Economic Protection for Retail Liquor Dealers: Residency Requirements and the Twenty-first Amendment

Monday, January 1st, 1990 at 12:00 am by Susan E. Brownlee
Susan E. Brownlee, Economic Protection for Retail Liquor Dealers: Residency Requirements and the Twenty-first Amendment, 1990 Colum. Bus. L. Rev. 317

The issue of whether residency requirements enacted pursuant to states’ Twenty-first Amendment powers violate the Commerce Clause is inherently factual. There is no question that states effect economic protectionism for their local liquor industries by excluding out-of-state competition. The focal point of any challenge to such residency requirements will be the validity of the justification asserted by the state. To the extent that a regulation conflicts with federal law, it must be an exercise of a state’s “core” Twenty-first Amendment power in order to be sustained. Furthermore, there must be no other less discriminatory means of accomplishing the state’s purpose than the absolute ban on out-of-state liquor competition. The days when a state could prevail in a Twenty-first Amendment challenge merely by intoning the words “Twenty-first Amendment” are gone. In recent years, the Supreme Court has repeatedly voiced its skepticism regarding state rationalizations for discriminatory liquor legislation. Unless a state can present evidence that the statutory purpose of a residency requirement is not mere economic protectionism, that the residency requirement actually accomplishes the stated purpose, and that the purpose cannot be accomplished in a less discriminatory manner, such requirements must be stricken as violative of the Commerce Clause.

Author Information

Associate, Rider & Associates, Houston, Texas. B.A., 1982, Wellesley College; J.D., 1987, Columbia University.