On May 16th, 2005, the Supreme Court of the United States issued a landmark decision in the case of Granholm, Governor of Michigan, Et Al, v. Heald Et. Al.. We will discuss this case at length in this blog, but let’s start with the basics.
You can see the official Supreme Court decision here, but the key passage from Justice Kennedy’s opinion follows:
These consolidated cases present challenges to state laws regulating the sale of wine from out-of-state wineries to consumers in Michigan and New York. The details and mechanics 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 prohibit 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 authorized nor permitted by the Twenty-first Amendment. Accordingly, 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.
Basically, because the states of New York and Michigan were allowing in-state wineries to ship directly to consumers while prohibiting out-of-state wineries from shipping directly to consumers in their state, the states were in violation of the Commerce Clause.
As a result, states must treat in-state and out-of-state wineries evenhandedly. This effectively means that states have two options – allow both in-state wineries and out-of-state wineries to ship directly to consumers in their state or prohibit direct shipments altogether.