Milton S. Kronheim & Company, Inc. v. District of Columbia

Opinion for the Court filed by Circuit Judge SENTELLE.

Separate concurring opinion filed by Circuit Judge SILBERMAN.

Separate dissenting opinion filed by Circuit Judge HENDERSON.

SENTELLE, Circuit Judge:

The District of Columbia appeals from an order of the United States District Court preliminarily and permanently enjoining it from enforcing the Storage Act, D.C.Code § 25-114(f), which generally forbids alcoholic beverage licensees from storing beverages outside the District. The district court, relying on a prior district court opinion affirmed by this court without published opinion, held the Act to be an unconstitutional violation of the Interstate Commerce Clause. We determine that the District is not collaterally es-topped by the prior opinion from defending the constitutionality of its Act. We therefore reach the merits of the controversy.

The District defends the storage requirement on three grounds. First, that the District of Columbia Alcoholic Beverage Control Act (“ABC Act”), a congressional enactment, authorizes the local warehousing requirement; therefore, the requirement is constitutional as federal statutes are not subject to the restrictions of the Commerce Clause. Second, even if the ABC Act is subject to the restrictions of the Commerce Clause, the local warehousing requirement does not violate the clause. And third, even if the requirement would otherwise violate the Commerce Clause, the Storage Act is constitutional as a valid exercise of the District’s core power under § 2 of the Twenty-first Amendment to the Constitution. We hold that, although the ABC Act authorizes the local warehousing requirement, the Act and any statute enacted pursuant to it are subject to the restrictions of the Commerce Clause; but we also hold *196that the storage requirement, although facially inconsistent with the Commerce Clause, is constitutional as a valid exercise of the District’s core power under the Twenty-first Amendment.

I. Background

In 1934, following the repeal of Prohibition, Congress enacted the ABC Act to regulate the importation and distribution of liquor within the District of Columbia. Act of Jan. 24, 1934, § 2; D.C.Code § 25-102. The Act created a three-tier system of distribution that, among other things, required manufacturers, wholesalers and retailers to obtain licenses before “manufactur[ing] for sale, keeping] for sale, or sell[ing] any alcoholic beverage” within the District of Columbia. ABC Act §§ 9(a), 12; D.C.Code §§ 25-109(a)(1), 113. The Act also established an Alcoholic Beverage Control Board, which was authorized to issue, transfer and revoke any license under the Act. ABC Act §§ 4, 6; D.C.Code §§ 25-104,106.

In addition, the ABC Act authorized the Commissioners (now the Council of the District of Columbia) to adopt rules to “control and regulate the manufacture, sale, keeping for sale, offer for sale, solicitation of orders for sale, importation, exportation, and transportation of alcoholic beverages in the District of Columbia.” ABC Act § 7; D.C.Code § 25-107(a). Acting pursuant to this provision, in 1986 the Council enacted the District of Columbia Wholesale Liquor Industry Storage Act (“the Storage Act”). The Storage Act amended § 13 of the ABC Act by adding a sentence requiring that no alcoholic beverage wholesaler licensed by the District shall “store beverages upon premises outside the District, except that licensed wholesalers permitted by the Board to store beverages outside the District as of January 1, 1986, may continue to do so until July 27, 1988.” D.C.Code § 25-114(f).

Appellee Milton S. Kronheim & Co., Inc. (“Kronheim”), a wholesaler of alcoholic beverages licensed under the ABC Act, distributing liquor, beer and wine to District of Columbia retailers, is authorized to store alcoholic beverages at two locations within the District. A Maryland affiliate of Kronheim, The Kronheim Company, Inc., is a licensed wholesale distributor of alcoholic beverages in Maryland. Kronheim desired to consolidate its warehousing operations in the District and Maryland by leasing a facility in Jessup, Maryland. Toward this end, Kron-heim filed suit in district court on February 2, 1995, seeking to enjoin enforcement of the Storage Act.

