Supreme Court Rules on Highly Anticipated Tennessee Wine Case
June 26, 2019
By Jeff Carroll, Chief Product Officer
The wine industry has been sitting on pins and needles for the last month waiting for a Supreme Court decision that had the potential to change liquor laws nationwide. With a mounting backlog, the Court delayed the decision on Tennessee Wine & Spirits Retailers Association v. Thomas (previously Blair), then finally made their decision public this morning.
Read Full Opinion: Tennessee Wine and Spirits Retailers Association v. Thomas
Justice Alito delivered the 7-2 opinion, which struck down Tennessee’s residency requirement. Justices Gorsuch and Thomas dissented. On top of striking down the residency requirement, the Court also took an expansive view of the case and clarified that Granholm was not limited to producers and that states can not discriminate against out of state businesses for protectionist reasons.
Here are a few key passages from the opinion:
Applying the appropriate §2 analysis here, Tennessee’s 2-year residency requirement cannot be sustained. The provision expressly discriminates against nonresidents and has at best a highly attenuated relationship to public health or safety.
Given all this, the Association has fallen far short of showing that the 2-year durational-residency requirement for license applicants is valid. Like the other discriminatory residency requirements that the Association is unwilling to defend, the predominant effect of the 2-year residency requirement is simply to protect the Association’s members from out-of-state competition. We therefore hold that this provision violates the Commerce Clause and is not saved by the Twenty-first Amendment.
And Granholm never said that its reading of history or its Commerce Clause analysis was limited to discrimination against products or producers. On the contrary, the Court stated that the Clause prohibits state discrimination against all “out-of-state economic interests”
Tom Wark, Executive Director of the National Wine Retailers Association, is celebrating the decision as a major development for retailers.
“The era of protectionist state laws banning interstate shipment of wine by out-of-state retailers is over. The Supreme Court made clear that the non-discrimination principles it applied to winery shipping in 2005 in Granholm v Heald also apply to retailer wine shipping. The only question now is if states, still desiring to harm their consumers ability to access the wines they want in order to protect in-state interests, will force long expensive court battles. Today’s decision is big win for wine consumers, free trade and fine wine retailers.”Tom Wark, Executive Director, NAWR
Michael Bilello, SVP Communications and Marketing from the Wine & Spirits Wholesalers of America, also provided a public statement on the case.
Although WSWA disagrees with the outcome of today’s Supreme Court ruling, we agree with the Court that the promotion of public health and safety is a primary function of alcohol regulation, with the three-tier system being paramount to the creation of the safest alcohol market in the world.
NPR: Supreme Court Hands Total Wine, Other Out-Of-State Liquor Retailers A Big Win
Washington Post: Supreme Court strikes down Tennessee liquor sales law
Irish Liquor Lawyer: Wow: Alito expands Granholm in Tennessee Wine Decision settling the long debate in the liquor world
Lex Vini: Supreme Court Decision is a Victory for Wine Retailers
Strike & Techel: The Supreme Court Rules in Tennessee Retailers: What Does it Really Mean?