I read with interest Louis Terminello's article published June 27 analyzing Tennessee Wine and Spirits Retailers Association v. Thomas and asking “Will Protectionist Alcohol Rules Withstand More Supreme Court Scrutiny?” 

In Tennessee, the U.S. Supreme Court struck down the state's residency requirements for obtaining a retail alcohol license because they unfairly discriminated against out-of-state residents. The Supreme Court held that the dormant commerce clause prohibits states from enacting laws that discriminate against out-of-state retailers unless those laws are narrowly tailored to a legitimate public purpose, and no nondiscriminatory alternative is available.

In his article, Terminello suggests that Tennessee will usher in a new revolutionary era in which the Supreme Court (and lower federal courts) increasingly strike down state alcoholic beverage laws as protectionist based on a predicted, but non-existent, “new and narrow test” for 21st Amendment analysis.

I see things differently. Viewed properly, Tennessee is merely a continuation of the Supreme Court's dormant commerce clause precedent, marked most recently in the alcoholic beverage industry by its decision in Granholm v. Heald  in 2005, but dating as far back as at least 1984 in Bacchus Imports v. Dias — nothing more, nothing less.

In Bacchus, the Supreme Court struck down an excise tax on alcoholic beverages that exempted certain in-state produced alcoholic beverages. In Granholm, the Supreme Court invalidated state laws that permitted in-state wineries to sell wine directly to in-state residents, but prohibited out-of-state wineries from doing the same.

Such discriminatory laws, the Supreme Court held, violated the Constitution's commerce clause by unfairly discriminating against out-of-state producers solely to give in-state producers a competitive advantage. None of these laws deterred underage drinking or facilitated tax collection in actual practice -– core principals of the police powers protected by the 21st Amendment.

In addition, nondiscriminatory alternatives existed that would have served the states' proffered policy objectives. So the protectionist laws were not tailored to a legitimate public purpose.

Fast forward to Tennessee … the Supreme Court invalidated a protectionist law hauntingly similar to those struck down in Granholm. Tennessee's law allowed its citizens to obtain a license to sell alcoholic beverages to Tennessee consumers but required other US citizens to become in-state residents for two years before qualifying for the same license.

The Supreme Court has, in the past, struck down protectionist state alcoholic beverage laws, and it will continue to do so in the future. However, the court also acknowledged that states have a valid interest in utilizing a three-tier system, liming the number of retail licenses it issues, limiting the amount of alcohol that can be sold to an individual, monitoring retailers and taking action against those who violate the substantive laws.

After Granholm, the Supreme Court's decision in Tennessee should not surprise or alarm anyone. Tennessee is not revolutionary but is instead entirely predictable. This case is not the harbinger of increased, activist Supreme Court review of alcoholic beverage laws. It is entirely consistent with prior Supreme Court precedent holding that protectionist legislation is, except in the narrowest of circumstances, always unconstitutional.

Samuel Rubert

Rubert Law

Weston