Tennessee Wine and Spirits Retailers Association v. Thomas, (SCOTUS Docket No. 18-96), whose US Supreme Court Decision is set to be announced in June 2019, asks the Justices to determine whether Tenn. Code Ann. §§ 57-3-203 and 57-3-204 (“Statute”) is unconstitutional. The statute requires individuals to reside within the state for two years before the Tennessee’s Alcoholic Beverage Commission (“TABC”) can grant them a license to sell alcoholic beverages. Additionally, in order to renew a license, Statute requires an individual to have resided in the state for 10 years. Corporations seeking a license are subject to similar requirements for their officers and shareholders. TABC had not enforced the Statute in the 6 years prior to this case.
21st Amendment gives states authority to regulate the
“transportation or importation” of “intoxicating liquors,” its scope was
limited by the 2005 decision in Granholm
v. Heald (544 U. S. 460 (2005)).
The majority opinion in Granholm
ruled that states cannot discriminate against out-of-state wineries because
doing so would violate the US Constitution’s Commerce Clause.
the petitioner, Tennessee Wine and Spirits Retailers Association (“the
Association”), argues that the 21st Amendment gives Tennessee
“virtually complete control” over the sale of alcohol within its borders provided
it does not impede interstate commerce (e.g. discriminating against
out-of-state products or regulating activities out-of-state). Further, the Association
argues the residency requirements are a matter of “legislative judgement,” as
Statute “increases the odds that liquor retailers will sell responsibly.”
respondent, Tennessee Fine Wines and Spirits, LLC (“Fine Wines”), argues that
residency requirements serve to protect in-state retailers from competition. They
say that the Court has long upheld the position that interstate commerce flow freely
and that the petitioner’s arguments to the contrary are “misguided.”
durational residency requirements fundamentally prohibit the flow of interstate
commerce and deny out-of-state retailers market access. The Association’s claim
to broad regulatory authority over the sale of alcohol seems not well-defined
and to contradicts core principles of the U.S. Constitution. Alternatively,
Fine Wines’ argument allows the 21st Amendment to coexist alongside the
Constitution’s Commerce and Privileges and Immunities Clauses.
It will be
interesting to see if this Supreme Court sustains Granholm or allows Tennessee’s protectionist policies to be confirmed.