03.21.2016(Day19)
ConstitutionalLaw
DormantCommerceClause(defined,moreorless,non-textually)
NowhereintheU.S.Constitution,Article1,§8doesitsaythatthestatesdonothave
thepowertoregulatecommerce
- Art.1,§8doesenumeratespecificactionsthatStatesshouldnotdo–coin
money,emitbillsofcredit,etc.
- Otherspecificrestrictionsonstatesincludeactionsthatwouldinterferewith
Congress’spowertoregulatecommerceinforeigntrade
TheCourthasinterpretedthecommerceclausetosupplyadditionaldomainof
activityprohibitedbythestates
o DormantCommerceclauserestrictionsarenon-textualrestrictions
(similartothedevelopmentofthesovereignimmunityrestrictions)
Whatisgoingonhere(historically,economically,politically)toallowthe
developmentofthedormantcommerceclause?
- ClearthatoneofthekeymotivationsforwritingtheConstitutionand
abolishingtheArticlesofConfederationwasthatstateswereimpedingtrade
amongthemselves,duetolackofregulations–i.e.so-calledtradewars
- FederalistPaperssuggestthattheConstitutionandtheCommerceClause
(specifically)shouldremedy“insufficientprovisionforaunifiedcommercial
systembetweenthestates”
- Comparativeadvantage–economictheory(quicksummary)–allelseequal,
tradeandspecializationsarisingfromtrading,ifoneentitycanbetter
produce,transport,market,etc.acertainproductthanotherentitiesandcan
alsoproduce,transport,marketanotherproduct/servicebetterthanothers,
thechoicebetweenwhethertotradethefirstorsecondproduct/service
dependsonacomparisonwiththeotherentitiesabilityinregardsofeachof
theproducts.
o Example:SupposeI’mSuperman.Ifightcrimebetterthananyone
Specialize in crime fighting, and trade crime
elseandamalsobetteratmachineoperating.TherearepeopleIcan
fighting for machine operation provided by
others, even though I'm better than them at tradewithwhoarehorribleatfightingcrime,butonlyslightlyworse
machine operating too, just because I'm thanmeatmachineoperating.Undercomparativeadvantageinafree
much MORE better at crime fighting.
market,Iwouldbeincentivizedtotradeonlymycrimefighting
servicesandnotthemachineoperatingservices.
If i do so, aggregate
wealth is higher
Tradeandfreetrade–canleadtoinequalityandconcentrationofwealth
- domestictradebarriersshouldbeminimalwhenCongresshasabilityto
regulate
ReasonsforinvokingtheDormantCommerceClause
1.Prohibitionagainstprotectionism
- Statesshouldnotbeabletoprotectlocalfirmsagainsttradeandcompetition
fromout-of-statefirms
2.Prohibitionagainstburdeninginterstatecommerce
Theimplicitanalysisofwhetherastate’slawisdiscriminatoryornot?
1. State’slegislativepurposeinenactingthelaw
2. State’sinterestinenactingthelaw(i.e.publichealth,safety,etc.)
3. Whetherthereisanultimateprotectionisteffect
Or, of course, where it draws an explicit geographic distinction
Hypo–Iowalawtaxingoutofstatecorn
- Thislawwouldbeadirectandcleardiscriminationagainstoutofstate
commerceandwouldbeclearlyunconstitutional
Hypo2–ThestateofIowapassesalawforbiddingtheimportofdiseasedporkthat
mightstartanepidemic.
Rehnquist’sdissentinPhiladelphiav.NewJersey–thecasesthatsustained
quarantinelawsareconstitutional
- DifferencefromHypo1–purpose(protectionistvs.legitimatepublichealth
purpose)
o Notreallyaneconomicpurpose,butratherapublicsafetypurpose
(onewhichthestateusuallyregulatesthroughitspolicepower)
And it would probably pass strict scrutiny, which it might still get based on the facial geographic discrimination
NotesonPhiladelphiav.NewJersey
- NJlawthatprohibitedsolid/liquidwastetransferredfromotherstatesinto
NewJersey’slandfills
o Soundslikeaquarantinelaw(keepingNJlandfillspacequarantined
fromoutsidelandfillspace)
o BUTwasteisatypeofcommerceinthewaythatdiseasedporkisnot,
itlacksthedirectconnectiontopublicsafetythatdiseasedporkhas
- Modifiedhypo–Iowahasgreatcommercialfacilitiesfordealingwith
diseasedpork(so-called“porksegregators”thatseparatediseasedporkfrom
thegoodstuff)
o PeoplewouldwanttoimporttheirporktoIowa
o Makingadeterminationabouthowimportantthestates’interestisin
keepingoutamaterial/subjectwouldplayapartindetermining
whetherthelawdiscriminated
- Modified-modifiedhypo–Iowadoesn’tprohibitdiseasedpork,butrather
requiresforeignporktogothroughpig-washing,whilestateporkdoesnot
o Thiswouldclearlynotbebanningnortaxingthepork,butcouldstill
haveaprotectionistpurpose
- ProtectionistpurposeinthePhiladelphiav.NewJerseycase–State’s
interestsatstake
o legitimateinterestotherthanprotectionism
o publichealthcrisis,environmentalcrisis(i.e.preventingZombie
apocalypse)
- Protectionisteffect–doesthelawactuallystickoutsiders
o Favorsinsidersoveroutsiders
o (burdeninterstatecommerce)
InterpretingNJ–themainideaseemstonotbeaboutwhetherNJistryingtokeep
apublichealthdangerout,butratherthatitistryingtoreserveitsinternal
resourcesagainsttheclaimsofout-of-staters(thisisafaciallydiscriminatorylaw)
Resources here being available landfill space
-
SincethisisreallywhatNJistryingtodo–thenitisclearlyprotectionistand
unconstitutionalunderdormantcommerceclauseanalysis
WestLynnCreamery,Inc.v.Healy(1994)
- discriminatorytaxbreaksareimpermissible
- Economicanalysistofigureouthowthisoperates
o E.g.an“Iowantaxcredit”foronlyin-stateproducerswouldbethe
sameeconomicallyasataxonlyonout-of-staters
o Itwouldservetoprotectin-stateproducersfromout-of-staters
Hypo–generalcorntaxenactedonallcornproducersandthenaseparatesubsidy
offeredonlytoin-statefarmers.Isthisconstitutional?
If it went through general revenue
- JusticeScaliathinksthiswouldbepossible–inhisconcurrence
1. Itisconstitutionalforstatestolevytaxes–IAcantaxcornsoldinthestate
2. Subsidiesarealsoconstitutional–IAcansubsidizelocalindustry
3. Therefore,bothenactmentsarevalidand,whenenactedseparately,
wouldbeconstitutional
Butthisisjustformalism,right?(Seemstobeaverysmalldifferencethatallows
somethingtobeconstitutionalwheneconomicoutcomesarethesameeitherway).
- Thereisn’treallyanalternative,isthere?
- Justiciability–dowewantfederalcourtsscrutinizingthegeneral
taxing/spendingchoicesofstates
o i.e.Dowewantfederalgovernmenttolookathowstatessubsidize
things?Thestates’motivationbehindit?
o Doingsomightdeprivepeopleinthosestatesoftheirdemocratic
controloverthestates’treasuries?
§ Federalism–generallyencourageslocalpoliticalcontrol,right?
- Separatefundsareonlyforthespecificthing,ratherthanthegeneral
revenue(subjecttootheruses)
o Taxesandsubsidieswouldbesubjecttopoliticalconstraintswhen
separatedoutofthegeneralrevenue
- Moreincentiveforin-statersto“represent”theout-of-staters’intereststo
restricttheprotectionistinterests
- Theendpointofthistypeofanalysismaybethatitisstilljustformalism,but
aconstitutionallyimportantformalism
ROLLBACK–onemorequestiononPhiladelphiav.NJ,inlightofWestLynn
Creamery:
CanNewJerseyjustbanallnewlandfillsaltogether?
- YES,butanadditionalquestion:NJisanet-wasteimporter,sobanning
landfillswillcauseNJtobecomeanet-wasteexporter
- So,itwouldstillhaveaprotectionisteffect,right?
o Manyofinterstatediscriminationcasesseetheconcernoflackof
politicalpowertoresistit
§ In-statefirms/residentsreapthebenefitsandvote(controlthe
politicalprocess),thoughout-of-statestruggleanddonotvote
BUT,whatabouttheinstategroupsnegativelyaffectedand
out-of-stategroupsbenefiting?
- Politicalaccess–instatepeopleaffectednegativelycanaffectpolitics
- Formalistelementdiscussedabove–withoutit,wehavetheissueofthestate
exercisingitsgeneralpowerstobansomething(policepowerbasedon
internaldemocraticautonomy),butwouldstillfinditunconstitutional
o Doesthisdiscriminateagainstinterstatecommerce?
o Option1)Notadiscriminationagainstinterstatecommerceor
Option2)Itisdiscrimination,butstillconstitutional
PreviewofDEANMILKtest–canhavealawdiscriminatingagainstinterstate
commerce,aslongasthereisnootherwaytoachieveaninterest(strictscrutiny)
Comparativeadvantage–freetradeisgood,buthowdoesthisargumentextendto
nastythings(garbage,diseasedcows,etc.)–ifMichiganisbetteratdestroying
garbagethanothers,themarketwouldbeabletoaccountforitandotherplaces
wouldnotneedtoregulatetheprices(i.e.NJwouldnotneedtoincreaseprices)
- NotonlyinFed.PapersbutalsoinPhillyv.NJ–whathappensifeverystate
doesit(aggregatedeffects)?
o Whatisgoodforonestate,theneveryotherstatecanalsodoit?
o Creatingagarbagetradewar?(forbiddingNJgarbage)
o Urbanizedstateshaveahardertimedestroyingwastethanruralor
naturalresource-richstates,creatingahugeburdenonfreetrade
Figuringoutwhenastateisdiscriminatingisthebiggestpartofthework,rather
thanapplyingtheruleoncetheiractionshavebeenfoundtobediscriminatory
§
OutlineforDay#19
Philadelphia v. New Jersey – 1978 (CB page 233)
Facts
•
•
NJmadealawprohibitingimportationofwaste
Privatelandfillownersandcitiesfromotherstateschallengedthelaw,claimingitwas
unconstitutionalbecauseitviolatedthedormantcommerceclause
Procedure
•
•
Trialcourt
o Declaredthelawunconstitutional
NJSC
o Heldthatthelawwasconstitutionalbecauseitwasdesignedtoprotectthestate’s
health
Issues
•
•
DoestheNJlawviolatethedormantcommerceclause?Yes.
