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Applying Heightened Scrutiny to Protectionist Alcohol Laws

Jarrett Dieterle April 28, 2017
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Recently, the South Carolina Supreme Court issued a decision striking down a state law that limited the number of liquor retail outlets that a single owner could operate within state boundaries. The Court held that the law’s sole justification was economic protectionism, which made it an improper use of the state’s police powers to regulate alcohol. R Street Institute fellow Jarrett Dieterle takes an in-depth look at case in this three-part blog series.

Part one and two of the series analyzed the South Carolina Supreme Court’s reasoning and the varying levels of constitutional scrutiny economic regulations have received throughout history. Part three will analyze how the recent revival in economic liberty litigation could apply to the world of alcohol.

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While protectionist alcohol laws might appear to be nothing more than garden variety restrictions on economic liberty, the role of Prohibition and its subsequent repeal add an additional constitutional dimension when it comes to regulating booze.

Today, nearly every state has a three-tiered alcohol distribution system that maintains a strict wall of separation between alcohol producers, distributors and retailers. Even more stringent are the numerous states in which the government still controls alcohol distribution. In addition to these structural restrictions, close observers have no difficulty finding arbitrary, bizarre, and overtly protectionist alcohol laws in nearly every state in the union. From Virginia’s food-beverage ratio law, which arbitrarily mandates how much booze versus food a restaurant can sell, to Indiana’s cold beer law, which only allows liquor stores (but not gas stations or grocery stores) to sell refrigerated beer, the examples are legion. [Read More]

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Differing Levels of Scrutiny for Economic Regulations: “Anything Goes” Rational Basis v. Rational Basis “With Bite”

Jarrett Dieterle April 26, 2017
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Recently, the South Carolina Supreme Court issued a decision striking down a state law that limited the number of liquor retail outlets that a single owner could operate within state boundaries. The Court held that the law’s sole justification was economic protectionism, which made it an improper use of the state’s police powers to regulate alcohol. R Street Institute fellow Jarrett Dieterle takes an in-depth look at case in this three-part blog series.

The first part of the series analyzed the reasoning used by the South Carolina Supreme Court in reaching its decision. Part two will explore the differing levels of constitutional scrutiny that economic regulations have received during our nation’s history.

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The fight over how to treat economic liberty under the Constitution has been as lengthy as it has been acrimonious. Under current constitutional jurisprudence, certain types of recognized rights—so-called “fundamental rights”—receive more robust judicial protection (known as “strict scrutiny”) than other rights. In order for a government to infringe upon these “fundamental” rights, it must have a compelling interest and adopt the least intrusive means to advance that interest. This requires an inquiry into both the goals of the infringing law and the means the law adopts to achieve those goals. [Read More]

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Could Economic Liberty Litigation Free the Booze?

Jarrett Dieterle April 24, 2017
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Recently, the South Carolina Supreme Court issued a decision striking down a state law that limited the number of liquor retail outlets that a single owner could operate within state boundaries. The Court held that the law’s sole justification was economic protectionism, which made it an improper use of the state’s police powers to regulate alcohol. R Street Institute fellow Jarrett Dieterle takes an in-depth look at case in this three-part blog series.

The first part of the series will analyze the reasoning used by the South Carolina Supreme Court in reaching its decision. Parts two and three take a look at economic liberty litigation and its potential application to the world of booze.

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The South Carolina Supreme Court recently struck down a state law limiting how many liquor retail outlets an individual or business could own within the Palmetto State.  According to the court, the only justification for the law was economic protectionism, an improper basis for economic regulation. The case may be a portent for oppressive and protectionist alcohol-regulation regimes across the country, and a sign that the recent revival in economic liberty jurisprudence could be coming to the world of booze. [Read More]