Bacchus Imports Ltd. v. Dias

PETITIONER: Bacchus Imports Ltd.
RESPONDENT: Dias
LOCATION: Chicago, Illinois

DOCKET NO.: 82-1565
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: Supreme Court of Hawaii

CITATION: 468 US 263 (1984)
ARGUED: Jan 11, 1984
DECIDED: Jun 29, 1984

ADVOCATES:
Frank H. Easterbrook - Argued the cause for the appellants
William David Dexter - Argued the cause for the appellee Dias

Facts of the case

The Hawaii Liquor Tax, enacted in 1939, imposed a twenty percent excise tax on wholesale liquor sales. Certain locally produced alcohol products, such as okolehao brandy and fruit wine, were exempt from the tax. Bacchus Imports, a liquor wholesaler, challenged the law's validity and sought a refund of $45 million from the state of Hawaii.

Question

Did Hawaii law violate the Import-Export Clause and the Commerce Clause of the Constitution?

Media for Bacchus Imports Ltd. v. Dias

Audio Transcription for Oral Argument - January 11, 1984 in Bacchus Imports Ltd. v. Dias

Warren E. Burger:

We'll hear arguments next in Bacchus Imports.

Mr. Easterbrook, I think you may proceed whenever you're ready now.

Frank H. Easterbrook:

Mr. Chief Justice, and may it please the Court:

The statute at issue in this case requires wholesalers of liquor to pay a tax of 20 percent on their wholesale price.

The statute defines liquor to include all alcoholic beverages, but it exempts, at least from 1971 to 1981, fruit wine, okolehao, made in Hawaii.

Thus, all products from out of state are taxed at a 20 percent rate, while most liquor made in Hawaii was not taxed.

The difference can be many dollars per bottle.

The challenge we press here is based on the Commerce Clause, the Import-Export Clause, and the Equal Protection Clause, because the principles underlying those clauses are very similar as applied to differential taxation of interstate transactions.

I will focus on the Commerce Claus at oral argument.

William H. Rehnquist:

Mr. Easterbrook, would your client have had any complaint if the exceptions for the Hawaiian drink and the pineapple wine were not included in the statute?

Frank H. Easterbrook:

You mean if they were administrative exceptions, Your Honor?

William H. Rehnquist:

No.

Simply if... if the statute had just been across the board.

Frank H. Easterbrook:

An argument was raised in the state court that a tax of 20 percent levied on a base which includes all transportation charges and earlier taxes operates in practice as a discrimination under the principles of Pike against Bruce Church, but that argument is not being pursued in this Court.

The argument on the Commerce Clause that we make here is rather straightforward.

Since 1875 this Court has held that a state may not levy different taxes on products produced in state and products brought in from out of state.

Such a differential taxation creates the very multiplicity of preferential trade zones that the Commerce Clause was designed to eliminate.

In response to that fairly simple argument, the State Supreme Court gave three answers.

One is that this tax is not designed to discriminate against out-of-state products, but instead to help local Hawaiian industry, and that therefore it has a legitimate purpose.

The second argument is that it's permissible to discriminate against out-of-state products so long as you permit all wholesalers to sell both the taxed product and the untaxed product.

And third, the Supreme Court of Hawaii argued that the tax is fairly apportioned.

Harry A. Blackmun:

Mr. Easterbrook, Paradise and McKesson did not appeal or did not come here, as they, except as Respondents?

Frank H. Easterbrook:

They did not appeal.

They are Appellees appearing in support of Appellant.

Harry A. Blackmun:

Is there a reason for not joining you and your client?

Frank H. Easterbrook:

I can't speak for them, Your Honor, but McKesson has sent a letter to the Clerk saying that they relied on the Supreme Court's rule that one appeal is enough from a single judgment.

There was only one judgment entered by the Supreme Court of Hawaii.

And their view was that one appeal having been filed, they did not need to file additional notices of appeal to bring their case here.

Harry A. Blackmun:

Get a free ride, hmm?

Frank H. Easterbrook:

Yes.