In deciding this case, the district court relied upon an earlier district court decision in Quality Brands, Inc. v. Barry, 715 F.Supp. 1138 (D.D.C.1989). In that case, Quality Brands, Inc., a licensed alcoholic beverage wholesaler in the District and a competitor of Kronheim, sought a declaratory judgment that the Storage Act was unconstitutional. The district court held that (1) the local warehousing requirement facially discriminated against interstate commerce in violation of the Commerce Clause, Quality Brands, Inc., 715 F.Supp. at 1139-40; (2) the articulated purposes given for the requirement could not withstand the “strict scrutiny” accorded facially discriminatory legislation, id. at 1140-42; and (3) the Twenty-first Amendment did not shield the District’s discrimination against interstate commerce, id. at 1142-43. Consequently, the Quality Brands court concluded that the local warehousing requirement violated the Commerce Clause and enjoined its enforcement. We affirmed that decision without a published opinion. Quality Brands, Inc. v. Barry, 901 F.2d 1130, 1990 WL 51795 (D.C.Cir.1990) (per curiam).

In this case, the district court granted Kronheim’s motion for a preliminary injunction, finding that Kronheim would suffer irreparable harm if its purchase of the Jessup warehouse did not go forward immediately. Milton S. Kronheim & Co., Inc. v. District of Columbia, 877 F.Supp. 21, 30 (D.D.C.1995). The court held that the district court’s decision in Quality Brands collaterally estopped the District from disputing the constitutionality of the Storage Act. Id. at 26-27. The court also determined against the District an issue left open in Quality Brands: whether Congress in the ABC Act authorized the District to require local warehousing or itself imposed such a requirement. Id. at 27-29.

*197The District filed an interlocutory appeal from this preliminary injunction. On summary judgment, the district court confirmed its findings, issued a declaratory judgment and permanently enjoined enforcement of the District’s local warehousing requirement. The District appealed the final judgment and this court consolidated the two appeals. After the district court granted its preliminary injunction, Kronheim completed the Jessup warehouse transaction and is currently consolidating its inventory in the new warehouse.

II. Analysis

A. Collateral Estoppel

The first question we must address is whether the District is collaterally estopped from defending the constitutionality of the Storage Act because of the district court’s opinion in Quality Brands, Inc. Offensive collateral estoppel precludes a defendant “from relitigating identical issues that the. defendant litigated and lost against another plaintiff.” Jack Faucett Associates, Inc. v. AT&T Co., 744 F.2d 118, 124 (D.C.Cir.1984), cert. denied, 469 U.S. 1196, 105 S.Ct. 980, 88 L.Ed.2d 982 (1985).

Three conditions must be satisfied before a party can be estopped from relit-igating an identical issue previously decided:

(1) [T]he issue must have been actually litigated, that is contested by the parties and submitted for determination by the court.
(2) [T]he issue must have been “actually and necessarily determined by a court of competent jurisdiction” in the first trial.
(3) [Pjreclusion in the second trial must not work an unfairness.

Id. at 125 (quoting Otherson v. Department of Justice, INS, 711 F.2d 267, 273 (D.C.Cir.1983)). The constitutionality of the Storage Act was certainly actually litigated, contested by the parties, and submitted for determination by the court in Quality Brands. Further, it was “actually and necessarily determined by a court of competent jurisdiction,” at least at the district court level, in that litigation. However, our unpublished affir-mance of the district court decision, we must confess, provided no clarity as to what was actually or necessarily determined on appeal. Although our memorandum accompanying the judgment in that matter recited that we affirmed that decision “substantially for the reasons articulated in the opinion of the district court,” we expressly stated that at least one other “substantial argument” had not been properly raised and that we did not determine the Commerce Clause issue. Therefore, the district court, obviously unable to reverse our prior decision but receiving little guidance from it for precedential purposes, quite justifiably found the first two elements of collateral estoppel to be present. Also quite justifiably, the district court did not undertake a massive investigation of the further element, as that court would have been in no position to declare the Storage Act constitutional anyway in view of the circuit having reached the result we did in Quality Brands. We are not so constrained.

