Heublein, Inc. v. State

• Decision Date: 07 January 1987
• Docket Number: No. 43677,43677
• Citation: 351 S.E.2d 190,256 Ga. 578
• Parties: HEUBLEIN, INC. v. STATE of Georgia et al.
• Court: Georgia Supreme Court

Page 190

351 S.E.2d 190

256 Ga. 578

HEUBLEIN, INC. v. STATE of Georgia et al.

No. 43677.

Supreme Court of Georgia.

Jan. 7, 1987.

Richard E. Walton, Harold V. Gorman, Jr., Heublein, Inc., Hartford, Conn., Morton Siegel, Michael A. Moses, James L. Webster, Siegel, Denberg, Vanasco, Shukovsky, Moses & Schoenstadt, Chicago, Ill., John L. Taylor, Jr., John L. Schaub, McDaniel, Chorey & Taylor, Atlanta, for Heublein, Inc.

Michael J. Bowers, Atty. Gen., Jeff L. Milsteen, Asst. Atty. Gen., Atlanta, for State of Ga. et al.

MARSHALL, Chief Justice.

This is an action for declaratory judgment and injunctive relief by Heublein, Inc., an importer of alcoholic beverages into this state. The action is being prosecuted against Georgia's taxing authorities. Heublein seeks a declaration of unconstitutionality with respect to Georgia statutes providing for an import tax on all distilled spirits and table wines imported for use, consumption, or final delivery into this state. OCGA §§ 3-4-60(2); 3-6-50(b). Heublein argues that this import tax violates the Equal Protection and Commerce Clauses. The superior court upheld the constitutionality of the tax, and Heublein appeals.

OCGA §§ 3-4-60 and 3-6-50 were rewritten by Georgia Laws 1985, p. 665 et seq. As rewritten, OCGA § 3-4-60(1) imposes "upon the first sale, use, or final delivery within this state of all distilled spirits an excise tax in the amount of 50 cents per liter and, upon the first sale, use, or final delivery within this state of all alcohol, an excise tax in the amount of 70 cents per liter ..." OCGA § 3-4-60(2) imposes "upon the importation for use, consumption, or final delivery into this state of all distilled spirits an import tax in the amount of 50 cents per liter and, upon the importation for use, consumption, or final delivery into this state of all alcohol, an import tax in the amount of 70 cents per liter ..."

OCGA § 3-6-50(a) imposes "on the first sale, use, or final delivery within this state of all table wines an excise tax in the amount of 11 cents per liter ..." OCGA § 3-6-50(b) imposes "upon the importation for use, consumption, or final delivery into this state of all table wines an import tax in the amount of 29 cents per liter ..." OCGA § 3-6-50(c) imposes "upon the first sale, use, or final delivery within this state of all dessert wines an excise tax in the amount of 27 cents per liter ..." OCGA § 3-6-50(d) imposes "upon the importation for use, consumption, or final delivery into this state of all dessert wines an import tax in the amount of 40 cents per liter ..."

In addition, all of these excise and import taxes impose "a proportionate tax at the same rate on all fractional parts of a liter."

1. The resolution of Heublein's constitutional claims is based on an analysis of a line of United States Supreme Court decisions commencing with State Board of Equalization v. Young's Market Co., 299 U.S. 59, 57 S.Ct. 77, 81 L.Ed. 38 (1936).

(a) In Young's Market Co., supra, the plaintiffs were wholesale sellers within the State of California of beer imported from out of state. They were arguing that a California statute and implementing regulations imposing an importer's license fee for the privilege of importing beer into California violated the Commerce Clause by discriminating against the wholesale seller of imported beer in favor of the wholesale seller of beer locally brewed. They also argued that the importer's license fee was discriminatory in violation of the Equal Protection Clause of the Fourteenth Amendment.

The Supreme Court held that the importer's license fee was valid under § 2 of the Twenty-first Amendment, which is the constitutional amendment that repealed Prohibition. Section 2 provides: "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."

The Court acknowledged that prior to adoption of the Twenty-first Amendment, imposition of the importer's license fee "obviously" would have been unconstitutional as a "direct burden on interstate commerce." 299 U.S. at p. 62, 57 S.Ct. at p. 78. However, the Court held that under the broad language of the Twenty-first Amendment, the right under the Commerce Clause to freely import from one state to another had been "abrogated ... so far as concerns intoxicating liquors." Id. The Court further held that "[t]he claim that the statutory provisions and the regulations are void under the equal protection clause may be briefly disposed of. A classification recognized by the Twenty-first Amendment cannot be deemed forbidden by the Fourteenth." Id. at p. 64, 57 S.Ct. at p. 79.

