Law Review Fall 2014

Fowl Play: The Potential Repercussions of the Supreme Court’s Denial of Certiorari in Ass’n des

Eleveurs de Canards et D’oies du Quebec v. Harris

Patrick McManus

On October 14, 2014 the Supreme Court of the United States denied a writ of certiorari to

hear Ass’n des Eleveurs de Canards et D’oies du Quebec v. Harris from the Ninth Circuit Court

of Appeals.1 That denial was part of a trend in Supreme Court jurisprudence that shows

increasing deference toward state legislation: the Court recently has refused to hear several cases

that involve state laws that regulate commerce in other states, or (when it has decided to hear

such cases) has limited the power of the Dormant Commerce Clause to strike down state laws.2

This Note will explain the significance of the Harris case and will argue that the Supreme Court

should have granted certiorari to resolve the important issue involved in this case. The Note also

will describe the potential effects that the Court’s denial will have on Dormant Commerce

Clause jurisprudence, interstate commerce, and federalism generally.

Part I of this Note provides background on the Dormant Commerce Clause and explains

why the clause often strikes down state laws that regulate commerce outside of a state’s borders.

In this respect, the Note will provide a brief history of the Dormant Commerce Clause and

explain the clause’s importance to this country’s federal system. Part II of this Note will

introduce the statute at issue, California Health & Safety Code Section 25982, and will describe

that statute’s effects on interstate commerce. Part II will then discuss the factual background and

the procedural history of the Harris case. Part III challenges the Supreme Court’s denial of

1 Ass’n des Eleveurs de Canards et D’oies du Quebec v. Harris, Lexis 6979 (U.S. Oct. 14, 2014).2 See Brannon P. Denning, Extraterritoriality and the Dormant Commerce Clause: A Doctrinal Post-Mortem, 73 LA. L. REV. 979, 979 (2013).

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certiorari in Harris. This section will explain why the Court should have heard the Harris case

and why this case presented the Court with a superb opportunity to provide certainty to Dormant

Commerce Clause jurisprudence. Finally, Part IV will suggest the ruling that the Court should

have made on the merits of the case. This section also considers the implications of the Court’s

denial on interstate commerce and federalism. Specifically, this section will argue that by

denying certiorari in this case, the Supreme Court opened the door for states to utilize unfair

practices in order to control production methods in other states and erect barriers that limit

interstate trade.

I. What is the Dormant Commerce Clause and Why is it Important?

Before the United States adopted the Constitution, the Articles of Confederation

governed our nation.3 A few scholars have referred to the Articles of Confederation as “a ‘mere

treaty’ between sovereign states.”4 The Articles of Confederation established a federal system,

but one which differed significantly from the United States’ current federal system, in that the

federal government depended on the states as a source of authority.5 Under the federal system

that the Articles of Confederation established, the states passed many self-protective tariffs that

resulted in “a confusing and conflicting skein of commercial regulations that lacked any

coordination.”6 Also, during this early period, many states passed laws that discriminated

against commerce in other states.7 For example, in 1781, the Virginia General Assembly passed

an act that taxed all goods or products imported into Virginia from any other state.8 In many 3 Primary Documents in American History - The Articles of Confederation, THE LIBRARY OF CONGRESS, http://www.loc.gov/rr/program/bib/ourdocs/articles.html (last visited Nov 20, 2014).4 Douglas G. Smith, An Analysis of Two Federal Structures: The Articles of Confederation and the Constitution, 34 SAN DIEGO L. REV. 249, 263-64 (1997).5 Id. at 255.6 Brannon P. Denning, Confederation-Era Discrimination Against Interstate Commerce and the Legitimacy of the Dormant Commerce Clause Doctrine, 94 KY. L.J. 37, 46 (2005-2006).7 Id. at 59-60. Professor Denning noted that seven states discriminated against commerce in other states while the Articles of Confederation governed the country. Id. at 60. Some of the states the discriminated against other states included Virginia, New York and Massachusetts. Id. at 60-64.8 Id. at 60-61.

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cases, one state’s discriminatory laws created rivalries that caused other states to discriminate

against that originating state.9

The federal government, under the Articles, did not have the power to regulate commerce

among the states.10 Accordingly, the states often promoted policies that served their own local

interests and demonstrated little concern regarding how their policies affected other states.11 In a

landmark case, Justice William Johnson stated that the rivalries between the states were some of

the most significant problems that led to the drafting of the United States Constitution.12 That

concern, which was incredibly important to the framers of the Constitution,13 seems to have been

undervalued in recent years by the Court’s interpretation of the Dormant Commerce Clause.14

The framers of the Constitution wanted to prevent states from passing discriminatory

laws that hindered interstate trade.15 The Interstate Commerce Clause was intended to prevent

states from passing discriminatory laws that would lead to “balkanization.”16 Balkanization arises

when states pass discriminatory laws that burden interstate commerce to such a degree that states

can no longer trade freely with each other.17 As the Supreme Court of the United States has

recognized, this was a primary concern which lead to drafting the Interstate Commerce Clause.18

The few simple words of the Commerce Clause . . . reflected a central concern of the Framers that was an immediate reason for calling the Constitutional Convention: the conviction that in order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations

9 Id. at 60.10 Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 571 (1997).11 Id.12 Gibbons v. Ogden, 22 U.S. 1, 231 (1824) (Johnson, J., concurring).13 See Id.14 See Brannon P. Denning, Extraterritoriality and the Dormant Commerce Clause: A Doctrinal Post-Mortem, 73 LA. L. REV. 979, 979 (2013).15 Hughes v. Oklahoma, 441 U.S. 322, 325 (1979).16 Id.17 See H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 554 (1949) (Black, J., dissenting).18 Hughes, 441 U.S. at 325.