While we must follow existing circuit law as established in our precedent, “we are bound only by prior published opinions of this Circuit and not by other means of deciding cases.” United States v. North, 910 F.2d 843, 881 (D.C.Cir.1990) (emphasis in original). We are therefore free in this published opinion to depart from the conclusion reached in our earlier unpublished memorandum. Kronheim understandably offers our unpublished disposition for its preclusive effect. Our circuit rules, while forbidding the citation of unpublished opinions as precedent, nonetheless permit use of those dispositions for preclusion. D.C.Cir. R. 28(e). We do not, however, find preclusion here. Despite the presence of the first element of collateral estoppel, the presence of the second element is much less certain. The third element, that is, that “preclusion in the second trial must not work an unfairness,” is not likely to be present where the first or second is unclear. That is, logically there is a fair probability of unfairness in estopping the relitigation of an issue where the fullness of its first litigation is uncertain. Because we have concluded that our decision in Quality Brands did not necessarily involve adjudication of the issue before us, and because we have concluded that the district court was misled by our *198disposition, we have reexamined the fairness of applying collateral estoppel. We hold that the District was not collaterally estopped from litigating the issues decided in Quality Brands. We will therefore proceed to examine the merits of the District’s arguments on the constitutionality of the statute.1

B. The Constitutional Issues

The constitutional considerations before us are not simple ones to decide, or even to express. Basically, Kronheim’s position, tracking the position of the plaintiff in Quality Brands, is that the Storage Act, by discriminating against out-of-state storage of alcoholic beverages by wholesalers, unconstitutionally burdens interstate commerce under the Commerce Clause of the Constitution, Art. I, § 8, cl. 3. The Quality Brands decision held that it did, that the justifications offered for that discrimination did not pass strict scrutiny, and that the Twenty-first Amendment did not shield the District’s Act from interstate Commerce Clause analysis. Because we have held that the Quality Brands decision does not have preclusive effect, we will consider the District’s answers to Kronheim’s arguments.

Before we analyze the merits of the question, we will briefly review the application of the Commerce Clause and the Twenty-first Amendment to enactments of the District of Columbia as it is not immediately apparent that either constitutional provision applies, though after appropriate study, we conclude that each does.

1. The Commerce Clause

Article I, § 8, cl. 3, provides only that “Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Though the face of this provision does not appear to preclude anything, the Supreme Court has long held that the clause not only grants regulatory power to Congress, but also “denies the States the power unjustifiably to discriminate against or burden [interstate commerce].” Oregon Waste Systems, Inc. v. Department of Environmental Quality, 511 U.S. 93,-, 114 S.Ct. 1345, 1349, 128 L.Ed.2d 13 (1994) (citing, interalia, Welton v. Missouri, 91 U.S. 275, 23 L.Ed. 347 (1876)). The Framers intended this “plenary authority over interstate commerce ... ‘to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation.’” Id. (quoting Hughes v. Oklahoma, 441 U.S. 322, 325-26, 99 S.Ct. 1727, 1731, 60 L.Ed.2d 250 (1979)).

This “negative commerce clause” would clearly provide the framework for analysis of the Storage Act if the District of Columbia were a state. That is, we would necessarily examine the legislation to determine if it “unjustifiably ... discriminated] against or burden[ed] the interstate flow of articles of commerce.” Oregon Waste Systems, 511 U.S. at -, 114 S.Ct. at 1349. But D.C. is not a state. Nonetheless, the same analysis applies. Our precedents dictate that we apply to local legislation of the District the same interstate commerce analysis as we would to state laws. See, e.g., Electrolert Corp. v. Barry, 737 F.2d 110 (D.C.Cir.1984) (applying negative commerce clause analysis to District legislation banning the possession of radar detectors). Therefore, should we determine that state legislation such as the Storage Act would be invalid under the negative commerce clause analysis, it is as invalid as it would be if the District were a state.

Because one line of the District’s defense is that the Twenty-first Amendment empowers it to enact this legislation even in the face *199of the interstate Commerce Clause, we need also determine whether the Twenty-first Amendment applies to the District. Section 2, the relevant section of the amendment, states in its entirety:

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.

