On June 26, IJ secured an important victory for economic liberty—and dealt a mighty blow to economic protectionism—with our second victory at the U.S. Supreme Court this term. Our case challenged Tennessee’s “durational residency” law, an outrageously protectionist restriction that required a prospective business owner to have been a state resident for 10 years before he or she could apply for and renew a retail liquor license.
Readers may recall from the February issue of Liberty & Law that the case began when Doug and Mary Ketchum applied for a license to purchase Kimbrough Fine Wine & Spirits, a historic liquor shop just down the road from Sun Studio in Memphis. Purchasing the shop would allow them to support themselves while following their doctor’s advice that they move their daughter, Stacie, who has cerebral palsy and paraplegia, from Salt Lake City to a climate less likely to cause complications for her health. But when they arrived in Memphis, they were met not with economic opportunity, but with a legal nightmare.
The Tennessee Wine and Spirits Retailers Association—the lobbying group for in-state alcohol retailers—threatened to sue the Tennessee Alcohol and Beverage Commission (TABC) if it failed to enforce the state’s residency requirements against the Ketchums and the national chain store Total Wine, which had also applied for a license around the same time. In response, the director of the TABC filed his own lawsuit, asking the court to determine the constitutionality of the durational residency requirements.
IJ followed that case closely as it made its way through the lower courts. After all, it involved the very issue that lies at the heart of our economic liberty work: regulations aimed not at protecting public health and safety, but at protecting favored business interests from competition. What’s more, the case tied directly to another IJ case challenging protectionism in the context of alcohol sales—our 2005 U.S. Supreme Court victory allowing winemaker Juanita Swedenburg to ship her wine directly to consumers in other states.
The Ketchums and Total Wine prevailed in the lower courts, but the liquor cartel—which took over litigation from the state—asked the U.S. Supreme Court for review. When the Court agreed, the Ketchums decided to partner with IJ to vindicate their rights once and for all.
Their perseverance was rewarded during the last week of this Supreme Court term. In a broadside indictment of economic protectionism, Justice Alito, for a seven-justice majority, held not only that Tennessee’s durational residency requirement was unconstitutional, but also that economic protectionism was not a legitimate basis for state alcohol regulation. The 21st Amendment, he wrote, “is not a license to impose all manner of protectionist restrictions on commerce in alcoholic beverages.” Tennessee’s law, he concluded, “blatantly favors the State’s residents and has little relationship to public health and safety.”
With this victory, IJ firmly established protection for economic liberty under the Commerce Clause of the U.S. Constitution. We also ensured that Doug and Mary can now rest easy, knowing that their livelihood—and their family—are safely at home in Tennessee.
Michael Bindas is an IJ senior attorney.