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among the Colonies and later among the States under the Articles of Confederation.19

The Dormant Commerce Clause does not explicitly appear within the text of the

Constitution, but rather is implied from the Constitution’s Commerce Clause.20 The Commerce

Clause grants Congress the power “to regulate Commerce with foreign Nations, and among the

several States, and with the Indian Tribes.”21 The Supreme Court has interpreted this provision

not only to grant Congress the affirmative power to regulate commerce between the states but

also to allow the federal government to prevent states from discriminating against interstate

commerce.22

The Supreme Court has adopted a two-pronged approach to analyze state regulation

under the Dormant Commerce Clause.23 If a state statute directly regulates or discriminates

against interstate commerce (meaning the statute favors in-state actors or products over out-of-

state actors or products) then the law generally will be unconstitutional.24 If the statute treats in-

state and out-of-state actors or products equally and affects interstate commerce indirectly, then

the Court takes a different approach, examining whether the statute furthers a legitimate state

interest and whether the burdens imposed on interstate commerce are clearly excessive of the

local benefits.25

The Dormant Commerce Clause prevents states from engaging in “economic

protectionism.”26 Economic protectionism involves enacting legislation that favors domestic

19 Id.20 See U.S. CONST. ART. I SEC. 8 CL. 3; City of Philadelphia v. New Jersey, 437 U.S. 617, 623 (1978); ERWIN CHEMERINSKY, CONSTITUTIONAL LAW, 450, (Wolters Kluwer, 3d ed. 2009).21 U.S. CONST. ART. 1 SEC. 8 CL. 3.22 Department of Revenue of Ky. V. Davis, 553 U.S. 328, 337 (2008); New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 273 (1998).23 Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 578-79 (1986).24 Id.25 Id. (citing Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)).26 City of Philadelphia, 437 U.S. at 623-24.

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industry (state businesses) over foreign competition (competition from other states) by placing

restrictions on foreign imports.27 A state law that promotes economic protectionism is

unconstitutional per se.28

In some cases, state laws that regulate commerce outside of the state’s borders may also

be considered unconstitutional for violating the Dormant Commerce Clause.29 Such statutes will

be unconstitutional even if they regulate commerce that has effects within the state.30 The

Supreme Court has stated that “[a] statute that directly controls commerce occurring wholly

outside the boundaries of a State exceeds the inherent limits of the enacting State’s authority and

is invalid regardless of whether the statute’s extraterritorial reach was intended by the

legislature.”31 In cases dealing with those types of state statutes, the Court must ask whether the

state law has the practical effect of controlling conduct beyond the state’s borders.32 In this sense,

the Dormant Commerce Clause also prevents a state from projecting its “regulatory regime into

the jurisdiction of another State.”33 The Court also should determine the consequences of other

states adopting similar statutes.34 The latter question adds to the principle that the Dormant

Commerce Clause seeks to bar inconsistent or conflicting legislation among the states.35

The Dormant Commerce Clause prevents some of the problems that led to the

Constitution’s adoption by prohibiting state governments from engaging in unfair economic

competition and imposing barriers on interstate trade.36 Without this doctrine, states would be

27 Protectionism, ENCYCLOPEDIA BRITANNICA, http://www.britannica.com/EBchecked/topic/479643/protectionism (Last visited Nov 20, 2014).28 City of Philadelphia, 437 U.S. at 624.29 Healy v. Beer Inst., 491 U.S. 324, 336 (1989).30 Id.31 Id. (alteration added).32 Id.33 Id.34 Id.35 Id. at 337.36 See Hughes, 441 U.S. at 325.

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able to obstruct interstate trade to achieve their own domestic objectives; interstate commerce

would lie in ruin. Thus, the dormant commerce clause must strike down certain state laws in

order to preserve the country’s federal system and interstate trade network. As this Note will

discuss, allowing states to pass discriminatory laws that place burdens on Interstate Commerce

may lead to disastrous consequences for this country’s federal system and interstate trade

network. The Dormant Commerce Clause, if applied properly, can help prevent those disastrous

consequences.

II. The Harris Case

A. The State Law at Issue

The Harris case arose with the enactment of California Health & Safety Code Section

25982, which bars the sale of any product in California that was produced from force feeding a

bird to enlarge its liver.37 The statute may seem strange and even trivial at first, but it has a

significant effect on a food product called foie gras.

Foie gras is the product of over-feeding a duck or goose to enlarge its liver.38 Foie gras is

a specialty food item that is “produced using the French method of gavage, which is the force-

feeding of those fowl that have been targeted for fattening of their otherwise small livers.”39

California Health & Safety Code Section 25982 effectively bans the sale of foie gras in

California because it prohibits products that are produced from over-feeding a bird. Governor

Arnold Schwarzenegger signed California Senate Bill 1520 which added Section 25982 to the

California Health & Safety Code on September 29, 2004.40

37 CAL. HEALTH & SAFETY CODE § 25982 (2014). The statute states that, “(a) product may not be sold in California if it is the result of force feeding a bird for the purpose of enlarging the bird’s liver beyond normal size.” Id. (alteration added).38 CECIL C. KUHNE III, THE LITTLE BOOK OF FOODIE LAW, 13 (American Bar Association 2012).39 Id.40 Ass’n des Eleveurs de Canards et D’oies du Quebec, et al. v. Harris, No. 2:12-cv-05735-SVW-RZ, 3 (C.D. Cal. Sept. 28, 2012).

