Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests.

Chapter 4 LIMITS ON STATE REGULATORY AND TAXING POWER PREEMPTION Two wa ! there are "#$#t! o% !tate power& I' Whe% Co%(re!! ha! a)te*& +Federal law trumps state law (or stated another way, state law is preempted) This is due to the S,pre$a) C"a,!e rt. !" of Constitution #The Constitution, and the $aws of the %& which shall 'e made in (ursuance thereof) and all Treaties made, or which shall 'e made, under the uthority of the %&, shall 'e the &upreme $aw of the $and.* +first step in analysis, -hen there is a conflict 'etween state law and federal law (or the Constitution), then federal law wins. II' Whe% Co%(re!! ha! NOT a)te*& This is when the .udiciary decides that federal law does not preempt state or local law. /ven if there0s no preemption, state law can 'e challenged under two principles1 2. Dor$a%t Co$$er)e C"a,!e the principle that state and local laws are unconstitutional if they place an undue 'urden on interstate commerce. o Even if Congress has NOT acted, even if its commerce power lies dormant, state and local governments cannot place an undue burden on interstate commerce. o Meant to preserve the free flow of goods and services throughout the economy. o When there is discrimination against out of staters o Relates to a classification of in state and out of state discrimination o Limits on states rights preemption, dormant commerce clause and privileges and immunities clause. (The bar exam will definitely as a !uestion based on one of these three concepts". o heirarchy of Law natural law (#od", then loo at the $onstitution (treaties and laws are supreme law of the land supremecy clause and preemption and privilges and immunities" 3. the Pr#-#"e(e! a%* I$$,%#t#e! C"a,!e rt. "!, 43 #The Citi5ens of each &tate shall 'e entitle to all (rivileges and "mmunities of Citi5ens in the several &tates* o This has 'een interpreted as limiting the a'ility of states to discriminate against out6of6staters w7 regard to constitutional rights or important economic activities. 28th amendment 9 think of police power, health, and welfare. A' PREEMPTION O. STATE AND LOCAL LAWS

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. +(reemption 9 3 types1 2. /:press 9 fed0l law e:pressly preempts state law a. "t doesn0t always have to e:pressly state the law. '. Congress0s intent can 'e a form of e:pressed preemption 3. "mplied a. Conflicts preemption 9 where state law and fed law are in conflict) fed wins '. Field preemption 9 fed law occupies the entire field, 'ut not e:pressed c. Federal o'.ective 9 "f the federal government can do it, then the state can or cannot. "n model answer a'out preemption, discuss e:press7implied and how the federal law works; +/ $a0or !#t,at#o%! where the USSC ha! #*e%t#1#e* whe% pree$pt#o% o)),r!& 2. -here a federal law e:pressly preempts state or local law 3. -here preemption is implied 'y a clear congressional intent to preempt state or local law <. (reemption when state law impedes the achievement of a federal o'.ective. /:press Congress e:pressly precludes state or local regulation in its legislation

$orillard To'acco Co. v. =eilly

Facts1 "n >anuary 2???, the ttorney @eneral of Aassachusetts promulgated comprehensive regulations governing the advertising and sale of cigarettes, smokeless to'acco, and cigars. The purpose of the regulation is to eliminate deception and unfairness in the way to'acco products are marketed, sold, and distri'uted in Aassachusetts in order to address the incidence of to'acco use 'y children under legal age and in order to prevent access to such products 'y underage consumers. Pro)e*,ra" 2#!tor & =eview 'y &upreme Court of lower court0s decision concerning preemption of state nuclear regulatory law 'y federal tomic /nergy ct. I!!,e& (FC$ -hether certain cigarette advertising regulations are pre6empted 'y the Federal Cigarette $a'eling and dvertising ct )B

2o"*#%(& Ces. Ge%era" Pr#%)#p"e! o1 Law& Decause federal law is said to 'ar state action in a field of traditional state regulation, namely, advertising, we work on the assumption that the historic police powers of the &tates are not to 'e superseded 'y the Federal ct unless that is the clear and manifest purpose of congress. Rea!o%#%( a%* D#!po!#t#o%& The congressional purpose is the ultimate touchstone of our inEuiry. "n the pre6emption provision, Congress uneEuivocally precludes the reEuirement of any additional statements on cigarette packages 'eyond those provided in the statute. Congress further precludes &tates or localities from imposing any reEuirement or prohi'ition 'ased on smoking and health with respect to the advertising and promotion of cigarettes. The purpose of the FC$ was twofold1 to inform the pu'lic adeEuately a'out the ha5ards of cigarette smoking, and to protect the national economy from interference due to diverse, non uniform, and confusing cigarette la'eling and advertising regulations with respect to the relationship 'etween smoking and health. Congress made several changes over time to the provisions of to'acco warnings. -e fail to see how the FC$ and its pre6emption provision permit a distinction 'etween the specific concern a'out minors and cigarette advertising especially in light of the fact that Congress crafted a legislative solution for those very concerns. -e also conclude that a distinction 'etween a state regulation of the location as opposed to the content of cigarette advertising has no foundation in the te:t of the pre6emption provision. Congress pre6empted state cigarette advertising regulations like the ttorney @eneral0s 'ecause they would upset federal legislative choices to reEuire specific warnings and to impose the 'an on cigarette advertising in electronic media in order to address concerns a'out smoking and health. ccordingly, we hold that the ttorney @eneral0s outdoor and point6of6sale advertising regulations targeting cigarettes are pre6empted 'y the FC$ .

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests.
&ummary of Fissents and Concurrences >ustice &tevens, with whom >ustices &outer, @ins'urg, and Dreyer .oin, dissenting on the preemption issue. s the ma.ority acknowledges, under prevailing principles, any e:amination of the scope of a preemption provision must #start with the assumption that the historic police powers of the &tates are not to 'e superseded 'y;Federal ct unless that is the clear and manifest purpose of Congress.* The te:t of the preemption provision must 'e viewed in conte:t, with proper attention paid to the history, structure, and purpose of the regulatory scheme in which it appears. This task, properly performed, leads ine:ora'ly to the conclusion that Congress did not intend to preempt state and local regulations of the location of cigarette advertising when it adopted the provision at issue in this suit. The legislative history of the provision also supports such a reading. The record does not contain any evidence that Congress intended to e:pand the scope of preemption 'eyond content restrictions. To the contrary, the &enate =eport makes it clear that the changes merely #clarified* the scope of the original provision. -hen Congress amended the preemption provision it did not intend to e:pand the application of the provision 'eyond content regulations. /ven if " were not so convinced, however, " would still dissent from the Court0s conclusion with regard to preemption, 'ecause the provision is, at the very least, am'iguous. The historical record simply does not reflect that it was Congress0s clear and manifest purpose. to preempt attempts 'y &tates to utili5e their traditional 5oning authority to protect the health and welfare of minors. 'sent such a manifest purpose. Aassachusetts and its sister &tates retain their traditional police powers.

-yeth v. $evine F CT&1 (henergan is a drug used to treat nausea. The drug can cause irreversi'le gangrene if it enters a patients artery. $evine went to a local clinic for treatment of a migraine headache. Gne of the drugs she received was (henergan for nausea. The com'ination of drugs provided her with no relief so returned the same day and recvd a second in.ection. The assistant this time administered the drug 'y iv push method and the (henergan entererd $evines artery. s a result $evine developed gangrene and the doctors were forced to amputate her right hand and then her entire foream. &he incurred su'stantial medical e:penses and the loss of her livelihood as a professional musician. '7-arnings on (henergan0s la'el were deemed sufficient 'y the federal Food and Frug dministration when it approved -yeth0s new drug application. (H1 $evine 'rought an action for damages against -yeth claiming that the la'eling was defective '7c it failed to instruct clinicians to use the "! drip method instead of the higher risk "! push method. -yeth filed a motion for summary .udgment arguing that $evine0s failure to warn claims were pre empted 'y federal law. Trial court found that -yeth, the manufac. Gf the drug failed to provide an adeEuate warning of the risk and awarded damages to respondent. "&&%/1 -hether the FF 0s approvals provide -yeth with a complete defense to $evine0s tort claimsB -hether federal law pre empts $evine0s claim that (henergan0s la'el did not contain an adeEuate warning a'out using the "! push method of administration. Io

HG$F"I@1

<

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. =%$/1 The purpose of Congress is the ultimate touchstone in every pre emption case. &econd in all pre emption cases, and particularly those in which congress has legislated in a field which the states have traditionally occupied;we start with assumption that the historic police powers of the states were not to 'e superseded 'y the federal act unless that was the clear and manifest purpose of congress. FF rules e:plain that newly acEuired information is not limited to new data, 'ut also encompasses new analyses of previously su'mitted data. =/ &GI"I@1 Wyeth%s &rgument' 2. "t would have 'een impossi'le for it to comply with the state law duty to modify (henergan0s la'eling w7o violating federal law. J manufacturer may only change a drug la'el after the FF approves a supplemental application. CD/ regulation provides that if a manuf. "s changing a la'el to add or strengthen an instruction or warning precaution or adverse reaction it need not wait for FF approval. 3. =ecognition of levine0s stat tort action su'stitutes a lay .ury0s decision a'out drug la'eling for the e:pert .udgment of the FF . -yeth argues that the CD/ regulation is not implicated in this '7c a 388K amendment provides that a manuf. Aay only change its la'el to reflect newly acEuired information. Courts =easoning1 &trengthening the warning a'out "! push administration would not have made (henergan a new drug. Ior would this warning have rendered (henergan mis'randed. 'sent clear evidence that the FF would not have approved a change to (henergan0s la'el, we will not conclude that it was impossi'le for -yeth to comply with 'oth federal and state reEuirements. -yeth failed to demonostrate that it was impossi'le for it to comply with 'oth federal and state reEuirements. The CD/ regulation permitted -yeth to unilaterally strengthen its warning, and the mere fact the FF approved (henergans la'el does not esta'lish that it would have prohi'ited such a change. =iegel v. Aedtronic 23K s. ct. ??? (388K) JThe Aedical Fevices mendments preempt states from imposing reEuirements different from federal law after the FF approves a medical device. JThe court held this preempts state tort lia'ility against manufacturers for devices approved 'y the FF JThe court reasoned that tort lia'ility, like regulation, changes 'ehavior and essentially creates reEuirements. $ipollone (xecutor of the (state of Rose ). $ippollone v. Liggett #roup, *nc.(+,,-" .ACTS& L is son of =ose Cipollone who died from lung cancer due to smoking. He sued the cigarette manufacturers claiming they were responsi'le for his mother0s death (she smoked for over M8 years) 'ec7 they failed to warn consumers

