Pabst Brewing Co. v. Crenshaw

Mr. Justice White

delivered the opinion of the court. .

The Pabst Brewing Company, a Wisconsin corporation, filed its bill in the court below to enjoin the beer inspector of the State of Missouri and his assistant from collecting or attempting to collect an inspection charge, fee, license or burden, which it was alleged' the law of Missouri imposed upon beer or other, malt liquors when shipped from other States into Missouri, after its delivery within that State to the consignee, and when held for sale for consumption in Missouri or for "shipment to other States. The general ground.upon which the law was *22assailed was that the exactions complained of were regulations of commerce repugnant to the Constitution of the United States. It was in addition specially averred that so far as the law imposed a charge on beer shipped from Wisconsin into Missouri, and held there by the consignee for sale and shipment for consumption in other States, the Missouri law was .repugnant to the conjmerce clause, because in this particular it discriminated in favor of beer manufactured in Missouri and held for sale or shipment for consumption in .other' States;

The bill was amended and demurred to. Whilst the court considered the law not to be in conflict with the commerce clause on the general grounds alleged, it nevertheless concluded, because of the averment concerning discrimination as to beer shipped into Missouri for reshipment to other States, that the demurrer could not be sustained. 120 Fed. Rep. 144. An answer was thereupon filed, as also a replication, and subsequently the cause was submitted upon the, pleadings and an agreed statement of facts.

The Supreme Court of Missouri having decided that the law in question did not provide for any charge or burden upon beer or other malt liquors shipped into Missouri and held there for reshipment to points outside of the State, the court "below, adhering to its previous opinion as to the general averments of the bill, and applying the construction given by the Supreme Court of the State to the statute, held, that it did not discriminate, and dismissed the suit.

The law of Missouri in question is entitled "An act creating the office of inspector of beer .and malt liquors of the State, and providing for the inspection of beer and malt liquors manufactured and sold in this State.” The provisions of the act essential to be considered may be summarized as follows:

It creates the office .of beer inspector, to be appointed* by the Governor, who shall'be an expert beer brewer, and who is required to furnish a bond, and is given power to appoint the necessary deputies to execute the provisions of the act. .The act forbids every person or corporation engaged .in brewing *23within the State from using any material or chemical in the manufacture of beer- or other malt liquors other than pure hops or pure extract of hops, or barley, malt, or wholesome yeast or rice. ' It is provided that the inspector or his deputies shall keep a record of those engaged in the manufacture, brewing and sale of malt liquors within the State and of the quantity manufactured or sold, 'and shall make a full report to the Governor concerning the same, and imposes upon the officials. named the duty of inspecting all beer or other malt liquors manufactured or sold within the State, to see that they conform to the standard of purity which the law requires. The act further-imposes an inspection fee, charge or license, accompanied with provisions for a label or stamp to be affixed upon the packages containing the beer or other malt liquors so manufactured or offered for sale within the State.

Concerning beer or other malt liquors manufactured outside of the State of Missouri and shipped into that State for sale and consumption within the State, after delivery and receipt under the shipment, the act provides as follows:

“Sec. 5. Every person, persons or corporation who shall receive for sale or offer for sale any beer or other malt liquors other than, those manufactured in this State shall, upon receipt of same, and before offering for sale, notify the inspector, who shall be furnished with a sworn affidavit, subscribed by an officer authorized to a-dminister oaths, from the manufacturer thereof, or other reputable person having actual knowledge of the composition of said beer or other malt liquors, that no material other than pure hops or the extract of hops, or pure barley, malt or wholesome yeast, or rice, was used in the manufacture of same; upon the receipt of said affidavit the inspector shall inspect and label the packages containing said beer or malt liquors, for which services he shall receive like fees as those imppsed upon the manufacturers of beer and malt liquors- in this State.”

In the printed and oral argument at bar all the contentions concerning discrimination are waived, • and the sole ground *24relied upon is the assertion that the statute constitutes a regulation of commerce and is hence repugnant to, the commerce clause of the Constitution of the United States.

