Healy v. The Beer Institute

491 U.S. 324 (1989)

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Nature of the Case

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Facts

The domestic retail price of beer was consistently higher than the price of beer in D's three bordering States. D's residents living in border areas frequently crossed state lines to purchase beer at lower prices. A 1981 statute required that out-of-state shippers affirm under oath at the time of posting that their posted prices were and would remain no higher than the lowest prices they would charge for each beer product in the border States during the effective period. The Supreme Court held that 'nothing in the Twenty-first Amendment permits Connecticut to set the minimum prices for the sale of beer in any other state, and well-established Commerce Clause principles prohibit the state from controlling the prices set for sales occurring wholly outside its territory.' It held the law violative of the Commerce Clause. In 1984, D amended its beer-price-affirmation statute to its current form. D now requires out-of-state shippers of beer to affirm that their posted prices for products sold to Connecticut wholesalers are, as of the moment of posting, no higher than the prices at which those products are sold in the bordering States of Massachusetts, New York, and Rhode Island. Ps challenged D's beer-price-affirmation statute. Ps claimed that the beer-affirmation statute, even as modified regulated out-of-state transactions, constituted economic protectionism, and unduly burdened interstate commerce, all in violation of the Commerce Clause. The District Court found the law constitutional on its face because, it 'leaves brewers free to raise or lower prices in the border states before and after posting in D and does not, therefore, regulate interstate commerce.' The Court of Appeals reversed. It held that the Connecticut statute's 'purposeful interaction with border-state regulatory schemes' means that shippers cannot, as a practical matter, set prices based on market conditions in a border State without factoring in the effects of those prices on its future Connecticut pricing options. It held that the 1984 statute unconstitutionally restricted the ability of out-of-state shippers to offer volume discounts in the border States. D appealed.