TFWS, Inc. v. Franchot: The Sherman Act Raids Maryland's Liquor Cabinet
Journal of Business & Technology Law, Forthcoming
Posted: 16 Feb 2011 Last revised: 25 Jun 2014
Date Written: November 11, 2010
In the 2009 case, TFWS, Inc. v. Franchot, the U.S. Court of Appeals for the Fourth Circuit considered whether Maryland’s statutes banning volume discounts on alcoholic beverages and requiring alcoholic beverage wholesalers to post-and-hold their prices with the State violated the Sherman Antitrust Act. The court affirmed that Maryland’s regulations were components of a “single regulatory scheme” preempted by the Sherman Act, and subsequently denied Maryland’s petition for a re-hearing en banc. The decision created a split between the Fourth and Ninth Circuits about whether volume discount bans are rightly preempted by the Sherman Act.
This Note argues that the Supreme Court should grant the writ of certiorari requested by the Comptroller of Maryland and resolve the circuit split in favor of the Ninth Circuit because:
(a) the Fourth Circuit committed a pivotal procedural error by bundling the provisions of Maryland’s statutes that regulate pricing of alcoholic beverages into a unified system rather than severing them prior to analysis;
(b) the Fourth Circuit’s unprecedented holding vitiates Maryland’s constitutional right to regulate prices of alcoholic beverages pursuant to the Twenty-first Amendment; and
(c) adopting the Ninth Circuit’s approach would serve to “harmonize state and federal powers,” bringing states’ interests in monitoring market prices under established exemptions to the Sherman Act.
Keywords: Sherman Act, Antitrust, Alcohol, Beverage, Liquor, Regulation, Post-And-Hold, Volume Discount, 21st Amendment, XXI, Twenty-First, Conflict, Hybrid, Unilateral, Restraint, Trade, Severability, Immunity, Immune, Preempt, Preemption, State Action, Competition, Law Of The Case, Maryland, Washington
JEL Classification: K2, K20, K21, K23,
Suggested Citation: Suggested Citation