Brevity and clearness in the consideration of the propositions relied upon to sustain the contentions made will be sub-served by fixing at the outset exactly what the statute does and by stating the legal principles which are . controlling.

The subject with which the statute deals is beer-and other malt .liquors. Plainly, it operates upon such liquors only when, manufactured in the State or if shipped from other States, after their arrival in the State and when they are held there for sale and consumption-therein.

It is provided by the act of Congress, commonly styled the Wilson Act, 26 Stat. 313, c. 728, as follows:

“That all fermented, distilled, or other intoxicating liquors of liquids transported into any State or Territory or remaining therein for use, consumption, sale or storage therein, shall upon arrival in such State or Territory be subject to the operation "and effect of the laws of such State or Territory enacted in the exercise of its police powers, to the same extent and in the same manner-us though such liquids or liquors -had been-produced in such State or Territory, and shall hot be exempt therefrom by reason of being introduced therein in original packages or otherwise,”

• The scope of this act and the power of Congress to adopt it were passed upon in In re Rahrer, 140 U. S. 545. The scope of the act was thus stated (p. 560):

“Congress has now "spoken and declared that imported liquors or liquids- shall, upon arrival in a State, fall within the category of domestic articles of a similar nature.” .

It was decided that although the act had the effect thus stated it was not repugnant to the Constitution of the United States, the court saying (p. 562):

“No reason is perceived why, if Congress chooses .to provide that certain designated subjects of interstate commerce , shall be governed by a rule which divests them of that character at *25an earlier period of time than would otherwise be the case, it is not within its competency to do so.”

In Rhodes v. Iowa, 170 U. S. 412, the purport of the act was -again passed upon. Reiterating the ruling made in the Rahrer case, it was decided that whilst the Wilson Act caused liquors shipped into Iowa from another State to be divested of their character as articles of interstate commerce after their delivery in Iowa to the person to whom consigned, nevertheless the act did not authorize the laws of Iowa to be applied to such merchandise whilst in transit from another State and before delivery in Iowa.

In Vance v. Vandercook Co., No. 1, 170 U. S. 438, the operation of á liquor law of South Carolina was considered. By the act in question the State of South Carolina took exclusive charge of the sale of liquor within the State, appointed its agents to sell the same, and empowered them to purchase the liquor, which was to be brought into the State for sale. The fact was that by the act in question the State of South Carolina, instead of forbidding the traffic in liquor, authorized it, and engaged in the liquor business for its own account, using it as a source of revenue. The act in addition affixed prerequisite conditions to the shipment into South Carolina from other States of liquor to a consumer who had purchased it for his own use and not for sale. Considering the Wilson Act and the previous decisions applying it, it was decided that the South Carolina law, in so far as it took charge in behalf of the State of the sale of liquor within the State and made such sale a source of revenue, was not an interference with interstate commerce. In so far, however, as the state law imposed burdens on the right to ship liquor from another State to a resident of South Carolina intended for his own use and not for sale within the State, the law was held to be repugnant to the Constitution, because the Wilson Act, whilst it delegated. to the State plenary power to regulate the sale of liquors in South Carolina shipped into the State from other States, did not recognize the right of a State to prevent an individual *26from ordering liquors from outside of the State of his residence for his own consumption and not for sale.

Quite recently, at this term, in American Express Company v. Iowa, and Adams Express Co. v. Iowa, 196 U. S. 133, 147, the construction affixed to the Wilson Act in the previous cases was applied, and the power of the State of Iowa to control the sale of liquors shipped from another State into that State, after their delivery to the consignee, was upheld.

Applying the Wilson Act and the decisions thereunder to the statute here assailed, we think it clear that the contention that it is repugnant to the commerce clause of the Constitution is without merit,' unless the reasons urged to show that the present case is not within 'the scope of the Wilson Act be well founded. We proceed to consider the contentions relied on to establish that proposition.

