Tennessee Wine and Spirits Retailers v. Thomas, Exec. Dir. of the Tennessee Alcoholic Beverage Commission

State-mandated durational residence requirements for business owners applying for retail liquor store licensing is unconstitutional under the dormant Commerce Clause and is not protected by the Twenty-First Amendment § 2.

Petitioner is a trade association for in-state liquor retailers. Respondent, acting under the direction of the state attorney general, declined to enforce statutory residency requirements on applicants with non-resident stockholders. Petitioner brought suit and the case was removed to federal court. The district court, following U.S. Supreme Court decision in Granholm v. Heald, 544 U. S. 460 (2005), concluded the residential requirements were unconstitutional. Petitioner appealed. Sixth Circuit Court of Appeals affirmed, finding the state residential requirements were “facially discriminate against out-of-state economic interests” and unconstitutional under the Twenty-First Amendment and the dormant Commerce Clause precedents. However, the circuit divided over the constitutionality specific to the 2-year residential requirement for an initial license.  Petitioner sought certiorari, specifically challenging the Sixth Circuit's invalidation of the 2-year residency requirement applicable to initial liquor store applicants. The U.S. Supreme Court affirmed, finding that the 2-year residency requirement favored in-state residents over out-of-state residents, thus violating the dormant Commerce Clause. Further, as the requirement relates to the sale of alcohol, the Court considered the Twenty-First Amendment §2, which grants latitude to the states for legislation of alcohol, but reasoned that §2 is not intended to allow states “to restrict the importation of alcohol for purely protectionist purposes.” The Court held a 2-year durational residency requirement applicable to retail liquor store initial license applicants violates the Commerce Clause and is not shielded by the Twenty-First Amendment §2. AFFIRMED.