Proposed Legislation to Restrict the Sales of Alcoholic Beverages in Interstate Commerce

• Court: Department of Justice Office of Legal Counsel
• Decided: April 16, 1984
• Status: Published

Opinion

Proposed Legislation to Restrict the Sales of Alcoholic Beverages in Interstate Commerce

Proposed legislation to prohibit the sale in interstate commerce of alcohol to persons under the age o f 21 is a valid exercise o f Congress’ power under the Commerce Clause and consistent with the Twenty-First Amendment. The Twenty-First Amendment permits states to enact legislation more restrictive than would otherw ise be permissible under the Com merce Clause; however, it does not deprive the federal government o f any authority over alcohol under the Commerce Clause.

The proposed legislation would not be “in violation” of more permissive state law s. Even if it were read to be “in violation” o f such law s, a court would likely find that the federal interest in preventing damage to national commerce outweighed any particular state’s interest in permitting access to liquor for persons under age 21.

April 16, 1984

M em orandum O p in io n for th e A s s is t a n t A t t o r n e y G e n e r a l , O f f ic e of L e g is l a t iv e A f f a ir s

This responds to your request of January 20, 1984 for our views on H.R. 3870, a bill to restrict the sales of alcoholic beverages in interstate commerce. Although Congress has not yet asked for the Department’s views on this bill, you have requested our opinion in view of the questions raised by opponents of the bill and the public debate over it.1We have reviewed H.R. 3870 and believe that it is constitutional. Section 1 of the bill contains congressional findings on the economic dam­ age done by drunk drivers, the disproportionate number of accidents caused by drunk drivers who are under the age of 21, and the benefits to the public welfare that will result from restricting sales of alcohol to those over 21. Section 2 prohibits the sale in interstate commerce of alcohol to those under 21: No person may sell or offer to sell any alcoholic beverage to any individual who is under the age of twenty-one if the beverage is or has traveled in interstate commerce or if the sale or offer to sell is made in an establishment which is in or affects interstate commerce. 1 See W ash. Post, Feb. 9, 1984, at A 12, col. 6; 70 A.B.A. J.18 (Apr. 1984). The O ffice of M anagem ent and Budget has recently asked for our view s on this bill.

53 Section 3 provides definitions; § 4, penalties; and § 5 authorizes civil actions by citizens against those who violate § 2 ? Section 6 permits the Secretary of Commerce to waive the application of § 2 in any state that has a law “effective in prohibiting the sale of liquor” to those under 21, and to cancel the waiver if the law is ineffective. Section 7 makes § 2 effective two years after passage of H .R .3870. The constitutional question raised by H.R. 3870 is whether § 2 of the Twenty-First Amendment to the Constitution prohibits the federal government from exercising authority under the Commerce Clause, U.S. Const, art. I, § 8, cl. 3, that would otherwise clearly furnish a constitutional basis for enacting this legislation.3 Although the issue is not, because of its novelty, entirely free from doubt, we believe that the proposed legislation is constitutionally permissible.

The Twenty-First Amendment to the Constitution repealed the Eighteenth Amendment and the imposition of nationwide prohibition. U.S. Const, amend. XXI. Section 2 of the 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.” The effect of § 2 is to permit states to enact legislation more restrictive than would otherwise be permissible under the Commerce Clause. See U nited States v. Frankfort D istilleries, Inc., 324 U.S. 293, 300 (1945) (Frankfurter, J., concurring); 76 Cong. Rec. 4141, 4143 (1933) (statement of Sen. Blaine). That is to say, the Twenty-First Amendment permits states to go beyond non-discriminatory regulation based on their police powers4 and enact discriminatory regulation.5 However, early arguments that § 2 entirely de­ 2 A s reported o u t by the Committee on Energy and C om m erce o f the H ouse o f R epresentatives, § 5 o f H.R. 3870 w ould perm it any one to file civil su its to enjoin violations of § 2. The suits could be brought only in state court. 3 G iven the phraseology o f § 2 of H.R. 3870, w e have analyzed this b ill under the Com m erce Clause. We do not ad d ress th e federal governm ent’s p o w e r over alcohol arising under other portions of the C onstitution, such as the Export-Im port Clause, see Department o f Revenue v. James Beam Corp., 377 U.S. 341 (1964), or the Fourteenth A m en d m en t's requirem ent o f equal protection, see Craig v. Boren, 429 U S. 190 (1976). 4 F o r exam ple, p rio r to passage o f th e Eighteenth A m endm ent, the Suprem e C ourt rebuffed Commerce C lause challenges to several state statutes prohibiting en tirely the sale o r manufacture o f alcohol. The Court held th at the law s w ere valid exercises o f the states’ p olice power o v e r local com m erce even though their effects “may reach beyond the State b y lessening the am ount of intoxicating liquors exported." Kidd v. Pearson, 128 U .S. 1, 22 (1888). Seealso F oster v. Kansas, 112 U.S. 201, 206 (1884); Bartemeyer v. Iowa, 85 U .S. 129, 133 (1873); The License Cases, 4 6 U.S. (5 H ow .) 504, 57 6 -7 7 (1847) (Taney, C.J.). 5 T hus, state statutes th at regulate the entry o f alcohol in order to p rotect a state liquor monopoly. State Board v. Young's Market Co., 299 U.S. 59 (1936), o r to retaliate against other states’ discrim inatory laws, Indianapolis Brewing Co. v. Liquor Control Comm’n, 305 U.S. 391 (1939), have been upheld even though such legislation “w ould obviously have b e en unconstitutional” in the absence of the Tw enty-First A mend­ m ent. State Board v. Young’s Market Co., 299 U.S. at 62. Prior to passage o f the Eighteenth A mendment, sim ilar discrim inatory statu tes barring th e entry o f alcohol into a state except under the auspices o f the state liqu o r m onopoly w ere struck down as an im perm issible burden on interstate com m erce. See, e.g., Vance v. W.A. Vandercook Co. (N o. 1), 170 U .S. 438 (1898); Scott v. Donald. 165 U.S. 58 (1897). The legislative histo ry o f § 2 indicates that it was passed, at least in part, to assure the “ dry” states that they would be able to defend th em selves against shipments o f alcohol into their states. 76 C ong. Rec. 4141 (1933).