“By interpretation of [the Supreme] Court the Amendment has been held to relieve the states of the limitations of the Commerce Clause on their powers over” the transportation or importation into the state of “intoxicating liquor.” Carter v. Virginia, 321 U.S. 131, 137, 64 S.Ct. 464, 468, 88 L.Ed. 605 (1944). That “relief” has over the years been held far less than absolute, but before we consider the limitations on the states’ powers to regulate alcohol within their boundaries under the Twenty-first Amendment, we must first determine whether that Amendment is at all relevant to the District of Columbia, which is still not a state. Ultimately, we conclude that the District for present purposes is to be considered as if it were a state under the Twenty-first Amendment. Because our reasons for so concluding are partially subsumed within the next step of our analysis, we will proceed with that analysis on the assumption that the Twenty-first Amendment applies rather than engage in a discussion that would soon prove duplica-tive.

2. The Congressional Enactment

The District first asserts that the Storage Act is not a violation of the interstate Commerce Clause on the basis that Congress required in-District storage under the ABC Act itself. According to the District, this would shield the Act from Commerce Clause scrutiny, as Congress, acting under the explicit power grant of that clause, obviously cannot be constrained by the implicit negative commerce clause. While this is true as a generality, there is a possible exception applicable to legislation concerning only the District of Columbia. When Congress passes legislation for the District of Columbia under the power expressly delegated to it by Article I, § 8, cl. 17 of the Constitution, “[t]o exercise exclusive Legislation in all Cases whatsoever, over [the] District,” it acts “in like manner as the legislature of a State.” Gibbons v. District of Columbia, 116 U.S. 404, 407, 6 S.Ct. 427, 429, 29 L.Ed. 680 (1886). As such, it may choose “to exercise a part, only, of its powers,” Neild v. District of Columbia, 110 F.2d 246, 251 (D.C.Cir.1940), and limit itself thereby to those powers which would be available to a state legislature. If that is the case with the ABC Act, then arguably the interstate Commerce Clause would apply as if that Act were state legislation rather than a congressional enactment.

However, it does not necessarily follow from the fact that Congress legislates for the District that it intends to deprive itself “of the rest of its powers.” Id. Even in legislating for the District, Congress may, if it chooses, “exercise ... within the District, general legislative powers delegated to Congress by the Constitution.” Id. If it has done so in the ABC Act, then there is no colorable argument that the negative commerce clause renders that Act invalid. Therefore, we will proceed to determine whether Congress in enacting that legislation intended to act as the legislature of the District, arguably bound by the negative commerce clause, or as the general legislature, plainly not so bound.

Congress enacted the ABC Act in January of 1934, in direct and express response to the repeal of Prohibition by the Twenty-first Amendment the preceding month. That amendment by itself had worked a fundamental alteration in the balance between regulation of alcohol by the federal government and by the states. It did not, however, resolve the question as to the District of Columbia. Cf. Norman’s on the Waterfront, Inc. v. Wheatley, 317 F.Supp. 247, 254 (D.Vi.1970), aff'd, 444 F.2d 1011 (3d Cir.1971) (noting that “[t]hough the 21st Amendment shifted the balance of power to regulate alcoholic beverages in interstate commerce, it did not purport to alter the relationship between Congress and the territories”). Congress therefore passed the ABC Act to fill that void with respect to the District of Columbia. The apparent purpose of the Act read as a *200whole was to put the District in essentially the same position with reference to alcoholic beverage control as were the separate states. Thus, while it might be said that Congress was acting “in like manner as the legislature of a State,” Gibbons, 116 U.S. at 407, 6 S.Ct. at 429, we cannot say with any certainty that Congress intended to deprive itself of the full range of its powers as it was not only determining, state-like, what the regulation of alcoholic beverages should be after the end of Prohibition, but also making the Congress-like determination that the void existed and that it, exercising its plenary power under Art. I, § 8, cl. 17, should fill that gap. With respect to states, the whole range of regulation of alcoholic beverages is exercised under either the Twenty-first Amendment by the states themselves or the interstate Commerce Clause by the Congress. With regard to the District, Congress in 1934 was exercising both powers and it would make no sense to say the Congress could not regulate the interstate commerce aspect because Congress itself was the only body which could. We thus conclude that if Congress mandated the in-District limitation of the Storage Act, then the congressional mandate would not be invalidated by the negative commerce clause.

