BETHESDA, MD – NOVEMBER 20, 2018 – American Beverage Licensees (ABL) submitted an amicus brief today with the U.S. Supreme Court in the case of Tennessee Wine and Spirits Retailers Association v. Byrd. As the petitioner in the case, the Tennessee Wine and Spirits Retailers Association is asking the Court to hold that Tennessee’s durational-residency requirement for granting retail and wholesale alcohol licenses is protected under the Twenty-first Amendment, and to reverse the Sixth Circuit Court of Appeals’ contrary ruling.
As ABL’s brief explains, the state’s residency requirements are lawful under the Twenty-first Amendment and further the State’s legitimate interests as part of its multi-step and comprehensive three-tier regulatory system. The ABL brief states, “By requiring distribution to occur through entities with sufficient connections to a State, that State can best enforce its own alcohol regulations.” The brief further notes that the physical presence of in-state wholesalers and retailers allows for states to more easily inspect those entities and facilitates enforcement of “laws designed for orderly market conditions and public safety.”
ABL’s brief also points out that the Court has long recognized that the dormant Commerce Clause applies differently in the unique context of state alcohol regulation under the Twenty-first Amendment, and is not intended to eviscerate the core Section 2 power of the Twenty-first Amendment, which explicitly gives a state the right to “regulate the sale or use of liquor within its borders.”
The ruling of the Sixth Circuit, if left to stand, could wrongly expand the express holding in Granholm v. Heald (2005), where the U.S. Supreme Court ruled on when state alcohol laws can treat in-state and out-of-state entities differently. Granholm reaffirmed that the three-tier system is “unquestionably legitimate” and recognized that case dealt with just the first tier of alcohol production – not wholesale or retail tiers.
“Independent beverage retailers support the strong authority of the Twenty-first Amendment, which has been recognized by courts and Congress for decades,” said ABL Executive Director John Bodnovich. “The Twenty-first Amendment and the three-tier system it has fostered have given rise to individual state retail alcohol markets that provide unprecedented choice and value to meet customer needs, while also accounting for those same consumers’ demands for public safety, product safety and accountability by those who produce, distribute and sell beverage alcohol products.”