association Michigan Beer & Wine
Wholesalers intervened as a defendant. Both the State and
the wholesalers argued that the ban on direct shipment from
out-of-state wineries is a valid exercise of Michigan’s power
under § 2 of the Twenty-first Amendment.

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On cross-motions for summary judgment the District
Court sustained the Michigan scheme. The Court of Ap-
peals for the Sixth Circuit reversed. Heald v. Engler, 342
F. 3d 517 (2003). Relying on Bacchus Imports, Ltd. v. Dias,
468 U. S. 263 (1984), the court rejected the argument that
the Twenty-first Amendment immunizes all state liquor laws
from the strictures of the Commerce Clause, 342 F. 3d, at
524, and held the Michigan scheme was unconstitutional be-
cause the defendants failed to demonstrate the State could
not meet its proffered policy objectives through nondiscrimi-
natory means, id., at 527.
B
New York’s licensing scheme is somewhat different. It
channels most wine sales through the three-tier system, but
it too makes exceptions for in-state wineries. As in Michi-
gan, the result is to allow local wineries to make direct sales
to consumers in New York on terms not available to out-of-
state wineries. Wineries that produce wine only from New
York grapes can apply for a license that allows direct ship-
ment to in-state consumers. N. Y. Alco. Bev. Cont. Law
Ann. § 76–a(3) (West Supp. 2005) (hereinafter N. Y. ABC
Law). These licensees are authorized to deliver the wines
of other wineries as well, § 76–a(6)(a), but only if the wine is
made from grapes “at least seventy-five percent the volume
of which were grown in New York state,” § 3(20–a). An
out-of-state winery may ship directly to New York consum-
ers only if it becomes a licensed New York winery, which
requires the establishment of “a branch factory, office or
storeroom within the state of New York.” § 3(37).
Juanita Swedenburg and David Lucas, joined by three of
their New York customers, brought suit in the Southern
District of New York against the officials responsible for ad-
ministering New York’s Alcoholic Beverage Control Law
seeking, inter alia, a declaration that the State’s limitations
on the direct shipment of out-of-state wine violate the Com-
merce Clause. New York liquor wholesalers and repre-

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sentatives of New York liquor retailers intervened in sup-
port of the State.
The District Court granted summary judgment to the
plaintiffs. 232 F. Supp. 2d 135 (2002). The court first deter-
mined that, under established Commerce Clause principles,
the New York direct-shipment scheme discriminates against
out-of-state wineries. Id., at 146–147. The court then re-
jected the State’s Twenty-first Amendment argument, find-
ing that the “[d]efendants have not shown that New York’s
ban on the direct shipment of out-of-state wine, and particu-
larly the in-state exceptions to the ban, implicate the State’s
core concerns under the Twenty-first Amendment.” Id.,
at 148.
The Court of Appeals for the Second Circuit reversed.
358 F. 3d 223 (2004). The court “recognize[d] that the physi-
cal presence requirement could create substantial dormant
Commerce Clause problems if this licensing scheme regu-
lated a commodity other than alcohol.” Id., at 238. The
court nevertheless sustained the New York statutory scheme
because, in the court’s view, “New York’s desire to ensure
accountability through presence is aimed at the regulatory
interests directly tied to the importation and transportation
of alcohol for use in New York,” ibid. As such, the New
York direct-shipment laws were “within the ambit of the
powers granted to states by the Twenty-first Amendment.”
Id., at 239.
C
We consolidated these cases and granted certiorari on the
following question: “ ‘Does a State’s regulatory scheme that
permits in-state wineries directly to ship alcohol to consum-
ers but restricts the ability of out-of-state wineries to do so
violate the dormant Commerce Clause in light of § 2 of the
Twenty-first Amendment?’ ” 541 U. S. 1062 (2004).
For ease of exposition, we refer to the respondents from
the Michigan challenge (Nos. 03–1116 and 03–1120) and the
petitioners in the New York challenge (No. 03–1274) collec-

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tively as the wineries. We refer to their opposing parties—
Michigan, New York, and the wholesalers and retailers—
simply as the States.
II
A
Time and again this Court has held that, in all but the
narrowest circumstances, state laws violate the Commerce
Clause if they mandate “differential treatment of in-state
and out-of-state economic interests that benefits the former
and burdens the latter.” Oregon Waste Systems, Inc. v. De-
partment of Environmental Quality of Ore., 511 U. S. 93, 99
(1994). See also New Energy Co. of Ind. v. Limbach, 486
U. S. 269, 274 (1988). This rule is essential to the founda-
tions of the Union. The mere fact of nonresidence should
not foreclose a producer in one State from access to markets
in other States. H. P. Hood & Sons, Inc. v. Du Mond, 336
U. S. 525, 539 (1949). States may not enact laws that burden
out-of-state producers or shippers simply to give a competi-
tive advantage to in-state businesses. This mandate “re-
flect[s] a central concern of the Framers that was an immedi-
ate reason for calling the Constitutional Convention: the
conviction that in order to succeed, the new Union would
have to avoid the tendencies toward economic Balkanization
that had plagued relations among the Colonies and later
among the States under the Articles of Confederation.”
Hughes v. Oklahoma, 441 U. S. 322, 325–326 (1979).
The rule prohibiting state discrimination against inter-
state commerce follows also from the principle that States
should not be compelled to negotiate with each other regard-
ing favored or disfavored status for their own citizens.
States do not need, and may not attempt, to negotiate with
other States regarding their mutual economic interests. Cf.
U. S. Const., Art. I, § 10, cl. 3. Rivalries among the States
are thus kept to a minimum, and a proliferation of trade
zones is prevented. See C & A Carbone, Inc. v. Clarkstown,

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511 U. S. 383, 390 (1994) (citing The Federalist No. 22,
pp. 143–145 (C. Rossiter ed. 1961) (A. Hamilton); Madison,
Vices of the Political System of the United States, in 2 Writ-
ings of James Madison 362–363 (G. Hunt ed. 1901)).
Laws of the type at issue in the instant cases contradict
these principles. They deprive citizens of their right to
have access to the markets of other States on equal terms.
The perceived necessity for reciprocal sale privileges risks
generating the trade rivalries and animosities, the alliances
and exclusivity, that the Constitution and, in particular, the
Commerce Clause were designed to avoid. State laws that
protect local wineries have led to the enactment of statutes
under which some States condition the right of out-of-state
wineries to make direct wine sales to in-state consumers on
a reciprocal right in the shipping State. California, for ex-
ample, passed a reciprocity law in 1986, retreating from the
State’s previous regime that allowed unfettered direct ship-
ments from out-of-state wineries. Riekhof & Sykuta, 27
Regulation, No. 3, at 30. Prior to 1986, all but three States
prohibited direct shipments of wine. The obvious aim of the
California statute was to open the interstate direct-shipping
market for the State’s many wineries. Ibid. The current
patchwork of laws—with some States banning direct ship-
ments altogether, others doing so only for out-of-state wines,
and still others requiring reciprocity—is essentially the
product of an ongoing, low-level trade war. Allowing States
to discriminate against out-of-state wine “invite[s] a multipli-
cation of preferential trade areas destructive of the very
purpose of the Commerce Clause.” Dean Milk Co. v. Madi-
son, 340 U. S. 349, 356 (1951). See also Baldwin v. G. A. F.
Seelig, Inc., 294 U. S. 511, 521–523 (1935).
B
The discriminatory character of the Michigan system is
obvious. Michigan allows in-state wineries to ship directly
to consumers, subject only to a licensing requirement. Out-

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of-state wineries, whether licensed or not, face a complete
ban on direct shipment. The differential treatment requires
all out-of-state wine, but not all in-state wine, to pass
through an in-state wholesaler and retailer before reaching
consumers. These two extra layers of overhead increase the
cost of out-of-state wines to Michigan consumers. The cost
differential, and in some cases the inability to secure a whole-
saler for small shipments, can effectively bar small wineries
from the Michigan market.
The New York regulatory scheme differs from Michigan’s
in that it does not ban direct shipments altogether. Out-of-
state wineries are instead required to establish a distribu-
tion operation in New York in order to gain the privilege of
direct shipment. N. Y. ABC Law §§ 3(37), 96 (West Supp.
2005). This, though, is just an indirect way of subjecting
out-of-state wineries, but not local ones, to the three-tier sys-
tem. New York and those allied with its interests defend
the scheme by arguing that an out-of-state winery has the
same access to the State’s consumers as in-state wineries:
All wine must be sold through a licensee fully accountable to
New York; it just so happens that in order to become a li-
censee, a winery must have a physical presence in the State.
There is some confusion over the precise steps out-of-state
wineries must take to gain access to the New York mar-
ket, in part because no winery has run the State’s regu-
latory gauntlet. New York’s argument, in any event, is
unconvincing.
The New York scheme grants in-state wineries access to
the State’s consumers on preferential terms. The sugges-
tion of a limited exception for direct shipment from out-of-
state wineries does nothing to eliminate the discriminatory
nature of New York’s regulations. In-state producers, with
the applicable licenses, can ship directly to consumers from
their wineries. §§ 76–a(3), 76(4), and 77(2) (West 2000).
Out-of-state wineries must open a branch office and ware-
house in New York, additional steps that drive up the cost

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of their wine. §§ 3(37), 96 (West Supp. 2005). See also App.
in No. 03–1274, pp. 159–160 (Affidavit of Thomas G. McKeon,
General Counsel to the New York State Liquor Authority).
For most wineries, the expense of establishing a bricks-and-
mortar distribution operation in 1 State, let alone all 50, is
prohibitive. It comes as no surprise that not a single out-
of-state winery has availed itself of New York’s direct-
shipping privilege. We have “viewed with particular sus-
picion state statutes requiring business operations to be
performed in the home State that could more efficiently be
performed elsewhere.” Pike v. Bruce Church, Inc., 397
U. S. 137, 145 (1970). New York’s in-state presence require-
ment runs contrary to our admonition that States cannot re-
quire an out-of-state firm “to become a resident in order to
compete on equal terms.” Halliburton Oil Well Cementing
Co. v. Reily, 373 U. S. 64, 72 (1963). See also Ward v. Mary-
land, 12 Wall. 418 (1871).
In addition to its restrictive in-state presence require-
ment, New York discriminates against out-of-state wineries
in other ways. Out-of-state wineries that establish the req-
uisite branch office and warehouse in New York are still inel-
igible for a “farm winery” license, the license that provides
the most direct means of shipping to New York consumers.
N. Y. ABC Law § 76–a(5) (West Supp. 2005) (“No licensed
farm winery shall manufacture or sell any wine not produced
exclusively from grapes or other fruits or agricultural prod-
ucts grown or produced in New York state”). Out-of-state
wineries may apply only for a commercial winery license.
See §§ 3(37), 76. Unlike farm wineries, however, commer-
cial wineries must obtain a separate certificate from the
state liquor authority authorizing direct shipments to con-
sumers, § 77(2) (West 2000); and, of course, for out-of-state
wineries there is the additional requirement of maintaining
a distribution operation in New York. New York law also
allows in-state wineries without direct-shipping licenses to
distribute their wine through other wineries that have the

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applicable licenses. § 76(5) (West Supp. 2005). This is an-
other privilege not afforded out-of-state wineries.
We have no difficulty concluding that New York, like Mich-
igan, discriminates against interstate commerce through its
direct-shipping laws.
III
State laws that discriminate against interstate commerce
face “a virtually per se rule of invalidity.” Philadelphia v.
New Jersey, 437 U. S. 617, 624 (1978). The Michigan and
New York laws by their own terms violate this proscription.
The two States, however, contend their statutes are saved
by § 2 of the Twenty-first Amendment, which provides:
“The transportation or importation into any State, Ter-
ritory, or possession of the United States for delivery or
use therein of intoxicating liquors, in violation of the
laws thereof, is hereby prohibited.”
The States’ position is inconsistent with our precedents and
with the Twenty-first Amendment’s history. Section 2 does
not allow States to regulate the direct shipment of wine on
terms that discriminate in favor of in-state producers.
A
Before 1919, the temperance movement fought to curb the
sale of alcoholic beverages one State at a time. The move-
ment made progress, and many States passed laws restrict-
ing or prohibiting the sale of alcohol. This Court upheld
state laws banning the production and sale of alcoholic bever-
ages, Mugler v. Kansas, 123 U. S. 623 (1887), but was less
solicitous of laws aimed at imports. In a series of cases be-
fore ratification of the Eighteenth Amendment the Court,
relying on the Commerce Clause, invalidated a number of
state liquor regulations.
These cases advanced two distinct principles. First, the
Court held that the Commerce Clause prevented States from
discriminating against imported liquor. Scott v. Donald,

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165 U. S. 58 (1897); Walling v. Michigan, 116 U. S. 446 (1886);
Tiernan v. Rinker, 102 U. S. 123 (1880). In Walling, for ex-
ample, the Court invalidated a Michigan tax that discrimi-
nated against liquor imports by exempting sales of local
products. The Court held that States were not free to pass
laws burdening only out-of-state products:
“A discriminating tax imposed by a State operating to
the disadvantage of the products of other States when
introduced into the first mentioned State, is, in effect, a
regulation in restraint of commerce among the States,
and as such is a usurpation of the power conferred by
the Constitution upon the Congress of the United
States.” 116 U. S., at 455.
Second, the Court held that the Commerce Clause pre-
vented States from passing facially neutral laws that placed
an impermissible burden on interstate commerce. Rhodes
v. Iowa, 170 U. S. 412 (1898); Vance v. W. A. Vandercook Co.,
170 U. S. 438 (1898); Leisy v. Hardin, 135 U. S. 100 (1890);
Bowman v. Chicago & Northwestern R. Co., 125 U. S. 465
(1888). For example, in Bowman, the Court struck down an
Iowa statute that required all liquor importers to have a per-
mit. Bowman and its progeny rested in part on the since-
rejected original-package doctrine. Under this doctrine
goods shipped in interstate commerce were immune from
state regulation while in their original package. As the
Court explained in Vance:
“[T]he power to ship merchandise from one State into
another carries with it, as an incident, the right in the
receiver of the goods to sell them in the original pack-
ages, any state regulation to the contrary notwithstand-
ing; that is to say, that the goods received by Interstate
Commerce remain under the shelter of the Interstate
Commerce clause of the Constitution, until by a sale in
the original package they have been commingled with

