U.S. Supreme Court

Supreme Court strikes down residency requirement for Tennessee liquor retailers

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A residency requirement for liquor retailers in Tennessee violates the commerce clause, the U.S. Supreme Court ruled Wednesday in a 7-2 opinion.

At issue was a two-year residency requirement for individuals and corporate officers seeking an initial liquor license for retail sales. In the court’s majority opinion, Justice Samuel A. Alito Jr. said the requirement is unconstitutional because it “blatantly favors the state’s residents and has little relationship to public health and safety.”

Alito said the requirement is not shielded by Section 2 of the 21st Amendment, which ended Prohibition. The section reads: “The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”

Section 2 “is not a license to impose all manner of protectionist restrictions on commerce in alcoholic beverages,” Alito wrote.

Alito said the court’s decision was part of the Supreme Court’s dormant commerce clause jurisprudence that holds the commerce clause not only gives Congress the power to regulate commerce, but also prevents states from enacting protectionist measures.

Alito said the dormant commerce clause is “deeply rooted in case law” and consistent with the framers’ intention of removing trade barriers by adoption of the Constitution.

Justice Neil M. Gorsuch dissented in an opinion joined by Justice Clarence Thomas. Gorsuch argued that states may impose residency requirements on alcohol retailers to ensure they comply with local laws and norms.

The decision is a victory for a national superstore called Total Wine Spirits Beer & More, which is owned by Maryland residents. It is also a victory for a Memphis couple who wanted to open a liquor store called Kimbrough Fine Wine & Spirits after they moved from Utah to Tennessee, the Memphis Commercial Appeal reports. Both stores had obtained liquor licenses after a lower court struck down Tennessee residency requirements.

Related article:

ABA Journal: “Liquor store war: Should a giant wine and spirits retailer be subject to state residency requirements?”

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