A wine dealer challenges California’s system of setting prices for wine merchants, arguing it violates the Sherman Antitrust Act. California officials argue that the system protects small wine dealers and say that the price regulation is within the state’s power to regulate alcohol granted in the Twenty-first Amendment. In California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., the U.S. Supreme Court says that while states have wide latitude to regulate alcohol under the Twenty-first Amendment, the amendment cannot be used to justify a system that violates federal antitrust laws.