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the general mass of property in the State.” 170 U. S.,
at 444–445.
Bowman reserved the question whether a State could ban
the sale of imported liquor altogether. 125 U. S., at 499–500.
Iowa responded to Bowman by doing just that but was
thwarted once again. In Leisy, supra, the Court held that
Iowa could not ban the sale of imported liquor in its origi-
nal package.
Leisy left the States in a bind. They could ban the pro-
duction of domestic liquor, Mugler, supra, but these laws
were ineffective because out-of-state liquor was immune
from any state regulation as long as it remained in its origi-
nal package, Leisy, supra. To resolve the matter, Congress
passed the Wilson Act (so named for Senator Wilson of
Iowa), which empowered the States to regulate imported liq-
uor on the same terms as domestic liquor:
“That all fermented, distilled, or other intoxicating liq-
uors or liquids transported into any State or Territory
or remaining therein for use, consumption, sale or stor-
age therein, shall upon arrival in such State or Territory
be subject to the operation and effect of the laws of such
State or Territory enacted in the exercise of its police
powers, to the same extent and in the same manner as
though such liquids or liquors had been produced in such
State or Territory, and shall not be exempt therefrom
by reason of being introduced therein in original pack-
ages or otherwise.” Ch. 728, 26 Stat. 313 (codified at 27
U. S. C. § 121).
By its own terms, the Wilson Act did not allow States to
discriminate against out-of-state liquor; rather, it allowed
States to regulate imported liquor only “to the same extent
and in the same manner” as domestic liquor.
The Court confirmed this interpretation in Scott, supra.
Scott involved a constitutional challenge to South Carolina’s
dispensary law, 1895 S. C. Acts p. 721, which required that

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all liquor sales be channeled through the state liquor commis-
sioner. 165 U. S., at 92. The statute discriminated against
out-of-state manufacturers in two primary ways. First, § 15
required the commissioner to “purchase his supplies from the
brewers and distillers in this State when their product
reaches the standard required by this Act: Provided, Such
supplies can be purchased as cheaply from such brewers and
distillers in this State as elsewhere.” 1895 S. C. Acts p. 732.
Second, § 23 of the statute limited the State’s markup on lo-
cally produced wines to a 10-percent profit but provided “no
such limitation of charge in the case of imported wines.”
165 U. S., at 93. Based on these discriminatory provisions,
the Court rejected the argument that the South Carolina
dispensary law was authorized by the Wilson Act. Id., at
100. It explained that the Wilson Act was “not intended to
confer upon any State the power to discriminate injuriously
against the products of other States in articles whose manu-
facture and use are not forbidden, and which are therefore
the subjects of legitimate commerce.” Ibid. To the con-
trary, the Court said, the Wilson Act mandated “equality or
uniformity of treatment under state laws,” ibid., and did not
allow South Carolina to provide “an unjust preference” to its
products “as against similar products of the other States,”
id., at 101. The dissent also understood the validity of the
dispensary law to turn in large part on §§ 15 and 23, but
argued that even if these provisions were discriminatory the
correct remedy was to sever them from the rest of the Act.
Id., at 104–106 (opinion of Brown, J.).
Although the Wilson Act increased the States’ authority
to police liquor imports, it did not solve all their problems.
In Vance and Rhodes—two cases decided soon after Scott—
the Court made clear that the Wilson Act did not authorize
States to prohibit direct shipments for personal use. In
Vance, the Court characterized Scott as embodying two dis-
tinct holdings: First, the South Carolina dispensary law
“amount[ed] to an unjust discrimination against liquors, the

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products of other States.” 170 U. S., at 442. This aspect of
the Scott holding, which confirmed the Wilson Act’s nondis-
crimination principle, was based “on particular provisions of
the law by which the discrimination was brought about.”
170 U. S., at 442. Second, “in so far as the law then in ques-
tion forbade the sending . . . of intoxicating liquors for the
use of the person to whom it was shipped, the statute was
repugnant to [the Commerce Clause].” Ibid. (citing Scott,
165 U. S. 58). See also 170 U. S., at 443 (distinguishing be-
tween the provisions at issue in Scott “which were held to
operate a discrimination” and those which barred direct ship-
ment for personal use).
This second holding, that consumers had the right to re-
ceive alcoholic beverages shipped in interstate commerce for
personal use, was only implicit in Scott. 165 U. S., at 78,
99–100. The Court expanded on this point, however, not
only in Vance but again in Rhodes. Rhodes construed the
Wilson Act narrowly to avoid interference with this right.
The Act, the Court said, authorized States to regulate only
the resale of imported liquor, not direct shipment to consum-
ers for personal use. 170 U. S., at 421. Without a clear in-
dication from Congress that it intended to allow States to
ban such shipments, the Rhodes Court read the words “upon
arrival” in the Wilson Act as authorizing “the power of the
State to attach to an interstate commerce shipment,” only
after its arrival at the point of destination and delivery there
to the consignee.” Id., at 426. See also id., at 424; Briden-
baugh v. Freeman-Wilson, 227 F. 3d 848, 852 (CA7 2000).
The Court interpreted the Wilson Act to overturn Leisy but
leave Bowman intact. Rhodes, supra, at 423–424. The
right to regulate did not attach until the liquor was in the
hands of the customer. As a result, the mail-order liquor
trade continued to thrive. Rogers, Interstate Commerce in
Intoxicating Liquors Before the Webb-Kenyon Act, 4 Va.
L. Rev. 353, 364–365 (1917).

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After considering a series of bills in response to the
Court’s reading of the Wilson Act, Congress responded to
the direct-shipment loophole in 1913 by enacting the Webb-
Kenyon Act, 37 Stat. 699, 27 U. S. C. § 122. See Rogers,
supra, at 363–370. The Act, entitled “An Act Divesting in-
toxicating liquors of their interstate character in certain
cases,” provides:
“That the shipment or transportation . . . of any spiritu-
ous, vinous, malted, fermented, or other intoxicating liq-
uor of any kind, from one State . . . into any other
State . . . which said spirituous, vinous, malted, fer-
mented, or other intoxicating liquor is intended, by any
person interested therein, to be received, possessed,
sold, or in any manner used, either in the original pack-
age or otherwise, in violation of any law of such State . . .
is hereby prohibited.” 37 Stat., at 699–700.
The constitutionality of the Webb-Kenyon Act itself was in
doubt. Vance and Rhodes implied that any law authorizing
the States to regulate direct shipments for personal use
would be an unlawful delegation of Congress’ Commerce
Clause powers. Indeed, President Taft, acting on the advice
of Attorney General Wickersham, vetoed the Act for this
specific reason. S. Rep. No. 103, 63d Cong., 1st Sess., 3–6
(1913); 30 Op. Atty. Gen. 88 (1913). Congress overrode the
veto and in Clark Distilling Co. v. Western Maryland R. Co.,
242 U. S. 311 (1917), a divided Court upheld the Webb-
Kenyon Act against a constitutional challenge.
The Court construed the Act to close the direct-shipment
gap left open by the Wilson Act. States were now empow-
ered to forbid shipments of alcohol to consumers for personal
use, provided that the States treated in-state and out-of-
state liquor on the same terms. Id., at 321–322 (noting that
the West Virginia law at issue in Clark Distilling “forbade
the shipment into or transportation of liquor in the State
whether from inside or out”). The Court understood that

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the Webb-Kenyon Act “was enacted simply to extend that
which was done by the Wilson Act.” Id., at 324. The Act’s
purpose “was to prevent the immunity characteristic of in-
terstate commerce from being used to permit the receipt of
liquor through such commerce in States contrary to their
laws, and thus in effect afford a means by subterfuge and
indirection to set such laws at naught.” Ibid. The Court
thus recognized that the Act was an attempt to eliminate
the regulatory advantage, i. e., its immunity characteristic,
afforded imported liquor under Bowman and Rhodes.
Michigan and New York now argue the Webb-Kenyon Act
went even further and removed any barrier to discrimina-
tory state liquor regulations. We do not agree. First, this
reading of the Webb-Kenyon Act conflicts with that given
the statute in Clark Distilling. Clark Distilling recognized
that the Webb-Kenyon Act extended the Wilson Act to allow
the States to intercept liquor shipments before those ship-
ments reached the consignee. The States’ contention that
the Webb-Kenyon Act also reversed the Wilson Act’s prohi-
bition on discriminatory treatment of out-of-state liquors
cannot be reconciled with Clark Distilling’s description of
the Webb-Kenyon Act’s purpose—“simply to extend that
which was done by the Wilson Act.” 242 U. S., at 324. See
also McCormick & Co. v. Brown, 286 U. S. 131, 140–141
(1932).
The statute’s text does not compel a different result. The
Webb-Kenyon Act readily can be construed as forbidding
“shipment or transportation” only where it runs afoul of the
State’s generally applicable laws governing receipt, posses-
sion, sale, or use. Cf. id., at 141 (noting that the Act author-
ized enforcement of “valid” state laws). At the very least,
the Webb-Kenyon Act expresses no clear congressional in-
tent to depart from the principle, unexceptional at the time
the Act was passed and still applicable today, Hillside Dairy
Inc. v. Lyons, 539 U. S. 59, 66 (2003), that discrimination
against out-of-state goods is disfavored. Cf. Western &

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Southern Life Ins. Co. v. State Bd. of Equalization of Cal.,
451 U. S. 648, 652–653 (1981) (holding that the McCarran-
Ferguson Act, 15 U. S. C. § 1011 et seq., removed all dormant
Commerce Clause scrutiny of state insurance laws; § 1011
provides: “Congress hereby declares that the continued reg-
ulation and taxation by the several States of the business of
insurance is in the public interest, and that silence on the
part of the Congress shall not be construed to impose any
barrier to the regulation or taxation of such business by the
several States”).
Last, and most importantly, the Webb-Kenyon Act did not
purport to repeal the Wilson Act, which expressly precludes
States from discriminating. If Congress’ aim in passing the
Webb-Kenyon Act was to authorize States to discriminate
against out-of-state goods then its first step would have been
to repeal the Wilson Act. It did not do so. There is no
inconsistency between the Wilson Act and the Webb-Kenyon
Act sufficient to warrant an inference that the latter repealed
the former. See Washington v. Miller, 235 U. S. 422, 428
(1914) (noting that implied repeals are disfavored). Indeed,
this Court has twice noted that the Wilson Act remains in
effect today. Hostetter v. Idlewild Bon Voyage Liquor
Corp., 377 U. S. 324, 333, n. 11 (1964); Department of Revenue
v. James B. Beam Distilling Co., 377 U. S. 341, 345, n. 7
(1964). See 27 U. S. C. § 121.
The Wilson Act reaffirmed, and the Webb-Kenyon Act did
not displace, the Court’s line of Commerce Clause cases
striking down state laws that discriminated against liquor
produced out of state. The rule of Tiernan, Walling, and
Scott remained in effect: States were required to regulate
domestic and imported liquor on equal terms. “[T]he intent
of . . . the Webb-Kenyon Act . . . was to take from intoxicating
liquor the protection of the interstate commerce laws in so
far as necessary to deny them an advantage over the intox-
icating liquors produced in the state into which they were
brought, yet, [the Act does not] show an intent or purpose to

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so abdicate control over interstate commerce as to permit
discrimination against the intoxicating liquor brought into
one state from another.” Pacific Fruit & Produce Co. v.
Martin, 16 F. Supp. 34, 39–40 (WD Wash. 1936). See also
Friedman, Constitutional Law: State Regulation of Importa-
tion of Intoxicating Liquor Under Twenty-first Amendment,
21 Cornell L. Q. 504, 509 (1936) (“The cases under the Webb-
Kenyon Act uphold state prohibition and regulation in the
exercise of the police power yet they clearly forbid laws
which discriminate arbitrarily and unreasonably against liq-
uor produced outside of the state” (footnote omitted)).
B
The ratification of the Eighteenth Amendment in 1919 pro-
vided a brief respite from the legal battles over the validity
of state liquor regulations. With the ratification of the
Twenty-first Amendment 14 years later, however, nation-
wide Prohibition came to an end. Section 1 of the Twenty-
first Amendment repealed the Eighteenth Amendment.
Section 2 of the Twenty-first Amendment is at issue here.
Michigan and New York say the provision grants to the
States the authority to discriminate against out-of-state
goods. The history we have recited does not support this
position. To the contrary, it provides strong support for the
view that § 2 restored to the States the powers they had
under the Wilson and Webb-Kenyon Acts. “The wording of
§ 2 of the Twenty-first Amendment closely follows the
Webb-Kenyon and Wilson Acts, expressing the framers’ clear
intention of constitutionalizing the Commerce Clause frame-
work established under those statutes.” Craig v. Boren, 429
U. S. 190, 205–206 (1976) (footnote omitted).
The aim of the Twenty-first Amendment was to allow
States to maintain an effective and uniform system for con-
trolling liquor by regulating its transportation, importation,
and use. The Amendment did not give States the authority
to pass nonuniform laws in order to discriminate against