Doesthequarantinelawexceptionapply?No.
Holding
•
•
IfNJcreatesalawprohibitingimportationofwaste,thenthelawisprotectionistandviolates
thedormantcommerceclauseandthequarantinelawexceptiondoesnotapply.
Reversed
Reasoning
•
•
Thecrucialquestioniswhetherthelawisprotectionistorwhetheritcanbesaidtobedirected
atlegitimatelocalconcernsanditseffectoninterstatecommerceisincidental
o WhatreallymattersisifNJisdiscriminatingbetweeninstateandoutofstatearticlesof
commerce,whichitobviouslyis
NJarguesthatthecourtshaveheldanexceptionforquarantinelaws
o However,thequarantinelawsaren’tanalogous
§ Themeretransportationofcontaminateditemsisdangerouswhereasthe
wasteisnotdangerousuntilitisdisposedof
§ NJhasnotregulatedthedisposalofinstatewaste,justdisposalofimported
waste
Dissent–Rehnquist
•
Notes
Thequarantineexceptionshouldapply
o JustbecauseNJhastodisposeofitsownwasteshouldn’tmeanithastodisposeofthe
wasteofothers
o Thecourthasupheldquarantinelawsthatonlyappliedtoimportation
OutlineforDay#19
•
•
•
•
Whatisthedistinctionofaquarantine?
o Purpose
o State’sinterest
o Protectionisteffect
Thesethreeaspectscanhelpdetermineifthere’sbeenaviolationofthecommerceclause
Interpretationofcase:
o There’samarketfortrash
§ Thestateistryingtoreserveitsinternalresourcesforthoseinstate
§ ThecourtsaysthatNJinterestandpurposeisjustprotectionist
CouldNJhavebannednewlandfills?
o Probablyyes
Dean Milk Co. v. Madison – 1951 (CB page 242)
Facts
•
•
•
MadisonWIcreatedanordinancethatbarredsaleofpasteurizedmilkunlessithadbeen
processedwithin5milesofMadison
DeanMilkislocatedinIllinoisandpasteurizeditsmilkinIL
DeanwasdeniedalicensetosellinMadison
Issues
•
Doestheordinanceviolatethedormantcommerceclause?Yes.
Holding
•
Ifacitycreatesanordinancebanningsaleofmilknotprocessedwithin5milesofthecity,then
theordinancediscriminatesagainstinterstatecommerce,andtherearelegitimatealternatives
thatcouldhavepreventedthediscriminationandstillpreservedthehealthandsafetyof
Madison,andthereforetheordinanceviolatesthedormantcommerceclause.
Reasoning
•
Thisisdiscriminationofinterstatecommercehidingundertheclothesofahealthandsafety
regulation
o Therearelegitimatealternativesthatcouldhavepreventedsuchdiscriminationand
protectedthehealthandsafety
§ Madisoncouldinspectthemilk
§ Madisoncouldhavecreatedanordinancebanningmilkprocessedatfacilities
withlowerqualitythantheirown
Dissent–Black
•
•
•
TheordinancedoesnotexcludewholesomemilkcomingfromIL,itonlyrequiresthatitis
processedinMadison
Thefactthatthishealthlawimposesaburdenontradedoesnotmeanthatitdiscriminates
NeitherofthealternativesprovidesasmuchprotectiontoMadison
OutlineforDay#19
Notes
•
•
•
Essentially,youcandiscriminateagainstinterstatecommerceifthereisnochoice
Strictscrutinytest
o Thestatecanonlydiscriminateagainstinterstatecommerceifthereisalegitimatelocal
interestandnootherwaytoservethelocalinterestwithoutdiscriminating
Dissentarguesthatthisisn’tdiscriminationagainstjustinterstatecommerce–itdiscriminates
againstmostmilkprocessorsinWisconsin
o Sowhydoesthecourtfinddiscriminationagainstinterstatecommerce?
o Subdivisiondiscriminationisalsoimpermissible
§ Createsthesameissuesastraditionaldiscriminationagainstinterstate
commerce
C and A Carbone Inc. v. Clarkstown – 1994 (CB page 244)
Facts
•
•
•
Well, the city planned the whole thing
Acitizenbuiltawastetransferstationwiththeplanforhimtosellittothecityin4years
Thetowncreatedanordinancethatrequiredallnonhazardouswasteintowntobebroughtto
thestation(toincreaserevenuetopayoffthefacility)
Carbonewantedtoprocessitswasteoutofstate(cheaper)
Issues
•
Doestheordinanceviolatethedormantcommerceclause?Yes.
Holding
•
Ifacitycreatesanordinancerequiringresidentstodisposeofwasteinaspecificwastetransfer
stationinordertopayoffconstructionofthestation,thentheordinanceviolatesthedormant
commerceclause.
Reasoning
•
•
Theordinancedeprivesoutofstatebusinessesaccesstothelocalmarket
Bringinginrevenueisnotalocalinterestthatcanjustifydiscriminationagainstinterstate
commerce
Concurring–O’Connor
•
•
Thedistinctioninthiscaseisthattheordinancedidn’tgiveanadvantagetolocalbusinessesin
general,buttoonebusinessagainstallcompetitors–localandnot
Butitstillimposesanundueburdenoninterstatecommerce
Dissent–Souter
•
•
Theordinanceisnotadiscriminationagainstoutofstatecompetitors,itconstrainslocaland
nonlocalcompetitors–thisisnoteconomicprotectionism
Themajorityignoresthedistinctionthatthisisessentiallyapublicenterprise,notaprivateone
OutlineforDay#19
o
Assuch,thereismorelikelytobeareasonfortheordinancebesideseconomic
protectionism
Notes
•
Thisisjustdeanmilkagain–preferredstatustoanin-stateprocessor
o Distinction–notonlyisitdiscriminationagainstcommerceifyouonlyallowproducers
infivemilesaccesstothemarket,butitisalsodiscriminationifyougiveamonopolyto
onebusiness
United Haulers Ass’n v. Oneida-Herkimer Solid Waste Management
Authority – 2007 (CB page 246)
Facts
•
Thecitycreatedanordinancerequiringpeopletodisposeoftheirwasteinastate-created
facility
Issues
•
Doestheordinanceviolatethedormantcommerceclause?No.
Holding
•
Ifalocalordinancerequireswastetobedisposedinagovernmentrunfacility,thenthe
ordinancedoesnotviolatethedormantcommerceclause.
Reasoning
•
•
•
Disposingoftrashisatraditionalgovactivity
o Lawsthatfavorthegovernment’sdisposaltreatallprivatebusinessesalikeanddonot
discriminateagainstinterstatecommerce
Governmenttrashdisposalisdifferentfromprivatebusinesses
o Govhasadutytoprotectthehealthandwelfareofitscitizens
o Lawsfavoringlocalgovcanhavemanymoregoalsthanprotectionism
Oftenthecourtfindsdiscriminationwhenthestateshiftscoststootherstates(becausethose
stateshavenosayinthepoliticalprocess),butthestateitselfwillhavetheburdenofcostinthis
instance
Dissent–Alito
•
•
•
Notes
ThiscaseisindistinguishablefromCarbone
o ThefacilitydidnotyetformallybelongtothecityinCarbone,butitwasbuiltwiththat
purposeandwouldinjustfiveyears
Thecourthasneverbeforecreatedanexceptionfordiscriminationinfavorofastateowned
entity
Thereisnoreasontoassumethatthegovhadanyothergoalthanprotectionism
o Also,thegoalsdon’tmatter–whatmattersisifthemeansarediscriminatory
OutlineforDay#19
•
•
•
Whydoesitmakeadifferencethatthefacilityisgovernmentrun?
o Traditionalgovernmentfunctionidea
o Govhasanobligationtodopublicwork
Thecourtusesaccesstopoliticalpowertodistinguishbetweenprotectionismand
nonprotectionsim
Dissent:isthisformalism–indistinguishablefromCarbone
Hypo
•
SupposethedealwerestructureddifferentlyinCarbone:insteadofthecitybuyingthefacility
for1dollarafterfiveyears,supposethecityowneditandjustleaseditanditsrevenuestothe
constructorforfreeforfiveyears.Constitutional?
o Thecityisentitledtodiscriminateinfavorofitself(unitedhaulers)
§ That’swhyitcanrequirethecitytoonlyusethatfacility
o Wealsoknowthatwhenthecityisactingasamarketparticipant,itcandiscriminate
§ That’swhytheycanpickalocaltooperateit
South-Central Timber Development, Inc. v. Wunnicke – 1984 (CB page
251)
Facts
•
Alaskaproposedtosellstatetimberwiththeconditionthatitbeprocessedinstate
Issues
•
•
•
IsAlaskaaparticipantintheprocessingmarket?No.
Doesthemarketparticipationdoctrineapply?No.
DoAlaska’sactivitiesviolatethedormantcommerceclause?Yes.
Holding
•
Ifastatesellstimberwiththeconditionthatitbeprocessedinstate,thenthestateisnota
participantintheprocessingmarket,andthesaleisnotprotectedbythemarketparticipation
doctrine,anditviolatesthedormantcommerceclause.
