A Letter from a Drug Enforcement Agent
- posted by Jim Leitzel @ 10:41 AM

The letter appeared one week ago in the Washington Times. The author indicated that he "served almost 30 years as a federal drug enforcement agent." He was writing to express support for the recent Supreme Court decision that allows judges to depart from the sentencing guidelines for cocaine offenses. In the course of the letter, this drug war veteran avers: "If the U.S. government wishes to continue its futile and counterproductive crusade against illegal drug use, it should regard all illegal drug trafficking and use as equally deserving of punishment." (While I do not think the drug war is futile, I do think it is counterproductive.) Speaking of law enforcers questioning the drug war...

Labels: drugs, sentencing, Supreme Court

 
The Next Attorney General (?) and Porn
- posted by Jim Leitzel @ 10:45 PM

The two attorneys general nominated by George W. Bush and confirmed by the Senate, John "Comstock" Ashcroft and Alberto Gonzales, both promoted anti-obscenity as a priority of their department's enforcement efforts. But those efforts never met the high standards of some anti-porn organizations. Can we hope for a further perfecting of the anti-porn plan if Michael Mukasey becomes AG? Senator Orrin Hatch wants to know, especially with respect to a campaign against mainstream porn, and the nominee offers reassurance: "...we have to make sure that this stuff does not affect children and does not wind up undermining families." Is that in Miller v. California, the notion that we can suppress sexually-explicit material if it undermines families? It must be, what with Mr. Mukasey being a retired judge and all. Mukasey seems much more categorical with respect to mainstream porn than waterboarding.

Labels: obscenity, pornography, Supreme Court

 
How Laws are Made, Ohio Version
- posted by Jim Leitzel @ 10:16 PM

In mid-2005, when the Supreme Court ruled that states could not discriminate against out-of-state wine producers in setting their rules for direct shipments to consumers, Vice Squad member Michael noted that the required unification might not lead to liberalization of direct shipment laws -- states could unify their rules (that is, end discrimination against out-of-state producers) by attaching to in-state producers the same burdens they had previously imposed only upon the out-of-state vintners. Ohio has taken a different tack, however, one that makes an end run around the law. Only small vineyards are allowed to make direct shipments to consumers. Why lo and behold, what do you know, all of Ohio's in-state wine makers are small enough to qualify to make direct shipments! Too bad that those big California wineries don't make the grade, but hey, this is evenhanded legislation.

I think that this law will have a hard time surviving judicial review. The fig leaf covering the unconstitutionality is that Ohio's definition of a small winery used a production quota that wasn't just any arbitrary number that protected all of the in-state producers. Rather, Ohio pulled the quota from the federal tax code, from a provision that offers a tax break to small vineyards. But the intent of this Ohio law is so obviously discriminatory -- the protective intent is admitted by one of the supporters, who says it was viewed as a 'jobs bill' -- that a federal court should have little trouble seeing through or around the fig leaf.

Details of how such a bill could become a law -- not for the squeamish -- are here. Thanks to Jonathan Adler of the Volokh Conspiracy for commentary and the pointer.