In addition, the Court held that "we cannot say that the exaction of a high license fee for importation may not, like the imposition of the high license fees exacted for the privilege of selling at retail, serve as an aid in policing the liquor traffic." Id. at p. 63, 57 S.Ct. at p. 79.

(b) Two years later in Mahoney v. Joseph Triner Corp., 304 U.S. 401, 58 S.Ct. 952, 82 L.Ed. 1424 (1938), the Court sustained the constitutionality of a Minnesota statute prohibiting the importation into the state of certain categories of intoxicating liquors. The Court held this statute to be constitutional, notwithstanding the discrimination arising in favor of liquor processed within the state. In so holding, the Court stated, "since the adoption of the Twenty-first Amendment, the Equal Protection Clause is inapplicable to imported intoxicating liquor." 304 U.S. at p. 401(1), 58 S.Ct. at p. 952.

(c) However, in subsequent cases, the Court has not literally followed the broad holding that the right under the Commerce Clause to freely import from one state to another has been abrogated so far as concerns intoxicating liquors. These subsequent cases, which are discussed, infra, generally involve instances in which: (1) the challenged state liquor law did not, in fact, regulate the "transportation or importation" into the state of intoxicating liquors "for delivery or use therein," as specified in the Twenty-first Amendment; or (2) the challenged state liquor law trenched upon some preeminent federal power. As to the Equal Protection Clause, at least in the area of individual rights, the Court has completely abandoned the view that state laws involving the regulation of intoxicating liquors within the state's borders are exempt from equal-protection challenges.

Thus, in Collins v. Yosemite Park Co., 304 U.S. 518, 58 S.Ct. 1009, 82 L.Ed. 1502 (1938), it was held that the Twenty-first Amendment did not give California the power to prevent the shipment into and through her territory of liquor to be distributed and consumed in a national park. In Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 84 S.Ct. 1293, 12 L.Ed.2d 350 (1964), it was held that the Commerce Clause prohibited New York from interfering with the tax-free sales of liquor to departing international airline travelers at a New York airport for delivery at the traveler's foreign destination. In Hostetter, the Court stated:

"This Court made clear in the early years following adoption of the Twenty-first Amendment that by virtue of its provisions a State is totally unconfined by traditional Commerce Clause limitations when it restricts the importation of intoxicants destined for use, distribution, or consumption within its borders ...

"This view of the scope of the Twenty-first Amendment with respect to a State's power to restrict, regulate, or prevent the traffic and distribution of intoxicants within its borders has remained unquestioned. See California v. Washington, 358 U.S. 64 [79 S.Ct. 116, 3 L.Ed.2d 106] ... Ziffrin, Inc. v. Reeves, 308 U.S. 132 [60 S.Ct. 163, 84 L.Ed. 128] ...

"To draw a conclusion from this line of decisions that the Twenty-first Amendment has somehow operated to 'repeal' the Commerce Clause wherever regulation of intoxicating liquors is concerned would, however, be an absurb over-simplification. If the Commerce Clause had been pro tanto 'repealed,' then Congress would be left with no regulatory power over interstate or foreign commerce in intoxicating liquor. Such a conclusion would be patently bizarre and is demonstrably incorrect ...

"Both the Twenty-first Amendment and the Commerce Clause are parts of the same Constitution. Like other provisions of the Constitution, each must be considered in the light of the other, and in the context of the issues and interests at stake in any concrete case." 377 U.S. 330-332, 84 S.Ct. 1296-1298.

(d) In Craig v. Boren, 429 U.S. 190, 209-210, 97 S.Ct. 451, 463-464, 50 L.Ed.2d 397 (1976), the Court expressly held that "the operation of the Twenty-first Amendment does not alter the application of equal protection standards that otherwise govern this case."

At issue in Craig were Oklahoma statutory laws discriminating between males under the age of 21 and females under the age of 18 with respect to the sale of 3.2% beer. The Court held the question for decision to be "whether such a gender-based differential constitutes a denial to males 18-20 years of age of the equal protection of the laws in violation of the Fourteenth Amendment." 429 U.S. at p. 192, 97 S.Ct. at p. 454. The Court held that this gender-based discrimination did violate equal protection, rejecting the argument that the fact that the challenged statutes concerned the sale and distribution of alcohol within the ambit of the Twenty-first Amendment insulated the statutes from the equal-protection challenge. As to this, the Court held that "the Twentyfirst Amendment does not save the invidious gender-based discrimination from invalidation as a denial of equal protection of the laws in violation of the Fourteenth Amendment." Id. at pp. 204-205, 97 S.Ct. at pp. 460-461.

However, it should be noted that the Court also distinguished Mahoney and Young's Market Co. as involving "purely...