Reasoning
•
•
•
Marketparticipantdoctrine–ifastateisactingasamarketparticipantratherthanamarket
regulator,thedormantcommerceclausedoesn’tlimitthestate’sactivities
InAlexandriaScrap,thegovdecidedtobuyscrapvehiclesandimposedmorestringent
documentationrecordsforoutofstatescrappers
o Thecourtupheldtheaction
o Alaskaarguesthatitscaseisanalogous
§ However,Alaskaimposesrestrictionsdownstream–wherethecompaniescan
processit
AlaskaalsoarguesthatReevesisanalogous
OutlineforDay#19
InReeves,thecourtupheldapolicyforastateownedcementplanttoonlyselltostate
residents
o However,inthatcaseforeigncommerce,anaturalresource,andrestrictionsonresale
werenotpresent(contrastingthecaseatbar)
Thestateisactingasmorethanaselleroftimber
o Acommercialsellerhasusuallynosayoverhowaproductisusedaftersale
o Themarketparticipationdoctrineallowsastatetoimposeburdensoncommercewithin
themarketitisaparticipantof,butnofurther
§ Marketsmustbenarrowlydefinedsothisruleisnotabused
§ Alaskaisaparticipantinthetimbermarket,nottheprocessingmarket
§ Downstreamrestrictionshaveastrongerregulatoryeffectthanlimitationson
immediatetransactions
• Theyrestrictpost-purchaseactivities
o
•
Dissent
•
Thisisaformalisticdecision
o Underthecourt’sreasoning,thestatecouldjustturnaroundandonlyselltobuyers
whoprocesstheirtimberinstate,orsubsidizeprocessing,orhavethelogsprocessed
andthensellthem
Notes
•
•
•
Wunnickeisastateofficialbeingsued(rememberexparteyoung–suedinofficialcapacity)
Thecourtisconcernedwithrestraintsonthegoodssold
ThestateownsmostofthetimberinAlaska,soithasamarketadvantage
o Alaskaisusingitsmarketpowertofavoritslocals–essentiallytheyareregulating
More Dormant Commerce Clause
•
•
•
Discriminatorytaxbreaksarealsoimpermissible
o Whataboutataxationincombinationwithastatesubsidy?
§ Thecourthasheldthatifthefundsfromataxaredirectlyappliedtoasubsidy
ofthesamemarket,itsunconstitutional
§ Butifthesubsidycomesfromgeneralstateaccounts,thereisnodiscrimination
ofinterstatecommerce
§ Isthisjustformalism? • Considerthatvotersprobablywouldn’tfightacornsubsidythatcomes
fromacorntax,butmightfightacornsubsidyfromgeneraltaxes–
morepoliticalrestraint
Onereasonwhydiscriminationagainstinterstatecommerceisundesirableisbecauseout-ofstatebusinessesareaffectedbythestateslaws,buthavenorepresentation.
Ifthedormantcommerceclausewereallpowerful,thenstateswouldbeunabletobananything
o Butthestatecanbanthings,sotwowaystolookatbanningofgoods:
§ Notaburdenofinterstatecommerce
§ Aconstitutionaldiscriminationofinterstatecommerce
Constitutional Law
03/21 Outline
The Dormant Commerce Clause: facial discrimination against out of state commerce
NOTE: Abolishing the paper for class! Students are no longer required to complete it.
o Federalist principles not only restrict Congress, they also restrict the states.
o Dormant Commerce Clause: nowhere in Article I section 8 does it say that the states do not
have the power to regulate commerce with foreign nations and among states.
o While it does have some specific restrictions on the power of states to do certain
things, such as laying duties on imports and coining money, the Supreme Court has
interpreted the commerce clause as describing certain things that states cannot do.
o One of the key motivations for the Constitution was that states were competing
against one another and the framers wanted to create a national market.
o Comparative advantage: supported in economics and says you should focus on the area
where you have a distinct advantage.
o Specialization in trade generally makes those richer rather than being a generalist and
not trading.
o In this presidential election, the international trade issue has come into the forefront
of issues because it can create inequality.
o Comparison Hypo 1: The state of Iowa passes a law taxing out of state corn. Anyone who
imports corn to the state pays X. Or, it’s just forbidden to import out of state corn.
o Direct and clear discrimination against out of state commerce. Protectionist idea-Wanting in state corn to be cheaper to get more sales.
o Clearly unconstitutional under the dormant commerce clause.
o Hypo 2: Diseased pork hypo: The state of Iowa passes a law forbidding the import of
diseased pork that might start an epidemic.
o States can do this under the quarantine exception.
o The exception involves quarantine laws described in Philadelphia case dissent.
o Maybe the distinction between the quarantine laws and the others is a public health
purpose.
o Philadelphia v. New Jersey
o Facts
§ New Jersey passed a law prohibiting the importation of waste collected
outside of the state.
§ The stated purpose of the statute was to protect the quality of the environment
of New Jersey.
§ Private landfill operators challenged the constitutionality of the law.
o Issue
§ Whether the New Jersey waste statute violated the commerce clause.
o Procedural History
§ The New Jersey Supreme Court held that the statute advanced vital
environmental objectives and found it constitutional.
§
The Supreme Court reversed the state court’s ruling and invalidated the New
Jersey law.
o Reasoning
§ This law is an illegitimate means of isolating the state from the national
economy.
§ Instead of trying to keep a public health danger out, New Jersey is trying to
reserve its internal resources for the people in state.
§ New Jersey has worked to slow the flow of commerce for protectionist
reasons.
o Dissent
§ The New Jersey law is similar to quarantine laws that are permitted.
§ The State should be allowed to prohibit imports based on the health issues it
poses to its citizens.
o Class Discussion:
o The court wants to avoid states having some type of garbage trade war.
§ If one state can do it, then they all should be able to.
§ Avoids trash production becoming a huge economic problem in states.
o Could NJ just ban landfills all together?
§ Probably yes.
§ Arguments for Constitutionality
• Political access argument. Burdening in state and out of state people.
• Formalist element. The state is not actually discriminating against
people formally. Just exercising its police powers.
§ However, you could also argue that this alters interstate commerce by forcing
more trash being shipped to other states.
o Why might we think that a tax on general revenues and subsidies are different?
§ If Iowa had a non-discriminatory corn sales tax, it would be constitutional.
§ Subsidies are also clearly constitutional because they are not a discrimination
against interstate commerce.
§ Formalist consequences can exist however, such as creating rebates for in
state people.
§ Maybe what the formalistic distinction does is give states breathing room.
§ If it’s in general revenue, people have less discretion in how the money will
be spent. Might be used for other purposes.
o There are three ways of figuring out whether a state is engaging in protectionism:
1. Maybe it’s about the states protectionist purpose.
§ Does the legislature have a subjective motive?
2. What the interests of the state are.
§ Do an environmental or health crisis exist?
3. Maybe it’s the effects of the law that matters.
o Wrap up
Maybe it’s not a discrimination against interstate commerce but it is a burden on
interstate commerce and is constitutional anyway.
o What Dean Milk case says is that you can have a law that discriminates against
interstate commerce as long as you have no other options.
o If the state has a very important interest then maybe the state can do it.
o Think about this hypo:
§ The state of Minnesota has a lot of lakes and it’s hard to monitor them all; it
thinks that people tend to evade pollution controls in other states that can
monitor all their lakes by sneaking toxic materials across the border to dump
in Minnesota’s. So it bans import of the stuff people dump, and puts
checkpoints on the easier-to monitor roads. Constitutional?
o
CONLAWOUTLINE
March22,2016
Class20
DeanMilkv.Madison(1951)
Facts:Madison,WIordinancebarredthesaleofpasteurizedmilkunlessithadbeenprocessed
andbottledatanapprovedpasteurizationplantwithinfivemilesofthecenterofMadison.
DeanMilkchallengedtheordinancebecauseitpasteurizeditsmilknotinthatradiusandwas
deniedlicensetosellsitsproductsinMadisonsolelybecauseofthat.
THEDEANMILKTEST:Ifreasonablenondiscriminatoryalternatives,adequatetoconservethe
localinterestsareavailable,thenthediscriminatorylawinquestionisinvalid.(Strict
scrutiny).
ForaquestionablediscriminatorylawtobevalidtheStatehastoshowaveryimportant
interestsandthestatealsohastoshowthattherearenotanyotherwaystonotcommitthe
badacttoservethelocalinterest
Tworeasonablealternativesinthiscase:
1. Statecouldchargethereasonablecostofinspectiontotheimportingproducersand
processors
2. Milkobtainsratingsbasedonuniformstandardsandestablishedbyhealthauthoritiesin
thejurisdictionwhereproductionandprocessingoccur.
Whatareargumentsthatthereisnotdiscrimination?
1. Equallydiscriminatingagainstothercitiesinstateasoutofstate…Thislawdoesnot
supporteveryinstatebusiness
2. Lawdoesnotexcludemilk,justwantstohavepasteurizedinMadisonareatobesold
there
3. Theburdenofthelawdoesnotmeandiscriminatory
4. Itdoesnotmatterthatthereareotheralternatives.
Propositionofcase:Citiesdiscriminatingagainstothercitiesinstateisinvalidjustasastateis
Well, not quite. There still has to be an interstate effect.
discriminatingagainstotherstates.
If Madison had some weird law like "no milk from any
other Wisconsin city, but out of state milk is fine," that
wouldnt violate dormant cc
C&ACarbonev.Clarkstown(1994)
Facts:Clarkstown,NYhadarrangementforacontractortobuildalandfillandmaintainitfor
fiveyearsandthenthecitywouldbuyitfor$1.Objectofthearrangementwastoamortizethe
costofthetransferstation:thetownwouldfinanceitsnewfacilitywiththeincomegenerated
bythetippingfeeds.Thesolutionthetownadoptedwastheordinancerequiringwastewithin
towntobedepositedatthetransferstation.Bypreventingeveryoneexceptfavoredlocal
operationfromperformingtheinitialprocessingstep,theordinancedeprivesoutofstate
businessesofaccesstoalocalmarket.
Whatthecasestandsfor:Notonlyisitdiscriminationagainstinterstatecommercebetween
states,itisalsodiscriminationagainstinterstatecommerceifsayingforonlyonelocal
business.
• Discriminationagainstinterstatecommerceinfavoroflocalbusinessorinvestmentisper
seinvalid,
• Stateandlocalgovernmentsmaynotusetheirregulatorypowertofavorlocalenterprises
byprohibitingpatronageofoutofstatecompetitorsortheirfacilities.