Labels: alcohol, federalism, free trade, licensing, Supreme Court

 
A Filtering Irony
- posted by Jim Leitzel @ 10:47 AM

Last night I posted about the initiative in Monroe County, New York, to make it difficult for library patrons to access "pornographic" websites on the internet. The post was motivated by this (not work safe) article in Adult Video News. The AVN article quoted Bill Smith, a Monroe County legislator. I didn't mention the quote in the blog post, but I e-mailed Mr. Smith last night concerning his quote. I wouldn't have mentioned the e-note on Vice Squad at all, except that my e-mail to Mr. Smith was not received because it was filtered out, according to the automatic reply I received last night. This is not the first time this has happened to me -- because vice policy-related e-mails often contain words which alarm e-mail filters, they occasionally are screened out by over-inclusive filters. Yes, filters are both under- and over-inclusive. In Buffalo, soon-to-be required filters will be screening out internet content at public libraries. I suppose that it might be hard for legislators to imagine that there might be "legitimate" reasons to access "pornographic" websites, but as a vice policy researcher who both frequently uses library internet connections and who visits sites such as AVN.com, I can assure them that it is so. I take these filters somewhat personally, as I am more likely than most people to be inconvenienced by them. Anyway, as I cannot successfully transmit my e-mail to Mr. Smith directly, I will append the text of it below. I was pointing out the difference between a library collection decision and the filtering mandate, using Justice Souter's words. (I misspelled Justice Souter's name in the original email but correct it below; I also omit the url of the avn.com article in my reproduction of the email.) Hello, I just read a story by Jed Nottingham, "Rochester Library Will Censor Web Viewing," which included a quote from you. (The article is at avn.com, a website that could easily fall afoul of internet filters; the article's precise url is [omitted here -- see above].) The paragraph including your quote is... "If adopting the recommendation is censorship, then this library is already in big trouble," said Bill Smith, the Republican majority leader of the county legislature and a county library board liaison, "[The] act of choosing books is censorship and [you] have a collection policy that implies and, in fact, results in rejection of material all the time." I just wanted to point put that there is what I take to be a significant difference between a collection policy and the internet filtering. I'll let Justice Souter make the point, from his dissent in US et al. v. American Library Association, Inc., et al., 539 U.S. 194 (2003): ...In the instance of the Internet, what the library acquires is electronic access, and the choice to block is a choice to limit access that has already been acquired. Thus, deciding against buying a book means there is no book (unless a loan can be obtained), but blocking the Internet is merely blocking access purchased in its entirety and subject to unblocking if the librarian agrees. The proper analogy therefore is not to passing up a book that might have been bought; it is either to buying a book and then keeping it from adults lacking an acceptable “purpose,” or to buying an encyclopedia and then cutting out pages with anything thought to be unsuitable for all adults. All the best. Regards, Jim Leitzel Update! Blocked again! I emailed Monroe County to provide the url of this post, and once again, could not get my e-mail through. That's quite an efficient email filter they have there. I'll try another message from my yahoo account. Further update: it looks as if the yahoo e-note made it past the vigilant Monroe County filter.

Labels: internet, pornography, Supreme Court

 
Library Internet Censoring in Rochester
- posted by Jim Leitzel @ 11:57 PM

Thanks to CIPA (Children's Internet Protection Act) and its Supreme Court blessing, many public libraries throughout our land already have filters aimed at blocking smut placed on all of their internet-connected computers. Monroe County, New York, intends to go CIPA one better, according to this (not work safe) AVN.com article about the new library smut policy:

The policy, which is expected to extend to all libraries in the county, calls for use of the library's Internet-filtering system to block all pornographic sites unless — after a written request — an administrator deems a site appropriate for a patron to view. While the county library board adopted the policy, there was no clear sense of how to implement it.

They also finessed the matter of what exactly constitutes a pornographic website.

Despite the CIPA precedent, I believe that there is a chance that the Monroe County policy could be found to violate the First Amendment. CIPA survived a per se challenge, but Justice Kennedy wrote a concurring opinion specifically for the purpose, it seems, of pointing out that CIPA might later be challenged not on its face, but as applied, if the method of disabling the filter for an adult patron proved onerous: "If some libraries do not have the capacity to unblock specific Web sites or to disable the filter or if it is shown that an adult user's election to view constitutionally protected Internet material is burdened in some other substantial way, that would be the subject for an as-applied challenge, not the facial challenge made in this case." Sounds to me like having to ask permission from an administrator in writing, and possibly even being turned down, burdens an adult's choice to view constitutionally protected material in a substantial way.

