Fine(ing) Wine: Challenging Direct-Shipment Licensing Fees on Dormant Commerce Clause Grounds

This Note advocates for a constitutional challenge to state direct-to-consumer licensing fees, arguing that the licensing fees impose an undue burden on interstate commerce. To this end, this Note will apply the Supreme Court’s dormant Commerce Clause jurisprudence to state DtC wine licensing fees. Under this framework, the Court has almost always invalidated state laws that discriminate against out-of-state interests absent a showing that the law is necessary to achieve a legitimate purpose other than economic protectionism. If the state law is not found to discriminate against out-of-state interests, the Court balances the law’s burdens on interstate commerce against its benefits, invalidating a law when the burden imposed on interstate commerce is “excessive in relation to the [law’s] putative local benefits.” There are two approaches to this balancing test. In balancing the law’s burdens on interstate commerce against its benefits, some circuit courts require a heightened standard in which the government must prove that the asserted local benefits are both genuine and credibly advanced by the law; other circuits accept any rational assertion of benefit by the state. This Note argues that the heightened approach to balancing is appropriate with respect to DtC licensing fees because of concerns that states will prop up seemingly legitimate interests that are not truly advanced by the licensing fees. Moreover, a rational basis standard ignores the unique climate conditions of particular states that affect the quality of wine production. This Note will ultimately conclude that DtC licensing fees are unconstitutionally burdensome on interstate commerce