UnitedHaulersAssn.OneidaHerkimerSolidWasteManagementAuthority(1994)
Facts:ThecontrolordinancesarequitesimilartothatinCarbone.Onlydifferenceisthatthe
lawshererequirehaulerstobringwastetofacilitiesownedandoperatedbyastatecreated
publicbenefitcorporation
DistinguishablefromCarbone:Lawgaveamonopolytoagovernmentpublicbusiness.
Governmenthaspublicdutiesandfunctionsdifferentfromthoseofaprivatebusinessandis
entitledtodiscriminateinitsownfavor.
Thecourtseemstosaywecantellthedifferencebetweentheprotectionismand
nonprotectionalismbylookingatwhetherthebusinessisgovernmentownedorprivateowned
Question
about holding or dicta relates to all the talk about traditional public functions
HoldingorDicta?Doesitmatterwhatthepublicserviceis?Ex.CupcakesinIowaCity.
Dissent:saysthatlawisnotdistinguishablefromCarbonebecausethebusinesswasstill
privatelyownedandwasgoingtolaterbepassedtogovernment.Formalism.Courthasheld
thataburdenimposedbyastateuponinterstatecommerceisnottobesustainedsimply
becausethestatuteimposingitappliesaliketothepeopleofalltheStates,includingthepeople
ofthestateenactingsuchstatute.
HYPO
SupposethedealwerestructureddifferentlyinCarborne:insteadofthecitybuyingthefacility
for$1after5years,supposethecityowneditandjustleaseditanditsrevenuestothe
constructorforfreeforfiveyears.Constitutional?
• State'sArgument?ArguelikeUnitedHaulersinthatthecourtwasmoreopento
acceptingdifferencesinwhoownsthebusiness.
o Employeestructurewouldbethesameaswouldbeforbothstateemployeesand
privateemployeessotherewouldn'treallybeadifferenceinthiscaseandHaulers
• BUT..Whatifstateonlyallowedbidfromthisonelesseeanddidnotopenbids
toothers?
Unconstitutionalbecausediscriminatingagainstoutofstatebiddersor
otherinstatebiddersingeneral.
o Stateisleasingoutthefacilityandnowisaparticipantinthemarket..
• BUT..onlyappliestotheextentthatthestateisactingasamarketparticipant
andnotaregulator.Itdoesn'tseemlikethestateisactinglikeamarket
participantwhenconsideringthesupplyside(seemsmorelikeitisactinglikea
regulator).
• Stateprobablywinsbecause:stateisentitledtodiscriminateinfavorofitself..becauseof
UnitedHaulers.Whenitisactingasamarketparticipantthenitcandiscriminateinfavor
ofitsownpeople.
• Counterargument:Canyoureallygothatfarthough?
South-CentralTimberDevelopmentv.Wunnicke(1984)
Facts:Alaskaproposedtosellstateownedtimbersubjecttotheconditionthatthepurchaser
processthetimberinAlaskabeforeitwasshippedoutofstate.SouthCentralwasanAlaska
corporationthatpurchasedandloggedtimberandthenshippeditelsewhereforprocessing.
Alaskasaysitisexemptfromdormantcommerceclausebecauseorthemarketparticipant
doctrine.Alaskasaysitisregulatingbycontractandisactinglikeamarketparticipantandthat
theycandiscriminateagainstpeopleofotherstates.
Issue:IsAlaskaactingasamarketparticipant??
Thelimitofthemarketparticipantdoctrinemustbethatitallowsastatetoimposeburdenson
commercewithinthemarketinwhichitisaparticipantbutallowsittogonofurther.
Decision:SupremeCourtsaysno.Statecannotimposerestrictionsonamarkettheyparticipant
inandcannotimposerestrictionsinthedownstreammarket.
• TheStatemaynotavailitselfothemarketparticipantdoctrinetoimmunizeits
downstreamregulationofthetimberprocessingmarketinwhichitisnotaparticipant.
BecauseoftheprotectionistnatureofAlaska'slocalprocessingrequirementandthe
burdenoncommerceresultingtherefrom,itfallswithintheruleofvirtualperseinvalidity
oflawsthatblocktheflowofinterstatecommerceataState'sborders.
• AlaskahasaVERYdominantmarketpositionbecauseitistheStateandownsmostofthe
forests(Alaskahasalotofforest)…Alaskahasamonopolyovertheforests…sothecourt
appropriatelythinksthattheStateisregulatingthemarket,notmerelyparticipating.
ell, not quite *most* but a huge amount, many
W
§
millions of acres (second biggest, after the feds)
Con Law Outline for Tues. 3/22/16
The Home processing Requirements Cases; Milk and Garbage cases. Yum
Dean Milk v. City of Madison:
Brief Facts: Madison enacts a city ordinance requiring that all milk sold must be
processed within 5 miles of the city. Dean Milk, an Illinois company claims the
regulation violates the (dormant) Commerce Clause.
Disposition: Regulation VIOLATES Commerce Clause
RULE: the Strict Scrutiny Test: A local or state regulation that is facially discriminatory
against out-of-state interests is only valid if it serves a legitimate local purpose and there
are no reasonable nondiscriminatory alternatives.
Reasons: CT finds 2 nondiscriminatory alternatives:
1. Madison can have its own inspectors inspect the foreign milk and still maintain
safety of public
2. Madison can rely on Illinois standards, which are essentially the same as
Madison’s.
Notes: Extends discriminatory invalidity to subdividing a state, not only to just state-tostate interactions.
Carbone v. Clarktown
Clarktown passes a law requiring that all persons dump their trash in a privately owned
trash collection center. This is all part of a deal where the city proposes to create a trash
monopoly for the private collector for a number of years, then buy the trash facility to
repurpose for public use. This is all because the city needed dat cash moneh to finance
the trash project in the first placeà thus it sought a private investor.
Disposition: Clarktown law is invalid,
RULE: gov can’t use its regulatory power to favor a private local enterprise in a way that
is discriminatory against interstate commerce
Notes from Gowder: private
Is the business really local?à to be later repurposed for public use.
O’Connor wants to use a “Pike Balancing test” to invalidate the lawà we will see this in
later cases.
United Haulers v. Oneida…Waste Management.
Facts: Essentially the same law as Carbone, but this time, the trash agency is
ACTUALLY owned by the state, a public entity.
Disposition: This regulation is OK (doesn’t violate Commerce Clause) because…
RULE: Governments are allowed to regulate commerce in a discriminatory way to favor
public industry if the commerce is of the type that is traditionally governmental in nature.
Notes from Gowder:
The Dissent: condemns the majority opinion as overly formalistic. There distinction
between public and private trash collectors is essentially non-existent between Carbone
and United Haulers.
This distinction also seems ignore the Strict Scrutiny analysis from Dean Milkà this test
probably would have invalidated the law.
Class Hypo:
•
Suppose the deal were structured differently in Carborne: instead of the city buying the facility for
$1 after 5 years, suppose the city owned it and just leased it and its revenues to the constructor for
free for five years. Constitutional?
• City Arg.: more like United Haulers, is a governmental industry in a traditionally
governmental area. Discrim is permissible.
• City can discriminatorily regulate for its own purposes if it’s a traditionally
governmental area (Haulers)
• Also City can discriminate for its own purposes when it is a Market
This second point is for the discrimination in whom it
Participant.
leases to.
The Market Participant Exception
RULE: A state/local government can discriminate against interstate commerce if the
government is a participant in the market.
Ex. A state government can discriminate against out of state car-scrap businesses IF the
state is the owner and operator of a car scrap business.
Rationale: A state has a greater interest favoring its own citizens in the course of its own
dealings.
Limitation:
à Downstream effects: Even if a State is a participant in one industry, if a regulation of
that industry has “downstream effects” on another industry the state is not involved inà
does NOT satisfy the Market Participant Exceptionà Violates Commerce Clause.
South Central Timber v. Wunnicke
Alaska participates in the timber industry. The State passes a law that has effects on how
the timber must be processed before it is sold in the state. Thus the Alaska regulation
also has “downstream effects” on the timber processing industry, an industry in which the
State has no part.
OutlineforMarch22,2016
Case:DeanMilkCo.v.Madison
Facts:Madison,WIordinancebarredsaleofmilkunlessithadbeenprocessedandbottled
within5milesofthecentralsquareofMadison.DeanMilkwasbasedinIllinoisand
pasteurizedatitsplantsthere(65and85milesfromMadison).DeanMilkwasdenieda
licensetosellinMadisonsolelybecauseitsplantsweremorethan5milesaway.
ProceduralHistory/Holding:Madison,WIisplainlydiscriminatingagainstinterstate
commerce.
Rationale
JusticeClarkopinionoftheCourt:
• Thisisaneconomicbarrierthatisprotectingamajorlocalindustryagainst
competitionfromotherstates.
• Therearereasonableandalternativemeansavailable:
1) Theycouldchargecompanieswhowishtoimportmilkthecostofinspecting
plantsandfarmsoutsidetheradius.
2) Theycouldalsorequiremilkproducedoutsideradiustoconformtothesame
standardsasthoseenforcedinthestate.
• RegulationisNOTessentialfortheprotectionoflocalhealthinterestsandplacesa
discriminatoryburdenoninterstatecommerce
JusticeBlackdissenting:
• NofindingthatDeanMilkisunabletohaveitsmilkpasteurizedwithinthedefined
geographicalarea
• Madison,WIismakingagoodfaithattempttosafeguardpublichealthbymaking
adequatesanitationinspectionspossible
• ThealternativesprovidedbytheCourtwouldnotassurethepeopleofMadisonas
pureasupplyofmilkasundertheirlaw
ClassDiscussiononDeanMilk
Wewouldcallthisaflavorofstrictscrutiny.