Labels: CIPA, internet, pornography, Supreme Court

 
Kansas Community Standards
- posted by Jim Leitzel @ 10:36 PM

Sexually-explicit forms of speech in the US can be regulated or banned provided that the three-part test from the 1973 case of Miller v. California is satisfied. The first part of the "Miller test" is that the work, taken as a whole, and in applying contemporary community standards, appeals to the prurient interest in sex. The second prong of the Miller test relating to "patent offensiveness" also relies upon contemporary community standards. (The third prong concerning the lack of serious literary, artistic, political or scientific value is not to be judged by community standards, according to a later Supreme Court decision, Pope v. Illinois (1987).)

I bring it up because I am wondering about the latest activities of anti-obscenity crusaders in Kansas. They have presented county prosecutors with petitions urging that grand juries be empaneled with the aim of bringing obscenity charges against some local businesses -- not one or two businesses, but, er, 32. Doesn't the very fact that they can identify 32 filth peddlers suggest that these businesses are operating in accord with community standards? I mean, maybe one or two businesses might be able to make a go of it even while flying wildly in the face of community standards -- but 32?

The anti-obscenity crusaders should be careful in opening up this petition thing. In Hong Kong, a student journal that included a quiz asking about incest and bestiality fantasies provoked 184 complaints, leading to a finding that the journal was indecent. But then a website went up describing some Biblical scenes; more than 1700 complaints have now been submitted to the indecency authorities about the Bible.

Labels: Asia, Kansas, obscenity, pornography, Supreme Court

 
The Posadas Case: The Way Ahead for Vice Advertising?
- posted by Jim Leitzel @ 11:40 PM

Vice Squad has long been concerned (see, for instance, the August 26, 2004 post on Rubin v. Coors (1995)) that interpretations of the First Amendment that preclude stringent regulation of commercial advertising for legal goods will mean less freedom, not more, as the government will choose to keep vice goods (such as marijuana or heroin, for instance) illegal rather than adopt a legalization scheme that must tolerate unfettered advertising. There is one Supreme Court decision, however, that I think points a way forward for legalized vice. The decision was rendered in Posadas de Puerto Rico Associates v. Tourism Company, 478 U.S. 328 (1986). The Posadas case concerns limitations on casino advertising in Puerto Rico.

When the legislature of Puerto Rico legalized casino gambling in the late 1940s, it simultaneously prohibited advertising by the casinos directed towards residents of Puerto Rico. Advertising aimed at foreign tourists, however, was permitted. By a 5-4 majority, the US Supreme Court, employing the Central Hudson test, upheld the legitimacy of the advertising restrictions. (The advertising restrictions that were upheld were not the full set adopted by the Puerto Rican legislature, but a narrower version that had been constructed by Puerto Rican courts.) The majority opinion also argued that “the greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling.” This commonsense notion has attracted a good deal of critical commentary (including some from later opinions by Supreme Court justices), and indeed, appears to fly in the face of the Central Hudson approach to regulating commercial speech.

In many circumstances, the existence of a “greater” power need not imply the existence of a “lesser” power. For instance, capital punishment for convicted murderers is constitutional in the United States, while the (arguably) lesser power of extreme torture is not constitutional. (That is, torture would be inconsistent with the Eighth Amendment’s protection against cruel and unusual punishments.) But in terms of vice regulation, the power (if it exists) to ban one of the traditional vices probably should include the lesser power of legalizing the vice while controlling the advertising of the vice, as the Posadas case suggests for casino gambling. A legal-sales-but- controlled-advertising regime essentially consists of an offer from the government to license sellers, conditional on their willingness to refrain from specified types of advertising. The threat not to license the vices in the absence of ad controls is quite credible, in that the traditional vices legally can be banned today, and often have been banned in the past. (And of course, many vice- related activities currently are prohibited in the US.) Such conditional offers, therefore, have a strong claim for promoting both individual liberty and speech, relative to the alternative that would arise if such licenses were not available. A conditional license to sell ketchup only in the absence of advertising cannot similarly be argued to be speech-and-liberty enhancing – a threatened ban on ketchup is neither credible nor traditional. Therefore, a Posadas-like acceptance of the constitutionality of conditional vice licenses need not imply that the government can more generally confer benefits only if speech rights are waived. (On this point in particular, though also for this post more generally, I am indebted to Mitchell N. Berman, “Commercial Speech and the Unconstitutional Conditions Doctrine: A Second Look at ‘The Greater Includes the Lesser.’” Vanderbilt Law Review 55(3): 693-796, April 2002; the working paper version can be found here.) The traditional vices have proven their exceptionalism from most other types of consumer goods and services over centuries, and it is appropriate that the legal regime recognize that exceptional history.

