Federal Limits on State Regulation of Interstate Commerce

Focus now on limits on State powers that flow from National Concerns

Art. I restraints on State regulation of commerce arise in 2 (or 3) situations:

Dormant Commerce Clause: congress is silent; it has taken no action, express or implied, to make fed policy on a given subject matter

Congress HAS exercised the commerce power, and the challenge to inconsistent State action rests both on the exercise of the commerce power under Art. I, §8, cl.3 and the PREEMPTIVE effect of fed legislation under the Supremacy clause

Privileges & Immunities Clause: “guarantees citizens of each state ALL privileges & immunities of citizens of the several states.

It bars certain state legislation that discriminates against out-of-state economic interests

Section 1. The Dormant Commerce Clause

Art. I. §10 bars States from imposing duties on imports or exports in foreign commerce w/o congress’ approval

But the text of the constitution nowhere expressly divests the States of power to regulate interstate commerce…It has been INFERRED.

Gibbons v. Ogden

Marshall: discussed (in dicta) the possibility that NY may not have the authority to regulate interstate ship traffic in the 1^st place, thus sketching his view of the negative implications of the Commerce Clause for State authority over commerce:

Gov argues: the full power to regulate a certain subj. implies plenary power and leaves no residuum, that a grant of the whole is incompatible w/ the existence of a right in another to any part of it.

Nascent Dormant Commerce Clause:

Marshall noted that even if the national commerce power was exclusive, it still coexisted w/ state power to enact legislation that may affect commerce (ie. health, safety and welfare regulation of imported good, under the police power)

Ex: goods imported into a State might be both the subj. of Federal commercial regulation and also of State health regulation if the goods are “a vehicle of disease”

Wilson v. Blackbird

Marshall’s “police”-“commerce” distinction:

Delaware law authorized the Black Bird Co. to build a damn across a navigable steam, which flowed into the Delaware River (and other states)

Wilson was the owner of a sloop licensed under Fed laws. The Sloop “broke & injured” the co.’s damn in order to pass through the creek

Opinion; the value of the prop on the creek is enhanced by excluding the waters & health of the inhabitants is improved

“MEASURES CALCULATED TO PRODUCE TO OBJECTS (HEALTH), AS LONG AS THEY DON’T COME INTO COLLISSION W/ THE POWERS OF THE FED GOV., ARE UNDOUBTEDLY W/IN THOSE RESERVED TO THE STATES.

3 MODERN CATEGORIES OF DORMANT COMMERCE CLAUSE CHALLENGES

The court focuses on the form & purpose of state law

State laws that “facially discriminate” against out-of-state commerce are almost always struck down under a virtually per se rule of invalidity (STRICT SCRUTINY)

“the very purpose of the commerce clause was to pretect against discriminating State legislation”

State laws that are “facially neutral” as between in state & out-of-state interests but have an “impermissibly protectionist purpose or effect” are also typically invalidated on the ground that they in fact favor local econ. Interests at the expense of out-of-state competitors

State laws that are facially neutral but that have a “disproportionate adverse effect” on IC may also be struck down, under the Pike v. Bruce Church balancing test: (PURPOSE v. BURDEN)

“where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on IC are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits”

If a legitimate local purpose is found, then the question is one of degree. And the extent of the burden that will be tolerated will depend on the NATURE of the local Interest, and on whether it could be promoted as well w/ a lesser impact on IC”

FACIAL DISCRIMINATION AGAINST OUT-OF-STATE COMMERCE

Philadelphia v. NJ

NJ law prohibited importation of trash that originated or was collected out of the state

Law challenged by NJ landfillers & other states

NJ argued health & safety and not economic protectionism

Ct. Held: ‘incidental burdens on IC may be unavoidable when a State legislates to safeguard its peoples health, but where simple economic protectionism is effected by state laws, a virtually per se rule of invalidity applies (no basis to distinguish between the health hazards created by NJ waste vs. other states waste)

YOU CAN’T ISOLATE A STATE FROM NATIONAL COMMERCE

A STATE IS W/O POWER TO PREVENT PRIVATELY OWNED ARTICLES OF TRADE FROM BEING SHIPPED & SOLD IN IC ON THE GROUND THEY ARE REQUIRED TO SATISFY LOCAL DEMANDS OR CAUSE THEY ARE NEEDED BY THE PEOPLE OF THE STATE

The evil of protectionism can lie in the means as well as the ends

Theories behind the Invalidating Facial Discrimination

Protectionist Purpose is illegitimate. Protectionist purpose is the purpose of improving the competitive position of local economic actors just b/c they are local, vis-à-vis their foreign competitors

Social Welfare-national social welfare will be maximized by inhibiting each state’s incentives to maximize own welfare. The economic unit is the Nation. Helps foster total prosperity

Representation Reinforcement- state regulation is inherently lacking in political safeguards of the national interest; out-of-staters have no rep in the making of laws against them.

NOTE: the rule of presumed invalidity doesn’t strike down all laws, quarantine laws are usually upheld

Ex. Maine v. Taylor: upheld law banning the importation of out-of-state baitfish cause had legitimate environmental purpose,( parasites)

State Hoarding of Natural Resources

Hughes v. Oklahoma

Ct. held invalid an OK law forbidding any person to “transport or ship minnows for sale outside the state which were born/raised w/in OK waters

OK failed to resort to...

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