THE SCOPE OF STATE POWER

1. (1) Is this a dormant commerce clause issue? Has Congress spoken? If yes, then Federal law trumps State law if they are in conflict. If no, First consider:
   1. • Is State acting as a Market Participant? If yes, then commerce clause analysis does not apply. If state discriminates and favors its own citizens it’s ok.
   2. If no, (i.e. if State is acting as a regulator) then you have to ask (2) and apply the rest of the dormant commerce clause tests:
2. (2) Does the law discriminate against commerce?
   1. If yes, then ask:
      1. (1) Is this statute motivated by economic protectionism or is there a legitimate state interest?
         1. (a) If it’s protectionist, then it’ll be per se invalid.
         2. (b) If there’s a legitimate state interest, then ask
            1. (2) Can we accomplish the state interest through a less discriminatory means?
               1. • If yes, statute will be upheld. [Court will almost always find that there was an alternative]
   2. If it doesn’t discriminate, it’s generally applied to interstate and intrastate commerce, then apply these questions-
      1. (1) Does the state law have a legitimate state purpose? i.e. Is it a POLICE POWER that has to do with the health of general welfare of its citizens?
      2. (2) Does the state law rationally serve the legitimate state interest? i.e. is there a rational relationship between the law and state interest?
      3. (3) Balancing Test:
         1. Do the benefits to the State from this law outweigh the burden to interstate commerce?
            1. If yes, the state will be valid even if it does burden commerce to an extent.

Annotations:

• 1.    New Energy Co. of Indiana v. Limbach An Ohio statute denies arebate to ethanol that comes from states that don’t grant a tax credit to ethanol from Ohio.  Basically, ifKentucky gives a rebate to Ohio produced ethanol, then Ohio gives a rebate to Kentucky.  Ohio also gives a cashsubsidy.  Other states are left our if they don’t have a tax rebate statute. Some states are benefited by the tax credit statute, but it stilldiscriminates on other states that don’t do the rebate.  Indiana can’t get a rebate because theyrepealed their rebate statute. HELD:  cash subsidy granted to New Energy Co. is fine, but discriminatory taxation of out of state manufacturersviolates the Commerce Clause.  “The Commerce Clause doesn’t prohibit all state action designed to give the residents an advantage in the marketplace, but only action of that description in connection with the State’s regulation of interstate commerce.”    
•       •       State is telling other states what to do-it’s not their business to foster interstate commerce.     

Annotations:

•   1.    Distinguishing Buck and Bradley:   a.    In Buck, Washington denied a license to travel from Washington and Oregon.  Court says it’s unconst. Because there is a prohibition of competition.  Remember Congress has power to determine “channels” and facilities of commerce (see Lopez)   b.    In Bradley, Ohio denies Bradley a license to run a truck from Cleveland to Michigan.  Where the state says that the purpose of the statute is safety-congestion, it’s likeable by the Court.  (it’s a police power-health, safety, welfare)    •       Analysis:  If state interest is to keep business out, courts strike it down.  In Buck there is a total prohibition; it is a denial to take any route.  However, in Bradley, P can’t use one particular route but he is free to come up with an alternate route.      
•   1.    South Carolina State Highway Dept. v. Barnwell   S.C. passes a statute that trucks can’t be wider than 90 inches.  Other states allow their truck to be longer.  If you have a 95 in. truck, you have to go around the highway.  HELD:  Upheld.  Roads are a local matter and this is a safety concern.  Court is deferential to state legislature.  There is a rational relationship between regulating truck length and safety.      

1. Apply: Generally Applicable Law Prongs

1. (1) Is there a legitimate state interest?
2. (2) Does law rationally serve the safety interest? (relationship between means and ends) No. There was evidence that safety was actually jeapordized because there were more accidents as result of this law.
3. (3) Do the burdens on commerce outweigh the benefits?

   Annotations:

   • Southern Pacific Co. v. Arizona   This is a case dealing with state regulation of railroad car size.  Railroads are not a matter of local concern (like highways).   This is declared a burden on commerce,  HELD:  Court says the burdens on interstate commerce outweigh the safety interest.  Court doesn’t want to say there’s no rational basis (questioning Congressional wisdom)