Commerce Clause

Question 1

Can a state ever violate the dormant commerce clause?

Answer 1

Legislation that violates the dormant commerce clause is typically deemed unconstitutional, unless:

1) the state is acting as a market participant;
2) the legislation favors state or local governments that are performing a traditional government function; OR
3) congress explicitly permits the legislation.

Question 2

The Dormant Commerce Clause

Answer 2

The Dormant Commerce Clause refers to a constitutional principle that is inferred from the Commerce Clause.

If Congress has not enacted legislation in a particular area of interstate commerce, then the states are free to regulate, so long as the state or local action does NOT:

1) discriminate against out-of-state commerce;
2) unduly. burden interstate commerce; or
3) regulate wholly out-of-state activity

a) A state law that discriminates against interstate commerce in a way that operates as a tariff or trade barrier against out-of-state interests is subject to strict scrutiny and virtually per se unconstitutional.
b) A non-discriminatory state law that imposes an incidental burden on interstate commerce will be unconstitutional if the burden it imposes is clearly excessive in relation to the putative local benefits.

Question 3

Discriminating against out of state - local economic interests

Answer 3

A state or local regulation discriminates against out-of-state commerce if it protects local economic interests at the expense of out-of-state competitors. Law here on its face does/doesn’t discriminate because ____. However, the mere fact that entire burden of a state’s regulation falls on an out-of-state business is not sufficient to constitute discrimination against interstate commerce.

The Dormant Commerce Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.

Question 4

Not Discriminatory but burden on interstate commerce

Answer 4

A state regulation that is not discriminatory may still be unconstitutional if it imposes an undue burden on interstate commerce. The courts will balance, case by case, the objective and purpose of the state law against the burden on interstate commerce and evaluate whether there are less restrictive alternatives.

Question 5

Discriminatory on its face

Answer 5

If a state or local regulation, on its face or in practice, is discriminatory, then the regulation may be upheld if the state or local government can establish that: i) an important local interest is being served, and ii) no other nondiscriminatory means are available to achieve that purpose.

Question 6

Market Participant Exception

Answer 6

A state may behave in a discriminatory fashion if it is acting as a market participant (buyer/seller) as opposed to a market regulator. If the state is a market participant, it may favor local commerce or discriminate against non resident commerce as could any private business.