54 prived the federal government of any authority under the Commerce Clause over alcohol were quickly rejected. United States v. Frankfort Distilleries, Inc., 324 U.S. 293,299 (1945); Jameson & Co. v. Morgenthau, 307 U.S. 171, 172-73 (1939).6 We believe that H.R. 3870 is constitutional for three reasons. First, we do not believe that H.R. 3870 violates the literal language of § 2 of the Twenty-First Amendment. Forbidding the sale of alcohol to those under 21 in a state that permits sales to those over, for example, the age of 18 is not “in violation of the laws” of the state. Id. It may replace a permissive state policy with a more restrictive federal statute, but it does so without literally violating a state statute.7 Thus, the ban on sale of alcohol to those under 21 raises questions under the Twenty-First Amendment only because some have assumed that broad federal deference to state action in this area is a matter of constitutional law rather than policy. Second, even assuming that H.R. 3870 were read to be “in violation” of a more permissive state law because the bill conflicts with the policy expressed by the state law, we believe that it would, under the balancing test articulated in the Supreme Court’s most recently decided case in this area, California Retail Liquor Dealers Ass 'n v. M idcal Aluminum, Inc., 445 U.S. 97, 108 (1980) (M idcal), pass constitutional muster because the federal interests would outweigh any particular state’s interest. M idcal involved a Sherman Act challenge to a California law governing wine pricing. In resolving whether the Sherman Act applied, the Supreme Court addressed the issue whether § 2 of the Twenty-First Amendment permit­ ted California to countermand the congressional policy in favor of competition. The Court emphasized that § 2 and the Commerce Clause must be viewed as part of a whole. ‘“ Like other provisions of the Constitution, each must be considered in light of the other, and in the context of the issues and interests at stake in any concrete case.’” Id. at 109 (quoting H ostetter v. Idlewild Liquor Corp., 377 U.S. 324, 331-32 (1964)). The focus of the analysis should be a “pragmatic effort to harmonize state and federal powers” that gives proper respect to both Clauses: 6 Id Jameson & Co. v. Morgenthau, the C ourt said: [T]he Federal Alcohol A dm inistration Act was attacked upon the ground that the Tw enty-First ■ Amendm ent to the Federal C onstitution gives to the States com plete and exclusive control over commerce in intoxicating liquors, unlim ited by the commerce clause, and hence that Congress has no longer authority to control the im portation o f these com m odities into the United States. W e see no substance in this contention. 307 U.S. at 172-73; see also H anfv. United States. 235 F.2d 710 (8th Cir.), cert . denied, 352 U.S. 880 (1956); Old Monastery Co. v. United States, 147 F 2 d 905 (4th C ir.), cert, denied, 326 U.S. 734 (1945); Jatros v. Bowles. 143 F.2d 453 (6th Cir. 1944); Arrow Distilleries, Inc. v. Alexander, 109 F.2d 397 (7th Cir), cert, denied, 310 U .S. 646 (1940) 7 T herefore, in states that do not forbid drinking under the age o f 18, H R. 3870’s passage w ill not oust a more perm issive state statute. The Fifth Circuit has read the T w enty-First Amendment as providing authority for perm issive state alcohol laws to override more restrictive federal regulations, notw ithstanding the Suprem acy C lause. Cf. Castlewood Int'l Corp. v. Simon, 596 F.2d 638 (5th Cir. 1979), vacated, 446 U.S. 949 (1980), opinion reinstated on remand, 626 F.2d 1200 (5th Cir. 1980) (Florida law perm itting sales at unlim ited discount to retailers prevailed over D epartm ent o f the Treasury regulation forbidding same; F lorida's interest in regulating intrastate retailers greater than federal interest in uniform national regula­ tions). See also Wine Indus, v. Miller. 609 F.2d 1167 (5th Cir. 1980); Washington Brewers Inst. v. United States. 137 F.2d 964 (9th Cir.), cert, denied, 320 U.S. 776 (1943).

