Constitutional Law I Dormant Commerce Clause II Nov. 17, 2004

Fall, 2004con Law I - Manheim2 Intentional Discrimination West Lynn Creamery v. Healy (1994) Retaliation anybody?  Mass tax on fluid milk products (in- and out-state); proceeds are distributed to in-state producers Discriminatory?  Tax is uniform, assessed on all producers, thus valid In-state interests (w/ vote) protect against abuses Virtual voice theory of representation  State subsidies restricted to in-staters are also valid Payment by state taxpayers creates political check Combination  lack of transparency and political oversight  Purpose and effect is to change mix of IC in milk

Fall, 2004con Law I - Manheim3 Unintentional Discrimination Minn. v. Clover Leaf Creamery (1981) Prohibition on plastic nonrecyclable containers  Stated purpose: health & safety (solid waste mgmt)  DC finds: economic protectionism Discrimination against out-state commerce?  Neutral: Dairy industry; presumably can adjust easily  Losers: Plastics industry (slightly, only wrt nonrecyclable bottles)  Winners: Cardboard industry; a major Minnesota product But out-state pulpwood firms can pick up slack DCC protects I/S commerce not industries Test: Does law necessarily cause a shift in business from out-state to in-state firms?

Fall, 2004con Law I - Manheim4 Standard of Review Dean Milk v. Madison (1951) City ordinance requires milk pasteurization within 5 miles of city and production within 25 miles  Is the law discriminatory (intentional or unintentional)? Discrimination against IC is protectionist unless no non-discriminatory alternative is available to achieve a legitimate local interest  What legitimate local interest at stake? Healthy milk, verified by inspection  Does it require 5/25 mile restrictions? Uniform inspection available

Fall, 2004con Law I - Manheim5 Rule in DCC cases

Fall, 2004con Law I - Manheim6 Standard of Review Maine v. Taylor (1986) Maine prohibits import of live baitfish  Discrimination against IC (intentional/unintentional)? What standard of review?  No non-discriminatory alternatives that adequately protect legitimate local interests Legitimate local interests  Protection of fisheries industry Non-discriminatory alternatives?  Imported fish introduce parasites; non-native species can upset delicate ecological balance  Experts: no suitable inspection means

Fall, 2004con Law I - Manheim7 Standard of Review Maine v. Taylor (1986) How strict is “strict scrutiny”  Who bears the burden of proof?  What result when “substantial scientific uncertainty” Can state guard against “imperfectly understood environmental risks”? Does Ct. adopt the precautionary principle?  “If there is reason to doubt the safety of an action, don’t do it. In the absence of scientific certainty, err on the side of precaution” Or the uncertainty principle? Maine Fish Health Issues Website

Fall, 2004con Law I - Manheim8 Extra-Territorial Effect CTS Corp v. Dynamics Corp (1987) Indiana anti-hostile takeover statute  regulates tender offers for Indiana corporations  most tender offers originate from out of Indiana  does law regulate out-of-state commercial activity? Rule: State laws cannot have direct extra- territorial effect (operate out-of-state) Can’t regulate foreign economic activity Ok  Baldwin v. G. A. F. Seelig: New York law regulates wholesale prices of milk purchased in-state. Ok  Also prohibits retail sale of imported milk unless wholesale price paid (out-of-state) is as high as NY

Fall, 2004con Law I - Manheim9 Extra-Territorial Effect Rule: State laws cannot have direct extra- territorial effect (operate out-of-state) Can’t regulate foreign economic activity  Edgar v. MITE Corp (1982): Illinois reviewed sale of stock occurring out-of-state to see if met state stds.  Brown-Forman v. NY (1986); Healy v. Beer (1989): Most-favored-nation trading status: Could not sell in-state for more than lowest price sold out-of-state. Can regulate in-state economic activity, even w/ incidental impact out-of-state  E.g. foreign goods sold in-state must meet standards  Tender offers (wherever made) must meet standards

Fall, 2004con Law I - Manheim10 Bringing it all Home Pike v. Bruce Church (1970) Arizona law requires Ariz. cantaloupes to be packed in-state Discriminatory? Facial: Ariz. growers may need to build plants  Only in-state firms burdened; not a DCC problem Effect: enhance reputation of Ariz. growers  Yes, but doesn’t affect mix of IC Burdensome? Yes, but all police power regs impose burden Is the burden justified?

Fall, 2004con Law I - Manheim11 Pike Test Where the statute regulates evenhandedly 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 local benefits.” discrimination against IC exercise of police not commerce power direct vs. indirect effect balancing of interests - even indirect effects can be too great

Fall, 2004con Law I - Manheim12 Pike Test Where the statute regulates evenhandedly 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 local benefits.” If a legitimate local purpose is found, then the question becomes one of degree … can the local interst be promoted as well with a lesser impact on IC? are these questions judicial or legislative in character?