Statement of Senator Patrick Leahy
Senate Judiciary Committee
Executive Business Session
S. 577, Twenty-First Amendment Enforcement Act
March 2, 2000


I commend the Chairman’s dedication to enforcing state liquor laws. But I must disagree with his approach. The Twenty-First Amendment Enforcement Act is not necessary and sets a dangerous precedent by erecting barriers to interstate and electronic commerce.

The bill would permit the enforcement of state liquor laws in Federal court. This expansion of the jurisdiction of the Federal courts is not warranted.

State attorneys general are already enforcing their state liquor laws in state courts – whether the alcohol was brought over the Internet or over the counter at the corner store. The Internet has not changed the enforcement of state liquor laws.

Just a few weeks ago, for instance, the Utah Attorney General successfully enforced that state’s liquor laws against an out-of-state direct sales shipper of alcoholic beverages.

That case resulted in fines of more than $25,000 and guilty pleads by a out-of-state direct shipper to state law counts of unlawfully importing alcohol and selling it to a minor.

Indeed, the Utah Attorney General, Jan Graham, declared: “This case represents a significant win for Utah. No longer can retailers claim that we have no authority over illegal transactions that occur outside of the state. If you’re shipping to a Utah resident, we can and will prosecute you.”

This legislation is using the Internet as an excuse to impose a Federal fix for a problem that is already being solved at the state level. Whatever happened to Federalism? In fact, the National Conference of State Legislatures opposes this legislation, calling the bill “an overreaction to a situation which can be reconciled among the states and not in a federal court.”

I also fear that some may be using the Internet as an excuse to protect the decades-old distribution system for wine and other alcoholic beverages. Although the Internet has not changed state liquor law enforcement, it has opened up the wine and beer market to new consumer choices and competition.

With the power of electronic commerce, adult consumers now have the freedom to choose from a rich assortment of different wine and beer products – from small wineries to nationwide brewers in America or any other country in the world.

We should be embracing this free market and open competition. Competition in the free market is the American way. But instead some wine and beer wholesalers want to use this legislation as a protectionist ploy to keep their present distribution system, which effectively locks out small wineries and micro-breweries from ever getting their products on a store shelf.

Mothers Against Drunk Driving and the National Conference of State Legislatures have noted that this Federal legislation is nothing more than an attempt to use the Federal courts in a disagreement between wholesalers and small independent wineries and breweries.

It is rare when I agree with the editorial board of The Wall Street Journal. But on August 12, 1999, The Wall Street Journal wrote about this legislation: “This is a bad bill, with dangerous consequences not only for alcohol but for the future of e-commerce and other cross-state transactions.” I whole-heartedly agree.

The Department of Justice has warned Congress in relation to legislation affecting the Internet that: “[A]ny prohibitions that are designed to prohibit criminal activity on the Internet must be carefully drafted to accomplish the legislation’s objectives without stifling the growth of the Internet or chilling its use.” This bill fails that test. It is not carefully crafted. In fact, it is not even needed. It also could chill the use of the Internet as a means of promoting interstate commerce.

This bill is a double whammy – it is unnecessary and dangerous to e-commerce.

Finally, Mr. Chairman, I want to note for the record that similar legislation offered by Senator Byrd was part of the Senate-passed Juvenile Justice bill, which has been languishing in conference for many months. If we really want to address underage drinking and juvenile crime, we should convene the juvenile justice conference and finish the work we started last May when the Senate passed the Hatch-Leahy juvenile justice bill by a strong bipartisan vote.

In light of the tragic shootings of the past few days, what we should be doing is redoubling our efforts to enact the Hatch-Leahy juvenile crime legislation and its sensible public safety provisions that passed the Senate last May with 73 votes. I do not fault Senator Hatch.

I know that the Chairman is doing what he can on this and that he shares my frustration that the House-Senate conference committee has been stymied in our effort to report that measure back to the House and Senate for final passage. I again urge the Republican leadership in the House and Senate to pass that bill without further obstruction and delay.

Let the Congress act and do what it can to help end this senseless violence. Six-year-olds killing other 6-year-olds is unthinkable but now, tragically, all too real. We should reconvene the juvenile justice conference this week.

I must oppose S. 577 because it is unnecessary since state courts are already enforcing state liquor laws on Internet and other direct sales of alcoholic beverages and because the bill is dangerous to the future growth of electronic commerce.