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B. The Case’s Factual Background

The plaintiffs in the Harris case consisted of three entities that sold duck products,

including foie gras.41 Association des Eleveurs D’oies du Quebec (“Association”) and Hudson

Valley Foie Gras, LLC (“Hudson Valley”) are non-California companies that raise ducks and sell

foie gras.42 The third plaintiff, Hot’s Restaurant Group, Inc., was a California restaurant that sold

foie gras before Section 25982 went into effect.43

The Association and Hudson Valley raise Moulard ducks.44 The ducks eat pellets that are

available to them for either twenty-four hours a day or at more limited times for the first ten to

fourteen weeks of the ducks’ lives.45 During the final stage of the feeding process, gavage,

which lasts between ten and thirteen days, feeders place a tube down the ducks’ esophagus to

deliver the feed directly to the ducks’ crop sac.46

The Association is based in Quebec.47 The Association produces and exports almost all

foie gras products in Canada and it accounts for all of the imports of foie gras in the United

States.48 Hudson Valley operates in New York and is the largest producer of foie gras products in

the United States.49 The plaintiffs have argued that Section 25982 has caused the Association to

lose about $100,000 a month, Hudson Valley to lose about $250,000 a month, and Hot’s

Restaurant to lose about $6,000 of income a month because these entities cannot sell foie gras in

California.50

41 Ass’n des Eleveurs de Canards et D’oies du Quebec v. Harris, 729 F.3d 937, 941-42 (9th Cir. 2013).42 Id.43 Id.44 Id. at 942.45 Id.46 Id.47 Ass’n des Eleveurs de Canards et D’oies du Quebec, et al. v. Harris, No. 2:12-cv-05735-SVW-RZ, 3 (C.D. Cal. Sept. 28, 2012).48 Id.49 Id.50 Id. A brief accounting shows that the three plaintiffs stand to lose a combined amount of about $5,000,000 a year because of Section 25982.

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C. The Case’s Procedural History

On July 2, 2012, the plaintiffs filed a complaint in the Federal District Court for the

Central District of California, alleging that Section 25982 was unconstitutional because, among

other things, it violated the Dormant Commerce Clause.51 On August 21, 2012, the plaintiffs

filed a motion for a preliminary injunction to enjoin the state of California from enforcing

Section 25982.52

Using the standard set forth in Winters v. National Resource Defense Council, Inc.,53 the

district court considered whether the plaintiffs were entitled to a motion for a preliminary

injunction.54 As to the first factor of the Winters test, the district court decided that the plaintiffs

were likely to suffer irreparable harm if a preliminary injunction was not granted because Section

25982 had caused all three businesses to lose revenue, and these plaintiffs could not recover this

lost revenue from the state even if they prevailed at trial.55

Under the second factor from Winters, however, the district court found that the plaintiffs

probably would not succeed on the merits of their Dormant Commerce Clause claim for several

reasons.56 First, the court held that Section 25982 did not discriminate against interstate

commerce because the statute treated in-state and out-of-state foie gras producers equally: the

statute banned all products produced from overfeeding a bird, regardless of state of origin.57

Also, the statute did not give consumers an incentive to purchase California foie gras rather than 51 Id. The plaintiffs also argued that the statute was unconstitutionally vague and was pre-empted by the Federal Poultry Products Inspection Act, but those arguments are outside of this Note’s scope. Id. 52 Id.53 Winters v. National Resources Defense Council, Inc., 555 U.S. 7 (2008). Winters established in order to obtain a preliminary injunction;, a plaintiff must show that he is likely to succeed on the case’s merits, that he is likely to suffer irreparable harm without the preliminary injunction, granting the injunction favors public interest, and the balance of the equities is in his favor. Id. at 19-27.54 Ass’n des Eleveurs de Canards et D’oies du Quebec, et al. v. Harris, No. 2:12-cv-05735-SVW-RZ, 5 (C.D. Cal. Sept. 28, 2012).55 Id. at 7-8. The plaintiffs could not recover even if they won the case because California’s Eleventh Amendment immunity prevented recovering lost profits. Id.56 Id. at 23-27.57 Id. at 18-19.

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out-of-state foie gras.58 In addition, the court deemed the plaintiffs unlikely to succeed on the

merits because Section 25982 did not directly regulate interstate commerce.59 Citing Healy v.

