QUESTION NO. 7
FEBRUARY 2010
OREGON BAR EXAM
The State of Franklin is in the midst of a deep economic recession. Unemployment
is high. Franklin’s tax revenues are down and government services are being cut.
Two important industries in Franklin are food processing and micro-brewed beer.
In response to the economic crisis, the Franklin Legislature enacted a package of
three bills:
House Bill 25 requires that crops grown in Franklin be processed or
packaged at food processing plants in Franklin before sale or export.
House Bill 50 provides that any U.S. citizen paying Franklin state
income tax is entitled to a deduction for childcare expenditures
incurred while seeking employment.
House Bill 100 imposes a 5% tax on beer imported from foreign
countries.
You are legal counsel to the Governor of Franklin. The Governor has asked you if
any of these bills likely violate any provision of the U.S. Constitution. The Governor
will veto a bill if you advise her that the bill is most likely unconstitutional.
Discuss potential arguments and counterarguments that might be raised
regarding the validity of each bill under the U.S. Constitution and whether you
would advise the Governor to sign or veto:
(35%)
1. House Bill 25.
(35%)
2. House Bill 50.
(30%)
3. House Bill 100.
© 2010
Oregon State Board
of Bar Examiners
QUESTION NO. 7
FEBRUARY 2010
OREGON BAR EXAM
Constitutional Law Answer Outline
I. House Bill 25 requires that crops grown in Franklin be processed or
packaged at food processing plants in Franklin before sale or export.
ISSUE:
Dormant Commerce Clause
a. Unless preempted by Congress, state governments generally may
regulate local aspects of interstate commerce as long as the
regulation:
i. Does not discriminate against out-of-state competition to
benefit local economic interests; and
ii. Is not unduly burdensome (the incidental burden on interstate
commerce does not outweigh the legitimate local benefit of the
regulation).
If a state regulation is discriminatory, it will generally be upheld only
if the regulation furthers an important state interest and there are no
reasonable non-discriminatory alternatives, or if the state is a market
participant.
b. State regulations that discriminate against interstate commerce that
operate in the nature of a tariff or trade barrier against out-of-state
competitors are almost always invalid. The Supreme Court has
sometimes said that such regulations are subject to “rigorous
scrutiny.”
i. See, e.g., C & A Carbone, Inc. v. Town of Clarkstown, N.Y., 511 U.S.
383, 392 (1994): “Discrimination against interstate commerce
in favor of local business or investment is per se invalid, save in
a narrow class of cases in which the municipality can
demonstrate, under rigorous scrutiny, that it has no other
means to advance a legitimate local interest.”
1. In Carbone, a local ordinance that required all local solid
waste to be processed at the local waste processing
plant was held to be a violation of the dormant
commerce clause. The town had enacted the ordinance
in order to finance the construction of the plant.
2. Although the regulation only applied to the local
transport of waste, its effects were interstate in reach.
3. The regulation deprived competitors, including out-ofstate firms, access to the local market.
c. Such regulations have long been held invalid. As summarized by the
Court in Carbone:
“In Dean Milk Co. v. Madison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329
(1951), we struck down a city ordinance that required all milk sold in
the city to be pasteurized within five miles of the city lines. We found
it “immaterial that Wisconsin milk from outside the Madison area is
subjected to the same proscription as that moving in interstate
commerce.” * * * In this light, the flow control ordinance is just one
more instance of local processing requirements that we long have
held invalid. See Minnesota v. Barber, 136 U.S. 313, 10 S.Ct. 862, 34
L.Ed. 455 (1890) (striking down a Minnesota statute that required any
meat sold within the State, whether originating within or without the
State, to be examined by an inspector within the State); FosterFountain Packing Co. v. Haydel, 278 U.S. 1, 49 S.Ct. 1, 73 L.Ed. 147
(1928) (striking down a Louisiana statute that forbade shrimp to be
exported unless the heads and hulls had first been removed within the
State); Johnson v. Haydel, 278 U.S. 16, 49 S.Ct. 6, 73 L.Ed. 155 (1928)
(striking down analogous Louisiana statute for oysters); Toomer v.
Witsell, 334 U.S. 385, 68 S.Ct. 1156, 92 L.Ed. 1460 (1948) (striking
down South Carolina statute that required shrimp fishermen to
unload, pack, and stamp their catch before shipping it to another
State); Pike v. Bruce Church, Inc., supra (striking down Arizona statute
that required all Arizona-grown cantaloupes to be packaged within
the State prior to export); South-Central Timber Development, Inc. v.
Wunnicke, 467 U.S. 82, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984) (striking
down an Alaska regulation that required all Alaska timber to be
processed within the State prior to export). The essential vice in laws
of this sort is that they bar the import of the processing service. Outof-state meat inspectors, or shrimp hullers, or milk pasteurizers, are
deprived of access to local demand for their services. Put another way,
the offending local laws hoard a local resource-be it meat, shrimp, or
milk-for the benefit of local businesses that treat it.” Id. 391-2.
d. House Bill 25 is a local processing requirement of just this sort. The
bill would discriminate against interstate commerce by barring outof-state food processors from the market of processing crops grown
in Franklin. It is not likely that Franklin can demonstrate, under
rigorous scrutiny, that House Bill 25 is the only means available to
advance a legitimate local interest. In fact, it is not clear that Franklin
could demonstrate any legitimate local interest being advanced.
e. House Bill 25 is most likely unconstitutional and should be vetoed.
II. House Bill 50 provides a state income tax deduction to any United States
citizen residing in Franklin for child care expenditures incurred while
seeking employment.