All of this however does not determine the case. Congress did not in fact mandate the storage requirement, although some provisions of the ABC Act point to an interpretation consistent with that requirement. It is one thing to contemplate the possibility of a requirement, another to mandate it. The District argues that Congress mandated the requirement when it provided in section 13 that “[e]ach license shall particularly describe the place where the rights of the license are to be exercised. Alcoholic beverages shall not be ... kept for sale ... by any licensee on premises other than the premises designated on the license.” D.C.Code § 25-114(e). It notes that section 11(c) of the Act also authorizes wholesalers to sell alcoholic beverages “from the place therein described.” D.C.Code § 25-111(a)(3). The District’s argument then couples these concepts with section 2 of the Act, D.C.Code § 25-102, which limits the territorial scope of the Act by providing that “[i]t shall apply only to the District of Columbia.” However, neither these nor the similar sections further cited by the District compel the conclusion that Congress intended that a wholesaler could store only at a place within the District.

Section 2 simply makes clear that the licensing process in question did not contemplate an attempt by Congress to retake the ground removed by the Twenty-first Amendment by regulating the commerce in alcohol within or among the several states. Limiting wholesalers to described premises does not say that those premises must be in the District. It may be that Congress so contemplated, it is not clear that Congress so mandated. Indeed, it is clear that it did not. If it had, the District Council would have had no need to have amended section 13 in the way now in controversy. Nor, would the District need to be defending that Amendment. It might be said that the precise reason we are here is that Congress did not mandate storage only within the District.

As Kronheim notes, the District itself construed the ABC Act as allowing out-of-District storage before the passage of the Storage Act, and even then grandfathered existing non-conforming warehouses. That is obviously inconsistent with its argument for congressional mandate. Kronheim can also argue credibly that section 24 of the Act, captioned “Licensees Doing Business Outside of the District,” compels its interpretation that wholesalers may store their beverages outside the District. But that section can equally be read as suggesting only that it is permissible under the Act for a District-licensed manufacturer and in limited circumstances a District-licensed wholesaler to do business outside the District. Because the ABC Act neither mandates nor forbids the storage limitation, we face the question left open by our unpublished resolution of Quality Brands: that is, does the Storage Act violate the negative commerce clause?

3. The Storage Act

Because we have determined that the local warehousing requirement of the Storage Act is a creature of the enactment *201by the District of Columbia Council and not the Congress, we must determine if it violates the Commerce Clause. In making this determination, we must at last consider whether the District of Columbia is treated as a state for purposes of the Twenty-first Amendment and, if so, what effect section 2 of that Amendment has on the Commerce Clause implications for the Storage Act. One-half of the equation is simple. That is, we will treat the District of Columbia as a state for purposes of Twenty-first Amendment analysis. As noted above, Congress determined at the time of the passage of the ABC Act in response to the repeal of Prohibition in the Twenty-first Amendment that the District would function in a state-like manner for alcohol regulation purposes. We have no warrant to interfere with Congress’s plenary power under Art. I, § 8, cl. 17, “[t]o exercise exclusive Legislation in all Cases whatsoever, over [the] District.” Thus, when the District Council, acting under its delegated legislative authority, amended the Code, its act was subject to the Commerce Clause, as affected by the interplay between that Clause and the Twenty-first Amendment.

The first step in analyzing whether a state law unjustifiably discriminates or burdens interstate commerce under the “negative” commerce clause is to

determine whether it “regulates evenhandedly with only ‘incidental’ effects on interstate commerce, or discriminates against interstate commerce.” Hughes [v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 260 (1979).] ... If a restriction on commerce is discriminatory, it is virtually per se invalid. By contrast, nondiscriminatory regulations that have only incidental effects on interstate commerce are valid unless “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.”

Oregon Waste Systems, 511 U.S. at-;, 114 S.Ct. at 1350 (citations omitted).

The District argues that the local warehousing requirement does not impermissibly burden interstate commerce. First, it contends that the requirement does not favor District manufacturers over out-of-state manufacturers as all alcoholic beverages sold in the District are manufactured outside the District, and, even if alcoholic beverages were produced in the District, they would be subject to the same requirement. Second, the District argues that the requirement does not discriminate against out-of-state labor, noting that the ABC Act and the Storage Act do not impose a residency requirement upon workers at storage facilities. And third, the District claims that the requirement does not favor District wholesalers over out-of-state wholesalers as the Acts apply only to wholesalers licensed by the District.