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out-of-state goods, a privilege they had not enjoyed at any
earlier time.
Some of the cases decided soon after ratification of the
Twenty-first Amendment did not take account of this history
and were inconsistent with this view. In State Bd. of
Equalization of Cal. v. Young’s Market Co., 299 U. S. 59, 62
(1936), for example, the Court rejected the argument that
the Amendment did not authorize discrimination:
“The plaintiffs ask us to limit this broad command [of
§ 2]. They request us to construe the Amendment as
saying, in effect: The State may prohibit the importation
of intoxicating liquors provided it prohibits the manufac-
ture and sale within its borders; but if it permits such
manufacture and sale, it must let imported liquors com-
pete with the domestic on equal terms. To say that,
would involve not a construction of the Amendment, but
a rewriting of it.”
The Court reaffirmed the States’ broad powers under § 2 in
a series of cases, see Mahoney v. Joseph Triner Corp., 304
U. S. 401 (1938); Indianapolis Brewing Co. v. Liquor Control
Comm’n, 305 U. S. 391 (1939); Ziffrin, Inc. v. Reeves, 308
U. S. 132 (1939); Joseph S. Finch & Co. v. McKittrick, 305
U. S. 395 (1939), and unsurprisingly many States used the
authority bestowed on them by the Court to expand trade
barriers. T. Green, Liquor Trade Barriers: Obstructions to
Interstate Commerce in Wine, Beer, and Distilled Spirits 4,
and App. I (1940) (stating in the wake of Young’s Market
that “[r]ivalries and reprisals have thus flared up”).
It is unclear whether the broad language in Young’s Mar-
ket was necessary to the result because the Court also stated
that “the case [did] not present a question of discrimination
prohibited by the commerce clause.” 299 U. S., at 62. The
Court also declined, contrary to the approach we take today,
to consider the history underlying the Twenty-first Amend-
ment. Id., at 63–64. This reluctance did not, however, re-

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486 GRANHOLM v. HEALD
Opinion of the Court
flect a consensus that such evidence was irrelevant or that
prior history was unsupportive of the principle that the
Amendment did not authorize discrimination against out-of-
state liquors. There was ample opinion to the contrary.
See, e. g., Young’s Market Co. v. State Bd. of Equalization of
Cal., 12 F. Supp. 140 (SD Cal. 1935) (per curiam), rev’d, 299
U. S. 59 (1936); Pacific Fruit & Produce Co. v. Martin, supra,
at 39; Joseph Triner Corp. v. Arundel, 11 F. Supp. 145, 146–
147 (Minn. 1935); Friedman, supra, at 511–512; Note, Recent
Cases, Twenty-first Amendment—Commerce Clause, 85
U. Pa. L. Rev. 322, 323 (1937); W. Hamilton, Price and Price
Policies 426 (1938); Note, Legislation, Liquor Control, 38
Colum. L. Rev. 644, 658 (1938); Wiser & Arledge, Does the
Repeal Amendment Empower a State to Erect Tariff Barri-
ers and Disregard the Equal Protection Clause in Legislat-
ing on Intoxicating Liquors in Interstate Commerce? 7 Geo.
Wash. L. Rev. 402, 407–409 (1939); De Ganahl, The Scope of
Federal Power Over Alcoholic Beverages Since the Twenty-
first Amendment, 8 Geo. Wash. L. Rev. 819, 822–828 (1940);
Note, 55 Yale L. J. 815, 819–820 (1946).
Our more recent cases, furthermore, confirm that the
Twenty-first Amendment does not supersede other provi-
sions of the Constitution and, in particular, does not displace
the rule that States may not give a discriminatory prefer-
ence to their own producers.
C
The modern § 2 cases fall into three categories.
First, the Court has held that state laws that violate other
provisions of the Constitution are not saved by the Twenty-
first Amendment. The Court has applied this rule in the
context of the First Amendment, 44 Liquormart, Inc. v.
Rhode Island, 517 U. S. 484 (1996); the Establishment
Clause, Larkin v. Grendel’s Den, Inc., 459 U. S. 116 (1982);
the Equal Protection Clause, Craig, supra, at 204–209; the
Due Process Clause, Wisconsin v. Constantineau, 400 U. S.

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487 Cite as: 544 U. S. 460 (2005)
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433 (1971); and the Import-Export Clause, Department of
Revenue v. James B. Beam Distilling Co., 377 U. S. 341
(1964).
Second, the Court has held that § 2 does not abrogate Con-
gress’ Commerce Clause powers with regard to liquor. Cap-
ital Cities Cable, Inc. v. Crisp, 467 U. S. 691 (1984); Califor-
nia Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc.,
445 U. S. 97 (1980). The argument that “the Twenty-first
Amendment has somehow operated to ‘repeal’ the Commerce
Clause” for alcoholic beverages has been rejected. Hostet-
ter, 377 U. S., at 331–332. Though the Court’s language in
Hostetter may have come uncommonly close to hyperbole in
describing this argument as “an absurd oversimplification,”
“patently bizarre,” and “demonstrably incorrect,” ibid., the
basic point was sound.
Finally, and most relevant to the issue at hand, the Court
has held that state regulation of alcohol is limited by the
nondiscrimination principle of the Commerce Clause. Bac-
chus, 468 U. S., at 276; Brown-Forman Distillers Corp. v.
New York State Liquor Authority, 476 U. S. 573 (1986);
Healy v. Beer Institute, 491 U. S. 324 (1989). “When a state
statute directly regulates or discriminates against interstate
commerce, or when its effect is to favor in-state economic
interests over out-of-state interests, we have generally
struck down the statute without further inquiry.” Brown-
Forman, supra, at 579.
Bacchus provides a particularly telling example of this
proposition. At issue was an excise tax enacted by Hawaii
that exempted certain alcoholic beverages produced in that
State. The Court rejected the argument that Hawaii’s dis-
crimination against out-of-state liquor was authorized by the
Twenty-first Amendment. 468 U. S., at 274–276. “The cen-
tral purpose of the [Amendment] was not to empower States
to favor local liquor industries by erecting barriers to compe-
tition.” Id., at 276. Despite attempts to distinguish it in
the instant cases, Bacchus forecloses any contention that § 2

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of the Twenty-first Amendment immunizes discriminatory
direct-shipment laws from Commerce Clause scrutiny. See
also Brown-Forman, supra, at 576 (invalidating a New York
price affirmation statute that required producers to limit the
price of liquor based on the lowest price they offered out of
state); Healy, 491 U. S., at 328 (invalidating a similar Con-
necticut statute); id., at 344 (Scalia, J., concurring in part
and concurring in judgment) (“The Connecticut statute’s
invalidity is fully established by its facial discrimination
against interstate commerce . . . . This is so despite the fact
that the law regulates the sale of alcoholic beverages, since
its discriminatory character eliminates the immunity af-
forded by the Twenty-first Amendment”).
Recognizing that Bacchus is fatal to their position, the
States suggest it should be overruled or limited to its facts.
As the foregoing analysis makes clear, we decline their invi-
tation. Furthermore, Bacchus does not stand alone in rec-
ognizing that the Twenty-first Amendment did not give the
States complete freedom to regulate where other constitu-
tional principles are at stake. A retreat from Bacchus
would also undermine Brown-Forman and Healy. These
cases invalidated state liquor regulations under the Com-
merce Clause. Indeed, Healy explicitly relied on the dis-
criminatory character of the Connecticut price affirmation
statute. 491 U. S., at 340–341. Brown-Forman and Healy
lend significant support to the conclusion that the Twenty-
first Amendment does not immunize all laws from Commerce
Clause challenge.
The States argue that any decision invalidating their
direct-shipment laws would call into question the constitu-
tionality of the three-tier system. This does not follow from
our holding. “The Twenty-first Amendment grants the
States virtually complete control over whether to permit im-
portation or sale of liquor and how to structure the liquor
distribution system.” Midcal, supra, at 110. A State
which chooses to ban the sale and consumption of alcohol

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altogether could bar its importation; and, as our history
shows, it would have to do so to make its laws effective.
States may also assume direct control of liquor distribution
through state-run outlets or funnel sales through the three-
tier system. We have previously recognized that the three-
tier system itself is “unquestionably legitimate.” North Da-
kota v. United States, 495 U. S., at 432. See also id., at 447
(Scalia, J., concurring in judgment) (“The Twenty-first
Amendment . . . empowers North Dakota to require that
all liquor sold for use in the State be purchased from a li-
censed in-state wholesaler”). State policies are protected
under the Twenty-first Amendment when they treat liquor
produced out of state the same as its domestic equivalent.
The instant cases, in contrast, involve straightforward at-
tempts to discriminate in favor of local producers. The dis-
crimination is contrary to the Commerce Clause and is not
saved by the Twenty-first Amendment.
IV
Our determination that the Michigan and New York
direct-shipment laws are not authorized by the Twenty-first
Amendment does not end the inquiry. We still must con-
sider whether either state regime “advances a legitimate
local purpose that cannot be adequately served by reasonable
nondiscriminatory alternatives.” New Energy Co. of Ind.,
486 U. S., at 278. The States offer two primary justifications
for restricting direct shipments from out-of-state wineries:
keeping alcohol out of the hands of minors and facilitating
tax collection. We consider each in turn.
The States, aided by several amici, claim that allowing
direct shipment from out-of-state wineries undermines their
ability to police underage drinking. Minors, the States
argue, have easy access to credit cards and the Internet and
are likely to take advantage of direct wine shipments as a
means of obtaining alcohol illegally.

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490 GRANHOLM v. HEALD
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The States provide little evidence that the purchase of
wine over the Internet by minors is a problem. Indeed,
there is some evidence to the contrary. A recent study by
the staff of the FTC found that the 26 States currently allow-
ing direct shipments report no problems with minors’ in-
creased access to wine. FTC Report 34. This is not sur-
prising for several reasons. First, minors are less likely to
consume wine, as opposed to beer, wine coolers, and hard
liquor. Id., at 12. Second, minors who decide to disobey
the law have more direct means of doing so. Third, direct
shipping is an imperfect avenue of obtaining alcohol for mi-
nors who, in the words of the past president of the National
Conference of State Liquor Administrators, “ ‘want instant
gratification.’ ” Id., at 33, and n. 137 (explaining why minors
rarely buy alcohol via the mail or the Internet). Without
concrete evidence that direct shipping of wine is likely to
increase alcohol consumption by minors, we are left with the
States’ unsupported assertions. Under our precedents,
which require the “clearest showing” to justify discrimina-
tory state regulation, C & A Carbone, Inc., 511 U. S., at 393,
this is not enough.
Even were we to credit the States’ largely unsupported
claim that direct shipping of wine increases the risk of under-
age drinking, this would not justify regulations limiting only
out-of-state direct shipments. As the wineries point out,
minors are just as likely to order wine from in-state produc-
ers as from out-of-state ones. Michigan, for example, al-
ready allows its licensed retailers (over 7,000 of them) to de-
liver alcohol directly to consumers. Michigan counters that
it has greater regulatory control over in-state producers
than over out-of-state wineries. This does not justify Michi-
gan’s discriminatory ban on direct shipping. Out-of-state
wineries face the loss of state and federal licenses if they fail
to comply with state law. This provides strong incentives
not to sell alcohol to minors. In addition, the States can
take less restrictive steps to minimize the risk that minors

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Opinion of the Court
will order wine by mail. For example, the Model Direct
Shipping Bill developed by the National Conference of State
Legislatures requires an adult signature on delivery and a
label so instructing on each package.
The States’ tax-collection justification is also insufficient.
Increased direct shipping, whether originating in state or
out of state, brings with it the potential for tax evasion.
With regard to Michigan, however, the tax-collection argu-
ment is a diversion. That is because Michigan, unlike many
other States, does not rely on wholesalers to collect taxes
on wines imported from out of state. Instead, Michigan
collects taxes directly from out-of-state wineries on all
wine shipped to in-state wholesalers. Mich. Admin. Code
Rule 436.1725(2) (1989) (“Each outside seller of wine shall
submit . . . a wine tax report of all wine sold, delivered,
or imported into this state during the preceding calendar
month”). If licensing and self-reporting provide adequate
safeguards for wine distributed through the three-tier sys-
tem, there is no reason to believe they will not suffice for
direct shipments.
New York and its supporting parties also advance a tax-
collection justification for the State’s direct-shipment laws.
While their concerns are not wholly illusory, their regulatory
objectives can be achieved without discriminating against in-
terstate commerce. In particular, New York could protect
itself against lost tax revenue by requiring a permit as a
condition of direct shipping. This is the approach taken by
New York for in-state wineries. The State offers no reason
to believe the system would prove ineffective for out-of-state
wineries. Licensees could be required to submit regular
sales reports and to remit taxes. Indeed, various States use
this approach for taxing direct interstate wine shipments,
e. g., N. H. Rev. Stat. Ann. § 178.27 (Lexis Supp. 2004), and
report no problems with tax collection. See FTC Report
38–40. This is also the procedure sanctioned by the Na-
tional Conference of State Legislatures in their Model Direct

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492 GRANHOLM v. HEALD
Opinion of the Court
Shipping Bill. See, e. g., S. C. Code Ann. § 61–4–747(C)
(West Supp. 2004).
Michigan and New York benefit, furthermore, from provi-
sions of federal law that supply incentives for wineries to
comply with state regulations. The Tax and Trade Bureau
(formerly the Bureau of Alcohol, Tobacco and Firearms) has
authority to revoke a winery’s federal license if it violates
state law. BATF Industry Circular 96–3 (1997). Without a
federal license, a winery cannot operate in any State. See
27 U. S. C. § 204. In addition the Twenty-first Amendment
Enforcement Act gives state attorneys general the power to
sue wineries in federal court to enjoin violations of state
law. § 122a(b).
These federal remedies, when combined with state licens-
ing regimes, adequately protect States from lost tax reve-
nue. The States have not shown that tax evasion from out-
of-state wineries poses such a unique threat that it justifies
their discriminatory regimes.
Michigan and New York offer a handful of other rationales,
such as facilitating orderly market conditions, protecting
public health and safety, and ensuring regulatory account-
ability. These objectives can also be achieved through the
alternative of an evenhanded licensing requirement. FTC
Report 40–41. Finally, it should be noted that improve-
ments in technology have eased the burden of monitoring
out-of-state wineries. Background checks can be done elec-
tronically. Financial records and sales data can be mailed,
faxed, or submitted via e-mail.
In summary, the States provide little concrete evidence for
the sweeping assertion that they cannot police direct ship-
ments by out-of-state wineries. Our Commerce Clause
cases demand more than mere speculation to support dis-
crimination against out-of-state goods. The “burden is on
the State to show that ‘the discrimination is demonstrably
justified,’ ” Chemical Waste Management, Inc. v. Hunt, 504
U. S. 334, 344 (1992) (emphasis in original). The Court has

