Premier-Pabst Sales Co. v. Grosscup

Background

A Delaware beer distributor sold beer brewed in Illinois and Wisconsin and had a license under Pennsylvania’s 1933 law. In 1935 Pennsylvania changed its licensing law to charge higher fees and larger bond penalties for sellers of imported beer than for in-state beer. The distributor did not apply for a new license under the 1935 law and sued state liquor officials in federal court, claiming the new law violated the Constitution. A three-judge federal court denied relief and dismissed the suit, and the state relied on the Twenty-first Amendment as authorizing the discrimination.

Reasoning

The Court did not decide whether the law was constitutional because the distributor lacked the legal right to bring the challenge. Under the 1935 law no license could issue to a corporation unless its officers, directors, and a majority of its shareholders had been Pennsylvania residents for two years. The parties agreed that the company’s officers and directors were non-residents and that its stock was held by another out-of-state corporation. Because the company could never legally receive a license, the Court said it could not show the kind of personal injury needed to attack the law, so the constitutional claim could not be heard. The Court also noted the State had power to terminate previously issued licenses and treated the 1935 law as doing so.

Real world impact

The decision leaves the 1935 licensing provisions unreviewed on the merits and affirms dismissal for lack of a suitable plaintiff. Businesses that cannot meet residency rules cannot challenge the statute. The ruling allows the State to end or replace earlier licenses under the new law.