This post follows up on an earlier post written about the same case.

Tennessee law imposes a residency requirement on individuals (and companies) wishing to operate retail liquor stores in TN, requiring applicants to have resided for the prior 2 years (for a new license), or 10 years (for a renewal); and if the applicant is a corporation, all its shareholders must reside in TN.

In a 7-2 decision released on June 26th, the Supreme Court ruled this Tennessee law is unconstitutional  according to the Commerce Clause. The decision is a win for liquor companies and consumers, who will no longer be subject to state protectionist policies (supported by the Tennessee Wine and Spirit Retailer Association)..

In its opinion, the Court concluded that “far from granting the States plenary authority to adopt domestic regulations, the Court’s police-power precedents required an examination of the actual purpose and effect of a challenged law.” Thus, the Court “reject[s] the Association’s overly broad understanding” of the 21^st Amendment, which the Association argued gives states “virtually limitless authority” to regulate liquor.

In practice, the Court’s decision means that state legislation may not impede interstate liquor trade unless the statute has a “demonstrable connection” to “public health and safety effects of alcohol use and to serve other legitimate interests.” It should be noted, however, that this decision does not affect intrastate trade.

You can read the entire opinion here.

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