Dormant Commerce Clause

States can pass laws that help its citizens unless Congress passes a law preempting it under its commerce powers. Delaware legislature paid Black Creek Marsh Co to build a dam across Black Bird Creek. Boat broke through the dam, claiming Delaware could not interfere with interstate commerce because the creek was used by in/out of staters for I/C.

Subjects that are national or require a uniform system will require exclusive regulation by Congress. State laws that legislate in this area will violate DCC. However, areas that are related to interstate commerce but are not national in nature or require a uniform system do NOT violate the DCC unless Congress has passed a law preempting it. Penn state law requiring some ships to pay a fee if they did not take a pilot does not violate the DCC because this is interstate activity that is not national in scope or require uniform rules.

From Cooley emerged the doctrine of selective exclusiveness: a) “natl govt would have the exclusive power to regulate those matters that were national in scope or which, by their nature, required uniform regulation. As to such matters, if Congress chose to legislate, it would preempt state law. If Congress chose not to legislate, the subject was beyond the reach of state legislation b) purely intrastate commerce was exclusively within the power of the states to regulate (b/c Commerce Clause did not give Congress the power to regulate such activity) c) interstate commerce NOT considered to be national in scope or requiring uniform regulation could be regulated concurrently by the states and by Congress. Application of these categories was subject to interpretation. Broadly speaking, until the Progressive Era the national government did very little regulating. So if a particular matter fell into the first category – being national in scope or requiring uniform regulation – the practical effect was to have no regulation of the activity at all.

State legislatures can pass laws that may burden interstate commerce so long as the law does not discriminate against out of staters and is not preempted by an existing Congressional law. If the court finds the state legislature has a rational basis for adopting the legislation based on safety or economic interests, the court should defer to the judgment of the state legislature and hold it constitutional. South Carolina imposed limits on the width and weight of semi-trucks that were more restrictive than the vast majority of states. State law challenged as being an undue burden on interstate commerce.

A facially neutral statute still violates the Commerce Clause if it has a discriminatory effect on interstate commerce. For such to be constitutional, state must show it is necessary – there are no less discriminatory alternatives available. North Carolina required all Apples imported to use USDA grade labeling or no label/grade at all– claiming it was to protect its citizens from deceptive and fraudulent marketing of apples. But this burdened Washington state producers, who used an even higher grading standard, because they would have to change labeling in order to sell to NC. Court found that NC was insidiously trying to advantage its own producers at the expense of Washington State producers. Legislative history indicating that a special interest group lobbied for the law will help a court find a discriminatory purpose.

A state may not discriminate against other states’ articles of commerce on the basis of origin. i.e. Regardless of it’s ultimate purpose, a State may not discriminate against articles of commerce coming from outside the state unless there is some reason, apart from their origin, to treat them differently. E.g. quarantining diseased livestock is OK. State legislatures. If a State law is basically a protectionist measure, it will be unconstitutional. If a State law can be fairly viewed as a law directed to legitimate local concerns, with effects upon interstate commerce that are only incidental, then it will be constitutional. NJ state law prohibited out of state waste from being deposited in NJ landfills because the state was concerned with environmental harm to NJ, as well as running out of space to store waste.

Same rule, different words: 1) if a state law discriminates against an out of state interest it is virtually per se unconstitutional 2) if the law does not discriminate it will still be struck-down if it places an unreasonable burden on I/C relative to any local benefit. Under 1) Court will use strict scrutiny in adjudicating whether a level of discrimination is permissible depending on how legitimate and critical the local purpose is, and whether or not there are reasonable non-discriminatory means available to attain the same purpose. Under this test, the court will apply its own rational basis review and will not be deferential to the empirical findings of the state legislature. Under 2) the court will balance the local benefit against the burden on I/C, and be much more deferential to the state interest.

Even reasonably attenuated forms of discriminatory law will trigger strict scrutiny. A state law that heavily burdens interstate commerce while only marginally furthering a state health and safety purpose is unconstitutional. Iowa law prohibited in most cases the use of semi and twin trailer trucks longer than 55 feet. Freightways Corp preferred using longer trucks and did not want to go around the state or detach the trailers at the border. Iowa said law was for safety but district court concluded there was no difference in safety between a semi truck and twin truck. Cited Raymond Motor Transportation Inc v Rice (1978) that if safety benefit in reducing accidents is so slight and is outweighed by the burden to commerce, state law is unconstitutional.

Market participant exception (noting that other exception is Congressional approval). But narrowly tailored to actual market state is operating in. “A state may impose burdens on commercial transactions within the market in which it is a participant, but may not go further and impose conditions that have a substantial regulatory effect outside of that particular market.” Alaska dept sold timber from state land but required as a condition that the timber be processed in state in order to give in state private businesses business. Court held this exceeded the scope of the market participant exception because it was acting more than merely a seller of timber in attempting to regulate timber processing.

Facts not given. Concurrence of Scalia why he doesn’t like dormant commerce clause, but will uphold it based on precedent/stare decisis. Thomas doesn’t like dormant commerce at all and believes it interferes with Congress’s authority to make policy decisions about commerce. Not the courts’ job. Facts related to two NY state counties forming a joint waste management authority. Passed ordinance that favored govt but treated in state and out of state private businesses the same. Court held not a violation of dormant commerce clause.