Dormant Commerce Clause
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The "Dormant" Commerce Clause, also known as the "Negative" Commerce Clause, is a legal doctrine that courts in the United States have inferred from the Commerce Clause of the United States Constitution. The Commerce Clause expressly grants Congress the power to enact legislation that affects interstate commerce. The idea behind the Dormant Commerce Clause is that this grant of power implies a negative converse — a restriction prohibiting a state from passing legislation that improperly burdens or discriminates against interstate commerce. The question of whether such a negative implication should be recognized, and how far it should extend, has been a subject of extensive disagreement among Federal judges.
The premise of the doctrine is that the U.S. Constitution reserves for the United States Congress at least some degree of exclusive power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes" (Article I, § 8). Therefore, individual states are limited in their ability to legislate on such matters. The Dormant Commerce Clause does not expressly exist in the text of the United States Constitution. It is, rather, a doctrine deduced by the U.S. Supreme Court and lower courts from the actual Commerce Clause of the Constitution.
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[edit] Origin of the doctrine
The idea that regulation of interstate commerce may to some extent be an exclusive federal power was discussed even before adoption of the Constitution, though the framers did not use the word "dormant." On September 15 of 1787, the framers in Philadelphia debated whether to guarantee states the ability to lay duties of tonnage without congressional interference, in order for states to finance the clearing of harbors and the building of lighthouses.[1] James Madison believed that the mere existence of the Commerce Clause would otherwise bar states from imposing any duty of tonnage: "He was more and more convinced that the regulation of Commerce was in its nature indivisible and ought to be wholly under one authority." Roger Sherman disagreed: "The power of the United States to regulate trade being supreme can controul interferences of the State regulations when such interferences happen; so that there is no danger to be apprehended from a concurrent jurisdiction." Ultimately, the constitutional convention decided upon the present language in Article I, Section 10, which says: "No state shall, without the consent of Congress, lay any duty of tonnage...."
The word "dormant," in connection with the Commerce Clause, originated in dicta of Chief Justice John Marshall. For example, in the case of Gibbons v. Ogden, , he wrote that the power to regulate interstate commerce "can never be exercised by the people themselves, but must be placed in the hands of agents, or lie dormant." Concurring Justice William Johnson was even more emphatic that the Constitution is "altogether in favour of the exclusive grants to Congress of power over commerce." Later, in the case of Willson v. The Black Bird Creek Marsh Company, , Chief Justice Marshall wrote: "We do not think that the [state] act empowering the Black Bird Creek Marsh Company to place a dam across the creek, can, under all the circumstances of the case, be considered as repugnant to the power to regulate commerce in its dormant state, or as being in conflict with any law passed on the subject."
[edit] Effect of the doctrine
In its effect, the doctrine often operates as a kind of free-trade clause as among the states. The Supreme Court, in explaining the necessity for the dormant Commerce Clause, said, "Our system, fostered by the Commerce Clause, is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation."[2]
In the first century of its jurisprudence, the Supreme Court often would evaluate Commerce Clause challenges to state laws or actions only for actual conflict with Congressional acts. See Cooley v. Board of Wardens, . Today, however, a more nuanced jurisprudence exists. If a law is alleged to violate the Dormant Commerce Clause, a court determines the law's constitutionality by examining its discriminatory and extra-territorial effects. In a Dormant Commerce Clause case, a court is initially concerned with whether the law facially discriminates against out-of-state actors or has the effect of favoring in-state economic interests over out-of-state interests. If so, it is typically found to be unconstitutional. See Brown-Forman Distillers v. New York State Liquor Authority, . If the law is not outright or intentionally discriminatory or protectionist, but still has some impact on interstate commerce, the court will evaluate the law using a balancing test. The Court determines whether the interstate burden imposed by a law outweighs the local benefits. If such is the case, the law is usually deemed unconstitutional. See Pike v. Bruce Church, Inc., .
In evaluating a Dormant Commerce Clause challenge, a Court first looks at the language of the state statute, determining if the statute is facially discriminatory or facially neutral. If the statute is facially discriminatory, then the statute is presumed unconstitutional. Typical cases demonstrating this analysis are the City of Philadelphia v. New Jersey, 437 U.S. 617 (1978), and C&A Carbone, Inc v. Town of Clarkstown, N.Y, 511 U.S. 383 (1994).
This presumption of unconstitutionality can be rebutted if the state can demonstrate that the law is necessary (that no other non-discriminatory means were available) to serve a compelling state objective or legitimate local interest. This is a hard presumption to rebut, and consequently the Supreme Court has only upheld one facially discriminatory state law. See Maine v. Taylor, 477 U.S. 131 (1986). This standard applies what is often called a strict scrutiny standard, even though this standard is not named in the texts of opinions. The standard named in opinions is usually referred to as heightened scrutiny.
