Grogan v. Hiram Walker & Sons, Ltd.

Background

A Canadian whisky company sued U.S. customs and revenue officers to stop them from enforcing Treasury orders that would prevent shipping whiskey from Canada through Detroit in bond to Mexico, Central or South America. A separate case involved the planned transfer of whiskey from one British ship to another in New York harbor. The companies relied on a statute allowing duty-free transit and on an 1871 treaty; lower courts split on whether those protections applied after national prohibition laws.

Reasoning

The central question was whether the Eighteenth Amendment and the National Prohibition (Volstead) Act bar moving or transshipping intoxicating liquor through or within the United States even when the shipment begins and ends abroad. The majority, writing for the Court, read the Amendment and the Volstead Act broadly and concluded they were meant to prevent the liquor business generally, not merely domestic use. Because the Amendment and the statute plainly forbid transportation for beverage purposes within or through the United States and Congress had expressly allowed transit only in narrow cases, the Court ruled that customs and revenue officials could stop such foreign-to-foreign shipments.

Real world impact

As a result, officials may prevent or interrupt shipments of alcoholic beverages that pass through U.S. territory or are transshipped in U.S. ports, even if the goods begin and end in other countries. The decision limits the practical effect of the older transit statute and the treaty when those movements conflict with the national prohibition laws.

Dissents or concurrances

A dissent argued the transit statute and treaty still permitted passage and that the Amendment and Volstead Act were not meant to repeal those international and statutory transit rights by implication, stressing treaty obligations and narrow construction.