Labels: casino, marketing, Supreme Court

 
Seconds on Secondary Effects
- posted by Jim Leitzel @ 10:55 PM

A couple days ago Vice Squad mentioned the "secondary effects" analysis that is the dominant strain in the body of US Constitutional law relevant for erotic dancing. The secondary effects are unhappy developments, including increased crime and lower property values, that might arise in the vicinity of an adult-oriented establishment. They serve as a basis for justifying, in a constitutional sense, some restrictions on the nature of adult-oriented activities that are permitted.

In California, purported secondary effects are being put to a new use, an attempt to justify a tax aimed specifically at the porn and adult entertainment industries. The proceeds of the proposed tax are earmarked for programs that combat crime.

The folks at Adult Video News are not impressed by the pending bill (as always with AVN, the link is not work-safe), calling it "a clearly unconstitutional attempt to selectively tax speech on the basis of its content." I agree with their characterization. The Supreme Court's secondary effects analysis is only applicable for controls upon speech that are deemed to be content-neutral, that would apply just as well to political speech as to commercial speech as to any other type of speech. It is a stretch to label a nude dancing ban (or, for instance, a G-string requirement) as content neutral, but that stretch is now established law. A tax on adult-themed enterprises is much broader than a nude dancing ban, and as it doesn't seem to apply to any other types of businesses that might spur crime or lower property values, seems on its face to be a content-based restriction on speech. And these sorts of restrictions must pass a higher bar to be consistent with the Constitution -- a bar placed so high that few restrictions can clear it.

There's a nice post from October 2006 concerning the jurisprudence around secondary effects on a blog entitled "talkbacknorthampton," which has many interesting posts defending free speech.

Labels: dancing, obscenity, pornography, Supreme Court, taxes

 
Nude Dancing and Secondary Effects
- posted by Jim Leitzel @ 11:55 PM

Can a municipality ban nude dancing in adult establishments? The Supreme Court has ruled that erotic dancing is a form of expressive conduct (like flag burning or draft card burning) and as such is entitled to a measure of the constitutional protections offered to speech. In practice, what this means is that a municipality can not just ban nude dancing, unless it provides a fig leaf of a rationale by claiming that what it really wants to do is to combat the nasty secondary effects associated with nude dancing, such as prostitution and public nuisance. And the fig leaf of a rationale doesn't materialize just because it is asserted that a requirement of G-strings is necessary to combat those secondary effects; rather, some sort of reference to actual evidence is required, too. Hartford, Vermont, couldn't be bothered with looking at any evidence before it passed a ban on nude dancing -- after the fact its planning department did manage to review the experiences elsewhere. But this lackadaisical approach was found by a Federal court to render the ordinance unconstitutional, and the 2nd Circuit Court of Appeals recently upheld the lower court's opinion.

Now does anyone really believe that nude dancing creates negative secondary effects but that allowing only nearly-nude dancing is a reasonable way of controlling these effects? Well, no. This obvious logical deficiency in the law provided a starting point for a provocative analysis by Amy Adler; here's a short excerpt from her abstract:

I show that the legal struggles over the meanings and the dangers of the gyrating, naked female body can be fully understood only when placed within a broader context: the highly charged terrain of female sexuality. By rereading the cases as texts regulating gender and sexuality and not just speech, a dramatically new understanding of them emerges: The nude dancing cases are built on a foundation of sexual panic, driven by dread of the female body.