Beer Inst., Inc.,60 the court noted that a state statute has the practical effect of regulating interstate

commerce if it controls conduct outside of the state.61 However, the court interpreted that rule

only to apply to state statutes that force people who want to conduct business outside the state to

comply with the challenged statute.62 Those types of statutes prohibit people or businesses from

adhering to the statute while also conducting an activity in another state.63 The court

disapproved of statutes which forced people or businesses to choose between conducting activity

in one state and adhering to the statute.64

According to the district court, California Health and Safety Code Section 25982 did not

require an individual or business to choose between force feeding a bird in another state or

adhering to the statute, so the statute did not directly regulate interstate commerce.65 While the

plaintiffs argued that Section 25982 had the practical effect of forcing out-of-state farmers to

follow California law when producing foie gras, the court held that state laws only directly

regulate interstate commerce if they force businesses to choose between taking an action in one

state and obeying to the challenged law, which Section 25982 did not do.66

Finally, in determining whether the plaintiffs’ claim was likely to succeed on the merits,

the Court ruled that Section 25982 did not violate the Dormant Commerce Clause under the Pike

v. Bruce Church test.67 That test examines both the burden imposed on interstate commerce by

58 Id. 59 Id. at 22-23.60 Healy v. Beer Inst., 491 U.S. 324, 336 (1989).61 Id. at 21 (citing Healy, 491 U.S. at 336).62 Id. at 21.63 Id.64 See Id. at 21-23.65 Id. at 21-23.66 Id.67 Id. at 24-27.

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state legislation and the state’s interest in enacting such legislation.68 According to the Court, the

plaintiffs had overestimated their claimed losses (estimated at about $5,000,000 per year)

because those estimated losses included losses due to inability to sell foie gras and other duck

products.69 While Section 25982 barred the sale of foie gras in California (if produced from

over-feeding), the statute did not bar the sale of other duck products, so the plaintiffs likely

would not have lost $5,000,000 a year.70 Moreover, the Court held that California had a

legitimate state interest in preventing animal cruelty.71 Therefore, the burdens on interstate

commerce were not clearly excessive of the state benefits, rendering Section 25982 a valid

statute.72

The district court also decided that the two other Winters factors weighed against

granting a preliminary injunctions for the plaintiffs.73 First, the balance of equities did not tip in

the plaintiffs’ favor because, as discussed above, the plaintiffs had overestimated their potential

losses.74 Second, the public interest did not weigh in the plaintiffs’ favor because of a “direct

correlation between economic losses imposed on plaintiffs and other sellers by Section 25982

and the number of birds that will not be force-fed.”75 Stated another way, preventing birds from

being force fed is a desirable outcome for the public, and fewer birds would be force fed if foie

gras producers suffered economic losses. So, the public interest encouraged the plaintiffs losing

money in order to deter force feeding birds.

68 Bruce Church, 397 U.S. at 142.69 Id.70 Id.71 Id.72 Id.73 Id. at 28-29.74 Id. at 28.75 Id. at 29.

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Accordingly, after examining all of these factors, the district court denied the plaintiffs’

motion for a preliminary injunction.76 The plaintiffs appealed to the United States Court of

Appeals for the Ninth Circuit, which agreed with the district court that the plaintiffs were not

entitled to a preliminary injunction, but offered different reasoning than that of the district court

on a few of the issues.77 While the Ninth Circuit concluded that Section 25982 did not

discriminate against Interstate Commerce or substantially burden Interstate Commerce for the

same reasons as the district court, the court applied different reasoning regarding whether

Section 25982 controlled conduct in other states.78

First, when discussing whether the plaintiffs were likely to succeed on the merits, the

Ninth Circuit held that Section 25982 did not directly regulate commerce in other states because,

among other reasons, it was not a price affirmation statute.79 According to the Ninth Circuit,

previous Supreme Court cases only bar state statutes that control conduct outside the state if the

statutes are price affirmation statutes.80 Moreover, the Ninth Circuit deemed the plaintiffs’ fears

that Section 25982 would result in balkanization to be merely speculative.81

The court also stated two other reasons for why the statute did not directly regulate

interstate commerce.82 First, the Court ruled that because Section 25982 did not target out of state

entities, it did not seek to directly regulate interstate commerce.83 Second, the court also ruled

that because Section 25982 did not completely ban the sale of foie gras in California, it did not

seek to directly regulate interstate commerce.84 The court noted that the statute prohibited the

76 Id.77 Harris, 729 F.3d at 948-52.78 Id.79 Id. at 949-951.80 Id. at 950-51.81Id. at 951.82 Id. at 949-51.83 Id. at 949.84 Id. at 949-50.

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plaintiffs from using a preferred method of production, but did not prevent them from producing

foie gras altogether.85 The court determined that while the statute may have prohibited a

profitable method of foie gras production, the Dormant Commerce Clause does not ensure that a

business will be able to utilize its preferred production methods.86

In April 2014, the plaintiffs filed a petition for a writ of certiorari to the Supreme Court of

the United States.87 On October 14, 2014 the Supreme Court denied the plaintiffs’ petition for a

writ of certiorari.88 For various reasons, the Supreme Court erred in denying certiorari.

III. Why the Supreme Court Should Have Granted Certiorari

A. Supreme Court Cases that Involve State Laws Regulating Conduct in Other

States are Inconsistent and Confusing for Lower Courts to Apply

One of the reasons why the Supreme Court should have granted certiorari in this case

involves the inconsistency that exists among lower courts with respect to this area of Dormant

Commerce Clause jurisprudence. In cases such as Healy v. Beer Institute, Inc. and Brown-

Forman Distillers Corp. v. New York State Liquor Authority, the Court held that two state

statutes which regulated commerce occurring outside of the state’s borders were

unconstitutional.89 The Court used broad, general language in these cases, holding that state

statutes that have the practical effect of controlling commerce in other states violate the Dormant

Commerce Clause.90 However, in Harris, the Ninth Circuit seemed to limit the scope of Dormant 85 Id. 86 Id.87 Petition for Writ of Certiorari No. 13-1313, LEXIS 1693 (U.S. 2014)88 Ass’n des Eleveurs de Canards et D’oies du Quebec v. Harris, Lexis 6979 (U.S. Oct. 14, 2014).89 See Healy, 491 U.S. 324 at 336; Brown-Forman, 476 U.S. 573 at 582.90 Id.

