A Primer on the Dormant Commerce Clause + Tied House Laws

Resident baby lawyer here with a little background on two of the legal issues that (I think) will come up in class today:

Dormant Commerce Clause:
Article I, Section 8 of the Constitution gives Congress the power to regulate interstate commerce. This is the Commerce Clause.

A negative reading of the Commerce Clause provides an implied limitation on a state's ability to regulate interstate commerce. That is, because the Constitution gives this power to Congress, states cannot exercise this power unless Congress explicitly delegates it to the states. This concept is known as the "Dormant" or "Negative" commerce clause. In evaluating whether a certain state action / regulation / law violates the dormant commerce clause, the key question is whether said action regulates interstate commerce in a manner that is protectionist / discriminates against other states without Congressional approval or an overriding legitimate state interest.

This is the basis of the Granholm decision, in which the Court found it illegal for states to allow DTC wine sales by in-state wineries while prohibiting DTC sales by those out-of-state (side note: potentially problematic for NVL). [It's worth noting that one could argue (as Justice Thomas did in his Granholm dissent) that the 21st Amendment gives a state the explicit power to regulate the importation and transportation of alcohol across and within its borders, and thus regulations that discriminate against out of state wineries do not violate the dormant commerce clause because Congress has expressly authorized such state action.]

Taking Granholm as it stands, what's unclear to me is why DTC sales by wineries (the issue in Granholm) are any different from retailer shipments to consumers. As the Wine Spectator maps show, only 14 states allow out-of-state retailer shipping. Assuming the other 36 states allow in-state retailer shipments, why are these 36 states' prohibitions on out-of-state retailer-to-consumer sales not also unconstitutional under the Dormant Commerce Clause?

Lastly, a quick note on the NYSLA reading: What's weird about the NYSLA charges against Empire Wine is that Empire Wine is an in-state retailer. The dormant commerce clause is supposed to prevent in-state agencies and legislators from enacting protectionist policies at the expense of other states (i.e., the NYSLA charges against NJ-based Wine Library). Here, however, we have an in-state agency going after an in-state retailer. I'm having a hard time figuring out NYSLA's policy rationale (as, apparently, was Tom Wark, executive director of the National Association of Wine Retailers: "I'm sure the people of New York feel relieved and safer knowing that [the NYSLA] is so enthusiastically working on their behalf to hamper legitimate commerce, hinder New York businesses and prevent out-of-state wine lovers from obtaining the wines they desire."). Why would NYSLA want to prevent Empire Wine from selling to consumers in other states?

Tied House Laws
Full disclosure, I didn't know anything about these laws until I dug around the internet a bit last night. I found the Wiki page pretty helpful (for shame). For those of you who don't want to spend any of your next 3 hours reading the page, here's the quick and dirty: UK pubs are either free houses or tied houses. Tied houses are required to source at least part of their beer from a certain brewery, whereas free houses can source beer, well, freely. The US had a similar system prior to prohibition, in which breweries would partner with a bar and run aggressive marketing campaigns through the bar to increase the breweries' market share. Post-prohibition, states (empowered by the 21A) enacted tied-house laws in an effort to curb (1) the "excessive" alcohol consumption that allegedly resulted from these aggressive marketing campaigns and (2) anticompetitive practices that were thought to result from a producer (wholesaler) inducing a wholesaler (retailer) to push the producer's (wholesaler's) products over another's. In effect, these laws prohibit vertical integration among producers, wholesalers, and retailers in the AB industry.

This, then, brings us to the three-tier system (and attendant licensing requirements) discussed in New Vine Logistics, which NVL claimed to avoid by classifying itself as a supply chain manager (and securing quasi-no action letters from state legislatures to that effect).

This also surfaces in the California ABC's Industry Advisory on Third Party Providers. Despite arguments that 3P providers aren't part of the three-tier system implicated by tied house laws (i.e., they aren't producers, suppliers, or retailers), the California ABC's final Industry Advisory (2011) prohibits a 3P provider from operating a platform that involves multiple tiers.