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Stevens, J., dissenting
upheld state regulations that discriminate against interstate
commerce only after finding, based on concrete record evi-
dence, that a State’s nondiscriminatory alternatives will
prove unworkable. See, e. g., Maine v. Taylor, 477 U. S. 131,
141–144 (1986). Michigan and New York have not satisfied
this exacting standard.
V
States have broad power to regulate liquor under § 2 of
the Twenty-first Amendment. This power, however, does
not allow States to ban, or severely limit, the direct shipment
of out-of-state wine while simultaneously authorizing direct
shipment by in-state producers. If a State chooses to allow
direct shipment of wine, it must do so on evenhanded terms.
Without demonstrating the need for discrimination, New
York and Michigan have enacted regulations that disadvan-
tage out-of-state wine producers. Under our Commerce
Clause jurisprudence, these regulations cannot stand.
We affirm the judgment of the Court of Appeals for the
Sixth Circuit; and we reverse the judgment of the Court of
Appeals for the Second Circuit and remand the case for fur-
ther proceedings consistent with our opinion.
It is so ordered.
Justice Stevens, with whom Justice O’Connor joins,
dissenting.
Congress’ power to regulate commerce among the States
includes the power to authorize the States to place burdens
on interstate commerce. Prudential Ins. Co. v. Benjamin,
328 U. S. 408 (1946). Absent such congressional approval, a
state law may violate the unwritten rules described as the
“dormant Commerce Clause” either by imposing an undue
burden on both out-of-state and local producers engaged in
interstate activities or by treating out-of-state producers
less favorably than their local competitors. See, e. g., Pike
v. Bruce Church, Inc., 397 U. S. 137 (1970); Philadelphia v.

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494 GRANHOLM v. HEALD
Stevens, J., dissenting
New Jersey, 437 U. S. 617 (1978). A state law totally prohib-
iting the sale of an ordinary article of commerce might im-
pose an even more serious burden on interstate commerce.
If Congress may nevertheless authorize the States to enact
such laws, surely the people may do so through the process
of amending our Constitution.
The New York and Michigan laws challenged in these
cases would be patently invalid under well-settled dormant
Commerce Clause principles if they regulated sales of an
ordinary article of commerce rather than wine. But ever
since the adoption of the Eighteenth Amendment and the
Twenty-first Amendment, our Constitution has placed com-
merce in alcoholic beverages in a special category. Section
2 of the Twenty-first Amendment expressly provides that
“[t]he transportation or importation into any State, Terri-
tory, or possession of the United States for delivery or use
therein of intoxicating liquors, in violation of the laws
thereof, is hereby prohibited.”
Today many Americans, particularly those members of the
younger generations who make policy decisions, regard alco-
hol as an ordinary article of commerce, subject to substan-
tially the same market and legal controls as other consumer
products. That was definitely not the view of the genera-
tions that made policy in 1919 when the Eighteenth Amend-
ment was ratified or in 1933 when it was repealed by the
Twenty-first Amendment.1 On the contrary, the moral con-
demnation of the use of alcohol as a beverage represented
1 In the words of Justice Jackson: “The people of the United States knew
that liquor is a lawlessness unto itself. They determined that it should
be governed by a specific and particular Constitutional provision. They
did not leave it to the courts to devise special distortions of the general
rules as to interstate commerce to curb liquor’s ‘tendency to get out of
legal bounds.’ It was their unsatisfactory experience with that method
that resulted in giving liquor an exclusive place in constitutional law as a
commodity whose transportation is governed by a special, constitutional
provision.” Duckworth v. Arkansas, 314 U. S. 390, 398–399 (1941) (opin-
ion concurring in result).

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Stevens, J., dissenting
not merely the convictions of our religious leaders, but the
views of a sufficiently large majority of the population to
warrant the rare exercise of the power to amend the Con-
stitution on two occasions. The Eighteenth Amendment
entirely prohibited commerce in “intoxicating liquors” for
beverage purposes throughout the United States and the
territories subject to its jurisdiction. While § 1 of the
Twenty-first Amendment repealed the nationwide prohibi-
tion, § 2 gave the States the option to maintain equally com-
prehensive prohibitions in their respective jurisdictions.
The views of judges who lived through the debates that
led to the ratification of those Amendments are entitled to
special deference. Foremost among them was Justice Bran-
deis, whose understanding of a State’s right to discriminate
in its regulation of out-of-state alcohol could not have been
clearer:
“The plaintiffs ask us to limit [§ 2’s] broad command.
They request us to construe the Amendment as saying,
in effect: The State may prohibit the importation of in-
toxicating liquors provided it prohibits the manufacture
and sale within its borders; but if it permits such manu-
facture and sale, it must let imported liquors compete
with the domestic on equal terms. To say that, would
involve not a construction of the Amendment, but a re-
writing of it. . . . Can it be doubted that a State might
establish a state monopoly of the manufacture and sale
of beer, and either prohibit all competing importations,
or discourage importation by laying a heavy impost, or
channelize desired importations by confining them to a
single consignee?” State Bd. of Equalization of Cal. v.
Young’s Market Co., 299 U. S. 59, 62–63 (1936).2
2 According to Justice Black, who participated in the passage of the
Twenty-first Amendment in the Senate, § 2 was intended to return “ ‘abso-
lute control’ of liquor traffic to the States, free of all restrictions which
the Commerce Clause might before that time have imposed.” Hostetter

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Stevens, J., dissenting
In the years following the ratification of the Twenty-first
Amendment, States adopted manifold laws regulating com-
merce in alcohol, and many of these laws were discrimina-
tory.3 So-called “dry states” entirely prohibited such com-
merce; others prohibited the sale of alcohol on Sundays;
others permitted the sale of beer and wine but not hard
liquor; most created either state monopolies or distribution
systems that gave discriminatory preferences to local retail-
ers and distributors. The notion that discriminatory state
laws violated the unwritten prohibition against balkanizing
the American economy—while persuasive in contemporary
times when alcohol is viewed as an ordinary article of com-
merce—would have seemed strange indeed to the millions of
Americans who condemned the use of the “demon rum” in
the 1920’s and 1930’s. Indeed, they expressly authorized the
“balkanization” that today’s decision condemns. Today’s de-
cision may represent sound economic policy and may be con-
sistent with the policy choices of the contemporaries of Adam
Smith who drafted our original Constitution; 4 it is not, how-
ever, consistent with the policy choices made by those who
amended our Constitution in 1919 and 1933.
My understanding (and recollection) of the historical con-
text reinforces my conviction that the text of § 2 should be
“broadly and colloquially interpreted.” Carter v. Virginia,
321 U. S. 131, 141 (1944) (Frankfurter, J., concurring).5 In-
v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324, 338 (1964) (dissent-
ing opinion).
3 See generally Green, Interstate Barriers in the Alcoholic Beverage
Field, 7 Law & Contemp. Prob. 717 (1940); post, at 517–520 (Thomas, J.,
dissenting).
4 Cf. Knickerbocker Ice Co. v. Stewart, 253 U. S. 149, 169 (1920) (Holmes,
J., dissenting) (“I cannot for a moment believe that apart from the Eight-
eenth Amendment special constitutional principles exist against strong
drink. The fathers of the Constitution so far as I know approved it”).
5 As he added in that case, “since Virginia derives the power to legislate
as she did from the Twenty-first Amendment, the Commerce Clause does
not come into play.” Carter v. Virginia, 321 U. S., at 143.

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Thomas, J., dissenting
deed, the fact that the Twenty-first Amendment was the only
Amendment in our history to have been ratified by the peo-
ple in state conventions, rather than by state legislatures,
provides further reason to give its terms their ordinary
meaning. Because the New York and Michigan laws regu-
late the “transportation or importation” of “intoxicating liq-
uors” for “delivery or use therein,” they are exempt from
dormant Commerce Clause scrutiny.
As Justice Thomas has demonstrated, the text of the
Twenty-first Amendment is a far more reliable guide to its
meaning than the unwritten rules that the majority enforces
today. I therefore join his persuasive and comprehensive
dissenting opinion.
Justice Thomas, with whom The Chief Justice, Jus-
tice Stevens, and Justice O’Connor join, dissenting.
A century ago, this Court repeatedly invalidated, as incon-
sistent with the negative Commerce Clause, state liquor leg-
islation that prevented out-of-state businesses from shipping
liquor directly to a State’s residents. The Webb-Kenyon Act
and the Twenty-first Amendment cut off this intrusive re-
view, as their text and history make clear and as this Court’s
early cases on the Twenty-first Amendment recognized.
The Court today seizes back this power, based primarily on
a historical argument that this Court decisively rejected
long ago in State Bd. of Equalization of Cal. v. Young’s Mar-
ket Co., 299 U. S. 59, 64 (1936). Because I would follow
Young’s Market and the language of both the statute that
Congress enacted and the Amendment that the Nation rati-
fied, rather than the Court’s questionable reading of history
and the “negative implications” of the Commerce Clause,
I respectfully dissent.
I
The Court devotes much attention to the Twenty-first
Amendment, yet little to the terms of the Webb-Kenyon Act.
This is a mistake, because that Act’s language displaces any

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498 GRANHOLM v. HEALD
Thomas, J., dissenting
negative Commerce Clause barrier to state regulation of liq-
uor sales to in-state consumers.
A
The Webb-Kenyon Act immunizes from negative Com-
merce Clause review the state liquor laws that the Court
holds are unconstitutional. The Act “prohibit[s]” any “ship-
ment or transportation” of alcoholic beverages “into any
State” when those beverages are “intended, by any person
interested therein, to be received, possessed, sold, or in any
manner used . . . in violation of any law of such State.” 1
State laws that regulate liquor imports in the manner de-
scribed by the Act are exempt from judicial scrutiny under
the negative Commerce Clause, as this Court has long held.
See McCormick & Co. v. Brown, 286 U. S. 131, 139–140
(1932); Clark Distilling Co. v. Western Maryland R. Co., 242
U. S. 311, 324 (1917); Seaboard Air Line R. Co. v. North Caro-
lina, 245 U. S. 298, 303–304 (1917). The Webb-Kenyon Act’s
language, in other words, “prevent[s] the immunity charac-
teristic of interstate commerce from being used to permit
the receipt of liquor through such commerce in States con-
trary to their laws.” Clark Distilling, supra, at 324.
1 The Webb-Kenyon Act provides:
“The shipment or transportation, in any manner or by any means what-
soever, of any spirituous, vinous, malted, fermented, or other intoxicating
liquor of any kind from one State, Territory, or District of the United
States, or place noncontiguous to but subject to the jurisdiction thereof,
into any other State, Territory, or District of the United States, or place
noncontiguous to but subject to the jurisdiction thereof, or from any for-
eign country into any State, Territory, or District of the United States, or
place noncontiguous to but subject to the jurisdiction thereof, which said
spirituous, vinous, malted, fermented, or other intoxicating liquor is in-
tended, by any person interested therein, to be received, possessed, sold,
or in any manner used, either in the original package or otherwise, in
violation of any law of such State, Territory, or District of the United
States, or place noncontiguous to but subject to the jurisdiction thereof, is
prohibited.” 27 U. S. C. § 122.

