The U.S. Supreme Court has just ruled that Tennessee’s two-year residency requirement to obtain a retail liquor license violates the Commerce Clause and is not settled by the Twenty-First Amendment.

In its decision, the court notes that it invalidated many state liquor regulations before ratification of the 18th Amendment and by late 19th Century had concluded that the Commerce Clause both prevented States from discriminating “against citizens and products of other states” and “prevented states from passing facially neutral laws that placed an impermissible burden on interstate commerce.

The 21st Amendment, the Court says, granted states latitude in regulating alcohol, but doesn’t allow states to violate the “nondiscrimination principle.”

Section 2 of the 21st Amendment was meant to “constitutionalize” the basic understanding of state power that existed before Prohibition, the court says.

Citing Bacchus Imports Ltd. v. Dias, the court says that “protectionism is not a legitimate section 2 interest shielding state alcohol laws that burden interstate commerce.”

Applying that analysis, the Court says “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.”

            It says the “State could better serve the goal of the residency requirement without discriminating against nonresidents by, e.g., limiting both the number of retail licenses and the amount of alcohol that may be sold to an individual, mandating more extensive training for managers and employees, or monitoring retailer practices and taking action against those who violate the law.”

We will have a full analysis later today.