Wagner v. City of Covington

Background

A group of soft-drink manufacturers based in Cincinnati sold their bottled drinks to retail stores in Covington, Kentucky. They routinely loaded cases of bottles onto wagons, crossed the river, and sold directly from the vehicle to local dealers, keeping title to bottles and cases. Covington passed ordinances requiring licenses and fees for wholesale dealers. The manufacturers sued in Kentucky state court to recover fees and stop enforcement, arguing the license conflicted with the Constitution’s commerce clause; state courts upheld the city, and the case reached the Supreme Court.

Reasoning

The Court considered whether these vehicle-to-store sales were immune as interstate commerce. It distinguished sales made only after orders taken in another State from sales made from stock carried into the city for immediate sale. The Court held that the latter practice is itinerant vending — local commerce — and may be taxed or licensed by the city so long as there is no discrimination against out-of-state goods. The Court therefore affirmed the judgment for the city, finding the license applied to the sellers’ traveling vending activities and did not unlawfully burden interstate commerce.

Real world impact

The ruling means businesses that bring a stock of goods into a city and sell directly from their vehicles can be required to obtain local licenses and pay fees. It preserves immunity only for goods brought in solely to fill prior orders. The decision leaves other business methods and broader constitutional limits for future cases.

Dissents or concurrances

Justices McKenna and Holmes dissented; the opinion notes only that they disagreed with the majority’s result.