State Powers in the Light of the Commerce Clause

Question 1

Commerce Clause

Answer 1

Gives power to regulate interstate commerce

Question 2

Interstate Commerce

Answer 2

1. Among the states
2. purchase, sale, transportation or exchange of goods between two or more people
3. Congress can regulate when it affects more than one state

Question 3

Intrastate commerce

Answer 3

Within a state; states regulate unless it affects interstate

Question 4

Dormant Commerce Clause

Answer 4

• If there is a dormant commerce clause, meaning that congress has not enacted laws regarding the subject, a state may regulate local aspects of interstate commerce if the regulation:
  (1) Does not discriminate against out-of-state competition to benefit local economic interests; and
  (2) Is not unduly burdensome (i.e., the incidental burden on interstate commerce does not outweigh the legitimate local benefits produced by the regulation)

If either test is not met, the regulation will be held void for violating the CC (Dormant CC / Negative CC)

Question 5

approach to dormant commerce clause

Answer 5

• Do the balancing test (burden on interstate commerce v. benefit on the state)
• Least restrictive means test (Are there other alternatives?)
• Selective exclusivity rule (Uniformity= congress; local matters=state)
• Market Participant doctrine (if state acting like a company than DCC doesn’t apply)

Question 6

Balancing Test

Answer 6

• Burden on interstate commerce v. Benefits to the state
  -Decided on case-by-case balancing test.
  -Where a state regulates “even-handedly” to effectuate legitimate local interest & the effects on interstate commerce are only incidental, the regulation will be upheld as constitutional unless the burden imposed on commerce is clearly excessive to the benefit it provides.

Question 7

3 things SC looks for in balancing test

Answer 7

• substantial burden on commerce
• burden on out-of-staters over in-staters. Is burden on out-of-state more than on in-state? (discrimination)
• where relative burden on interstate commerce and effect are disproportionate to each other.
  if there is one, the state is less likely to win.

Question 8

How can a state sustain a discriminatory statute (in commerce)?

Answer 8

States must show a substantial public health/safety and welfare benefit to sustain a discriminatory statute. Those benefits must substantially outweigh the burdens.

Question 9

Least Restrictive Means Test

Answer 9

• The law can survive if and only if it is justified by a legitimate police power purpose and there is simply no other alternative that is less burdensome on interstate comm. It cannot have as its stated purpose the regulation of interstate comm.
• If there are reasonable adequate alternatives available they should be used
• Can state achieve purpose that does less harm to Interstate Commerce; court balancing what legislation does with policies.

Question 10

Nondiscriminatory regulation

Answer 10

affects those inside the state in the same way as those outside the state.

Question 11

Discriminatory regulation

Answer 11

A state law that discriminates against other states will likely be found to burden interstate commerce and be unconstitutional

Question 12

Market Participant Doctrine

Answer 12

When a state acts as a producer or a supplier of a marketable good or service, it may discriminate against non-residents
-If a state is acting as a buyer/seller like a private firm, it is a market participant and the state can do what it wants/discriminate. (es: state universities charging lower tuition for in-state students)

Question 13

Market Regulator

Answer 13

If a state is acting like a regulator, it will be limited by the commerce clause.

Question 14

If a state acts as both a market participant and a regulator,

Answer 14

The dormant commerce clause applies.
-When the state acts as a regulator while it is a participant, then it violates the dormant commerce clause.

Question 15

Gibbons v. Ogden

Answer 15

Federal law is supreme over state law
-the NY statutes prohibiting steamboat licenses conflicted with Federal licensing laws
-Congress may regulate because it affects commerce among the states

Question 16

Cooley v. Board of Wardens

Answer 16

Selective exclusivity; Sometimes the federal Commerce Power is exclusive and overrides state legislation even though Congress has not explicitly exercised that power. And sometimes, it is not exclusive. If the item is such that national uniformity is necessary, then congressional power is exclusive, even though Congress is silent. It has not exercised the power, which is why we speak of the “dormant” Commerce Power.

Question 17

South Carolina State Dept. v. Barnwell Brothers

Answer 17

SC ruled the South Carolina restriction on the width and weight of trucks was reasonable because their highways are narrow and flimsy; the state regulation does not impose a discriminatory burden on interstate commerce and the state legislature had a rational basis for the law

Question 18

Where there is no Federal legislation, the judiciary should go no further than in inquiring:

Answer 18

Has the state acted within its powers in adopting a statute?
Is the means adopted reasonable to the end sought?
-The court should not “legislate from the bench” and decide if the means chosen by the states was the MOST rational one, that’s not its job, that’s the state legislature’s job in the absence of federal legislation.

Question 19

Southern Pacific v. Arizona

Answer 19

Arizona Train Limit Law implemented a restriction on train lengths which unreasonably obstructed interstate commerce. The burden on cross-country railroads was too high, and did not actually contribute to better safety within the State.

