Pg 13

Question 1

What is involved in the exception to the dormant commerce clause for when a state statute might be upheld?

Answer 1

• If there is no other means to advance a legitimate local interest
• it was necessary to further a compelling state interest
  – and the means chosen were the least discriminatory means against interstate commerce

Question 2

What is involved in a balancing approach as an element to the dormant commerce clause?

Answer 2

The court decides if the state law was even-handed regulation or only incidentally affected intrastate commerce, or if it discriminated against interstate commerce interests.
– If it was even-handed regulation with a legitimate local public interest and its effect on interstate commerce was incidental, it is upheld unless the burden on commerce is clearly excessive in relation to the benefits locally.
– If a legitimate local purpose is found, it is a question of degree. The extent of the burden allowed depends on the nature of the local interests and whether it could be promoted as well with a lesser impact on interested activities.
– State laws that affect the national market are invalid under the dormant commerce clause if there is a less burdensome non-discriminatory alternative

Question 3

What is a summary of the balancing approach that is used for the dormant commerce clause?

Answer 3

Each case depends on the weighing of all relevant circumstances. States get deference for genuine health and safety concerns, but regulations that on their face or as applied discriminate against interstate commerce are rejected.

Question 4

What is the test that is usually used under the balancing approach for dormant commerce clause?

Answer 4

The least restrictive means test

Question 5

What is the least restrictive means test that is used under the balancing approach for the dormant commerce clause?

Answer 5

It must involve a legitimate safety measure that is being accomplished by using the least restrictive effects on interstate commerce.

Exception: if the goal is to promote health or welfare of the people, states do not have to use means that have the least burden on commerce so long as using the least burdensome means would put the health and welfare of the people at risk.

I.e.: law that baby clothes have to be packaged in state because the state has strict anti-flammable regulations that make sure no kid dies of fire. This is onerous, but if the alternative means a few kids a year die from fire, then that is too great a risk

Question 6

Purposeful protectionist regulations under the dormant commerce clause are what?

Answer 6

Per se impermissible

Question 7

If the idea behind a regulation is to favour local versus out-of-state interests, what does the commerce clause say?

Answer 7

The commerce clause is violated. States cannot economically isolate themselves, erect trade barriers to stop interstate competition, etc.

Question 8

If a state law is trying to serve a legitimate police power objective, can it still be discriminatory and void under the dormant commerce clause?

Answer 8

Yes. I.e.: New Jersey trying to stop Philadelphia from dumping solid waste. The courts don’t care that the state is dealing with a health or safety issue if the regulation is a barrier to the free flow of interstate commerce

Question 9

Is it possible for states to prefer their own citizens over out-of-state consumers with regard to having access to natural resources in the state?

Answer 9

No because this is resource protectionism.

Question 10

Can a state prohibit people from catching fish and shipping them out of state?

Answer 10

The state can regulate things like fishing, but it doesn’t own all wild animals in the state. When someone catches a fish and reduces it to his possession, it is his and not the state’s. States can conserve natural resources, but only in non-discriminatory ways

Question 11

Can states try to prevent their products from being exported into the national market through embargoes?

Answer 11

No, but laws that affect the export of goods can be upheld if they are the least burdensome alternative for achieving a legitimate state goal that doesn’t interfere with federal laws

Question 12

Is it possible for states to engage in price fixing within their state?

Answer 12

Yes, such as California raisins or Pennsylvania milk.

Question 13

Is it possible for states to burden the export of local products in order to enhance the reputation of those products or to keep those resources for local consumption?

Answer 13

No

Question 14

Is it possible for a state to require an in-state industry to use a certain amount of locally produced goods?

Answer 14

No because this favours local industry and discriminates against interstate competition

Question 15

Is it OK for a state to give tax subsidies to in-state people?

Answer 15

Yes, but if they are trying to shift the direct costs to out-of-state people, that is not OK.

Question 16

If a state law nominally gives a subsidy to in-state residents but actually is a discriminatory tax that looks like a tariff or trade barrier, is that OK?

Answer 16

No

I.e.: Massachusetts milk pricing order put a tax on liquid milk that was sold into Massachusetts. The money was put into a state fund that subsidized Massachusetts dairy farmers. By linking the tax to the fund, that was a tariff that put extra costs on buying out-of-state products

Question 17

What are the four major things that cannot happen with regard to a tax subsidy if the state wants the subsidy to stay in place under the dormant commerce clause?

Answer 17

– Can’t put a discriminatory tax on industry that imposes a high liability on out-of-staters
– you can’t tax industries that look non-discriminatory, but have an exemption or credit for in-state members
– can’t put a non-discriminatory tax on industry that puts revenue in a separate fund that has been given as rebates or subsidies to in-staters
– can’t give subsidies for in-state members that are funded by the state’s general revenues

Question 18

If a State statute does not discriminate on the surface and is meant to serve a legitimate social welfare objective, can it still be discriminatory?

Answer 18

Yes, it can be discriminatory in its impact on interstate commerce.

Ie: North Carolina required closed apple containers with only federal marks, which has a discriminatory impact on Washington apples

Question 19

What does the 21st amendment do in relation to the dormant commerce clause?

Answer 19

State power to regulate liquor gives the state latitude for licensing fees and importation of liquor from other states, but not from foreign countries because that would violate the export-import clause

Question 20

What are likely scenarios under the dormant commerce clause?

Answer 20

• State imposing a tax, fee, or license on a tangible object
• rebates, discounts on taxes based on a property bought or sold in the state, or other in-state taxes that are paid
  – differential marketing requirements based on the location of the producer or seller (only in-state wine producers can make direct sales to consumers)
  – Subsidies to in-state sellers
  – residential license issues

Question 21

If an in-state license is five dollars and an out-of-state license is $150, what does the commerce clause have to say about that?

Answer 21

The commerce clause prevents state action that puts an excessive burden on interstate commerce relative to the state’s legitimate interest.

On an essay: ask if the licensing fee affects interstate commerce, or if it is directed against interstate commerce. Look at whether the higher fee is an economic protection measure and if it has a substantial effect in the aggregate on interstate commerce. If the answer is no, there’s no DCC issue.

Question 22

When states charge different amounts for in-state and out-of-state licenses, what is the argument to make an essay?

Answer 22

First look at what the state is trying to do by charging the two different rates
– states will usually argue: the amount generated by the fees is small, the effect on interstate commerce is only incidental and not substantial, there was a legitimate non-protectionist interest of the state, the residents already pay taxes to support the activity like hunting or university but out-of-staters do not pay taxes, so this allows them to pay their fair share, which is an attempt to partially equalize the cost. This argument is usually accepted, but…..
– the regulation can still be struck down if it puts an undue burden on interstate commerce relative to the state’s legitimate interest in equalizing the costs. If the purpose is to favour local economic interests, it will be struck down. If the fee is too high, the court might say that the burden on commerce relative to the legitimate interest in equalizing it is too great