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Commerce Clause jurisprudence, holding that Section 25982 did not directly regulate interstate

commerce because it was not a price affirmation statute.91 Thus, it remains unclear whether the

rules from Healy and Brown-Forman only apply to price affirmation statutes, or whether they

apply to all statutes that regulate commerce in other states.

Healy and Brown-Forman both involved state price affirmation statutes.92 A “price

affirmation” statute requires producers to guarantee that the price charged for an item will be at

least as low as the price charged for that same item in another state.93 For example, in Healy, a

Connecticut statute required all out-of-state beer shippers to confirm that the prices they posted

for beer for Connecticut wholesalers were (when posted) no higher than the prices the shippers

posted for the same products in New York, Rhode Island, and Massachusetts.94 The Connecticut

statute forced out-of-state beer shippers to charge Connecticut wholesalers at least the same

amount that the shippers charged similar wholesalers in bordering states.95 In Brown-Forman, a

New York statute required every liquor producer that sold liquor to wholesalers in New York to

sell liquor for a price that was no higher than the liquor’s lowest price anywhere else in the

country.96

In both of these cases, the Court held that the price affirmation statutes violated the

Dormant Commerce Clause because those types of statutes controlled conduct in other states.97

However, both decisions contained general language with respect to state laws regulating

conduct in other states; neither case stated that only price affirmation statutes that regulated

91 Harris, 729 F.3d at 950-51.92 See Healy, 491 U.S. 324 at 326-330; Brown-Forman, 476 U.S. 573 at 576.93 WARD A. GREENBERG, Liquor Price Affirmation Statutes and the Dormant Commerce Clause, J-STOR, JSTOR.ORG/STABLE/1288825 (last visited Nov. 20, 2014).94 Healy, 491 U.S. at 326-330.95 Id.96 Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 575 (1986).97 See Id. at 583-84; Healy, 491 U.S. at 336.

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commerce in other states would violate the Dormant Commerce Clause.98 Moreover, an earlier

case, Edgar v. MITE Corp.,99 stated that the Dormant Commerce Clause prohibited state statutes

from regulating commerce in other states.100 That case, unlike Healy and Brown-Forman, did not

involve a price affirmation statute; it involved the Illinois Business Take-Over Act.101 The

Illinois Business Take-Over Act required a company, under certain circumstances, to register an

offer to take over another company with the Illinois Secretary of State if certain conditions

existed.102 The Supreme Court declared that the Act violated the Dormant Commerce Clause

because it attempted to regulate interstate commerce in other states, since the law affected

shareholders of companies who lived outside of Illinois.103 Thus, the Court in Edgar utilized the

Dormant Commerce Clause to strike down a state statute that regulated commerce outside of the

state, even where the statute at issue was not a price affirmation statute.104

Reviewing Edgar in conjunction with some of the general language in Healy and Brown-

Forman seems to imply that any state statute that attempts to regulate commerce outside of the

state’s borders violates the Dormant Commerce Clause. Each case contains language that

condemns any state statute that seeks to control commerce in other states, not just price

affirmation statutes. Yet, given the Ninth Circuit’s holding in Harris that Section 25982 did not

regulate conduct in other states because it was not a price affirmation statute, this area of

jurisprudence remains uncertain.

A 2003 Supreme Court case may be responsible for the Ninth Circuit’s view that the

Dormant Commerce Clause only strikes down state price affirmation statutes (and not other

98 See Healy, 491 U.S. at 336; Brown-Forman, 476 U.S. 573 at 583-584.99 Edgar v. MITE Corp, 457 U.S. 624 (1981).100 Id. at 642-43.101 Id. at 626.102 Id. at 642-43.103 Id.104 See Id.

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types of statutes) that regulate commerce outside of the state.105 In Pharm. Research & Mnfrs. of

Am. v. Walsh,106 the plaintiffs, an association of drug manufacturers, challenged a Maine statute

that provided discounts on prescription drugs to uninsured Maine citizens.107 The Court held that

because this statute did not regulate the price of any transaction occurring outside Maine, require

manufacturers to sells drugs for a certain price, or tie the price of in-state products to out-of-state

price, the Healy rule (i.e. state statutes that control conduct outside of the state are

unconstitutional) did not apply.108 Yet, while some have interpreted Walsh to hold that the Healy

rule does not apply to any statutes that do not regulate prices,109 a closer reading of the Court’s

opinion shows that interpretation is false. While the Walsh Court stated that the rule from Healy

did not apply to that particular case, the Court never stated that the Healy rule would only apply

to cases that involved price affirmation statutes.110 In other words, the Court decided that the

Healy rule did not apply to a case that did not involve a price affirmation statute, not to all cases

that do not involve price affirmation statutes.111

Why did the Court in Walsh ignore the language from three Supreme Court cases (Healy,

Brown-Forman, and MITE), each of which supported the broad idea that state statutes which

regulate conduct in other states violate the Dormant Commerce Clause?112 Walsh is confusing at

best; the case seems to reject at least three prior cases that provided a clear standard to apply to

state laws that regulated commerce outside of the state, without providing any guidance of its

own on the issue.