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. a'out the ha5ards of smoking, fraudulently misrepresenting those ha5ards, and conspiracy to deprive the pu'lic of certain info. a'out smoking. 2?N? federal statute 9 which amended the 2?NO Federal Cigarette $a'eling and dvertising ct 9 reEuired that cigarette packages have a warning that the surgeon general has determine cigarette smoking as ha5ardous to one0s heath and it also 'anned cigarette advertising in any medium of electronic communication su'.ect to FCC .urisdiction. "t also stated, #Io reEuirement or prohi'ition 'ased on smoking and health shall 'e imposed under &tate law w7 respect to the advertising or promotion of any cigarettes the packages of which are la'eled in conformity w7 the provisions of the ct.* is as ing Congress to re!uire tobacco companies to have more of an e"plicit warning on cigarettes about the health ha#ards than what the federal act re!uires $ here is the conflict w% laws. ISSUE& Fid the federal statute preempt Cipollone0s state common6law claimsB C/&. ANALYSIS& $ook at the two statutes1 i. 2?NO ct 6 it only preempted the mandating of particular cautionary statements, and did not preempt state law damages actions ii. 2?N? act 9 A%CH D=G F/= than 0NO ctP #t pree$pt! 34! )"a#$! 5a!e* o% a 1a#",re to war% a%* the %e,tra"#6at#o% o1 1e*era"" $a%*ate* war%#%(! to the e7te%t that tho!e )"a#$! re" o% o$#!!#o%! #% the 84! a*-ert#!#%(9pro$ot#o%!' D%T it doesn0t preempt L0s claims 'ased on e:press warrenty, intentional fruad7misrepresentation, or conspiracy (To'acco cos. mad a'out thisP) ROL& .e*era" !tat,tor "aw: wh#)h )o%ta#%! e7pre!! pree$pt#-e "a%(,a(e: $a 5e #%terprete* 5a!e* ,po% the #%te%t or p,rpo!e o1 1e*era" "aw to pree$pt !o$e: 5,t %ot a"": !tate )o$$o% "aw )"a#$!' Pree$pt! 34! !tate "aw )"a#$! a. Conflicts (reemption 9 if a federal and a state law are mutually e:clusive, so that a person cannot comply w7 'oth, then state law is preempted. .lorida Lime / &vocado #rowers v. 0aul, )irector, )ept. of &g. of $alifornia pg. 1+2 California0s g. Code 9 prohi'its #the transportation or sale of avocadoes in C which contain less than KQ of oil, 'y weight e:cluding the skin and seed* This is in conflict w7 a federal order that avocados grown in Florida do not need to have a certain oil content. &G 9 California has 'een e:cluding Florida avocados 'ec7 they don0t meet the KQ oil reEuirement.

3. "mplied (reemption1

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. lthough there are different standards, Florida growers, if selling in California, can pick their avocados later so that they meet the California reEuirements 9 it0s not a physical impossi'ility, so the state law is IGT preempted. The federal law was setting a minimum standard, so the stricter state law of California is not in conflict w% the federal law and would not be preempted.

'. Pree$pt#o% 5e)9 !tate "aw #$pe*e! the a)h#e-$e%t o1 a 1e*4" o50e)t#-e J/ven if the federal and state laws are not mutually e:clusive, preemption will 'e found if the state or local law interferes w7 attaining a fed0l legislative goal Cts. must determine the federal o'.ective and must decide the point at which state regulation interferes w7 achieving the goal. 0acific #as and (lectric $o. v. 3tate (nergy Resources California adopted a law that imposed a moratorium (a delay in performance) on the 'uilding of nuclear plants within the state until it demonstrated a means to dispose of high6level nuclear waste. The L sued California and asserted that this state law was preempted 'y the federal tomic /nergy ct of 2?OM and was invalid under the &upremcy Clause. ROL& State "aw #! pree$pte* #1 #t !ta%*! a! a% o5!ta)"e to the a))o$p"#!h$e%t o1 the 1,"" p,rpo!e! a%* o50e)t#-e! o1 Co%(re!!; howe-er: the Co,rt w#"" %ot #%ter1ere where there #! a per$#!!#5"e 5a!#! 1or the !tate "aw' 2A%a" !#!& "n its conclusion the court is inviting Congress to enact laws, or clarification of e:isting laws, if it desires to prevent the states from having laws that stop the construction of nuclear plants on economic grounds. The court determined that a state0s economic reasons do not conflict with the federal law0s purpose of ensuring safety. The case demonstrates how the courts must determine the federal o'.ective and whether, or at what point, the state law interferes with achieving the goal. The court characteri5ed the federal government0s o'.ective in the tomic /nergy ct Euite narrowly, there'y avoiding preemption of state law, which o'viously limited the 'road purpose of promoting nuclear energy. The court offered a 'road interpretation of the state statute 9 focusing on the economic 'asis 9 rather than limiting its purpose to safety, which would have resulted in preemption. 2C. (reemption -hen Federal $aw Gccupies the Field 9 the most imp0t e:ample is immigration law. 2. "f the federal government e:ercises superior authority in a particular field, and enacts a complete scheme of regulation, states cannot enact laws that conflict or interfere with, curtail or complement, the federal law, or enforce additional or au:iliary regulations. 2#%e!

&ines, 'ecretary of (abor and )ndustry of *ennsylvania v. +avidowit# 2?M2 .a)t!& &tate alien registration law was challenged on the ground that the federal alien registration law occupied the field and therefore preempted the state law. ( 0s lien

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. =egistration ct (reEuires the carrying of an alien "F card) conflicted w7 Congress0s lien =egistration ct (does IGT reEuire the carrying of a card). I!!,e& "f the federal government has e:ercised superior authority in a particular field can the states enact laws which conflict or interfere with, curtail or complement, the federal law, or enforce additional or au:iliary regulationsB 2o"*#%(& IG R,"e& "f the federal government e:ercises superior authority in a particular field, and enacts a complete scheme of regulation, states cannot enact laws which conflict or interfere with, curtail or complement, the federal law, or enforce additional or au:iliary regulations. Th#! 1e*4" "aw wa! $a*e to prote)t per!o%a" "#5erat#e! o1 "aw<a5#*#%( a"#e%! thro,(h o%e ,%#1or$ %at#o%a" re(#!trat#o% !t !te$ a%* to "ea-e the$ 1ree 1ro$ #%1=,#!#tor#a" pra)t#)e! a%* po"#)e !,r-e#""a%)e that $#(ht a11e)t #%ter%a#o%a" re"at#o%! 5,t a"!o *#!"o a"t to the "aw' A%a" !#!& This one of the early cases wherein the &upreme Court esta'lished the traditional preemption test. Where Co%(re!! ha! e%a)te* "aw! that are #%te%*e* to o)),p a 1#e"*: !tate "aw #! pree$pte*. Iote that the case involves implied preemption, since the federal ct did not e:pressly state that it preempted all other laws. Thus, the Court was reEuired to determine whether Congress, in enacting the law, intended to occupy the field of alien registration. "n finding such intent, the court acknowledged the e:istence of numerous treaties and international practices, which are aimed at preventing in.urious discrimination against aliens. "t commented that the regulation of aliens is so intimately 'lended and intertwined w7 responsi'ilities of the national government that where it acts, and the state also acts on the same su'.ect, the federal act is supreme. >ustice &tone dissented and Euestioned whether Congress even had the power to e:clusively regulate aliens. He further o'.ected to the invalidating of a state law unless it could 'e shown that it e:pressly violated rights or o'.ects of national concern. &R1 'ut how does this case mesh w7 the previous oneB Foesn0t this fed0l law set the minimum and the state law makes it more strict w7 the carrying of the cardBB 9 see the avocado case; -hen dealing with foreign policy, there is great deference to the government. "f it0s an area that traditionally goes to the federal government, then the federal government typically occupies the field. I>' The Dor$a%t Co$$er)e C"a,!e 9 the 'iggest issue is whether the .udiciary, in the a'sence of congressional action, should invalidate state and local laws 'ec7 they place an undue 'urden on interstate commerce. . Io constitutional provision e:ists that e:pressly prohi'its states from 'urdening interstate commerce. However, the &upreme Court has inferred such prohi'ition under the Commerce Clause, which gives Congress the power to regulate commerce among the states. The *or$a%t or %e(at#-e Co$$er)e C"a,!e "#$#t! !tate a%* "o)a" re(,"at#o% that ,%*," 5,r*e%! #%ter!tate )o$$er)e'

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. D. /ven if there is no federal law, or if there is federal law 'ut a .udicial finding of no preemption, a state or local law may 'e declared unconstitutional under the #dormant* or #negative* Commerce Clause if it unduly impedes interstate commerce. Thus, states may not enact laws that 'urden the e:portation of local products in order to protect and advance local economic interests. 2'P' 2oo* +&tate could not deny license for new milk distri'ution plant engaged in interstate commerce even though such limitation on interstate 'usiness would protect and advance local economic interests.,

Tuesday, 4arch --, -225 6When there is a law, as ' Who passed that law7 *f $ongress, then we must deal w8 the commerce clause and use the Lope9 1 prong test. )$$ when do we now when we use this to stri e down a state or local gov%t7 When there is not an express power in $onstitution or in a statute. *f $ongress is silent or have not acted on the issue, it still can be unconstitutional. :;se )$$ when' $ongress has not acted <ut states or local gov%t =&3 acted ;se )$$ when the state8local regulation has unduly burdened interstate commerce (This is in the eye of the beholder" =ow do we now commerce has been burdened or impeded7 )oesn%t every law affect interstate commerce7 Well, no. )$$ is used when out>of>staters are discriminated against the in>staters. Types of discrimination and how to recogni9e them' out of staters pay higher tuition )oes classification per se mean discrimination7 (x. people who ma e more money pay 4?R( taxes o ,hen using +CC, -ou M.'T as these !uestions///0 o 'T1TE 1CT)ON $ need this first0 This can be a law or a regulation $ 1 law may be facially discriminatory 2e". no male may be a licensed florist in (134 2e". only a license person can perform a service3 5'tatute would start w%0 no person from out of state may06 $ this is prohibitory language 1 regulation $ may not be facially discriminatory, but can be applied to discriminate This is imp7t to determine which it is bec% if it7s facially discriminatory, then it is presumed to be unconstitutional $ use 5strict scrutiny6 review o C(1'')8)C1T)ON $ need this