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Thomas, J., dissenting
The Michigan and New York direct-shipment laws are
within the Webb-Kenyon Act’s terms and therefore do not
run afoul of the negative Commerce Clause. Those laws re-
strict out-of-state wineries from shipping and selling wine
directly to Michigan and New York consumers. Ante, at
469, 470. Any winery that ships wine directly to a Michigan
or New York consumer in violation of those state-law restric-
tions is a “person interested therein” “intend[ing]” to “s[ell]”
wine “in violation of ” Michigan and New York law, and thus
comes within the terms of the Webb-Kenyon Act.
This construction of the Webb-Kenyon Act is no innova-
tion. The Court adopted this reading of the Act in McCor-
mick & Co. v. Brown, supra, and Congress approved it
shortly thereafter in 1935 when it reenacted the Act without
alteration, 49 Stat. 877; see, e. g., Keene Corp. v. United
States, 508 U. S. 200, 212–213 (1993) (applying presumption
that reenacted statute incorporates settled judicial construc-
tion). McCormick considered a state law that prohibited
out-of-state manufacturers (as well as in-state manufactur-
ers) from shipping liquor to a licensed in-state dealer without
first obtaining a wholesaler permit. The Court held that by
shipping liquor into the State without a license, the out-of-
state manufacturer “[fell] directly within the terms of ” the
Webb-Kenyon Act, thus violating it. 286 U. S., at 143; see
also Rainier Brewing Co. v. Great Northern Pacific S. S. Co.,
259 U. S. 150, 152–153 (1922) (holding that under the Webb-
Kenyon Act, beer importers must “carry” beer into the State
“in the manner allowed by the laws of that State”). While
the law at issue in McCormick did not discriminate against
out-of-state products, the construction of the Webb-Kenyon
Act it adopted applies equally to state laws that so discrimi-
nate. If an out-of-state manufacturer shipping liquor to an
in-state distributor without a license “s[ells]” liquor “in viola-
tion of any law of such State” within the meaning of Webb-
Kenyon, as McCormick held, an out-of-state winery directly
shipping wine to consumers in violation of even a discrimina-

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tory state law does so as well. The Michigan and New York
laws are indistinguishable in relevant part from the state law
upheld in McCormick.2
The Court answers that the Webb-Kenyon Act’s text
“readily can be construed as forbidding ‘shipment or trans-
portation’ only where it runs afoul of the States’ generally
applicable laws governing receipt, possession, sale, or use.”
Ante, at 482. What the Court means by “generally applica-
ble” laws is unclear, for the Court concedes that the Webb-
Kenyon Act allows States to pass laws discriminating against
out-of-state wholesalers. See ante, at 484, 488–489. By
“generally applicable [state] laws,” therefore, the Court ap-
parently means all state laws except for those that “discrimi-
nate” against out-of-state liquor products. See ante, at 482–
484, 488–489.
The Court leaves unexplained how this ad hoc exception
follows from the Act’s text. The Act’s language leaves no
room for this exception. The Act does not condition a
State’s ability to regulate the receipt, possession, and use of
liquor free from negative Commerce Clause immunity on the
character of the state law. It does not mention “discrimina-
tion,” much less discrimination against out-of-state liquor
products. Instead, it prohibits the interstate shipment of
liquor into a State “in violation of any law of such State.”
27 U. S. C. § 122. “[A]ny law of such State” means any law,
including a “discriminatory” one.
The Court’s distinction between discrimination against
manufacturers and discrimination against wholesalers is
2 The Court notes that McCormick held that the Webb-Kenyon Act only
authorized “valid” laws, the suggestion being that McCormick’s holding
applies only to nondiscriminatory (and hence “valid” laws). Ante, at 482.
The Court takes this word out of context. By “valid” laws, McCormick
meant laws not pre-empted by the National Prohibition Act, rather than
laws that treated in-state and out-of-state products equally. See 286
U. S., at 143–144 (finding the legislation “valid” because the National Pro-
hibition Act did not pre-empt it).

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equally unjustified. There is no warrant in the Act’s text
for treating regulated entities differently depending on their
place in the distribution chain: The Act applies in undifferen-
tiated fashion to “any person interested therein.” A wine
manufacturer shipping wine directly to a consumer is an in-
terested party, just as an out-of-state liquor wholesaler is.3
The contrast between the language of the Webb-Kenyon
Act and its predecessor, the Wilson Act, casts still more
doubt on the Court’s reading. The Wilson Act provided that
liquor shipped into a State was “subject to the operation and
effect of the laws of such State . . . to the same extent and
in the same manner as though such liquids or liquors had
been produced in such State or Territory.” § 121. Even
if this language does not authorize States to discriminate
against out-of-state liquor products, see ante, at 478, the
Webb-Kenyon Act has no comparable language address-
ing discrimination. The contrast is telling. It shows that
the Webb-Kenyon Act encompasses laws that discrimi-
nate against both out-of-state wholesalers and out-of-state
manufacturers.
In support of its conclusion that the Webb-Kenyon Act did
not authorize States to discriminate, the Court relies heavily
on Clark Distilling Co. v. Western Maryland R. Co., 242
U. S. 311 (1917). Ante, at 481–482. Its reliance is mis-
placed. Clark Distilling held that the Webb-Kenyon Act
authorized a nondiscriminatory state law, 242 U. S., at 321–
322, and so had no direct occasion to pass on whether the Act
also authorized discriminatory laws. Nothing in it implicitly
3 The Court also states that the “Webb-Kenyon Act expresses no clear
congressional intent to depart from the principle . . . that discrimination
against out-of-state goods is disfavored.” Ante, at 482. That is not cor-
rect. It is settled that the Webb-Kenyon Act explicitly abrogates nega-
tive Commerce Clause review of state laws that fall within its terms. See
supra, at 498–499. There is no reason to require another clear statement
for each sort of law to which it might apply. The only question is whether,
fairly read, the Webb-Kenyon Act covers Michigan’s and New York’s
direct-shipment laws. As I have explained, it does.

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decided that unsettled question in the manner the Court
suggests.
To the extent that it is relevant, Clark Distilling supports
the view that the Webb-Kenyon Act authorized States to dis-
criminate. Contrary to the Court’s suggestion, Clark Dis-
tilling did not say (on pages 321, 322, or elsewhere) that the
Webb-Kenyon Act “empowered [States] to forbid shipments
of alcohol to consumers for personal use, provided that [they]
treated in-state and out-of-state liquor on the same terms.”
Ante, at 481. Instead, Clark Distilling construed the
Webb-Kenyon Act to “extend that which was done by the
Wilson Act” in that its “purpose was to prevent the immunity
characteristic of interstate commerce from being used to per-
mit the receipt of liquor through such commerce in States
contrary to their laws.” 242 U. S., at 324. The Court takes
this passage only to refer to “nondiscriminatory” state laws,
ante, at 481, but this is not correct. The passage the Court
cites implies that the Webb-Kenyon Act also abrogated
the nondiscrimination principle of the negative Commerce
Clause, since that principle flows from the “immunity charac-
teristic of interstate commerce,” no less than any other nega-
tive Commerce Clause doctrine. In other words, Clark Dis-
tilling recognized that the Webb-Kenyon Act took “the
protection of interstate commerce away from all receipt and
possession of liquor prohibited by state law.” 242 U. S., at
325 (emphasis added). Clark Distilling thus confirms what
the text of the Webb-Kenyon Act makes clear: The Webb-
Kenyon Act “extended” the Wilson Act by completely immu-
nizing all state laws regulating liquor imports from negative
Commerce Clause restraints.4
4 The Court also opines that, quite apart from the Webb-Kenyon Act,
the Wilson Act “expressly precludes States from discriminating.” Ante,
at 483. It does not. The Wilson Act “precludes” States from nothing.
Instead, it authorizes them to regulate liquor free of negative Commerce
Clause restraints by “subject[ing]” imported liquor “to the operation” of
state law, taking state law as it finds it. 27 U. S. C. § 121. Even if, as

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B
Straying from the Webb-Kenyon Act’s text, the Court
speculates that Congress intended the Act merely to over-
rule a discrete line of this Court’s negative Commerce Clause
cases invalidating “nondiscriminatory” state liquor regula-
tion laws, including Vance v. W. A. Vandercook Co., 170 U. S.
438 (1898), and Rhodes v. Iowa, 170 U. S. 412 (1898). Ante,
at 478–484. According to the majority, ante, at 483–484, the
Webb-Kenyon Act left untouched this Court’s cases prevent-
ing States from regulating liquor in “discriminatory” fashion.
See, e. g., Scott v. Donald, 165 U. S. 58 (1897) (Scott); Walling
v. Michigan, 116 U. S. 446 (1886); and Tiernan v. Rinker, 102
U. S. 123 (1880). The plain language of the Webb-Kenyon
Act makes the Court’s guesswork about Congress’ intent un-
necessary. But even taken on its own terms, the majority’s
historical argument is unpersuasive. History reveals that
the Webb-Kenyon Act overturned not only Vance and
Rhodes, but also Scott and therefore its “nondiscrimination”
principle.
The origins of the Webb-Kenyon Act are in this Court’s
decision in Leisy v. Hardin, 135 U. S. 100 (1890). Leisy held
that States were prohibited from regulating the resale of
alcohol imported from outside the State so long as the liquor
stayed in its “original packag[e].” Id., at 124–125. This
rule made it more difficult for States to prohibit the in-state
consumption of liquor. Even if a State banned the domestic
production of liquor altogether, Leisy left it powerless to
stop the flow of liquor from outside its borders.
Congress reacted swiftly by enacting the Wilson Act in
August 1890. The Wilson Act authorized States to regulate
liquor “upon arrival in such State” whether “in original pack-
the Court suggests, the Wilson Act does not authorize States to discrimi-
nate, ante, at 478, the Webb-Kenyon Act extends that authorization to
cover discriminatory state laws. The only question here is the scope of
the broader, more inclusive Webb-Kenyon Act. The Court’s argument
therefore adds nothing to the analysis.

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ages or otherwise,” 27 U. S. C. § 121, and therefore subjected
imports to state jurisdiction “upon arrival within the juris-
diction of the State.” Rhodes, supra, at 433 (Gray, J., dis-
senting). The Wilson Act accordingly abrogated Leisy and
similar decisions by subjecting liquor imports to the opera-
tion of state law once the liquor came within a State’s geo-
graphic borders.
Rather than holding that the Wilson Act meant what it
said, three decisions of this Court construed the Act to be a
virtual nullity. The first was Scott, supra. South Carolina
had decided to regulate traffic in liquor by monopolizing the
sale and distribution of liquor. All liquor, whether produced
in or out of the State, could be sold to consumers in the State
only by the state commissioner of alcohol. Id., at 66–68, n. 1,
92. The law thus prohibited out-of-state manufacturers and
wholesalers, as well as their in-state counterparts, from ship-
ping liquor directly to consumers.
The appellee, Donald, was a citizen of South Carolina who
had ordered liquor directly from out-of-state shippers for his
own personal use, rather than through the state monopoly
system as South Carolina law required. Id., at 59; see also
Scott v. Donald, 165 U. S. 107, 108–109 (1897) (Donald).
South Carolina officials seized the liquor he ordered after it
had crossed South Carolina lines, but before he had received
it. Donald sued the officials for damages, as well as an in-
junction allowing him to import liquor directly from out-of-
state shippers for his own personal use. Scott, supra, at
69–70; Donald, supra, at 109–110.
The Court held that South Carolina’s ban on the direct
shipment of liquor unconstitutionally interfered with the
right of out-of-state entities to ship liquor directly to con-
sumers for their personal use, entitling Donald to damages
and injunctive relief. Scott, supra, at 78, 99–100; Donald,
supra, at 114; see also Vance, supra, at 452 (describing the
“ruling” of Scott to be that a State could not “forbid the

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shipment into the State from other States of intoxicating liq-
uors for the use of a resident”). The Court reasoned that
the ban on importation, “in effect, discriminate[d] between
interstate and domestic commerce in commodities to make
and use which are admitted to be lawful.” Scott, 165 U. S.,
at 100. The Court reserved the question whether a state
monopoly system that allowed consumers to import liquor
directly was constitutional; for the Court, it “suffic[ed]” that
South Carolina’s ban on imports “discriminate[d] against the
bringing of such articles in, and importing them from other
States.” Id., at 101. The Court’s excuse for holding that
the Wilson Act did not save the State’s ban on importation
was the same as the Court’s excuse today: that the Wil-
son Act did not authorize “discriminatory” state legislation.
Ibid. On this basis, the Court affirmed Donald’s damages
award. Ibid.
In response to Scott, Senator Tillman of South Carolina
quickly introduced the first version of what became the
Webb-Kenyon Act. His bill explicitly attempted to reverse
the Scott decision. The Senate Report on the bill noted that
“[t]he effect of [Scott was] to throw down all the barriers
erected by the State law, in which she is protected by the
Wilson bill, and allow the untrammeled importation of liquor
into the State upon the simple claim that it is for private
use.” S. Rep. No. 151, 55th Cong., 1st Sess., 5 (1897). The
Report also addressed Scott’s holding that South Carolina’s
ban on importation was “discriminatory” and adopted the
Scott dissenter’s view that the ban on importation effected
“no discrimination against citizens of other States.” S. Rep.
No. 151, at 5. The bill accordingly would have amended the
Wilson Act to grant States “ ‘absolute control of . . . liquors
or liquids within their borders, by whomsoever produced and
for whatever use imported.’ ” 30 Cong. Rec. 2612 (1897).
The bill passed in the Senate without debate. It failed in
the House, perhaps because the House Judiciary Committee

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added an amendment that barred discrimination against the
products of other States, leaving Scott intact. H. R. Rep.
No. 667, 55th Cong., 2d Sess., 1 (1898).
Meanwhile, the Court continued to narrow the reach of
the Wilson Act. In Rhodes and Vance, the Court even more
broadly stripped States of their control over liquor regula-
tion. Rhodes did so by holding that the phrase “upon arrival
in such State” in the Wilson Act meant that state law could
regulate imports only after their delivery to a consignee
within the State. 170 U. S., at 421 (internal quotation marks
omitted). This meant that States could regulate imported
liquor, even when in its original package, but only after it
had been delivered to the eventual consignee. Rhodes, in
other words, read the Wilson Act to overturn Leisy, but not
Bowman v. Chicago & Northwestern R. Co., 125 U. S. 465
(1888), which had recognized a constitutional right to import
liquor in its original package free from state regulation until
it reached its consignee. Rhodes, supra, at 423. Like
Leisy, then, Rhodes seriously hampered the ability of States
to intercept liquor at their borders.
Vance involved the constitutionality of a law very similar
to the law struck down in Scott. After its loss in Scott,
South Carolina amended its ban on importation. Rather
than flatly banning imports unless they went through the
state monopoly system, the new law allowed out-of-state
wholesalers and manufacturers to ship liquor directly to con-
sumers, but only if the consumer showed that the liquor
passed a state-administered test of its purity. Vance, 170
U. S., at 454–455.
Vance had two distinct holdings. First, the Court struck
down this condition on the direct importation of liquor as
an impermissible burden on “the constitutional right of the
non-resident to ship into the State and of the resident in the
State to receive for his own use.” Id., at 455. The Court
derived the right to direct importation primarily from the
“ruling” of Scott that a State could not “forbid the shipment

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into the State from other States of intoxicating liquors for
the use of a resident.” 170 U. S., at 452.
Second, the Court held that, apart from its ban on direct
shipments of liquor to consumers, South Carolina’s monopoly
over liquor distribution was otherwise constitutional. Id.,
at 450–452. It rejected the argument that this monopoly
system was unconstitutionally discriminatory. In particu-
lar, the Court reasoned that the monopoly system was not
discriminatory because Scott had held (a holding that Rhodes
had fortified) that South Carolina consumers had a constitu-
tional right to import liquor for their own personal use, even
if a State otherwise monopolized the sale and distribution of
liquor.5 A monopoly system, the Court implied, was nondis-
criminatory under the rule of Scott only if it also allowed
consumers to import liquor from out-of-state shippers for
their own personal use. Three Justices in Vance dissented
from that holding, on the ground that such a state monopoly
system constituted unconstitutional discrimination under,
among other cases, Scott and Walling v. Michigan, 116 U. S.
446 (1886). 170 U. S., at 462–468 (opinion of Shiras, J., joined
by Fuller, C. J., and McKenna, J.).
Rhodes and Vance swept more broadly than Scott.
Rhodes held that States lacked power to regulate imported
liquor before it reached the consignee, regardless of whether
the liquor was intended for the consignee’s personal use, see
supra, at 506; it did not, as the Court implies, simply repeat
Scott’s holding that consumers had a right to import liquor
for their own personal use, ante, at 480. Rhodes’ holding,
5 See Vance v. W. A. Vandercook Co., 170 U. S. 438, 451–452 (1898) (“But
the weight of [the argument that the state monopoly system is discrimina-
tory] is overcome when it is considered that the Interstate Commerce
clause of the Constitution guarantees the right to ship merchandise from
one State into another, and protects it until the termination of the ship-
ment by delivery at the place of consignment, and this right is wholly
unaffected by the act of Congress [i. e., the Wilson Act] which allows state
authority to attach to the original package before sale but only after deliv-
ery. Scott v. Donald, supra; Rhodes v. Iowa”).