• Strictscrutiny:ifstatehasmajorimportantinterestandnootherwaytoachieve
excepttodiscriminateagainstinterstatecommercemaybethentheycandoit
WHATistheTESTinthecase?Rigorousscrutinytest.Needstoshownoreasonable
alternativesavailabletoachievetheimportantinterest
• Ifaregulationdiscriminatesagainstinterstatecommerce,onlywayitwillbe
permissibleisifNOreasonablepermissiblenondiscriminatoryalternativesare
available
Thisisfaciallynon-discriminatory,soquestioniswhethertheburdenoninterstate
commerceoutweighsthelocalbenefits.
Madison,WIhadreasonablealternativestheycouldhavetaken,thereforetheywerenot
usingtheleastrestrictivemeanstoachievegoalofsanitaryregulationofmilk.
Doesthisregulationbenefiteveryin-statebusiness?
No,itdiscriminatesagainstWImilkfromoutsideofMadison.BUTmightthestateallow
themtodothesame,sotheytolerateit?
Isthisactuallydiscriminationagainstinterstatecommerce??
Sincealsodiscriminatewithinthestateisthisdiscriminationagainstinterstatecommerce?!
àIfyouallowallcitiestodothissubdivisionofstatetodiscriminateagainstgoodsoutside
thatsubdivisionisessentiallysameasallowingtodiscriminatealltogether
THISCASESTANDSFOR
1) Strictscrutinyliketest
2) Subdivisionsdiscriminatingisalsoimpermissible
Case:Carbornev.Clarkstown
Facts:Towncloseditslandfillandagreedtobuildanewsolidwastefacility.Localprivate
contractoragreedtoconstructandoperatefor5yearsandthenthetownwouldbuyitback
for$1.Townguaranteedaminimumwasteflowof120,000tons/year.Tomeetthis
guaranteetheyrequiredallnonhazardouswastewithinthetowntobedepositedatthe
transferstation.Carbone,aprivaterecyclerwithafacilityinClarkstownsoughttoshipits
wastetoacheaperprocesseroutsidethestate.
ProceduralHistory/Holding:Ordinancedeprivesout-of-statebusinessesaccesstoalocal
market.Perseinvalid!
Rationale
JusticeKennedyopinionoftheCourt:
• Hoardssolidwasteandthedemandtogetridofitforthebenefitofthepreferred
processingfacility.
• Discriminationagainstinterstatecommerceinfavorofalocalbusinessisperse
invalid,exceptforanarrowsetofcasesinwhichtheycandemonstrateunderstrict
scrutinythatithasnoothermeanstoadvancealocalinterest
• Flowcontrolordinanceismainlyafinancingmeasure
JusticeO’Connorconcurring:
• Wasn’tdiscriminatorybuthadnondiscriminatoryburdenoninterstatecommerce
butstillfallsunderPikebalancingtest
JusticeSouterdissenting:
•
•
Lawdoesn’tdifferentiatebetweenalllocalandallout-of-townprovidersofaservice
butinsteadbetweenoneresponsibleforenduringthatthejobgetsdoneandall
others,regardlessoflocation
Therefore,itisoutsidetheprotectionistmeasuretheCommerceClausehasbeen
thoughttobarstatesfromenactingagainsteachother
ClassDiscussiononCarbone
Alternatewaysthestatecoulddothis?1)raisetaxes2)issuebonds.
Whatiswrongwithit??Itisn’tthewasteitselfbutitisafinancingmeasurewhichis
favoringaninstateprocess.SimilartoDeanMilk.Discriminationagainstinterstate
commerceifyousayonlythisonelocalbusiness.Localmonopoly.
WhatisthePikebalancingtest??“Wherethestatuteregulateseven-handedlytoeffectuate
alegitimatelocalpublicinterest,anditseffectsoninterstatecommerceareonlyincidental,
itwillbeupheldunlesstheburdenimposedonsuchcommerceisclearlyexcessivein
relationtotheputativelocalbenefits.”
• ThistestiscalledthePikebalancingtestbecauseitderivesfromthecaseofPikev.
BruceChurch,Inc.Underthisbalancingtest,apresumptionofvalidityattachesto
thestatestatute(ormunicipalordinance).Itwillbeupheldeventhoughitburdens
interstatecommercesolongastheburdenitimposesisnotexcessiveinrelationto
itsvalueasahealth,safety,environmentalprotectionorconsumerprotection
measure.Towin,thechallengermustshowthelawburdensinterstatecommercein
asignificantwayandthebenefitsofthelawarenotsufficienttooutweighthe
burdens.
Case:UnitedHaulersv.SolidWasteManagementAuthority
Facts:Lawhererequireshaulerstobringwastetofacilitiesownedandoperatedbyastatecreatedpublicbenefitcorportation.
ProceduralHistory/Holding:FlowControlOrdinancesinthiscasearedifferentfromthose
inCarboneasthelawsatissueherebenefitaclearlypublicfacility.
Rationale
ChiefJusticeRobertsopinionoftheCourt:
• Flowcontrolordinanceinthiscasebenefitsaclearlypublicfacilitywhiletreatingall
privatecompaniesthesame
• Governmenthastheresponsibilitytoprotectthehealth,safetyandwelfareofits
citizensàdoesnotmakesensetoregardlawsfavoringlocalgovernmentandlaws
favoringprivateindustrywithequalskepticism
• Citizensabdbusinessofthecountiesbearthecostoftheordinance
JusticeAlitodissenting:
•
•
•
OnlydifferencebetweenthefacilityatissueinCarboneandtheoneinthiscaseis
thattitlehasnotyetpassedtothemunicipality
Courtistakingformoversubstanceinadoptingatestthatturnsonthistechnical
distinction
Respondentsaredoinghereexactlywhatthemarketparticipantdoctrinesaysthey
cannot:whileactingasmarketparticipantsbyoperatingafee-for-servicebusiness
enterpriseinanareainwhichthereisanestablishedinterstatemarket,theyare
alsoregulatingthatmarketinadiscriminatorymannerandclaimingthattheir
specialgovernmentalstatusinsulatesthemfromdormantCommerceClause
challenge
ClassDiscussiononCarboneandUnitedHaulers
Whyisthisdiscriminationagainstinterstatecommerce?
UnitedHaulers:theflowcontrolordinancebenefitaclearlypublicfacility,whiletreatingall
oftheprivatecompaniesthesame
OrdinanceinCarbornedeprivesoutofstatebusinessesaccesstolocalmarkets.Ithoards
solidwasteandthedemandtogetridofitforthebenefitofthepreferredprocessing
facility.Flowcontrolordinancethereisafinancingmeasure.
HowtodistinguishUnitedHaulersfromCarborne?
Insteadofprivateentityitisagovernmentcreatedentity.
UnitedHaulersgavemonopolytoitself.Govhasfunctiontoprotectthehealth,safetyand
welfareofitscitizens
CanyouexplaintherelevanceoftheargumentinthelastparagraphofUnitedHaulers,and
applyittoCarborne?
Democraticarguments:ideathatthepoliticalprocesscanprotectagainstabuseshere.So
whoisreallygettingmessedoverbythis?Primarypeoplearethepeoplepayingmonopoly
priceswhoarethelocalvoterswhohaveaccesstothepoliticalprocessandcansanction
thecity
Politicalpower:Courtsuggestcantelldifferencebetweenprotectionismornotbywhether
stategivingmoneyortakingawayfromthosewhoarelikelytobevotingforit
DissentsaysthatformallyCarbonewasgoingtobeownedbythecityeventually.SUPER
FORMALISTIC.Deniespropositionthatlocalpeoplearetheonesgoingtobepaid
Whatdowegetfromthecase?Conlawishard.Thinkdissentisprobablyrighthereonthe
formalisticnatureofthedistinction.
InClassHypo
SupposethedealwerestructureddifferentlyinCarborne:insteadofthecitybuyingthe
facilityfor$1after5years,supposethecityowneditandjustleaseditanditsrevenuestothe
constructorforfreeforfiveyears.Constitutional?
Aretheyobligedtotakebidsfromoutofstateforcontractor?Whatiftheyonlyadvertised
intown?Iftheydon’tallowanyoneelsetobid,itisfavoringlocalbusiness.
Defense:marketparticipantexception-whengovernmentisaparticipantandnot
regulator.SinceleasingoutasopposedtorunningitselfitsnotregulatingandNOT
participating.Appliestoextentthatstateisactuallyactingasparticipantandnot
regulation.BUTitdoesn’tseemlikeactingasparticipantwithrespecttothesupplyside.
THINKSCITYWINsHERE.Cityisentitledtodiscriminateinfavorofitself.(regulatory)
requirepeopletopurchasethingsthroughitsownmonopolieswhencityisactingas
marketparticipate.Entitledtodiscriminateinfavoroflocals.
Idea is two distinct argumwnts: 1) state can enact
flow control ordinance in favor of itself. 2) state as
MarketParticipantException
market participant can favor local contractor to run
its trash facility
Case:SouthCentralTimberv.Wunnicke
Facts:Alaskaproposedtosellstate-ownedtimbersubjecttoconditionthatthepurchaser
processitinAlaskabeforeitwasshippedout.SouthCentralwasAlaskacorporationthat
purchasedandloggedtimberandthenshippeditelsewhereforprocessing.Theyclaimed
thatinstateprocessingrequirementviolatedthedormantcommerceclause.Alaska
claimedthatitwasexemptfromtheCommerceClausebecauseofmarket-participant
doctrine
ProceduralHistory/Holding:Ifastateisactingasamarketparticipantratherthana
regulatortheCommerceClauseplacesnolimitationonitsactivities.Howeverhere
Alaska’sregulationfallswithintheruleofvirtualperseinvalidityoflawsthatblockthe
flowofinterstatecommerceacrossastatesborders.
Rationale
JusticeWhiteopinionoftheCourt:
• Statecanonlyimposerestrictionsonthemarkettheyparticipatein.Heretheyare
tryingtodownstreamtheimplication
• Thelimitofthemarket-participantdoctrinemustbethatitallowsastatetoimpose
burdensoncommercewithinthemarketinwhichitisaparticipant,butallowsitto
gonofurther
• Herethestateisattemptingtogoverntheprivate,separateeconomicrelationships
ofitstradingpartners,thatisitrestrictsthepost-purchaseactivityofthepurchaser.