Kronheim contends that the storage requirement discriminates against interstate commerce in warehouse facilities and storage space. It argues: “In essence, the Storage Act is a discriminatory local content and processing requirement, which requires alcoholic beverage wholesalers to' acquire and maintain ... [an] element[ ] of production— commercial real estate — within the boundaries of the District.” We agree with the appellee and find the local warehousing requirement is patently discriminatory. The requirement not only deprives out-of-state businesses access to a local market, C & A Carbone, Inc. v. Clarkstown, N.Y., 511 U.S. 383,-, 114 S.Ct. 1677, 1681, 128 L.Ed.2d 399 (1994), but also requires business operations be performed in the District even if they could be performed more efficiently elsewhere. Pike v. Bruce Church, Inc., 397 U.S. 137, 145, 90 S.Ct. 844, 849, 25 L.Ed.2d 174 (1970).

In this aspect, our analysis of the Storage Act is similar to the Supreme Court’s consideration of an ordinance of a New York municipality requiring specified local handling of solid waste which had the effect of depriving out-of-state businesses of a local market by preventing them from performing an initial processing step reserved for a favored local operator. Though the town argued that the ordinance was not discriminatory because it did not differentiate among items of solid waste on the basis of geographic origin, the Court disagreed, noting that “the article of commerce is not so much the solid waste itself, but rather the service of processing and disposing of it.” C & A Carbone, Inc., *202511 U.S. at -, 114 S.Ct. at 1682. As appellee notes, the article of commerce at issue here is not so much the sale of alcoholic beverages, but rather, the service of storing the beverages. Regarding this stream of commerce, the Storage Act discriminates as it allows only wholesalers who store then-beverages within the District to sell then-product. In Carbone, the Court struck down the solid waste ordinance holding that “[i]n this light, the ... ordinance is just one more instance of local processing requirements that [the Court] long ha[s] held invalid.” Id. The same reasoning applies here, and we hold that the Storage Act is facially discriminatory.

Because the statute is facially discriminatory, Commerce Clause jurisprudence, ignoring for the moment the effects of the Twenty-first Amendment, would dictate that we should invalidate the statute unless the District can show that the local warehousing requirement “advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.” New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 278, 108 S.Ct. 1803, 1810, 100 L.Ed.2d 302 (1988); see also Oregon Waste Systems, 511 U.S. at-, 114 S.Ct. at 1351. This inquiry requires the strictest scrutiny. Hughes, 441 U.S. at 337, 99 S.Ct. at 1736. Appellant advances two such purposes. First, the District contends that the storage requirement serves important inspection and enforcement interests, noting that the District’s power to enforce its alcoholic beverage laws is limited to premises within its borders. Second, the District argues that the storage requirement is integral to both maintaining its “three-tier system of distribution,” which strictly separates the functions of supplier, wholesaler and retailer, and discouraging creation of a “tied house,” in which one firm controls the entire chain of distribution.

Appellee contests both of these putative regulatory interests. First, appellee argues that the local warehousing requirement does not serve inspection or enforcement interests as the District has never inspected any wholesaler’s warehouse or goods prior to distribution to retailers, nor has the District explained why inspections could not occur at a warehouse outside the District. Second, appellant contends that the District makes “little effort to maintain a three-tier level of distribution,” noting that even if the District did have such an interest it could be equally served in other non-discriminatory ways. The district court ruled with appellee, relying on the collateral estoppel worked by Quality Brands. Because we have ruled that we are not so estopped, we will examine'the question anew.