Vice Squad had a nude dancing frenzy a few years ago; here's the May 28, 2004 post. (This link seems to work, but other links to previous posts basically have been failures since an 'upgrade' to Blogger's software -- the links generally take you only to the month of the relevant post. I will try to remember to include the actual date of linked previous posts for those with too much time on their hands. And in Blogger's defense, I must say that I like the new "label" feature, so that you can easily reach all of Vice Squad's dancing-related posts. One problem with this feature, however, is that our blog had about 1200 unlabeled, pre-existing posts, and the process of going back and attaching labels has been haphazard. But we will soldier on.)

Labels: dancing, obscenity, Supreme Court

 
US Supreme Court on punitive damages in Philip Morris v. Williams
- posted by Michael @ 9:09 PM

Earlier today, in a 5-4 decision, the US Supreme Court set aside a $79.5 million punitive damages determination that a jury in Oregon awarded to a smoker's widow in a case against Philip Morris. The court returned the case, or rather the determination of the award, to the Oregon Supreme Court that earlier upheld it. You can read about this case and today's decision here and here, for example. The Supreme Court majority's reasoning seemed to be confused and confusing, as was pointed out by the dissenters. Justice Ginsburg, with whom Justice Scalia and Justice Thomas joined, used rather strong language in her dissent (e.g., "The Court's order is ... all the more inexplicable..." and "The answer slips from my grasp"). Other dissenters seemed similarly amazed at the majority's opinion. I do not think, however, that I am qualified to judge the details of legal reasoning. What surprised me was how far this reasoning seemed to be from anything that economists have to say about punitive damages.

I do not have much time tonight and so my explanations are going to be rather sketchy. (I might write more about this later though.)

A typical economics argument is that social efficiency (defined roughly as maximization of social wealth) requires that damage awards in tort cases be equal to the damage caused by the tortfeaser. This way, the potential injurers would have the incentives to take the socially efficient amount of precaution. Making damages too high (low) would result in too much (little) precaution. All that sounds reasonable -- but why then do we have punitive damages? There is no settled view on this issue. David Friedman in his book Law's Order (starting on p. 207) lists several potential reasons. (This book is available on the web in its entirety, so you can read the details at the address above.) Here is a rundown on his list and its (non-)applicability to today's decision (the italics below are quotes from Friedman):

1. Punitive damages do not exist. What are misinterpreted as punitive damages are simply damages for hard-to-measure injuries. This clearly doesn't work as $79.5 million is obviously much greater than any reasonable valuation of the smoker's injuries.

2. Punitive damages serve to express public condemnation. This might very well be the case, but it has nothing to do with economic analysis of law.

3. Punitive damages are a probability multiplier to compensate for the chance that a tortfeasor may never be sued or the victim may be unable to win his case. Personally, I like this explanation (although Friedman has reservations about it). For example, this particular case was about one smoker, but chances are that many other Oregonians were in a similar situation and were similarly harmed by Philip Morris. Since those other smokers haven't (and presumably won't) sue, punitive damages are imposed on Philip Morris to match its costs with social costs. This sounds reasonable to me, but this reasoning was expressly rejected by the Supreme Court (because, the argument goes, it violates due process).

4. Punitive damages are a way of playing it safe if damage is hard to measure but efficient offenses are unlikely. As with #1, it is hard to imagine injuries to one person being almost $80 million, so this cannot be "playing it safe" and erring on the high side. This is clearly above and beyond any reasonable measure of compensation for injury to one person.

5. When we correctly take account of the costs of litigation in calculating efficient danages, it turns out that more deterrable torts should be punished more severely than less deterrable torts relative to the damage they do. Punitive damages are for a class of particularly deterrable torts. This is a tricky argument, but it boils down to saying that we might award punitive damages when the supply of offenses is rather elastic (i.e., very responsive to the size of the damage award) because that would reduce the number of such offenses and reduce litigation costs, so that the inefficiency of a very large damage award (due to making potential injurers take too much precaution) is balanced by lower litigation costs. Again, hard to imagine litigation costs of the size that would need to be balanced by an $80 million damage payment.

