Seventh Circuit Upholds Indiana Law Regulating Wine Deliveries via Motor Carrier

The Seventh Circuit Court of Appeals has turned aside a challenge to an
Indiana law that prevents an alcoholic beverage retailer from shipping wine to
its customers via motor carrier. Lebamoff Enters., Inc. v. Huskey, No. 11-1362
(7th Cir., decided January 17, 2012). The retailer claimed that the law was
preempted by the Federal Aviation Administration Authorization Act of 1994
and that it violated the dormant Commerce Clause of the U.S. Constitution.

Writing for the panel, Judge Richard Posner explained that the Twenty-First
Amendment, which confers core powers on the states to regulate the sale
of alcoholic beverages, places a thumb on the scale balancing state and
federal interests. If the state interests are within those core powers, wrote
Posner, there is a “‘strong presumption’ of validity.” According to the court,
Indiana requires that drivers employed by liquor retailers be trained in the
state’s alcohol laws and the recognition of phony IDs to prevent underage
drinking. The state also allows the shipment of alcoholic beverages from
wineries that have verified their customers’ age in person, thus confirming its
strong interest in the matter. Because motor carriers’ drivers do not undergo
such training, the court determined that allowing them to ship wine would
“undermine the state’s efforts to prevent underage drinking.”

The court also rejected the retailer’s claim of constitutional infirmity, finding any effects on interstate commerce negligible. A concurring judge would not have employed the “quasi-legislative form of interest-balancing” assessment undertaken by his colleagues. According to Judge David Hamilton, “the Twenty-first Amendment to the Constitution should foreclose those balancing tests when the state is exercising its core Twenty-first Amendment power to regulate the transportation and importation of alcoholic beverages for consumption in the state. The challenged state law here, forbidding some but not all direct deliveries of alcohol by common carriers to consumers, falls within that core power. The law should be upheld even if, as I believe, its actual benefits are minimal and its burdens on federal interests are significant.