Kansas Attorney General Opinion 2020-011

2020-011Kanag

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December 10, 2020
ATTORNEY GENERAL OPINION NO. 2020- 11
The Honorable Julia Lynn
State Senator, Ninth District
18837 West 115th Terrace
Olathe, KS 66061
Re: 	Intoxicating Liquors and Beverages—Licensing and Related Provisions;
City Option—Persons and Entities Ineligible for Licensure; Licensure of
Nonresidents
Intoxicating Liquors and Beverages—Licensure and Sale of Liquor by the
Drink—Persons 	and 	Entities 	Ineligible 	for 	Licensure; 	Licensure 	of
Nonresidents
Synopsis: 	The Kansas statutes imposing residency requirements on persons seeking
a license to sell liquor as a retailer or to sell liquor by the drink, K.S.A. 2020
Supp. 41-311 and 41-2623, facially discriminate against nonresidents. It is
unlikely that the State could advance a legitimate local purpose for the
requirements. Thus, the residency requirements in K.S.A. 2020 Supp. 41-
311 and K.S.A. 2020 Supp. 41-2623 would likely be found unconstitutional
under the dormant Commerce Clause of the U.S. Constitution and are
therefore unenforceable. Cited herein: K.S.A. 2020 Supp. 41-311; 41-311b;
41-2623; U.S. Const., Art. I, § 8.
* 	* 	*
Dear Senator Lynn:
As State Senator for the Ninth District, you request our opinion on the constitutionality of
residency requirements in two Kansas liquor licensing statutes in light of the decision of
the United States Supreme Court in Tennessee Wine and Spirits Retailers Association v.
Thomas. 1 Specifically, you ask the following:
1 588 U.S. ___, 139 S. Ct. 2449 (2019).
Senator Julia Lynn
Page 2
Are the residency requirements for applicants for a liquor retailer license in
K.S.A. 41-311(b)(1) and (2) unconstitutional under the dormant Commerce
Clause?
Is the durational residency requirement for applicants for a license to sell
liquor by the drink in K.S.A. 41-2623(a)(3) unconstitutional under the
dormant Commerce Clause?
Applying the reasoning of the United States Supreme Court in Tennessee Wine, we
conclude that the answer to both of your questions is yes — a challenge to the
constitutionality 	of 	the 	residency 	requirements 	in 	these 	statutes 	would 	likely 	be
successful. 2
We begin by examining the statutes themselves. Both statutes have durational residency
requirements, and K.S.A. 2020 Supp. 41-311 has a complete prohibition on licensure of
nonresidents. K.S.A. 2020 Supp. 41-311(b) states in relevant part:
No retailer's license shall be issued to:
(1) A person who is not a resident of this state; [or]
(2) a person who has not been a resident of this state for at least four years
immediately preceding the date of application.
Concerning licenses to sell liquor by the drink, K.S.A. 2020 Supp. 41-2623(a) states in
relevant part:
No license shall be issued under the provisions of this act to:
. . . .
(3) A person who has not been a resident of this state for a period of at least
one year immediately preceding the date of application.
2 The constitutionality of residency requirements for licensure under the Kansas Liquor Control Act have
been in question since at least 2000, when suit was filed challenging the residency requirement for a
distributor’s license. The requirement was found unconstitutional by a federal district court in Glazer’s
Wholesale Drug Co., Inc. v. Kansas, 145 F. Supp. 2d 1234, 1247 (D. Kan. 2001). The State appealed the
decision, but before the appeal was heard, the Legislature amended the then-current K.S.A. 41-311(d) to
remove the residency requirement. Further, the Legislature enacted K.S.A. 41-311b, which requires, inter
alia, national criminal history records checks for nonresident applicants for licensure. See Kan. Atty. Gen.
Op. No. 2006-12. That Attorney General Opinion concluded that when the Legislature removed the
residency requirement from K.S.A. 41-311(d), “the State’s ability to argue the constitutionality of residency
requirements for other license applicants under the Liquor Control Act [was] significantly weakened.”
Senator Julia Lynn
Page 3
The Tennessee statute considered by the Supreme Court is strikingly similar. It states in
relevant part:
No retail license under this section may be issued or transferred to or held
by, to any individual:
(A) Who has not been a bona fide resident of this state during the two-year
period immediately preceding the date upon which application is made to
the commission. 3
Applying 	long-standing 	dormant 	Commerce 	Clause 	principles, 	the 	United 	States