The court in Quality Brands, applying strict scrutiny, found that appellant’s justifications did not survive scrutiny under the Supreme Court’s final test from Hughes: that is, “whether non-discriminatory alternatives exist to serve the local purpose.” Quality Brands, 715 F.Supp. at 1142. In reaching that conclusion, the Quality Brands court examined the history of the adoption of the local warehousing requirement, noting that at the time of the Council’s vote on the amendment, the general counsel raised the question of the Act’s constitutionality, alerting the board to the negative commerce clause implications of protectionist legislation. Id. at 1141. A member of the Council suggested “several putatively legitimate state interests which would be promoted by requiring geographic proximity of warehouses, e.g., auditing company records, monitoring compliance with the ABC laws, monitoring licenses, cheeking tax forms for audits,” and similar enforcement goals. Id. The Quality Brands court rejected the enforcement rationales along with the three-tier licensing system as not established under the lack of nondiscriminatory alternatives test. If this regulation dealt with any industry not governed by the Twenty-first Amendment—that is, any industry except alcoholic beverages— we might well be inclined to agree. However, in the case of alcohol, the problem is a more difficult one. Because it is alcohol that the Storage Act regulates, the Twenty-first Amendment does apply, and we must extend our analysis.

As we noted above, “[b]y interpretation of [the Supreme] Court the Amendment has been held to relieve the states of the limitations of the Commerce Clause on their pow*203ers over” the transportation or importation into the state of “intoxicating liquor.” Carter v. Virginia, 321 U.S. 131, 137, 64 S.Ct. 464, 468, 88 L.Ed. 605 (1944). As we further noted, however, that relief has in more recent years been held far less than absolute. The more recent case Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984), is a more current authoritative delineation of the relationship between the Commerce Clause and the Twenty-first Amendment. In Bacchus, the Supreme Court considered an Hawaiian statute which imposed an excise tax on liquors sold at wholesale but provided exemptions from that tax for certain locally produced alcoholic beverages. The Court, noting that “[t]he legislature’s reason for exempting” the local liquors was to “promote the establishment of a new industry” and “ ‘to help’ in stimulating” a local industry. 468 U.S. at 270, 104 S.Ct. at 3055 (quoting In re Bacchus Imports, Ltd., 65 Haw. 566, 573-74, 656 P.2d 724, 730 (1982)).

The Supreme Court held that this protectionist legislation “violated the Commerce Clause because it had both the purpose and effect of discriminating in favor of local products.” Bacchus, 468 U.S. at 273, 104 S.Ct. at 3056. The state of Hawaii, argued that the Twenty-first Amendment saved the tax exemption from the fate it would have endured under “ordinary Commerce Clause principles.” Id. at 274, 104 S.Ct. at 3058. The Court rejected that argument, noting that “[t]he central purpose” of the Twenty-first Amendment “was not to empower States to favor local liquor industries by erecting barriers to competition.” Id. at 276,104 S.Ct. at 3058. Because Hawaii’s justification for its tax structure discriminating against interstate commerce was the promotion of local industry, the statute before the Court “constitute[d] mere economic protectionism” and was “therefore not entitled to the same deference as laws enacted to combat the perceived evils of an unrestricted traffic in liquor.” Id.

Kronheim may eolorably and even credibly argue that the District’s local warehousing requirement is protectionist. Indeed, we cannot say with any assuredness that protectionism is not a purpose of the legislation. Nonetheless, the Storage Act both by its terms and according to its history is designed to advance the core enforcement purposes protected by section 2 of the Twenty-first Amendment. In this case then, the legislative body operated with a mixed motive.

While under Bacchus and other Supreme Court decisions, e.g., 324 Liquor Corp. v. Duffy, 479 U.S. 335, 107 S.Ct. 720, 93 L.Ed.2d 667 (1987), the Supreme Court has been consistently emphasizing limitations on the Twenty-first Amendment power of the states, the nonprotectionist side of the District’s mixed motive places section 2 squarely within the Amendment’s ambit. Thus, unlike the Hawaiian statute, it was “enacted to combat the perceived evils of an unrestricted traffic in liquor,” as set out in the councilman’s statement analyzed. by the Quality Brands court. The Bacchus decision struck down the Hawaiian statute “because the tax "violates a central tenet of the Commerce Clause but is not supported by any clear concern of the Twenty-first Amendment.” Bacchus, 468 U.S, at 276, 104 S.Ct. at 3058. The Supreme Court has long recognized that the Amendment “created an exception to the normal operation of the Commerce Clause,” Craig v. Boren, 429 U.S. 190, 206, 97 S.Ct. 451, 461, 50 L.Ed.2d 397 (1976), and that the resultant authority of the state under the Amendment over importation of intoxicants “is transparently clear.” Id. at 207, 97 S.Ct. at 462. The Court has also concluded that the state’s authority under the Amendment includes the “plenary power to regulate and control ... the distribution, use, or consumption of intoxicants within her territory after they have been imported.” Department of Revenue v. James B. Beam Distilling Co., 377 U.S. 341, 346, 84 S.Ct. 1247, 1250, 12 L.Ed.2d 362 (1964). Nothing in Bacchus or the other later cases overrules the principles iterated in the Boren and Beam cases. Despite the mixing with the tainted motive of protectionism, D.C.’s claimed motives of “legitímate state interests which would be promoted by requiring geographic proximity of warehouses, e.g., auditing company records, monitoring compliance with the ABC laws, monitoring licenses, cheeking tax forms for audits, etc.,” Quality Brands, 715 F.Supp. at *2041141, falls squarely within the state’s core enforcement powers over alcohol.