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. o +)'*191TE T9E1TMENT O8 ')M)(19 *EO*(E O9 )' T&E9E +)'C9)M)N1TO9- )NTENT:$ e". two white boys enrolled at '.(C and tried to ;oin a sorority0 told no based on race and se" $ is the effect of the statute discriminatory in nature: NEE+ 1(( O8 T&E 1<O=E $ 1(( T&9EE

>8-) $ (1 is the only state that re!uires a license for a florist &.*. &ood ? 'ons, )nc. v. +uMond, Commissioner of 1griculture and Mar ets of New -or (Doston Ailk Fistri'utor v. I.C. griculture Commissioner) 2?<? .a)t!& th#! )a!e )o%)er%e* power o1 the !tate o1 %ew or? to *e% a**#t#o%a" 1a)#"#t#e! to a)=,#re a%* !h#p $#"? #% #%ter!ate )o$$er)e where the (ro,%*! o1 *e%#a" are that !,)h "#$#tat#o% ,po% #%ter!tate 5,!#%e!! w#"" prote)t a%* a*-a%)e "o)a" e)o%o$#) #%tere!t!' 2P *#!tr#5,te* $#"? to #%ha5#ta%t! o1 @o!to%' The )#t o5ta#%! ABC o1 #t! $#"? 1ro$ !tate! other tha% MA' There wa! a propo!e* a**#t#o%a" p"a%t 1or the !a$e ?#%* #% Gree%w#)h NY: wh#)h NY wa%te* to *e% to MA' FuAond (F), a IC agriculture commissioner, denied Hood ((), a Doston milk distri'utor, a license to 'uild a new milk distri'ution facility, and Hood (() challenged the denial 'ased on the dormant commerce clause. I!!,e& Aay a state deny a license for a new plant to acEuire and ship milk in interstate commerce on the grounds that such limitation on interstate 'usiness will protect and advance local economic interestsB 2o"*#%(& IG 9ule0 'tates may not enact laws that burden the e"portation of local products in order to protect and advance local economic interests. A%a" !#!& This case reflects the traditional argument .ustifying the need for a dormant Commerce Clause. The court discusses the historical reasons, looking at the desire of the Forefathers to federali5e regulation of foreign and interstate commerce, and prevent state laws that interfered therewith. Thus, em'argoes that promote local economic o'.ectives 9 such as retaining domestic resources for local consumption 9 are not permitted under the principle dormant Commerce Clause. Iote that there are some .ustices, such as current Thomas, who are critical of the dormant Commerce Clause and assert that there is no te:tual 'asis in the Constitution to support such an interpretation of the Clause. The Court continues to struggle w7 competing policy considerations as to whether there should 'e a dormant Commerce Clause, and when it should apply. The economic o'.ective, as distinguished from any health, safety, and fair dealing purpose of the regulation, was the root of the invalidity. /very farmer and every craftsman shall 'e encouraged to produce 'y the certainty that he will have free access to every market in the Iation;every consumer may look to the free competition from every producing area in the nation to protect him from e:ploitation 'y any. Traditional arguments of dormant commerce clause12. +historical, Framers intended to prevent state laws that interfered with interstate commerce. 3. +economic, The economy is 'etter off if state and local laws impeding interstate commerce are invalidated <.

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. +political, states and their citi5ens should not 'e harmed 'y laws in other states where they lack political representation Note! to Co%!#*er Dwhen the regulation is of such a character that its 'urden falls principally upon those without the state, legislative action is not likely to 'e su'.ected 1rt. of Confederation was abandoned due to economic reasons bec% states had discriminating against trade w% other states in order to protect local interest. One reason for the creation of .''C was to create common mar et and to protect the state trade. )n Europe they are brea ing down the barriers so that they are able to trade more freely $ Euro created. 1'@ T&E T&9EE A.E'T)ON'0 What%s the state action7 @es. & regulation that denied of a licence to build a new mil plant. $lassification7 >ustifications for having a dormant Commerce Clause1 a. Constitutional framers intended to prevent state and local laws that interfered with interstate commerce. '. &tronger economy e:ists if there are no local or state laws that impede interstate commerce. c. $ack of political representation in certain states should not result in harm to those states and their citi5ens.

&rguments against the dormant $ommerce $lause. a. There is no basis in the text of the $onstitution for it. b. *t ma es little sense. c. *t is virtually unwor able in application. d. $ongress has the power to invalidate state laws that unduly burden interstate commerce. Austice Thomas also added' *f $ongress wants to eep the states from doing something, then $ongress should use the )$ to preempt it. M. The /arly Formant Clause Cases 9 (res 2?<K a. "n 2K3M, the &upreme Court acknowledged in #ibbons v. ?gden 9 and in cases thereafter 9 that the Commerce Clause can limit a state0s power to make laws that interfere with interstate commerce, even where Congress has not acted) however, there can 'e .ustification for state regulation for state regulation where it is e:ercising its police power, and not .ust power over interstate commerce.

28

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. '. The Court toiled with that criteria should 'e used to determine when a state law 'urdening commerce should 'e upheld as a valid e:ercise of police power, or invalidated as one violating the dormant Commerce Clause. (2) "n 2KO2, the &upreme Court esta'lished #the &elective /:clusiveness Test* for .udicial review of state regulation of Commerce ECoo"e F which provides that if the su'.ect of the regulation reEuires national uniformity, then congressional power is e:clusive. 8or national matters, then state law is invalidated under the dormant commerce clause. However, if the su'.ect matter is of a purely local concern, then the state may regulate the su'.ect, providing there are no competing federal regulations. Coo"e ' 8or local matters, state law is allowed under the dormant commerce clause.

(3)

1aron <. Cooley v. The <oard of ,ardens of the *ort of *hiladelphia (&hip Aaster v. (ennsylvania &hipping uthority) 2KO2 .a)t!& &tate law reEuired ships to hire local pilots to guide them through (ort of (hiladelphia, or pay a fine. I!!,e& "s the Congressional power to regulate commerce e:clusive of all state powers to regulate commerceB IG 9ule0 The Congressional power to regulate commerce is not e"clusive of all state powers to regulate commerce. A%a" !#!& The case presented in the te:t'ook is such an edited version that it is difficult to understand the facts and the principle of law. However, the case is recogni5ed for esta'lishing #the selective e:clusiveness test,* which provides that if the su'.ect of the regulation reEuires national uniformity, then Congressional power is e:clusive. However, #1 the !,50e)t $atter #! o1 a p,re" "o)a" )o%)er%: the% the !tate $a re(,"ate the !,50e)t: pro-#*#%( there are %o )o$pet#%( 1e*era" re(,"at#o%!' &ome scholars have noted, however, that this test does not determine whether a su'.ect is appropriately a local or national concern. &imply '7c there are no federal statutes governing a particular concern does not necessarily imply that the federal government is not interested, or meant to leave the concern to the &tates. Note that in the early case of Bibbons v. Odgen, the test was police power v. commerce power, whereas in Cooley the focus is on the local v. national sub;ect matter of regulation. C. The Aodern Formant Commerce Clause Test 2. Aoving away from the rigid police power test of #ibbons v. ?gden and #the &elective /:clusiveness Test* of $ooley, which focuses on the su'.ect matter of the local regulation, the modern courts apply a 'alancing approach that e:amines the 'enefits of a law against the 'urdens that it places on interstate commerce.

22

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. 3. state may impose nondiscriminatory restrictions w7 respect to the character of motor vehicles moving in interstate commerce as a safety measure and as a means of securing the economical use of its highways. a. Thus, a state law placing width and weight limitations on trucks operating on state highways does not impose an unconstitutional 'urden on interstate commerce so as to violate the Commerce Clause. S'C' State 2w Dept'

'outh Carolina 'tate &ighway +epartment v. <arnwell <rothers, )nc. (&tate v. Trucking Co.) 2?<K .a)t!& Darnwell Dros, "nc. (() challenged state law prohi'iting operation of trucks on state highways as an unconstitutional 'urden on interstate commerce. The law1 &C prohi'its use on the state highways of motor trucks and semitrailer motor trucks whose width e:ceeds ?8 inches and whose weight including load e:ceeds 38,888 pounds. I!!,e& Foes a state law placing width and weight limitations on trucks operating on state highways impose an unconstitutional 'urden on interstate commerceB IG R,"e& state law placing width and weight limitations on trucks operating on state highways does not impose an unconstitutional 'urden on interstate commerce so as to violate the Commerce Clause. The law is not discriminatory to others $ it applies to all people moving in and out of 'outh Carolina7s highways 2and the law is a safety measure regulating e"cessive loads by CD wheelers which doesn7t violate the CEth 1m. or burden interstate commerce3 A%a" !#!& local highways are 'uilt, owned, and maintained 'y the stte or its municipal su'divisions. The state has a primary and immediate concern in their safe and economical administration. This 2?<K case is demonstrative of the &upreme Court0s shift to a 'alancing approach for determining whether state regulation violates the Commerce Clause. &uch approach e:amines the 'enefits of a law against the 'urdens that it places on interstate commerce. =ecall that previous tests consisted of the rigid police power test used in #ibbons v. ?gden +e:clusive monopoly for operating steam'oats in state waters, and #the &elective /:clusiveness Test* of $ooley +state law reEuiring ships to hire local pilots or pay pilotage fee,, which focused on the su'.ect matter of the local regulation. Compare the holding of this case with the following case, 'outhern *acific, wherein the court invalidated a state law limiting the length of trains operating in the state b%c the burdens on interstate commerce outweighed the states7s asserted safety need for the law. However, a state law that puts a significant 'urden on the interstate commerce, yet provides no real improvement in safety, will 'e found to violate the commerce clause. So,ther% Pa)#1#) +(urported state safety6

