Repeal of Prohibition

Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.

Section 2. The transportation or importation into any State, Territory, or Possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

Amendment XXI

When the nation repealed Prohibition via the Twenty-first Amendment in 1933, it vested primary control over alcoholic beverages in the states. The common understanding of the framers of the Twenty-first Amendment was that it grants each state the power to regulate alcoholic beverages within its borders without intrusion by federal law or regulation. The question remains, however, as to how much and what kind of federal intrusion the amendment blocks. The Twenty-first Amendment has three parts. Section 1 explicitly repealed the Eighteenth Amendment and brought an end to Prohibition. Accordingly, because many saw the Twenty-first Amendment as nothing but a repeal of the Eighteenth Amendment, Congress passed the resolution without much substantive debate. Most of the legislative debate centered on the issue of saloons and the ratification process codified in Section 3 of the amendment, which mandated the use of state conventions. The amendment was passed by the Senate on February 16, 1933, and by the House four days later. It became law on December 5, 1933.

In the original resolution there was an additional section, which granted Congress and the states "concurrent power to regulate or prohibit the sale of intoxicating liquors to be drunk on the premises where sold." This provision was designed primarily to authorize the prohibition of saloons. But Members of Congress finally agreed that such regulation belonged with the states, and the section was removed.

Section 2 became the Twenty-first Amendment's primary source of judicial conflict. The question was whether the amendment gave the states absolute control over alcohol, notwithstanding the Commerce Clause and the Import-Export Clause, or whether the amendment permitted the states only enough autonomy to be dry without infringing on the scope of the rest of the Constitution. The amendment tracks very closely the language of a pre-Prohibition federal statute, the Webb-Kenyon Act (1913), current version at 27 U.S.C. § 122 (1994), that gave states power to tax alcoholic beverages not only when sold in state, but also when sold through the mail in interstate commerce.

In State Board of Equalization v. Young's Market Co. (1936) and in Ziffrin, Inc. v. Reeves (1939), the Supreme Court originally interpreted the Twenty-first Amendment as an absolute exception to the Commerce Clause. However, this changed in 1964 with a string of Twenty-first Amendment cases. In Hostetter v. Idlewild Bon Voyage Liquor Corp. (1964), Justice Potter Stewart, writing for the majority, argued forcefully that the Twenty-first Amendment was not an absolute exception to the Commerce Clause as far as liquor was concerned. Likewise, in Department of Revenue v. James B. Beam Distilling Co. (1964), the Court held that Kentucky's tax on imported whiskey violated the Import-Export Clause. Justice Stewart, again writing for the majority, stated:

To sustain the tax which Kentucky has imposed in this case would require nothing short of squarely holding that the Twenty-first Amendment has completely repealed the Export-Import Clause so far as intoxicants are concerned. Nothing in the language of the Amendment nor in its history leads to such an extraordinary conclusion. This Court has never intimated such a view, and now that the claim for the first time is squarely presented, we expressly reject it.

Similarly, in Wisconsin v. Constantineau (1971), the Court held that a Wisconsin statute, which empowered a police chief to post in all local retail liquor outlets a notice forbidding the sale of alcohol to the plaintiff because of his excessive drinking, without giving the plaintiff any advance notice or opportunity to contest it, violated the due process requirements of the Fourteenth Amendment.

Throughout the 1970s and early 1980s, the Supreme Court continued to chip away at the Twenty-first Amendment. See, e.g., United States v. Tax Commission of Mississippi (1975) (holding that the states could not tax the sale of liquor on military bases within their borders because the United States has concurrent jurisdiction over military bases); Craig v. Boren (1976) (noting that the Twenty-first Amendment does not override the equal-protection requirements of the Fourteenth Amendment); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc. (1980) (finding that the Twenty-first Amendment does not protect a state regulation that violates the Sherman Act because of the Supremacy Clause); Larkin v. Grendel's Den, Inc. (1982) (stating that the state may not exercise its powers under the Twenty-first Amendment in a way that impinges the rights protected under the Establishment Clause). But see New York State Liquor Authority v. Bellanca (1981) (allowing a state to prohibit the sale of liquor on premises where topless dancing occurs because "[w]hatever artistic or communicative value may attach to topless dancing is overcome by the State's exercise of its broad power under the Twenty-first Amendment").

In Capital Cities Cable, Inc. v. Crisp (1984), the Court finally articulated a balancing test to determine when the state's powers under the Twenty-first Amendment trump the Commerce Clause:

In such a case, the central question is whether the interests implicated by a state regulation are so closely related to the powers reserved by the Amendment that the regulation may prevail, even though its requirements directly conflict with express federal policies.

Utilizing this balancing test in Bacchus Imports, Ltd. v. Dias (1984), the Court struck down a Hawaiian tax law that favored certain liquors that were only manufactured locally because "[s]tate laws that constitute mere economic protectionism are...not entitled to the same deference as laws enacted to combat the perceived evils of an unrestricted traffic in liquor."

In 324 Liquor Corp. v. Duffy (1987), the Court balanced the state's virtually complete control over the liquor distribution system within its borders against the policy behind the Sherman Anti-Trust Act and found the latter of more weight. In a sharp dissent, Justice Sandra Day O'Connor, joined by Chief Justice William H. Rehnquist, rejected the majority's conclusion. The dissent described in detail the legislative history and the subsequent state practices to show that the amendment was designed to give the states absolute control over the manufacturing and distribution of liquor within their borders. The "Senate discussions," she wrote, "clearly demonstrate an intent to confer on States complete and exclusive control over the commerce of liquor." The states understood the meaning as well. Immediately after the ratification of the Twenty-first Amendment, states enacted strong price-control measures, "the very type of statute that this Court strikes down today." The majority opinion answered Justice O'Connor's argument with a one-paragraph footnote that focused on maintaining federal economic power through the Commerce Clause and the Antitrust Laws.

That same year in South Dakota v. Dole (1987), the Court held that Congress could use its spending power to regulate indirectly interstate commerce with regard to intoxicating liquors. In Dole, Congress made certain highway funding contingent upon a state's acceptance of a minimum drinking age of twenty-one years. Justice O'Connor and Justice William J. Brennan, Jr., each filed dissents, with Brennan arguing that the Twenty-first Amendment limited the spending power.

In 44 Liquormart, Inc. v. Rhode Island (1996), the Court held that Rhode Island's prohibition against certain advertisements stating the prices of liquor was an abridgment of the First Amendment's protection of free speech. Although the lengthy decision contained several concurring opinions, all nine Justices agreed that the Rhode Island law was not saved by the Twenty-first Amendment.

After a number of years in which the Supreme Court pruned state powers under the Twenty-first Amendment, the amendment now leaves a state with the power to become dry if it chooses. Beyond that, however, the Court has held that state control of liquor is subject to federal power under the Commerce Clause (Article I, Section 8, Clause 3), Granholm v. Heald (2005), the Spending Clause (Article I, Section 8, Clause 1), the First Amendment, and, it follows, the Necessary and Proper Clause (Article I, Section 8, Clause 18) and the Supremacy Clause (Article VI, Clause 2).

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David Wagner
Professor of Law
Regent University School of Law