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Flashcards in Dormant Commerce Clause Deck (27)
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1

Where does DCC come from?

Not enumerated, implied from CC

2

What is DCC purpose?

-Principle that state and local laws are unconstitutional if they place an undue burden on interstate commerce.

- Limits state and local action if it interferes w/ interstate commerce in an impermissible way.

3

When do you run DCC analysis?

-DCC operates when Congress has not regulated in an area or when state has excised a tax w/o congressional approcal

4

Do you apply aggregate effects test?

No, this would eliminate state ability to reg.

5

Pros of DCC

- Efficiency/Economical- If burden then creates inefficiency and interferes w/ free market/competition. Uniformity is essential in certain areas.
- Political- 1) Congress cannot oversee every law that state/local gov. are enacting. They cannot predict what they need to do to prevent state and local laws from interfering w/ ISC. 2) Lack of political rep. Citizens from one state should not be harmed by laws of another state where they have no political representation.
- Historical- Framers intent to prevent state laws that interfered w/ ISC

6

Cons of DCC

- Textual- not explicit in const.
- Inst. Comp- Sep. of powers. Task of reviewing laws congress's job not courts
-Federalism- minimize instances where state/local laws are invalidated

7

What is Current Test?

CURRENT TEST:
1) Ask if the law is discriminatory→ Discriminate against out-of-staters or does it operate equally between in-staters and out-of staters
2) Non Facially Discriminatory → Presumption of constitutionality. Balance if burdens on ISC are clearly excessive to its benefits then law struck down.
3) Discriminatory→ Court applies strong presumption against law. Requires a compelling state interest that is not protectionist and that there is no other non-discriminatory or less discriminatory alternative.

8

What is the question to ask?

Does state discriminate against out of staters or in our out of staters equally?

9

What happened in Cooley (old test)

-Penn law required ships entering or leaving port to use a local pilot or pay a fine that would support retired pilots

- Things national in scope require fed. reg.
- Things local in nature require laws spec. to that location

Problems
- Allows states to use protectionism
- Does not provide framework between what is local and what is national.

10

Barnwell: What discrimination?

-NON DISCRIMINATORY: All trucks on the state’s road have to comply
- Road are something that states have primary responsibility over
-BALANCE: willing to accept there were Substantial safety benefits from having smaller truckloads

11

Southern Pacific Railroad: What discrimination?

Trains have length requirement

NON DISCRIMINATORY: applies to all trains. Railroads are fed.

BALANCE: Even though longer trains more dangerous Burdens outweighed benefits

12

Philadelphia v. New Jersey: What Discrim?

Discriminatory: Only prohibits waste from out of state

If safety was issue: could have made a law that applied to ALL solid waste

13

Hughes: What Discrim?

Discriminatory: Can't transfer minnows out of state but not limit on number of minnows in staters could catch

- states have interest in conserving wild animals
- Could be less discrim. to further interest

14

What is Reciprocity Requirement?

where state allows out-of-staters to have access to their market if the reg. is the same in other state is facially discriminatory.

15

What happens in Maine v. Tailor?

-Maine says no live bait fish transport
-Court says environmental risk legitimate purpose. Prospect of irreversible damage.
-No alternative because all out of state fish had this parasite and too difficult to look at all fish.

-ONLY case where facially discriminatory law has passed strict scrutiny standard.

16

When is facially neutral law likely to be found discriminatory?

- A law is likely to be found discriminatory if it imposes costs on out of staters that in staters would not have to bear.
-Law is more likely to be deemed discriminatory if its effect is to exclude virtually all out of staters from a particular market but not if it excludes just one subset of out of staters.

17

Hunt v. Washington Apple: What Discrim?

Facially Neutral: Discrim in effect

-all closed container apples sold/shipped in state bear no grade except US standard

-Burden imposed on WA growers enormous
- imposes cost only on out of state growers w/o any cost to in-state. This is equivalent of economic protectionism
PREEMPTION

18

West Lynn Creamery: What Discrim?

Facially Neutral: Discrim. in purpose

-Tax on all dealers and subsided to instate farmers
-Equivalent to tax on out of state milk. Can't use economic protec. Can't fund self w/ out of staters tax. PREEMPTION

19

Minn. v. Clover Leaf Creamery: What Discrim?

Facially Neutral: Not Discrim. in Purpose
-MN Ban on sale of milk in state in non-recyclable containers

-Purpose valid and actual/not protectionist
- Court says its an even handed regulation. Some ppl challenging were in state entities.
- Benefits greater than burdens in this case. NO PREEMPTION

20

Pike v. Bruch Church: What Discrim?

Facially Neutral: Where a statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld UNLESS the burden imposed on such commerce is clearly excessive in relation to the putative

21

What are the exceptions to DCC?

1) Congressional Approval
2) Market Participant

22

What is the Congressional Approval exception and the extra notes?

If congress ordains that states may freely regulate an aspect of ISC, any action taken by a state w/I scope of the congressional authorization is rendered invulnerable to CC challenge.

NOTES: Once congress acts, its no longer dormant. If SC says states cannot do something Congress can go back and allow it. Other provisions in the constitution function as limits to this. (Western and Southern LIfe ins.)

23

What is the Market Participant Exception?

Restraints of the DCC do not apply when a state has become a participant (buyer/seller) in a market rather than regulating it.

NOTE: Only have to comply w/ same reg and restrictions that private entities. (Reeves Cement)

When using its own funds it is market participant, when using federal funds must use how federal statute says(Mass. Council of Construction Employees)

24

What is Western and Southern Life Ins.?

Congressional Approval: Even though tax does burden ISC it was permissible because congress had approved it.

Cali. Insurance Code imposes a retaliatory tax on out of stater insurers doing business in Cali. (McCarran-Fergusun Act)

25

What happens South Central Timber?

-Market participants do not normallycontrol what happens after purchase. NO “downstream”
-If market participator they can operate in a way that prefers in state parties, even though this activity would normally violate DCC.
- States are not free to impose conditions that have a substantial regulatory effect outside of the market in which they are operating.

26

Exxon Corp.

Facially Nuetral

Statute prohibits petroleum producers/refiners from operating retail service stations in state

Exxon Arg-effect of statute is to protect in-state ind. Dealers from out of state comp.and burden only fails on out staters

-Court says even if Exxon and shell are being barred from operating in Maryland there are other ind. Marketers that will be at liberty to operate even w/ new MNlaw.
-Not a burden on int. commerce and not a burden place on out of state entities. Just burden on all producers and refiners which court says state can do. (not discriminatory even though most of these entities were out of state)

ALWAYS Use facts of market in question



27

Exxon Corp.

Facially Nuetral

Statute prohibits petroleum producers/refiners from operating retail service stations in state

Exxon Arg-effect of statute is to protect in-state ind. Dealers from out of state comp.and burden only fails on out staters

-Court says even if Exxon and shell are being barred from operating in Maryland there are other ind. Marketers that will be at liberty to operate even w/ new MNlaw.
-Not a burden on int. commerce and not a burden place on out of state entities. Just burden on all producers and refiners which court says state can do. (not discriminatory even though most of these entities were out of state)

ALWAYS Use facts of market in question