South-Western Legal Studies in Business

State Liquor Regulations Must Treat In-State and Out-of-State Firms the Same
Description Washington high court struck down a state statute as in violation of the Commerce Clause. The law imposed greater regulatory controls on out-of-state wine producers than were imposed on in-state wine producers. Such differential standards are economic favoritism that are prohibited by the Constitution.
Topic Constitutional Law
Key Words Commerce Clause; Interstate Commerce; Wine
C A S E   S U M M A R Y
Facts Washington state, like many states, has comprehensive regulation of the sale of alcoholic beverages. One part of the law holds that out-of-state wine suppliers can sell wine in the state only to licensed distributors. An in-state wine distributor contended that an out-of-state wine supplier violated the state distribution scheme by shifting its distribution to another company in the state. The trial court found for the wine supplier, holding that the state regulatory scheme was unconstitutional since in-state wineries were not subject to the same statutory standards. The in-state distributor appealed.

Affirmed. The statute protected in-state wineries from regulations that were applied to out-of-state wineries. This differential treatment is a violation of the Commerce Clause. Statutes that regulate or discriminate against interstate commerce, or have the effect of favoring in-state economic interests over out-of-state interests, are economic protection of in-state industry and violate the commerce clause.

Citation Mt. Hood Beverage Co. v. Constellation Brands, Inc., --- P.3d --- (2003 WL 359776, Sup. Ct., Wash., 2003)

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