Dormant Commerce Clause (Update)

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DORMANT COMMERCE CLAUSE (Update)

The "dormant commerce clause" limits state power to obstruct economic nationalism. At the core of this principle is the idea that states may not overtly discriminate against interstate commerce. For example, when New Jersey blocked importation of solid waste from other states, the Supreme Court found a constitutional violation in phila-delphia v. new jersey (1978). In cases like West Lynn Creamery, Inc. v. Healy (1994), the Court has continued to insist that protective tariffs and similar trade barriers offend this antidiscrimination principle.

Courts sometimes invoke the dormant commerce clause to strike down state laws that are not discriminatory on their face. In a leading case, Hunt v. Washington State Apple Advertising Commission (1977), the Supreme Court invalidated a North Carolina law that barred the display on apple crates of any grading symbol other than the federal Department of Agriculture grade. The Court reasoned that this law, although superficially neutral, unjustifiably burdened growers from the state of Washington, who had developed their own distinctive grading system. Courts often evaluate evenhanded regulatory laws under the balancing test set forth in Pike v. Bruce Church, Inc. (1970), which provides that such laws "will be upheld unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits."

State taxing measures have provided a common source of dormant commerce clause litigation. In Complete Auto Transit, Inc. v. Brady (1977), the Court summarized its many holdings in the tax field with a test that focuses on the presence of (1) nondiscrimination; (2) fair apportionment; (3) a reasonable nexus between the taxed activity and the taxing state; and (4) an appropriate relation between the burden imposed by the tax and the services afforded to the taxpayer by the state. In cases like Oklahoma Tax Commission v. Jefferson Lines, Inc. (1995), the Court has continued to apply this four-step methodology.

In some situations the dormant commerce clause does not operate even when state laws are facially discriminatory. A quarantine exception permits states to block the importation of articles, such as germ-infested rags, whose very movement creates risks of contagion. The dormant commerce clause also does not apply when a state acts as a market participant rather than a market regulator; for example, courts have upheld "buy local" laws under which a state insists on making its own purchases solely from in-state suppliers. Discriminatory state laws may escape invalidation if there is no less-restrictive alternative for achieving an important state interest; thus the Court, in Maine v. Taylor (1986), upheld a state's outright ban on the importation of baitfish where there was no other way to safeguard native fish populations from certain diseases. In Camps Newfound/Owatonna, Inc. v. Town of Harrison (1997), the Court suggested that the dormant commerce clause would not invalidate monetary subsidies limited to in-state businesses even if they had the same effect as unlawfully discriminatory tax benefits. Finally, even if a state law otherwise would violate the dormant commerce clause, Congress can validate the law by way of ordinary legislation enacted pursuant to its commerce power, without the need for a constitutional amendment.

Particularly because the dormant commerce clause lacks a clear textual foundation, it is sometimes decried as illegitimate. But such luminaries as james madison endorsed the principle, and many analysts argue that it reflects the central aims of the Framers. In the end, proponents of the principle have won out, for the Court has recognized and applied some form of the dormant commerce clause for more than 140 years.

Dan t. coenen
(2000)