Chapter IV
The Dormant Commerce Clause
and Related Doctrines
The Dormant Commerce Clause
• Two sides of the Commerce Clause
– A grant of power to Congress
– A limitation on state power
• Preemption
• Implied limitation
• Conflict between:
– The DCC (unexercised commerce power)
– State Police Power
The DCC
“The Constitution was framed under the
domination of a political philosophy . . . 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
division.” Justice Benjamin Cardozo
Basic Idea:
• The nation forms a single economic unit.
• No state may isolate itself from the consequences
of this unified market.
The DCC
What type of analytical problem is presented
by the Dormant Commerce Clause?
Definitional scope of power?
Structural limitation on power?
External limit?
The DCC: Essential Model
What an individual state cannot do:
Regulate ISC (in purpose or through out-ofstate regulatory effect)
Discriminate against ISC.
Excessively burden ISC.
The DCC: A Framework
• Is the law rationally related to a legitimate state
purpose?
• Does the law have the practical effect of
regulating out-of-state transactions?
• Does the law discriminate against ISC?
– If so, has the state adopted the least discriminatory
means to achieve its goal?
• Are the burdens the law places on ISC or foreign
commerce clearly excessive in relation to the
benefits which the law affords the state?
• Has the state adopted the least burdensome
means to achieve its goal?
The DCC: Rational Basis
• Rational relation between the means
adopted and the legitimate end to be
achieved.
– Highly deferential standard
– Police Power: health, safety & welfare
– Compare substantive due process
• Per se invalidity:
– Impermissible: a purpose to regulate ISC
– Impermissible: economic protectionism
Purpose to Regulate ISC
Buck v. Kuykendall (1925)
Limitation on number of common carriers
serving state segment of interstate route in order
to avoid excessive competition on the route.
Bradley v. Public Utilities Comm’n (1933)
Limitation on number of common carriers
serving state segment of interstate route in order
to promote highway safety within the state.
Purpose: Economic Protectionism
South Central Timber Dev., Inc. v. Wunnicke (1984)
State requires that a timber harvested within the state be
processed into lumber within the state.
Baldwin v. G.A.F. Selig, Inc. (1935)
State law designed to protect local dairy farmers
prohibits the importation of milk that was purchased outof-state at a wholesale price below the state-imposed
minimum for in-state wholesale transactions.
Discrimination against ISC
• Three ways in which a law may
discriminate:
– On its face
– By design (economic protectionism)
– Disproportionate impact
– As applied
The DCC: A Framework
• Rationality (goal, legitimacy, means/ends
rationality)
• Out-of-state regulatory effect (rare)
• Discriminate (identify the classification and the
type)
– Least discriminatory means
– “Compelling” interest
• Burdens clearly excessive (burdens v. benefits)
• Least burdensome means (rare)
Philadelphia v. NJ (1978)
• What was the state’s goal?
– Did the parties agree on this?
– How did the Court resolve this disagreement?
– What result if the Court had sided with the plaintiffs?
• Was the assumed goal legitimate?
• What means did the state adopt to advance that
goal?
• Were those means rationally related to the
assumed goal?
Philadelphia v. NJ (1978)
• Did the state law have the practical effect of regulating
out-of-state transactions?
– Out-of-state effect?
– Regulatory?
• Was the state law discriminatory? If so, what type of
discrimination?
• Are all discriminations against ISC invalid?
– Quarantine laws?
• Did the state here adopt the least discriminatory means
to advance its environmental goal of landfill
preservation?
• Compare Maine v. Taylor (1986)
Dean Milk Co. v. Madison (1951)
Illinois
Wisconsin
.
Madison
Dean Milk Co. v. Madison (1951)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
Dean Milk Co. v. Madison (1951)
• Burdens
– Benefits v. Burdens
• Least Burdensome Means
[Note: The Dean Milk Court resolved the
case on the discrimination issue.]
Hunt v. Wash. St. Apple Ad. Comm’n (1977)
Hunt v. Wash. St. Apple Ad. Comm’n (1977)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
Hunt v. Wash. St. Apple Ad. Comm’n (1977)
• Burdens
– Benefits v. Burdens
• Least Burdensome Means
[Note: The Hunt Court resolved the case
on the discrimination issue.]
Exxon Corp. Governor of Md. (1978)
Exxon Corp. Governor of Md. (1978)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
Exxon Corp. v. Governor of Md. (1978)
• Burdens
– Benefits v. Burdens
• Least Burdensome Means
H.P. Hood & Sons v. DuMond (1949)
H.P. Hood & Sons v. DuMond (1949)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
H.P. Hood & Sons v. DuMond (1949)
• Burdens
– Benefits v. Burdens
• Least Burdensome Means
West Lynn Creamery, Inc. v. Healy (1994)
A Tax
A Subsidy
West Lynn Creamery, Inc. v. Healy (1994)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
West Lynn Creamery, Inc. v. Healy (1994)
• Burdens
– Benefits v. Burdens
• Least Burdensome Means
• Note Justice Scalia’s concurrence.
