CH 3 & 4 Flashcards

Question

Reeves, Inc. v. Stake | 1980

Answer 1

Under the market participant exception to the Commerce Clause, when a state government acts as a market participant rather than a market regulator, it may favor its own citizens in commercial dealings. The State of South Dakota built a cement plant to deal with cement shortages within the state. The South Dakota Cement Commission (the Commission) concluded that all of the cement produced would be needed inside the state. Nevertheless, the plant’s output exceeded South Dakota customers’ needs for many years, and the plant was able to supply cement to both in-state and out-of-state contractors. Later a boom in the construction industry coincided with internal difficulties at the plant. As a result, the plant was unable to fill all of its cement orders. To combat this problem, the Commission reaffirmed that the plant should preferentially supply cement to South Dakota contractors first before filling orders with out-of-state contractors. Reeves, Inc. (Reeves) (plaintiff) was an out-of-state contractor who suffered serious financial harm when the plant stopped filling its orders. Reeves sued the Commission and its chairman, William Stake (collectively, defendants), in district court, challenging the state’s cement sales policy. Reeves argued that the policy unconstitutionally discriminated against interstate commerce in violation of the Commerce Clause. The district court agreed and enjoined the Commission from continuing its preferential treatment of in-state buyers, but the court of appeals reversed. The United States Supreme Court granted certiorari.

Answer 2

When Congress has not acted, if a state regulation does not discriminate against interstate commerce and the state legislature has a rational basis for adopting the regulation based on safety or economic interests, the Court must defer to the judgment of the state legislature in holding the regulation constitutional. In 1933, South Carolina passed a regulation prohibiting the operation on its state highways of certain motor trucks and “semi-trailer” motor trucks which exceeded width and weight limitations. For purposes of the weight limit, the statute considered semi-trailer motor trucks, which were composed of two pieces, as one single unit. Barnwell Bros., Inc. (plaintiff), an out-of-state trucking company, brought suit in district court against the South Carolina Highway Dept. (defendant), challenging the South Carolina weight restrictions as an impermissible restriction on interstate commerce. The district court upheld the South Carolina regulations on the grounds that Congress had not acted to regulate this area of interstate commerce, thus leaving all regulation up to the individual states. The court of appeals reversed. The South Carolina Highway Dept. appealed to the United States Supreme Court.

Answer 3

A state may impose burdens on commercial transactions within the market in which it is a participant, but may not go further and impose conditions that have a substantial regulatory effect outside of that particular market. In September 1980, the Commissioner of the Department of Natural Resources of Alaska (defendant) announced that the department would sell approximately forty-nine million board-feet of timber in Icy Cape, Alaska in October, 1980. However, the contract for sale required that all timber sold must be processed within the State of Alaska before being shipped outside the state. South-Central Timber Development, Inc. (plaintiff) was an Alaska-based timber retailer that did not operate an Alaska mill and sold primarily unprocessed timber to exclusively out-of-state clients. South-Central brought suit in district court seeking to enjoin enforcement of the in-state processing requirement on the grounds that it violated the dormant Commerce Clause. The district court agreed and granted the injunction, but the court of appeals reversed. The United States Supreme Court granted certiorari.

Answer 4

A state law that has the practical effect of discriminating against interstate commerce will not be struck down unless the burden it places on interstate commerce is clearly excessive in relation to the putative local benefits it confers. In 1977, Minnesota passed a statute banning the retail sale of milk in plastic, nonreturnable, nonrefillable containers, but permitted sales in other nonreturnable, nonrefillable containers, such as paperboard milk cartons. The legislature argued that the statute was passed to address solid waste and other environmental concerns in the state. Clover Leaf Creamery Co. and other Minnesota and non- Minnesota plastic producers and dairies (plaintiffs) brought suit against the State of Minnesota (defendant) in district court seeking to enjoin enforcement of the statute. Clover Leaf alleged that the actual purpose of the Minnesota legislature was to promote the interests of certain segments of the local dairy and pulpwood industries at the expense of the economic interests of other segments of the dairy industry and plastics industry. The district court agreed with this argument and struck down the statute, and the state supreme court affirmed after an extensive hearing. The United States Supreme Court granted certiorari.