Downstreamrestrictionshaveagreaterregulatoryeffectthandolimitationsonthe
immediatetransaction
JusticeRehnquistdissenting:
• DisagreeswiththelinedrawnbetweentheStateasamarketparticipantandState
asamarketregulator
• Alaskaisjustessentiallypayingthebuyerofthetimberindirectly,bymeansofa
reducedprice,tohireAlaskaresidentstoprocessthetimber
•
UndercurrentprecedentAlaskacouldaccomplishthissameresultinalternative
wayssoitisundulyformalistictoconcludethatthepaththey’vechosenisthe
forbiddenbytheCommerceClause.
ClassDiscussiononSouthCentral
Alaskaissayingtheyownthelumberandaresellingit.Theyaren’tregulatingitorpassing
alaw.Totheextenttheyareregulating,itisdonebycontractnotbythepowerofthestate.
Whatisthenormativejustification?Statejustmakingacontractandconditiononthestuff
weareselling.Ordinaryandwedoitallthetime.
Privityofcontractideafloatingaroundthatifstateismarketparticipantthenitshouldonly
becausingpeopletodothingswiththosetheyareinthisprivityofcontractwith.
What’sAlaska’sdefenseofitscontract?HowdoestheCourthandleit?
Theideaisthemonopolyidea.Alaskaissellingtimber.Dominantmarketposition.The
courtthinksAlaskaisregulatingbcitiscontrollingalloftheresourcesandusingmarket
powerfromthestatetofavoritslocalpeopletosayyouhavetousemonopolytoprocessin
state.Looksclosetoprotectionismthattheframerswouldhaveopposedtosaynoyouwill
notbeabletodoit.
CouldmakeanargumentthatthisisNOTregulatinganythingandthisisn’treallyaffecting
downstream.Thestateisjustsayingdearpurchaseryoumustdothiswiththestuffyou
bought,whichseemslikeareasonabledefense.
Whatifstategoesandbuysthelumberprocessingsothatitisallstateowned?Permissible
todiscriminateinfavorofitselformarketparticipation.LikelythisWOULDbe
constitutional!
Dean Milk Co. v Madison
US SC 1951
Brief Fact Summary. A city ordinance prohibiting the sale of pasteurized milk not
processed and bottled in a pasteurization plant within five miles of Madison, Wisconsin
is invalid because it imposes an undue burden on interstate commerce.
Synopsis of Rule of Law.
Strict Scrutiny Test (constitutional in very few cases) state has to show a very important
interest and that there are no reasonable and adequate alternatives to serve the local
interest.
A city ordinance that places a discriminatory burden on interstate commerce that is not
essential for the protection of local health interests violates the commerce clause.
• If the state has a really important public interest they may be permissible if they
outweigh the detriment imposed on interstate commerce.
Facts. The city of Madison, Wisconsin enacted an ordinance that barred the sale of
pasteurized milk unless it had been pasteurized and bottled at an approved
pasteurization plant within five miles of Madison’s central square. Of the five processing
plants within the allowed distance, only three of them did business in Madison. Plaintiff,
Dean Milk, a processing plant in Illinois, challenged the ordinance, claiming that it
violated the dormant commerce clause. The highest state court rejected the commerce
clause attack.
Issue. Whether the discrimination inherent in the Madison, Wisconsin ordinance can be
justified in view of the character of the local interest and the available methods of
protecting them.
Held. No.
-There were reasonable and adequate alternatives available to pasteurize milk other
than limiting pasteurization to the local market.
- The effect of the ordinance was to block the free flow of commerce.
- The ordinance was protectionist in nature and thus, a violation of the commerce
clause.
-allowing cities and municipalities to discriminate against each other would bring the
same problems of allowing states to discriminate against each other.
Dissent.
- Not discrimination of interstate commerce because it discriminates against other milk
producers in Wisconsin not within the radius.
-There was no finding in the state courts that Plaintiff, Dean Milk, is unable to have its
milk pasteurized within the five-mile radius of the city square.
-The ordinance is not discriminatory, but rather an attempt to safeguard public health.
Such a health regulation should not be invalidated merely because the Court believes
that alternative milk-inspection methods might insure cleanliness and healthiness of
Plaintiff’s milk.
-The alternatives suggested by the Court would not assure the people of Madison as
pure a supply of milk as they receive under the ordinance.
2 propositions of Dean Milk
1. Strict scrutiny test
2. Intercity discrimination is not permissible
C&A Carbone v Clarkstown
USSC 1994
Brief Fact Summary. Clarkstown, New York, required all wastes collected within the
town to be deposited at a designated private waste station. Whereupon, the station
would collect a certain fee. The Petitioner, C & A Carbone, Inc. (P) wanted to send its
Clarkstown wastes collected to an out-of-state station, which charged a lower fee.
Synopsis of Rule of Law.
-The Commerce Clause forbids the enactment of local laws that impose commercial
barriers or discriminate against an article of commerce by reason of its state origin or
destination
Facts.
Clarkstown subsidized a private waste disposal station by guaranteeing a minimum flow
of waste to a private waste station and allowing the station to charge a certain fee. To
assure the guaranteed flow, the Town enacted a “flow control ordinance” whereby all
solid waste collected from within the town were required to be deposited at the
designated station. Carbone, a private recycling facility, collected waste from elsewhere
in New York and in New Jersey. Without the flow control ordinance in effect, carbone
would have sent its non-recyclable waste to an out-of-state waste station and paid a
lower fee for disposal.
Issue. Was the Clarkstown’s flow control ordinance in violation of the Commerce
Clause?
Held. Yes.
• Providing a monopoly against out of state competitors is discriminatory and
impermissible under the dormant commerce clause.
• While the immediate effect of the ordinance is local in scope, its economic effects
are interstate in reach. The Petitioner’s facility receives wastes from places outside
of Clarkstown and even out-of-state. To require such wastes to be channeled to
the designated Clarkstown facility with its higher fees, drives up the costs of out-ofstate interests to dispose of their wastes. Moreover, with regard to wastes
originating in Clarkstown, by preventing everyone but the designated facility to
dispose of wastes, the ordinance deprives out-of-state businesses access to the
local market.
Concurrence. Justice Sandra Day O’Connor (J. O’Connor) wrote that because the intown processors and the out-of-town processors are treated equally, she could not
agree that the ordinance discriminated against interstate commerce. The ordinance is
unconstitutional, however, because it imposed an excessive burden on interstate trade
relative to the benefit it conferred. (pike balancing test)
United Haulers Assn v Oneida Waste Management
-Only salient difference to the majority between this case and Carbone is that the law
here required haulers to bring waste to facilities owned and managed by the state(In
carbone the city gave a monopoly in United it simply gave a monopoly to itself. ) Since
public welfare and garbage disposal has always been in the realm of local government
and the municipalities should not be treated as private businesses, the law should not
construed to be unconstitutional as dormant commerce case.
•
There's a difference between protectionism and non-protectionism by seeing
whether there is representation for constituents. (the state officials implementing
the monopoly are elected into office)
Dissent: Alito Stevens Kennedy
• Formalistic distinction for what constitutes protectionism: the only difference
between United and Carbone is that the monopoly in carbone, the city was forced
to use a 3rd party to finance the building of a waste facility and the city in United
could finance it themselves but in effect they were both doing virtually the same
thing.
Gowder:
• The dissent is right about the formalistic distinction but such distinctions may be
constitutionally significant
• Q: assume dissent is right, are there still Con. Reasons for upholding the United
decision?
Hypo: Suppose the deal were structured differently in Carborne: instead of the
city buying the facility for $1 after 5 years, suppose the city owned it and just
leased it and its revenues to the constructor for free for five years.
Constitutional?
Arguments
1. Still probably not constitutional private company is getting all the profits instead of
the state that elects its officials.
2. Argument that the state may still be a participant if it hires someone to run the
trash facility while still owning the facility.
Not sure they'd win...
Gowder: city wins here or at least has viable argument
-City can discriminate in favor of itself and create a monopoly for itself (United) =>city
owns facility
-state allowed to discriminate in favor of locals if it is a market participant (market
participant exception)
**Market participant Doctrine: "permits a state to influence a discrete and
identifiable class of economic activity in which it is a major participant"
-applies to a state to the extent that a state is a participant and not a regulator.
South central Timber Development inc. v Winnicke
US SC 1984
State official is being sued because you can't sue a state 11th amendment (ex-parte
young).
Brief Fact Summary. Defendant Alaska, acted as a “market participant” by requiring all
purchasers of timber to process the timber in Alaska before shipping it out of the state.
Plaintiff, South-Central Timber Development Inc. contended that the provision violates
the commerce clause.
State argument: Alaska owned the timber and were selling it with a condition through
contract. We're acting like a market participant.
1. We're not regulating anything
2. Merely a condition on a purchase
Issue. Whether Defendant’s restriction on processing was exempt from the commerce
clause because of the “market-participant” doctrine.
Held. No.
-Downstream idea: regulating what happens next with a product
-state is more than a mere seller of timber because sellers almost always have no say
in what you do with the product you buy. What the state is doing is in effect regulating
and favoring local interests.
-****Alaska may be a participant in the timber market, but it may not use its leverage
(owns a lot of timber) in that market to exert a regulatory effect in the processing
market, in which it is not a participant.****
-the processing restriction here takes place after the completion of the parties’ direct
commercial obligations, rather than during the course of an ongoing commercial
relationship. Thus, the Defendant-State may not avail itself of the market-participant
doctrine to immunize its downstream regulation of the timber-processing market in
which it is a participant.
-Because of the protectionist nature of Defendant’s local-processing requirement and
the burden on commerce resulting therefrom, it falls within the rule of virtual per se
invalidity of laws that “block the flow of commerce at a state’s borders.”
-the ct. makes a sophisticated distinction between state participation and regulation.
Dissent. Defendant is merely paying the purchaser of timber indirectly, by means of a
reduced price, to hire Defendant’s residents to process the timber, and that is not a
violation of the commerce clause
Collective outline for day 21: March 23, 2016
Dormant Commerce Clause (cont.)