Southern Pacific v. Arizona (1945)
Southern Pacific Co. v. Arizona (1945)
• Rationality
– Goal
– Legitimacy
– Means/Ends Rationality
• Out-of-state regulatory effect
• Discrimination
– Facial, Design, Impact, Applied
– Least Discriminatory Means
– Substantiality of the Ends (“compelling)”
Southern Pacific Co. v. Arizona (1945)
• Burdens
– What burdens did the train limit law impose on ISC?
– What were the potential benefits of the law?
– On what grounds did the Court conclude that the
burdens were clearly excessive?
• Least Burdensome Means
– Can you think of any less burdensome means to
accomplish the end (train safety)?
• A comment on Justice Black
Kassel v. Cons. Freightways Corp.
(1981)
Kassel v. Cons. Freightways Corp.
(1981)
Kassel v. Cons. Freightways Corp.
(1981)
•
•
•
•
Rationality
Out-of-state regulatory effect – NONE
Discrimination
Burdens
Consider the different approaches of the
plurality, the concurrence & the dissent.
Kassel v. Cons. Freightways Corp.
(1981)
• Burdens
– What burdens did the train limit law impose on ISC?
– What were the potential benefits of the law?
– On what grounds did the Court conclude that the
burdens were clearly excessive?
• Least Burdensome Means
– Can you think of any less burdensome means to
accomplish the end (train safety)?
• A comment on Justice Black
Out-of-State Regulatory Effects
• Regulatory v. Economic
• Out-of-State Transaction
Law prohibits or mandates certain out-ofstate behavior such that a failure to
comply will result in the imposition of legal
sanctions.
Out-of-State Regulatory Effects
NY Law:
Monthly posting of wholesale liquor prices; affirmation of “lowest” price.
Bars reduction of price (in- or out-of-state).
Dormant Commerce Clause:
A Single Economic Unit
The Market Participant Doctrine
The Case of the Inoperable Hulk
Hughes v. Alexandria Scrap
The Market Participant Doctrine
The Case of the Commie Concrete
Reeves, Inc. v. State
The Market Participant Doctrine
• Key Questions:
– Is the state regulating or is the state spending
(buying or selling)?
– If the latter, what is the scope of the market
within which the state is participating?
The Market Participant Doctrine
The Case of the Lumbering Tree
South Central Timber Dev., Inc. v. Wunnicke
Dormant Commerce Clause:
Dual Model
REGULATION
SPENDING
The Privileges and Immunities Clause
Art. IV, § 2
“The Citizens of each State shall be entitled to
all Privileges and Immunities of Citizens in the
several States.”
What type of constitutional principle does the P & I
Clause represent?
Similar to the Dormant Commerce Clause?
Discrimination
• Against citizens of another state.
– Must be a US citizen & permanent resident of
a state.
– Corporations are not citizens for purposes of
the P&I Clause.
• Facial, design, applied, impact.
P & I Fundamental Rights
• Right to pass through (travel)
• Right to reside
• Right to do business (work or common
callings)
• Right to own & inherit property
• Exemption from higher taxes
• Right to seek redress in state courts
P & I Test
(Mid-Level Scrutiny)
• Has the state shown a substantial reason
for the discrimination?
– Noncitizens constitute a unique and peculiar
source of the evil at which the law is aimed.
• Has the state adopted the least
discriminatory means to advance that
interest?
P & I Hypotheticals
• State law limits bar membership to citizens
of the state.
• State university charges lower tuition for
in-state residents.
• State refuses to sell concrete processed at
a state-owned plant to an out-of-state
corporation.
– Suppose the plaintiff were an individual out-ofstate citizen.
Consent to State Regulation of ISC
• Dormant Commerce Clause Violation
• Congressional Consent to the State
Regulation
– Clear Statement of Intent
Dormant Commerce Clause &
State Taxation
The Complete Auto Body Test:
1. Substantial Nexus
2. Fairly Apportioned
3. Discrimination against ISC
4. Fairly Related
Supremacy Clause
This Constitution, and the Laws of the
United States which shall be made in
Pursuance thereof; and all Treaties made,
or which shall be made, under the
Authority of the United States, shall be the
supreme Law of the Land; and the Judges
in every State shall be bound thereby, any
Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.
Preemption
Three Types:
Express Preemption
Conflict Preemption
Field Preemption
Conflict Preemption
Two Types:
Physical Impossibility
Obstacle to the Congressional Objective
Field Preemption
Congressional intent to “occupy” the field:
Express
Implied (pervasiveness)
Key question: What is the scope of the field?
Gade v. Nat’l Solid Waste Mgmt. Ass’n
(1992)
• Potential conflict between Illinois law and
the federal OSH Act & OSHA regulations.
• Plurality:
– Express or Implied
– Conflict or Field
• Kennedy Concurring
• Dissent