Supreme Court held this statute unconstitutional. 4 The dormant Commerce Clause has
been termed the “negative implication” of the Commerce Clause: while the Commerce
Clause explicitly grants Congress the power to “regulate interstate commerce … among
the several States,” 5 it also implicitly limits the power of the states to adopt laws unduly
restricting interstate commerce. 6 The Supreme Court has explained that the dormant
Commerce 	Clause 	prevents 	states 	from 	“adopting 	protectionist 	measures” 	that
“discriminat[e] ‘against citizens and products of other States.’” 7 A discriminatory state law
will survive a dormant Commerce Clause challenge “only upon a showing that it is
narrowly tailored to ‘advanc[e] a legitimate local purpose’” 8 that “cannot be adequately
served by reasonable nondiscriminatory alternatives.”9 In Tennessee Wine, the Court
rejected arguments that the durational residency requirement served public health and
safety, finding that any relationship to such purposes was “at best … highly attenuated.” 10
It held that because the durational residency requirement in the statute “blatantly favors
the State’s residents” and “has little relationship to public health and safety,” it violates
the dormant Commerce Clause. 11
The durational residency requirements in the Kansas statutes at issue are legally
indistinguishable from the requirement in the Tennessee statute for purposes of dormant
Commerce Clause analysis. The statutes facially discriminate against citizens of other
states. Although it is beyond the scope of an Attorney General Opinion to identify every
possible local purpose for the statutes, we do not consider it likely that the State could
make a showing of a legitimate local purpose that would satisfy constitutional muster,
given the Supreme Court’s unsympathetic attitude toward the public health and safety
3 Tenn. Code Ann. § 57-3-204(b)(2).
4 Tenn. Wine, 139 S. Ct. at 2457.
5 U.S. Const. art. I, § 8.
6 Dept. of Rev. of Ky. v. Davis, 553 U.S. 328, 337 (2008) (citations omitted).
7 Tenn. Wine, 139 S. Ct. at 2459, 2464, quoting Walling v. Michigan, 116 U.S. 446, 460 (1886).
8 Id. at 2461, quoting Dept. of Rev. of Ky., 553 U.S. at 338 (citations omitted).
9 Dept. of Rev. of Ky., 553 U.S. at 338.
10 Tenn. Wine, 139 S. Ct. at 2474.
11 Id. at 2457. The fact that the Tennessee statute concerned alcohol, and thus implicated the Twenty-first
Amendment, did not save the statute. The Court stated that, although § 2 of the Twenty-first Amendment
“allows each State leeway to enact the measures that its citizens believe are appropriate to address the
public health and safety effects of alcohol use and to serve other legitimate interests,” it does not give the
States “license … to adopt protectionist measures with no demonstrable connection to those interests.” Id.
at 2474.
Senator Julia Lynn
Page 4
justifications put forth by Tennessee. Thus, we conclude that a challenge to the
constitutionality of the durational residency requirements in K.S.A. 2019 Supp. 41-
311(b)(2) and K.S.A. 2020 Supp. 41-2623(a)(3) would likely be successful. 12
Further, we opine that a constitutional challenge to the outright prohibition of licensure of
any 	nonresident 	in 	K.S.A. 	2020 	Supp. 	41-311(b)(1), 	a 	“non-durational” 	residency
requirement, would also likely be successful. The holding in Tennessee Wine referred to
Tennessee’s “two-year residency requirement” because that was the only question before
the 	Court, 	but 	much 	of 	the 	Court’s 	analysis 	did 	not 	refer 	to
the duration of residency requirements. Instead, the Court focused on the statute’s blatant
discrimination between residents and nonresidents in the granting of licenses. In its
analysis, the Court applied broad principles of constitutional law, and we find no grounds
to suspect that those principles would apply differently to a non-durational residency
requirement.13
Sincerely,
Derek Schmidt
Kansas Attorney General
AnnLouise Fitzgerald
Assistant Attorney General
DS:AA:AF:sb
12 We note that, if these provisions were held unconstitutional or were removed from the statutes by the
Legislature, the requirements for licensure of nonresidents found in K.S.A. 2020 Supp. 41-311b, which
include national criminal background checks, would then apply to applicants for licenses under these
statutes.
13 This conclusion was also reached by the Attorney General of Oklahoma. See Okla. Atty. Gen. Op. No.
2019-13 (Dec. 31, 2019).

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