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Thomas, J., dissenting
for example, made it easier for bootleggers to circumvent
state prohibitions on the resale of imported liquor, because
it enabled them to order large quantities of liquor directly
from out-of-state interests. For its part, Vance held that
the right to import for personal use recognized in Scott
applied even if the State conditioned the right to import
directly on compliance with regulatory conditions (e. g.,
a state-administered purity test). Those broader holdings,
consequently, spurred more vigorous congressional attempts
to return control of liquor regulation to the States. See R.
Hamm, Shaping the Eighteenth Amendment 206–212 (1995)
(hereinafter Hamm); Rogers, Interstate Commerce in Intox-
icating Liquors Before the Webb-Kenyon Act, 4 Va. L. Rev.
353, 364–365 (1917). The legislative debate in subsequent
years accordingly focused on their effect. That may be what
misleads the majority into believing that the Webb-Kenyon
Act took aim only at Rhodes and Vance.
Yet early versions of the Webb-Kenyon Act, not to men-
tion the Act itself, also overturned Scott’s holding that ban-
ning the direct shipment of liquor for personal use was
unconstitutionally discriminatory. Like Senator Tillman’s
initial bill, other early versions of the Webb-Kenyon Act took
aim at Scott, Rhodes, and Vance. They made clear that out-
of-state liquor was subject to state law immediately upon
entering the State’s territorial boundaries, even if intended
for personal use. See Hamm 206, 208.
The version that eventually became the Webb-Kenyon Act
was likewise designed to overturn the holdings of all three
cases, and thus to reverse Scott’s “nondiscrimination” princi-
ple. The House Report says that the bill was “intended to
withdraw the protecting hand of interstate commerce from
intoxicating liquors transported into a State or Territory and
intended to be used therein in violation of the law of such
State or Territory.” H. R. Rep. No. 1461, 62d Cong., 3d
Sess., 1 (1913). Thus, the bill targeted Scott’s notion (as ap-
plied by Vance) that imports destined for personal use were

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exempt from state regulation. There was no mention of an
exception for “discriminatory” state laws, though such an
amendment to an earlier version of the Webb-Kenyon Act
had been proposed before, see supra, at 505–506; the idea
was that imports were subject to state law once within a
State’s geographic borders, regardless of the law’s character.
In fact, proponents of the final version of the bill defeated
proposed amendments that would have restrained States
from restricting imports destined for personal use, and
thereby would have left Scott intact. Hamm 215; 49 Cong.
Rec. 2921 (1913); see also H. R. Rep. No. 2337, 58th Cong.,
2d Sess., 2–3 (1904) (prior unenacted version drawing excep-
tion for shipments for in-state personal use).
In contrast to those unenacted amendments, the Webb-
Kenyon Act reversed Scott, Rhodes, and Vance by forbidding
the importation of liquor “intended to be received, possessed,
sold or in any manner used . . . in violation of any law of
such state”—regardless of the nature of the state law or the
imported liquor’s intended use. See Seaboard Air Line R.
Co., 245 U. S., at 304 (noting that the Webb-Kenyon Act al-
lowed States to regulate “irrespective of any personal right
in a consignee there to have and consume liquor”). That is
why, just four years after its enactment, this Court described
the Webb-Kenyon Act as removing “the protection of inter-
state commerce away from all receipt and possession of liq-
uor prohibited by state law.” Clark Distilling, 242 U. S., at
325 (emphasis added).
The foregoing historical account belies the majority’s claim
that the Webb-Kenyon Act left Scott untouched. The Court
reasons that the Webb-Kenyon Act overturned only those
decisions that “ ‘in effect afford[ed] a means by subterfuge
and indirection to set [state liquor laws] at naught,’ ” ante, at
482 (quoting Clark Distilling, supra, at 324), a description
the Court takes to cover Rhodes and Vance, but not Scott.
However, Scott’s holding, by precluding state monopoly sys-
tems from prohibiting direct shipments of liquor to consum-

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ers, “set [state liquor laws] at naught” just as Rhodes and
Vance did. The Court concedes that the Webb-Kenyon Act
“close[d] the direct-shipment gap” and that Scott recognized
a constitutional right for consumers to import liquor directly
for their own personal use. Ante, at 480, 481. These con-
cessions cannot be squared with the Court’s simultaneous
suggestion, ante, at 481–484, that the Webb-Kenyon Act left
Scott untouched. The only way to overturn Scott’s direct-
shipment holding was to abrogate its premise that South
Carolina’s monopoly system was unconstitutionally discrimi-
natory, as Senator Tillman recognized from the start. See
supra, at 505. Reversing Scott’s holding that a State could
not ban direct shipments of liquor to consumers was a core
concern of the Webb-Kenyon Act.
Repudiating Scott’s nondiscrimination holding was also es-
sential to ensuring the constitutionality of state liquor licens-
ing schemes and state monopolies on the sale and distribu-
tion of liquor. This is so because the constitutionality of
these state systems remained in some doubt even after
Vance. As explained, Vance upheld South Carolina’s mo-
nopoly system (stripped of its ban on direct shipments) as
“nondiscriminatory” only because that system had preserved
the constitutional right established in Scott and Rhodes to
send and receive direct shipments of liquor free of state in-
terference. Supra, at 506–507. The Court admits that the
Webb-Kenyon Act abolished that right. Ante, at 481. Had
the Webb-Kenyon Act done so without also allowing the
States to discriminate, Vance’s reasoning implied that the
Court was likely to strike down state monopoly systems, and
therefore probably licensing schemes as well, as unduly “dis-
criminatory.” See 170 U. S., at 451 (equating a state monop-
oly scheme with a private licensing scheme). The only way
to stave off that holding, and so to preserve States’ ability
to regulate liquor traffic, was to overturn Scott’s “nondis-
crimination” reasoning. Faced with a Judiciary that had
narrowly construed the Wilson Act, see supra, at 504–508,

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Thomas, J., dissenting
Congress drafted the Webb-Kenyon Act to authorize all
state regulation of importation, whether or not “discrimina-
tory.” Just as Rhodes read the Wilson Act to repudiate
Leisy but not Bowman, see supra, at 506, the majority reads
the Webb-Kenyon Act to repudiate Rhodes but not Scott,
committing an analogous error. I would not so construe
the Webb-Kenyon Act.
C
The majority disagrees with this historical account pri-
marily by disputing my reading of Scott. It reads Scott to
have held two things: first, that certain discriminatory provi-
sions of South Carolina’s monopoly system were not author-
ized by the Wilson Act, and therefore were unconstitutional;
and second, that Donald had a constitutional right to import
liquor directly from out-of-state shippers. Ante, at 478–480.
This recharacterization of Scott (together with its mischarac-
terization of Rhodes’ holding, see supra, at 506) is the basis
for the Court’s contention that the Webb-Kenyon Act only
overruled Scott’s second holding, leaving the first untouched.
Ante, at 481–484.
The Court misreads Scott. Scott had only one holding:
that the state monopoly system unconstitutionally discrimi-
nated against Donald by allowing him to purchase liquor
from in-state stores, but not directly from out-of-state inter-
ests. The issue of direct importation was squarely at issue
in Scott, not simply “implicit.” Ante, at 480. This was the
only basis, after all, for affirming Donald’s damages award
for interference with his ability to import goods directly
from outside the State. Scott’s reasoning that the South
Carolina law was unconstitutionally discriminatory was the
basis for affirming that award, not a separate and distinct
holding.
While South Carolina law also allowed the state alcohol
administrator to discriminate against out-of-state liquor
when purchasing liquor for sale through the monopoly sys-
tem, ante, at 478–479, any constitutional defect with those

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portions of the law would have been at most grounds for
allowing Donald to purchase out-of-state liquor through the
state monopoly system, as the dissent argued (and as the
majority strains to characterize Scott’s actual holding, ante,
at 479). See 165 U. S., at 104–106 (Brown, J., dissenting).
But Scott rejected that view and held that the broader dis-
crimination effected by the law was grounds for allowing
Donald to import liquor directly himself, bypassing the mo-
nopoly system entirely. Scott’s holding therefore rested on
a conclusion that a ban on direct importation was “discrimi-
nation” under the negative Commerce Clause. That conclu-
sion was natural for Justice Shiras, the author of Scott,
whose view apparently was that all state monopoly systems,
even ones that seem nondiscriminatory to our modern eyes,
were unconstitutionally discriminatory. See Vance, supra,
at 465, 467 (Shiras, J., dissenting) (citing the nondiscrimina-
tion cases Walling v. Michigan, 116 U. S. 446 (1886), and
Minnesota v. Barber, 136 U. S. 313 (1890)). The Court’s nar-
rower understanding of “discrimination” is anachronistic.
Vance confirms this reading of Scott. Vance correctly
characterized Scott as establishing a right for consumers
to receive shipments of liquor directly from out-of-state
sources. 170 U. S., at 452. It also characterized Scott’s rea-
soning as resting on the discriminatory character of the state
law. 170 U. S., at 449. These two descriptions, taken to-
gether, suggest that the discriminatory character of the law
was the basis for Scott’s holding that Donald had a constitu-
tional right to receive liquor directly, instead of a separate
holding. Moreover, Vance also implied that a monopoly sys-
tem that did not allow consumers to receive liquor directly
was unconstitutionally discriminatory. See supra, at 507.
That suggestion supports the idea that Scott considered a
ban on such direct shipments to be discriminatory.
Brennen v. Southern Express Co., 106 S. C. 102, 90 S. E.
402 (1916), likewise bolsters that Scott considered South Car-
olina’s ban on direct importation to be unconstitutionally dis-

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criminatory, quite apart from the provisions that authorized
the state administrator of alcohol to prefer local products
over out-of-state ones. See ante, at 478–479 (describing dis-
criminatory provisions). In Brennen, the court considered
the constitutionality of a state monopoly system that chan-
neled all liquor through state dispensaries by banning direct
shipments, but that allowed a consumer to import directly
one gallon of liquor per month for his own personal use. 106
S. C., at 107–108, 90 S. E., at 403. Though out-of-state liquor
had equal access to the state-run liquor dispensaries, see
generally 2 S. C. Crim. Code §§ 794–878 (1912) (providing for
otherwise nondiscriminatory state-run monopoly system),
the court held that this system unconstitutionally discrimi-
nated against out-of-state liquor because it allowed consum-
ers to purchase only a limited quantity of liquor via direct
shipments, yet unlimited amounts from state stores. The
court noted that “there was no limit to the quantity which a
citizen who patronized the dispensaries might buy and keep
in his possession for personal use,” whereas the law limited
direct-shipment purchases to a specific quantity each month.
106 S. C., at 108, 90 S. E., at 403. This, the court reasoned,
“was, therefore, clearly a discrimination made in favor of liq-
uors bought from the dispensaries,” and so was unconstitu-
tionally discriminatory under the rule of Scott. 106 S. C., at
108, 90 S. E., at 403–404. The court thus recognized that
Scott’s reasoning implied that a state monopoly system was
unconstitutionally discriminatory unless it allowed consum-
ers to purchase liquor directly from out-of-state shippers on
the same terms as they could purchase liquor from the state
monopoly system.
Brennen refutes the Court’s characterization of Scott. It
shows that the South Carolina system at issue in Scott was
“discriminatory” because it banned direct importation, not
because its provisions authorized the state alcohol adminis-
trator to prefer local products. Even the Court concedes
that the Webb-Kenyon Act abrogated the right to direct im-

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514 GRANHOLM v. HEALD
Thomas, J., dissenting
portation recognized in Scott. See ante, at 480, 481. It fol-
lows that the Act also overturned the nondiscrimination rea-
soning that was the foundation of that right.
In sum, the Webb-Kenyon Act authorizes the discrimina-
tory state laws before the Court today.
II
There is no need to interpret the Twenty-first Amend-
ment, because the Webb-Kenyon Act resolves these cases.
However, the state laws the Court strikes down are lawful
under the plain meaning of § 2 of the Twenty-first Amend-
ment, as this Court’s case law in the wake of the Amendment
and the contemporaneous practice of the States reinforce.
A
Section 2 of the Twenty-first Amendment provides: “The
transportation or importation into any State, Territory, or
possession of the United States for delivery or use therein
of intoxicating liquors, in violation of the laws thereof, is
hereby prohibited.” As the Court notes, ante, at 484, this
language tracked the Webb-Kenyon Act by authorizing state
regulation that would otherwise conflict with the negative
Commerce Clause. To remove any doubt regarding its
broad scope, the Amendment simplified the language of the
Webb-Kenyon Act and made clear that States could regu-
late importation destined for in-state delivery free of nega-
tive Commerce Clause restraints. Though the Twenty-first
Amendment mirrors the basic terminology of the Webb-
Kenyon Act, its language is broader, authorizing States to
regulate all “transportation or importation” that runs afoul
of state law. The broader language even more naturally en-
compasses discriminatory state laws. Its terms suggest, for
example, that a State may ban imports entirely while leaving
in-state liquor unregulated, for they do not condition the
State’s ability to prohibit imports on the manner in which
state law treats domestic products.

