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Total Wine’s Fight To Enter Tennessee Heads To The Supreme Court

September 28, 2018

The Supreme Court of the United States has agreed to take on the case involving Total Wine & More’s entry into the Tennessee market, which the Tennessee Wine and Spirits Retailers Association (TWSRA) is fighting on the grounds that Total hasn’t fulfilled the state’s residency requirements. Total Wine asserts that Tennessee’s residency requirement is discriminatory against out-of-state residents and therefore in violation of the Constitution’s Dormant Commerce Clause.

Under Tennessee law, corporations and other business entities may not obtain a retail liquor license unless every director, officer, and shareholder of the business has been a Tennessee resident for at least nine years. Total Wine challenged the law successfully on Commerce Clause grounds in both federal district and appeals courts, and noted in its brief to the Supreme Court that Tennessee’s own attorney general “twice opined that this residency statute violated the Dormant Commerce Clause and could not be enforced.” In the meantime, Total was granted a license by the Tennessee Alcoholic Beverage Commission and opened its first store in Knoxville earlier this summer.

In its petition to the Supreme Court appealing the earlier federal court decisions, the TWSRA argues that “requiring individuals (or corporate principals) to reside in the communities they serve for a sustained period before becoming eligible for retail or wholesale licenses ensures that each seller will be knowledgeable about the community’s needs and committed to its welfare.”

The retailer group says the case provides an opportunity for the court to clarify the legality of such residency requirements, which are in effect in at least 21 other states. Pointing to the landmark Granholm v. Heald decision that declared it illegal for states to discriminate between in-state and out-of-state wineries when it comes to direct-to-consumer wine sales, the TWSRA asserts that a Supreme Court decision in the case “will provide much needed guidance to courts that have struggled to understand Granholm’s implications for other restrictions that states impose on retailers and wholesalers.”—Daniel Marsteller

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