Internet Library of Law
and Court Decisions

Alcohol - Internet Library of Law and Court Decisions - Updated May 11, 2002

Court holds that those provisions of North Carolina's Alcoholic Beverage Control law which prohibit out-of-state retailers from selling liquor directly to North Carolina consumers, while allowing in-state wineries to make such sales, are unconstitutional violations of the Commerce Clause of the United States Constitution.  The dormant Commerce Clause prohibits states from enacting regulations, such as those at bar, which directly discriminate against interstate commerce.  The court held that the legislation at issue was not saved by operation of the Twenty First Amendment, which grants the States the power to regulate in-State liquor sales.  The Twenty First Amendment does not trump the Commerce Clause; rather, when faced with a conflict between their competing concerns, courts engage in a balancing test, asking "whether the interests implicated by [the] state regulation are so closely related to the powers preserved by the Twenty First Amendment that the regulation may prevail …".  Here, North Carolina did not identify the state interests served by the challenged regulation.  As a result, the District Court assumed the purpose of the legislation was to protect local wineries from out-of-state competitors.  The Court held that such an improper purpose mandates a finding that the statute is an unconstitutional violation of the Commerce Clause.  The Court accordingly enjoined North Carolina from enforcing the statutes at issue, including those laws "that prohibit … out-of state wine dealers from directly shipping wines to … North Carolina residents."

Court denies motion brought by defendants to dismiss claim that N.Y. Alcohol and Beverage Control Law ("ABC Law") Sections 102 (1)(a), (c) and (d) is unconstitutional because it violates the Commerce Clause, the Privileges and Immunity Clause and the First Amendment.

(Court dismissed plaintiff's claim that defendant, by allegedly selling alcoholic beverages over the Internet to Massachusetts residents without the license required under Massachusetts law, had tortiously interfered with plaintiff's business relationships with consumers. The Court held that the licensing statute, Mass. M.G.L. Chapter 138, did not create a private right of action in liquor wholesalers to enforce it. Instead, enforcement was within the purview of the state's Alcoholic Beverage Control Commission.)