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Regulatory and Distribution Law Updates for the Alcohol Industry. A NEW SUPREME COURT CASE MAY IMPACT THE FUTURE OF SPIRITS DIRECT SHIPPING. Tennessee’s two-year residency requirement for retail license applicants is unconstitutional. Specifically, the question Tennessee Retailers posed to the Court is whether the 21st Amendment of the U.S. Constitution gives states that authority to, consistent with the so-called “dormant” Commerce Clause of the Constitution, regulate sales of alcohol beverages by imposing residency requirements on Particularly, they examined the Sixth Circuit’s opinion in February 2018 which affirmed the district court decision that invalidated Tennessee’s residency requirements, held that “a three-tier system can still function” without the two-year durational residency the constitutional validity of the Tennessee law imposing residency requirements on retail alcohol beverage license applicants. As you likely have read in the trade press already, on Wednesday, November 28, 2018, the US Court of Appeals for the Seventh Circuit The opinion adds three judges of the Seventh Circuit to the collection of legal minds rejecting the notion that the dormant Commerce Clause Like other cases brought by Lebamoff and its legal team, this case involves a challenge to state laws that prohibit direct-to-consumer wine shipments by out-of-state retailers. Illinois, like many states, permits in-state retailers to deliver wine directly to Illinois consumers located anywhere in the state. The law, however, denies that same privilege to out-of-state retailers. This distinction, according to the plaintiffs, amounts to discrimination against out-of-state economic interests in violation of the Constitution’s dormant drew an implicit distinction between laws discriminating against producers and products (not permitted) and laws affecting the notes that prior Supreme Court opinions have applied dormant Commerce Clause principles to laws that did not regulate producers or products.