1st. The Wilson Act, it is argued, subjects liquors shipped from one State into another, after their arrival at their destination, only to the “laws of such State or Territory enacted in the exercise of its police powers . . .” As, it is said, the law of Missouri was not enacted in the exercise of the police power, hence malt liquor received from another State and held in Missouri for sale retained its character as an article of interstate commerce until sold in the original package.

But the proposition rests upon the mere assumption that the law of Missouri was not enacted in the exercise of the police power of that State. Certainly the regulation of the sale of liquor is essentially a police power. Surely, also, provision made in a state law tending to determine the purity of malt liquors offered for sale and consumption within a State is likewise an exertion of the same power. Conceding that the law in question may be inadequate to accomplish the purpose designed and produces a large revenue to the State over and above the cost of inspection, this affords no Federal ground upon which to hold that the police power of the State was not brought into play in'making the enactment where the law does not operate upon a subject within Federal control.. This *27becomes evident when it is borne in mind that, whether' the, statute be regarded as a prohibition, as a regulation, as a license or as an inspection law, if it encroached upon the Federal authority it would be void, and, on the contrary,- in all or any of these aspects, the law would be valid, so far as the Federal Constitution is concerned, if it did not so encroach. The purpose of the Wilson Act was to make liquor after its arrival a domestic product -and to confer- power upon the States to deal with it accordingly. The police power is hence to be measured by the right of a State to control or regulate domestic products, a state and not a Federal question as respects the commerce clause of the Constitution. So far as the state aspect is concerned the matter is foreclosed by a decision of the Supreme Court of Missouri passing upon the validity, under the state constitution, of the law now under consideration. State v. Bixman, 162 Missouri, 1. In that, case a person was proceeded against for selling malt liquor made within the State of Missouri without complying with the statute. The validity of the statute was assailed, on the ground, among others, that it was a revenue law and repugnant to the uniformity clause of the state constitution; that it was not an inspection law because it did not provide for an adequate inspection, and because the burden which it imposed was obviously out of all proportion to the cost of inspection, since the charge which was exacted copiously. enriched the .state treasury. The state court, after an elaborate review of its previous decisions, held that the mere fact that a revenue was produced by the execution of the statute did not cause the statute to be merely a revenue measure, and that although the inspection which the law provided might be inadequate, nevertheless the statute did not violate the state constitution. These views were sustained upon the ground that the statute dealt-with a subject which was peculiarly within the police power of the State. Summing up its conclusions as to the validity of the statute, the court declared:

“In our opinion, it [the law] is a police regulation, imposing *28conditions upon the business of manufacturing and selling beer and malt liquors in this State, which- business the State may absolutely suppress, or permit upon such terms as the legislature may prescribe. We construe the act in view of all its parts, and in connection with other license laws of this State, and hold that the fee exacted is the price which the State demands for the privilege of doing the .business of brewing and selling beer and malt liquors in this State, and it is immaterial by what name it is called.”

As then, the Supreme Court of Missouri has determined that the statute does not conflict with the state constitution and is valid because it is a police. regulation imposing conditions upon the business of manufacturing and selling beer in Missouri, a traffic which it is conceded the State had the power to prohibit entirely, it follows that we are without power, from a consideration of the state constitution, to treat the-law as invalid because of the revenue provisions of the state constitution or other'limitations imposed by that constitution upon the state government. It necessarily results from this that the assailed law comes directly within the express terms of the Wilson Act. The determination of this question by the Supreme Court of Missouri, as to liquor manufactured in Missouri, in the absence of discrimination, is necessarily conclusive. also as to the character of the law when applied to a similar article shipped from other Statés into Missouri after arrival at its destination, and when held for sale and consumption in that State. This must be the case, since, as we have seen, the Wilson Act, to use the words of In re Rahrer, places liquor coming from another State after its arrival “within the category of domestic articles of a similar nature.”

To decide that an exertion by a State of its power to regulate the sale of malt liquors manufactured within the State was an exercise of its police authority, and yet to say that the same, when applied to liquor shipped into the State from other States, after delivery, was not an exertion of the police power, would be to destroy the Wilson Act, and frustrate the very *29object which it was intended to accomplish, and besides would overrule the previous decisions of this court upholding and enforcing that statute.

