QUESTION: I have been told on multiple occasions that you could be arrested if you leave PA to buy beer and wine in NJ or MD upon re-entry to PA. But, PA's laws have the practical effect that you can buy beverages cheaper, and in greater selection, in neighboring states. PA is also something of a "market participant" in that it regulates beer distribution and you can only buy liquor in "state stores." It would seem that their laws violate DCC in terms of discriminating against out of state distributors and placing unnecessary burden on IC -- blocking the transport of beverages across state lines -- unless there is some federal law that expressly says the states can do this (controlled substances across state lines?). So where does this authority come from?
ANSWER: There are several things going on here. First, for many years states were afforded more authority to regulate alcohol, even in discriminatory ways, due to the language of the Twenty-first Amendment. This largely ended in 2005 with the Supreme Court's decision in Granholm v. Heald, which invalidated discriminatory state rules regarding the shipment of wine. So it is possible that some of the laws you reference were, but are no longer, constitutional. Second, the regulation of distribution is not market participation. But, third, if the state is in the market of alcohol as a buyer and seller, it can discriminate in favor of local interests in this specific activity.
QUESTION: If a state law is challenged under dormant Commerce Clause, does the decision necessarily have implications for potential federal laws? That is, if a state law is struck down under DCC, does it follow that Congress could in future pass a law to regulate in that area and it therefore passes under Commerce Clause? Or the reverse, that if the state law is upheld, can Congress nonetheless pass a law to preempt it?
ANSWER: There are several things going on here. First, for many years states were afforded more authority to regulate alcohol, even in discriminatory ways, due to the language of the Twenty-first Amendment. This largely ended in 2005 with the Supreme Court's decision in Granholm v. Heald, which invalidated discriminatory state rules regarding the shipment of wine. So it is possible that some of the laws you reference were, but are no longer, constitutional. Second, the regulation of distribution is not market participation. But, third, if the state is in the market of alcohol as a buyer and seller, it can discriminate in favor of local interests in this specific activity.
QUESTION: If a state law is challenged under dormant Commerce Clause, does the decision necessarily have implications for potential federal laws? That is, if a state law is struck down under DCC, does it follow that Congress could in future pass a law to regulate in that area and it therefore passes under Commerce Clause? Or the reverse, that if the state law is upheld, can Congress nonetheless pass a law to preempt it?
ANSWER: Yes and yes. It should. The Court has said on several occasions that the reach of the dormant Commerce Clause is the same as that of Congress's commerce power. So a holding that a given state law is subject to dormant Commerce Clause scrutiny (whether upheld or invalidated) should mean that a federal law regulating the same subject is within Congress's commerce power. Congress could thus bless state laws that have been previously held by a court to violate the dormant Commerce Clause, or it could preempt state laws that courts have upheld against dormant Commerce Clause challenges.