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CONTACT: David Fish
September 24, 2004
(202) 289-8928
High Court Should Affirm E-Commerce Case
PFF Joins Amicus Brief Opposing Discriminatory State Regulations

WASHINGTON D.C. - The U.S. Supreme Court should strike down a state regulation stifling ecommerce, according to The Progress & Freedom Foundation and other organizations who filed an amicus brief this week urging the High Court to affirm a lower court's ruling in Granholm v. Heald. While the case under review challenges state laws banning out-of-state wineries from shipping their product directly to consumers (while allowing in-state wineries to do so), these amici emphasize that the decision could impact state laws affecting Internet sales of other goods and services in national commerce.

The U.S. Court of Appeals for the Sixth Circuit ruled that a Michigan law's discrimination between state and out-of-state wineries violates the Commerce Clause of the U.S. Constitution. The state of Michigan and in-state vendors appealed to the Supreme Court, arguing that the 21 st Amendment allows the state to discriminate. But PFF Senior Policy Counsel William F. Adkinson Jr., believes that, in light of the damage to e-commerce, the Court should affirm the lower court's decision that the Michigan law runs afoul of the Commerce Clause.

"This is a case about discriminatory state regulation of the sale of wine," amici argue in their brief filed with the Supreme Court on Thursday. "More fundamentally, it is a case about the viability of interstate electronic commerce in the United States. [We] urge the Court to take this opportunity to clearly delineate the crucial role of the dormant Commerce Clause in preventing local protectionism from undermining the national market and the benefits it brings to consumers and businesses throughout America."

Citing the Commerce Clause, the brief explains that "Although the Framers could not have imagined the technological advances that have led to the Internet, they could imagine, and worked to establish, the open, nondiscriminatory, and national market that the Internet and e-commerce have come to epitomize." In short, "The Internet is the quintessential interstate commerce medium that overcomes the tyranny of distance... thus fulfilling the Founders' vision of a single national market."

The brief maintains that discrimination against out-of-state vendors "offends rooted Commerce Clause principles" and that "the Court has held that statutes that discriminate against interstate commerce in purpose or effect are virtually per se invalid." Moreover, it argues that the 21 st Amendment "does not save Michigan's discriminatory statutory scheme from a finding of unconstitutionality under the dormant commerce clause."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation