<html><body>Federalism under the Influence: Dope, Booze, and the Commerce Clause November 10, 2004 Edited transcript prepared from a tape recording <TABLE width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="25%">2:45 p.m.</TD> <TD vAlign=top align=left width="75%" colSpan=2> Registration</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">3:00</TD> <TD vAlign=top align=left width="25%">Introduction:</TD> <TD vAlign=top align=left width="50%">Michael S. Greve, AEI</TD></TR> <TR> <TD vAlign=top align=left width="25%">3:15</TD> <TD vAlign=top align=left width="75%" colSpan=2>Uncorking the Dormant Commerce Clause</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Panelists:</TD> <TD vAlign=top align=left width="50%">Brannon Denning, Cumberland School of Law</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">Todd Zywicki, Georgetown University Law Center</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Moderator:</TD> <TD vAlign=top align=left width="50%">R. Hewitt Pate, U.S. Department of Justice</TD></TR> <TR> <TD vAlign=top align=left width="25%">4:15</TD> <TD vAlign=top align=left width="25%">Break</TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">4:30</TD> <TD vAlign=top align=left width="75%" colSpan=2>The Dope on the Commerce Clause</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Panelists:</TD> <TD vAlign=top align=left width="50%">Viet Dinh, Georgetown University Law Center</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%">John Eastman, Chapman University School of Law</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Moderator:</TD> <TD vAlign=top align=left width="50%">Edward Warren, Kirkland & Ellis</TD></TR> <TR> <TD vAlign=top align=left width="25%">5:30</TD> <TD vAlign=top align=left width="25%">Break</TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">5:45</TD> <TD vAlign=top align=left width="75%" colSpan=2>Putting the Commerce Clause in Its Proper Place: Is the Supreme Court Up to It?</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%">Speaker:</TD> <TD vAlign=top align=left width="50%">Richard A. Epstein, University of Chicago Law School</TD></TR> <TR> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="25%"> </TD> <TD vAlign=top align=left width="50%"> </TD></TR> <TR> <TD vAlign=top align=left width="25%">6:30</TD> <TD vAlign=top align=left width="75%" colSpan=2> Reception</TD></TR></TBODY></TABLE> Proceedings: MR. GREVE: My name is Mike Greve.  I'm with AEI's Federalism Project, and I welcome all of you today.  We're here to discuss two cases or sets of cases that will be heard by the Supreme Court very shortly.  One concerns California's Medical Marijuana Law.  The other set of cases concerns various state restrictions on direct, interstate shipments of wine.  We'll first do one panel on the wine cases.  We'll do one panel on the marijuana case.  We will then hear from Richard Epstein on whether the modern Supreme Court is up to a sensible interpretation of the Commerce Clause.  Thereafter, we'll adjourn for some product sampling.  There's, of course, wine out there, and you may want to be careful with the cookies we've prepared for this occasion. Before we start, I'd thought I'd say a few words on our decision to discuss these cases in tandem and to yoke them together in this fashion.  To take the obvious first: both cases are to be argued within 10 days from each other; the marijuana case on November 29th; the wine case on December 7th.  Both obviously involve intoxicating substances.  Both involve the Commerce Clause; in one case, the affirmative Commerce Clause, which is actually in the Constitution, and in the other case, the dormant Commerce Clause, which arguably is not. In both respects, these cases come after a considerable hiatus.  The last Commerce Clause case was decided in 2000, which is now quite some time ago.  That was U.S. v. Morrison.1  The last dormant Commerce Clause case goes back even further, to 1997.  That was Camps Newfound.2  It will be interesting to see what, if anything, has changed on the Court in this regard since then.  But there's a little more to this.  These cases involve lots of nuances, dicey legal questions, and constitutional provisions in particular, the 21st Amendment in addition to the Commerce Clause.  These questions deserve the attention our expert panelists will undoubtedly devote to these matters.  But I want to take one step back and point out the way in which these cases highlight two very distinct problems of American Federalism, which, when you think about it, turn out to be two sides of the same problem. The first problem is federal meddling in local affairs. That, of course, was the target, for example, of the Reagan Administration's New Federalism, and the concern has become only more pressing over time.  Forget about for one second what Congress may do, what the true extent of its commerce powers is.  Forget about the merits of California's Medical Marijuana Law and your thoughts on medical marijuana or marijuana in general.  It seems to me this case is about is grossly misplaced priorities.  Last one looked, this country is fighting an actual war.  As we all know, that poses, among other things, pressing legal questions. There are in the international arena pressing legal questions.  Here at home, Attorney General Spitzer is laying waste to one industry after another.  And amidst all of that, the federal government is trolling after casual or medical drug users.  Quite apart from the powers question, that seems strangely misplaced. Look at the Federalist Papers and ask yourself, what did Hamilton actually think?  What would be the ultimate safeguard against the wholesale displacement of state authority?  The answer is something like economies of scale.  There would be no advantage to the Federal Government meddling in local matters, Hamilton said.  Obviously, that is no longer true. The second federalism problem is state interference with interstate commerce.  Any number of examples come readily to mind.  Class actions with tens of thousands of members, we're now told, are the intrinsic prerogative of some Mississippi or Illinois Court, because that's where the plaintiff chose to file them.  State AGs have assumed an astounding measure of authority over interstate commerce.  States regulate and tax interstate transactions on an unprecedented scale.  The trial lawyers and the attorneys general will all tell you, hey, that's what federalism is about, but it seems to me obvious that this is not what federalism is about.  It is a federalism problem, and it's arguably by now more serious than federal meddling in local affairs.  Again, read the Federalists Papers.  The Founders are almost obsessed over protecting commercial relations from state meddling, and they erected a whole edifice to guard to against it.  Maybe the dormant Commerce Clause is indeed an invention, but the prohibitions of Article I, Section 10, the non-discrimination provisions of Article IV, federal diversity jurisdiction these are actually there.  They're not constitutional inventions, but all of them have gone out of commission over a very wide range. Of course, Congress can also preempt state interferences; that, in fact, is the original purpose of the Commerce Clause.  But it's equally obvious that frequently Congress doesn't do this. I ve said that these two problems are actually two sides of the same federalism problem, and to my mind, it's this: any federal regime presupposes some distinction between national affairs and local affairs and some way to protect that equilibrium within some range.  But we don't have that anymore.  What we have instead is basically full concurrent state and local and federal authority over the full range of private transactions.  That's the 30,000 foot overflight view.  Before you're free to move about the cabin, I want to leave you with two questions. The first question is this: a federal system that routinely generates this bilateral overreach needs constitutional limitations.  But it may also be the system that is least able to enforce them, and the reason why it may be least able to enforce them is that the political institutions are so committed to the regime.  Maybe you can draw some lines in this or that case maybe in these cases we're here to discuss today.  But if the Supreme Court can take only what the political branches will give it, and if that ain't much, then you have to ask yourself at some point, why try in the first place?  What is the entire enterprise really worth? My second question is this: what has prompted this loss of a federal equilibrium in the first place?  The conventional account, I take it, is that industrial capitalism happened to the Constitution, and the troglodyte system that the Founders invented was just not tenable.  Complex industrial organizations confound distinctions between national and local affairs, or so one hears.  Personally, I think that was never very believable.  If you look at the cases of the era when the system collapsed Wickard v. Filburn,3 Erie Railroad4 complexity is not what went on in those kinds of cases.  But at least there, the argument still had a veneer of plausibility.  You were dealing with railroads, with agriculture, with big industrial systems.  You look at the cases we're here to discuss today, and I think it's totally implausible.  It's true that in the wine cases the states argue that their interests require a seamless web of regulation.  But it's equally obvious, at least to me, that they can have that seamless web of regulation without discriminating against out-of-state commerce.  (Again, put aside the 21st Amendment question for the purposes of this discussion.)  In the marijuana case, the federal government says that the Controlled Substances Act, which controls not only marijuana but all prescription drugs and so forth, would completely collapse without criminalizing the mere possession of marijuana.  But I think no one really believes that as an empirical proposition.  So, what's happening here is that complexity and interdependence arguments are marched into a battlefield where there' a very serious risk that they'll be shot down by one single stray bullet, let alone a sustained argument.  That raises the suspicion that they are a mere decoy for something else, for some other argument or force that drives this.  I actually have a hunch what that something might be, but I'll leave you all to guess.  Instead I'll introduce the moderators of our panels, who will, in turn, introduce the speakers; and I'm delighted to say that both of them are very old friends of AEI, and the Federalism Project, and myself.  Hew Pate, Assistant Attorney General for Antitrust, will moderate the first panel; Ed Warren, of Kirkland & Ellis, the second.  Thanks, all, again. UNCORKING THE DORMANT COMMERCE CLAUSE MR. PATE: Well, thanks very much, Mike. It's great to be here at AEI to talk about these cases.  I have to first give something I rarely give, which is a disclaimer.  Usually, unlike the situation at the Federal Trade Commission, where you have a multi-headed body, I'm able to say that anything I say may well bear a striking resemblance to the official policy of the Antitrust Division.  But not today, because the Justice Department has taken no position in these cases, and anything I say is purely on my own nickel. We're here to talk about two cases in which the Court is going to be addressing the application of the Commerce Clause to wine importation:  Granholm v. Heald from the Sixth Circuit, and Swedenburg v. Kelly from the Second Circuit. In brief summary, in Michigan, in-state wineries, under the Michigan statutory system, are allowed to direct ship to consumers, but out-of-state consumers are required to use the traditional three-tier wholesale and resale regulated alcohol distribution network.  In New York, it's a little bit different. Both in and out of state wineries are able to ship to consumers, but must do so while maintaining a physical presence in New York. You don't have to go very far in these cases to see that they're a great opportunity for attempts to make a witty turn of phrase.  When I first got into it, I was directed to the Wine and Spirits Wholesalers of America web site to get the briefs, and I find that the Wine and Spirits Wholesalers motto is bringing you life's memorable moments. [Laughter.]  Which I think has a certain irony.  The disputes over whether discriminatory wine importation laws are going to be valid have produced opinions not just from the Sixth Circuit and the Second Circuit, but also from the Eleventh, the Fourth, and the Seventh Circuit.  In the Seventh Circuit, this dispute happened to reach the desk of Judge Easterbrook, who observed in opening his opinion that [t]his case pits the 21st Amendment, which appears in the Constitution, against the dormant Commerce Clause, which does not. 5  And so, we have the question whether the discriminatory aspects of the state statutes at issue will violate the Commerce Clause.  I won't necessarily say dormant, because that's part of the argument whether in light of the re-passage of the Webb Kenyon Act, it's fair to say the Commerce Clause is dormant here or not.  And then the second question, if you chose to follow the traditional form of analysis, is whether laws that would otherwise be illegally discriminatory under the Commerce Clause are saved by virtue of being within the core purposes of the 21st Amendment.  The Second Circuit went about its analysis in a slightly different order, and our panelists, undoubtedly, will talk about that. We're very fortunate to have with us today a couple of clear experts on the field.  Brannon Denning is Associate Professor of Law at Sanford University's Cumberland School of Law, where he teaches Constitutional Law and Professional Responsibility.  Prior to joining Cumberland, he taught at Southern Illinois University's School of Law.  Brannon has written extensively on the Commerce Clause, the dormant Commerce Clause doctrine, and various other constitutional and political issues.  For purposes of today's talk, he has written an article entitled Smokey and the Bandit in Cyberspace: The Dormant Commerce Clause, the 21st Amendment, and State Regulation of Internet Alcohol Sales.   In this article, Brannon makes the observation that recently lower court cases invalidating long-standing state alcohol regulations seem to have fallen under the spell of the Internet, and assume that e-commerce must be free.  Our next speaker has responded to that with an extensive blog from the Volokh Conspiracy, which you can find on the Internet.6  Todd Zywicki is currently a Visiting Professor at Georgetown University Law Center.  He's on leave from George Mason.  During the 2003 to 2004 academic year, he served as director of the Office of Policy Planning at the Federal Trade Commission.  Todd teaches in the areas of bankruptcy, contracts, commercial law, law and economics, and public choice in the law.  He's also taught previously at Boston College Law School, and at Mississippi College School of Law. So, without further ado, I'm going to turn to our speakers to discuss these cases, which have produced an outpouring of briefs from some of the leading lights in Supreme Court practice, and undoubtedly will lead to interesting arguments.  By coin toss, Todd, you have the floor. MR. ZYWICKI: Thanks, Hew.  My mission is to talk about the direct shipment of wine cases, but also to draw some more general lessons about what we can learn about federalism and about the change in the Commerce Clause over time, as Mike discussed in his opening statement.  I'm going to talk first about the wine direct shipping cases, and, in some detail, about the historical context in which the 21st Amendment was enacted.  That will help us to tease out how the Commerce Clause has changed over time and what that tells us about it. Now, just to kind of clear the decks with some background points.  I'm sure nobody in this room has ever done this, but rumor has it that occasionally, maybe back in your old days, you may have known some kids in school who were underage drinkers, who somehow managed to sneak over to the 7-11 and slip past the vigilant minimum-wager behind the counter and actually get a bottle of Gallo or maybe a six-pack of Milwaukee's Best.  A lot of things have been kicked around on the policy front about how kids are going to get on the Internet and buy pinot noir.  It's obviously a silly argument.  Kids can buy alcohol from traditional bricks-and-mortar outlets very easily.  The estimates are that 15 to 30 percent of the time at least, kids are able to buy alcohol from traditional bricks-and-mortar outlets.  Moreover, this isn't a question about whether or not there's going to be direct shipping or not.  In New York, for instance, there are already 190 in-state wineries shipping directly to consumers.  The only question is whether or not Virginia and Oregon wineries can also ship, along with New York wineries. The physical presence exception that Hew described is, of course, a myth, which is to say that no winery has ever qualified for that because it requires them to have a warehouse and all sorts of silly things.  So, it's not a serious exception, although the Second Circuit seemed to believe in some sort of existence proof regarding it.  It's also the case that the evidence indicates that consumers are unambiguously better off in terms of lower prices and greater choice from Internet sales.  See the path breaking report by the Federal Trade Commission on Internet Wine Sales. Clearly if this were not alcohol, the state regulation would violate the dormant Commerce Clause.  Clearly, there's no serious justification for these laws.  There's certainly no evidence that actually backs it up, which is usually what's required in a Commerce Clause situation, especially for discriminatory laws.  The question here is, given that state law is blatantly discriminatory and largely pointless, is it nonetheless saved by the 21st Amendment? The 21st Amendment has three provisions.  The first repeals the 18th Amendment, which imposed Prohibition.  The second says that The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors in violations of the laws thereof, is hereby prohibited.   Now, some people have argued that by its plain language, Section 2 allows the states to do whatever they want to in the field of alcohol.  And in Young s Market,7 the protectionists' favorite case (which was decided back in the '30s), the Court did not look at the legislative history and simply said that the 21st Amendment saved the state law at issue. Well, if you're serious about the plain language, you've got to really be serious about it.  So, if the states can pass any law, then they could say only white people can import wine.  Or they could say you can only import wine if you agree not to criticize the government.  Heck, it seems to me they could enslave people and force them to drive beer trucks, because that's only protected by the 13th Amendment.  There's nothing in Section 2 that specifically limits it to the Commerce Clause or the dormant Commerce Clause.  In fact, in Young s Market, Justice Brandeis acknowledged as much because there the argument was both a dormant Commerce Clause argument and an equal protection argument.  Justice Brandeis, being honest, said the claim that the statutory provisions and the regulations are void under the Equal Protection Clause may be briefly disposed of.  That is, a classification permitted by the 21st Amendment cannot be deemed forbidden by the 14th. So, if you decide to go down the plain language route, if you're in for a dime, you're in for a dollar.  You've got to agree that the Amendment repeals everything that came before it.  There's no principled distinction in the text to draw a distinction.  Unsurprisingly, the Supreme Court has decided that's not a very appetizing way of going about this, and, in fact, has applied the Equal Protection Clause, the First Amendment, Due Process, the Commerce Clause itself, and the Export-Import Clause.  All these things are said to be effective, notwithstanding the 21st Amendment.  Plain language doesn't get you very far. That turns us to the question of the history of the 21st Amendment.  And what you see when you actually look at the history is that the purpose of the 21st Amendment was to reverse the disastrous experience with Prohibition that was ushered in by the 18th Amendment.  What it intended to do was to restore the constitutional balance that had been disrupted by the 18th Amendment.  The problem with the 18th Amendment was that it got the federal government too much involved in the local and state affairs governing alcohol.  The effect of the 21st Amendment was to take the federal government back out of local police power affairs, and to give back to the states exclusive authority to use the police power. Nothing in the history and nothing in commonsense, logic, or anything, suggests that Congress meant to give the states new powers to meddle in interstate commerce.  The problem was the federal government had overreached, and that's what Congress was trying to pull back on. The background is in the 19th century, in the license cases.  In Mugler v. Kansas,8 the Supreme Court said that states, pursuant to their police power, could enact prohibition within their states, barring the sale and manufacture of alcohol within their boundaries.  The police power gives the states the power to regulate local affairs in the name of health, safety, and morals; right?  The problem was that notwithstanding the fact that states could enact prohibition (pursuant to their police power), they could not bar importation of alcohol from out of the state.  Under the so-called original package doctrine, which prevailed in the late 19th century, states were required to allow the shipment into the state of alcohol so long as it was in its original package.  The Supreme Court held that commerce did not end, and the police power did not attach, until the product actually came to rest, basically when the person popped the top off of the booze. In the Wilson Act, Congress, using its Commerce Clause authority in a positive manner, said that notwithstanding the original package doctrine, the police power of a state would attach to alcohol once it hit the state.  It would attach in the same way to imported alcohol as it did for domestic alcohol.  The effect of this was to try to eliminate the reverse discrimination which had been caused by the alternative regime.  In Scott v. Donald,9 the Supreme Court said that because the Wilson Act was enacted pursuant to the states' police power, it was also subject to the traditional restraint on the state police power, which does not allow discriminatory bans on interstate commerce.  Here, the Supreme Court was building on a prior case called Walling v. Michigan,10 which unambiguously held that the police power does not allow states to enact discriminatory barriers to interstate commerce.  The problem with the Wilson Act was it did not reach alcohol used for personal use.  So, in the Webb-Kenyon Act, Congress, again using its Commerce Clause power, went a further step and basically prohibited the shipment of transportation of alcohol into a state in violation of the law of any such state.  Webb-Kenyon was designed to close the personal use loophole, to allow states to be completely dry and not have to deal with alcohol being shipped into their state.  In Brennen v. Southern Express Co.,11 which is the only case I've been able to find on this because it's a very short window, the South Carolina Supreme Court said that the effect of the Webb-Kenyon Act was to simply extend the Wilson Act in this way, and the Court there specifically said the non-discrimination principle that ran from Walling through the Wilson Act and Scott v. Donald to the Webb-Kenyon Act remained fully in force.  Again, it was allowing the states to attach their police power to things shipped in interstate commerce. The system worked fine until the 18th Amendment, the effect of which was to try to make wet states dry.  That turned out to be a complete catastrophe.  And why was Prohibition such a catastrophe?  It got the federal government involved in police power activity on the local level busting saloons, and doing all those sorts of things. Treasury Secretary Andrew Mellon noted in 1926 the catastrophe that Prohibition had become, and to him the problem was jurisdictional.  What everybody understood, at least until Justice O'Connor got a hold of the 21st Amendment in a case called 324 Liquor about 20 years ago,12 was that the 18th Amendment was repealed by the 21st Amendment because the federal government was terrible at imposing Prohibition.  What everybody understood was that the purpose of the 21st Amendment was to withdraw the federal government from meddling in local affairs governing alcohol.  That's the language that you see over and over again in the legislative history: restore the constitutional balance.   Senator Wagner said the purpose of the 21st Amendment was to restore the Constitutional balance of power and authority in our federal system, which had been upset by national Prohibition.  That equilibrium, he called it, which prior to the 18th Amendment was one of the functional marvels of our system.  And what was that system?  It was a clear division that gave the states exclusive authority for the local police power, and gave the federal government authority over interstate commerce.  And, in the Wilson Act, in the Webb-Kenyon Act, what we saw was the federal government using its Commerce Clause authority to allow the states to attach their police power to imported alcohol. It's often a rhetorical device to say that someone could not be more wrong in characterizing particular legal arguments.  In this case, it's literally true: if you read Justice O'Connor, who's been the leading Supreme Court apologist for protectionism in this realm, it is clear that she has the issue 180 degrees backwards.  Every single snippet of legislative history (and it's always just snippets--it's never put in context) she relies on is backwards, because she has completely lost track of the fact that the 21st Amendment was repealing the 18th Amendment, withdrawing the federal government from local police power activity. There's nothing in any of the history I've described that suggests that Congress meant to give the states new powers; completely unexplained, unnecessary, novel powers to regulate interstate commerce.  The evidence suggests that Congress meant to allow dry states to stay dry after the repeal of Prohibition, but there's no evidence that it meant to allow wet states to engage in economic warfare against the products of other wet states.  There's simply no evidence that that is the case. So, what does this tell us about federalism?  First, under the old regime, what we saw was a very clear division of responsibility between the state and local governments to regulate in the name of the police power and the federal government to do interstate commerce.  Nowadays, it's very muddled; the states are doing their own thing; while the federal government, through the spending power and under the Commerce Clause,  has essentially arrogated to itself what looks like a police power, notwithstanding some protestations in Lopez.  It seems to me that a case could be made that the old system of very clear delineation was much preferable. Second, the new regime has created an ambiguity about the Commerce Clause itself, which is to say that we've got this sort of bastardized offspring of the dormant Commerce Clause in the past 50 years, which is the Pike balancing test.  Often people say that Justices Scalia and Thomas don't believe in the dormant Commerce Clause.  There is no dormant Commerce Clause.  But that is completely untrue.  Scalia and Thomas recognize that the non-discrimination prong of the dormant Commerce Clause is inherently part of the Constitution.  It's a key structural protection of the Constitution.  An excellent article by Brannon Denning, available on SSRN, goes through the early history.13 Scalia and Thomas make it very clear that the non-discrimination principle is robust.  What they disagree with is the Pike balancing test.  And why did we get that test?  Because we started muddying the lines about 50 years ago, so we couldn't figure out what was legitimate federal action and what was legitimate state action.  If you read Judge Easterbrook's opinion closely [in Bridenbaugh], it is clear that he is drawing that distinction as well. One last word on the litigation: either way the Supreme Court might uphold these laws is a complete catastrophe.  Either the Supreme Court could say the state laws are discriminatory and, notwithstanding that, are saved by the 21st Amendment, which would overthrow about 200 years of history saying that you can't discriminate against interstate commerce without a very compelling showing that the discrimination is warranted.  Or it could say these laws are non-discriminatory because of these ridiculous physical presence requirements.  Well, there is no stopping point to that principle.  States could say, To protect our citizens from fraud, Amazon has to establish a physical presence in our state.  L.L. Bean has to establish a physical presence in our state.   It's absurd, and the Supreme Court has rejected again and again the idea that requiring somebody to establish a physical presence to do business in a state does not violate the dormant Commerce Clause.   MR. PATE:  Thanks.  And right on time.  Brannon. MR. DENNING: I want to thank Todd for the hard work that he's done in uncovering some things that I wish I had had the benefit of when I first wrote my article.  I was relieved, indeed, to find that we weren't actually going to have to engage in a debate. I wanted to lay out the case for the states, and then, like Todd did, try to draw a few kind of big picture points.  Before I do that, though, I want to say that you will probably find few other Constitutional law professors who are as in love with the dormant Commerce Clause doctrine as I am. I'm a huge dormant Commerce Clause fan and think it quite possibly is one of the most important doctrines the Supreme Court has ever fashioned and enforced.  I'm also a big fan of cheap booze, and so in arriving at the position I have, I am in the relatively rare position of a constitutional law professor actually taking a position that he feels the Constitution compels him to take that is totally against his interest. Let me lay out the case that the states are going to be making before the Court and try to explain why I think it's a compelling one.  The strongest arguments that the states are going to be able to advance and have advanced in the briefs are the text of the 21st Amendment; the case law, particularly the early case law interpreting and applying that amendment; and the congressional statutes on which the 21st Amendment was closely modeled. The text of the 21st Amendment, as Todd has pointed out, talks about alcohol that's imported into a state for delivery or use.   And to do that in violation of the laws of that state violates the 21st Amendment.  It's kind of funny that the 21st Amendment doesn't actually empower the states to do anything.  Literally read, it makes importation into states in violation of their laws unconstitutional.  I don't know what the implications of that are, but it's kind of an odd way, if you really read the provision literally.  But, as Todd pointed out, the Amendment has been most often interpreted to empower states to set their own alcohol policy, and then limit out-of-staters or limit importers from coming into the state or bringing alcohol in in violation of the laws.  On the history, I think that we agree generally, although we tend to put a slightly different interpretation on the purpose behind the 21st Amendment and what the history strongly suggests. I would suggest, and have suggested, that the purpose of this provision was both to repeal the 18th Amendment, empowering the states to take back over from the federal government their own alcohol policy, and also to constitutionalize the statutory reversal of various Supreme Court decisions applying the dormant Commerce Clause doctrine against states trying to regulate alcohol coming into their territories.  I think, based on my reading, that Congress did this with the knowledge that the powers that it was giving the states could be abused.  The authors of the Amendment understood that the power could be used to impose protectionist regimes that would disadvantage out of state alcohol producers. The early case law that Todd referred to, the Young's Market line of cases beginning in the mid-'30s and until the late '30s, which have never been repudiated, interpret the 21st Amendment in just this way.  I don't agree that you have to go in full bore for Justice Brandeis' presumption that all bets were off when it came to alcohol.  I agree, it would be absurd to argue that states, by virtue of the 21st Amendment, could be permitted to restrict women or African Americans from importing alcohol.  You have to understand the history.  And the history was that throughout the 19th century, the Court regularly deployed the dormant Commerce Clause doctrine to frustrate state regulatory attempts.  I think that when that power was given back, through the Wilson and Webb-Kenyon Acts and then in the Section 2 of the 21st Amendment, that there was a complete redelegation of this power, which I think includes the power to regulate unwisely or abusively.  In fact, the Young's Market line of cases present fact situations that are almost identical or very close to the fact situations that are presented by the direct shipment cases.  In Young's Market, for example, there was a state statute that imposed a $500 tax on importing out of state alcohol, but no tax needed to be paid if you were distributing alcohol that had been produced in the state.  Out-of-state producers argued that the 21st Amendment requires equal treatment.  In other words, you can ban alcohol completely, but if you allow it, then you have to allow alcohol to be brought in from out of state on equal terms with that which is distributed in state.  Justice Brandeis, for a unanimous Court, rejected this argument, and said that that argument would involve not a construction of the 21st Amendment, but a rewriting of it.  People who have sought to overturn the state structures for the distribution of alcohol have seized on subsequent cases where the Court, through some rather unfortunate loose language, seemed to intimate that the Young's Market line of cases has been totally repudiated . Actually, if you look at the facts, those later cases occur in situations that fall outside the import for delivery or use language that is at the heart of the 21st Amendment.  So, that's the text.  That's the case law. Let me say a word about the Congressional statutes as well.  The dormant Commerce Clause doctrine is a default rule.  In the absence of congressional action, the Court has inferred from the grant of power to Congress over interstate commerce certain restrictions on the states' ability to regulate that commerce.  Congress, however, has the power to redelegate power to the state, which includes the power even to discriminate against interstate commerce or at least to remove the strictures of the dormant Commerce Clause doctrine in certain areas.  One area in which Congress has done this, probably the most recent example other than alcohol, is in the business of insurance.  The McCarran-Ferguson Act permitted states to regulate the business of insurance, and as the Court has said most recently in Western & Southern Life Insurance Company,14 once Congress has redelegated that power to the states, the dormant Commerce Clause is inoperative.  There are two acts even before the 21st Amendment was ratified.  The Wilson Act and then the Webb-Kenyon Act, which came later in response to some Supreme Court decisions that had narrowed the scope of the Wilson Act and frustrated the congressional attempt to delegate power to the states.  There's an important difference between the two acts.  The Wilson had language requiring equal treatment.  In other words, it gave states the power to regulate alcohol coming into the state, but it said it had to be a regulation on equal terms with that which was produced in the state.  The Webb-Kenyon Act, which was passed to close some loopholes and reverse some Supreme Court decisions that had restricted state power, had language similar to the Wilson Act, requiring equal treatment, which was eliminated from the final version of the Act.  Section 2 of the 21st Amendment, in turn, tracks the Webb-Kenyon Act's language, which doesn't make any mention of equal treatment, and was intended to constitutionalize Webb Kenyon because there was some fear that a Supreme Court majority might overturn the decision in which it upheld Webb Kenyon and upheld the power of Congress to redelegate this power to the states. I certainly wouldn't regard it as disastrous if the Court upheld these laws.  I think it would be ironic in a way if one of the few provisions in the Constitution whereby states are specifically empowered to do certain things were held not to convey the power that it appears to convey, consistent with the understanding of the framers, the early courts, and most federal district courts deciding 21st Amendment cases after the ratification of the Amendment.  Second, I think it would be unfortunate for the amending process, too.  Once framers , courts , and states' expectations have been upset, people may say, What's the use of going through the difficult process of proposing and ratifying an amendment if 10, 20, 30 years down the road it can just be ignored because it's convenient, because people think that the power that had been delegated to the states has been used unwisely?  We can just go to courts and convince them that that wasn't the power that was delegated in the first place.   I think that would be an unfortunate result for the Article V Amendment process, and would tend to strengthen the hands of courts. Let's not make any mistake about what would result if these laws are struck down.  What courts will have to preside over is the judicial dismantling of seven decades worth of alcohol policy and seven decades word of regulatory apparatus that have been set in a large number of states.  It may be a bad regulatory apparatus.  I would certainly, if I had the opportunity, vote to tear down these three-tier closed systems.  But to have courts do it seems to me, though I dislike the term intensely, like precisely the sort of judicial activism against which so many conservatives regularly inveigh even conservatives who are huge supporters of the free market system. Judge Easterbrook has a great line in his Bridenbaugh opinion from the Seventh Circuit in which he turned aside a dormant Commerce Clause challenge to a direct shipment ban.  He said that the states have the power to regulate wine in ways that they may not regulate cheese.  And from my reading of the Amendment, from the cases, and from the context in which the Amendment arose, I think that's right. MR. PATE:  Thanks, Brannon.  Let me start with a couple of questions.  It's very hard to see anything other than a very complete authority in the states to deal with reimportation in any way they see fit.  Now, you don't necessarily have to go with Todd's in for a glass, in for the whole bottle argument.  But at least as it goes to direct economic regulation of importation, if you're not willing to take a very literalist approach to it, where are you left?  And if you really start getting into the history, what's wrong with Todd's case that historically the point of the Amendment was really just to tell the dry states that they weren't required to have their policy against alcohol consumption thwarted by forced importation?  And if that's all you're left with, then why don't we just apply the Commerce Clause? MR. DENNING:  That's a really good question and the stuff that Todd has written on the Volokh Conspiracy and other places caused me to think about it.  Todd deploys the textualist argument successfully to direct people to the history.  In other words, the only way you avoid the in for a penny, in for a pound argument is to say you've got to be specific about what the problem was that this Amendment attempt to address.  And I think that where we differ is that Todd, as I understand him, says that all of the activity took place against a baseline norm of non-discrimination, and the Webb-Kenyon Act took out that equal treatment language that the Wilson Act contained.  One response might be that everybody understood that to be the case.  When I was doing the historical research, that kind of anti-discrimination background didn't jump out at me in the materials that I looked at. Now, it is true, and I think Todd makes this point, as well, when the Young's Market line of cases came out, there were a number of law review notes and comments that said, This is terrible.  You're just empowering the states to engage in economic protectionism.   And the only thing I can say is that there's at least one statement I'll use a snippet of legislative history, a statement by a Representative Lee.  He could have been in his Senate hideaway or in his office or at the Mayflower Hotel when he submitted this to the Congressional Record, but he warns that  the power being given to the states can be abused.  I think that in balance the framers were willing to take that chance. MR. ZYWICKI: The riddle is about legislative history more generally.  This entire history is predicated on a mind set that is completely alien to the way we think about law today, which is to say that the whole debate was about the police power.  We almost never speak of the police power these days except for Richard Epstein, who would like for us to speak about it a lot.  But the whole history is about a very robust notion of the police power and an equally robust notion that the police power could not be used to discriminate.  That's why I draw all the way back on the history of Walling that goes to the Wilson Act and to the Webb Kenyon Act.  Basically, all the legislative history is addressing the notion that what this is about is allowing the states to effectuate their police power.  I'll give you one example.  Here's what Senator Kenyon himself said in proposing the Webb Kenyon Act about the act: ...its purpose, and its only purpose, is to remove the impediment existing as to the States in the exercise of their police powers regarding the traffic or control of intoxicating liquors within their borders. 15  A strong non-discrimination principle is implicit in the entire era, as is a strong police power notion.  It's not clear today if there's anything called the police power anymore after Lawrence v. Texas.16 MR. PATE:  Since this is a case that's actually being argued before the Court, it would be prudent to turn away from this inquiry into the right answer, and to ask about the practicalities.  What s interesting to me about it is this idea that you could go on the Internet, and find wines that you wouldn't be able to buy in your local area.  I guess the parties are concerned enough about the interests of the sitting justices that one of the briefs actually leads off the very first sentence in the argument This case is not about fine and rare wines. My question for you, Todd, is what is the practical upshot?  The Supreme Court fairly recently has said the three-tier system of regulation is unquestionably valid.  It has declared that the so-called core purposes of the 21st Amendment include not just temperance and maybe freedom from competition, if you want to say it uncharitably, but also taxation, the ability to collect revenue.  But look at Judge Easterbrook's opinion in the Seventh Circuit; in reviewing the standing of the parties, he says everybody in this case seems to be declaring their willingness to violate the laws in question here, and to sell the wine without obtaining a permit or presumably being willing to go through the collection of taxes.  As long as all those objectives are valid, what really is the practical upshot of these cases?  What possibility is there that the ultimate result could be anything more dramatic than simply saying we'll remove the provision that allows in-state wineries in Michigan to direct ship? MR. ZYWICKI:  The key to understanding Bridenbaugh is that Easterbrook makes a threshold determination that as applied to the plaintiffs in that case, the law is non-discriminatory.  It wasn't actually that producers wanted to sell.  It was actually in-state consumers who wanted to buy wine from out of state.  And the premise of Easterbrook's argument is that there weren't any harmed sellers who were in front of him.  So basically what he was saying is that these plaintiffs, these in-state consumers were saying that they were harmed, even though they couldn't identify anybody who actually wanted to sell them wine from out of state.  A threshold determination of Bridenbaugh was that it was a non-discriminatory law. Secondly, I think the welfare effects are clear with respect to wine, which is that there's a substantial savings on price.  There's a dramatic increase in choice, and most dramatically what you would expect in any sort of competitive market, is that the incumbents, the bricks-and-mortar retailers, have to respond to competition.  What we've seen is increasing concentration in the wholesale market.  As small wineries have grown like topsy, there's thousands of small wineries that have developed, multiplying the choices available to consumers, the three-tier system is becoming more and more of a bottleneck, and bricks and mortar retailers are being more and more protected from competition in order to keep their prices up. The final point is, what's the payoff?  I don't think a favorable decision would require a dismantling of the three-tier system.  What it does do is deprive state legislatures of the weasel solution.  There's no serious public policy argument here.  This kind of law is a sop to the wholesalers.  It allows states to give a sop to the wholesalers and then throw a bone to little in-state wineries and in-state consumers who want to be able to go to the New York Finger Lakes region, on vacation, buy some wine, ship it back, and sell it within the state.  If you deprive states of the weasel solution, maybe they'll ban all shipment of wine, but it's at least equally plausible that they're going to allow all wine to come in.  If nothing else, the non-discrimination principle forces them to make that choice in a more transparent way. MR. DENNING: Todd had a hand in the FTC report that found that there really wasn't a rash of underage drinking, underage ordering over the Internet, and I guess I'm just slightly uncomfortable with saying that that has absolutely no validity.  You wonder about the consequences if Internet sales began to proliferate and not only for pinot noir and rare and fine wines, as the case put it: Beer of the Month Club over the Internet, or Wild Turkey dot com.  With the proliferation of credit cards, more teenagers have access to credit cards and certainly access to the Internet, and I'm wondering if it isn't a problem in waiting.  All I've seen are sensationalist reports from trade groups that want to keep the three-tier system in place and the FTC's evidence that this isn't as big a problem.  But it doesn't strike me as completely irrational that underaged people would, as a result of this, be able to have access to alcohol when they shouldn't. MR. ZYWICKI:  This isn't a question about direct shipping or not direct shipping.  This is whether only the 190 wineries in New York are allowed to direct ship or whether everybody else is.  And that cat is out of the bag.  The argument that this is going to allow underage drinkers access to alcohol is gone. MR. PATE:  Let's open the floor.  Richard Epstein?  We'll have you--you should wait for the microphone or, in your case, not. MR. EPSTEIN:  I'm going to have nothing to say after I ask this question.  But I'll ask it anyhow.  I was listening to Todd's argument about the fact that what Section 2 was designed to do was essentially to restore or to reaffirm the ability of the state to regulate under its police power jurisdiction.  The difficulty I have with that argument is if you didn't put in Section 2, and only put in Section 1, and just simply repealed the 18th Amendment, then, in effect, it seems to me that the states' police power jurisdiction would be assured in its traditional fashion.  The dormant Commerce Clause would be there so that everything you say that Sections 1 and 2 together do is, in fact, done by Section 1 itself.  (I have a new argument that maybe Section 2 is itself unconstitutional given the U.N. Charter, but we put that aside for a moment.)  It seems to me that your argument proves too much, because it doesn't give any independent role to Section 2. MR. ZYWICKI:  I think that Brannon and I may have the same answer, which is that Section 2 constitutionalized the Webb-Kenyon Act.  And the language is the same as the Webb Kenyon Act.  When they repealed Prohibition, the dry states were afraid that the next thing that was going to happen was Congress was going to repeal the Webb Kenyon Act.  Everybody would be getting drunk again.  There was also a concern that if re-presented to the Supreme Court, the Webb Kenyon Act would be declared unconstitutional, because it's a novel statute, and it s unclear whether or not Congress can actually delegate its Commerce Clause authority in that way to a state.  At the time the Webb-Kenyon Act was enacted, the Attorney General rendered the opinion that it was unconstitutional at that time.  And one of the people who argued against the Webb-Kenyon Act in the Senate was Justice Sutherland, who subsequently went on the Supreme Court. After the repeal of the 18th Amendment, dry states were afraid first they'd be cast on the goodwill of Congress to maintain Webb Kenyon, which they didn't have a lot of confidence in, given the political dynamics; and secondly, that Webb Kenyon would be cast on the will of the Supreme Court if it were re-presented, and it was by no means clear that if the Supreme Court would uphold it. MR. DENNING:  The only thing I would add was that I found some pretty strong evidence that there were wet states, too, that wanted this as much as the dry states because they feared that the drys would gain ascendency again as they did prior to the proposal and ratification of the 18th Amendment.  They wanted to make sure that they would have their interests protected as well. MR. ZYWICKI:  In a sense, there was something in there for wets and drys both.  At the time, if you read the articles from the New Republic or the New York Times, the country was riven by wet-dry, almost like red and blue states. MR. STERLING:  Eric Sterling from the Criminal Justice Policy Foundation.  My recollection is that the 21st Amendment was enacted in a tremendous political situation; that it involved the presidential election.  There was a great deal of debate about it in a way that doesn't strike me as common in other kinds of constitutional amendments.  I'm curious about the actual drafters.  I have the recollection that there was a group of lawyers called the Voluntary Committee of Lawyers, who were working behind the scenes and advising the states and their constitutional ratification conventions.  Who was really involved in the drafting of this--of besides simply taking the language from the Webb-Kenyon Act? MR. ZYWICKI:  I don't recall specifically.  What's interesting is there's relatively little debate on Section 2 in Congress.  Most of the debate is on the proposed, but never enacted Section 3, which would have given the federal government concurrent power to regulate saloons; they were particularly concerned that the saloons are going come back and corrupt us all.  I don't recall specifically who was involved other than particular Senators. But because this really just seemed to constitutionalize the Webb-Kenyon Act, I didn't see that much debate around Section 2 that was too much different than what they said about the Webb-Kenyon Act. MR. DENNING: There's a fascinating story about the battle over the framing and ratification of the 18th Amendment.  There was a tremendous outpouring of literature right after that occurred, with people making arguments that the Amendment itself, insofar as it nationalized something that, to that point, had been considered absolutely local, so the Amendment itself was unconstitutional.  And there are two good books.  David Kyvig is an historian who's written a wonderful book called Repealing Prohibition.  And then there's another book about the regulation of alcohol, by another legal historian named Richard Hamm [Shaping the Eighteenth Amendment: Temperance Reform, Legal Culture, & the Polity, 1880 1920].  Those are both really interesting and fascinating books.  If I remember Kyvig's book correctly, he really goes into those groups of lawyers who agitated for years for Prohibition's repeal.  And you're right: it was part and parcel of the 1932 election.  The only thing I would add is that both parties were running away from the 18th Amendment as fast as they could, but that Franklin Roosevelt and the Democrats had sort of a built-in base of northeastern immigrants, particularly people of German stock and Italians and others, who, you know, enjoyed drinking and wanted to see it return.  And the western Republicans, Mid-Westerners, you know, were part of the people who had really agitated for this in the first place. MR. ZYWICKI:  Part of what was going on was the collapse in tax revenues associated with the Great Depression.  Alcohol was seen as a viable place for especially state and local governments to go for tax revenues.  That was another reason it was very popular. [AUDIENCE QUESTION]: Todd, I was surprised to hear your comment that both Justice Thomas and Justice Scalia embrace the dormant Commerce Clause.  I thought Justice Thomas's opinion in Camps Newfound was pretty stridently opposed to the Court's made-up dormant Commerce Clause.  Now, granted, both of them have joined or written opinions applying the Commerce Clause, but I've always taken that to mean that there's a lot of water under this bridge not as an embrace of the dormant Commerce Clause. MR. ZYWICKI:  What I thought I said was not necessarily that they embrace the dormant Commerce Clause, but they both embrace the non-discrimination principle.  It's clear in Camps Newfound that Thomas clearly believes there's a non-discrimination principle in the Constitution.  It's just located in the Import-Export Clause, as opposed to the dormant Commerce Clause.  Scalia, for instance, prefers to use the phrase negative Commerce Clause when he's referring to the non-discrimination principle of the Commerce Clause, and I think he's suggested it might properly be cabined in the Privileges & Immunities Clause. The Pike stuff is where I think they see the genie is out of the bottle, and they don't want to extend it.  But I see in both of them an adherence to non-discrimination.  For instance, in the Healy case,17 Scalia specifically says in concurrence that the discriminatory nature of the law removes the protection of the 21st Amendment.  And ithe CTS case,18 by Scalia, very clearly implies that the Supreme Court should be in the business of reviewing discriminatory laws, but not non-discriminatory laws. MR. DENNING:  Actually, I was going to correct Mike [Greve].  The last dormant Commerce Clause case the Court took was the Maine Prescription Drug Case,19 in which the Court very cursorily dismissed a fine dormant Commerce Clause argument that could have been levied against the Maine Prescription Drug Program.  The reason I bring that case up is because that's the case in which Thomas, in another case from that same Term, Hillside Dairy,20 basically announces that he will not enforce it anymore.  Discriminatory, non-discriminatory, Pike balancing it doesn't matter.  He's decided that the dormant Commerce Clause is unwieldy, unworkable, and he's not going to enforce it. Scalia, interestingly enough, also wrote two concurring opinions in which it sounds like he s only going to decide dormant Commerce Clause cases and strike down state laws on the basis of stare decisis.  Now it sounds like he's limiting his position even further, only striking down laws in cases in which the facts are identical to cases that have come before.  That could embrace the anti-discrimination principle or it could just allow him to draw minuscule factual differentiations among cases. If you add up the votes in the cases here, I think that the states are going to be in a pretty good position. MR. PATE: What do either of you make of the argument in the brief Miguel Estrada filed that since Congress did reenact Webb-Kenyon, whatever is going here, there isn't room for the dormant Commerce Clause because Congress has spoken? MR. ZYWICKI:  From what I can tell, Webb-Kenyon was reenacted for one reason, which was that it was unclear where the legal landscape stood after the 18th Amendment, and whether the repeal of the 18th Amendment brought everything back to life or that sort of thing.   The 21st Amendment Enforcement Act of 2000 created new procedural mechanisms for states to be able to enforce their state laws against out-of-state shippers.  It's attached to the Webb-Kenyon Act, and there is a provision inserted called Rules of Construction, the clear intent of which, if you look at the legislative history, was for Congress to make the statement that Webb-Kenyon was not meant to bless discriminatory state laws.  They used sort of awkward language to do it, but if you follow the legislative history, that's how it came through.  Several members of Congress actually filed a brief in the wine case, also, in the Supreme Court, where they reassert the position that Webb-Kenyon is not a reverse delegation, but rather a positive use of congressional power to allow the states to enforce their laws. MR. DENNING: I would just add that if the Court wanted to weasel out of this dilemma and not answer the question about whether the 21st Amendment trumps the dormant Commerce Clause, they could say that whatever the 21st Amendment does to the dormant Commerce Clause Doctrine, the dormant Commerce Clause Doctrine doesn t apply here, because Congress has redelegated power to the states.  I hope they don't do that. MS. WACHTELL:  Mr. Zywicki, you really had me going with a lovely argument until at the end you said, however they decide this case, it's a complete catastrophe.  It seems to me if they decided under the 21st Amendment, it's one piddly little industry that got lucky or at least the non-export in it got lucky.  And I wonder if you saw it being anything more than that in terms of other industries? Mr. Denning, I didn't quite follow whether your argument was that the states need no argument in order to support this, no rationale other than it's written into the Constitution or that they only need a rather weak rationale.  The latter sounds a little more like what you were saying and more cogent.  In other words, if we can save six children from becoming alcoholics in the State of North Carolina, it doesn't matter how much money is saved to consumers.  That strikes me as the kind of thing that Congress would do and maybe the Constitution would do and would support, in light of the sense that this industry is so sui generis. MR. ZYWICKI: I'll grant the point.  It would be less disastrous if they decided narrowly on 21st Amendment grounds than if they adopt the Second Circuit reasoning, which I think could be really catastrophic.  So, I would say that the harm to the republic would be still present, but perhaps less if they blessed discrimination only in this context, depending on what kind of language they use and how much they allow.  What I'm concerned about is that the states are going to be able to wave their hands, and instead of producing real evidence, produce the kind of junk that they actually have in their briefs, which is hand waving.  The Supreme Court has been very good and very rigorous about saying you have to demonstrate real evidence.  If the Supreme Court can draw that line again, and basically say the 21st Amendment creates a narrow exception, that would not be that bad.  But to the extent that the Court gives credence to these very poor justifications for discrimination that the states have advanced, I think that could have real negative effects for other Commerce Clause cases. MR. DENNING:  The states have said this helps us promote temperance.  I've always thought that's a crappy argument.  But the second thing is taxes.  State alcohol regulation does preserve a revenue structure that could be circumvented with direct shipment, in the way that sales taxes can be evaded through Internet sales.  Finally, I think that there is a non-frivolous, although not terribly strong, argument that state law could help at least stop some enterprising underage drinkers.  If you eliminate the dormant Commerce Clause, I think we're back to a rational basis standard.  The question becomes whether a reasonable legislature could have believed that those good benefits would flow from its regulatory structure.  Although hopeful signs have shown up in some other cases regarding economic regulation, I think still the rule is generally as long as the Court can hypothesize good things that flow from state regulation, it doesn't matter whether those are present or not.  In my ideal world, that would not be the rule, but I think that's the rule right now at least outside the Sixth Circuit and outside the funeral home directors world,21 but I think that that would be a much easier argument for the state to make. JUDGE WILLIAMS:  I may have misunderstood what you were describing as the basic thrust of the 21st Amendment.  You made it sound as if the evil perceived was feds involved in local law enforcement, which makes it sound as if the feds were inefficient but compared to what?  Compared to state law enforcers?  It would seem to me that the more obvious explanation is just the basic federalist principle that states ought to be allowed to make their own trade-off between the evils of abuse and the evils of crime.  A second issue is the balancing under Pike, which seems to me essential to screen out forms of discrimination that were not formal and obvious. MR. ZYWICKI: I agree with your characterization of Pike.  Pike says, balance the benefits inside the state to the harm outside the state.   I think that Pike is most useful in providing a proxy for discrimination: if the costs dramatically exceed the benefits, we can probably infer that it's a discriminatory law.  That's not exactly how the Supreme Court has characterized it.  They've characterized Pike as a wide open balancing test, and this is where I read Scalia and Thomas ridiculing it.  With respect to your question about the failure of Prohibition, there's a lot going on.  What comes out of legislative history is that most of that discussion arises in the context of the proposed, but never enacted, Section 3, the saloon amendment.  The proposal was there to have the federal and state governments have concurrent authority over saloons.  But concurrent authority really means federal authority because of the Supremacy Clause.  That's what happened under Prohibition: the feds displaced the states because of the Supremacy Clause.  And if you enact Section 3, it's going to just bring the feds back, meddling in saloons.  The next thing you know and you see this in Wagner's speeches the feds are going to be setting closing times, and they're going to be setting who can drink where.  So, you see both aspects, the practical as well as the jurisdictional.  The Federal Government can't run this operation because they don't want to invest the resources, and that tells us why we have usually left the police power in state and local hands.  THE DOPE ON THE COMMERCE CLAUSE MR. WARREN: Viet Dinh is a Professor of Law and Co-Director of the Asian Law and Policy Studies at Georgetown.  Viet was, as you all know, an Assistant Attorney General for Legal Policy in the Bush Administration from 2001 to 2003.  And he claims to be very much involved in the Patriot Act. MR. DINH: I don't claim that. MR. WARREN: This is a part of a conspiracy, as I understand it from the New York Times, because Viet Dinh clerked for Judge Silverman.  According to the New York Times, always able to sniff out a conspiracy, in one famous meeting in the Justice Department, nine out of fourteen participants were Silverman law clerks.  He also clerked for Justice O'Connor. John Eastman, I have known forever.  John was a student of mine at the University of Chicago (and Richard Epstein s as well, I'm sure).  John clerked for Mike Luttig , and then for Clarence Thomas.  He was an associate briefly until he decided to go to academia, where he's been at the Chapman University School of Law since 1999, and he is the director of the Claremont Institute's Center for Constitutional Jurisprudence.  He has become a true gadfly in litigation, as I understand it, over constitutional issues. I think this is a great case, a fun case to talk about, and it's much simpler to describe than the case that Hew had to describe.  California has a statute called the Compassionate Use Act, which is intended "to ensure that patients and their primary care givers who obtain and use marijuana for medical purposes upon the recommendation of a physician are not subject to criminal prosecution.   And that recommendation can be written or oral.  It's a very open-ended statute which you would expect only in blue states.  But there are about a dozen states that have enacted similar statutes, including Alaska and Montana.  So, this is not just a blue state issue. In this case, we have the perfect plaintiffs.  We have plaintiffs who are seriously ill, incapacitated, tried all kinds of drugs.  They don't work.  They are using only home grown marijuana.  There's no interstate argument about these marijuana plants.  The plaintiffs had the good fortune of having the DEA come in and seize six of their marijuana plants otherwise, there would be serious ripeness issues in this case, and there may still be some justiciability problem, but it looks pretty good.  This statute comes right up against the Controlled Substances Act, which has been on the books since 1970.  Under that statute, Category 1 substances (including marijuana) are banned, and Congress has made findings that Category 1 substances are substances that have a high potential for abuse; that have no currently accepted medical use in treatment in the United States; and where there is a lack of an accepted safe use of the drug or other substance under medical supervision.  So the findings of Congress seem to come right up against what California is saying.  In addition, the Controlled Substances Act makes a number of findings, including that local distribution and possession of controlled substances contribute to a swelling of the interstate traffic in said substances.  Controlled substances manufactured and distributed intrastate cannot be differentiated, and federal control of intrastate incidence of the traffic in controlled substances contributes to the effective control of interstate drug traffic.  So that's the clash. Viet is going to speak first, and John is going to speak second, but I thought I would just frame the questions that it seems to me they both have to answer.  Viet: quoting Judge Sentelle, in a case involving interstate commerce, said it's neither interstate nor commerce.  As only Judge Sentelle could say it, he quoted the old chestnut, "If we had some ham, we could fix some ham and eggs, if we had some eggs."22 [Laughter.] John, the dilemma you face is equally daunting because, under this California statute, you need a prescription of some kind, oral or written.  As I watch television, getting prescriptions, say for Viagra, is not exactly the hardest thing in the world.  Doesn't this really amount to the proposition that anyone who wants to use marijuana, who is in possession of marijuana, if they've gotten a wink and a nod from a physician, is in the clear?  And isn't it a fact that we're really talking about possession of marijuana in California as coming outside the ambit of federal law as a consequence of this compassionate use statute? MR. DINH:  I'm not sure I am completely 100% on board with the government's position.  I will start by articulating the government's position, and in some respects, advocating it.  But I ll also offer you a first cut at evaluating its merits, and then turn it over to John Eastman to give us the natural implications of the government's position in Commerce Clause jurisprudence. The dissent below by Judge Beam and the primary argument in the Department's petition and the brief relies heavily, if not exclusively, on Wickard v. Filburn.  And the argument goes, heck, if poor Filburn were growing marijuana instead of wheat, there's no question that the Court would validate the restrictions on his activity.  I don't think that that is going to be a particularly persuasive argument, especially after Lopez.  I read Lopez as basically restricting Wickard v. Filburn to its facts.  I think the fact that it is marijuana and drugs in this case will sway at least one important vote in the court.  But the argument is much more refined, and I think it will come out much more clearly in oral argument. The rejoinder to the Wickard v. Filburn line of argument is, That's fine, but there Congress was trying to regulate interstate commerce.  Here, there is no interstate commerce in marijuana because of the effect of governmental regulation.  There is no market for marijuana, and so therefore there's no corresponding impact on the national market from subsistence production as there was in Wickard v. Filburn. I actually think that argument works the other way.  If Congress has the ability to restrict trade all together, and therefore to prohibit the black market, if you will, of marijuana, then it is a stronger argument than, say, in Wickard, in which Congress arguably can be characterized as trying to prevent a gray market that would work to diminish its regulation of the primary market.  Here, what Congress is trying to do is prohibit all together, and so therefore the prohibition of intrastate production for subsistence purposes should be prohibitable.  Here the argument is very, very subtle.  It is the same argument that the government has made in the child pornography context, and it is primarily one of enforcement. If Congress has the power which it undoubtedly does to prohibit outright interstate movement and production of marijuana, and marijuana is an international and national product that is fungible in nature, it is impossible for the government to enforce this prohibition by allowing for a vibrant or any black market in marijuana. In the child porn context, especially over digital pornography, the defense is that this does not use an actual live child, but rather just a pixalation by computer programmers.  And since there are no primary effects to the use of minors, it is pure speech and therefore should not be prohibitable under the traditional child pornography statutes.  That's a very difficult problem to get over, and so the Department argues to Congress that we have to be able to create some sort of rebuttable resumption in order to get at the true problem of child pornography using an actual child.  Of course, the argument is strengthened in this context because you do not have an independent operation of a constitutional protection, like the 1st Amendment, to protect against the overbreadth.  Here, it is just a straightforward exposition of congressional power under Article I, Section 8.  But I think analytically the argument remains the same. If the Necessary & Proper Clause means anything, it must give Congress the additional power to institute enforcement measures in order to regulate pursuant to substantive authority under the Commerce Clause of Article I, Section 8.  And so the Necessary & Proper Clause, allowing for the proper enforcement of the admittedly permissible regulation of interstate movement of marijuana is, at the end of the day, probably the best argument that the government can make. It is the best argument.  It is not, however, necessarily an analytically clean argument because the natural question is, why can't you make everything a movement in interstate commerce?  You recall the Chief's opinion in Condon23 a couple of years back where he said driver information is "a thing" in interstate commerce, and so Congress properly regulates that thing in interstate commerce so with cereal, so with wheat, so with anything, any product that can be a thing in interstate commerce.  If government then seeks to ban such products, then the argument would go, Congress would have the enforcement power to ban interstate production and consumption of that product, also. I guess the rejoinder to that is simply a structural one.  It's one thing to regulate, but it's quite another thing to ban a product outright together, and the political process works best when such a ban is instituted.  It is not an entirely persuasive argument to distinguish between regulation and banning, but there is some practical reality to the fact that the electorate would rise up much more in response to an outright ban of a particular product than to its simple regulation. Whatever the outcome of this analysis is, one aspect of the case and of the Ninth Circuit opinion is troubling to the analysis for the respondent: two of the plaintiffs here are people who grow marijuana in order to distribute to the admittedly very sick and very sympathetic plaintiff who actually needs it for medical purposes, and the Ninth Circuit injunction is to permit such distribution also.  So it's not just simply the production and immediate consumption for personal use, but the actual distribution of marijuana across the economic units.  So there is commerce, in a way.  It depends on what the dying patient gives in reciprocity to such distribution, but one can imagine love and affection being able to be an adequate compensation. MR. WARREN:  A smile? MR. DINH:  Exactly, free love for such a distribution.  And so there I think the argument is much harder; that is, it is a commercial transaction, with respect to distribution, and the only thing that justifies it is this so-called medical necessity.  But you d have to explain why is there is a medical necessity exception to what normally would be the ordinary Commerce Clause analysis.  I think that the case would be much stronger had it been just one plaintiff for consumption without any distribution.  The way it is phrased, I think that it may well give the Court an easy way out without deciding the central issue that we have in this case.  The really interesting issue is, what if Filburn were growing marijuana instead of wheat? MR. EASTMAN:  I want to add a few things to your description of the case.  Not only were the perfect plaintiffs here, but I think we also had the perfect judge.  That this comes from Harry Pregerson I think really defines a little bit of the dynamic of the case.  The jokes about the Alt 9 macro of the Supreme Court are true: This case comes from the Ninth Circuit, and there are three other reasons it ought to be reversed.   Your description of the statute I think is also good, but it leaves out something.  We can have oral or written prescriptions.  But I think even prescriptions by smoke signal would be permissible. [Laughter.] I want to take up your challenge directly: with prescriptions being so easy, isn't this really legalized possession and doesn't that make it a much tougher case for me?  I actually don't think it does.  I don't think the fact that this was a medical exception in the California statute matters one iota to the constitutional argument.  If California wanted to go further and legalize simple possession, without any connection with interstate commerce, it would be allowed to do so.  I think that's part of the reason Mike has brought me in here.  I'm from California.  I even wore my Jerry Garcia tie to defend this position. [Laughter.] But let me make a disclaimer.  I never have smoked, and I'm not a fan of the California policy.  I think it's terrible policy, but I also am a big fan of California's right to do this.  As you get into the opinion, what's most interesting to me is that I think both Judge Pregerson in the majority, and Judge Beam in dissent, are absolutely correct--both of them. Judge Pregerson goes through a very careful, thoughtful, and analytically accurate application of the four factors in Lopez unlike most other courts in the country that have been looking at Lopez challenges to a variety of federal statutes.  And the majorities in all of these Commerce Clause challenges are ducking the careful Lopez analysis that Judge Pregerson engages in here. If you go through that analysis, this is not economic activity.  We're talking about homegrown marijuana, for personal use.  There's nothing economic about it.  There is no jurisdictional hook.  (A lot of the courts in the country, when they admit that there is no jurisdictional hook, they then go in and say, the courts will substitute their own jurisdictional hook when the statute lacks it and just completely write that element of Lopez out.)   There are also no specific findings on this particular subject.  The courts have been ducking that issue, too.  Generic findings are good enough even though the Supreme Court in Morrison came back and said they re not good enough.  The same ignoring of the Supreme Court's rules has existed since Lopez and Morrison.  And the lower courts, almost uniformly, except for Judge Pregerson here, have been just ignoring the rules from those cases. And then, of course, there s the notion that this is too attenuated.  You can't read the government's brief, its five-step analysis to get to some connection to the Commerce Clause, without understanding the joke that the attenuated prong of Lopez has become.  Judge Pregerson doesn't permit that.  He engages in a very serious application of the Lopez factors and comes out and says, "Therefore, I've got to uphold California's law and strike down the federal Commerce Clause statute." Now, why does he do that?  Is Judge Pregerson a big defender of the Lopez line of cases?  I don't think there's anybody in this room, certainly not me, who thinks that.  This is an "in your face" gauntlet to the Supreme Court.  Unfortunately, I think because of the facts of this case, because we're talking about the Controlled Substances Act and the law and order crowd, I think Judge Pregerson may have called the Court's bluff.  As a result, we're not going to get the Court embracing Richard Epstein's view that Wickard's got to go.  We're going to get the Court watering down what little remains of Lopez and Morrison, I fear.  I hope I'm wrong about that, but that's my prediction. Now, I said that both Judge Pregerson and Judge Beam were equally correct, and they're on opposite sides of the case.  How can that be?  Well, Judge Beam says persuasively, correctly, that Judge Pregerson's decision absolutely conflicts with Wickard.  He's absolutely right.  And I think what he's demonstrated to us is what the court in Lopez and again in Morrison was not willing to admit: taken seriously, taken logically, the holdings in both of those cases amount to an overruling of Wickard.  The majority has gone out of its way to say, "We're not touching Wickard." That is simply dishonest. Now, Wickard is still on the books.  So Judge Beam, in dissent, says you can't do this without striking down Wickard, and the Court says we can't do that.  But you also can't apply the Lopez holding faithfully, consistent with Wickard.  So they're both right, and they have presented to the Court the utter conflict in its reasoning in both Lopez and Morrison: How can you have a Commerce Clause that has any limits at all but keeps Wickard v. Filburn on the books?  Wickard is not economic activity, really.  True, I ve argued before the D.C. Circuit that it s economic and Morrison says it was economic in a way that carrying a gun to school for sale in Lopez was not.  But the real problem here, and I think Justice Thomas in Lopez had his finger on it, is that the substantial effects test, when combined with the aggregation principle, taken seriously (and not even to their logical extreme) mean that there is absolutely nothing that Congress cannot regulate.  That's the challenge presented to the Court with this case, and Judge Pregerson knows it.  And he, I think rightly, suspects that the Justices not going to be up to the task. Look at a couple of broader issues that this case also presents to us.  We've gotten to the world now where nobody in Congress takes seriously their constitutional obligation before they vote on a statute and where the Executive signs statutes, combined with a signing order that says, "I believe this to be unconstitutional."  And when we get to the Court, the Court is now deferring to the constitutional judgments of the political branches with such a degree of deference that none of the three are ever engaging in the constitutional inquiry. What's most striking to me about this case is the government's vigorous defense, not just how this is consistent with Lopez, but with a much broader understanding of Wickard than even the Wickard Court put out.  And this is coming from a conservative administration.  They're taking a position in their brief that is a broader understanding of the commerce power and the federal government's authority under the commerce power, than any brief I recall having been filed by the Clinton Justice Department. The broader question I have is, whose oaths are being followed and whose are not?  Does the executive have any independent obligation to make assessments of constitutionality either in its enforcement decisions or in the positions it takes before the Court?  And if it doesn't think it has any independent obligation to assess constitutionality, is it appropriate for the Court to be giving such a level of deference to the positions taken by the Department of Justice? I think, first, executive officials do have an obligation, and they need to revisit that.  There is a way to do this without completely throwing off the obligation to represent your agency.  We could have two-tiered briefs.  You could have a brief that says, Under existing precedent, such as Wickard v. Filburn, this statute is applicable or it can be upheld.  But Wickard v. Filburn was called into question in Lopez, and in fact a faithful application of the Constitution, which we are independently obligated to advance, says that Wickard v. Filburn was probably wrongly decided.  And, in fact, the Court at the time that it rendered that decision was in the habit of really not paying much attention to the Constitution at all.  So we ought not to take the fact that the Court in Wickard has said this is okay as a carte blanche.  Now, we'll continue to rest on the argument that Wickard is there, but encourage you to revisit that.   I would think that would be a more appropriate role for the Department of Justice in a case such as this.  It has taken that role in the past, but it has not done so in the last four years, and I hope we get to the point where it will start doing so again.  Otherwise every single decision of the Court that is not grounded in the Constitution becomes a carte blanche, forever more, with nobody ever challenging it and nobody taking the independent obligation of their oath to the Constitution seriously. That, it seems to me, is the more critical challenge presented by this and a lot of other cases that have come down since Lopez.  Is Lopez just going to be the anomaly that scholars all over the country that didn't like it have claimed it was and that those of us who really liked it but couldn't get cert in any of the 100 cases following have feared that it is?  Judge Pregerson is fairly confident that his little case here is going to make Lopez just that anomaly. This is not a regulation of commerce.  You cannot look at the findings by Congress and think anything other than that this is a raw exercise of police power using a Commerce Clause hook.  Finding number two: The illegal importation, manufacture, distribution, and possession and improper use of controlled substances have a substantial and detrimental effect on the health and general welfare of the American people.   That's a police power purpose.  That's not a Commerce Clause purpose.  It's not like these little marijuana plants, even in commerce, are going to blow up and destroy whatever other commodity is sitting next to them; It s rather, the feds say, that we can't differentiate possession by Ms. Raich and possession by somebody who s actually brought their marijuana across state or international borders.  Well, so what?  If not aimed at regulating commerce, it doesn't matter whether we can differentiate or not.  If marijuana is possessed in California, it's subject to California's police power not to the federal government's police power, because they don't have one.  So that claim, as well, is one aimed at a police power purpose, not a Commerce Clause purpose. The one purpose that is arguably a commerce clause purpose is actually 180 degrees opposite of the argument that was made in Wickard v. Filburn: that by not buying wheat on the interstate market, Farmer Filburn depressed the interstate market in wheat.  Well, here, it's that by home-growing their own marijuana, they are swelling the interstate market in marijuana.  You can't have it both ways.  Again, the purpose that they have articulated, in defense of this Commerce Clause hook, is so pretextual I think you've got to conclude that this is a reach to a police power purpose that is improper. You don't get there with the Necessary & Proper Clause either, however much the Department of Justice wants it to.  When the end is not a commerce purpose but a police power purpose, you can't use the means to get to the illegitimate end.  McCulloch decided that a long time ago.  It would be the solemn duty, and painful duty, of this Court to say that that's a pretext and to strike down that statute.  I think that's the right result here.  I fear we're not going to get there. MR. DINH:  I think John misunderstands my argument.  The end is the regulation of interstate movement or nonmovement of marijuana, and the means is the prohibition of domestic or intrastate production and distribution because the product is fungible.  In the end there is clearly legitimate interest in the ban on interstate movement of goods, and the fear is that the domestic production would make that ban unenforceable.  So it's not as easy as McCulloch v. Maryland. With respect to the Department of Justice, you make a very good point.  However, the analysis is a little bit more subtle.  Let's take a case in point--the Campaign Finance Reform Act. MR. EASTMAN:  That's what I was thinking of. MR. WARREN:  As was I. MR. DINH:  It doesn't take a genius to request an opinion from the Department of Justice on the constitutionality of McCain-Feingold.  And it doesn't take a genius to say that the Department of Justice is taking its time in order to respond to such requests for the constitutionality.  Why?  Because once Congress passes a statute, then it has that presumption of constitutionality, and the Department of Justice has a duty to defend that statute subject to its obligation to the Court to present only reasonable arguments.  Also you don't want to tie the hands of the president for political purposes by opining prematurely on the constitutionality of a pending bill.  If you have only an unreasonable position, your duty to the Court is not to defend that statute, which, by the way, Ted Olson has done several times with respect to one statute, portions of which I argued in favor of: the Family Medical Leave Act.  Ted sent a letter to Congress saying, We will not defend X, Y, and Z, in light of this case, that case and the others.   So he has exercised that authority. But in presenting its arguments to the Court, the DOJ has to weigh whether or not this argument is reasonable in light of this precedent.  So it meets this competing duty that is independent of the duty to adjudicate, as an initial matter, whether or not it's constitutional because, in that position, the SG is both advocate and tenth justice.  And the best articulation of this problem is probably Seth Waxman's articulation of how he dealt with the 30-501 problem in that context. MR. EASTMAN:  I think the presumption of constitutionality goes out the window when the authors of the bill are admitting on the floor that it's unconstitutional.  They just don't know how many parts of it the Court is going to strike down.  And I think it goes out the window when the president, in signing, has his signing statement that acknowledges its unconstitutionality as well.  I don't think you get a presumption of constitutionality out of such thing.  And I think the independent oath, both of the solicitor general and the president, doesn't allow you to do those kind of things.  The law has got to be faithfully executed not just executed no matter what. MR. WARREN:  But let's bring it back to marijuana-- [Laughter.] I could get going on campaign finance, and we would never stop.  Let me pose to you both this question.  First of all, if I read Judge Pregerson's opinion, one of the two plaintiffs, Monson, the one whose marijuana plants were confiscated, actually grows her own marijuana.  So there is no distribution in that case. With Raich, I think there's no compensation, other than a smile and a thank you, I think, from Raich to the people that are growing the marijuana for her.  I think, even in her case, that it would be a great extension of the Oakland Cannabis24 case to see this as distribution.  But Oakland Cannabis raises the question that I want to pose for both of you: it seems to me that affirming the Ninth Circuit is easy, but are we going to get an opinion from the Court?  Because we had three justices in the Oakland Cannabis case who basically said this is Lawrence v. Texas.  This is personal privacy rights.  Justice Breyer did not participate in the case.  He may very well go along with that. I mean, are we going to get an opinion from the Court in this case? MR. EASTMAN:  I hadn't thought through the full implications of that until just now, and it hits me like a brick.  I would much rather have them sell us out on Wickard v. Filburn than to find a constitutional right to smoke pot along the Lawrence v. Texas. MR. WARREN:  I'm only presupposing there's four votes.  There are four justices who are reluctant to go down the Lopez-Morrison road, but, on the other hand, are very sympathetic to the plaintiffs and are likely to say, "Affirm on these grounds."  And so then the question is, do you really have five votes to get an opinion from the Court? MR. EASTMAN:  No, but you're right.  Because there is nothing in the lower court's opinion that addresses it on those terms, and I don't think it's within the MR. WARREN:  Parties talk about it in the briefs. MR. DINH:  Both issues are presented, right? MR. EASTMAN:  Yes. MR. DINH:  At the end of the day, as I've said, the government's argument merges into the medical necessity argument, and they can go one of two ways.  I think the medical necessity argument is utterly incomprehensible, except if you find a personal right to smoke pot.   MR. WARREN:  I think that it's a little different than the medical necessity argument, though, because it seems to me the medical necessity argument goes by the by with Oakland Cannabis.  It seems like to me the argument is more, look, this is in your home, marijuana which you have grown.  This is privacy at its essence, and if you can do certain other things in your home, why can't you do this? MR. EASTMAN:  I think this just shows how wrong Lawrence was.  Leave the states to regulate their own health, safety, welfare and morals free of the federal hand, and you'll get some states that make crazy decisions and other states that make sound decisions, and over time the sound decisions will prevail.  You won't get all of that debate and experimentation with a single federal rule. MR. WARREN:  Let me ask one more question. Viet, as I listen to you, and honestly as I read the SG's brief, I say this sounds like a field preemption case.  They're really basically saying we've got this comprehensive statute, and we've got all of these findings, and there's just no business for the states to get into this.  And yet this isn't a preemption case at all.  It's a Commerce Clause case.  And once you start posing the question in terms of commerce, then I think Judge Sentelle's description of the problem is apt. MR. DINH:  You are absolutely right.  You put your finger on the weakest point of the argument, both in terms of the failure of a pervasive federal regulation in order to justify a core Section 8 authority and also the fact that the preemptive scope of CSA is not as clear as one would think. I think that's why, ultimately, it will have to rise or fall on this question of an attack on federal enforcement authority, which, as I articulated, may well argue too much.  I'm sure Richard will comment on this, but frankly, we've seen this Court, and particular justices who shall remain nameless simply really change their minds on the advent of these cases. MR. EASTMAN:  The one thing that I hold out on that question, and that I think is good in the Department of Justice brief, is they are taking more seriously than has been taken in a long time the line between the direct commerce power and the means power in the Necessary & Proper Clause.  And they actually cite them separately, which is fairly rare. What I think that's going to tap into is a discussion that we get out of a majority of the court in Printz v. United States, when Justice Scalia, striking down the Brady bill, makes that distinction.  And then he engages in the two-part inquiry that the Necessary & Proper Clause actually asks us to engage in: is it necessary, as broadly or loosely as we want to define that?  And there's lots of ways you could do your enforcement mechanism shy of regulating all possession or banning all possession greater border enforcement, both interstate and international border. But even if you accept a broader MR. DINH:  Wait.  Except in the most populist state in the union, you know, there's free love. MR. EASTMAN:  But that means it's no longer about the commerce, but it's about people actually using marijuana in the state, and that's the police power and not the commerce power.  And then it seems to me the second part of that inquiry, which Scalia elaborates well in Printz: is it proper to so intrude on a state's own exercise of their police power?  And I could see necessary being a close call. MR. WARREN:  I think it's about time to let some of the actual participants in the audience participate officially.  So who would like to be first in the audience?  Richard? [Laughter.] MR. EPSTEIN:  Let me just go back again to the history.  If you're trying to figure out where John is coming from, and it's a place that I'm sympathetic with: I assume your argument necessarily predicates that the old lottery case, Champion v. Ames25 was wrongly decided. MR. EASTMAN:  That's correct. MR. EPSTEIN:  If it's rightly decided, then, in effect, everything that you have said disappears on that ground. MR. EASTMAN:  Yes. MR. EPSTEIN:  For those of who don't remember what Champion v. Ames was, it was the question of whether or not, when you ship lottery tickets from one state to another in interstate commerce, Congress could ban the shipment notwithstanding the fact that they weren't going to leak pollution on the tracks of trains running in interstate commerce.  And the issue then became, did it make a difference whether these tickets were illegal in the place from which they went or the place to which they were going, or did it not matter at all?  The Eastman position which I have a lot of sympathy for, mainly because I think it's correct is that it doesn't matter what's happening at either end.  Congress can't touch it.  If it's illegal in the place in which it is shipped, then they can punish you.  If it's illegal in the place to which it's going, then they can punish it, but the feds are essentially out.  There is no general federal police power.  If that's the case, then it seems to me that the federal government doesn't have the power to stop trafficking in marijuana unless and until you can show that it has damages to the vehicles that are carrying the marijuana.  So your argument was, well, the feds can still stop the stuff at the border.  If you really believe in Champion v. Ames, they can't. MR. EASTMAN:  They can help Nevada stop it at the border if Nevada doesn't want it coming over. MR. EPSTEIN:  I don't believe that.  Where do they get the auxiliary police power if they don't have the independent police power?  If Champion is wrong, it seems to me the government is out of the anti-trafficking business. MR. EASTMAN:  All right.  You've convinced me. [Laughter.] MR. EPSTEIN:  I think that's right, but understand this is not undoing Wickard.  You're undoing Champion v. Ames, which was a five-four decision and was wrong.  I mean, you make me look like a timid conservative. MR. EASTMAN:  I've been trying, you know. [Laughter.] MR. DINH:  He makes you look like a liberal.  Nobody can ever make you look timid, Richard. [Laughter.] MR. EPSTEIN:  But don't shrink from it.  It's probably right. MR. EASTMAN:  I think it's right and it goes back to, What's the purpose?  McCulloch insists that we ask this question:  Is it a police power purpose for which they're using a Commerce Clause hook as a pretext?  Then they don't get to do it.  If it's a commerce purpose, then they get to do it.   MR. DINH:  The question here, because now we're talking about trafficking, is the exact same question that pervades the entire Commerce Clause analysis, which is why I have some sympathy for Justice Thomas's denunciation of the effects test.  On the one hand, John's position is separate from the fact that he is arguing against Champion v. Ames.  But there is no clear line all the way to the position where I said was the weak point of the  Department of Justice's argument where they can ban anything that can potentially move in interstate commerce.  The only restriction on it is a structural political one, and anywhere within that spectrum, you really can't have a principled line, unless Richard has a flash of brilliance. MR. EPSTEIN:  I do. [Laughter.] JUDGE WILLIAMS:  I want to ask John what a commerce purpose is.  Richard talked about the lottery tickets not leaking on the trains and so forth.  Preventing leaks is a good commerce purpose, obviously;  that's protecting the arteries of interstate commerce.  But what about exercise of power under the Commerce Clause to solve a collective action problem among the states?  Is that not to be considered?  I would have thought that would be what the Constitution was all about. MR. EASTMAN:  Well, I would take an intermediate step.  It depends on how big the collective action problem is.  If it's Nevada and California over Lake Tahoe runoff, then I would say the Compact Clause is supposed to be a stop gap so that you don't get a federal regulation of a regional problem.  What stake does Rhode Island have in that?  And the right answer is they ought not to have any.  And so I don't think the Commerce Clause reaches it unless that criteria truly is met. One thing that was not discussed on the last panel ought to be part of the discussion because it really does show what the commerce power is.  On the notion that the dormant Commerce Clause, even under the Scalia-Thomas restricted version of it, would prohibit discriminatory regulations.  I don't think that's accurate, certainly for Thomas, and arguably for Scalia, if he was writing on a clean slate.  The right answer is that the positive Commerce Clause allowed Congress to step in when the discriminatory regulation became such a problem that it needed to be fixed.  Shy of that the states were free to act and the courts weren't going to make a separate political judgment on their own.  No dormant commerce clause. If you look at that way, it is the ability of Congress to step in and intercede to keep a free flow of commerce going against barriers that states might throw up, when it became to a critical level where it was necessary.  I think that's what the original Commerce Clause was designed to accomplish maybe not solely, but principally. MR. DINH:  That's tough, though.  It didn't say, to preserve interstate commerce.   It says, to regulate interstate commerce. MR. EPSTEIN:  To answer [Judge Williams s] question, you've got to go back to another of the old chestnuts, which is Hammer v. Dagenhart.26  The argument in that case made by John W. Davis, as assistant solicitor general of the United States, is we've got a perfect "Prisoners' Dilemma" coordination game.  I can't get a 14-year-old statute for child labor in North Carolina.  And since I can't get it there, I can't get it anywhere else because there's a race to the bottom.  And the Supreme Court's basic position is that that's exactly what we want to have under those circumstances--competition amongst the various states.  The law at issue in the Hammer case said that if you are a company or if one of your affiliates makes goods which uses child labor, then you can't ship anything in interstate commerce, whether or not the product that is shipped was made with the child labor in question.  Essentially, Congress tried to hold interstate trade hostage and the justification they gave was the "Prisoners' Dilemma."  And what the Court said was Gibbons v. Ogden doesn't help you there because this is an effort tantamount to saying how the states shall run their manufacturing.  They struck it down, and then seven years later they struck down the child labor statutes, attacks on exactly the same ground. So some "Prisoners' Dilemma" games are virtuous, and you don't want to allow the federal government  to regulate against it.  There is absolutely nothing to say that you want to ratchet up child labor statutes so as that the highest dominates as opposed to the lowest. JUDGE WILLIAMS:  I'm not sure on what legal premise there's a "Prisoners' Dilemma" problem in that case.  The question is, what is there to prevent any state from simply saying nothing of any kind shall be sold in this state if made with child labor or slavery, whatever. MR. STERLING:  Ed, as you described the case and you read the findings in the Controlled Substances Act, you didn't mention the finding about the treaty power that the Controlled Substances Act is, in part, enacted to carry out the single convention on narcotics. MR. EASTMAN:  That's a good point. MR. DINH:  Great point. MR. STERLING:  There was a very good brief that Peter Bensinger, and Bob Dupont, and Herb Kleber [ph], former top drug officials in the United States, had written for them that lays out the importance of the treaty power.  I'm wondering if our panel would discuss the implications of that. In talking about Wickard v. Filburn, I was struck, in looking at the brief from the attorneys general of Louisiana, Mississippi and Alabama, who are supporting the patients in this case, and they make the point that Filburn, the farmer, was not just growing wheat for his bread for his own kitchen, but he raised something like 28,000 pounds of wheat that year.  This was part of a very large farming operation, a whole lot bigger than just six plants. MR. WARREN:  That's a very good point.  My reaction to the Wickard v. Filburn issue is that that argument, which was made by others as well, is so persuasive that the Court is never going to overrule Wickard because they're just going to say, look, that was a much more pervasive interstate commerce problem.  And if you guys agree with that, I would really be more interested in hearing your response to the first question, which is the treaty power issue, which is an interesting question. MR. EASTMAN:  At some point, the Court is going to have to address the conflict between its decision in Missouri v. Holland27 and its decision in Reid v. Covert28 in light of Lopez.  Reid v. Covert said you can't use the treaty power to do things domestically that violate specific prohibitions of the Constitution.  Missouri v. Holland seems to say that you can use the treaty power to do things domestically that are in excess of your enumerated powers under the Constitution.  But Lopez put teeth back into the limits of enumerated powers doctrine.  And so, to the extent there's a treaty power issue here, if the Court resolves it correctly, it goes away once we decide the commerce issue.  If there's no authority under the Commerce Clause, the treaty power can't let us reach it, in any event.  If there is authority under the Commerce Clause, we don't need the treaty power to reach it. MR. DINH:  I agree with that analysis.  I don't think, however, that the articulation of Article I, Section 8, stands on a par with the negative prohibitions because you get to the second one after you find whether you have the power under Article 1, Section 8.  So the real question is whether or not you allow the treaty power to be the new commerce clause of the last 50 years, which is, if you allow the treaty power to be what it is in Missouri v. Holland, then, again, it doesn't take a genius the go out and find somebody to sign a treaty in order to get congressional power, in which case it would be a massive, massive loophole that you can do an end run around Article I, Section 8. MR. EASTMAN:  And certainly not a loophole that was ever intended.  I mean, the notion that a treaty power could be used to regulate domestically is just completely foreign to the old version of the treaty power. MR. GREVE:  Much as I enjoy rip-roaring debates about Wickard v. Filburn, I wonder whether it's really right that you can make no distinctions between here and there.  The question is not, can you articulate some principle that you can defend through six rounds of law review articles.  The question is, can you defend it with a straight face for 20 minutes, which is all you need in the Supreme Court? [Laughter.] And I don't mean this facetiously at all.  The way the Supreme Court tries to parse this is to say the aggregated activity itself has to be economic, and economic must mean something like the exchange of goods and services for consideration among consenting adults.  One may or may not agree, but isn't that a viable distinction? Let me ask a follow-up question.  It's not just an aggregation issue.  It's also a question of the level of generality.  It seems to me, on that issue, both the plaintiffs (or at least the court below), and the government are very unpersuasive.  The plaintiffs want to say, Look only at us, these particularly sympathetic plaintiffs.   So you effectively excise their particular conduct from the general reach of the statute.  Conversely, the government says, "No, we go into the stratosphere and argue the Controlled Substances Act in general.  Anything that does arguably anything at all to promote the statutory purposes here at hand must ipso facto be okay.   That demagogic insistence on going into outer space and formulating the problem at the most general level also has to be wrong. Why can't you, if you're looking for a distinction, go to the statutory text itself, which here turns out to make a distinction between possession with intent to distribute, which actually has a nexus to commerce in some sense, and on the other hand, mere possession?  That gets you out of your lottery conundrum, and it's a viable distinction.  I'm not saying this is the most persuasive case that I could construct from first principles, but maybe it's the best we can do.   MR. EASTMAN:  Can this be distinguished from Wickard?  On the surface, yes.  I'm reminded of the old story of Justice Scalia having trouble with a particular opinion dealing with trucks that wasn't in line with the precedent dealing with trains, and he went to the Chief and asked, "What am I supposed to do with this?   And the Chief said, That was trucks.  This is trains.  There's a difference. [Laughter.] That was wheat.  This is marijuana.  There is a difference. [Laughter.] It seems to me that the way  the Court wrote the opinion in Wickard doesn't allow for a distinction.  The factual distinction you want to draw that Wickard's farm was a lot bigger: all that is irrelevant.  The thing that they're looking at it in that case is the excess we're talking about.  It was homegrown, it wasn't going in the market, and I don't see how you distinguish it, once you add in the aggregation principle.  You could distinguish the cases, if you take out the aggregation principle, but that's such a core part of Wickard that that's not really a distinction.  That's overruling. MR. DINH:  Richard's argument or question regarding Champion v. Ames helps me put it all in context.  Where John and I truly differ is that John believes it has to be both interstate and commerce, and I think that it has to be either interstate or commerce simply because I think that we operate in a national commercial market.  It s the same argument that I'm sure each and every single one of in this room has made in the preemption context: commercial activity is, by its nature, national.  I think that's how one should read United States v. Lopez.  In that sense, the real trick, with respect to the distribution, is whether for-free distribution is part of commerce or whether it is simply marginal behavior.  I actually like the carve-out, as a doctrinal matter, of simple possession versus possession with intent to distribute.   MR. EASTMAN:  The other distinction you want to draw is that what was going on here is really not economic in the way that what was going on in Wickard is.  What's not economic about it?  That marijuana isn't an economic commodity because it's illegal or that this particular use of it isn't economic.  But the way the Wickard Court describes how it was deciding that case, it's not on the small portion that he might have sold locally.  They said we're not going to look at that.  We're looking at the stuff he's putting on his own table, and I don't see how that's any more economic than this personal use is. MR. WARREN:  As a lawyer, as an advocate, I agree with Mike [Greve].  The idea that you can't stand up there and say this case is distinguishable from Wickard on three or four different grounds and write two paragraphs in an opinion which says this is not that case I really think you can do that.  And I think we have to come to grips with Mike's question because I think that's going to be what happens. Richard, you want to say something? MR. EPSTEIN:  The brief that was actually written for the principal parties goes through exactly that kind of deconstruction of Wickard.  And the way in which it does it is it ignores the opinion, and it spends its time on the description of facts that was presented by the Solicitor General in order to make sure that the case was understood.  And maybe that will work.  But it's interesting: after Lopez, Wickard is in play because the traditional view of Wickard was, if you feed your own crops to your own cows, you're in interstate commerce, end of discussion.  Now everybody is massaging the case, going back into the record.  I thought the Covington people, and I think Randy Barnett, did a very good job in making these preposterous arguments without any sign of guilt or shame, which I also think is extremely important. [Laughter.] MR. EASTMAN:  I've done it myself.  I spent a lot of time arguing before the D.C. Circuit on my toad case that you've got to take seriously the fact in Lopez that he brought the gun to school to sell, and I got my head handed to me on a platter.  That's nowhere in the opinion.  We only look at the opinion. MR. EPSTEIN:  No, no, no.  It is right there in front of the Wickard opinion in the same report of the case in the oral argument.  And when you read the opinion in light of what it says, this informs as to what the Court meant by substantial.   I think that's the way they do it. On the treaty power, I think the right line to take on this is as follows:  A traditional treaty is something which I give up something unto you in order for you to give up something unto me.  And the migratory bird treaty was that.  You're not going to kill the protected birds in Canada.  We're not going to kill them in the United States. The modern human rights treaties, many of which I loathe and detest, say: We're going to protect our citizens with a minimum wage law because it's just and fair, and you're going to protect your citizens with a minimum wage law because it's just and fair.   That it seems to me is the kind of thing that you can't do.  You just can't get yourself into the position where you could regulate local issues within the state by finding the Republic of Zimbabwe and having them enter into a treaty with you, whereby you agree to impose this sort of regulation.  That's where the quid pro quo comes in with respect to a treaty, and I think the analysis is actually consistent with ancient practice.  No one would have ever had to exclude these modern treaties because no one would have ever had the effrontery to present this sort of construct as a serious argument 200 years ago. MR. EASTMAN:  Let me just clarify what I said about Missouri v. Holland because I perfectly agree.  The way Missouri v. Holland is used to support the later treaties--   MR. WARREN:  If you can make it quick.  We ought to cut it off here.  We do want to hear from Richard. [Laughter.] MR. EASTMAN:  I thought we had. [Laughter.] MR. EASTMAN:  Can't we just skip to the cocktails? MR. STERLING:  This treaty, the single convention on narcotics, is that kind of we-give-up and you-give-up because we're trying to protect something.  It's a little different than the human rights treaty in building upon many decades of treaties.  It was for protection of international trade.  We give up our ability to unrestrictedly ship opiates into the international market.  We adopt this international system of regulation to protect you and visa versa.   MR. DINH:  This is why this drug problem turns on the enforcement problem, and it is a classic collective action problem in terms of enforcement.  If you do have any one country or any one state where the marijuana is allowed to be possessed or distributed internally, then you have lost total control of the market. MR. EASTMAN:  The prostitution example in Nevada and California or Nevada and Utah I think disproves that.  I'd like to see a lot more evidence that that's the only way or even a remotely plausible way to get a lid on the trafficking. MR. DINH:  We don't have to get into an argument of how you can assume prostitution differs from consumption of pot.  That's obvious. [Laughter.] MR. WARREN:  In all seriousness, I think we want to stop. [Applause.] MR. GREVE:  With our collective consent, I want to abrogate our break and go directly to Richard's talk and see what else he has to say. [Laughter.] Richard Epstein needs no introduction.  By his own proud admission, Richard is ineligible for any public office in the United States of America because his entire intellectual enterprise has been to build a bridge to the 19th century. [Laughter.] This reputation lasts until he shows up at the Cato Institute, which invites him whenever they think they need some closet socialist to balance their Libertarian panels.  It's always interesting to see Richard thread that needle.  Tonight he'll do us a great honor to try that on the Commerce Clause.   MR. EPSTEIN:  I don't know where to begin or even whether to begin.  I thought the discussion was much more interesting than anything that I have to say now, but I think it's probably useful, in light of the way in which this discussion has gone back to cases like Champion v. Ames and Hammer v. Dagenhart and so forth to start with the beginning and then work forward. In the time that I've been sitting here listening to others, I've done some detailed research on the history of the 18th Amendment, and it turns out that its relationship to the 21st actually has some important implications about how it is that we understand the Commerce Clause. One of the important things to remember is that 1933 is an important date in trying to understand the way in which the 21st Amendment was  drafted.  Far from being a completely frivolous point (like most of the things that I say), this one actually has some meat and some substance to it. The Commerce Clause really marks, in many ways, an intellectual step backward from the kinds of provisions that were found in the Articles of Confederation, on this point and this point only.  Go back and look at Article 4 of the Articles of Confederation, which deals with mutual friendship and affiliation: that's the origin of these rather mysterious words, at least as far as I've been able to trace it, Privileges and Immunities.   Since the Articles of Confederation was an arrangement that  presupposed a weak central government, is it was a dormant Commerce Clause which was explicitly enacted not in perfect form, but close enough to perfect form for these purposes in the original article.  It said, in effect, that no state could impose various forms of barriers of trade, so that any merchant who wants to do business in one state will now be able to do it on like terms with respect to the businesses in other states. That strikes me as to be where you'd want to go.  Shutting down the federal government might not be the ideal thing.  I don't want Hew [Pate] to be unemployed ( although sometimes I do), but at least there is a very attractive notion that if you're looking at what's going on here, the clear implication is that the dormant Commerce Clause surely seems to have, on a policy basis, more to commend it than the actual affirmative power of the Commerce Clause.  When you write the Constitution as was done in Article I, section 8, the dormant Commerce Clause has to become an elegant exercise in statutory construction, and the affirmative power of the Commerce Clause turns out to be a matter of straightforward, ordinary discussion and implication. The only historical source I ever read consistently is the Federalist Papers, and the truth about the matter is about 80 percent of everybody's arguments, sooner or later, devolves on some permutation of what was said there.  When you go back and you actually look at the history of the Commerce Clause, and if you go back and you read Federalist No. 11, and you see the way in which Hamilton looked at this particular clause, what he was worried about was a "Prisoners' Dilemma" game.  Each of the states, in a desperate effort to get foreign goods, would lower the tariffs against foreign commerce.  And so he wanted to make sure that Congress had the power to regulate foreign commerce so that it could set up some kind of a tariff wall.  What this means, in effect, is that the regulatory impulse associated with the Commerce Clause is built in right there on the ground floor on the first day.  At this point, you get into what is sometimes called the distribution problem.  If the attitude that you have on the Commerce Clause with respect to foreign commerce is intensely regulatory, why is it that when you start talking about Indian tribes (and remember the Non-Intercourse Treaty comes out very early in this history) or commerce among several states, you don't have also this powerful regulatory impulse at the congressional level to try to run a planned economy from the center? It seems to me that the word "regulation," could, to some extent, be read narrowly so as to mean only regularize the way in which commerce is to be conducted, so it's a giant statute of frauds.  But in light of the way in which it was clearly meant, understood, and enforced with respect to foreign commerce, it seems to me that regulation in this particular case has much more of its modern sense than the Lockean sense of regulate (to make sure that land transactions are going to be done in an orderly fashion by having them signed and witnessed). A question then is, is there any difference between the domestic and the foreign market?  And there surely is.  But they're not found in the Commerce Clause.  They're found in a cross between the Import & Export Clauses, on the one hand, which are surely designed to limit the kinds of taxes and exactions that can be imposed, and in the Privileges & Immunities Clause on the other, limited by the very enigmatic sense as to what counts as a citizen.  (That turns out to be a natural person who is a citizen for this purpose, but not of course when you use citizen in connection with diversity jurisdiction, where the term covers anything that you can invent, with all sorts of stipulative rules with respect to corporations.)  So it's a funny mix as to exactly how far the privileges go.  The same applies with respect to the fact that the Privileges & Immunities clause was limited to citizens, whereas the Equal Protection and the Due Process Clauses are both applied to all persons, which has very profound implications as to how you would read those clauses if you think we got the Slaughterhouse cases correct.  But I don't want to digress too much.  What I do want to suggest is that the basic program that we had was powerful national regulation of commerce in all its aspects.  If you look at privileges and immunities, and if you look at all of the other language that is associated with imports and exports, they were designed to prevent state balkanization of the market at that level.  So, in some sense, the Hamiltonian vision prevailed.  What are the limitations of this particular model when you go back to the original structure and organization of the Commerce Clause?  Here, Viet Dinh committed one of the sort of primary mortal sins from which there is no redemption or excuse when it comes to the way in which we read the argument.  Justice Marshall, in this first exposition in Gibbons v. Ogden, 29 refused to distinguish between that commerce which is internal to the states, and anything which simply has to do with possession or use of the various objects of commerce.  In fact, the entire opinion doesn't talk about manufacture.  (The word is not in the opinion, except in one very marginal way having to do with a constitutional provision elsewhere.)  The whole point is to say, purely domestic commerce i.e., local trade, exchange transportation and so forth is out from underneath federal regulation and is subject to state regulation.  Only transportation or communication that goes across borderlines falls in the federal domain.  The use of the word "intercourse," meaning a course which goes from one place to another place, was his synonym for commerce precisely because he wanted to exclude all else.  Why did he want to do that?  Because he knew if he went any further, the entire delicate formation of the union in the antebellum South would fall to pieces.  If you could stop commerce in the broader definition, Congress could prohibit the slave trade inside the State of Mississippi as of the year 1801.  It turns out there's just no possibility whatsoever that there was anybody, in any way, shape or form, who thought that the decisive line for federal power took place between possession on the one hand and various kinds of commercial transactions, on the other.  It was very clear that the minimum condition for commerce in the earliest stages was cross-border transactions.  This not necessarily perfect.  When you get, a century later,to the antitrust cases, it is quite clear that they fall very uneasily between local commerce on the one hand and national commerce on the other.  It is instructive that the conservatives essentially threw in the towel the day after E.C. Knight,30 when they said that if you're organizing a nationwide cartel, we'll treat that as interstate commerce rather than as a purely local activity.  I think, on balance, nobody wants to reverse that particular decision even myself, which is a kind of a sad admission.  So, Hew, you have a job after all--not a big one, but a job. With this kind of structure, how do the cases shake out?  Here I think the first point is the peculiar circumstance which aligns Gibbons v. Ogden with free trade as opposed to the national Hamiltonian vision.  It is simply the dumbest of luck, in terms of the scheme that Marshall had who was a nationalist, not a free marketer.  You've got to understand the difference.  Marshall said the federal scheme is going to trump the state scheme.  As it turned out, it just happened that the federal system encouraged competition between Elizabethtown, New Jersey, and New York City, whereas the New York system was an effort to create a state monopoly in New York waters.  Essentially Marshall bounced the local monopoly and put the federal competitive position in a state of preeminence.  But if it had been the other way, if the federal government had decided to confer monopoly control of traffic from Elizabethtown to New York and give it to a single guy, and New York wanted to have open harbors, which would be allowed to be used in that interstate transport, there is no question that the national monopoly would have trumped the local competitive policy.  Absolutely nothing about the logic of our friend Marshall is pro-competitive, except for the very happy circumstance that the competition was there, and you could write the rhetoric in such a way as to confuse the issue of national domination with the issue of competitive equilibrium solely by virtue of the facts.  The other very blessed feature of Gibbons is Judge Johnson's concurrence, which, in effect, says, "Oh, my God.  I don't want to rely on the licensing statute.  I want to treat the whole Commerce Clause as a preemption against local monopolies."  And so what you get the dormant Commerce Clause, born out of the concurring opinion in Gibbons v. Ogden. As you go through the 19th century there s a constant tension between the Commerce Clause as a way to aid competition on the one hand, and then the Commerce Clause as a way to throttle and to regulate industry on the other.  There is no doubt that the first Interstate Commerce Act of 1887 was an effort to stop state balkanization of the system which resulted from some of the earlier cases.  But as you start moving forward through the Shreveport Rate cases and then the 1920 Commerce Act, and the nationwide cartelization of the entire industry, a compliant Supreme Court goes along because the justices forget what Marshall said about the purely internal definition of commerce within the state. They follow Viet Dinh's line, and they say, we can regulate anything that's in commerce.  But it turns out that "manufacture," as understand in E.C. Knight, was not. Now, how do we know this?  For the first time in my life, I actually read the 18th amendment today while Todd was talking, and I will read it aloud to you not because I have a beautiful voice, but because it is actually instructive of  the way in which the commerce power was understood in the United States prior to the year 1937 by the amenders of the Constitution. The 18th Amendment says, "After one year from the ratification of this article, the manufacture, sale or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes, is hereby prohibited."  Note what's going on here.  What they do is to pass an amendment which includes, for the first time in the federal Constitution, the word "manufacture."  It also includes the word "sale" because they're after all local sales.  And the reason they have to put this in there is because it is quite clear that when they are trying to change the landscape on intoxicating substances, they are basically willing to run roughshod over the principles of federalism as they were understood at that time.  If they were simply trying to figure out what the federal government can do, the manufacture language would not have been in there, and you would have had a rather different situation. Now, in 1933, which is before 1937, at least the last time I looked, they now repealed the Amendment.  But they give the states power.  What do they give them?  The 21st Amendment, Section 2 says, "The transportation or importation into any state" and so forth, shall not be done in violation of the laws thereof."  A couple of things are conspicuous.  Local sales and local manufacturers are not made subject to state regulation under this clause.  You ask, "Why did they write it this way?"  The answer, as late as 1933: you don't have to protect the states against federal control on this particular issue because the feds don't have any control over local sales, and they have none on local manufacturers.  Basically Section 2 is a reverse preemption.  This is a case where the states cannot be trumped by the federal government on a transportation and importation issue which would clearly be within the Gibbons v. Ogden's definition of commerce, as they understood it after Champion v. Ames. So now you have this wonderful anomaly.  Could the federal government pass a statute, notwithstanding the 21st amendment, which says that no one can manufacture or sell liquor inside a state?  I think the answer is it could, but that's crazy because you know what political struggle is going on here.  We now have a genuine flip-over.  When you changed the scope of the Commerce Clause in 1937 so it is beyond recognition, it turns out that the 21st Amendment doesn't make any sense any more. I have never seen a better piece of  textual evidence which suggests, contrary to what everybody on the left is willing to assume, that this is a case in which everybody understood that E.C. Knight was, in fact, good law.  There is no other way to describe what they're writing or how they think about this issue in either 1918 or 1933 against the backdrop of either Wickard v. Filburn or, strangely enough, although nobody has wanted to mention it, the questions about NLRB v. Jones & Laughlin Steel.31 One of the things that we want to do when we take after Wickard, let's make no mistake about it, is folks like myself also want to go after the Civil Rights Act of 1964.  We want to essentially roll back the clock so that those areas become state matters.  And the reason why Wickard v. Filburn will not be overruled is that everybody understands that if it goes, Jones & Laughlin goes, and if Jones & Laughlin and Wickard go, then so too does Heart of Atlanta and McClung.32  People will argue, whether it's by prescription or otherwise, these changes are so much a part of the overall structure. In light of this reasonably clear history, how should we start to think about the pending cases if we are doing this as a matter of first principle?  I am genuinely torn with respect to the case that's coming up on the wine transactions because I wish, in effect, that the dormant Commerce Clause issues had been preserved.  The argument that Todd makes is not wrong, obviously, but it's not right obviously either.  The problem is he has to work at it because there is no explicit reservation or qualification.  So what you have to do is to take a categorical provision, which reads like a jurisdictional statement, in reference to Commerce Clause powers, and now treat it as though it's essentially a presumption subject to a huge form of implication, which goes to reading in another clause which isn't in there; i.e., the dormant Commerce Clause. My hope is that if they decide this so that the clause stands alone, what they say, in effect, is it's only concerned with importation and so forth.  Any other activity is outside the scope of the clause.  It's an exception only to the dormant Commerce Clause.  It doesn't deal with the inter-penetration of this and anything else on individual rights, so the reading goes narrow. My fear is that of all the useless things that have come up by the feckless mind of man, the dormant Commerce Clause is the one manifest improvement over the original constitutional design that these justices managed to careen themselves into.  This case would be an unmitigated disaster if, in fact, they said, well, 150 years of this principle is too long.  There is no dormant Commerce Clause.  Therefore, there is no conflict.  Therefore, the 21st Amendment is going to necessarily trump. The secret of success in the United States is that you needed the dormant commerce clause when all was said and done to fill in the gaps between the Import-Export Clauses and the Privileges & Immunities clauses to make sure that you could preserve a national market. And the tragedy that looms in this case is that, in an effort to overreach, perhaps one would be slapped down.  And I just hope that the traditionalists amongst us, i.e., Justice Scalia, on this issue will take an unprincipled pass with respect to the subject and restrain himself to the point where he says, "Look, if it's an explicit discrimination with respect to basic commercial activities, then it's caught by the dormant Commerce Clause.  The only time we use a higher level of factual scrutiny is if, in fact, the dormant Commerce Clause is applied to transportation and communications across state lines, i.e., the stuff that should have been within the scope of the affirmative power of the commerce clause to begin.   Now, when we get to the Raich case, I did write a brief in this case.  I'm not so sure it won t get me censured or disbarred, and I tried to be reasonably polite.  The first thing I want to say concerns the attitude of the government.  I think Viet hinted at this, although he's too politic to say it: It was the most frightening thing to read the way in which these true drug warriors write their brief.  It was just relentless, it was unthinking, it was unbending.  They took the medical evidence and managed to ignore everything that went to the opposite side. For example, they said, "You know, the FDA has never approved this stuff in the botanical form."  Well, you've got to understand what the FDA test is.  In order to get something approved, you have to prove safety ingredient by ingredient.  Whenever you're burning weed and I'm, by the way, a nonuser, I'm quite happy to confess combustion alters chemical composition.  So, in order to meet the test, you'd have to know all the ingredients in all of the marijuana.  It also differs from lot to lot, and then you have to figure out what happens to the stuff when it goes up to smoke.  This means, in effect since there are several hundred chemicals at work and God knows how many they're transformed into you'd probably have to get more approvals for the use of botanical pot than in the entire history of the FDA for any other kind of prescription drug that has ever been sold.  This is not a serious option. But just as the ancient man used to take bags of herbs and put them on his side as he went out to hunt, the reason people use this stuff is it works.  The testimony on that seems to be very fine.  If you're going to worry about side effects: if you looked at somebody in the condition of Monson and Raich, side effects are the last thing that they're worried about.  If the feds want to argue, in this obnoxiously paternalistic style which seems to fit the Justice Department today, that these patients don't understand their own interests, then I would wish on them the same suffering that these people are trying to alleviate and see if they would sing the same tune. It is just terrible, and it indicates a very deep tension (and forget about the constitutional arguments) between the ordinary respect for liberty and autonomy, particularly for people in serious conditions of health, and this kind of authoritarian tone that we know what is best for you, even though you suffer.  One of the things about conservatives that trouble me is that their definition of an ethical principle is that you know you're doing the just thing only when you make other people miserable. [Laughter.] MR. EPSTEIN:  This is not an attitude we want to have in this country.  Those of you around this administration, get them to lighten up a little bit on some of the rhetoric.  Just the tone is a true tragedy. None of this may be at all relevant.  When I wrote my brief, I felt dutybound to contest the point on the facts mainly because the government made such a big deal of it.  But there is the John Eastman line: if it's possession, it's local, and I don't care whether it's a pot party or not.  I think if you're a lawyer, and you looked at the actual cases, every single case has upheld the power of the federal government to enact the Controlled Substances Act with respect to general distribution and use, possession and so forth.  The Supreme Court basically signed onto that in the Oakland case.  So you're not going to make that win. So then the question is, how do you argue it?  At this point, I actually think that Greve's question is correct: you've got to find an approach that allows you to defend the principle of state rights without having to commit yourself to the lackadaisical program that California calls a medical marijuana program.  And in fact, the same people who will give you the evidence that this stuff actually works for medical use will tell you that the Oakland program is something of a joke in terms of enforcement.  And this is the way I think you have to deal with it, which is to say to the Court: Look, this is a question of evidence.  If you want to remand this case, don't rely on 1970 findings to say that the two markets don't separate.  Go back down and see what happens in Oakland.  But remember there are 11 other states, including some red states, which have passed statutes of this particular form.  The way this program gets played out in Helena is not going to be the same way as it gets played out in Oakland.  If you strike this thing down on its face, you're killing the people who are running good programs along with killing people who run bad programs, without even asking whether or not you could partition or segment the world in some kind of a way. Since the Supreme Court loves to balance everything and anything, what you have to do is to balance the need of enforcement with respect to the international markets and all of our treaty obligations with local autonomy and state powers.  And if somebody can put together a program in which you actually have restricted distribution so that it doesn't bleed into the other market, you can no longer say that by virtue of the fact that the drugs are fungible, inter-penetration is a necessary truth.  One of the problems about being holy warriors, if you work for the Justice Department, is that everything becomes per se and perfectly clear.  In this particular situation, they may yet be able to win, but t the government that wants to live by the sword has to die by the sword. DOJ officials made, I am quite confident, the very calculated decision, in this particular case, to introduce no fact evidence whatsoever with respect to the Oakland program because they were going for the per se ban.  If they win on that, they have made a gutsy call.  But if the standard that I put forward is one which has any plausibility and for judges who are interested in federal-state arrangements, for whom balancing is the norm under Pike and lots of other cases, you can certainly find a non-absolutist approach then it's not that the federal officials have forever lost.   It means that they actually have to do some work to win.  If they do some work, they can knock down this Oakland program.  But if California comes up with some new system which gets rid of the smoke signals and the oral prescriptions and says that you have to take the stuff under doctor's supervision, et cetera, et cetera, all of a sudden the game is going to look very different. So that was the way in which we tried to argue, in the brief that I wrote for the Institute for Justice, the narrow point.  And I'm not unhappy about the unaccustomed moderation that I displayed in this particular case.  But the issue then comes: can you chase after Wickard directly?  And I think the answer is, sure, you can.  The way in which you chase after Wickard, doctrinally, is you force Justice Rehnquist to mean what he says, when he said that we're going back to first principles.  We're going to look at Wickard v. Filburn in the light of Gibbons v. Ogden.  Once you do that, if you read Gibbons v. Ogden, it becomes pretty clear what commerce means. It's not just the general words that matter, although they actually are much more favorable to the states than would otherwise be done.  It was the illustrations that Chief Justice Marshall gave: he said, in effect, that when something comes for inspection, that is a state function at the end of an interstate journey.  It is not a federal function.  In effect, he has a view of interstate commerce which is exactly mine.  When you're sitting on the airplane, and you're going through O'Hare Airport, you're in interstate commerce.  The moment you get into a cab, you're in intrastate commerce and the only dispute is when you went to the cab line, which commerce were you in?  I think that's exactly the way in which it was understood by Chief Justice Marshall.  I don't think there's any other reading of the Gibbons opinion.  My favorite illustration of how these things get backwards is a quote in Larry Tribe s book, which is noted for its nonverisimilitude.  Any time he quotes half a sentence, you've got to read the rest of the sentence just to figure out what it means.  Here, the critical sentence in the original form says, Comprehensive as  the word among is, it may very properly be restricted to that commerce which concerns more States than one.   In Larry's skillful hands it becomes, after a recognition that the holding was narrow, this: Marshall indicated that, in his view, congressional power to regulate commercial intercourse extended to all commercial activity  having any interstate component or impact however indirect. Acting under the Commerce Clause,  Congress could legislate with respect to all commerce which concerns more states than one. 33 So he cuts the word "restricts," and then he substitutes the phrase "extended to," which of course gives it a completely different meaning expansive, instead of contracting.  Instead of the reference being to that commerce which concerns more states than one, the clear implication is that all commerce concerns more states than one.  So a restrictive clause now becomes a nonrestrictive clause.  We call this constitutional interpretation: that the theory of context and structure are applied in such a way that you get an eminent constitutional law professor who, in effect, cannot read from the beginning to the end of a sentence and keep the whole text right. [Laughter.] What gets me even madder about this argument: I pointed this error out in my article on the proper scope of the Commerce Clause in 1987.34 I know Tribe read the article.  But in the new edition of this case book, the argument appears in exactly the same form that it was in the first edition.  No effort whatsoever to even acknowledge the fact that you've misread the sentence. If you're going to go in on the big Wickard issue, you'll have to tell the Supreme Court essentially everybody from Justice Jackson on is fibbing for a good purpose.  What's the good purpose?  To some extent, it's about experimentation, which was the phrase I think that John referred to, but it's also about monopoly.  If you go back to the decisions that are concerned with the scope of federal power under the Commerce Clause, with the scope of individual liberties under the various Due Process clauses, the Property Clauses and so forth, every single expansion of government power, under the Commerce Clause, or every single restriction of individual liberty under the Takings or the Due Process Clause, has been designed to foster a growth in government-sponsored monopoly or cartel.  I cannot think of a single exception to that rule in all of the cases I've read--whether you are talking about Nebbia v. New York, whether you are talking about the Schechter case and that particular cartelization through "fair" practices in the poultry industry, whether you're talking about Wickard v. Filburn, Jones & Laughlin, New State Ice v. Liebman: local monopolies triumph.  This in effect should start to give you the key. What makes the earlier principles of pre-1937 jurisprudence infinitely more respectable than the modern variety of progressive liberalism is the different philosophical premises from which the two schools start, incoherent as they were.  The economic theory was less well-developed in 1900 than by 1937, when they should have known better.  The classical guys were trying to preserve competition and to limit the scope of monopoly by the various strategies they used to interpret the clauses of commerce and individual rights.  That's why they were willing to give a pass on the antitrust laws and keep Hew Pate employed, but they were not willing to allow, for example, collective bargaining on the railroads, which pushed things in exactly the opposite direction.  And so you see all the anti-monopoly decisions in the labor cases being done with a great deal of vigor, and they're doing it consistently with respect to both business and with respect to labor.  When you get to the progressive era, those new guys on the block didn't believe in competition as a principle.  They believed that their intelligence would allow them to decide when and, if so, how monopoly would be the preferred form of social organization.  They never got the economics right.  If you read Felix Frankfurter defending collective bargaining as a labor matter, the prose is an institutional and intellectual embarrassment.  You wonder why the man even got tenured at Harvard .  I mean, the prose is babbling incompetence on the order of faith healing.   Here is a sample from 1920: Collective bargaining is the starting point of the solution and not the solution itself.  This principle must, of course, receive ungrudging acceptance. It is nothing but belated recognition of economic facts that the era of romantic individualism is no more.   These are not the days of Hans Sachs, the village cobbler and artist, man and meistersinger.  We are confronted with mass production and mass products;  the individual, in his industrial relations, but a cog in the great collectivity.35 Firms are big.  Yes, we know that.  Did Frankfurter understand that the number of firms, rather than the size of firms, might have something to do with the deliberations?  Never heard of the idea of market power.  Sorry.  That's just too complicated for me to understand.  That's literally the way the debate goes.  And so what happens is, if you're going to get these justices to overturn Wickard v. Filburn, what you have to do is to get them to realize that the Antitrust Division could remain, but the price-fixing cartels run by the Agricultural Department have to go.  What you say, in effect, is as follows: We concede that the power to regulate power amongst the several states is a monopoly enhancing provision.  But if that's the case, we refuse to extend it, when every single extension that we can identify with respect to its use has had one and only one consequence, which is to strengthen the hand of nationwide cartels when, under the old system, it turns out that local sales, such as in the Wrightwood Dairy case or Wickard v. Filburn, could defeat much of the use of the control over interstate commerce by simply rerouting farm produce into less inefficient forms in a way to beat the price control system. And you should applaud that.  What was so extraordinary about the government briefs is these federal champions came before the Supreme Court and said, "We have a heroic mission for the American people.   I will quote what that mission was:  The world price of grain is 40 cents a bushel.  We have to keep the domestic price up to $1.16."  That was essentially the legislative purpose that they used to invoke Wickard v. Filburn. Our hope, when we wrote the brief, is the Justices might come to realize that  the shameful purpose to which this extensive power has been put not in some cases, but I think in virtually every case that you can identify, including the civil rights cases (which are an effort to create monopoly terms in hiring, as opposed to having competitive markets) then perhaps we might have a chance.  But I really think it's like trying to talk to Sharon and Arafat.  This is a generation of people, even though some of them are my age, who are so hopelessly rooted in the past in terms of the way in which they think about things, that until there is a turnover in personnel nothing will happen. And seeing who's in the White House now, I'll hold my breath because I don't think you're going to get an economic libertarian as your next member for the vacancy on the United States Supreme Court.  I hope otherwise, but I just suggest, Steve, that you and I aren't in the mix. [Laughter.] [Applause.] MR. STERLING:  The Controlled Substances Act strengthens the organized crime cartel. MR. EPSTEIN:  I'm sure that it does that.  I don't think that the CSA was designed to achieve that because I don't think there was a lobby which was able to get itself monopoly prices, but, yes, it's certainly keeping the price up and competition out. I think, though, it would be very hard, under any traditional view of the police power, to say that state prohibition against the sale of harmful drugs would be illegal, and I think John Eastman is right at least to that extent.  Privileges & Immunities which is the operative clause, not Equal Protection, not Due Process essentially had to refer to traditional liberties in reference to what went on in the Articles of Confederation.  That's why Lawrence is so suspect: it's remotely plausible if you're talking about liberty, and not plausible if you're talking about Privileges & Immunities, with its emphasis on traditional liberties.  I am actually going to write a fairly long paper you know, six pages or something which talks about what would have happened if they had decided Slaughterhouse right.  And it turns out everything turns over, including Brown v Board of Education.  It comes out the other way.  MR. ZYWICKI:  The first is just to buttress something you mentioned, which I discussed in my remarks: the proposed, but never enacted, Section 3, the Saloon Amendment.  Clearly by defeating the Solomon Amendment, they understood that Congress wasn't going to be able to reach this local activity So the only way they could have would have been through that particular means.  Note if they had passed that, what that says about the protectionist position in the current litigation: you could have had a situation where Congress, via the Supremacy Power, would have taken over the complete regulation of local saloons; whereas, supposedly, under the interpretation that's proffered by the states in the wine litigation, the states would have had plenary authority over interstate commerce, which says something I think about the plausibility of that interpretation. MR. EPSTEIN:  There's a complete flip over, by virtue of the subsequent expansion of the Commerce Power.  There's nothing in the 21st Amendment which prevents the federal government from controlling the consumption of alcohol inside the several states.  They could prohibit it in wet states.  They could presumably mandate it in dry states.  I mean, that's the way it reads.  I had not really focused on this because why would you read a defunct amendment?  But when you put the whole history together, what it shows that everybody understood what E.C. Knight meant all the way through 1934.  And it's like a drop off a cliff between Schechter and Butler and all those old cases and the new decision.    [AUDIENCE MEMBER]:  One other question relates to the general monopoly observation, which is the way in which a lot of this garbage came in based on New Deal economics; right? MR. EPSTEIN:  Well, actually, progressive economics. [AUDIENCE MEMBER]:  Progressive economics; right.  But basically the idea that competition was suspect.  One example that strikes me is the state action doctrine of Parker v. Brown,36 where the court there says you must be mad to think that California can't take these fully appropriate steps to prevent competition in the raisin industry.  The general question is, what does the court do when it's saddled with a bunch of precedent which seem to derive from bad economics? MR. EPSTEIN:  The answer is: if it's bad economics and bad constitutional law, you overrule.  Isn't that the right thing to do?  Parker v. Brown gets it exactly backwards.  Private cartels will disintegrate.  State cartels will be preserved.  You create an exception to a general principle to allow durable cartels to exist and do so with respect to markets where most of the consumers are outside the states so that the political check is relatively minor.  That's a real piece of genius.  And then you try and figure out exactly how far you cut back down on it, so the state can't do it as a market participant.  But you still have the Montana severance tax, which is exactly the same kind of situation.37  Interestingly enough, long before Stigler wrote about the substitution of taxation for regulation, in Hammer v. Dagenhart and the child labor tax cases, somebody on the Supreme Court had figured that out first.  If we strike down the one, we have to strike down the other.  What is so clear is that the pre-1937 case law, when tested against modern economic theory, does so much better than the post-1937 case law that it is simply a sheer act of will on the part of the dominant American constitutional establishment to make sure that the reason we have this vast expansion is to allow for benevolent legislation.  If they said to allow these novel readings for perverse legislation, it would be a more accurate description of what's going on.  It is really quite striking. I recently wrote a piece going through the public health regulation.  It's the same game in one of my favorite cases, a case called Jew Ho,38 which struck down San Francisco quarantine statute where the purpose of this quarantine was to prevent the spread of infectious diseases.  How did they achieve that?  Well, they told the Chinese merchants they couldn't leave their quarter in San Francisco, but they allowed the white merchants to enter.  They also had a differential vaccination statute.  And the judge struck it down on the grounds that although the police power is legitimate with respect to the right to quarantine, this charade is purely pretextual.  This battle was going on all the time.   At least in the pre-'37 era, they understood that there was a tension, and they tried to solve it instead of just simply invoking it.  What the police power meant in the traditional view is that you were not only a defender of the police power to the extent that it did impose implied limitations on the state, but you believed that the term had some descriptive relevance to indicate those things that aren't police measures.  The most important class of measures that were not police measures that were routinely struck were anti-competitive measures, which had no safety or health purpose.  In effect, that was the filter which they applied to every single case.  Everything ends up at the police power: that is the way in way in which they got to the competitive equilibrium.  The moment you changed the word police power to legitimate state interest, well, then that's in the hands of New Deal types; and what's the New Deal interest?  It's maintaining prices for the raisin farmers in California, so they could exploit the rest of the world.  The class of permissible purposes has evidently expanded. And you can see Hayek was writing at this time that every time you give protection to one guy, you increase the uncertainty to everybody else.  The progressive justices assumed that you could do the analysis sector by sector and give greater security in one area without creating greater volatility in the other area.  It's as though you could give everybody a fixed claim against assets and not make anybody's stock more risky with respect to a corporation.  It's whistling Dixie.  This is not profound economics.  It is the most shameless sort of economic incompetence that you could ever imagine.  Unfortunately, the closer you look at some of this material, the worse it gets.  The progressive principle that competition and monopoly are equally good in the eyes of the law is essentially what drove every piece of constitutional interpretation, which eroded the traditional pre-'37 world view. MS. WACHTELL :  Restricted as I am in my knowledge of both economics and law MR. EPSTEIN:  That's good.  I'll put you on the Supreme Court. [Laughter.] MS. WACHTELL :  I can only go to the point in your speech where you seem to be talking about something that didn't directly involve both the civil rights statutes.  Now, I've heard some great arguments as to why Brown is not only unconstitutional, but wasn't a good decision.  Still, most people think Brown is the best decision that the Supreme Court ever came up with.  So, you have to think to yourself, what is the point from the standpoint of American civilization of arguing from that basis?  MR. EPSTEIN:  I think you misunderstood what I said. MS. WACHTELL: I do think most people look at that as, you know, a way of the federal government looking at the states saying we know best.  This is, in fact, the example that justifies the triumph of the federal government.  So, my statement to you: rather than looking for a way to reverse those decisions, can't you make up your policy and your agenda in terms of putting a rationale into these cases? MR. EPSTEIN:  I think you misunderstand the enterprise.  My enterprise, the first enterprise, is to figure out what they were trying to do.  The second enterprise is to figure out whether it was right or wrong.  And in those cases where they got something right in the original analysis, you get very upset when somebody uses bad policy to overturn good constitutional structures. The point about the Equal Protection Clause, the Due Process Clause, and the Privileges & Immunities Clause is a very different point.  It's designed to explain what happened when Slaughterhouse was read out of existence so that the only kinds of protections that were left were contained in the Equal Protection and Due Process Clauses.  Let me give you the story, and then we'll tie into the segregation of schools and segregation in the workforce.  Because they're very different issues. The original 14th Amendment Privileges & Immunities Clause says that All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.   Now, this sentence has a lot to do with some of the real complications that follow, because what it does in effect is to give you a new test of citizen.   We're going to put aside exactly what it means except for one point: under this particular definition, the only people who are citizens are natural persons.  There are no corporations that born in the United States. The next clause says, No state shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States.   The first thing to understand about this clause is that it is designed to give some reasonably strong protection only to citizens; right?  Now you read the next two clauses: nor shall any state deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. This is essentially a two-tiered constitutional provision.  Citizens get relatively deep protection, and then you have to figure out what we mean by Privileges & Immunities.  You go back to Corfield v. Coryell39 and a bunch of other cases, and essentially it's economic liberties the right to marry, gay marriage put aside the right to enter into a contract the right to make wills; give evidence, and so forth.  These are the rights that only citizens have under the Constitution. So, now, in effect, if you want to read the traditional substance of Due Process language: nor shall any state deprive any person of life, liberty, or property with due process of law   to be substantive due process, you have the following anomaly: you have all of these rights given in the first clause to citizens; right?  And then you have them given again to persons.  Well, why is it that you give it first to a specific class and then to another, broader class with fewer rights.  What's going on here?  What's going on here is the basic intuition was that citizen status meant something, unlike today where we tend to downgrade it in terms of its institutional significance.  Our citizens are entitled to earn an honest living and do all the rest of that stuff.  Foreigners are here cut out from that protection.  And what do we do?  We basically won't seize their property, throw them in jail without giving them a trial.  So that if, in fact, the substantive half of the Privileges & Immunities Clause means what it says, then Lochner and Adair were wrong.  Because it now reads perfectly naturally as saying there's a minimum level of protection we give to everybody, and there's a higher level of protection that we give to citizens.  We know what's in the first group.  And so the second set of protections cannot be everything that's in the first group.  The same thing applies with respect to Equal Protection.  What happens to Brown v. Board is you can't figure out strong education rights in a provision which is designed to prevent differential enforcement of the criminal laws.  That's the point of the word protection :  it's meant as a word of limitation.  I think that's the way it was understood.  I'm not saying I like it.  I think it's just terrible.  You know, the idea that you take aliens into this country, and they get no economic rights whatsoever and citizens get lots of them, is also pretty repellant.  But I think that's the way the Fourteenth Amendment reads. This is not an accidental connection.  In the Slaughterhouse cases, Justice Miller says, my God, this means in effect that you have completely inverted the relationship between the federal and the state governments.  You now have a situation where the federal government, to use his phrase, will be a perpetual censor over what the state can do in the regulation of the lives of their citizens.  He says, I can't conceive of that.  So, instead of having the Privileges and Immunities Clause cover all of the privileges and immunities that everybody understood it to cover for citizens of the United States, it says in your role as federal citizens you can go back and forth across state borders and petition the government, and nobody ever heard from the Privileges and Immunities Clause again. Fast forward to 1897, to Allgeyer v. Louisiana.40  This is a case in which the Court said the idea of liberty in the Fourteenth Amendment, given to all persons, includes liberty of contract.  The phrase liberty really means a lot more and Due Process means without just compensation.   You're making this basically into a classical liberal position.  Justice Peckham writes the opinion in Allgeyer.  He says, somebody tried to do introduce this vision under Slaughterhouse, and got absolutely whomped.  So that' clause is out of the picture.  Now, I don't have to worry about this deep/narrow stuff; right?  Because the only deep right you have under Slaughterhouse turns out to be the right to go across borders as a United States citizen.  So, now, you can give the rights to enter into contracts to everybody under the sun without running into embarrassment in the clause.  Without even arguing the point, the rights that were once meant only for citizens now all of a sudden go to all individuals.  And when you start flipping around Due Process at this point, you're no longer treating it as a procedural position.  You're treating it as a charter of liberty.  So, it's not that it was incorporation.  That's not the way this started in the railroad cases.  It started with: We think.   The argument was that the words without Due Process mean without just compensation.   And, oh, by the way, there's this police power, which is always out there, and you got a classical liberal doctrine. So when you get Slaughterhouse wrong, you make it possible to get Brown v. Board right.  And the irony is if you go back to the original position, you essentially get the federal government out of any regulation of the state to the extent that the state wishes to distribute benefits and burdens amongst its various citizens, except insofar as they're dealing with their ordinary common law rights.  I think that's a pretty accurate rendition.  If you go back to Coryell, which provided the broad definition of what's a privilege and immunity: that was a case which was won by the state, because it said the ability to use public fisheries is not a privilege and immunity of the citizens of separate states.  It's something that we could reserve to our own citizens.  And so the odd point is that if you put Privileges and Immunities back in its original context, everything else has to be shrunk down.  By narrowing privileges and immunities to the point where it doesn't do any work, you create a very different Constitution from the one that you actually started out with.   And, in many ways, it's a better Constitution. Now, what about the other issues?  I do think that lots of the problems in the South would be covered by Equal Protection.  Differential law enforcement is something for which there would be clear  violation.  So, if you kept a black person from the polls and let a white person go there because of race, that would be a denial.  It's not as though you get nothing coming out of this alternative vision.  And what was so very clear is that even the minimal version of Equal Protection was not enforced during all of this period before the 1930s when people started to wake up and smell the bacon.  And the same thing was true with Due Process.  I don't think you get Brown out of the original view.  I do think you get it out of the new view. It's ironic how these constitutional mistakes constrict on one hand, and then they expand on another.  If you're a straight Libertarian, you can't think of an intelligent argument which would allow the states to prohibit some kind of union between people of the same sex, because your view about licenses is that they're always restricted to serve a narrow public function and can never be used for generalized purposes to stop the kind of behavior you don't like.  On the traditional view is the only reason you can refuse to license is for conduct that you can punish as a wrong after it is done.  So it's a very different world.   MR. GREVE:  I'm absolutely positive Richard will be delighted to tell you what he really thinks, but the official part is concluded.  Please join me in thanking Richard wholeheartedly.  Please join us for refreshments. [Applause.] 1  529 US 598 (2000). 2  520 US 564 (1997). 3  317 US 111 (1942). 4  304 US 64 (1938). 5  Bridenbaugh v. Freeman-Wilson, 227 F.3d 848, 849 (2004). 6  <A target=_blank href="http://volokh.com/" target=_blank>http://volokh.com/</A> 7  299 US 59 (1936). 8  123 US 623 (1887). 9  165 US 58 (1897). 10  116 US 446 (1886). 11  106 S.C. 102 (1916). 12  479 US 335 (1987). 13  Brannon P. Denning, Confederation-Era Discrimination Against Interstate Commerce and the Legitimacy of the Dormant Commerce Clause Doctrine, September 13, 2004, <A target=_blank href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=588261" target=_blank>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=588261</A>. 14  Western & Southern Life Ins. Co. v. Bd. of Equalization, 451 US 648 (1981). 15  49 Cong. Rec. 707 (1912). 16  539 US 558 (2003). 17  West Lynn Creamery v. Healy, 512 US 186 (1994). 18  CTS Corp. v. Dynamics Corp. of America, 481 US 69 (1987). 19  Pharmaceutical Research & Mfrs. of America v. Walsh, 538 US 644 (2003). 20  Hillside Dairy, Inc. v. Lyons, 539 US 59 (2003). 21   Craigmiles v. Giles, 312 F 3rd 220 (6th Cir. 2002). 22  Nat l Assoc. of Home Builders v. Babbitt, 130 F.3d 1041, 1061 (D.C. Cir. 1997). 23  Reno v. Condon, 528 U.S. 141 (2000). 24  United States v. Oakland Cannabis Buyers Coop, 532 US 483 (2001). 25  188 US 321 (1903). 26  247 US 251 (1918). 27  252 US 416 (1920). 28  354 US 1 (1957). 29  22 US 1 (1824). 30  United States v. E.C. Knight, 156 US 1 (1895). 31  301 US 1 (1937). 32  Heart of Atlanta Motel, Inc. v. United States, 379 US 241 (1964); Katzenbach v. McClung, 379 US 294 (1964). 33 Lawrence H. Tribe, American Constitutional Law, Volume 1 (West Publishing Co. 3d ed. 1999): 808. 34  Richard A. Epstein, The Proper Scope of the Commerce Power, 73 Virginia Law Review 1387 (1987). 35  Felix Frankfurter, Yale Review, Book 211 (1920). 36  317 US 341 (1943). 37  Montana v. Crow Tribe of Indians, 523 US 696 (1998). 38  Jew Ho v. Williamson, 103 F. 10 (N.D. CA 1900). 39  6 F.Cas. 546 (C.C. PA 1823). 40  165 US 578 (1897).</body></html>