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515 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
The state laws at issue in these cases fall within § 2’s broad
terms. They prohibit wine manufacturers from “trans-
port[ing] or import[ing]” wine directly to consumers in New
York and Michigan “for delivery or use therein.” Michigan
law does so by requiring all out-of-state wine manufacturers
to distribute wine through licensed in-state wholesalers.
Ante, at 468–469. New York law does so by prohibiting
out-of-state wineries from shipping wine directly to consum-
ers unless they establish an in-state physical presence, some-
thing that in-state wineries naturally have. Ante, at 470,
474–476. The Twenty-first Amendment prohibits out-of-
state wineries from shipping wine into Michigan and New
York in violation of these laws. In holding that the Consti-
tution prohibits Michigan’s and New York’s laws, the major-
ity turns the Amendment’s text on its head.
The majority’s holding is also at odds with this Court’s
early Twenty-first Amendment case law. In State Bd. of
Equalization of Cal. v. Young’s Market Co., 299 U. S. 59
(1936), this Court considered the constitutionality of a Cali-
fornia law that facially discriminated against beer importers
and, by extension, out-of-state producers. The California
law required wholesalers to pay a special $500 license fee to
import beer, in addition to the $50 fee California charged
for wholesalers to distribute beer generally. Id., at 60–61.
California law thus discriminated against out-of-state beer
by charging wholesalers of imported beer 11 times the fee
charged to wholesalers of domestic beer.
Young’s Market held that this explicit discrimination
against out-of-state beer products came within the terms of
the Twenty-first Amendment, and therefore did not run afoul
of the negative Commerce Clause. The Court reasoned that
the Twenty-first Amendment’s words are “apt to confer upon
the State the power to forbid all importations which do not
comply with the conditions which it prescribes.” Id., at 62.
The Court rejected the argument that a State “must let im-
ported liquors compete with the domestic on equal terms,”

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516 GRANHOLM v. HEALD
Thomas, J., dissenting
declaring that “[t]o say that, would involve not a construction
of the Amendment, but a rewriting of it.” Ibid. It recog-
nized that a State could adopt a “discriminatory” regulation
of out-of-state manufacturers as an incident to a “lesser de-
gree of regulation than total prohibition,” for example, by
imposing “a state monopoly of the manufacture and sale of
beer,” or by “channel[ing] desired importations by confining
them to a single consignee.” Id., at 63 (punctuation omit-
ted). And far from “[not] consider[ing]” the historical argu-
ment that forms the core of the majority’s reasoning, ante,
at 485, Young’s Market expressly rejected its relevance:
“The plaintiffs argue that limitation of the broad lan-
guage of the Twenty-first Amendment is sanctioned by
its history; and by the decisions of this Court on the
Wilson Act, the Webb-Kenyon Act and the Reed Amend-
ment. As we think the language of the Amendment is
clear, we do not discuss these matters.” 299 U. S., at
63–64 (footnote omitted).
The plaintiffs in Young’s Market advanced virtually the same
historical argument the Court today accepts. Brief for Ap-
pellees, O. T. 1936, No. 22, pp. 57–75. Young’s Market prop-
erly reasoned that the text of our Constitution is the best
guide to its meaning. That logic requires sustaining the
state laws that the Court invalidates.
Young’s Market was no outlier. The next Term, the
Court upheld a Minnesota law that prohibited the impor-
tation of 50-proof liquor, concluding that “discrimination
against imported liquor is permissible.” Mahoney v. Joseph
Triner Corp., 304 U. S. 401, 403 (1938). One Term after
that, the Court upheld two state laws that prohibited the
importation of liquor from States that discriminated against
domestic liquor. See Indianapolis Brewing Co. v. Liquor
Control Comm’n, 305 U. S. 391, 394 (1939) (noting that the
Twenty-first Amendment permitted States to “discriminat[e]
between domestic and imported intoxicating liquors”);

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517 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
Joseph S. Finch & Co. v. McKittrick, 305 U. S. 395, 398
(1939). In sum, the Court recognized from the start that
“[t]he Twenty-first Amendment sanctions the right of a State
to legislate concerning intoxicating liquors brought from
without, unfettered by the Commerce Clause.” Ziffrin, Inc.
v. Reeves, 308 U. S. 132, 138 (1939); accord, Duckworth v. Ar-
kansas, 314 U. S. 390, 398–399 (1941) (Jackson, J., concurring
in result); Carter v. Virginia, 321 U. S. 131, 138–139 (1944)
(Black, J., concurring); id., at 139–143 (Frankfurter, J., con-
curring). The majority gives short shrift to these persua-
sive contemporaneous constructions of the Twenty-first
Amendment, as Justice Stevens properly stresses. Ante,
at 495 (dissenting opinion).
B
The widespread, unquestioned acceptance of the three-
tier system of liquor regulation, see ante, at 466–467, and
the contemporaneous practice of the States following the
ratification of the Twenty-first Amendment confirm that
the Amendment freed the States from negative Commerce
Clause restraints on discriminatory regulation. Like the
Webb-Kenyon Act, the Twenty-first Amendment was de-
signed to remove any doubt regarding whether state monop-
oly and licensing schemes violated the Commerce Clause, as
the majority properly acknowledges. Ante, at 488–489; see
also supra, at 510–511. Accordingly, in response to the end
of Prohibition, States that made liquor legal imposed either
state monopoly systems, or licensing schemes strictly cir-
cumscribing the ability of private interests to sell and dis-
tribute liquor within state borders. Skilton, State Power
Under the Twenty-First Amendment, 7 Brooklyn L. Rev.
342, 345–346 (1938); L. Harrison & E. Laine, After Repeal:
A Study of Liquor Control Administration 43 (1936).
These liquor regulation schemes discriminated against
out-of-state economic interests, just as Michigan’s and New
York’s direct-shipment laws do. State monopolies that did
not permit direct shipments to consumers, for example, were

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518 GRANHOLM v. HEALD
Thomas, J., dissenting
thought to discriminate against out-of-state wholesalers and
retailers by favoring in-state products. See Vance, 170
U. S., at 451–452; supra, at 507. Private licensing schemes
discriminated as well, often by requiring in-state residency
or physical presence as a condition of obtaining licenses.6
Even today, the requirement that liquor pass through a li-
censed in-state wholesaler is a core component of the three-
tier system. As the Court concedes, each of these schemes
is within the ambit of the Twenty-first Amendment, even
though each discriminates against out-of-state interests.
Ante, at 466–467, 488–489.
Many States had laws that discriminated against out-of-
state products in addition to out-of-state wholesalers and
retailers. See Kallenbach, Interstate Commerce in Intox-
6 See Note, Economic Localism in State Alcoholic Beverage Laws—
Experience Under the Twenty-First Amendment, 72 Harv. L. Rev. 1145,
1148–1149, and n. 25 (1959) (hereinafter Economic Localism); see also 3
Colo. Stat. Ann., ch. 89, § 4(a) (1935) (residency requirement); 17 Fla. Stat.
Ann. § 561.24 (1941) (prohibiting out-of-state manufacturers from being
distributors); Ill. Rev. Stat., ch. 43, § 120 (Smith-Hurd 1937) (residency re-
quirement); Ind. Stat. Ann. § 3730(c) (1934) (residency requirement); 1 Md.
Ann. Code, Art. 2B, § 13 (1939) (residency requirement); 4B Ann. Laws of
Mass., ch. 138, §§ 18, 18A (1965) (residency requirements); 5 Comp. Laws
Mich. § 9209–32 (Supp. 1935) (residency requirement); 1 Mo. Rev. Stat.
§ 4906 (1939) (citizenship requirement); Neb. Comp. Stat., ch. 53, Art. 3,
§ 53–328 (1929 and Cum. Supp. 1935) (residency requirement), § 53–317
(physical presence requirement); 1 Nev. Comp. Laws § 3690.05 (Supp. 1931–
1941) (residency and physical presence requirements); 2 Rev. Stat. of N. J.
§ 33:1–25 (1937) (citizenship and residency requirements); N. C. Code Ann.
§ 3411(103)(11⁄ 2) (1939) (residency requirement); 1 N. D. Rev. Code § 5–0202
(1943) (citizenship and residency requirements); Ohio Code Ann. § 6064–17
(1936) (residency and physical presence requirements); R. I. Gen. Laws,
ch. 163, § 4 (1938) (residency requirement); 1 S. D. Code § 5.0204 (1939)
(residency requirement); Vt. Rev. Stat., Tit. 28, ch. 271, § 6156 (1947) (resi-
dency requirement); 8 Rev. Stat. Wash. § 7306–23G (Supp. 1940) (physical
presence requirement), § 7306–27 (citizenship and residency require-
ments); Wis. Stat. § 176.05(9) (1937) (citizenship and residency require-
ments); Wyo. Rev. Stat. Ann. § 59–104 (Supp. 1940) (citizenship and resi-
dency requirements).

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519 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
icating Liquors Under the Twenty-First Amendment, 14
Temp. L. Q. 474, 483–484 (1940); T. Green, Liquor Trade Bar-
riers: Obstructions to Interstate Commerce in Wine, Beer,
and Distilled Spirits 12–19, and App. I (1940) (hereinafter
Green).7 For example, 21 States required that producers
who had no physical presence within the State first obtain a
special license or certificate before doing business within the
State, thus subjecting them to two layers of licensing fees.
Id., at 12. Thirteen States charged lower licensing fees for
wine manufacturers who used locally grown grapes. Id.,
at 13. Arkansas went so far as to create a blanket exception
to its licensing scheme for locally produced wine. See 2
Pope’s Digest of Stat. of Ark. §§ 14099, 14105, 14113 (1937).
Eight States taxed out-of-state liquor products at greater
rates than in-state products. Green 13. Twenty-nine
States exempted exports from excise taxes that were appli-
cable to imports. Id., at 14. At least 10 States (plus the
District of Columbia) imposed special licensing requirements
on solicitors of out-of-state liquor products. See Harrison &
Laine, supra, at 194–195. Like the California law upheld in
Young’s Market, 10 States charged wholesalers who dealt
in imports greater licensing fees. Economic Localism 1150;
Crabb, State Power Over Liquor Under the Twenty-First
Amendment, 12 U. Det. L. J. 11, 27 (1948); Green 13. Many
States also passed antiretaliation statutes limiting or ban-
ning imports from other States that themselves discrimi-
nated against out-of-state liquor. Economic Localism 1152;
Green 14. All told, at least 41 States had some sort of law
7 See also, e. g., Ill. Rev. Stat., ch. 43, § 115(h) (Smith-Hurd 1937) (special
license for growers of locally grown grapes); 5 Comp. Laws Mich. § 9209–55
(Supp. 1935) (exemption from malt tax for in-state manufacturers); 1 Nev.
Comp. Laws § 3690.15 (Supp. 1931–1941) (special importer’s fees; lower li-
cense fees for manufacturers and wholesalers who deal in in-state prod-
ucts); N. M. Stat. Ann. § 72–806 (Supp. 1938) (licensing exemption for in-
state wineries); R. I. Gen. Laws Ann., ch. 167, § 8 (1938) (authorizing state
agency to impose retaliatory tax); Utah Rev. Stat. § 46–8–3 (Supp. 1939)
(requiring state commission to prefer locally grown products).

