Tennessee Wine and Spirit Retailers v. Byrd

Whether the Twenty-first Amendment empowers states, consistent with the dormant Commerce Clause, to regulate liquor sales by granting retail or wholesale licenses only to individuals or entities that have resided in-state for a specified time.

Respondent, Byrd, Executive Director of the Tennessee Alcoholic Beverage Commission (TABC), filed a declaratory judgment action to determine the constitutionality of Tennessee’s durational-residency licensing requirement for alcohol sales. Tennessee law requires that applicants be bona fide residents of Tennessee for at least two years preceding the application date. Byrd sought declaratory judgment after Petitioner, a group representing the interests of Tennessee business owners, informed TABC that it would sue if the Commission granted licenses to a number of applicants who failed to meet the durational-residency requirement. The district court held that dormant Commerce Clause scrutiny extended to state laws governing local retailers. Further, the court found Tennessee’s durational-residency requirement facially discriminatory and noted that nondiscriminatory alternatives existed. The Sixth Circuit affirmed. Petitioner argues that the Court should resolve this circuit split in favor of durational-residency requirements, because the Court’s recent Twenty-first Amendment cases confirm that states retain special authority in regulating alcohol, and durational-residency requirements do not discriminate against out-of-state goods by regulating wholesalers and retailers of alcohol. Petitioner further argues that even under limited dormant Commerce Clause scrutiny, durational-residency requirements serve legitimate government interests related to public health because they ensure that retailers have knowledge of and a personal investment in the community in which they sell alcohol.