Answer 5

States may discriminate against rights of out-of-state residents as long as there is a substantial reason for the difference in treatment, and the discrimination practiced against nonresidents bears a substantial relationship to the state’s objective. The Rules of the Supreme Court of New Hampshire (defendant) limit bar admission to state residents. Kathryn Piper (plaintiff) took and passed the February 1980 New Hampshire bar exam. She passed all requirements to be admitted to the New Hampshire bar and filed an application for admission along with a form illustrating her intent to become a New Hampshire resident. She was denied admission to the bar on the grounds that she would have to establish a home address in New Hampshire prior to being sworn in. Piper filed suit in federal district court seeking to enjoin enforcement of the restrictions on her bar admission, and the district court agreed and granted the injunction. The court of appeals affirmed. The Supreme Court of New Hampshire appealed to the United States Supreme Court.

Answer 6

The Privileges and Immunities Clause of the Constitution prevents states from discriminating against citizens of other states unless valid independent reasons exist for the discrimination, and the degree of discrimination bears a close relationship to those reasons. A South Carolina statute designated certain maritime waters off the coast of that state as “a common for the people of the state for the taking of fish.” However, the statute also required payment of a license fee of $25 for each shrimp boat in the area owned by a South Carolina resident, and $2,500 for each boat owned by a non-resident. Toomer (plaintiff) was an individual fisherman from Georgia, who instituted this action along with four other Georgia fishermen in district court against Witsell (defendant), the South Carolina official responsible for enforcing the statute and fees. Toomer sought to enjoin enforcement of the South Carolina statute on the grounds that it violated the Privileges and Immunities Clause of Art. IV, § 2 of the Constitution, and the Equal Protection Clause of the Fourteenth Amendment to the Constitution. The district court denied the injunction and dismissed the case, and Toomer appealed directly to the United States Supreme Court.

Answer 7

A state may not discriminate against out-of-state interests if those interests are sufficiently fundamental to the promotion of interstate harmony so as to fall within the purview of the Privileges and Immunities Clause, unless the state has a substantial reason for treating out-ofstate citizens differently, and the discriminatory means it imposes are closely related to accomplishing that reason. A municipal ordinance of the city of Camden, New Jersey required that at least forty percent of the employees of contractors and subcontractors working on city construction projects be Camden residents. United Building & Construction Trades Council of Camden County (plaintiff) brought suit against the Mayor & Council of the City of Camden (defendants), challenging the ordinance on the grounds that it violated the Privileges and Immunities Clause of the Constitution. The New Jersey Supreme Court held that the dormant Commerce Clause did not apply to invalidate the ordinance because the city of Camden was acting as a market participant. The Privileges and Immunities Clause did not apply because the discrimination was based on municipal, not state residency. United Building appealed to the United States Supreme Court.

Answer 8

An otherwise unconstitutional delegation of legislative power to the executive may nevertheless be sustained on the ground that its exclusive goal is to provide relief in a foreign conflict. Congress passed a resolution authorizing the President to stop the sale of arms to countries involved in the Chaco border dispute. That same day, President Roosevelt issued an executive order prohibiting munitions sales to warring countries involved in the Chaco border dispute. In 1936, an indictment was issued alleging that Curtiss-Wright Export Co. (defendant) illegally sold arms to Bolivia, a country engaged in the Chaco border dispute. The transaction was in violation of the congressional resolution and the President’s executive order. The district court issuing the indictment held for Curtiss-Wright, ruling that the indictment was not supported by sufficient information to charge Curtiss-Wright. The United States government (plaintiff) appealed directly to the United States Supreme Court.