23

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. measure law limiting the length of trains outweighed 'y the 'urdens on interstate railroad commerce., Note! to Co%!#*er The purpose of the Commerce clause addressed when state legislation nominally of local concern is in point of fact aimed at interstate commerce or 'y its necessary operation is a means of gaining a local 'enefit 'y throwing the attendant 'urdens on those without the state. 'outhern *acific v. 1ri#ona (=ailroad Co. v. &tate) 2?MO .a)t!& ri5ona (() created a law limiting the num'er of railroad cars per train as a safety measure, and &outhern (acific Co. (F) asserted that the law violated the Commerce Clause. I!!,e& re the 'enefits of a purported state safety6measure law limiting the length of trains outweighed 'y the 'urdens on interstate railroad commerceB C/& R,"e& "n deciding whether a state law 9 created for its safety measures 9 violates the Commerce Clause, the court will 'alance the 'enefits of the law against the 'urdens it imposes on interstate commerce. A%a" !#!1 t first 'lush, it is difficult to reconcile the holding in this case w7 the previous case of 3outh $arolina +state regulations limiting width and weight of trucks operated on state highways do not violate commerce clause,. However, the evidence concerning the relationship of the state law and the safety reEuirements in <arnwell was much stronger than in this case. "n addition, the court in <arnwell noted #few su'.ects of state regulation are so peculiarly of local concern as is the use of state highways.* Here, however, the court was persuaded 'y the economic 'urden involved in complying with the state law, the lack of uniform application of regulation among the states concerning train car length, and the impediment to the free flow of commerce, all of which 'alanced against the slight safety advantage afforded 'y the state law. F. Fiscriminatory and Iondiscriminatory &tate and $ocal $aws 2. The purpose of the dormant Commerce Clause is to prevent protectionist state legislation 9 laws that discriminate '7c they 'enefit the state0s citi5ens at the e:pense of out6of6staters 9 which often interferes w7 interstate commerce. Courts must therefore determine whether the state or local law discriminates against out6of6staters. a. "f the law discriminates against out6of6staters, there is a strong presumption against the law, and it will 'e upheld only if it is necessary to achieve an important purpose. '. "f the law is non6discrimanatory, if is presumed valid unless the 'urdens on interstate commerce outweigh the 'enefits.

3.

2<

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. F. 8acially discriminatory laws $ those that by their very terms distinguish b%w 2and discriminate against3 inGstaters and outGofGstaters $ will be found to violate the dormant Commerce Clause. a. "t is a violation of the dormant Commerce Clause for one state to prohi'it others from commerce w7in its 'orders. C#t o1 Ph#"#*e"ph#a -' New Ger!e +&tate law that permitted waste from inside I.>. to 'e disposed of in the &tate0s landfills, 'ut prohi'ited waste from other states violated Commerce Clause.,

City of *hiladelphia v. New Hersey (Gut of &tate City v. &tate) 2?SK .a)t!& %.&. &upreme Court held that I.>. (F) statute, which prohi'ited other states from disposing of solid and liEuid waste in I.>. (F), violated the Commerce Clause. I!!,e& "s it a violation of the Commerce Clause for one state to prohi'it others from selling and transporting legitimate articles of commerce w7in its 'ordersB C/& 9ule0 'tate laws that regulate commercial activity may not, on their face or in effect, favor inGstate interest over outGofGstate interest. A%a" !#!1 The statute involved in this case is a 1a)#a"" *#!)r#$#%ator "aw 9 the very language of hte law discriminates, through distinction, against out6of6staters. The law permitted waste from inside I.>. to 'e disposed of in the &tate0s landfills, 'ut prohi'ited waste from other states. "n such a case, there is a strong presumption that the law violates the Commerce Clause, unless it can e shown that it is necessary to achieve a very important purpose. lthough the law here is discriminatory, the ma.ority and dissent have differing views on whether such law is .ustified. s the ma.ority commented, there may come a time when I.>. (F) will need to e:port its waste to (enn. or I.C., and those states may then claim the right to close their 'orders. "n that circumstance, the Commerce Clause will not protect I.>. (F) .ust as it protects its neigh'ors now, from efforts 'y one state to isolate itself in the stream of commerce from a pro'lem shared 'y all. Iote that in the ne:t case, $/& $arbone *nc. v. Town of $lar stown, the court if faced with the issue of whether the law is discriminatory. '. &tate and local governments violate the dormant Commerce Clause if they enact laws that favor local enterprise 'y prohi'iting patronage of out6of6state competitors or their facilities. C H A Car5o%e: I%)' -' Tow% o1 C"ar?!tow%: NY +$ocal ordinance that reEuired all waste to 'e processed at local transfer station violated the commerce clause.,

C ? 1 Carbone, )nc. v. Town of Clar stown, N- (-aste (rocessing Co. v. Town) 2??M .a)t!& $ocal ordinance, which reEuired all waste to 'e processed at local waste transfer facility 'efore leaving town, was challenged as violating Commerce Clause. I!!,e& Aay state and local government enact laws that favor local enterprise 'y prohi'iting patronage of out6of6state competitors or their facilitiesB IG 9ule0 'tate and local governments may not enact laws that favor local enterprise by prohibiting patronage of outGofGstate competitors and their facilities.

2M

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. A%a" !#!& This case is another e"ample of a facially discriminatory law, in that is favored a local company, to the e"clusion of others. The Court noted that discrimination e"isted even though both outGofGstate processors were re!uired to have their waste purchased at the favored company. =ecall in the previous case, $ity of 0hiladelphia v . Bew Aersey, the ma.ority and dissent agreed that the law was discriminatory, 'ut differed on whether such law was .ustified. Here, >ustice &ooter put emphasis on the fact that the law differentiated '7w only the one operator and all others, including those w7in the state as well as out6of6staters. Ievertheless, the ma;ority relied upon the law favoring the local processor and prohibiting patronage of outGofGstate competitors. There was only ONE operator to process waste/ The commerce was the disposal of the waste $ not the waste itself. c. "t is a violation of the Commerce Clause for states to enact laws that attempt to conserve natural resources for use 'y their own residents. 2,(he! -' O?"aho$a +&tate law that prohi'ited the transportation of minnows outside the state violated the Commerce Clause.,

.nited &aulers 1ssn., )nc v. OneidaG&er imer 'olid ,aste Management 1uthority Note! to Co%!#*er This case defines #discrimination* as 9differential treatment of instate and out of state economic interests that 'enefits the former and 'urdens the latter. Te!t 2. whether the law discriminates on its face against interstate commerceB 3. must not 'e simply motiviated 'y economic interests in favor of the stateB a. "f its then invalid on its face then it can 'e overcome 'y showing that the state has no other means to advance a legitimate local purpose. &ughes v. O lahoma 2?S? .a)t!& &tate law that prohi'its the transportation of minnows outside the state violated the Commerce Clause. I!!,e& "s it a violation of the Commerce Clause for states to enact laws that attempt to conserve natural resources for use 'y their own residentsB C/& R,"e& "t is a violation of the Commerce Clause for statutes to enact laws that attempt to conserve natural resources for use 'y their own residents. A%a" !#!& nother facially discriminatory law that fails constitutional muster. The &upreme Court re.ected the purpose of the statute as a conservative measure, and noted that there was no showing that nondiscriminatory alternatives had 'een attempted and failed. The statute would have had a 'etter chance at survival had there 'een limitations placed on the num'er of minnows that could 'e taken 'y those w7in the &tate. =ather, the limitation was placed on transporting them outside the &tate, there'y allowing the &tate0s residents to keeps the minnows for themselves.

2O

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. Note! to Co%!#*er Durden of proof rests on the state when their statutes7laws are Euestioned under the dormant commerce clause. ;*-hen discrimination against commerce;is demonstrated, the 'urden falls on the state to .ustify it 'oth in terms of the local 'enefits flowing from the statute and the unavaila'ility of non discriminatory alternatives adeEuate to preserve the local interests at stake. d. &tate reciprocity laws 9 where state permits out6of6staters to use its market or resources only if they are from states that grant the same rights to citi5ens 9 are facially discriminatory. Great A H P Tea +&tate law that permitted shipment of milk into state only if other state would do the same with respect to &tate0s mil violated the Commerce Clause.,

M.

Facially neutral laws 9 those that 'y their terms do not distinguish '7w in staters and out6of6staters 9 will violate the dormant Commerce Clause if they are found to have discriminatory purpose or clarkstoeffect on out6of6 staters. Can also 'e found to 'e discriminatory if they were enacted for a protectionist purpose1 helping in staters at the e:pense of out of staters. a. Thus, a facially neutral I.C. statute that had the practical effect of not only 'urdening interstate sales of -a. state applies ('y reEuiring apple containers to 'ear only %&F grade la'els), 'ut also discriminating against them in various ways, violated the dromant Commerce Clause. 2,%t However, a facially neutral state law that caused some 'usiness to shift from one interstate supplier to another did no impermissi'ly 'urden interstate commerce. (2) Decause it did not create any 'arriers against interstate independent dealers, did not prohi'it the flow of interstate goods, did not place added costs upon them, and did not distinguish '7w in6state and out6of6state companies in the retail market. E77o%

'.

c.

state pricing order, which imposed a ta: on the sale of local products, the proceeds of which were distri'uted as a su'sidy to in6 state producers of the product, discriminated against interstate commerce 'y having a protectionist purpose, which therefore violated the Commerce Clause. We!t L %% Crea$er

2N

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. d. facially neutral state will violate the Commerce Clause if the incidental 'urden imposed on interstate commerce is clearly e:cessive in relation to the putative local 'enefits. State o1 M#%%' I'tate statute $ that regulated evenhandedly by prohibiting all mil retailers from selling their products in plastic, nonreturnable mil containers, w%o regard to whether the mil , the containers, or the sellers were from outside the state $ did not discriminate b%w interstate and intrastate commerce, and the incidental burden imposed on interstate commerce was not clearly e"cessive in relation to the putative local benefits.J $ The purpose of statute was to discriminate against mil in plastic containers 2essentially petroleum products since they ma e plastic3, but the court held that the purpose was to protect the environment since plastic is not biodegradable.

,ashington state apple case $ was it discrim. in purpose or effect: +esigned to effect to discourage commerce. E""on $ facially discrim, effect or purpose: (aw that prevents refineries from owning or operating gas stations. 2integrated oil company $ one that does it all0 lease for land, drill oil, produce it, refine it, transport it, sell it3 >Court ruled0 No discrim. effect or purpose bec% the act created no barriers against interstate independent dealrs, prohibit flow of interstate goods, place added costs upon them or distinguished it from in state or out of state patrons, etc. )n the absence of these O. $aws that are discriminatory are su'.ect to strict scrutiny upon .udicial review. a. #reasona'le alternatives* doctrine is used 'y the courts in analy5ing Commerce Clause issues. Thus, if there are reasona'le alternatives that would have a less discriminatory effect, the law will 'e held unconstitutional. Dea% M#"? +-here reasona'le and adeEuate alternatives were availa'le, a local health ordinance that placed a discriminatory 'urden on interstate commerce violated the Commerce Clause., state statute that affirmatively discriminates against interstate commerce may 'e upheld if it passes the vigorous strict scrutiny test. Ma#%e -' Ta "or +&tate law prohi'iting the importation of live 'aitfish did not violate the Commerce Clause '7c its purpose was to the &tate0s environmental well6'eing.,

'.