105 See Pharm. Research & Mfrs. Of Am. v. Walsh, 538, U.S. 644 (2003).106 Pharm. Research & Mfrs. Of Am. v. Walsh, 538, U.S. 644 (2003).107 Id. at 649.108 Id. at 669.109 See Appellee’s Brief at *12, Ass’n des Eleveurs de Canards et D’oies du Quebec v. Harris, 729 F.3d 937 (9th Cir. 2013), 2014 U.S. S. Ct. Briefs Lexis 2433.110 See Id. at 669.111 See Id.112 See Brannon P. Denning, Extraterritoriality and the Dormant Commerce Clause: A Doctrinal Post-Mortem, 73 LA. L. REV. 979, 992 (2013).

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This confusion also has affected lower courts. For example, the Ninth Circuit and the

United States District Court for the District of Columbia have rendered opposite conclusions

regarding whether the Dormant Commerce Clause strikes down any state law that regulates

commerce outside of the state or only such state statutes that control prices.113 In Harris, as

previously discussed, the fact that Section 25982 was not a price affirmation statute was a major

reason for why the Ninth Circuit did not declare the statute unconstitutional.114 In Pharm.

Research & Mfrs. v. District of Columbia,115 in contrast, the United States District Court for the

District of Columbia struck down a District of Columbia statute that banned drug manufacturers

from selling, supplying, or imposing minimum resale requirements to a patented prescription

drug if such an action caused the drug to be sold at an excessive price in the District of

Columbia.116 While the case technically involved a statute that dealt with prices,117 it was not a

price affirmation statute; in that the statute did not require out-of-state shippers to affirm that the

prices of the products sold in the District of Columbia were no higher than the same products in

other states.118 The Court did not mention price affirmation statutes at all in rendering its

decision.119 Instead, the Court turned to the general rules from Healy and Brown-Forman, finding

that the challenged statute did directly regulate commerce outside of the District of Columbia

and was thus unconstitutional.120 Also, the Court noted that the critical question asked in cases

113 See Harris, 729 F.3d 937; Pharm. Research & Mfrs. of Am. 406 F.Supp. 2d 56.114 Harris, 729 F.3d at 950-51.115 Pharm. Research & Mfrs. of Am., 406 F.Supp. 2d 56 (D.D.C. 2005).116 Id.117 This statute, however, was not a price affirmation statute because it did not require out-of-state shippers to affirm that the prices of products sold in the District of Columbia were no higher than prices for the same products in other areas.118 See Pharm. Research & Mfrs. of Am., 406 F.Supp. 2d 56.119 Id. at 67120 Id.

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that involve these types of statutes was whether the statute had the practical effect of controlling

conduct beyond the boundaries of the state.121

Given those inconsistencies in this area of Dormant Commerce Clause jurisprudence, the

lower courts seem not to know what standard to apply to statutes that regulate commerce in other

states: are all of these statutes unconstitutional or only such statutes that are also price

affirmation statutes? The Harris case presented the Court with a chance to make a clear,

definitive ruling on that issue and, in turn, the Court could have cleared up the confusion. The

Supreme Court should have granted certiorari because it could have provided certainty to this

confusing area of Dormant Commerce Clause jurisprudence.

B. The Ninth Circuit is Split on How to Assess State Statutes that Regulate

Conduct in Other States

An additional reason why the Supreme Court should have granted certiorari in the Harris

cases involves inconsistent opinions on how to apply the Dormant Commerce Clause within the

circuits. In addition to the broader split between the various circuits regarding how to apply the

Dormant Commerce Clause to these types of state statutes,122 confusion also exists within the

circuits themselves.123 The Ninth Circuit’s justices cannot agree on how to assess the

constitutionality of state statutes that regulate conduct (specifically production methods) in other

states.124 In Rocky Mountain Farmers Union v. Corey,125 the Ninth Circuit had to decide the

constitutionality of California’s Low Carbon Fuel Standard regulation.126 The Low Carbon Fuel

Standard required certain entities that sold fuel in California to reduce the carbon intensity of

121 Id. at 70.122 See Harris, 729 F.3d 937 cf. Pharm. Research & Mfrs. of Am., 406 F.Supp. 2d 56.123 See Rocky Mt. Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013) cf. Rocky Mt. Farmers Union v. Corey, 740 F.3d 507 (9th Cir. 2014).124 Id.125 Rocky Mt. Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013).126 Id. at 1101

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their products by about six percent by 2020.127 In examining the concerns regarding

extraterritorial application of that regulation, the Majority stated that “[i]n the modern era, the

Supreme Court has rarely held that statutes violate the extraterritoriality doctrine . . .” noting that

“the two most prominent cases where a violation did occur both involved similar price-

affirmation statutes.”128 Accordingly, the Majority seemed to have set a tone regarding price

affirmation statutes early in its opinion.

