Alcohol regulation

In Tennessee Wine and Spirits Retailers Association v. Thomas the Supreme Court held 7-2 that Tennessee’s law requiring alcohol retailers to live in the state for two years to receive a license is unconstitutional. The State and Local Legal Center (SLLC) filed an amicus brief in this case arguing the law was constitutional.  

Two constitutional provisions are at issue in this case. The dormant Commerce Clause prohibits state laws that unduly restrict interstate commerce. Both parties agree that if Tennessee’s durational-residency requirement applied to anyone wishing to sell anything other than alcohol it would violate the dormant Commerce Clause.

The State and Local Legal Center (SLLC) amicus brief in Tennessee Wine & Spirits Retailers Association v. Byrd argues that Tennessee’s law requiring alcohol retailers to live in the state for two years to receive a license is constitutional.

According to Tennessee Wine & Spirits “[a]t least twenty-one States impose some form of durational-residency requirement for liquor retailers or wholesalers. And many States impose other residency-based requirements on those entities.”

The Twenty-First Amendment to the U.S. Constitution is famous because it repealed prohibition. The second section, which prohibits the transportation or importation of alcohol into a state in violation of state law, is less well-known. Despite this section’s broad language and the Supreme Court’s repeated affirmation that the states’ three-tier system of regulating alcohol (manufacturers sell to wholesalers; wholesalers sell to retailers; retailers to consumers) is constitutional, the Supreme Court has limited states’ ability to regulate the distribution of alcohol.

The question the Supreme Court will decide in Tennessee Wine & Spirits Retailers Association v. Byrd is whether Tennessee’s law requiring alcohol retailers to live in the state for two years to receive a license violates the Constitution’s dormant Commerce Clause. The dormant Commerce Clause prevents states from “discriminat[ing] against interstate commerce” or “favor[ing] in-state economic interests over out-of-state interests.”

According to Tennessee Wine & Spirits “[a]t least twenty-one States impose some form of durational-residency requirement for liquor retailers or wholesalers. And many States impose other residency-based requirements on those entities.”