Case: Baldwin v. G.A.F. Seelig, Inc.
Facts and Procedural History: The state of New York enacted a law titled the Milk Control Act,
which established a system of minimum prices that milk dealers had to pay to milk producers.
The state of New York denied the plaintiff, G.A.F. Seelig, Inc., a license to sell its milk because
the company bought its milk from a producer in Vermont and paid a lower price than it would
have had to pay a New York milk producer. Seelig sued Baldwin (a state official) in federal
court, arguing that New York’s Milk Control Act was unconstitutional because it violated the
doctrine of the Dormant Commerce Clause. The District Court found for the plaintiff, preventing
the Act from being enforced. The U.S. Supreme Court granted certiorari and affirmed.
Holding: New York’s Milk Control Act was an unconstitutional protectionist statute that
discriminated against out-of-state businesses.
Rationale: The Court believes that prohibiting the importation of goods that are purchased for
less than what a local producer would have received for such goods is similar to illegal customs
duties. The Court refuses to draw a distinction between the two because the avowed purpose of
the Milk Control Act involves stifling competition between the states.
The state argues that the purpose of the Milk Control Act is not just economic, but also to
guarantee an adequate supply of milk for the state. The Court rejects this argument, saying that
such an exception would “eat up the rule.” The Court is searching for a limiting principle that
will prevent all protectionist legislation from being upheld as a regulation of “supply.”
The Court also posits a seemingly Originalist argument against the state’s claim. Allowing states
to enact anticompetitive legislation in order to protect local interests under the guise of protecting
the supply defeats the Founder’s purpose in drafting the Commerce Clause, which was to create
a unified, national market.
Case: H.P. Hood & Sons v. Du Mond
Facts and Procedural History: The state of New York allowed licenses for new milk processing
plants to be granted only when the Commissioner (Du Mond) believed that granting a license
would not harm a market that was already adequately served. Du Mond denied a license to H.P.
Hood & Sons, a Boston milk distributor. Hood sued, and New York’s state courts found for Du
Mond. The Supreme Court reversed.
Holding: New York’s milk plant licensing scheme was unconstitutional.
Rationale: New York’s milk plant licensing scheme is impermissible because it protected local
interests by curtailing interstate commerce. The scheme could be used to deny access to the
market to out-of-state businesses.
In dissent, Justice Black argued that the intent of the law was not discriminatory and that the
Court should not assumed that Du Mond would discriminate.
Class Discussion:
The subject of discussion was ‘What kinds of legislation qualify as protectionism or
discrimination against interstate commerce?’
States can easily craft laws that do not facially discriminate against out-of-state businesses yet
accomplish the same outcomes as facially discriminatory laws.
Hood is a vague and confusing case, and it needs further explanation. There are two ways to
interpret this case. The first interpretation is that it is simply a “stupid case” and doesn’t contain
much of value. The second interpretation is that the Court is saying that it disapproves of giving
a state official discretion that can be used to discriminate against out-of-state businesses,
especially when that official has incentives to favor local interests.
In Hunt v. Washington State Apples Advertising, a note case involving a North Carolina law that
prohibited packages of apples from bearing any quality label other than the federal government’s
label. The state of Washington sued because its standards were actually higher than the federal
standards. The rationale behind this case is that North Carolina’s law is unconstitutionally
discriminatory because it denied Washington the ability to use its brand-recognition advantage in
the North Carolina market.
HYPO: Can Vermont prohibit the importation of GMO products unless they bear a label that
identifies them as containing GMOs? (The idea here is that consumers are less likely to buy
products with a GMO label.)
The difficulty of the above hypo is that, while it applies equally in-state and out-of-state
producers, Vermont producers are more likely to lack GMOs. However, not all Vermont
producers lack GMOs, and not all out-of-state producers use GMOs. This hypo isn’t quite as
discriminatory as some of the cases, we’ve read. The purpose of the law seems to be more about
consumer knowledge than about discriminating against out-of-state businesses. This is a very
ambiguous hypothetical.
Something else to consider is whether it would be any more permissible to require labels for nonGMO products, which would presumably be a market advantage for non-GMO products.
We also discussed the difference between a burden on out-of-state commerce and a burden on
interstate commerce. A burden on out-of-state commerce is discrimination because it treats
businesses differently. A burden on interstate commerce is not discriminatory but does lower the
overall volume of commerce. The Dormant Commerce Clause is used strike down state laws that
do either.
Under different standards! Strict scrutiny vs pike
balancing
Outline for March 23, 2014
Baldwin v G.A.F. Seelig Inc.
Facts: Arose form a state effort to stabilize milk prices, New York Control Act of 1933 set
minimum prices to be paid to milk producers by New York dealers. Baldwin held the law
unconstitutional as applied to out of state milk producers. Law prohibited New York sales of outof state milk had been purchased below the price for similar purchases within New York.
Issue: Can New York control the price of milk in New York through this type of regulations?
Holding: New York has no power to project its legislation into Vermont by regulating the price
to be paid in that state for milk acquired there. New York is equally without power to prohibit
the introduction within her territory of milk of wholesome quality acquired in Vermont whether
at high prices or low ones.
Reasoning: If this power is exerted it will set a barrier to traffic between one state and another.
This type of obstruction is a direct burden on the state. On that assumption we are asked to say
that intervention will be upheld as a valid exercise by the state of its internal police power. It was
framed upon the theory that the peoples of the several states must sink or swim together, and that
in the long run prosperity and salvation are in union and not in division.
In-class
•
Law said that minimum prices had to be paid by New York dealers,
o Doesn’t try to make out of state milk be put on worse footing
o Tries to set in state milk on equal footing to in-state milk
o New York producers can lower prices but Vermont producers cannot (may be
enough to call facially discriminatory) Removes Vermont’s competitive
I misspoke in class here about ny producers being able to lower prices---they could not, because
advantage NY imposed price controls. But still forbids out of staters from competing on price
•
Outlaws people using price advantages from being out of state may think its not a facial
discrimination
o Disrupts interstate commerce by not allowing milk in the state
o Undermining through the law, economically speaking it is the same as if it had
imposed a tax on out of state milk
§
•
Achieved the same goal through a backdoor route.
State’s defense- state is trying to assert a stable supply of milk, use subsidies or bailouts
to industries in important industries
o This is one of those industries, preserving the supply of milk by making sure that
farmers can make a profit
o Court says that this interest does not outweigh the interest of other states
•
Proves to much idea, it follows from that all protectionist legislation would be
permissible, all protectionist legislation could be argued this way, and the whole thing
would eat up (core structure of argument seen in Con Law)
o Destroying to whole dormant commerce clause
o This exception can not be enough to get one out of the dormant commerce clause
•
Originalist claim
o Sink or swim together no economic isolation, not one cares about the local supply
and that supply may be in other state
o Only legitimate entity that should be in charge of maintaining supply should be
congress
•
Subsidizes idea, in general rule comes up again, probably looks to much like interfering
with general autonomy of the states (loop hole accepted because of federalism)
H.P. Hood & Sons v Du Mond
Facts: Hood was a Boston milk distributor who had long obtained milk from New York
producers and maintained three receiving depots there. Hood sought a New York license to
establish a fourth depot but was denied the license on the basis of a New Tork law stating that
licenses for new plants could not be issued, unless the Commissioner was satisfied that “issuance
of license will not tend to a destructive competition in a market already adequately served, and
that this issuance of the license is in the public interest.
Issue: Does this statute as applied violate the dormant Commerce Clause?
Holding: The statue as applied violates the commerce clause and cannot stand.
Reasoning: The only additional restriction, imposed for the avowed purpose and with the
practical effect of curtailing the volume of interstate commerce to aid local economic interests,
that are the question here. Principle of out economic unit is the Nation which alone had gamut of
power states are not separate economic units. This would exclude an entirely new foreign
handler from coming into the state to purchase.
Dissent Black: The language of the act is not discriminatory, legislative history shows that this
was not the intent, has not been administered with hostile eye. It is not the function of this court
to revise state economic judgments.
Dissent Frankfurter: The effect of the majority’s opinion is no matter how important the industry
is to the state; a state cannot prevent deny an applicant access to a market within the state if that
applicant happens to intend the out of state shipment of the product that he buys.
In-Class
•
Gowder’s interpretation
discretion
o There is too much digression in the state
o Justice Black’s dissent- applies to both in state and out of state milk distributors
exactly the same totally non-discriminatory
2
§
Ways to react- this is wrong (justice black was right)
§
Court was extremely suspicion about this type of discretion vested in a
local individual (local official would favor the local business)
•
Concerned about he scopes of power actually given
•
Don’t like local have affect on interstate commerce in
discriminatory matter (more inclined to discriminate against
foreign producers)
What is discrimination against interstate commerce?
•
When a law makes a facial discrimination against interstate commerce
o Deans Milk and Clarkston are pretty facial cases, give privileges to in state actors
compared to out of state actors
o Could craft a law that does these things without these open distinctions
§
Taxing a method that everyone of state uses, and subsidizing the in-state
method of doing something
§
Thinking about discriminating against interstate commerce in a subtler
way
•
Which ways actually count?
•
Get strict scrutiny need to figure out if it discriminate against
interstate commerce
Note Cases
Hunt v Washington State Apple Advertising Comm’n
•
Washington is growing great apples, but North Carolina says that it doesn’t accept apples
about US grade. North Carolina is taking away Washington’s advantages with the
reputation for their apples had been developed. (consumer goodwill)
•
Court says that this discriminates against interstate commerce (Vermont Hypo)
o Vermont could force it to label nation wide having an out of state could burden
interstate commerce everywhere (impose an undue burden on interstate
commerce)
o How might it discriminate against, both instate GMO and out of state GMO
•
3
§
Not a burden dependent on local industry
§
Favor local product over the GMOs from out of state
•
Vermont trying to promote competitive advantage that it gets
•
Real suspicious, separate discrimination and the burden may use
burden
Distinguish to kinds of burden
o Burden on out of state commerce (discrimination) (protectionism) v. Burden on
interstate commerce (not discrimination)
§
Discriminate Interstate commerce- a misnomer, saying state discriminates
against out of state commerce
•
§
if a state is burdening out of state commerce, then that is a form of
discrimination
Burden on interstate commerce- is essentially a burden that falls on
everyone who participates in interstate commerce
•
Regulation on truck mud flap shapes (Illinois)
•
Court held that this was unconstitutional because it would be
inconvenient to the the people driving through the state
o Burden is on people coming into the state
o Defense of Vermont’s law gives a competitive advantage to people in other states
as well (does not have the purpose or effect of protecting in state v out of state
industry)
Bacchus Imports, Ltd v Dias (Hawaiian booze case)
•
Vermont may be similar to this case
Exxon v Gov of Maryland and Clover Leaf
Also could be similar to Vermont GMO ban
•
Distinguished, in both cases the court empathized that out of state actors where also the
benefits of the subsidizes. These are made in many different cases, but no reason that in
must be made in that state and this benefits those producers as well.