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520 GRANHOLM v. HEALD
Thomas, J., dissenting
that discriminated against out-of-state products, many if not
most of which (contrary to the Court’s suggestion, ante, at
485) predated Young’s Market and its progeny. See, e. g.,
Green App. I. This contemporaneous state practice re-
futes the Court’s assertion, ante, at 484–485, 488–489, that
the Twenty-first Amendment allowed States to discrimi-
nate against out-of-state wholesalers and retailers, but not
against out-of-state products.
Rather than credit the lay consensus this state practice
reflects, the Court relies instead on scattered academic and
judicial commentary arguing that the Twenty-first Amend-
ment did not permit States to enact discriminatory liquor
legislation. Ante, at 485–486. Most of the commentators
and judges the Court cites did not adopt the construction of
the Amendment the Court embraces. For example, some
argued that the Twenty-first Amendment only allowed
States to enact nondiscriminatory prohibition laws—i. e., to
allow “dry states to remain dry.” See Note, 55 Yale L. J.
815, 816–817 (1946); de Ganahl, The Scope of Federal Power
Over Alcoholic Beverages Since the Twenty-First Amend-
ment, 8 Geo. Wash. L. Rev. 819, 822–823 (1940); Friedman,
Constitutional Law: State Regulation of Importation of In-
toxicating Liquor Under Twenty-First Amendment, 21 Cor-
nell L. Q. 504, 511–512 (1936); Recent Cases, Constitutional
Law—Twenty-first Amendment, 85 U. Pa. L. Rev. 322, 323
(1937); W. Hamilton, Price and Price Policies 426 (1938).
The Court, by contrast, concedes that a State could have a
discriminatory licensing or monopoly scheme. Ante, at 488–
489. The Court must concede this, given that state practice
shows that the Twenty-first Amendment authorized such
practices, and given that the Webb-Kenyon Act allowed
States to enforce their own licensing laws, even if they did
not prohibit the use and consumption of liquor entirely.
Others apparently defended the position that the Twenty-
first Amendment did no more than prevent Congress from
permitting the direct importation of liquor into a State, leav-

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521 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
ing the Constitution untouched. See Joseph Triner Corp. v.
Arundel, 11 F. Supp. 145, 146–147 (Minn. 1935); Young’s
Market Co. v. State Bd. of Equalization of Cal., 12 F. Supp.
140, 142 (SD Cal. 1935), rev’d, 299 U. S. 59 (1936). Still
others did not state a clear view on the scope of the Twenty-
first Amendment. See generally Legislation, Liquor Con-
trol, 38 Colum. L. Rev. 644 (1938); Wiser & Arledge, Does
the Repeal Amendment Empower a State to Erect Tariff
Barriers and Disregard the Equal Protection Clause in Leg-
islating on Intoxicating Liquors in Interstate Commerce? 7
Geo. Wash. L. Rev. 402 (1939) (arguing that the Twenty-first
Amendment did not repeal the Equal Protection Clause).
Instead of following this confused mishmash of elite opin-
ion—the same sort of elite opinion that drove the expan-
sive interpretation of the negative Commerce Clause that
prompted the Twenty-first Amendment—I would credit the
uniform practice of the States whose people ratified the
Twenty-first Amendment. See ante, at 496–497 (Stevens,
J., dissenting).
The majority’s reliance on the difference between discrimi-
nation against manufacturers (and therefore, their products)
and discrimination against wholesalers and retailers is diffi-
cult to understand. The pre-Twenty-first Amendment “non-
discrimination” principle enshrined in this Court’s negative
Commerce Clause cases could not have prohibited discrimi-
nation against the producers of out-of-state goods, while per-
mitting discrimination against out-of-state services like
wholesaling and retailing. See Lewis v. BT Investment
Managers, Inc., 447 U. S. 27, 42 (1980) (invalidating state law
that discriminated against banks, bank holding companies,
and trust companies with out-of-state business operations);
Memphis Steam Laundry Cleaner, Inc. v. Stone, 342 U. S.
389, 394–395 (1952) (invalidating tax that discriminated
against solicitors for out-of-state-licensed businesses). Dis-
crimination against out-of-state wholesalers and retailers
also risks allowing “economic protectionism.” The Court’s

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522 GRANHOLM v. HEALD
Thomas, J., dissenting
concession that the Twenty-first Amendment allowed States
to require all liquor traffic to pass through in-state whole-
salers and retailers shows that States may also have
direct-shipment laws that discriminate against out-of-state
wineries.
III
Though the majority dismisses this Court’s early Twenty-
first Amendment case law, it relies on the reasoning, if not
the holdings, of our more recent Twenty-first Amendment
cases. Ante, at 486–489. But the Court’s later cases do not
require the result the majority reaches. Moreover, I would
resolve any conflict in this Court’s precedents in favor of
those cases most contemporaneous with the ratification of
the Twenty-first Amendment.
A
The test set forth in this Court’s more recent Twenty-first
Amendment cases shows that Michigan’s and New York’s
direct-shipment laws are constitutional. In Bacchus Im-
ports, Ltd. v. Dias, 468 U. S. 263 (1984), this Court estab-
lished a standard for determining when a discriminatory
state liquor regulation is permissible under the Twenty-first
Amendment. At issue in Bacchus was a Hawaii statute that
imposed a 20 percent excise tax on liquor, but exempted cer-
tain locally produced products from the tax. The Court held
that the Twenty-first Amendment did not save the discrimi-
natory tax. The Court reasoned that the Twenty-first
Amendment did not permit state laws that constituted “mere
economic protectionism,” because the Twenty-first Amend-
ment’s “central purpose . . . was not to empower States to
favor local liquor industries by erecting barriers to competi-
tion.” Id., at 276. The Court noted that the State did “not
seek to justify its tax on the ground that it was designed to
promote temperance or to carry out any other purpose of the
Twenty-first Amendment, but instead acknowledg[ed] that
the purpose was ‘to promote a local industry.’ ” Ibid. (quot-

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523 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
ing Brief for Appellee Dias, O. T. 1983, No. 82–1565, p. 40).
The Court therefore struck down the tax, “because [it] vio-
late[d] a central tenet of the Commerce Clause but [was] not
supported by any clear concern of the Twenty-first Amend-
ment.” 468 U. S., at 276; accord, Brown-Forman Distillers
Corp. v. New York State Liquor Authority, 476 U. S. 573,
584–585 (1986) (“Our task . . . is to reconcile the interests
protected by the” Twenty-first Amendment and the negative
Commerce Clause).
Michigan’s and New York’s direct-shipment laws are con-
stitutional under Bacchus. Allowing States to regulate the
direct shipment of liquor was of “clear concern” to the fram-
ers of the Webb-Kenyon Act and the Twenty-first Amend-
ment. Bacchus, supra, at 276. The driving force behind
the passage of the Webb-Kenyon Act was a desire to reverse
this Court’s decisions that had precluded States from regu-
lating the direct shipment of liquor by out-of-state interests.
See supra, at 508–509. The laws struck down in Scott, 165
U. S. 58 (1897), and Vance v. W. A. Vandercook Co., 170 U. S.
438 (1898), required out-of-state manufacturers to ship liquor
through the State’s liquor regulation scheme—exactly what
the Michigan and New York schemes do. By contrast, there
is little evidence that purely protectionist tax exemptions
like those at issue in Bacchus were of any concern to the
framers of the Act and the Amendment.
Moreover, if the three-tier liquor regulation system falls
within the “core concerns” of the Twenty-first Amendment,
then so do Michigan’s and New York’s direct-shipment laws.
The same justifications for requiring wholesalers and retail-
ers to be in-state businesses equally apply to Michigan’s and
New York’s direct-shipment laws. For example, States re-
quire liquor to be shipped through in-state wholesalers be-
cause it is easier to regulate in-state wholesalers and retail-
ers. State officials can better enforce their regulations by
inspecting the premises and attaching the property of in-
state entities; “[p]resence ensures accountability.” 358 F. 3d

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524 GRANHOLM v. HEALD
Thomas, J., dissenting
223, 237 (CA2 2004). It is therefore understandable that the
framers of the Twenty-first Amendment and the Webb-
Kenyon Act would have wanted to free States to discrimi-
nate between in-state and out-of-state wholesalers and re-
tailers, especially in the absence of the modern technological
improvements and federal enforcement mechanisms that the
Court argues now make regulating liquor easier. Ante, at
492. Michigan’s and New York’s laws simply allow some
in-state wineries to act as their own wholesalers and retail-
ers in limited circumstances. If allowing a State to require
all wholesalers and retailers to be in-state companies is a
core concern of the Twenty-first Amendment, so is allowing
a State to select only in-state manufacturers to ship directly
to consumers, and therefore act, in effect, as their own
wholesalers and retailers.
B
The Court places much weight upon the authority of Bac-
chus. Ante, at 487–488. This is odd, because the Court
does not even mention, let alone apply, the “core concerns”
test that Bacchus established. The Court instead sub si-
lentio casts aside that test, employing otherwise-applicable
negative Commerce Clause scrutiny and giving no weight
to the Twenty-first Amendment and the Webb-Kenyon Act.
Ante, at 472–476, 489–493. The Court therefore at least im-
plicitly acknowledges the unprincipled nature of the test
Bacchus established and the grave departure Bacchus was
from this Court’s precedents. See 468 U. S., at 278–287
(Stevens, J., dissenting); James B. Beam Distilling Co. v.
Georgia, 501 U. S. 529, 554–557 (1991) (O’Connor, J., dissent-
ing). Bacchus should be overruled, not fortified with a tex-
tually and historically unjustified “nondiscrimination against
products” test.
Bacchus’ reasoning is unpersuasive. It swept aside the
weighty authority of this Court’s early Twenty-first Amend-
ment case law, see 468 U. S., at 281–282 (Stevens, J., dis-
senting), because the Bacchus Court thought it “ ‘an absurd

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525 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
oversimplification’ ” to conclude that “ ‘ the Twenty-first
Amendment has somehow operated to “repeal” the Com-
merce Clause,’ ” id., at 275 (quoting Hostetter v. Idlewild Bon
Voyage Liquor Corp., 377 U. S. 324, 331–332 (1964)). The
Twenty-first Amendment did not impliedly repeal the Com-
merce Clause, but that does not justify Bacchus’ narrowing
of the Twenty-first Amendment to its “core concerns.”
The Twenty-first Amendment’s text has more modest ef-
fect than Bacchus supposed. Though its terms are broader
than the Webb-Kenyon Act, the Twenty-first Amendment
also parallels the Act’s structure. In particular, the
Twenty-first Amendment provides that any importation into
a State contrary to state law violates the Constitution, just
as the Webb-Kenyon Act provides that any such importation
contrary to state law violates federal law. Its use of those
same terms of art shows that just as the Webb-Kenyon Act
repealed liquor’s negative Commerce Clause immunity, the
Twenty-first Amendment likewise insulates state liquor laws
from negative Commerce Clause scrutiny. Authorizing
States to regulate liquor importation free from negative
Commerce Clause restraints is a far cry from precluding
Congress from regulating in that field at all. See Bacchus,
supra, at 279, n. 5 (Stevens, J., dissenting). Moreover, Bac-
chus’ concern that the Twenty-first Amendment repealed the
Commerce Clause is no excuse for ignoring the independent
force of the Webb-Kenyon Act, which equally divested dis-
criminatory state liquor laws of Commerce Clause immunity.
Stripped of Bacchus, the Court’s holding is bereft of sup-
port in our cases. Bacchus is the only decision of this Court
holding that the Twenty-first Amendment does not authorize
the in-state regulation of imported liquor free of the negative
Commerce Clause. Given the uniformity of our early case
law supporting even discriminatory state laws regulating im-
ports into States, then, Michigan’s and New York’s laws eas-
ily pass muster under this Court’s cases.

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526 GRANHOLM v. HEALD
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Nevertheless, in support of Bacchus’ holding that “state
regulation of alcohol is limited by the nondiscrimination prin-
ciple of the Commerce Clause,” ante, at 487, the Court cites
Brown-Forman Distillers Corp. v. New York State Liquor
Authority, 476 U. S. 573 (1986), and Healy v. Beer Insti-
tute, 491 U. S. 324 (1989). Ante, at 487. At issue in those
cases was the constitutionality of protectionist legislation
that controlled the price of liquor in other States. Brown-
Forman, supra, at 582–583; Healy, supra, at 337–338. In
invalidating such a statute, Brown-Forman found that the
Twenty-first Amendment, by its terms, gives “New York
only the authority to control sales of liquor in New York, and
confers no authority to control sales in other States.” 476
U. S., at 585; see also Healy, supra, at 342–343 (following
Brown-Forman’s construction). Brown-Forman and Healy
are beside the point in these cases. Brown-Forman did not
involve a facially discriminatory law. See 476 U. S., at 579.
And unlike Healy, there is no claim here that the Michigan
and New York laws do anything but regulate within their
own borders, thereby interfering with the ability of other
States to exercise their own Twenty-first Amendment power.
Equally inapposite are the cases the Court cites concern-
ing state laws that violate other provisions of the Constitu-
tion or Acts of Congress. Ante, at 486–487. Cases involv-
ing the relation between the Twenty-first Amendment and
Congress’ affirmative Commerce Clause power are irrelevant
to whether the Twenty-first Amendment protects state
power against the negative implications of the Commerce
Clause. See James B. Beam, supra, at 556 (O’Connor, J.,
dissenting); Bacchus, supra, at 279, and n. 5 (Stevens, J.,
dissenting). Similarly, my interpretation of the Twenty-
first Amendment would not free States to regulate liquor
unhampered by other constitutional restraints, like the First
Amendment and the Equal Protection Clause. As this
Court explained in Craig v. Boren, 429 U. S. 190, 205–207
(1976), the text and history of the Twenty-first Amendment

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527 Cite as: 544 U. S. 460 (2005)
Thomas, J., dissenting
demonstrate that it displaces liquor’s negative Commerce
Clause immunity, not other constitutional provisions.
IV
The Court begins its opinion by detailing the evils of state
laws that restrict the direct shipment of wine. Ante, at
466–468. It stresses, for example, the Federal Trade Com-
mission’s opinion that allowing the direct shipment of wine
would enhance consumer welfare. FTC, Possible Anticom-
petitive Barriers to E-Commerce: Wine 3–5 (July 2003),
available at http://www.ftc.gov/os/2003/07/winereport2.pdf
(as visited May 12, 2005, and available in Clerk of Court’s
case file). The Court’s focus on these effects suggests that
it believes that its decision serves this Nation well. I am
sure that the judges who repeatedly invalidated state liquor
legislation, even in the face of clear congressional direction
to the contrary, thought the same. See supra, at 503–508.
The Twenty-first Amendment and the Webb-Kenyon Act
took those policy choices away from judges and returned
them to the States. Whatever the wisdom of that choice,
the Court does this Nation no service by ignoring the textual
commands of the Constitution and Acts of Congress. The
Twenty-first Amendment and the Webb-Kenyon Act dis-
placed the negative Commerce Clause as applied to regula-
tion of liquor imports into a State. They require sustaining
the constitutionality of Michigan’s and New York’s direct-
shipment laws. I respectfully dissent.