Skip to main content

AG Hunter Lowers Boom on Barrier to Entry; Legislature Should Follow His Lead


Even as the Oklahoma Supreme Court struck down a recent alcohol distribution law, the Attorney General paved the way for the state’s Alcoholic Beverage Law Enforcement Commission (ABLE) to remove an obstacle from the expansion of liquor store competition - finding that Oklahoma’s five-year in-state residency requirement before one can own a liquor store likely runs afoul of the U.S. Constitution and recent U.S. Supreme Court precedent. 

The AG’s opinion, issued at the end of December, informs the state’s alcohol commission that portions of the state constitution (Article 28A, Section 4(A) & (B)) are unenforceable. These provisions require that ABLE issue a Retail Spirits License or Wine and Spirits Wholesaler License only to someone who has been a resident of Oklahoma for the previous five years. Presumably ABLE, who requested the opinion, will now begin issuing licenses to otherwise qualified applicants regardless of how long they have lived in Oklahoma. 

Tennessee had a similar provision, though only a two-year residency requirement. Last year the law was declared unenforceable because it conflicts with the dormant aspect of the federal constitution’s Commerce Clause. This is the part of the constitution that gives Congress the power to regulate commerce among the states. In addition to affirmatively granting this power, courts have long held that it implied states do NOT have the power to regulate interstate commerce in ways that harmed other states, or residents of other states. 

While the state’s liquor laws are still plagued with crony policies, this is a small victory. Consumers win when they have more options. Licensing makes it harder for new competitors to enter a market. In this instance, liquor licensees in the state were effectively insulated from all out-of-state competition. Who would recognize a market opportunity, move across state lines to fill it, and then wait a non-productive five years before doing so? Almost no one. The true goal of the law was to make sure only “True Oklahomans” - those who live here by accident of birth - could sell liquor. Outsiders who recognize a need and seek to help Oklahomans by providing a service are out of luck. 

Excluding out-of-state entrepreneurs and professionals, or making it more difficult for them to enter the state, is something of a grand tradition in Oklahoma. Attorneys who pass the bar exam in another state are only deemed competent to work in Oklahoma if they have practiced law continuously for FIVE of the last seven years. Those who pass Oklahoma’s bar are full-fledged attorneys from the time of their swearing in. 

Another example is Polygraph Examiners, who are granted reciprocity if they are from a state with equivalent licensing requirements, which also grants reciprocity, but only IF they have first practiced there for TWO years. Funeral Directors wanting to move into Oklahoma must have a license from a state with similar licensing requirements (which is problematic since few states require such burdensome standards) and FIVE years of experience. 

Cosmetologists who went to school in a state without a licensing board are out of luck completely. Oklahoma will not accept training reported directly from a cosmetology school outside the state - only from another licensing agency. Not only does Oklahoma’s legislature evidently believe this state’s cosmetologists are unable to compete with those from out of state, it must also see our cosmetology schools as somehow lesser than their out-of-state rivals. 

We ought to be embarrassed by this. Legislatures of old seemed to think Oklahomans were not bright enough to compete with newcomers. They may also have believed Sooners required more consumer protection than residents of other states (though this is less likely, since licensing does very little to actually protect consumers). While these laws were mostly passed well before anyone presently in the state house took office, it remains a mystery why so little has been done to repeal them. Oklahomans are not any more in need of paternalism or protectionism than anyone else. We can recognize and seize entrepreneurial opportunity as well as anyone else - especially in our own back yard. And we are just as capable of using Yelp or Angie’s list to check a practitioner’s reputation - as anyone else. It’s time the laws of the state reflect this reality. 

Mike Davis is Research Fellow at 1889 Institute. He can be reached at mdavis@1889institute.org.

The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.

Popular posts from this blog

1889 Institute's Statement Regarding School Closures

The 1889 Institute, an Oklahoma think tank, has released the following statement regarding Joy Hofmeister’s proposal to keep schools closed for the remainder of the school year. We at the 1889 Institute consider Joy Hofmeister’s proposal to close Oklahoma’s schools for the rest of the school year a gross overreaction to the coronavirus situation. Even in the best of times and circumstances, suddenly shifting every student in the state from traditional classrooms to online distance learning will have negative educational consequences. This in addition to the economic burden on two-earner families forced to completely reorder their lives with schools closed. We believe many of our leaders have overreacted to worst-case scenarios presented by well-intended health experts with no training or sense of proportion in weighing the collateral damage of shutting down our economy versus targeting resources to protect the truly vulnerable. We say reopen the schools and stop the madness. ...

Can Government Force You to Close Your Business?

1889 Institute takes no position on whether any or all of these measures are warranted or necessary, or whether their economic fallout would inflict more human suffering than they prevent. We are simply evaluating whether they are legal.   With the unprecedented (in the last 100 years at least) reaction surrounding the outbreak of Covid-19, questions that few living legal scholars have considered are suddenly relevant.   Can a quarantine be ordered?   Can a mass quarantine, lockdown, or “cordon sanitaire” be ordered? Can businesses be ordered to change their behavior?   Can businesses be ordered to close? Can state governments order these measures? Can local governments order these measures? My legal brief addresses these issues from a statutory point of view; it is clear that state law gives the governor and mayors broad authority in a state of emergency. They must, of course, do so in a neutral way that they reasonably believe will help preve...

Legislating through Litigation

Oklahoma’s Attorney General and trial courts appear to now be in the business of taxing industries and appropriating funds to state agencies. These are powers that the Oklahoma Constitution explicitly grants to the legislature . They are certainly not given to the Attorney General or the courts. But in the name of mitigating a “public nuisance,” these legislative powers have effectively been misappropriated.   The $572 million judgment recently handed down in Oklahoma’s opioid litigation looks an awful lot like a piece of legislation. It purports to tackle a broad societal problem by taxing a company alleged to have contributed to it and using the money to fund government agencies and programs aimed at ameliorating the problem. The Court and Attorney General justified this approach by claiming an “abatement plan” was needed to counter the so-called public nuisance of prescription drug abuse. Besides stretching the public nuisance theory far beyond its historical application ,...

The Bravery of Those Who Died to Defend Us Highlights Our Cowardice

Memorial Day commemorates those who died in military service to our country. These people died not for a chunk of land, for the natural resources available on that chunk of land, nor for any such simple material possession. They died for an idea, a way of life, as well as for each other. We used to be the Land of the Free, and the Home of the Brave. Now we're the land of the lockdown and the home of the trepidatious.   The bravery of heroes past has been replaced by dirty looks for those who dare to go outside without a mask - even in their own cars – where mask wearing, at best, can only be justified as a sign of solidarity . But solidarity for what? Certainly not freedom. That solidarity happens when people stand shoulder to shoulder against the jackboots who would take someone to jail for what now appears to be the shocking desire to earn a living to feed a family. What follows are three stories of heroism, and four contrasting acts of cowardice. May the deeds of the...