•
Maryland bans oil company’s from also owning gas stations, court says that these
independent gas stations get the same benefits as Maryland gas station owners.
o Do they distinguish from Hunt as well?
§
4
Not entirely clear
The Dormant Commerce Clause, Continued
Outline #21
Facially Neutral Laws with Protectionist Purpose or Effect
Baldwin v. G.A.F. Seelig, Inc. (US, 1935)
• Rule: A state can’t pass protectionist laws which overly burden interstate commerce for the
purpose of reducing competition between the states.
• Facts: NY passed the Milk Control Act which prohibited the importation of milk unless the
price paid to the producer (by a 3rd party) reached the minimum required amount for NY
milk farmers.
o Not nominally, facially discriminatory
o Practical implication: Price control was a barrier to out of state milk importation.
§ Takes competitive edge away from out of state farmers
o Problem: Not necessarily discriminating against interstate commerce, but definitely
undermining it.
o State Arg.: NY is just trying to maintain a stead supply of pure, wholesome milk.
(Gowder is about this argument – think about the similarity to the auto industry
bailout/subsidy)
• Holding: This law sucks. Overturned.
• Reasoning:
o 1st point: The learned Cardozo is basically like, “Okay, fine. Let’s suppose this is true
that the state’s argument is validation for strict scrutiny. What follows?”
§ All protectionist legislation would be permissible.
§ "It all collapses, eats up the rule under the guise of the exception."
nd
o 2 point: Originalist claim, States are in it to win it together
§ No one cares about your local supply. Your supply in VT is just as good as
your supply on NY.
§ Nationally integrated market abolished the idea of locally isolated markets.
§ Invalidates claim to subsidize local markets (tariff barriers)
§ Mr. Stone asked an intense question and I didn’t follow. Something about
loopholes in the dormant commerce clause.
H.P. Hood & Sons v. Du Mond (US, 1949)
• Rule: A state can’t pass laws that discriminate against interstate commerce, even when its
sneakily through a weird local discretion rule.
• Facts: is a Boston milk distributor. NY had licensing regulations concerning who gets to
operate dairy receiving depots. Commissioner distributes licenses and gets to decide if there's
enough milk floating around.
o Hella unclear process.
• Reasoning:
o Gowder’s Interpretation of this hot mess case:
§ The Court probably felt that the state had too much discretion and it was
suspicious.
§ Local discretion's potential effect on IC is the big issue here
Dissent:
Law
applies identically to in and out of sate distributors
•
1
o Seems like its non-discriminatory (Gowder believes it)
o Is this case wrong and Black was right?
§ Gowder- this is a stupid case.
§ Court was suspicious of this sort of discretion in a local state official. How
can some bureaucrat decide if there’s enough production or not? Inherent
bias in favor of his state.
Identifying Protectionism in Facially Neutral Laws
Hunt v. Washington State Apple Advertising Comm’n (US, 1977)
• Rule: You can’t screw with interstate commerce by unnecessarily disadvantaging out of state
producers. (get over yourself, SC)
• Facts: Washington has grade A apples. Exemplary apples. NC requires labels that say its
“U.S. grade” even though WA’s apples were above it.
o WA has strong branding for their apples and this messes it up.
o Discrimination against interstate commerce.
• Reasoning: Requiring WA to downgrade their labeling lowers their appeal/burdens out of
state producer.
• Dissent:
• VT Hypo: VT has required labeling of genetically modified organisms
o Does it violate dormant commerce clause?
• Not feasible for distribution companies to have different label for VT
§ Does VT law create a new national standard?
§ Does out of state effect of this burden interstate commerce?
• More efficient to label everywhere, possible undue burden?
• However, this is common. CA Clean Air Emission standards.
§ School books: TX school board
• TX standards are applied across the countries b/c textbooks are
expensive
§ How does DCC deal with this?
• Discrimination?
§ It makes in and out of state GMOs less desirable
§ Gowder doesn’t know if it’s a winner
§ VT products are more competitive because they're already pure and they
make out of state GMO products look worse
• Nils asked a great Q: burden that’s discriminatory v general discriminatory policy
§ Burden on out of state commerce vs. Burden on interstate commerce
The misnomer is • BIC is a misnomer; we mean that a state discriminates on out of state
"discriminating
commerce
against interstate
• If a state is burdening OOSC, then that’s discrimination.
commerce"
• Its saying "you out-of-staters have to pay more, less revenue,
competitors in state pay less, etc…"
• Discrimination (protectionism) / Strict Scrutiny
§ BIC
• A burden that falls on everyone who participates in IC, whether in state
or out of state
• Classic example is regulation on truck mud flaps case
2
•
Not discriminatory/ Pike Balancing Test
Bacchus Imports, Ltd. v. Dias (US, 1984)
• HI statute: exempted okolehao from the states 20% wholesale liquor tax.
o Protectionist purpose and effect existed here, obviously, cause whatever the plant is
is native to HI.
o Struck it down.
Exxon Corp. v. Governor of Maryland (US, 1978)
• Maryland banned oil companies from owning gas stations.
• There are no local oil producers in Maryland so there’s no distinction to be made between
the treatment of out of state and in state oil companies.
More to the point, there are indpeendent gas dealers both in and out of state
Minnesota v. Clover Leaf Creamery Co. (US, 1981)
• Banned the retail sale of milk products in plastic nonreturnable containers but permitted
sales in returnable containers made of pulpwood.
• Pulpwood containers could be made other places so there are out of state benefiters of this
law.
Exxon & Cloverleaf v Hunt & Bacchus:
• What's the distinction here?
o Both E & C, the Court emphasized that there were lots of out of state benefiters of
the subsidy
§ Not like Bacchus where okolehao was only grown in HI
o Exxon: similar issue, MD bans oil company from owning gas stations
§ No oil produced or refined in the state. Chill, Exxon.
§ Upheld law.
• Does it distinguish them from Hunt?
o Lots of states might grow apples
o Not entirely clear if its reconcilable
3
3-23
I.
Whatisdiscriminationagainstinterstatecommerce?
a. FacialDiscrimination
i.
Notalllawsthatareagainstinterstatecommercearefaciallydiscriminative
1. StateofIowamakespaperinaspecialway,sowetaxeveryonewho
doesn'tusethismethod
b. Baldwin
i.
NYlawdoesnotallowforoutofstatemilktobesoldforlessthanin-statemilk
1. Essentiallyforbidspriceadvantagesforoutofstatedairies
ii.
Nottechnicallydiscriminating,butstilltryingtounderminecommerce
iii.
State'sdefenseisthatwearetryingtopreservethesupplyofmilkbymakingsure
thatNYfarmerscanmakeaprofit
1. Courtrespondstothisbyclaimingthatallprotectionistlegislationcouldbe
allowedaslongastheexcuseforlocalsuppliersisused
2. Sothis"provestoomuch"
iv.
Thereisanoriginalistclaiminthiscase
1. "theConstitutionwasframedunderthedominionofapoliticalphilosophy
lessparochialinrange"-p258
2. Whocaresaboutyoursupply?YoursupplycanbeinVermont. ensuring the supply of
3. Theonlylegitimateentitythatshouldbeconcernedwithsubsidizing
[anything]iscongress,becausetheycontrolthenationalmarket
c. Hood
i.
BostonmilkdistributerwhowantedanotherdepotwasdeniedbyNY
commissionerbasedonhisdecisionthattherewasalreadyenoughmilkfloating
around
ii.
Problem:toomuchdiscretioninthestateandthecourtissuspicious
1. Lawappliesthesameinandoutsideofthestatebecausetheexactsame
decisionneedstobemadebythecommissioner-Black'sargument
(dissent)
2. Thecourtdoesn'tlikethatthediscretioncantechnicallyfavorinstate
My interpretation
producers(majority)
d. Hunt
i.
Washington(state)growsahighergradeofapplethantheUSDAneeds,NCdoes
notallowstategradedsystems-theyrequireUSDAor"notgraded"labels
ii.
Hypo:VermontrequiresGMOfoodsbelabeled.IsthisokunderDCC?
1. IsVermonttryingtopromoteitsowncompetitiveadvantagebyrequiring
otherstatestodisclosetheirlackofanadvantage?
2. Isthissuspicious?
3. BestDefense?VermontandotherstatesprobablyhavebothGMOand
Non-GMOproducers,somaybeitdoesn'thaveaprotectionistidealandis
insteadjustaburden...somaybeweusethePikebalancingtest?
e. Burdenonoutofstatecommercev.burdenoninterstatecommerce
i.
Outofstateburdens=discrimination(protectionism)
ii.
Burdenoninterstatecommerceisaburdenoneverybody
1. Mud-flapcase
f. ExxonandCloverLeaf
i.
Howdowedistinguishthesecases?
ii.
1. Inbothofthesecases,thecourtemphasizedthattherewerelotsofoutof
staterswhobenefittedfromthesubsidy
2. CloverLeaf-pulpwoodcanbegrowneverywheresotherecanbealotof
non-Minnesotanproducerwhobenefitfromthelaw
DotheydistinguishfromHuntaswell?
1. Therecouldbelotsofstatesthatmakeapples,dotheyhavethesame
benefitsinNC?