ISSUES: 14th Amendment Equal Protection (Alienage Discrimination)
and Congress’ Art. I, Sec. 4 “naturalization” power
a. The 14th Amendment applies to actions of state governments. State
government classification of people is subject to one of three levels of
scrutiny:
i. Strict scrutiny applies if the classification is a “suspect
classification” or involves a “fundamental right.” State
government classifications based on race, national origin, and
alienage are suspect classifications. To survive strict scrutiny,
such classification must be necessary to achieve a compelling
government interest.
ii. Intermediate scrutiny applies if the classification is a “quasisuspect classification.” Classifications based on gender or
legitimacy are treated as quasi-suspect classifications. To
survive intermediate scrutiny, such classification must be
substantially related to an important government interest.
iii. Rational basis review applies to any other classification. To
survive rational basis review, the classification must be
rationally related to a legitimate government interest.
b. State law classifications based on alienage, such as laws that condition
benefits on citizenship, are usually subject to strict scrutiny (with at
least one exception), and are generally invalid.
i. For instance, in Graham v. Richardson, 403 U.S. 365 (1971), the
Court held invalid a state statute that denied welfare benefits
to resident aliens and one that denied them to aliens who had
not resided in the United States for a specified number of
years.
ii. In applying strict scrutiny, the Graham Court stated: “a State's
desire to preserve limited welfare benefits for its own citizens
is inadequate to justify Pennsylvania's making noncitizens
ineligible for public assistance, and Arizona's restricting
benefits to citizens and longtime resident aliens. * * * [T]he
‘justification of limiting expenses is particularly inappropriate
and unreasonable when the discriminated class consists of
aliens. Aliens like citizens pay taxes and may be called into the
armed forces. * * * [A]liens may live within a state for many
years, work in the state and contribute to the economic growth
of the state.’ * * * There can be no ‘special public interest’ in tax
revenues to which aliens have contributed on an equal basis
with the residents of the State.” Id. at 375-6.
iii. Similarly, the Court has invalidated state laws requiring U.S.
citizenship in order to be admitted to the bar, Application of
Griffiths, 413 U.S. 717 (1973), or to compete for civil service
jobs, Sugarman v. Dougall, 413 U.S. 634 (1973). However, the
Court has exempted from strict scrutiny those state
government classifications requiring U.S. citizenship that “are
bound up with the operation of the state as a governmental
entity.” Ambach v. Norwick, 441 U.S. 69 (1979). Therefore,
citizenship requirements for employment as a teacher, id., and
police officer, Foley v. Connelie, 435 U.S. 291 (1978), have been
subject only to rational basis review and upheld. This
exception is referred to as the Self Governance or Political
Function exception to strict scrutiny.
c. House Bill 50 explicitly makes a government benefit (i.e., a tax
deduction) contingent on U.S. citizenship. It is unlikely that Franklin
can demonstrate that such a classification is necessary to achieve a
compelling government interest. Preserving limited state resources
for the benefit of citizens has been held to not be a compelling
government interest.
d. An additional argument against the validity of House Bill 50 is that it
infringes upon Congress’s authority under Article I, Section 4 to
“establish a uniform rule of naturalization.” In Graham, the Court held
that state restrictions on state benefits were also contrary to Art. I,
Sec. 4 because “State laws that restrict the eligibility of aliens for
welfare benefits merely because of their alienage conflict with * * *
overriding national policies in an area constitutionally entrusted to
the Federal Government.” Graham, at 378. Therefore, unless
Congress has authorized such a distinction based on citizenship,
states may not infringe on Congress’ plenary authority over
citizenship issues by enacting laws making state benefits contingent
on citizenship.
e. House Bill 50 is most likely unconstitutional and should be vetoed.
III. House Bill 100 imposes a 5% tax on beer imported from a foreign country.
ISSUES: Import-Export Clause, Commerce Clause and 21st Amendment
a. Article I, Section 10 states that “No state shall, without the Consent of
Congress, lay any Imposts or Duties on Imports or Exports, except
what may be absolutely necessary for executing its inspections Laws .
. .”
b. This tax on beer, which applies only to beer imported from a foreign
country and not to beer made in Franklin or elsewhere in the U.S., is
most likely a state duty on an import and therefore contrary to Art. I,
Sec. 10.
c. In addition, the Commerce Clause gives Congress the exclusive
authority to regulate foreign (as well as interstate) commerce.
i. See I.a above for general Commerce Clause discrimination test.
ii. In addition, in cases involving foreign commerce, a state tax is
also invalidated if it would create a substantial risk of
international multiple taxation or would prevent the federal
government from “speaking with one voice” regarding
international trade or foreign affairs issues. Barclays Bank PLC
v. Franchise Tax Board, 512 U.S. 298 (1994).
d. This tax is discriminatory since it applies only to beer imported from
foreign countries. It is unlikely that Franklin could argue that such a
tax furthers an important state interest and that there are no
reasonable nondiscriminatory alternatives.
e. Franklin might argue that it has broad latitude under the 21st
Amendment to regulate and tax alcoholic beverages and that such
power supersedes Commerce Clause and Import-Export Clause
limitations. However, in a case where the state regulation appears so
clearly to be an exercise of economic favoritism for local business,
such argument is likely to fail.
i. The 21st Amendment repealed Prohibition in 1933. Sec. 2 of
the Amendment provides that “The transportation or
importation into any State . . . for delivery or use therein of
intoxicating liquors, in violation of the laws thereof, is hereby
prohibited.”
ii. In Granholm v. Heald, 544 U.S. 460 (2005), the Supreme Court
confirmed that “the 21st Amendment does not supersede other
provisions in the Constitution and, in particular, does not
displace the rule that States may not give a discriminatory
preference to their own producers.”
f. House Bill 100 is most likely unconstitutional and should be vetoed.
© 2010
Oregon State Board
of Bar Examiners