6. Punitive damages are designed to deter strategic torts. (Strategic torts are torts that are meant to affect the behavior of others in the future such as, for example, beating up your rival for the favors of a girl. Your goal might be not only to punish this particular rival but to deter others from competing with you for girls in the future.) This explanation does not seem to be applicable to this case at all.

In short, today's Supreme Court decision seems to run counter to any economic view of punitive damages. Not the end of the world, of course -- but perhaps such decisions make it more difficult to convince students of the relevance of the economic analysis of law.

Labels: litigation, Supreme Court, tobacco

 
Shopping-Addicted Embezzler Skirts Jail
- posted by Jim Leitzel @ 6:18 PM

Ms. Elizabeth Roach has had quite a ride through the Federal court system so far. The long-time Vice Squad reader will recall that Ms. Roach is an oniomaniac -- a shopping addict. Between her shopping mania and her depression, well, she somehow ended up embezzling $240,000 from her employer. The trial judge felt sympathy, and departed downward from the sentencing guidelines (calling for at least a year of jail) via some home confinement, probation, restitution, and work release. The prosecution appealed the downward departure, and a Seventh Circuit Court of Appeals agreed that the sympathy was misplaced. On remand, Ms. Roach's sentence of a year in prison complied with the guidelines. Another appeal ensued -- this one from the defense -- but then the Supreme Court ruled that those pesky guidelines were only advisory, not mandatory. Yesterday saw the unveiling of what is likely to be the final chapter, as today's Chicago Tribune reports:

Elizabeth Roach was sentenced for a third time Monday for the same offense, averting prison for stealing nearly $250,000 from her employer to pay for a shopping addiction.

U.S. District Judge Matthew Kennelly sentenced Roach to 5 years' probation in large part so she could continue to undergo psychiatric treatment that has helped her with chronic depression and compulsive shopping.

The judge also ordered that she serve 3 months in work release followed by 9 months of home confinement.

Roach, 51, of Chicago has already paid more than $270,000 in fines and restitution.

Roach's lawyer, Jeffrey Steinback, said his client was relieved by the probation sentence and that the prosecution appears to be finally concluded.

Labels: oniomania, Supreme Court

 
Vice is Elsewhere -- More-or-Less Permanently
- posted by Jim Leitzel @ 1:38 PM

Our final class meeting in the 2005 version of the Regulation of Vice course at the University of Chicago took place last week, and the exam is scheduled for Tuesday. With the summer ahead and a semi-sabbatical in store for next year, I will try to devote myself to finishing up the book I have been composing (decomposing?) on vice policy. Ryan has elected to graduate on Saturday, instead of hanging around as my research assistant -- there's no understanding the priorities of youth. And so, for me at least, it seems to be a propitious moment to step aside from blogging. Yes, to the delight of dozens, Vice Squad as we have come to know it will cease to exist. For your vice policy fixes, please visit the links on the sidebar. Pete at Drug WarRant will be particularly worth checking out as the implications of today's Supreme Court decision filter down.

If I may, let me take a second to mention how enjoyable this blogging gig has been for me. I feel close to many people whom I have never met, thanks to their e-mails or their blog posts. My co-bloggers, Nikkie, Mike, Ryan, and the taciturn Bernard have been wonderful and supportive. Many readers wrote in with suggestions and criticisms -- I am much obliged. Will Baude, despite his own stubbornness in graduating last year, deserves thanks for showing me the blogging ropes and leading by example. In this case, I will ignore Hamlet and use a man after his desert: thanks Will.