N.

$aws that are non6discriminatory 9 those where in6staters and out6of6 staters are treated eEually 9 are not su'.ect to a strict scrutiny test) rather,

2S

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. they will 'e upheld if the 'enefits to the state or local government outweigh the 'urdens on interstate commerce. a. -here a state statute regulates evenhandedly to effectuate a legitimate local pu'lic interest, and its effects on interstate commerce are only identical, it will 'e upheld unless the 'urden imposed on such commerce is clearly e:cessive in relation to the putative local 'enefits. Lore% P#?e +&tate law that prevented the transportation of uncrated cantaloupes w7in the &tate violated the Commerce Clause., "n determining whether a state0s nondiscriminatory highway safety law violates the dormant Commerce Clause, the court will uphold the law unless the total effect of the law as a safety measure is so slight or pro'lematical as not to outweigh the national interest in keeping interstate commerce free from interferences that seriously impede it. @#55 +&tate law 9 nondiscriminatory on its face '7c it reEuired all trucks and trailers to use the reEuired mud flaps, regardless of whether they were in6state or out6of6state trucks 9 was struck down due to 'urden on interstate movement of trucks., (2) However, state regulations concerning highway safety, which carry a strong presumption of validity, will 'e declared invalid under the Commerce Clause if the furtherance of safety is marginal or the 'urden on commerce is su'stantial. Ra $o%* Ia!!e" +&tate statute restricted the length of trucks traveling on its highways to a ma:imum of N8 feet.,

'.

c.

state has a right to regulate domestically incorporated corporations, including voting rights of shareholders, and such non6discriminatory law does not violate the dormant Commerce Clause. CTS Corp'

=unt v. Washington 3tate &pple pg. 11C Iorth Carolina was trying to prohi'it -ashigton apples from coming into the state (-ashington0s apples had a higher grading standard) "f there is no %& g. &tandard stamped on closed crate of apples when getting to Iorth Carolina, then unpack them to check and see if they are in regulation w7 %&F standard. They wanted to make -ashington apples more e:pensive so that it would cost more to 'uy those, so that the Iorth Carolina apples would 'e cheaper (so their profits would go up). &tate act was unconstitutional 'ec7 it discriminated against -ashington state apples 'ec71 (2) it 'urdened interstate commerce 'ec7 I.C. was aware 2K

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. of how -ashington graded its apples and would affect the apples (3) stripped away -ashington0s comparative advantage in the apple market (<) "t 'enefitted local apple growers in I.C. K81C)1((- NE.T91( (1,' here these were enacted to help in>staters at the expense of out of>staters :West Lyn $reamary v. =ealy pg. 1D1 Aass. pricing order imposes an assessment on all fluid milk sold 'y dealers to Aass. retailers. 'out 37<rs od that mild is produced out of state. "ssue1 whether the pricing order unconstitutionally discriminates against interstate commerce. C/&. Dec7 the pricing order is funded 'y ta:es on the sale of milk produced in other states and it violates the principle that &tates may not #'ene fit in6state economic interests 'y 'urdening out6of6state competitors* :3tate of 4innesota v. $lover Leaf pg. 1D5 Ainn. law 'anned the sale of milk in ($ &T"C containers, 'ut allowed the sale of milk in paper'oard cartons 'ec7 of a waste pro'lem (plastic is not 'iodegrada'le) "&&%/1 whether the incidental 'urdent imposed on interstate commerce 'y the ct is #clearly e:cessive in relation to the putative local 'enefits*B "t is IGT 'ec7 the impact is relatively minor. Ailk can continue to move across the Ainn. 'order and the packaging restraints is relatively minor 9 not #clearly e:cessive*. A%a" !#! #1 Law #! Dee$e* D#!)r#$#%ator p(' /4J ,hen law is discriminatory, the burden falls on the state to ;ustify it in terms of local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives ade!uate to preserve the local interests at sta e. )ean 4il $o. v. $ity of 4adison E -isconson law made the sale of milk unlawful unless it was pasteuri5ed at an approved plant w7in a O mile radius of the city of Aadison. (laintiff denied license 'ec7 it got its milk pasteuri5ed in "llinois, and not w7in O miles of Aadison. o Held1 law is unconstitutional 'ec7 it places an undue 'urden on interstate commerceP &tate was una'le to prove that nondiscriminatory alternatives were not availa'le 'ec7 there were some via'le alternativesP 4aine v. Taylor and ;3 E law ($acey ct) prohi'iting the importation of live 'aitfish is at issue. The plaintiff, despite this law, arranged to have 2OK,888 live golden shiners delivered to him from out of state, 'ut his shipment was intercepted and plaintiff was indicted. o L argued that ct placed an undue 'urden on interstate commerce o &tate said that the 'an protects the state fisheries from parasites and nonnative species that maight 'e included in shipments of live 'aitfish. o &tate must prove 3 things1 That the statute #serves a legitimate local purpose* IF

2?

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. This purpose cannot 'e served well 'y availa'le nondiscriminatory means (no other alternatives) o &tate was a'le to prove the a'ove two things 'y e:pert testimony that the parasites would risk the fish of Aaine and disrupting the environment. A%a" !#! #1 a "aw #! *ee$e* NON<*#!)r#$#%ator & *f the court concludes that a state%s law is B?T discriminatory (treats in>staters and out> of>staters ali e", then it%s subFected to a less demanding test. These laws are upheld as long as the benefits to the gov%t outweigh the burdens on interstate commerce. *i e v. <ruce Church pg. 152 66Continuously on the <19 e"am G Canteloupe growers were no longer allowed to ship canteloupes to packaging company out of state to C 'ec7 the ri5ona state law regulated how the canteloupes were to 'e packed (in closed containers approved 'y the supervisor) > to be pac ed in &ri9ona and the co. faced a loss of TS88,888 if it could no longer ship it to plant to pack. "n other words, the company would have to 'uild a new packing plant in the state and this would 'e e:cessive. $aw was meant to protect local 'usiness. o Ge%era" r,"e IMP4T @ALANCING TEST1 7(ike Test -here the statute regulates a legitimate local pu'lic interest, and its effects on interstate commerce are only incidental, it will 'e upheld %I$/&& the 'urden imposed on such commerce is C$/ =$C /UC/&&"!/ in relation to the putative local 'enefits. "f a legitimate local purpose is found, then the !uestion becomes one of degree. nd the e:tent of the 'urden that will 'e tolerated depends on the nature of the local interest involved and on whether it could 'e promoted as well w7 a lesser impact on interstate activities. (ike test is not necessary if the ordinance7statute7law discriminates against interstate commerce (ike test is reserved for laws directed to legitimate local concerns, with effects upon interstate commerce that are only incidental. The (ike test will uphold a nondiscriminatory statute unless the 'urden imposed on interstate commerce is clearly e:cessive in relation to the putative local 'enefits. 4 KUESTIONS to a!? E5 Pro1' W#%!to%F& 2. "s there a state law that regulates interstate activityB yes 3. "s that statute facially discriminatoryB 9 here no, facially neutral, 'ut had a discriminatory effect <. Dalancing Test (since it0s not facially discriminatory) 9 re we placing a putitive 'urden on interstate commerceB Ces, on the cost of packing canteloupes. &o does the 'enefit of guaranteeing .o's in ri5ona w7 this law outweigh the discrimination against out of statersB Io. &o, ask1 Fo the putitive 'urdens ('urden on interstate commerce) outweigh the putitive 'enefits (the 'enefits the states receives from the passage of the law) 9)++)C@ '1-'0 1ny economic regulation <.9+EN' interstate commerce, it is ;ust a matter &O, M.C& it burdens.

38

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. DDDA 5,r*e% o% #%ter!tate )o$$er)e (e%era"" w#"" %ot 5e ,phe"* #1 there #! a "e!! 5,r*e%!o$e a"ter%at#-e a-a#"a5"e to the !tate' JJJThe e:tent of the 'urden that will 'e tolerated will of course depend on the nature of the local interest involved and on whether it could 'e promoted as well with a lesser impact on interstate activities. o (urpose of the law1 to protect the reputation of growers w7in the state) this is a legitimate pu'lic interest, D%T it does impose an undue 'urden 'ec7 it would reEuire a person to go into a local packing 'usiness solely to enhance the reputation of other producers w7in its 'orders. <ibb ()03" v. BavaFo .reight Lines 9 pg. <O3 (FG=A IT CGA. C$ %&/) P92& =eview of 'y %& &upreme Court of the constitutionality of state law .ACTS& "llinois law reEuired trucks and trailers traveling w7in the state to 'e eEuipped w7 a certain type of rear fender mudguard having detailed specifications 9 (These are contoured mud flaps versus the conventional straight mud flaps). The law was passed to prevent the throwing of de'ris into passing or following cars 'y these trucks7trailers. L said law violated CC and the district court agreed stating that the contoured flaps actually posed a greater ha5ard such as the 'rakes on trucks7trailers not 'eing as effective and 'eing more suscepti'le to 'eing hit 'y other trucks. (lus, the carriers would have to eEuip all of their trucks w7 this type of mudguard since it is impossi'le for them to determine which truck was going where on what day. Cost would 'e su'stantial 6 TMO88 to TMOKM8 to do this. ISSUE& Foes a state0s nondiscriminatory highway safety law violate the dormant Commerce Clause where the total effect of the law as a safety measure is slight and it seriously interferes w7 interstate commerceB C/&. ANALYSIS& The court will uphold the law under the dormant commerce clause if the total effect of the law is so slight as to not outweigh national interest in keeping the commerce free from 'urdens. .'E+ T&E <1(1NC)NB TE'T0 1lthough this law is nondiscriminatory on its face and the power of the states to regulate the use of their highway is very broad, it still places an undue burden on interstate commerce w% only a slight advantage to the state. )f different states had different rules for mudflaps, then the truc s would have to change flaps once they entered each state $ this is an undue burden/ Therefore, the law clearly violates the dormant commerce clause. This case is comparable to 3outhern 0acific v. &ri9ona (x. Rel wherein the law restricting length of train cars in one state was invalid bec8 the burden on interstate commerce outweighed the state%s asserted safety need for the law. ROL& I% *eter$#%#%( whether a !tate4! %o%*#!)r#$#%ator h#(hwa !a1et "aw -#o"ate! the *or$a%t Co$$er)e )"a,!e: the )o,rt w#"" ,pho"* the "aw ,%"e!! the tota" e11e)t o1 the "aw a! a !a1et $ea!,re #! !o !"#(ht or pro5"e$at#)a" a! %ot to o,twe#(h the %at#o%a" #%tere!t #% ?eep#%( #%ter!tate )o$$er)e 1ree 1ro$ #%ter1ere%)e! that !er#o,!" #$pe*e #t Gassel v. $onsolidated .reightways $orp. of )elaware pg. 15D