Eloquently testifying to the legitimacy of the District’s claims, as well as to the potentially dire consequences of the precedent we might establish by striking the Act, are an array of state statutes subject to potential attack on the same Commerce Clause basis. See, e.g., Ark.Code § 3-5-216(a) (1987) (“[L]ight wines or beer ... may be received and kept in storage at a distributor’s place of business in this state”); Cal. Bus. & Prof. Code § 23355.1(a) (1992) (“Deliveries of distilled spirits by a licensee to a retail licensee may be made from the vendor’s licensed premises or from a warehouse located within the county in which the vendor’s licensed premises are located ...”); Colo.Rev.Stat. § 12-47-115(l)(a)(I), (b)(1), (c.5) (1985 Rep. Vol.) (“A wholesaler’s liquor license shall be issued ... for the following purposes only: (I) To maintain and operate two warehouses and one sales room in this state ... ”); Del.Code tit. 4, § 501(f) (1993) (“No person may import into this State any alcoholic liquor unless it is delivered directly to a licensed warehouse or warehouses in Delaware...and is unloaded and physically stored in said warehouse or warehouses.”); Fla. Stat. § 561.54 (1987) (“It is unlawful ... to make delivery from without the state of any alcoholic beverage to any person ... within this state, except ... qualified bonded warehouses in this state”); N.J.Rev.Stat. § 33:1-11 (1993) (“[T]he delivery of such alcoholic beverages by the holder of [a plenary wholesaler’s] license to retailers ... shall be from inventory in a warehouse located in New Jersey which is operated under a plenary wholesale license.”); Minn.Stat. § 340A.305 (1994) (“All licensed wholesalers must own or lease warehouse space within the state and must have adequate delivery facilities to perform the function of a wholesaler_ [Alcoholic beverages manufactured outside the state ... must be unloaded into the wholesaler’s warehouse located in this state. Licensed wholesalers may distribute alcoholic beverages only from the warehouse”); Okla. Stat. Ann. tit. 37, § 521.E (1995) (“A wholesaler license shall authorize the holder thereof to operate a single bonded warehouse with a single central office together with delivery facilities at a location in this state only at the principal place of business for which the wholesaler license was granted.”); S.D. Compiled Laws Anno. § 35-4-45 (1992) (“Any bonded warehouse within South Dakota may, upon compliance with the provisions of this section, receive alcoholic beverages for storage purposes”).

We therefore conclude that although the Act facially violates the negative commerce clause, it is supported by a clear concern for the core enforcement function of the Twenty-first .Amendment, and we therefore reverse the district court’s decision declaring the statute unconstitutional.

III. Conclusion

For the reasons set forth above, we conclude that the local warehousing requirement of the Storage Act is constitutional. The decision of the district court is reversed.

. The dissent takes our result to task for "raising] a number of questions, [including] how today's decision will affect Quality Brands.” Dissent at 213 n.9. We obviously do not decide that question as it is not before us, but as our dissenting colleague herself tacitly recognizes, that question will be governed, not by nonmutual offensive collateral estoppel, but rather by case preclusion between the parties to the very action in question, the form of preclusion traditionally known as res judicata. See Dissent at 213 n.9, and authorities collected therein. Should the District attempt to act against Quality Brands without further legislative enactment, the effects of this decision on the relationship between the parties to the original action will then be ripe for decision.