Twenty-first Amendment to the United States Constitution

The second section bans the importation of alcohol in violation of state or territorial law. This has been interpreted to give states essentially absolute control over alcoholic beverages, and many U.S. states still remained "dry" (with state prohibition of alcohol) long after its ratification. Mississippi was the last, remaining dry until 1966;[12] Kansas continued to prohibit public bars until 1987.[13] Many states now delegate the authority over alcohol granted to them by this Amendment to their municipalities or counties (or both).

Section 2 has been the source of every Supreme Court ruling directly addressing Twenty-first Amendment issues.

Early rulings suggested that Section 2 enabled states to legislate with exceptionally broad constitutional powers. In State Board of Equalization v. Young's Market Co., the Supreme Court recognized that "Prior to the Twenty-first Amendment it would obviously have been unconstitutional"[14] for a state to require a license and fee to import beer anywhere within its borders. First, the Court held that Section 2 abrogated the right to import intoxicating liquors free of a direct burden on interstate commerce, which otherwise would have been unconstitutional under the Commerce Clause before passage of the Twenty-first Amendment.[15] In its second holding, the Court rejected an equal protection claim because "A classification recognized by the Twenty-first Amendment cannot be deemed forbidden by the Fourteenth."[15] Over time, the Court has significantly curtailed this initial interpretation.

In Craig v. Boren (1976), the Supreme Court found that analysis under the Equal Protection Clause of the Fourteenth Amendment had not been affected by the passage of the Twenty-first Amendment. Although the Court did not specify whether the Twenty-first Amendment could provide an exception to any other constitutional protections outside of the Commerce Clause, it acknowledged "the relevance of the Twenty-first Amendment to other constitutional provisions becomes increasingly doubtful".[16] Likewise, it has been held that Section 2 of the Twenty-first Amendment does not affect the Supremacy Clause[17] or the Establishment Clause. Larkin v. Grendel's Den, Inc., 459 U.S. 116, 122, n. 5 (1982). However, the Craig v. Boren Court did distinguish two characteristics of state laws permitted by the Amendment, which otherwise might have run afoul of the Constitution. The constitutional issues in each centered or touched upon:(1) "importation of intoxicants, a regulatory area where the State's authority under the Twenty-first Amendment is transparently clear";[18] and (2) "purely economic matters that traditionally merit only the mildest review under the Fourteenth Amendment".[19] As to the Dormant Commerce Clause in particular, the Court clarified that, while not a pro tanto repeal, the Twenty-First Amendment nonetheless "primarily created an exception to the normal operation of the Commerce Clause".[20]

In South Dakota v. Dole (1987), the Supreme Court upheld the withholding of some federal highway funds[21] to South Dakota, because beer with an alcohol content below a specified percentage could be lawfully sold to adults under the age of 21 within the state.[22] In a 7–2 majority opinion by Chief Justice Rehnquist, the Court held that the offer of benefits is not coercion that inappropriately invades state sovereignty.[23] The Twenty-first Amendment could not constitute an "independent constitutional bar" to the spending power granted to Congress under Article I, section 8, clause 1 of the Constitution.[24] Justice Brennan, author of the majority opinion in Craig v. Boren, provided a brief but notable dissent based solely on Section 2.[25] Justice O'Connor also dissented, arguing that "the regulation of the age of the purchasers of liquor, just as the regulation of the price at which liquor may be sold, falls squarely within the scope of those powers reserved to the States by the Twenty-first Amendment."[26]

In 44 Liquormart, Inc. v. Rhode Island (1996), the Court held states cannot use the Twenty-first Amendment to abridge freedom of speech protections under the First Amendment.[27] Rhode Island imposed a law that prohibited advertisements disclosing the retail prices of alcoholic beverages sold to the public. In declaring the law unconstitutional, the Court reiterated that "although the Twenty-first Amendment limits the effect of the Dormant Commerce Clause on a State's regulatory power over the delivery or use of intoxicating beverages within its borders, the Amendment does not license the States to ignore their obligations under other provisions of the Constitution".[28]

Most recently, however, Granholm v. Heald (2005) held that the Twenty-first Amendment does not overrule the Dormant Commerce Clause with respect to alcohol sales, and therefore states must treat in-state and out-of-state wineries equally. The Court criticized its earliest rulings on the issue, (including State Board of Equalization v. Young's Market Co.) and promulgated its most limited interpretation to date:

The aim of the Twenty-first Amendment was to allow States to maintain an effective and uniform system for controlling liquor by regulating its transportation, importation, and use. The Amendment did not give States the authority to pass nonuniform laws in order to discriminate against out-of-state goods, a privilege they had not enjoyed at any earlier time.[29]

In a lengthy dissent, Justice Thomas argued that the plain meaning of Section 2 removed "any doubt regarding its broad scope, the Amendment simplified the language of the Webb-Kenyon Act and made it clear that States could regulate importation destined for in-state delivery free of negative Commerce Clause restraints".[30] In his historical account, Justice Thomas argued the early precedent provided by State Board of Equalization v. Young's Market Co. was indeed correct, and furthered the original intent of the Twenty-first Amendment to provide a constitutional guarantee authorizing state regulation that might conflict with the Dormant Commerce Clause (similar to the Webb–Kenyon Act).