Pg 14 Flashcards
How do you begin to approach a DCC essay?
Start with regular commerce clause, then the negative aspect that denies the states the power to discriminate or burden the flow of interstate commerce
What is the essay approach for a dormant commerce clause question?
1) ask if the state’s action is a legitimate exercise of state power.
- States have general police powers and can favour their own citizens to support employment, income, taxes of the state, and their own citizens
2) ask if it is discrimination against interstate commerce, thus constituting economic protectionism
3) ask if it unduly burdens interstate commerce to the point that the burden on interstate trade is clearly excessive in relation to the local benefits.
4) consider exceptions:
– market participant
– no reasonable alternative
– congressional authorization
– regulation is necessary for a legitimate health and safety purpose
If a state provides cheaper prescription drugs to its residents, would that be considered an undue burden under the dormant commerce clause?
This would be a substantial local benefit versus a nebulous harm to interstate commerce, so it would not be considered to be an undue burden
How does congressional authorization count as an exception to the dormant commerce clause?
Congress can pass laws that say that state or local governments can discriminate or use unreasonable burdens in interstate commerce. If this is the case, then the dormant commerce clause is not violated
What would be an example of when the dormant commerce clause would not be violated because the regulation would be necessary for a legitimate health and safety purpose?
Maine’s quarantine law on bait fish because parasites could cause huge problems
What is the market participant exception to the dormant commerce clause?
The dormant commerce clause does not apply when the state is not acting in its regulatory capacity, but is actually participating in the marketplace as a buyer/seller/producer. Then it can regulate free of restrictions from the dormant commerce clause and is allowed to favor its own citizens over others.
I.e.: a state can order that all construction projects have 50% local workforce because the city is spending its own funds on the project
When does a state act as a market participant under the market participant exception?
When it is participating directly in some aspect of the market as a purchaser, seller, or producer, and the alleged discriminatory effects on the interstate market flowed from these market actions.
When a public entity participates in the market under the market participant exception, what can they do?
- It can sell and buy what it chooses
- to or from whom it chooses
- on terms of its choice
What is the important thing that the market participant exception does not allow a public entity that is participating in a market to do?
The market participant exception does not give the public entity the right to use its regulatory power to control the actions of others in that market
Whenever you apply the market participant exception to the DCC, what do you have to be careful about?
Careful that the state isn’t both participating and regulating. If that is the case, then the DCC does apply. The state cannot impose conditions that have a substantial regulatory effect outside of its own market.
I.e.: putting conditions on the purchase or sale of something makes the state a regulator.
Ie: if you only sell cement to out-of-staters if they do some business in state, that is an attempt to regulate
What does the market participant exception to the DCC often involve?
Local hiring preference laws. If the state relies on its coercive power to affect compliance, like having fines, it is not a private actor. If the state is a market participant, it cannot pass regulations to favour its own interests over other commerce goers.
How do you find out why the state is doing what they are doing in order to find out if the market participant exception applies for the DCC?
Look at the legislative history statement of purpose. This says what the state is actually doing versus what they say they are doing and what the effect is of their actions.
If the state’s stated purpose was not to benefit the state as a party, they are probably not a participant
If Arizona deports all Mexicans, and Delaware won’t buy from Arizona while that is happening, are they a market participant or not?
They are market participant
If Arizona deports all Mexicans, and Delaware won’t buy from Arizona while that is happening, it is considered to be a market participant. But if Delaware tells its private businesses that they cannot buy from Arizona, is DE still a market participant?
No, it is regulating and using police power to discriminate against interstate commerce, so the market participant exception would not apply
How do you discuss the market participant exception on an essay?
If a state puts regulations on the use of materials that are sold or distributed by the states, the courts must determine:
– if the regulation results in residents bearing the cost for providing benefits to people within the state’s jurisdiction
– if the regulation is unconstitutionally shifting the cost for local benefits to out-of-state people/interests by improper restrictions on competition
