Constitutional Law I

Dormant Commerce Clause II

Nov. 17, 2004

Fall, 2004 con Law I - Manheim 2

Intentional DiscriminationWest Lynn Creamery v. Healy (1994) Retaliation anybody?

Mass tax on fluid milk products (in- and out-state); proceeds are distributed to in-state producers

Discriminatory? Tax is uniform, assessed on all producers, thus valid

In-state interests (w/ vote) protect against abuses Virtual voice theory of representation

State subsidies restricted to in-staters are also valid Payment by state taxpayers creates political check

Combination lack of transparency and political oversight Purpose and effect is to change mix of IC in milk

Fall, 2004 con Law I - Manheim 3

Unintentional Discrimination

Minn. v. Clover Leaf Creamery (1981) Prohibition on plastic nonrecyclable containers

Stated purpose: health & safety (solid waste mgmt) DC finds: economic protectionism

Discrimination against out-state commerce? Neutral:

Dairy industry; presumably can adjust easily Losers:

Plastics industry (slightly, only wrt nonrecyclable bottles) Winners:

Cardboard industry; a major Minnesota product But out-state pulpwood firms can pick up slackDCC protects

I/S commerce not industries Test: Does law necessarily cause a shift in

business from out-state to in-state firms?

Fall, 2004 con Law I - Manheim 4

Standard of ReviewDean Milk v. Madison (1951) City ordinance requires milk pasteurization

within 5 miles of city and production within 25 miles Is the law discriminatory (intentional or unintentional)?

Discrimination against IC is protectionist unless no non-discriminatory alternative is available to achieve a legitimate local interest What legitimate local interest at stake?

Healthy milk, verified by inspection Does it require 5/25 mile restrictions?

Uniform inspection available

Fall, 2004 con Law I - Manheim 5

Rule in DCC cases

Fall, 2004 con Law I - Manheim 6

Standard of ReviewMaine v. Taylor (1986) Maine prohibits import of live baitfish

Discrimination against IC (intentional/unintentional)? What standard of review?

No non-discriminatory alternatives that adequately protect legitimate local interests

Legitimate local interests Protection of fisheries industry

Non-discriminatory alternatives? Imported fish introduce parasites; non-native species

can upset delicate ecological balance Experts: no suitable inspection means

Fall, 2004 con Law I - Manheim 7

Standard of ReviewMaine v. Taylor (1986) How strict is “strict scrutiny”

Who bears the burden of proof? What result when “substantial scientific

uncertainty” Can state guard against “imperfectly understood

environmental risks”? Does Ct. adopt the precautionary principle?

“If there is reason to doubt the safety of an action, don’t do it. In the absence of scientific certainty, err on the side of precaution”

Or the uncertainty principle? Maine Fish Health Issues Website

Fall, 2004 con Law I - Manheim 8

Extra-Territorial EffectCTS Corp v. Dynamics Corp (1987) Indiana anti-hostile takeover statute

regulates tender offers for Indiana corporations most tender offers originate from out of Indiana does law regulate out-of-state commercial activity?

Rule: State laws cannot have direct extra-territorial effect (operate out-of-state) Can’t regulate foreign economic activity

Baldwin v. G. A. F. Seelig: New York law regulates wholesale prices of milk purchased in-state. OkOk

Also prohibits retail sale of imported milk unless wholesale price paid (out-of-state) is as high as NY

Fall, 2004 con Law I - Manheim 9

Extra-Territorial EffectRule: State laws cannot have direct extra-territorial effect (operate out-of-state) Can’t regulate foreign economic activity

Edgar v. MITE Corp (1982): Illinois reviewed sale of stock occurring out-of-state to see if met state stds.

Brown-Forman v. NY (1986); Healy v. Beer (1989): Most-favored-nation trading status: Could not sell in-state for more than lowest price sold out-of-state.

Can regulate in-state economic activity, even w/ incidental impact out-of-state E.g. foreign goods sold in-state must meet standards Tender offers (wherever made) must meet standards

Fall, 2004 con Law I - Manheim 10

Bringing it all HomePike v. Bruce Church (1970) Arizona law requires Ariz. cantaloupes to be

packed in-stateDiscriminatory? Facial: Ariz. growers may need to build plants

Only in-state firms burdened; not a DCC problem Effect: enhance reputation of Ariz. growers

Yes, but doesn’t affect mix of ICBurdensome? Yes, but all police power regs impose burden Is the burden justified?

Fall, 2004 con Law I - Manheim 11

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

discrimination against ICexercise of police not commerce power

direct vs. indirect effect

balancing of interests - even indirect effects can be too great

Fall, 2004 con Law I - Manheim 12

Pike TestWhere the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce 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 becomes one of degree …

can the local interst be promoted as well with a lesser impact on IC?

are these questions judicial or legislative in

character?