55 [T]here is no bright line between federal and state powers over liquor. The Twenty-First Amendment grants the States virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system. Al­ though States retain substantial discretion to establish other liquor regulations, those controls may be subject to the federal commerce power in appropriate situations. The competing state and federal interests can be reconciled only after careful scru­ tiny of those concerns in a “concrete case.” M idcal, 445 U.S. at 110.8 The analysis of H.R. 3870 must begin, therefore, with an identification of the state and federal interests involved. States that already prohibit drinking by those under 21 have interests that coincide, at least presently, with the federal interests detailed in § 1 of H.R. 3870. The practical effect of the proposed bill would be to assist those states in enforcing their own laws by reducing the availability of alcohol in neighboring states that have more permissive laws. On the other hand, states that have drinking ages lower than 21 have presumably made a legislative determination that drinking by those over, for example, the age of 18 is permissible. The interests of these states may be described as protecting their separate decisions to permit access to liquor to those over 18.9 The federal government’s interest is, we assume, the economic injuries and resultant allocation of resources flowing in interstate commerce caused by 8 In Midcal, the C ourt identified the federal interest as the “fam iliar and substantial” one o f a national policy favoring com petition. 445 U.S. at 110. The state's interest in the resale price m aintenance statute had been identified by the C alifo rn ia Supreme C ourt as tw ofold: prom otion o f tem perance and orderly market conditions. Id. at 112. T hat same c o u rt had then found, how ever, that there was in fact little correlation betw een the statute and eith er tem perance or orderly m arket conditions. The U nited States Suprem e Court stated, in co n clu d in g that the federal in terests outw eighed state concerns. “ [w]e have no basis fo r disagreeing w ith the view o f the C alifornia courts th at the asserted state interests are less substantial than the national policy in fav o r o f com petition.” Id. at 113. 9 T here may also be states, particularly those w ith a m onopoly on liquor sales, that have an econom ic interest in prom oting sales to those o v er 18. T o the extent that states advance an econom ic interest, however, it seem s reasonable to assum e that the federal governm ent can dem onstrate that its econom ic interest in property and people probably outweighs w hatever the particular sta te 's individual interest is in revenue from potential sales. W e do not believe that th e exercise o f C ongress’ authority in this fashion under the Commerce C lause w ould be h eld to violate any state interest protected by the Tenth A mendment. The sale o f alcohol by a state m onopoly is not one o f the “integral governm ent functions,” National League o f Cities v. (Jsery, 426 U.S. 833, 855 (1976), protected by that Amendm ent from federal interference. See Ohio v. Helvering, 292 U.S. 360, 3 6 8 -6 9 (1934); South Carolina v. United States, 199 U.S. 437, 463 (1905). Both Ohio and South Carolina involved state challenges to federal taxes on the state liquor monopoly. The South Carolina Court held th at the sale o f liquor by a state m onopoly “ is o f a private nature” and not a governm ental function w hose taxation w ould “ im pede o r embarrass a State in the discharge o f its functions.” 199 U.S. at 463. This ruling was reaffirm ed in the Ohio case notw ithstanding passage o f the Tw enty-First Amendment: A d istinction is sought in the fact th a t after that case was decided the Eighteenth A mendment was passed, and thereby, it is contended, the traffic in intoxicating liquors ceased to be pnvate business, and then w ith the repeal o f the am endm ent assum ed a status which enables a state to carry it on under the police pow er. The point seem s to us altogether fanciful. The Eighteenth A m endm ent outlaw ed the traffic; but, certainly, it did not have the effect o f converting w hat had alw ays been a private activity in to a governm ental function. Ohio v. Helvering, 292 U .S. at 369.

56 drunk drivers under the age of 21. H.R. 3870, § 1. The loss of life, the crippling of individuals, the loss to production because of time lost from work, and the property damage caused by accidents involving such drunk drivers will, we assume, be detailed in H.R. 3870’s legislative history.10 Using M idcal 's bal­ ancing test, we believe that a court could find, assuming a sufficient legislative history, that the federal government’s interest in preventing damage to national commerce outweighed any particular state’s interest in permitting access to liquor for those under 21. Finally and, we believe, importantly, given that § 2 of the Twenty-First Amendment was intended to assure that states would be able to enact restrictive legislation retaining prohibition on a local level, 76 Cong. Rec. 4140-41 (1933), it would be anomalous if states could use § 2 to insist on permissive state laws that could frustrate federal efforts directed towards a limited form of temperance.

Conclusion

H.R. 3870 will not mandate importation of alcohol into any state in violation of its laws. Under the M idcal test, Congress could, we believe, articulate a federal interest that would outweigh a state’s interest in providing its citizens under the age of 21 access to alcohol. We therefore believe that H.R. 3870 will survive constitutional attack.

L a r r y L . S im m s Deputy Assistant Attorney General Office o f Legal Counsel

10 W e assum e that the statistical evidence will be more persuasive than that presented to the Suprem e C ourt in Craig v. Boren, 429 U .S. 190 (1976), and rejected there as too tenuous. See id. at 200-04 (striking dow n state ban on sale o f 3.2 percent beer to males between the ages o f 18 and 21).