We need not, however, further consider the subject, since the proposition relied upon is not open to discussion, as a similar contention was expressly ruled upon in Vance v. Vandercook Co., No. 1, supra. In that case, as has already been said, the State of South Carolina had by law taken charge of the sale of liquors in the various counties of the State, no liquor being allowed to be sold except through the state agencies. The law by which this system was put in force had been upheld by the state courts as a lawful exertion of the police power. The validity of the act was assailed in the Circuit Court of the United States on the ground of its repugnancy to the commerce clause of the Constitution, and the lower court sustained the contention. Among the grounds relied upon in this court was that the law in question was not within the Wilson Act, because it was not an exertion of the police power of the State, since it did not forbid, the sale of liquor, but on the contrary fostered and encouraged it and made it a source of revenue. In holding this proposition to be untenable the court said (p.447):

“The confusion of thought which is involved in the proposition to which we-have just referred is embodied in the principle upon which the. court below mainly rested its conclusion. That is, ‘ if all alcoholic liquors, by. whomsoever held, are declared contraband, they cease to belong to commerce, and are within the jurisdiction of the police power; but so long as their manufacture, purchase or sale, and their use as a beverage in any form or by any person are recognized, they belong to commerce and are without the domain of the police power.’ But this restricts the police power to the mere right to forbid, and denies any and all authority to regulate or restrict. The manifest purpose of the act of Congress was to subject original packages to the regulations and restraints imposed by the state law. If the purpose of the act had been to allow the *30state law to govern the sale of the original package only where the sales of all liquor were forbidden, this object could have found ready expression, whilst, on the contrary, the entire context of the act manifests the purpose of Congress to give to the respective States full legislative authority, both for the purpose of prohibition as well as for that of regulation and restriction with reference to the sale in original packages of intoxicating liquors brought in from other States.”

2d. Conceding, it is argued, that the Missouri statute attached to the liquor after delivery at its destination in Missouri, nevertheless’as the burdens which the statute imposed were of such a character as to affect traffic in the article and hence operate to deter shipments into Missouri, therefore the statute must be treated as if it bote upon the liquor while still in transit as a subject of interstate commerce. This proposition simply amounts to contending that the Wilson Act should be disregarded, since to enforce it would give the States power to regulate interstate traffic in liquor. If when a State has but exerted the power lawfully conferred upon it by the act of Congress its action becomes void as an interference with interstate commerce because of the reflex or indirect influence arising from the exercise of the lawful authority, the result would be that a State might exert its power to control or regulate liquor, yet if it did so its action would amount to a regulation of commerce and be void. And this would be but to say at one and the same time that the power could and could not. be exercised.. But the, proposition would have a much more serious result, since to uphold it would overthrow the distinction between direct and indirect burdens upon interstate. commerce by means of which the harmonious workings of our constitutional system has been made possible.

3d. It is further insisted that, as the Missouri law is denominated in its text as an inspection law, and does not provide an adequate inspection, and besides imposes a burden beyond the cost of inspection, the law is repugnant to the Constitution of the United States when tested by previous *31decisions of this court determining when particular inspection laws amounted to a regulation of commerce, citing Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U. S. 160, and Postal Telegraph-Cable Co. v. New Hope, 192 U. S. 55. These cases, however, simply considered state laws which operated upon interstate commerce. To apply them to the Missouri law necessarily involves deciding that the malt liquors to which that law applied had not ceased to be articles of interstate commerce; and, therefore, again, merely disregards the Wilson Act and the decisions of this court concerning it. Indeed, the whole argument upon which the entire case of the plaintiff in error proceeds rests upon this fallacious assumption, since it admits on the one hand the validity or- the Wilson Law, and yet seeks to take this case out of the reach of its provisions by distinctions which have no foundation in reason, unless it be that that law is to be disregarded or held to be unconstitutional.

Decree affirmed.