States wishing to legislate protectionist measures might intentionally craft laws that appear facially neutral but still have a discriminatory effect - such as a state passing a law allowing the sale of milk from any state, but only if pasteurized within 5 miles of the place of sale. See Dean Milk Co. v. Madison, 340 U.S. 349(1951). Because of this, if the state statute is facially neutral then the Court will also examine its purpose or effect. See Hunt v. Washington State Apple Advertising Comm., 432 U.S. 333 (1997) and Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978).
If the statute's purpose or effect is deemed discriminatory, then it is presumed unconstitutional. See Dean Milk Co. v. City of Madison, Wisconsin, 340 U.S. 349 (1951). Again, this presumption can be rebutted if the state can demonstrate under a strict scrutiny standard that the law is necessary (that no other non-discriminatory or less restrictive means were available) to serve a compelling state objective or local interest. The Court often finds that there are other means available and frequently holds the state law unconstitutional. See Hunt v. Washington State Apple Advertising Comm., 432 U.S. 333 (1997).
If the Court finds that the purpose or effect of the state statute was not discriminatory, but there is some impact on interstate commerce, then it applies a balancing test. In this test, the Court balances the burden on interstate commerce against the local state interest and putative benefit. If interstate impacts are infrequent or insignificant in relation to the alleged benefits to the state, a court frequently upholds the state law. See Pike v. Bruce Church, Inc., , and Bibb v. Navajo Freight Lines, Inc., .
[edit] Exceptions to the doctrine
There are two notable exceptions that can permit state laws or actions that otherwise violate the Dormant Commerce Clause to survive court challenges. The first exception occurs when Congress has legislated on the matter. See Western & Southern Life Ins. v. State Board of California, 451 U.S. 648 (1981). In this case the Dormant Commerce Clause is no longer "dormant" and the issue is a Commerce Clause issue, requiring a determination of whether Congress has approved, preempted, or left untouched the state law at issue. The second exception is "market participation exception". This occurs when the state is acting "in the market," like a business or customer, rather than as a "market regulator."[3] For example, when a state is contracting for the construction of a building or selling maps to state parks, rather than passing laws governing construction or dictating the price of state park maps, it is acting "in the market." Like any other business in such cases, a state may favor or shun certain customers or suppliers.
The primary cases enunciating the market participation exception principle are Reeves v. William Stake, 447 U.S. 429 (1980) and South-Central Timber v. Wunnicke, 467 U.S. 82 (1984). The Reeves case outlines the market participation exception test. In this case state-run cement co-ops were allowed to make restrictive rules (e.g. rules not to sell out-of-state). Here, this government-sponsored business was acting restrictively like an individually-owned business and this action was held to be constitutional. South-Central Timber is important because it limits the market exception. South-Central Timber holds that the market-participant doctrine is limited in allowing a State to impose burdens on commerce within the market in which it is a participant, but allows it to go no further. The State may not impose conditions that have a substantial regulatory effect outside of that particular market.
The "market participation exception" to the Dormant Commerce Clause does not give states unlimited authority to favor local interests, because limits from other laws and Constitutional limits still apply. In United Building & Construction Trades Council v. Camden, 465 U.S. 208 (1984), the city of Camden, New Jersey had passed an ordinance requiring that at least forty percent of the employees of contractors and subcontractors on city projects be Camden residents. The Supreme Court found that while the law was not infirm due to the Dormant Commerce Clause, it violated the Privileges and Immunities Clause of Article IV of the Constitution. Justice Rehnquist's opinion distinguishes the market-participant doctrine from the privileges and immunities doctrine. Similarly, Congress has the power itself under the Commerce Clause to regulate and sanction states acting as "market participants," but it lacks power to legislate in ways that violate Article IV.
In the 21st century, the Dormant Commerce Clause has been a frequent legal issue in cases arising under state laws regulating some aspects of Internet activity. Due to the interstate, and often international, nature of Internet communications, state laws addressing internet-related subjects such as spam, online sales or online pornography can often trigger Dormant Commerce Clause issues.
[edit] Rejection of the doctrine
Supreme Court Justices Antonin Scalia[4] and Clarence Thomas[5] have rejected the notion of a dormant commerce clause.
[edit] References
- ^ 2 M. Farrand, Records of the Federal Convention of 1787, p. 625 (1937) (1787-09-15).
- ^ H.P. Hood & Sons, Inc. v. Du Mond, .
- ^ South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 87 (1984).
- ^ Tyler Pipe Industries v. Department of Revenue, 483 U.S. 232 (1987).
- ^ United Haulers Association v. Oneida-Kerkimer Solid Waste Management Authority, 550 U.S. ___ (2007).
[edit] See also
- In Granholm v. Heald (2004), the U.S. Supreme Court held that certain restrictions on interstate liquor shipments violated the Dormant Commerce Clause, notwithstanding section two of the Twenty-first Amendment.
