As the liquor industry anticipates a groundbreaking decision in the Tennessee Wine and Spirits Retailers Association v. Blair (Tennessee Wine) case, the Supreme Court has the option to render a decision and yet at the same time defer making any groundbreaking legal precedent. To all us legal geeks out there, it is a disappointing option that the Court has available.

The Standing Question

An important but may be overlooked question is whether the plaintiff, Tennessee Wine and Spirits Retailers Association, has standing to sue?

The State of Tennessee, which is a respondent in this case, sought a declaratory judgement from the Federal District Court on whether its durational residency requirements were constitutional. After the Federal District Court’s decision was issued which determined that the durational residency requirements were not constitutional, Tennessee did not appeal the decision to the 6th Circuit and the Tennessee Attorney General waived their right to participate in oral arguments in support of their law at the 6th Circuit.

Tennessee Wine and Spirits Retailers Association filed an appeal to the 6th Circuit, when the 6th Circuit ruled that the durational residency requirements were unconstitutional, it petitioned the U.S Supreme Court.

Tennessee Wine and Spirits Retailers Association is a private trade group, that does not officially represent the people of Tennessee but represents a private economic interest.

So the major question is can a non-governmental agency represent the state’s interest in court? Especially when a state decides that they don’t want to spend the resources to uphold the law!

 

Supreme Court Precedent on Standing

The Supreme Court dealt with a similar fact pattern in Hollingsworth v. Perry,  570 U.S. 693 (2013). In this case, the State of California refused to represent its interest when a Judge ruled that a ballot initiative, Proposition 8, which limited marriage to opposite gender couples, was unconstitutional. The sponsors of Proposition 8 intervened and appealed all the way to the Supreme Court. The Court in a 5-4 decision ruled that the intervenors lacked standing to sue.

The Court’s opinion specifically stated that “We have never before upheld the standing of a private party to defend the constitutionality of a state statute when state officials have chosen not to. We decline to do so for the first time here.” Id. at 715

So, is the Supreme Court bound by its own precedent and thus required to dismiss Tennessee Wine Retailers Association’s challenge based on lack of standing?

If the Court does not dismiss due to lack of standing, then does it ignore its own standards in deciding this case. And if the latter is the case, could it open itself up to criticism that its exercising arbitrary power with no rhyme or reason.

 

Probability of whether the Court will dismiss based on standing?

So what is the probability that the Court decides this case based on lack of standing? Nobody really knows, but let’s be clear, Tennessee Wine is not the Hollingsworth case, there are distinct and clear differences.

In Hollingsworth there was a clear cut and for the most part singular constitutional issue.

In Tennessee Wine there are distinct issues where there is a circuit split. This case deals with the complex question of whether Granholm’s reach is limited to producers or extends to retailers and wholesalers and whether the durational residency requirements are constitutional.

In addition to comparing the differences between the two cases, one must also look to the strength of the Hollingsworth decision.  Hollingsworth was decided 5-4 and since the decision, two new members joined the Court, so it is hard to determine whether Hollingsworth is a so-called super-precedent. This case could test whether Hollingsworth is limited in its application, or whether its precedent is applied in every standing issue of this nature.

In my view, the Court took this case, even with the crazy durational requirements involved, because there is a clear and distinct circuit split on the constitutional issues surrounding residency requirements, and whether a state can impose restrictions on nonresidents. The Court could have waited for other cases to work their way through the system, however it may have felt the need to end the controversy.

 

If the Court decides based on standing what is the effect?

If the Court decides the case on standing rather than merit, then chaos will still reign in the liquor world and the Court will delay the inevitable. The Circuit splits will not be resolved, and we will need to wait for the Lebamoff and Sarasota Wines cases to create the circuit splits and resolve the Granholm issue.

The other effect is it could create an avalanche where a state could decide not to defend a law and then the law becomes obsolete not based on the legal process but based on the political whim of a government official in office at the time.

 

Conclusion

Conventional wisdom indicates that the Court will issue a decision on the merits and that the Granholm issue could be resolved.

But the dark horse result is the Court dismisses based on lack of standing.

So let’s see how it all comes out in the wash. Has the Court hemmed itself in based on Hollingsworth or will they reign in the chaos in the liquor world? Only time will tell how the Roberts Court will stand on this issue!