32

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. "ssue1 -hether an "owa statute that prohi'its the use of certan large trucks w7in the state unconstitutionally 'urdens interstate commerceB &tate law prohi'its the length of vehicles 9 so the Freight company cannot use its NO foot trucks &tate said it did so for safety, 'ut state F "$/F to present any persuausive evidence that NO foot dou'les are less safe than OO 9foot singles Held1 &tate law unconstitutionally 'urdens interstate commerceP Io other mid6-estern or -estern state had such a law /vidence clearly esta'lished that the NO foot (twin) truck is as safe as the OO foot (semi) Consolidated had to re6route trucks around "owa or detach the trailers of the twins and ship them separately The law added a'ot T23.N million each year to the costs of trucking companies. lso, the law reEuires more highway miles to 'e driven to transport the same Euantity of goods (either 'y going around "owa or 'y using more smaller trucks to carry goods through "owa) 9 so it could 'e more dangerous 'y increasing highway accidents.

CASES W2ERE T2E COURT UP2ELD A NON<DISCRIMINATORY LAW UNDER T2E DORMANT COMMERCE CLAUSE& $T3 $orp. v. )ynamics $orp. of &merica pg. 15H "ndiana law limited corporate takeovers 'y reEuiring that a purchaser who acEuired #control shares* in an "ndiana corporation would acEuire voting rights only if the transaction was approved 'y a ma.ority vote of the pree:isting disinterested shareholders (aw applied to corporations only in that state $ facially discriminatory: NO 'tate action: yes Fynamics contended that this law discriminated against out of staters since most hostile take overs would 'e done 'y entities outside of "ndiana, 'ut court didn0t 'uy thisP The ct does not prohi'it any entity 9 resident or nonresident 9 from offering to purchase, or from purchasing, shares in "ndiana corporations, or from attempting there'y to gain control. Held1 &tate law is upheld 'ec7 the act does IGT impose a greater 'urden on out of state offerors than it does on in staters. (ut another way #The fact that the 'urden of a state regulation falls on some interstate companies does not, 'y itself, esta'lish a claim of discrimination against interstate commerce* 6 from the (xxon v. #ov. of 4aryland case (urpose of lawB To protect "ndiana corporations 9 'y allowing shareholders, when a takeover offer is made, an opportunity to decide collectively whether the rsulting change in voting control of the corporation as they perceive it, would 'e desira'le 9 &T T/ has the (G-/= to do thisP NOTE& The )o,rt ha! )o%!#!te%t" *e)"are* ,%)o%!t#t,t#o%a" !tate "aw! that re(,"ate o,t o1 !tate )o%*,)t o1 5,!#%e!!e! 33

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. EXAMPLES& o (dgar v. 4*T( $orp Court declared a law unconstitutional that reEuired the &ec. of &tate to ad.udicate the action if the offer was ineEuita'le or would work a fraud on the sellers 'ec7 the law was a direct restraint on ".C. and was controlling conduct 'eyond the state o <rown>.orman )istillers $orp. v. B@ 3tate Li!uor &uthority 6 law was unconst. that reEuired liEuor distillers selling wholesale in the state to file a montly price schedule to sell at those prices in IC and to sell at the lowest prices the distiller charged wholesale in any other state for the same month 'ec7 IC was regulating the liEuor prices in other states. o =ealy v. The <eer *nstitute 9 Conn. law was unconst. that reEuired 'eer companies to post their prices each month and to attest that the prices were not higher than the prices in four states 'ordering Conn. 'ec7 it tried to regulate out of state 'eer prices. State "aw! that discriminate a(a#%!t o,t o1 !tater! are a"$o!t a"wa ! *e)"are* ,%)o%!t#t,t#o%a"' S,)h a "aw w#"" 5e a""owe* ONLY #1 #t #! pro-e% that the "aw #! %e)e!!ar the "ea!t re!tr#)t#-e $ea%! to a)h#e-e a %o%<prote)t#o%#!t p,rpo!e' I1 a "aw does NOT discriminate a(a#%!t o,t o1 !tater!: the Co,rt 5a"a%)e! #t! 5,r*e%! o% #%ter!tate )o$$er)e a(a#%!t #t! 5e%e1#t!' The #%=,#r #! 1a)t *epe%*e%t a%* the o,t)o$e o5-#o,!" t,r%! o% how the Co,rt appra#!e! the 5,r*e%! a%* the 5e%e1#t!'

SUMMARY

E'

E7)ept#o%! to the Dor$a%t Co$$er)e C"a,!e

:;nusual application of ).$.$. 4aine v. Taylor and ;3 This is an unusual e:ception in that the law prohi'ited the importation of live 'aitfish 'ec7 of the diseases that it carries and if allowed, would kill off Aaine0s fish. Facially discriminatoryB Ces. (revents out of staters from importing live 'aitfish. Ct. used the balancing the test0 the state interest to protect its fish outweighed the fact that the law was facially discriminatory. )ean 4il pg. 1DH also an unusual application of )$$ L' Co%(re!!#o%a" Appro-a" #1 )o%(re!! appro-e! the% the )o$$er)e power #! %o "o%(er *or$a%tM a. "f Congress has specifically approved the &tate law, there can 'e no dormant Commerce Clause violation even if the &tate law is clearly discriminatory. (2) Congress, 'y its authority to regulate commerce among the several &tates, may give &tates the power to enact laws that

3<

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. restrict the flow of interstate commerce. We!ter% H So,ther% L#1e I%!,ra%)e Th#! #! o%e o1 the 1ew area! where Co%(re!! ha! the )"ear a,thor#t to o-err,"e a USSC *e)#!#o% #%terpret#%( the Co%!t#t,t#o%; #1 the )o,rt *ee$! a $atter to -#o"ate the *')')': the% Co%(re!! )a% re!po%* 5 e%a)t#%( a "aw appro-#%( the a)t#o%: there5 e11e)t#-e" o-err,"#%( the S,pre$e Co,rt'

,estern ? 'outhern (ife )nsurance Co. v. 'tate <oard of E!uali#ation of California (2?K2) ("nsurance Co. v. &tate) 9 (@ <N8 .a)t!& "nsurance company (() challenged state law that imposed a retaliatory ta: on out6of6state insurers on the ground that it violated the Commerce Clause. I!!,e& Aay Congress give &tates the power to enact laws that restrict the flow of interstate commerceB C/& R,"e& Congress 'y its authority to regulate commerce among the several &tates, may give &tates the power to enact laws that restrict the flow of interstate commerce. A%a" !#!& This case demonstrates one of the exceptions to the $ommerce $lause $ongressional &pproval. "f Congress has specifically approved the &tate law, there can 'e no dormant Commerce Clause violation even if the &tate is clearly discriminatory. &ince Congress must have acted in order to indicate its approval of &tate law, the commerce power is not #dormant.* Thus, if the &upreme Court were to rule that a particular &tate law violated the dormant Commerce Clause, Congress could enact a law that authori5es the &tate law, there'y effectively overruling the &upreme Court. This case was not a difficult one for the Court, since the federal statute (the AcCarran 9 Ferguson ct ) clearly gave &tates the power to enact laws regarding the 'usiness of insurance, w7o any limitations. -estern V &outhern made a weak argument that there was an implied limitation concerning discriminatory anti6competitive ta:ation. The Court re.ected the argument '7c the #uneEuivocal language of the ct suggests no e:ceptions.* +oes this treat out of staters differently: -E'. 9ET1()TO9- T1L G Ta" on insurance companies $ e". ins. policy in California $ M N ta", but since you7re from (1 who charges ON ta". 'o California is ma ing (1 pay the ON even though the rest of C1 people only pay MN +oes this discrminate against out of staters bec% it increases their ta"es: -es. 8acially discrimin: -es, but doesn7t matter bec% Congress has authori#ed retalitory ta"es 2The McCarranG8erguson 1ct3 '. However, even though a &tate law may not violate the dormant Commerce Clause '7c Congress has given specific approval for it, the law can still 'e challenged under other constitutional provisions such as the /Eual (rotection Clause and the (rivileges and "mmunities Clause.

JThe case that follows, Reeves v. William 3ta e, is an e:ample of the other e:ception to the dormant Commerce Clause, the market participation e:ception.