The end of Vice Squad as we know it does not mean the end of Vice Squad categorically. I hope to continue to post occasionally, and welcome the co-bloggers to continue to post whenever they are so moved. But I think that we will do a better job of backing away from blogging than Andrew Sullivan appears to have done, though not as well as Jacob Levy has managed. Will Baude and Jacob Levy, incidentally, are jointly responsible (via blog posts) for my current reading of Czeslaw Milosz's The Captive Mind -- more evidence of the beneficial influences of blogospheric activity. I hope that somewhere along the line, Vice Squad has had some positive influence, too.

Labels: Crescat, Drug WarRant, solipsism, Supreme Court

 
Supremes Happy to Add to the Misery of Deathly-Ill People...
- posted by Jim Leitzel @ 11:55 AM

...by denying them access to medical marijuana. Will Baude has the initial word, and links to the opinions.

I'm disappointed but not really surprised or even angry at the Supreme Court. It isn't the Supreme Court's fault that our drug laws grossly violate the most elementary standard of justice, that one shouldn't be punished unless one has done something wrong.

Here's the opening to Justice Thomas's dissent:

Respondents' Diane Monson and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything -- and the Federal Government is no longer one of limited and enumerated powers.

Labels: Crescat, marijuana, Supreme Court

 
Be careful what you wish for
- posted by Michael @ 1:40 PM

In an earlier brief post, I suggested that the Supreme Court decision (links to opinions are here; see also Jim's earlier post) that prohibited discrimination between in-state and out-of-state wineries with respect to direct shipments of wine was good news for wine drinkers. Alas, I was wrong. Perhaps I underestimated the power of the state wholesalers lobbies. There are, of course, two ways to eliminate disparities in the treatment of in-state and out-of-state wineries. One is to let everybody ship the stuff directly, the other is to prohibit direct shipments altogether. It appears that at least some of the states are taking the latter route. Things are moving in that direction in Michigan and, as I learned this morning, they have already arrived there in Indiana (see this column by Mike Leonard; paid subscription required).

Apparetnly, on May 20, the Indiana Alcohol and Tobacco Commission (ATC) issued a letter stating that in-state direct shipments of wine are considered to be Class A misdemeanor. ATC Chairman, David Heath, seems to have taken a line from Casablanca by appearing to be shocked by the discovery that gambling, ooops.. sorry, direct wine shipments have been taking place in Indiana. His letter to the wineries begins in this way, "It has come to our attention that wineries in Indiana may be engaged in selling wine by taking orders via Internet, mail, and/or telephone and directly shipping to the consumer's address." Of course, these shipments have been going on in Indiana for only 30 years. In fact, the initial lawsuit contained evidence about direct wine shipments in Indiana obtained from the official state website that describes Indiana wineries.

Incidentally, the legality of changing the rules by an ATC letter without going through a formal admninistrative process is questionable. So, perhaps this letter will be challenged and ATC will be forced to jump through some bureaucratic hoops first. But now I am not sure if it is such a good idea to press ATC to follow the rules. God knows what the regulators will come up with during the formal administrative process of revising their interpretation of the current Indiana law.

Labels: alcohol, free trade, Supreme Court

 
The Internet Wine Case
- posted by Jim Leitzel @ 1:29 PM

I finally got around to reading the opinions (available here) in the internet wine case. It was a close call. My untutored view is that the closest cases to this one, which occurred both pre-Prohibition and in the immediate aftermath of Prohibition, suggest that the discriminatory New York and Michigan laws should have been upheld. But the more recent cases that touched on the 21st Amendment, though by and large not as directly on-point as the earlier cases, suggest that the non-discrimination principle should apply despite the 21st Amendment. It was close for a reason.

At any rate, having read the opinions, I am not discouraged by the result. (I suppose I could have managed to think this through without reading the opinions, but somehow, I wasn't able to.) My general concern is that when other fundamental principles -- principles that I generally support, like free speech and free trade -- are allowed to trump vice policy, that we will end up with both an erosion of those principles and poor vice policy. But here, the overall alcohol regulatory policy of a state is not really at stake. The Court, by overturning controls that discriminate against producers in other states, does not (at least directly -- who knows what the future ramifications might be? --) limit the restrictiveness of any state's alcohol policy. The dormant Commerce Clause has here trumped some alcohol controls, but not an alcohol policy. That's fine by me -- not that anyone asked!

