SCOTUS orders Texas to respond to Walmart cert petition over in-state liquor licensing requirements against public companies selling distilled spirits. We may yet have some good alcohol-related cases this term.
Walmart has been leading a charge against a Texas alcohol law that prohibits many public companies from retailing distilled-spirits. Walmart’s contention involves a Commerce Clause challenge to the liquor law arguing the real impact and purpose behind the law which appears facially neutral (i.e., no publicly traded corporations can have liquor licenses to sell distilled spirits) is to keep out-of-state interests from competing with in-state liquor licensees.
The argument stems from interesting facts such as the odd circumstance that given the ban, 98% of liquor stores in Texas are wholly owned by Texans.
Walmart had initially won their case at the trial level and then the 5th Circuit reversed the win last fall.
The Supreme Court circulated Walmart’s petition for cert to conference and following some filings by amici, the petition garnered an immediate reaction requesting a response from the State of Texas. Texas had filed a waiver in an attempt to appear nonchalant about the State’s fears of having their protectionist alcohol law overturned.
You can follow the docket as well as find Walmart’s petition and the amicus brief in support of Walmart’s petition filed by the Cato Institute and in this important alcohol retailer licensing case here.
Interestingly, and supporting the contention about the facts not bearing out the allegations of the law’s neutral, impact amici in the case have argued in their support of the Supreme Court taking up the matter that the 5th Circuit’s reliance on a bright-line rule about laws dictating corporate form and whether or not they can have a discriminatory impact from Exxon Corp. v. Governor of Maryland (a case laying down the rule from 1978) should be reconsidered. This is an intelligent argument given the trend in subsequent decades away from bright-line prohibitions and toward nuanced and factored analysis and tests.
The Walmart brief finds good authority against State protectionism in alcohol regulation and liquor legislation under Tennessee Wine & Spirits v. Byrd and let’s not forget that in addition to finding against protectionism, that case involved a facially neutral residency requirement that also had a practical effect of keeping publicly traded corporations out of the Tennessee liquor store operation.
Let’s hope for the sake of a fun liquor-related term, that the answer here is “granted.”