3M

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. Mar?et Part#)#pa%t E7)ept#o% a. "f a &tate is acting as a participant in a particular market, it may favor its own citi5ens even if there is discrimination against out6of6 staters. Not regulating economic activities as a state, but as a participant in the mar et $ again, not a 9EB.(1TO9 e". ,hen state owns dorm, and it rents it out P it7s a proprietor EL. (.' $ (afayette .tility 'ystem is acting li e a mar et participant when it sells (afayette its utilities 2New Olreans and &ouma does this as well3 &tates that are #market participants* in the 'uying or selling of goods, as opposed to #market regulators,* are not 'ound 'y the Commerce Clause and thus may favor in6state interests. DDWhat are the )hara)ter#!t#)! o1 a $ar?et part#)#pa%tO &tate acting as aparticipant 9 'uying or selling goods in the market place ctions of state favor in6state interests and discriminate against out of staters ('ut okay as long as state is a market participant and IGT acting as a regulator) /:amples1 &ughes court upheld a Aaryland law designed to rid the state of a'andoned automo'iles 'y having the state pay for the destrution of inopera'le cars. The state reEuired minimal documentation of ownership from in6state scrap processors, 'ut reEuired more proof from out of state scrap processors. Court siad that the &taet was a market participant as it was purchasing the cars, and therefore is discriminatory actions against out of staters did not violate the F.C.C. 9eeves 6 &tate6owned cement plant, which sold to private 'uyers, 'ut later gave preference to in6state 'uyers, did not violate Commerce Clause since &tate was a market participant. 9eeves, )nc. v. ,illiam 'ta e (2?K8) (Gut6of6state cement 'uyer v. &.F. Gfficial) .a)t!& -hen &outh Fakota (F) 'uilt a stateGowned cement plant, which sold to private 'uyers, 'ut later gave preferences to in6state 'uyers, =eeves ((), a long time 'uyer, challenged the policy under the Commerce Clause. =eeves was ready w7 his money to 'uy, 'ut &outh Fakota told them no 'ec7=eeves was from out of state and due to the shortage of cement, &.F. wanted to fill orders for their in6state customers first. This okay 'ec7 state is a market participant and owns the cement. I!!,e& Aay a &tate, which produces goods for sale to private 'uyers, give preference to in6state 'uyersB C/& R,"e& State! that are $ar?et part#)#pa%t! #% the 5, #%( or !e""#%( o1 (oo*!: a! oppo!e* to $ar?et re(,"ator!: are %ot 5o,%* 5 the Co$$er)e C"a,!e a%* th,! $a 1a-or #%<!tate #%tere!t!' A%a" !#!& The &upreme Court in this case utili5es the #market participant* e:ception to the Commerce Clause. 1s long as the 'tate is discriminating in favor of its own citi#ens while conducting mar et transactions 9 in this case state owned cement plant 9 there will 'e no violation of the Commerce Clause. However, where the &tate is acting as a 3O (2) N'

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. regulator rather than a participant, the Commerce Clause will apply. >ustice (owell in his dissent argued that the &tate was engaging in protectionist policies '7c it operated a commercial enterprise for the advantage of private citi5ens. There is a fine line of distinction concerning what conduct constitutes market participation and what constitutes economic protectionism. n e:ample of the &tate acting as a regulator would 'e if it0s policy reEuired privately owned cement plants w7in the &ate to sell e:clusively to in6state residents. =eeves (() certainly was not impacted 'y the &tate0s (F) policy since it had grown to purchase ?OQ of its cement from the &tate (F) over the last 38 years) nevertheless, the action 'y the &tate (F) was not constitutionally prohi'ited. (3) However, where the &tate is acting as a regulator rather than a participant, the Commerce Clause will apply. Thus, if &tate0s policy reEuired privately owned cement plants w7in the &tate to sell e:clusively to in6state residents, the &tate would 'e acting as a regulator, and such policy would violate the Commerce Clause.

'.

There is a limitation, however, to the market participant e:ception to the dormant Commerce Clause. (2) lthough state6owned 'usinesses may favor resident purchasers, they may not attach conditions to the sale of products that will 'urden interstate commerce. (3) Thus, the market participant e:ception is limited to the particular market in which the state is a participant. So,th< Ce%tra" T#$5er De-e"op$e%t I%)' -' Co$$#!!#o%er: Depart$e%t o1 Nat,ra" Re!o,r)e! o1 A"a!?a +&tate law imposed conditions #down6stream* 9 reEuiring the 'uyer of the tim'er to partially process it in6state 'efore shipping it out of the &tate 9 went 'eyond the market participant e:ception and violated the Commerce Clause.,

,hite v. Massachusetts Council of Construction Employers, )nc. (2?K<) .a)t!& /:ecutive order issued 'y mayor of Doston reEuired that all construction pro.ects funded in whole or in part 'y city funds, should 'e performed 'y a work force consisting of at least half 'ona fide residents of Doston. 2o"*#%(& pplication of the mayor0s e:ecutive order to the contracts in Euestion did not violate the Commerce Clause. A%a" !#!& The city e:pended its own funds in entering into construction contracts for pu'lic pro.ects, it was a market participant and entitled to 'e treated as such. '. There is a limitation, however, to the market participant e:ception to the dormant Commerce Clause.

3N

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. (2) (3) lthough state6owned 'usinesses may favor resident purchasers, they may not attach conditions to the sale of products that will 'urden interstate commerce. Thus, the market participant e:ception is limited to the particular market in which the state is a participant. So,th< Ce%tra" T#$5er De-e"op$e%t I%)' -' Co$$#!!#o%er: Depart$e%t o1 Nat,ra" Re!o,r)e! o1 A"a!?a +&tate law imposed conditions #down6stream* 9 reEuiring the 'uyer of the tim'er to partially process it in6state 'efore shipping it out of the &tate 9 went 'eyond the market participant e:ception and violated the Commerce Clause.,

'outhGCentral Timber +evelopment, )nc. v. Commissioner, +epartment of Natural 9esources of 1las a (2?KM) ( laska Tim'er Co. v. laska) .a)t!& laska (F) imposed a restriction on 'uyers of laska (F) tim'er that reEuired them to process the tim'er in laska (F) 'efore e:port. I!!,e& Aay a &tate, acting as a market participant, impose conditions on #down6stream* market participants w7o violating the dormant Commerce ClauseB IG R,"e& 1lthough stateGowned businesses may favor resident purchasers, they may not attach conditions to the sale of products that will burden interstate commerce. A%a" !#!& This case demonstrates that there is a limitation to the market participant e:ception to the dormant Commerce Clause. <y imposing conditions 5downGstream,6 1las a 2+3 went beyond the mar et in which it was participating . The Court re.ected laska0s (F) argument that it was merely su'sidi5ing the local tim'er processing plants. 'tate then too it a step further when they imposed a restriction on the timber sold and moved from being a mar et participant to becoming a mar et 9EB.(1TO9. Critics of the market participant e:ception assert that protectionism should not 'e permitted at all, regardless of whether the state is acting as a market participant or a regulator, and moreover, there is no clear distinction '7w when the state is acting as a regulator or a market participant. Fefenders of the doctrine argue that the citi5ens of a state should 'e permitted to recoup the 'enefits of the ta:es that they pay. Iotes that the dissent in this case was unconcerned a'out he down6stream conditions, arguing that laska (F) had not improperly shifted the cost to out6of6state persons or entities. ". The underlying policy Euestion is whether there should 'e a market participant e:ception. "t is critici5ed1 2) the dormant Commerce Clause is meant to stop protectionist actions 'y state governments) protectionism should not 'e allowed regardless of whether the state is acting in a proprietary or a regulatory capacity. 3) there is not a clear distinction '7w situations where the government is acting as a regulator and when it is a market participant. The market participant e:ception can 'e defended as allowing citi5ens in a state to recoup the 'enefits of the ta:es that they pay. The Pr#-#"e(e! a%* I$$,%#t#e! C"a,!e

"". !.

3S

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. &tates and local governments may not discriminate against out6of6staters w7 respect to #privileges and immunities* that they accord their own citi5ens, pursuant to the &upreme Court0s interpretation of the (rivileges and "mmunities Clause of the %.&. Constitution. ( rt. "! 4 3.) D. PH I a!? TWO =,e!t#o%!& 2. Has the state discriminated against out of staters w7 regards to privileges and immunities that it accords to its own citi5ensB DDM,!t ha-e *#!)r#$#%at#o% a(a#%!t a )#t#6e% o1 a%other !tate to app" PHI )"a,!e. 3. "f there is discrimination, is there sufficient .ustification for the discriminationB J(V" is IGT a'solute, 'ut creates a strong presumption against state and local laws that discriminate against out of staters in regards to1 2. fundamental rights 3. imp0t economic activities (especially regarding a'ility to earn a living) D. &imilarities and Fifferences '7w the (rivileges and "mmunities Clause and the Formant Commerce Clause. Pr#-#"e(e! a%* I$$,%#t#e! C"a,!e can only 'e used when there is discrimination against out6of6staters Gnly %.&. Citi5ens can sue under (V" (no corporations or aliens) Two e:ceptions 9 Congressional pproval and Aarket (articipant apply C. Dor$a%t Co$$er)e C"a,!e pplies to out of state discrimination 'ut the Commerce Clause is also applica'le to laws that 'urden interstate commerce regardless if they discriminate against out6of6staters. Corporations and aliens can sue under the Formant Commerce Clause Those two e:ceptions do not apply here .

Pr#-#"e(e! a%* I$$,%#t#e! o1 C#t#6e%!h#p are tho!e #%tere!t!: wh#)h are 1,%*a$e%ta": wh#)h 5e"o%(: o1 r#(ht: to the )#t#6e%!: a%* #%)",*e& L' Prote)t#o% 5 the (o-er%$e%t' N' E%0o $e%t o1 "#1e a%* "#5ert ' /' R#(ht to a)=,#re a%* po!!e!! propert ' 4' To p,r!,e a%* o5ta#% happ#%e!! a%* !a1et ' The (rivileges and "mmunities Clause will not prevent, however, the government from prescri'ing restraints for the general good of the whole, and it applies only to those privileges and immunities that 'ear upon the vitality of the Iation as a single entity. D#!)r#$#%at#o% A(a#%!t O,t<o1 Stater! W#th Re(ar* to .,%*a$e%ta" R#(ht! 2. The @#"" o1 R#(ht! #! the $o!t 5a!#) o1 1,%*a$e%ta" r#(ht!: 1or wh#)h the Pr#-#"e(e! a%* I$$,%#t#e! wo,"* app" ' However, a violation of one0s constitutional rights most often would 'e challenged under the particular amendment, rather than the (rivileges and "mmunities Clause.

F.

/.

3K

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. F. D#!)r#$#%at#o% A(a#%!t O,t<o1 Stater! W#th Re(ar* to I$porta%t E)o%o$#) A)t#-#t#e! 2. Aost challenges to laws that discriminate against out6of6staters w7 regard to #$porta%t e)o%o$#) a)t#-#t#e! #%-o"-e o%e4! a5#"#t to ear% a "#-e"#hoo*. &uch discrimination will not 'e permitted unless there is sufficient .ustification for it related to achieving a su'stantial state interest. 3. Thus, a state law that imposed a higher license fee on commercial, out6of6 stater shrimp 'oats violated the (rivileges and "mmunities Clause. Too$er -' W#t!e"".

