Tennessee Wine and Spirits Retailers Assn. v. Thomas
139 S. Ct. 2449
| SCOTUS | 2019Background
- Tennessee requires a 2‑year residency to obtain an initial retail liquor‑store license, a 10‑year residency to renew, and bars corporate licenses unless all shareholders are residents.
- Tennessee Attorney General concluded these durational‑residency rules discriminate against out‑of‑state economic actors under the Commerce Clause; TABC ceased enforcing them.
- Two out‑of‑state‑connected businesses (Total Wine and Affluere) applied for licenses but did not meet the residency rules; TABC sought declaratory relief; district court struck the laws and issued licenses.
- Sixth Circuit affirmed invalidation of the residency rules; Tennessee Wine & Spirits Retailers Association sought certiorari only on the 2‑year initial‑license residency requirement.
- Supreme Court held the 2‑year initial‑license residency requirement violates the dormant Commerce Clause and is not saved by §2 of the Twenty‑first Amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tennessee's 2‑year durational‑residency requirement for initial retail liquor licenses violates the dormant Commerce Clause | Association: §2 of the Twenty‑first Amendment lets States regulate alcohol distribution free of Commerce Clause scrutiny | State/Association: §2 constitutionalizes broad state authority over alcohol and permits residency/distribution restrictions | Held: The requirement facially discriminates and cannot be justified; it violates the dormant Commerce Clause |
| Whether §2 of the Twenty‑first Amendment immunizes discriminatory in‑state distribution rules from Commerce Clause review | Association: §2 exempts state alcohol regulation (including in‑state distribution rules) from dormant Commerce Clause scrutiny | Court: §2 grants latitude to regulate alcohol but does not override the nondiscrimination principle or other constitutional limits; protectionism is not a §2 interest | Held: §2 does not permit protectionist measures; it does not save the 2‑year rule |
| Whether the 2‑year rule serves legitimate public health/safety or other nonprotectionist §2 interests | Association: residency aids processability, oversight, applicant vetting, and responsible sales tied to local familiarity | Court: these asserted benefits are speculative or can be achieved by nondiscriminatory means (agent for service, background checks, inspections, training, license limits) | Held: Record lacks concrete evidence tying the rule to health/safety; nondiscriminatory alternatives exist; the rule fails strict scrutiny for discrimination |
| Whether the provision applying the 2‑year rule to corporate officers/directors is severable and similarly invalid | Association: (implicit) corporate application is part of state regulatory design | Court: provision applying residency to officers/directors discriminates and is equally unjustified | Held: The corporate‑officer application of the 2‑year requirement is invalid as well |
Key Cases Cited
- Granholm v. Heald, 544 U.S. 460 (2005) (§2 does not immunize state laws that discriminate in favor of in‑state alcohol producers; apply nondiscrimination analysis)
- Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984) (Twenty‑first Amendment does not save state measures whose predominant purpose is economic protectionism)
- Healy v. Beer Institute, 491 U.S. 324 (1989) (invalidated state law that discriminated against out‑of‑state shippers; §2 does not excuse Commerce Clause violations)
- Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324 (1964) (recognized core state authority to regulate in‑state alcohol distribution but limited where federal commerce or other federal interests govern)
- Craig v. Boren, 429 U.S. 190 (1976) (interpreting §2 in historical context; §2 constitutionalized pre‑Prohibition allocation of alcohol regulatory authority)
- Department of Revenue of Ky. v. Davis, 553 U.S. 328 (2008) (dormant Commerce Clause principle: discriminatory laws may be sustained only if narrowly tailored to legitimate local purpose)
- Brown‑Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573 (1986) (states may not enact discriminatory measures against out‑of‑state economic interests despite §2)
- Walling v. Michigan, 116 U.S. 446 (1886) (early rule: Commerce Clause forbids state laws discriminating against out‑of‑state citizens/products)
- Bowman v. Chicago & Northwestern R. Co., 125 U.S. 465 (1888) (dormant Commerce Clause restricts state regulation that burdens interstate commerce)
- Leisy v. Hardin, 135 U.S. 100 (1890) (similar limitation on state laws burdening interstate commerce)
- State Bd. of Equalization of Cal. v. Young’s Market Co., 299 U.S. 59 (1936) (early post‑repeal case reading §2 broadly, later narrowed by subsequent precedent)