The 324 Liquor Corp., doing business as Yorkshire Wine & Spirits, brought a case against Duffy and others in 1986. The issue at hand was the constitutionality of New York's liquor pricing system under the Sherman Act, which prohibits certain business activities that federal government regulators deem to be anti-competitive. Under this law, wholesalers were required to sell their products at the same price to all retailers regardless of quantity purchased. This meant that smaller businesses could not benefit from bulk purchasing discounts typically offered by suppliers. The Supreme Court ruled in favor of 324 Liquor Corp., stating that New York’s Affirmation Law violated the Sherman Act because it promoted price fixing among liquor wholesalers and prevented competition based on price between different retail outlets.

In the dissenting opinion for 324 Liquor Corp., DBA Yorkshire Wine & Spirits v. Duffy et al., Justice O'Connor, joined by Chief Justice Rehnquist and Justices Powell and Scalia, argued that New York's law setting minimum retail prices for liquor did not violate the Sherman Act because it was a valid exercise of state power under the Twenty-first Amendment. They contended that this amendment gives states broad authority to regulate alcohol within their borders without interference from federal antitrust laws. The dissenters also disagreed with the majority's interpretation of Midcal Aluminum Inc. v. Healy, arguing instead that New York's price affirmation statute should be considered as part of an overall regulatory scheme aimed at promoting temperance and ensuring orderly market conditions rather than as a simple resale price maintenance agreement.