The Majority also discussed the history and development of the rules from Healy and

Brown-Forman and compared the Low Carbon Fuel Standard to the challenged statutes from

Walsh.129 In holding that the Low Carbon Fuel Standard did not violate the Dormant Commerce

Clause,130 the Majority did not explicitly rely upon the fact that the Low Carbon Fuel Standard

was not a price affirmation statute. However, the Majority implied that the lack of a price

affirmation element was significant.131 The Majority compared the case to Walsh and stated that

the Low Carbon Fuel Standard did not attempt to ensure that ethanol prices in California were

lower than in other states.132

While the Ninth Circuit subsequently denied the Rocky Mountain plaintiffs’ petition for

rehearing en banc, Justice Milan Smith’s dissenting opinion from that denial exposes a split

between the Ninth Circuit Justices.133 Justice Smith and five other justices did not seem to see

the lack of a price affirmation element as significant here, instead focusing more generally on the

regulation’s practical effect of regulating commerce that occurred outside of California.134 While

127 See Rocky Mt. Farmers Union v. Corey, 740 F.3d 507, 508 (9th Cir. 2014); 17 CA ADC § 95482 (Barclays 2014).128 Rocky Mt. Farmers Union, 730 F. 3d at 1101.129 Id. at 1101-04.130 Id. at 1104.131 Id.132 Id. at 1103.133 Rocky Mt. Farmers Union, 740 F.3d at 508.134 Id. at 518.

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the Dissent applied the rules from Healy and Brown-Forman, it never mentioned that those rules

only apply to price affirmation statutes.135 In fact, the Dissent was much more concerned about

California’s influence on out-of-state production methods than prices.136 The Dissent did not

mention the regulations’ potential effects on prices but stated that the regulations should be

struck down because they controlled how manufacturers in other states fashioned their

products.137 The Dissent’s opinion is a primary reason why the Supreme Court should have

granted certiorari for Harris: lower court justices are confused and do not know what standard to

apply to state statutes that control activity in other states.

Ninth Circuit justices thus appear to differ regarding how to apply the Dormant

Commerce Clause to state statutes that regulate activity outside of the enacting state. While six

dissenting justices in Rocky Mountain seem to believe that a state statute should be struck down

whenever it regulates commerce outside of the state, whether the statute is a price affirmation

statute or not, other justices in the Ninth Circuit do not agree. The majority in the Rocky

Mountain decision (and in Harris) declined to find a violation of the Dormant Commerce Clause

where the statutes did not attempt price affirmation. These cases thus lead to a rather simple

question: what is the appropriate standard to apply to state statutes that seek to control conduct in

other states? The case law on this topic is inconsistent,138 lower courts are split on how to assess

these types of statutes,139 and the Ninth Circuit itself cannot even agree on the proper standard.140

This is a very confusing area of Dormant Commerce Clause jurisprudence which would

definitely benefit from a clear and definitive ruling from the Supreme Court.

135 See Id. at 517-19.136 See Id.137 Id. at 518.138 See Walsh, 538 U.S. 544 cf. Healy, 491 U.S. 324; Brown-Forman, 476 U.S. 573; MITE, 457 U.S. 624.139 See Harris, 729 F. 3d 937 cf. Pharm. Research & Mfrs. of Am., 406 F.Supp. 2d 56.140 See Rocky Mt. Farmers Union, 740 F.3d 507.

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Justice Antonin Scalia once noted that “once one gets beyond facial discrimination our

negative-Commerce-Clause jurisprudence becomes (and has long been) a ‘quagmire.’”141 Harris

presented the Supreme Court with a golden opportunity to clear up the “quagmire”142 but the

Court failed to seize it. The Supreme Court could have made a definitive ruling on this topic and

provided lower courts (and future litigants) with certainty regarding this important topic. As it

stands, this confusing and complicated area of Dormant Commerce Clause jurisprudence remains

as perplexing and convoluted as ever. Lower courts will still have trouble applying a consistent

standard; there may be many inconsistent rulings across the country on this issue in the future.

The Supreme Court could have prevented those problems by granting certiorari and making a

clear ruling on how to assess the constitutionality of state statutes that seek to control conduct in

other states.

IV. How the Supreme Court Should Have Ruled and Why

The Supreme Court could have resolved this significant confusion by grating certiorari in

the Harris case. The Court then could have provided clear and definitive rule regarding how the

lower courts should evaluate state statutes that control conduct in other states. While any clear

ruling would have added certainty to this area of Dormant Commerce Clause jurisprudence, the

Supreme Court should have declared California Health and Safety Code Section 25982

unconstitutional because the statute attempts to regulate production methods in other states. For

a number of reasons, the Court should have ruled that state statutes that control production

methods in other states are unconstitutional, regardless of whether those statutes are price-

affirmation statutes.

141 West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994) (citing Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 (1959)).142 Id.

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First, a ruling that declared all of those types of statutes unconstitutional would have

deterred states from engaging in economic protectionism and passing laws that hinder other state

economies. If states are free to pass laws that prohibit the sale of products based on production

methods in other states, then some serious complications may arise.143 States may start banning

certain products for less than noble purposes. While some states may prohibit the sale of

products inside the state based on the product’s method of production for noble reasons (such as

preventing harm to the environment), that will probably not be the case for all states. Many states

may ban products to carry out more sinister objectives, such as promoting their own domestic

economies over other states’ economies. Those states will be able to pass those statutes under

the guise of disliking certain types of production methods. Those laws, in turn, may anger rival

states while also signaling that states may pass those types of laws without fearing courts striking

the laws down for Dormant Commerce Clause reasons. That combination, anger at one state for

passing a law that prohibited the sale of products based on production methods and realization

that those laws are valid, may lead to states passing many of these types of laws. States that are

in competition with each other may keep passing laws until interstate trade becomes so heavily

burdened that it is impracticable.

