Discarding the North Dakota Dictum: An Argument for Strict Scrutiny of the Three-Tier Distribution System
In Granholm v. Heald, the Supreme Court held that states must treat instate and out-of-state alcoholic beverages equally under the dormant Commerce Clause and established a heightened standard of review for state alcohol laws. Yet in dictum the Court acknowledged that the three-tier distribution system-a regime that imposes a physical presence requirement on alcoholic beverage wholesalers and retailers-was “unquestionably legitimate.” Though the system’s physical presence requirement should trigger strict scrutiny, lower courts have placed special emphasis on Granholm’s dictum, refusing to subject the three-tier distribution system to Granholm’s heightened standard of review. This Note argues that the dictum should be discarded and that courts should carefully scrutinize the three-tier distribution system. Under Granholm’s heightened standard of review, the three-tier distribution system would be found unconstitutional.