Answer 9

A presidential claim of privilege asserting only a generalized interest in confidentiality is not sufficient to overcome the judicial interest in producing all relevant evidence in a criminal case. President Nixon (defendant) was named as a co-conspirator in various charges including conspiracy to defraud the United States. The United States District Court for the District of Columbia subpoenaed various tapes and documents relating to specific meetings in which Nixon was a participant. Nixon filed a formal claim of privilege and a motion to quash the subpoenas. The United States District Court for the District of Columbia denied the motion. The United States Supreme Court granted certiorari.

Answer 10

The President’s actions have supremacy over state law with respect to foreign relations. In 1907, the New York branch of the First Russian Insurance Co. (FRIC) was organized under the former Russian government. In 1919, the newly created Russian government nationalized Russian insurance companies, including FRIC, and canceled all company debts and shareholder rights. FRIC continued to do business in New York until 1925, when the Supreme Court of New York ordered that Pink (defendant), the New York Superintendent of Insurance, take control of FRIC’s assets. After Pink paid FRIC’s U.S. creditors, there remained a balance of more than $1,000,000. In 1931, the New York Court of Appeals ordered Pink to use the balance to first pay FRIC’s foreign creditors who had previously filed attachments, then pay any surplus to FRIC’s board of directors. This action was stayed, however, due to a claim on FRIC’s assets by the United States (plaintiff). In 1933, the United States recognized the new Russian government and accepted Russia’s Litvinov Assignment regarding certain claims. The United States, in honoring the Litvinov Assignment, sued Pink to recover the remaining assets under Pink’s control.

Answer 11

A regulation violates the Commerce Clause if the combination of a tax and subsidy discriminates against interstate commerce, even if each component would be constitutional if separated. In the 1980s and early 1990s, Massachusetts dairy farms began to lose their share of the overall dairy market due to lower prices of their competitor producers in other states. In response to the downsizing of the Massachusetts dairy market, the state created a Special Commission to investigate solutions to this problem. Healy (defendant), head of the Special Commission, recommended that Massachusetts impose a tax on all fluid milk sold to Massachusetts retailers by dealers. The tax would then be used to subsidize the efforts of Massachusetts’s dairy farmers to help them compete in the national milk market. West Lynn Creamery, Inc. (plaintiff), an out-of-state milk dealer, was taxed. West Lynn Creamery challenged the Massachusetts statute in superior court on the grounds that it impermissibly discriminated against interstate commerce. The court denied relief, and the state supreme court affirmed. The United States Supreme Court granted certiorari.

Answer 12

When a state government enters the market as a participant, it is not subject to the restraints of the Commerce Clause. ``` Mayor White (defendant) issued an executive order requiring that construction projects funded by Boston city funds be completed by construction companies who have Boston residents comprising at least half of their employees. The Supreme Judicial Court of Massachusetts determined that the executive order was unconstitutional because it violated the Commerce Clause of the United States Constitution in that it imposed a significant burden on interstate commerce by prohibiting the hiring of construction companies with a majority of out-of-city workers. Mayor White appealed. ```

Answer 13

(1) When Congress confers decision making authority to agencies, it must set forth in a legislative act an intelligible principle to which the person or body authorized to act is directed to conform; and (2) Under § 109 of the Clean Air Act, the EPA Administrator may not consider implementation costs in setting national ambient air quality standards. Section 109(a) of the Clean Air Act (CAA) requires the Administrator of the Environmental Protection Agency (EPA) (defendant) to promulgate National Ambient Air Quality Standards (NAAQS) for certain air pollutants. Section 109(b)(1) of the CAA directs the EPA to set ambient air quality standards, the attainment and maintenance of which in the judgment of the Administrator are necessary to protect the public health. In July 1997, the Administrator revised the NAAQS for particulate matter and ozone. The American Trucking Associations, Inc. and others (plaintiffs) challenged the new standard in federal court. The U.S. Court of Appeals for the District of Columbia found that § 109(b) (1) of the CAA delegated legislative power to the Administrator in contravention of Article I, § 1 of the United States Constitution because the EPA had interpreted the CAA to provide no “intelligible principle” to guide the agency’s exercise of authority. The appellate court further held that Whitman is prohibited from considering the costs of implementation in setting NAAQS under the CAA. The appellate court remanded the NAAQS to the EPA. The case then came before the United States Supreme Court.

