Tennessee Wine & Spirits Retailers Association v. Blair [SCOTUSbrief]

The state law that’s at issue in this case,
uh, is Tennessee’s, uh, durational residency requirement, which is basically a fancy way
of saying that in order to have an alcohol retailing license in Tennessee, uh, you have
to be a resident of the state of Tennessee, and you need to be a resident for two
years. Um, and then to renew that license you have to have been a resident for ten years. Obviously, that law, uh, advantages, uh, people
that are in-state Tennessee residents and disadvantages people that are from out-of-state
that are trying to establish a retail store in the state. Not only does it, um, apply to the individual
applying for the license, but if like a corporation is trying to apply for a retailing license
in, uh, Tennessee, uh, actually all of the directors and the officers of the corporation
have to be Tennessee residents, uh, for two years, ten years for renewing. And actually one hundred percent of the stockholders of
the company do as well, so it’s a very, uh, rigorous, strict requirement that requires,
uh, retailers to have a real, in-state presence. And so the Court’s determining whether that
law discriminates against out-of-state residents in a way that burdens interstate commerce
and violates the Dormant Commerce Clause. Dormant Commerce Clause plays into this case
because it’s a derivative of the Commerce Clause itself, which of course gives Congress
the power to, uh, regulate, uh, commerce among the states. And the idea was that in order to have a real
flow of goods and trade, uh, in the country and a robust national economy, uh, that you
needed to make sure that states weren’t passing laws that were protectionist, that were burdening
interstate commerce by advantaging their own economic, uh, uh, actors and citizens, uh,
to the disadvantage of those that were out of state. So the key question in this case, then, is
how the Dormant Commerce Clause and the Twenty-first Amendment interact with each other and whether
one kind of trumps the other one. As far as past Supreme Court, uh, decisions
and precedents that will have a direct, uh, role in the decision, uh, in this case, um,
there was the Bacchus case, um, which involved a, uh, a taxation scheme in Hawaii for alcohol,
um, and it set, uh, I believe it was a 20%, uh, tax for all alcohol, but it exempted certain,
uh, spirits that were native to Hawaii and that were only locally produced, and the Supreme
Court, uh, said that unduly burdened interstate commerce, um, inappropriately favored, um,
Hawaii producers and alcohol products over out-of-state products. Fast-forward a couple years, uh, in 2005,
there was the landmark Granholm v. Heald case, uh, which, uh, dealt with, um, uh, laws from
Michigan and New York that, uh, protected, uh, in-state wineries in those states, allowed
them to ship their wine directly to consumers in those states but didn’t allow out-of-state,
uh, wineries to ship their wine to consumers. The Court, uh, again stepped in and said that
despite the robust state power that the Twenty-first Amendment creates, the Dormant Commerce Clause
still, uh, cuts across that and acts as a limiting mechanism on that, and you can’t,
uh, as a state, pass economically discriminatory legislation, uh, in the alcohol markets. The best argument, um, for uh, Tennessee,
um, Wine and Spirits, um, would be trying to, uh, cabin the past Supreme Court cases
that have said that the Dormant Commerce Clause does limit the Twenty-first Amendment, sort
of cabin those to only involving alcohol products or producers of alcohol and not applying to
retail licenses and the retail level of the alcohol marketplace, and kind of creating
that way to differentiate those cases would give the Court, uh, kind of a narrow holding
that would, uh, allow it to uphold, uh, Tennessee’s law without having to overturn some of its,
uh, past cases. The best argument for the other side is that even though
the Twenty-first Amendment, uh, is robust and gives states a lot of, uh, control in
the alcohol marketplace, the Dormant Commerce Clause still does limit it and still does
cut across it. Even if the Court were to hold in this case that the, uh, Dormant Commerce
Clause, uh, uh, overrides the Twenty-first Amendment and that the Tennessee, uh, residency
requirement should be struck down, I think they would be, uh, well-suited to
make an argument that there’s still a lot of uh, uh, area left, a lot of space left
for the states to be able to regulate, uh, their alcohol markets. The key question in the case would be the
intersection of that Dormant Commerce Clause and the Twenty-first Amendment, which grants
a lot of power to states to, uh, control and to regulate alcohol.

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6 thoughts on “Tennessee Wine & Spirits Retailers Association v. Blair [SCOTUSbrief]

  1. Why are they not using the Privileges & Immunities Clause to argue discrimination against out-of-state citizens? That's the stronger argument here.

  2. I like this TN law. It limits big corporations from out of state from dominating the local industry. We need more laws like that so huge international corporations don't get a foothold and business can more easily be family run corporations. Which put their earnings back into the state they make it in. Of course the same should apply nationally as well.

  3. Personally,Tennessee is discriminating again resadents who do not have time in the state. As long as the people own property in the state and have ID in the state,i see no readon why a lobbying organization has the power to try to put citizen out of biz.

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