Question 20

Badwin v. GAF Seeling Milk

Answer 20

NY law prohibited the sale of VA milk at a price lower than the NY state-controlled price of milk.
Holding: Unconstitutional discriminatory regulation
Reasoning: States cannot use the power to tax nor the police power to establish an economic barrier against competition with the products or labor from other states.
- A state may not seek to regulate prices by excluding foreign goods obtained at a lower price.
- States have no power to project its police powers beyond its borders

Question 21

Henneford v. Silas Mason Co

Answer 21

Use tax on property purchased elsewhere but used in the state (Washington) is constitutional and does not hamper interstate commerce:
- does not discriminate out-of-state participants
- applied equally
- imposed with the property is at rest

Question 22

Dean Milk v. City of Madison

Answer 22

City ordinance making it unlawful to sell milk unless it’s been pasteurized within 5 miles of the city unconstitutional; its not the least restrictive means
- A state may not discriminate against interstate commerce, even to protect the health and safety of its people, if reasonable alternatives exist which do not discriminate and are adequate to conserve legitimate local interests.

Question 23

HP Hood & Sons v. Du Mond

Answer 23

Hood, a dairy distributor, was denied a license for a new depot in NY because the NY Dept of Ag stated the market was already sufficiently served
HOLDING: unconstitutional as applied; places an undue burden on interstate commerce
RULE: a state may not use its police power to suppress competition from out of state companies

Question 24

Hughes v. Oklahoma

Answer 24

OK Stat. forbids the sale of minnows outside the state if they’re caught within the state.
HOLDING: Unconstitutional
Reasoning: Conservation and protection of wild animals have a valid purpose, but the statute is discriminatory when non-discriminatory measures could be applied
“arguably most restrictive means”

Question 25

3 prong test

Answer 25

1. Whether the challenged statute regulates evenhandedly with only “incidental” effects on interstate commerce OR discriminates against interstate commerce either on its face in practical effect
   *Facial discrimination invokes the strictest scrutiny of any purported legitimate local purpose and of the absence of nondiscriminatory alternatives
2. Whether the statute serves a legitimate local purpose
3. Whether alternative means could promote this local purpose as well without discriminating against interstate commerce

Question 26

Reeves v. Stake

Answer 26

South Dakota cement plant preferentially supplied SD contractors, but acted as a market participant and therefore was allowed to give preference to its own citizens

Question 27

Privileges and Immunities Personal Mobility

Answer 27

• provision recognizing that any individual born anywhere in the US is entitled to both state and national citizenship
• Only fundamental rights, privileges, and immunities are protected, like constitutional interest and the ability to earn a livelihood.
• Only discriminations without a “substantial reason” are forbidden when there is a less restrictive means of achieving the state’s goals; and
• Only individuals who are United States citizens can claim the protection of the Privileges and Immunities Clause.

Question 28

P&I prevents states from

Answer 28

discriminating against out-of-state CITIZENS

Question 29

2 steps to determine P&I violation

Answer 29

1. Is the Right (activity) protected?
   Court must decide whether the ordinance burdens one of those privileges and immunities protected by the Clause. (ex: Livelihood; Right to earn a livelihood; Right to work/ get a job; Doesn’t just apply to work for a city, also applies to private jobs)
2. Is there a substantial government interest in eradicating the evil?
   -Whether there is substantial reason for such discrimination
   -Substantial relationship to the problem
   -does not preclude discrimination against citizens of different states where there is a substantial reason for the difference in treatment
   -Whether such reasons do exist and whether the degree of discrimination bears a close relation to them
   -Nonresidents must somehow be shown to constitute a peculiar source of evil at which the statute is aimed

Question 30

Comity

Answer 30

states have to treat the citizens of other states with some level of respect

Question 31

What is a substantial reason

Answer 31

the out of state citizens are a peculiar source of evil

Question 32

Hicklin v. Orbeck

Answer 32

Alaska Hire Act allowed only Alaskan citizens to be hired in oil and gas purposes; unconstitutional as a violation of P&I b/c nonresidents were losing the privilege to earn a livelihood on the sole basis of being non-residents. There was no substantial reason that indicated noncitizens constituted a peculiar evil.

Question 33

United Building v. Mayor of Camden

Answer 33

Camden city ordinance required contractors doing business with the city to employ 40% of their work force from Camden; unconstitutional violation of P&I clause because Camden is denying other residents the privilege to earn a livelihood, no substantial reason is shown the nonresidents are a source of the problem

Question 34

Conflict Preemption

Answer 34

If a state statute conflicts with a federal statute, federal wins

Question 35

Field Preemption

Answer 35

Field preemption is found when the scheme of federal regulation is so complete and so pervasive that it is reasonable for the courts to conclude that Congress intended federal law to govern the entire field and that congress intended to leave NO room for the states to regulate or supplement the subject mater
- Congress has occupied a field and there is no room for states to regulate

Question 36

What is interpreted when determining field preemption?

Answer 36

1. Qualities of pervasiveness
2. The perceived need for national uniformity
3. The importance of the national policy in terms of how problematic state regulation would be.

Question 37

Preemption test

Answer 37

1. Is the federal statute valid (legitimate)?
   i. Does government have the power to legislate?
2. Does the federal statute conflict with state law (irreconcilable)?
   Look to the Congressional intent
   Extent of federal coverage (whether irreconcilable differences exist)

Question 38

Silkwood v. Kerr-McGee

Answer 38

Silkwood was contaminated at Kerr-McGee’s nuclear reactor and died, her estate pressed charges. Kerr-McGee claims there can be no punitive damages b/c federal law preempts state law.
Holding: No preemption
Reasoning: State law of damages is not preempted by federal regulation of nuclear safety because Congress did not intend to occupy the full field, just safety and regulation, and left the remedies to states.