Answer 14

Under the Commerce Clause, states may pass laws that affect commerce, so long as they are not repugnant to the power of Congress to regulate interstate commerce. The Black Bird Creek Marsh Company (the Company) (plaintiff) was authorized by a Delaware law to construct a dam across a creek that fed into the Delaware River through a deep-level marsh. The creek was navigable, and the tide ebbed and flowed through it. Constructing the dam likely enhanced the value of property on the banks of the marsh. The health of the inhabitants of these properties was also probably improved by the construction of the dam. However, the dam also stops a previously navigable creek and, therefore, impacts the rights of those who had been using the creek. The owners of a boat (defendants) broke the dam. The defendants were sued by the Company for trespass. The defendants challenged the authority of the state to authorize the construction of the dam.

Answer 15

The President of the United States may not engage in lawmaking activity absent an express authorization from Congress or the text of the Constitution. In late 1951, steel mill owners and their employees had disagreements over the terms of collective bargaining agreements. Unable to reach an agreement, the steel mill employees’ representative gave notice of intent to strike after the expiration of their current agreement. The federal government unsuccessfully entered the negotiations, and on April 4, 1952, the steel mill employees’ union gave notice of its intent to strike on April 9, 1952. The importance of steel as a component in weapons and war materials led President Truman to believe that a reduction in steel production from a nationwide strike would jeopardize the nation’s security. The President issued Executive Order 10340 directing Sawyer (defendant), the Secretary of Commerce, to take control of and continue operating most of the nation’s steel mills. Sawyer carried out the order, and Youngstown Sheet & Tube Co. (plaintiff), along with other steel mill operators, brought suit in district court alleging that the President’s order amounted to an exercise of lawmaking, a legislative function reserved expressly for Congress. Therefore, the President’s exercise of lawmaking was unconstitutional. The district court granted an injunction in favor of the Youngstown Sheet & Tube Co., on the grounds that the President acted unconstitutionally, but the court of appeals stayed the injunction. The United States Supreme Court granted certiorari.

Answer 16

Article II of the Constitution grants the U.S. president the exclusive authority to formally recognize a foreign sovereign through executive power that Congress may not contradict via statute. Menachem Binyamin Zivotofsky (plaintiff) was born to United States citizens living in Jerusalem. Zivotofsky’s mother requested a passport and report of birth abroad for her son, listing his place of birth as Jerusalem, Israel. The request was denied pursuant to a State Department policy put forth by the U.S. president, which provided that a passport could only list Jerusalem as the place of birth. Zivotofsky filed suit in federal district court against Secretary of State John Kerry (defendant), claiming that § 214(d) of the Foreign Relations Authorization Act, Fiscal Year 2003 (Act), 116 Stat. 1350, permitted citizens born in Jerusalem to list their place of birth as Israel. The district court dismissed the action, reasoning that the action presented a nonjusticiable political question and that Zivotofsky lacked standing. Zivotofsky appealed. The court of appeals affirmed the political-question determination, but reversed on the standing issue. The United States Supreme Court granted certiorari to review, vacated the judgment, and remanded the matter to the court of appeals to determine whether Zivotofsky’s interpretation of § 214(d) was correct and whether the statute was constitutional, rather than whether Jerusalem was in fact part of Israel. On remand, the court of appeals held that the statute was unconstitutional, concluding that the president exclusively held the power to recognize a foreign sovereign and that § 214(d) directly contradicted this constitutional authority. The Court again granted certiorari.

CH 3 & 4 Flashcards

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