Toomer v. ,itsell (2?MK) JI$p4t that the!e are COMMERCIAL .IS2ERMANMM @e)9 #1 #t wa! re)reat#o%a" E"#?e the re)reat#o%a" e"? h,%t#%( )a!eF the% #t wo,"* 5e )o%!t#t,t#o%a"' (Gut6of6state fishermen v. &outh Carolina Gfficial) .a)t!& Toomer (() and other out6of6state commercial fisherman challenged &.C. (F) law that imposed a higher licence fee on out6of6staters 'ased upon the (rivileges and "mmunities Clause. I!!,e& Foes a state law that discriminates against out6of6staters violate the (rivilege and "mmunities Clause where its purpose is to conserve natural resources 'ut creates commercial monopoly for the &tate0s residents 'y e:cluding non6residentsB C/& R,"e& I% *eter$#%#%( whether a State "aw -#o"ate! the Pr#-#"e(e! a%* I$$,%#t#e! C"a,!e: the )o,rt $,!t *eter$#%e whether the "aw *#!)r#$#%ate! a(a#%!t )#t#6e%! o1 other State! a%*: #1 !o: whether there #! !,5!ta%t#a" rea!o% 1or the *#!)r#$#%at#o% 5e o%* the $ere 1a)t that the are )#t#6e%! o1 other !tate!' A%a" !#!& s the introductory case to the (rivileges and "mmunities Clause, we learn that if a statute is o'viously discriminatory against non6citi5ens, it will 'e held unconstitutional unless there is some su'stantial reason 'eyond the mere fact of non6citi5enship. The court indicated that even if there was a valid purpose for the law, not .ust any means could 'e used to o'tain the o'.ectives. =ather, there must 'e a correlation '7w the non6 citi5ens and attaining the desired o'.ectives. Here, the court concluded that there was no evidence that non6citi5ens were a #peculiar source of the evil.* -e can assume that the citi5en fisherman of &outh Carolina (F) were also contri'uting to the diminishment of the shrimp supply and the threat of e:cessive trawling. Thus, there could 'e no su'stantial reason for the &tate (F) to e:clude non6citi5ens other than the mere fact of their citi5enship. Finally, note that this case is an e:ample of a common (rivileges and "mmunities Clause challenge 'ased upon discrimination against out6of6staters w7 respect to their a'ility to earn their livelihood. This case is distinguisha'le from Lester <aldwin v. .ish and #ame, which follows the ne:t case, '7c commercial fisherman are affected. two<!tep a%a" !#! is used to determine whether a state or local ordinance violates the (rivileges and "mmunities Clause. W .#r!t, the court must *eter$#%e #1 the !tat,te or or*#%a%)e *#!)r#$#%ate! a(a#%!t o,t<o1< !tate re!#*e%t! o% a $atter o1 1,%*a$e%ta" )o%)er%, and, +!e)o%*, if there is discrimination, whether there #! !,5!ta%t#a" rea!o% 1or the *#!parate treat$e%t. .nited <uilding and Construction Trades Council of Camden County v. Mayor and Council of the City of Camden' <.

3?

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. .nited <uilding and Construction Trades Council of Camden County v. Mayor and Council of the City of Camden (2?KM) (Trade Grgani5ation v. City) .a)t!& municipal ordinance, which reEuired M8Q of employees working on city6funded pro.ects 'e city residents, was challenged under (rivileges and "mmunities Clause. I!!,e& -ill a local ordinance violate the (rivileges and "mmunities Clause if it discriminates against non6residents 'y 'urdening a #fundamental* privilege, such as employment, and there is no su'stantial reason for the disparate treatmentB C/& R,"e& TWO STEP ANALYSIS& The (rivileges and "mmunities Clause prevents states (and cities) from discriminating against non6residents if1 (2) the discrimination 'urdens a #fundamental* privilege (including #employment*), and (3) there is no #su'stantial reason* for disparate treatment. A%a" !#!1 lthough the $ourt was unable to ma e a definitive ruling on the constitutionality of the ordinance due to an incomplete factual record, it set forth a two6step analysis to 'e used to determine whether a state or local ordinance violates the (rivileges and "mmunities Clause. First, the court must determine if the statute or ordinance discriminates against out6of6state residents on a matter of fundamental concern. The court held that #employment* is a matter of fundamental concern. &econd, the court must determine if there is a su'stantial reason for the discriminatory statute or ordinance treating in6staters and out6of6staters differently. However, the Court did not make a factual finding on whether Camdon (F) had a su'stantial reason for its statute, and the matter was remanded 'ack to the &tate for a determination on this second prong of the test. The case also made clear that the (rivileges and "mmunities Clause applies to residency restrictions imposed 'y local governments as well as the &tate. "t notes that w7o such a holding, the &tates could escape the reEuirements of the Clause 'y having each city impose residency reEuirements, there'y e:cluding all out6of6state residents. "t noted that Iew >ersey residents were not residents of Camden, although not en.oying protection under the (rivileges and "mmunities Clause, had the a'ility to vote out lawmakers or legislation that discriminated against them, whereas out6of6staters had no such voting rights w7in the state. M. The (rivileges and "mmunities Clause is not a'solute. a. =ecreation or sport is not a #fundamental* right. '. Thus, a state law, which imposed higher fees for recreational hunting on out6of6state residents than in6state residents, was constitutional '7c it was determined that recreational hunting is not a #fundamental right* entitled to protection under the (rivileges and "mmunities Clause. Le!ter @a"*w#% -' .#!h a%* Ga$e Co$$#!!#o% o1 Mo%ta%a'

(ester <aldwin v. 8ish and Bame Commission of Montana (2?SK) (Hunters v. &tate) 9 *?) does not apply bec% el hunting does not fall into a 5fundamental rights6 category/ This is a recreational 1CT)=)T-.

<8

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. K+oes out of state tuition violate the *? ) clause: NO, bec% your tuition is subsidi#ed by (1 ta"es. )f out of state students $ are NOT citi#ens of (1 $ get their tuition also subsidi#ed by (1 ta"es, even though they don7t pay (1 ta"es. 'tate is paying for a service for you in education, even for out of staters, so they get an e"tra benefit if they didn7t pay more. <.T if there7s a state that did not subsidi#e your education at all, but still charged out of state tuition 2higher tuition3, still not *?) bec% it7s not a fund. right or an economic activity. <ut would fall under the +CC bec% it would be acting as a mar et participant. .a)t!& @ame hunters, Daldwin and others ((), challenged state law that imposed higher fees for hunting licence on out6of6staters on ground it violated (rivileges and "mmunities Clause. I!!,e& Foes a state law that makes a distinction '7w residents and non6residents concerning recreational hunting threaten a #fundamental right* entitled to protection under the (rivileges and "mmunities ClauseB IG R,"e1 &tate law, which imposes higher license fees for recreational hunting on out6of6state residents than in6state residents, is constitutional '7c recreational hunting is not a #fundamental right* entitled to protection under the (rivileges and "mmunities Clause. A%a" !#!& This case demonstrates that the (rivileges and "mmunities Clause is limited to protecting #fundamental rights* that involve economic interests, such as one0s livelihood, and civil rights. Thus, not all forms of discrimination against out6of6state residents are protected. Gnly those that 'ear on the #vitality of the Iation as a single entity* will 'e su'.ect to protection. =ecall that in Toomer v. Witsell #commercial* fisherman successfully challenged a sate law that imposed higher license fees on out6of6staters operating commercial shrimp 'oats 'ased upon the (rivileges and "mmunities Clause. The commercial fisherman had their livelihood affected 'y the law, whereas here the Court concluded that out6of6state hunters0 livelihood was not affected 'y the recreation and sport of game hunting. However, one of the plaintiffs, Daldwin ((), was a hunting guide and earned a living at it. Thus, his livelihood was affected. Note! To Co%!#*er w7o some provision of the kind removing from the citi5ens of each state the disa'ilities of alienage in the other states, and giving them eEuality of privilege with citi5ens of those states, the repu'lic would have constituted little more than a league of states) it would not have constituted the union which now e:ists. "n line wit this underlying purpose, it was long ago decided that one of the privileges which the clause guarantees to citi5ens of &tate a is that of doing 'usiness in state ' on terms of su'stantial eEuality with the citi5ens of that state. O. However, the practice of law is a fundamental right entitled to protection under the (rivileges and "mmunities Clause. S,pre$e Co,rt o1 New 2a$p!h#re -' Iathr % A' P#per'

>>IfinalJ'upreme Court of New &ampshire v. @athryn 1. *iper (2?KO) 9 pg. <SO (&tate &upreme Court v. Ion6=esident ttorney) Law *#!)r#$#%ate* a(a#%!t a% #%*#-#*,a" who wa! o,t o1 !tate re!#*e%t <2

Commerce clausepresumes a national market free from local legislation that discriminates in favor of local interests. @,t !ta%*ar* o1 *#!)r#$#%at#o% wa! %ot $et Th#! t pe o1 )a!e 5e)a$e a% #!!,e re)e%t" whe% a 1ew peop"e 1ro$ @e"(#,$ app"#e* to ta?e the LA 5ar e7a$: 5,t %ot a PHI #!!,e !#%)e @e"(#,$ )#t#6e%! are %ot US )#t#6e%!' .a)t!& Ion6resident attorney, (iper ((), challenged &tate &upreme Court =ule that reEuired &tate0s lawyers to 'e residents of the &tate on ground it violated (rivileges and "mmunities Clause. I!!,e& Foes the practice of law constitute a #fundamental right* su'.ect to protection under the (rivileges and "mmunities ClauseB C/& R,"e& 2) The opportunity to practice law is a #fundamental right*) 3) there is no su'stantial reason for denying 'ar admission in the &tate to non6residents) and <) such discrimination does not 'ear a close relationship to the &tate0s o'.ectives. A%a" !#!& -e learn from this case that the practice of law is a fundamental right that is protected 'y the (rivileges and "mmunities Clause. $awyers are vital to the nation, at least in connection w7 the importance for the out6of6state counsel in protecting federal rights. fter concluding that the practice of law was a fundamental right entitled to protection, the court determined whether a su'stantial reason e:isted for the =ule e:cluding nonresidents from the 'ar. This is the primary area wherein the Court and the dissenting >ustice disagree. The opinion re.ects each of Iew Hampshire0s (F) .ustifications for this =ule, whereas the dissenting .ustice sets forth e:amples of why a state could have su'stantial .ustification for denying non6residents admission to practice. DNew Or"ea%! !tat,te re=,#r#%( po"#)e o11#)er! to 5e New O"rea%! re!#*e%t! wa! ,%)o%!t#t,t#o%a" 5e)9 #t -#o"ate* the r#(ht to tra-e"' Note! N Co%!#*er "n deciding whether the discrimination 'ears a close or su'stantial relationship to the states o'.ective, the court has considered the availa'ility of less restrictive means.

<3