Archive for the ‘spirits’ tag
Wine Wholesalers
Question regarding commerce clause. Please help?
The retail price of wine in kansas was consistently higher than the price of wine in boardering states. as a result, Kansas residence living in border areas frequently crossed state lines to purchase wine at lower prices. accordingly, Kansas enacted a statute that required out of state shippers of wine to affirm that their posted prices for product sold to kansas wholesalers, as of the moment of posting, was no higher than the prices at which those products were sold in the bordering states. does the statute violate the commerce clause. why?
dormant commerce cl ques. not explicit in us const but the const provides “The Congress shall have power . . . To regulate commerce … among the several states,…” Article I, Section 8, Clause 1. Supreme Court has held this means that states cannot discriminate in interstate commerce. The idea behind the Dormant Commerce Clause is that this grant of power to Congress implies a negative converse — a restriction prohibiting a state from passing legislation that improperly burdens or discriminates against interstate commerce. In a Dormant Commerce Clause case, a court is initially concerned with whether the law facially discriminates against out-of-state actors or has the effect of favoring in-state economic interests over out-of-state interests. If so, it is typically found to be unconstitutional.
In your case, the Kansas legislature passed a law requiring affrimation by out of state shippers that their posted prices for product sold to kansas wholesalers was no higher than the prices at which those products were sold in the bordering states.
This does not seem discriminatory at all. Prices are supposed to be even across the board and not higher to Kansas residents.
On the other hand, Kansas legislature is apparently using this as a method to fix the neighboring state’s prices at a lower price than they are selling wine. EDIT i believe that violates the commerce clause in that the effect is to favor in Kansas state economic interests (ie, the businesses in Kansas will sell wine for a greater price). whether that law is enforceable on the neighboring states is another story. good luck
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