Fight for Liquor License Heads to Supreme Court

A sick child, the search for a better life, and a law going back to Prohibition are all at the heart of the case.

L Iquor License

MEMPHIS, Tenn. (AP) — Doug and Mary Ketchum chose Memphis, Tennessee, as a place to live with their disabled adult daughter because it has clearer air than their former home in Utah. That was the easy part. Their decision to support themselves by buying a liquor store has been considerably more complicated, and it is at the heart of a Supreme Court case that is being argued Wednesday.

The Ketchums say Tennessee makes it almost impossible for someone to break into the liquor business from out of state. They contend, and lower courts have agreed, that Tennessee law forcing people to live in the state for two years to get a license to sell alcohol and 10 years to renew a license is unconstitutional because it discriminates against out-of-state interests.

The state's association of liquor sellers, backed by 35 states and the District of Columbia, relies on the constitutional amendment that actually ended the Prohibition era in the United States to defend the two-year residency requirement. The 21st Amendment also left states with considerable power to regulate the sale of alcohol. Tennessee itself has essentially stopped defending the residency requirements and not even the retailers' group is defending the longer renewal provision.

The arguments at the court will focus on provisions of the Constitution. To the Ketchums, however, the case is more personal.

Thirty-two-year-old Stacie Ketchum has cerebral palsy. She suffered a bad case of pneumonia in 2015 that doctors attributed to the air quality where they were living in Utah, her father said. A cold air "inversion" holds all the smog in the valley where they lived, he said. One of her lungs collapsed and filled with fluid, he said.

"We thought we were going to lose her a couple of times during that six weeks she was in the hospital," Doug Ketchum said. "The doctors told us she needed a better environment. We needed to get her someplace where there was clearer air, clearer water, probably a warmer climate, if we expect her to live another year or so."

The family looked for a new place to live. Ketchum, a network engineer, sent out resumes but received few responses. He did come across a broker on the internet who finds businesses for people. He did some research and found Kimbrough Wines & Spirits, a liquor store located on the ground floor of an apartment building in a commercial area east of downtown Memphis. The store is in a good location on a heavily traveled street and boasts a steady, diverse local clientele.

Mary Ketchum is a wine connoisseur, and they thought it would be "kind of fun" to own a liquor store. "We flew to Memphis, and both of us fell in love with it when we got here," Doug Ketchum said. "We just decided we were going to take the leap of faith and change our lives."

The Ketchums liked the foliage and the friendliness of people in Memphis. They now own Kimbrough and are selling liquor with a license granted to them in April 2017 after the law was first struck down.

"Although we are running it, we've had a lot of challenges with it, just because of the lawsuit, and all the baggage that comes along with that," said Doug Ketchum, who works a second job as a network engineer for an elevator company.

"Our hope was that when we got the liquor store, that we would have a lot more time and a little more flexibility with our work schedule, so that we could spend more time with her," Doug Ketchum said. The liquor license ordeal has negatively affected their family life, he said.

Stacie's health has generally improved since they moved, though she once contracted pneumonia, her father said. The family is being represented by a libertarian public interest law firm, the Institute for Justice, that often takes on cases in which people challenge regulations the institute believes exist mainly to discourage competition.

Tennessee's absence from the case "really demonstrates, or at least emphasizes, the protectionist nature of these laws," said the Institute for Justice's Michael Bindas, adding that the laws are "not designed to accomplish anything other than to keep folks like Doug and Mary Ketchum out of this business."

Another liquor store, part of a national chain with nearly 200 stores in 23 states, also is part of the case. Carter Phillips, a leading Supreme Court lawyer in Washington, will argue on behalf of the Ketchums and the other store, Total Wine Spirits Beer & More in Knoxville, Tennessee.

In 2005, the justices ruled 5-4 that state laws must treat wineries equally regardless of their location. The ruling struck down laws in New York and Michigan as discriminatory because they allowed in-state wineries, but not out-of-state businesses, to ship directly to consumers.

But only three justices, Clarence Thomas, Ruth Bader Ginsburg and Stephen Breyer, remain on the court from that decision, which also did not split the court in liberal and conservative blocs. Critics of the earlier ruling said the court had deprived states of the ability to control alcohol within their borders.

Tennessee liquor stores that support the residency requirements told the court that the 21st Amendment gave back to the states the substantial authority they had to regulate alcohol before Prohibition began in 1920. Although Americans voted to end Prohibition, they endorsed "the temperance goals that motivated it," the retailers association said in a Supreme Court brief.

The case is Tennessee Wine and Spirits Retailers Association v. Blair, 18-96.