Labels: alcohol, free trade, internet, Supreme Court

 
Alcohol Treatments Spreading Like...
- posted by Jim Leitzel @ 7:27 PM

...Kudzu. Yes, by taking a concentrated kudzu extract, heavy drinkers cut back their consumption, relative to those who took the placebo. They still drank, but somewhat less: "Study author Dr. Scott E. Lukas of McLean Hospital and Harvard Medical Center in Massachusetts explained that during the experiment, people drank their first beer right away, but were less likely to want more beer if they had taken kudzu the previous week."

I was mildly surprised at today's Supreme Court decision in the Internet Wine case. Probably not happily surprised -- even though I think that mail-order sales of wine direct to households should be legal -- as I am concerned about the eventual impact upon free trade or interstate commerce when these principles are used to trump the vice policy of individual states. But first I'll read the opinions, available here.

Labels: alcohol, free trade, Supreme Court, treatment

 
Good news for wine drinkers
- posted by Michael @ 11:00 AM

The Supreme Court ruled earlier today that the states cannot prohibit or severely limit direct wine shipmewnts from out-of-state wineries while permitting direct shipments from in-state establishments. I am certainly going to raise a glass of something made outside my homestate of Indiana tonight to celebrate. Cheers.

Labels: alcohol, free trade, Supreme Court

 
McCain Rushes In Where Supremes Fear to Tread
- posted by Jim Leitzel @ 6:58 PM

How do you know when the chairman of the US Senate's Indian Affairs Committee is launching an attack on Indian gaming? "'I don't want this hearing to be viewed as some attack on Indian gaming,' [Senator John] McCain said."

One of the main issues, it seems, is that bingo machines have evolved to where they look and act a lot like slot machines. That is a problem for states where Indian casinos are permitted to operate bingo machines, but not slot machines. And although it is not mentioned in the linked article, it is also a problem in states where Indian casinos are permitted to operate slot machines along with bingo machines. Why? You will be surprised to learn that there is a revenue angle. The pacts that such casinos sign with the states often include a provision whereby the tribes pay a per-slot-fee to the state. Federal appellate courts have ruled that bingo machines are not slot machines, and the Supreme Court has not taken up appeals -- so state gambling revenue is on the line.

Labels: bingo, gambling, Native Americans, slot machine, Supreme Court

 
Tennessee's Alcohol Ad Restrictions
- posted by Jim Leitzel @ 3:57 PM

The office of the Tennessee Attorney General has issued an opinion that many of the state's controls on alcohol advertising violate the US Constitution. Among the questionable rules are bans on distilled spirits advertising on television and radio.

As a matter of Constitutional law, the AG is probably correct; the opinion is here (5 page pdf). It relies on various recent US Supreme Court decisions, including the 1995 case of Rubin v. Coors. This string of cases seems to suggest that the advertising of legal vice products will receive about the same amount of Constitutional protection as any commercial speech. As the loyal Vice Squad reader knows, I view the lack of control over advertising as dangerous for the continued tolerance of legal vice -- states can always outlaw the advertising if they first prohibit alcohol.

Labels: alcohol, marketing, Supreme Court

 
That Big Federal Tobacco Suit
- posted by Jim Leitzel @ 11:42 PM

A couple weeks ago we passed along speculation that the federal suit against Big Tobacco, now bereft of the potential $280 billion jackpot, might be settled. The April 2 New York Times updates the various prongs of the case -- bits of it are being argued in two separate courts, with a third in waiting -- while indicating that the litigation costs alone make a strong argument for hasty resolution: "Barring a settlement, the [litigation] efforts - along with appeals almost certain to reach the Supreme Court - are expected to drag out for months, driving up litigation costs to hundreds of millions of dollars for each side."

Labels: litigation, Supreme Court, tobacco