1. Lecture 33 The Commerce Power
Part 10: Commerce Power of States II

2. This lecture This the last part of the Commerce Clause chapter!
We will finish up on state discrimination against interstate commerce
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3. Hunt v. Washington State Apple Advertising Commission (1977)
Background
North Carolina adopts a regulation saying that all apples shipped into the state either had to say USDA grade or nothing at all
Other grading system information was prohibited
North Carolina said it was to ensure uniformity no other state had this regulation
Apple growers in Washington State challenge this they grow 30% of the apples
Their standards are even higher than the USA
They asked North Carolina to make an except for their apples
They refuse, so the growers sue
They lose at the trial court level, so the case is appealed to the Supreme Court

4. Hunt v. Washington State Apple Advertising Commission- II
Question
Did this regulation place an unfair burden on interstate commerce and thus violate the Commerce Clause?
Arguments
For James Hunt (law is constitutional)
The State is protecting its citizens from fraud and deception in marketing of apples
It applies equally to all apples, no matter their source
This is part of the residuum of power left to the states

5. Hunt v. Washington State Apple Advertising Commission- III
Arguments
For the Washington State apple growers
It reasonably burdens interstate commerce in three ways
It discriminates in favor of local apple growers
It denies Washington apple growers the marketing advantage their state earned through its higher quality standards for its apples
It increases costs in interstate commerce by requiring different labeling in North Carolina than in other states

6. Hunt v. Washington State Apple Advertising Commission- IV
Unanimous opinion by Chief Justice Burger
North Carolina does not dispute that it increases costs
But they say local benefits outweigh that
7 of the 13 states shipping apples into North Carolina had their own grading system
North Carolina says it meant to address uniformity fraud and deception in apples
Restriction on state power when its purpose is to discriminate against interstate goods
The overriding requirement is a common market
Costs are raised for Washington growers, but not those in North Carolina
They are not forced to alter their marketing practices, but Washington is
This could put the Washington growers at a disadvantage

7. Hunt v. Washington State Apple Advertising Commission- V
More from Chief Justice Burger
Washington had earned a reputation for good apples
Through its expensive inspection and grading system
Under this law, they would effectively be downgraded in North Carolina by having to adhere to the lower USDA standard
Burger notes that it was the North Carolina apple growers who pushed this bill to benefit
Farmers are a powerful group
It also only effects closed containers of apples those shipped in commerce
When discrimination in interstate commerce is found, the burden falls on the state to justify it and unavailability of other options
The statute aims more at apple wholesalers than consumers
If Washington’s apples fell below a certain standard they could be banned from sale

8. Maine v. Taylor (1986) Maine v. Taylor (1986) Background
Maine had a law prohibiting live fish as bait in any state inland waters
It was to protect indigenous fish from parasites and diseases common in bait fish and to prevent these fish from getting in state waters
The Lacey Act made it a federal crime to transport fish in violation of state laws
Taylor was indicted for importing out of state bait under the Lacey Act
He loses at the trial court level, but wins at the 1st Circuit
The 1st Circuit said this had an “aura of protectionism”
Less discriminatory means existed as well

9. Maine v. Taylor- II
Question: Did the law unconstitutionally burden interstate commerce?
Arguments
For the State of Maine (uphold the law)
Congress encouraged such laws in the Lacey Act
The law satisfies the purpose and alternative requirements
For Taylor (overturn the law)
A state law discriminating against interstate commerce must show it serves a legitimate local purpose and no reasonable alternatives exist
The state did not show a legitimate local purpose existed overstating the problem
Maine did not take advantage of less discriminatory alternatives

10. Maine v. Taylor- III Justice Blackmun writes for a 8-1 Court
The Maine statute restricts interstate trade by a direct ban
Hughes v. Oklahoma (1979) says the burden falls on the state to demonstrate
The statute serves a legitimate local purpose, and
There are no alternative non-discriminatory means available
The Court basically buys into Maine’s arguments
This does not appear to be designed to shield Maine companies from out of state competition

11. Maine v. Taylor- IV Justice Stevens, dissenting
He sees this as blatant discrimination against out of state products
Maine already has golden shiners in the state
But they are discriminating against ones produced elsewhere
He also sees alternative means to achieve the same result

12. Granholm v. Heald (2005) Granholm v. Heald (2005) Background Question
Instate wineries can legally sell and ship their products directly to residents within the state, but out of state wineries cannot
Those challenging the law wanted to purchase win from out of state wineries
They challenge the law as discrimination under the commerce clause
Question
Does this violate the dormant commerce clause in taken in conjunction with the 21st Amendment?

13. Granholm v. Heald- II Arguments For Granholm (uphold the law)
The 21st Amendment gives the states the power to adopt any reasonable regulation in terms of alcoholic beverages
The provision in the amendment was designed carve out an exception to the dormant commerce clause
Congress reaffirmed this in the Webb-Kenyon Act
In state wineries are under the supervision and regulation by the state, but not out of state wineries

14. Granholm v. Heald- III Arguments For Heald (overturn the law)
This law is classic discrimination under the dormant commerce clause by treating instate and out of state companies differently
The 21st Amendment does not allow for violations of the commerce clause by states
The Webb-Kenyon Act does not confer this power
This does not meet the two part test
26 states allow this practice with little problem

15. Granholm v. Heald- IV Justice Kennedy rules for a 5-4 Court
Note Scalia is joining with three of the liberals
Stevens is with three conservatives
State laws may violate the commerce clause if they provide for differential treatment of instate and out of state interests
States must basically stay neutral
Avoid tendencies of Balkanization
These laws deprive citizens of the right to products from other states
This is essentially a low level trade war

16. Granholm v. Heald- V More from Kennedy
Does the 21st Amendment save the law?
No, it does not allow discrimination against out of state companies
The 21st Amendment does not supersede other parts of the Constitution
Two part test
States argue this keeps alcohol from minors and facilitates tax collection
However, there is little support for either of these
The burden is on the state to justify the discrimination and they fail to meet that burden

17. Granholm v. Heald- VI Thomas, J. dissenting
Joined by Rehnquist, O’Connor and Stevens
The other dissent is actually Stevens, joined by O’Connor
He relies on the Webb-Kenyon Act and the 21st Amendment
He says these displace the dormant commerce clause regarding this activity
Note they were subsequent to the Commerce Clause

18. Next lecture
We will move into the chapter on the powers to tax and spend
Pages
Overview of the power
Constitutional Authority
Taxation of Exports