Smokey and the Bandit in Cyberspace: The Dormant Commerce Clause, the Twenty-first Amendment, and State Regulation of Internet Alcohol Sales

Abstract

Recently, federal courts have used the dormant Commerce Clause doctrine to strike down state regulations of alcohol sales, as applied to out-of-state alcohol producers and purchasers, despite the text of the Twenty-first Amendment, which appears to authorize such state regulation. This article argues that in striking down state regulations, these courts have ignored constitutional text, evinced indifference to the history of the Twenty-first Amendment, and misapplied Supreme Court precedent. In sum, they have come close to effecting a virtual repeal of the Amendment. But, I argue, there is opportunity in this new wave of litigation - opportunity to repair the erosion of state power under the Amendment caused by years of parsimonious interpretation by the U.S. Supreme Court and carried further by the recent decisions. In this essay, I do three things. First, I summarize the history of the framing and ratification of the Twenty-first Amendment, and demonstrate that its purposes were understood to go well beyond merely allowing states to pursue temperance policies. Second, I chart the evolution of the Supreme Court's Twenty-first Amendment jurisprudence, and describe the Court's move from rules to standards in applying the Amendment, which has resulted in a dramatic reduction of state power over alcohol. Finally, I critique the recent district court decisions that limit states in the one area in which their power remained largely unquestioned by the Supreme Court - the regulation of liquor imports from out-of-state. By way of conclusion, I offer suggestions to lower courts and to the Supreme Court for properly applying the Amendment in future cases.