The U.S. Supreme Court heard oral arguments in January 2019 in the case of Tennessee Wine and Spirits Retailers Association v. Clayton Byrd. The case challenges Tennessee’s liquor retail licensing laws, which requires that owners and officers of companies retailing liquor in the state reside in the state for at least two years prior to receiving the license. The law further requires that to renew a license the owners and officers must all have resided in the state for at least ten years. Two out-of-state applicants challenged the law, arguing it violates the dormant Commerce Clause of the U.S. Constitution, which prohibits state laws that discriminate against interstate commerce.
This is a case to watch because a decision in favor of the out-of-state retailers could embolden others who might seek to challenge other state law based occupational licensing requirements. For California automotive retailers, the most analogous restriction on licensing is the physical place of business requirements: dealers may only receive a dealer license to sell in California if they have a physical place of business in the state. This effectively prohibits out-of-state businesses from directly retailing vehicles in California through non-traditional means, such as online sales. The decision is expected in the spring of this year.