That problem, balkanization, is precisely the type of problem that the Dormant

Commerce Clause was designed to prevent.144 Indeed, allowing the practices described above

would create similar problems of competing state economies that America faced during the

Articles of Confederation era.145 The federal government, through the Dormant Commerce

Clause, is supposed to prevent balkanization by regulating interstate commerce and prohibiting

143 See Brannon P. Denning, Confederation-Era Discrimination Against Interstate Commerce and the Legitimacy of the Dormant Commerce Clause Doctrine, 94 KY. L.J. 37, 59-66 (2005-2006). Professor Denning’s article provides a historical review of problems involving discriminatory state laws and balkanization while the Articles of Confederation governed this nation. Id. 144 See Hughes, 441 U.S. at 325.145 Id.

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state governments from burdening interstate commerce with their own local agendas.146 States’

knowledge that the Dormant Commerce Clause will strike down discriminatory and other types

of unfair laws is probably a factor that stops the states from passing those types of laws in the

first place.

A hypothetical scenario that examines the consequences of passing these types of laws

highlights the seriousness of this problem. As mentioned above, California Health and Safety

Code Section 25982 prohibits an entity from selling products in California if those products were

produced from overfeeding a duck or goose to enlarge the bird’s liver.147 Because this provision

remains valid and enforceable, the largest foie gras producer in America (Hudson Valley Foie

Gras) no longer can sell its foie gras in California.148 Hudson Valley operates in New York.149

What if the state of New York becomes upset that the largest foie gras producer in the state (and

country) is losing money and cannot operate properly due to Section 25982? The New York

legislature may decide to retaliate against California.

Perhaps New York will pass a statute that prohibits the sale of organic vegetables that are

produced by farmers using specialized irrigation methods because the state is concerned with

water use.150 This statute may have the practical effect of prohibiting California avocados from

being sold in New York because of the irrigation methods employed by California avocado

farmers.151 Because the Supreme Court has declined to hear many extraterritoriality cases

recently and lower courts have only struck down price-affirmation statutes that control out-of-

146 See Hughes, 441 U.S. at 325-26; Camps Newfound/Owatonna, Inc., 520 U.S. at 571.147CAL. HEALTH & SAFETY CODE § 25983 (2014).148 See Id.; Harris, 729 F.3d 937.149 Ass’n des Eleveurs de Canards et D’oies du Quebec, et al. v. Harris, No. 2:12-cv-05735-SVW-RZ, 3 (C.D. Cal. Sept. 28, 2012).150 The California Avocado Commission makes several recommendations regarding irrigation and water use to avocado growers. Irrigation, CALIFORNIA AVOCADO COMMISSION, http://www.californiaavocadogrowers.com/growing/cultural-management-library/irrigation (last visited Nov 20, 2014).151 See Id.

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state conduct, no one may even challenge the New York statute. However, if an affected person

decides to challenge the statute, then the state of New York may ensure the statute’s validity by

making similar arguments to those made by California in Harris. In that situation, New York

would not be able to sell foie gras in California and California would not be able to sell avocados

in New York.

This complication could lead to two more serious problems. First, trade between

California and New York may seriously deteriorate. The states may become angry with each

other because of the burdensome state laws so that each state decides to pass more laws that

burden the other state. While those two states probably would not stop trading with each other

altogether, the states could pass statutes that could lead to serious burdens on interstate trade.

Less trade between these two states would result in less money travelling in interstate commerce,

a negative impact on the national economy. Second, other states may recognize the situation

between California and New York and take advantage of that situation to benefit their own

domestic economies. What if New Jersey realizes that it can advance its domestic economy by

banning out-of-state products based on how the products are produced? Perhaps the New Jersey

legislature would pass a law that prohibits the sale of tomatoes grown in soil with a certain pH

level.152 The state may pass that law to ensure that stores in New Jersey only sell tomatoes

grown in New Jersey. The state would be able to mask its protectionist objective under the guise

of controlling production methods in rival states. That law would allow New Jersey to advance

its domestic economy while also burdening interstate commerce because fewer tomatoes would

be shipped to New Jersey and thus less money would travel in interstate commerce.

152 The pH scale measures how acidic a substance is. What is pH?, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, http://www.epa.gov/acidrain/measure/ph.html (last visited Nov 20, 2014). One source suggests that tomatoes grow best in soil with a pH level between 6.0 – 6.8. Garden Prep for Tomatoes, THE NATIONAL GARDENING ASSOCIATION, http://www.garden.org/foodguide/browse/veggie/tomatoes_getting_started/358 (last visited Nov 20, 2014).

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Those examples emphasize the possible unintended consequences that may arise due to

the Supreme Court’s failure to make a ruling on state statutes that control out-of-state production

methods. More and more states may eventually start passing laws that control production

methods in other states. That could lead to serious balkanization problems in this country; the

framers drafted the Dormant Commerce Clause to avoid such problems.

V. Conclusion

The Supreme Court should have granted certiorari for the Harris case because the Court

would have been able to make a ruling that added certainty to this confusing area of the law and

prevent possible future balkanization problems. The Harris case presented the Court with a

prime opportunity to accomplish both of those objectives, but the Court failed to seize that

opportunity. Now, Dormant Commerce Clause jurisprudence remains confusing and lower

courts still have trouble applying a standard to state laws that control conduct in other states.

Also, states may be able to further domestic objectives by limiting the sale of products based on

how the products are manufactured. That may ultimately lead to immense burdens on interstate

commerce that seriously hinders interstate trade, exactly what the Dormant Commerce Clause is

supposed to prevent.

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