South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, p.204
- Alaskan timber purchaser and shipper brought action challenging Alaska's requirement that timber taken from state lands be processed within the state prior to export
Reasoning
- Alaska's requirement that timber taken from state lands be processed within the state prior to export was not exempt from commerce clause scrutiny under market-participant doctrine,, since Alaska was not participant in processing market but only in timber-selling market and was using its leverage in selling market to exert regulatory effect in processing market.
- Alaska's requirement that timber taken from state lands be processed within the state prior to export was invalid per se under the commerce clause, because of its protectionist nature and because of the burden it imposed on interstate commerce.
- Justify state preferences for in-staters through subsidies rather than regulation
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o Textual -
Facially neutral laws with protectionist in purpose or effect p.209
- Facial discrimination against inter-state commerce is rarity given the Court’s readiness to strike down, e.g. tariff against product of other states
- Discriminatory purpose may be difficult to discern ; this difficulty may be overcome to the extent that proof of a forbidden purpose may be inferred from the effects of a state rule
Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, p.210
- NY’s effort to stabilize milk prices ; NY law set the minimum prices to be paid to milk producers by NY dealers ; Seelig, a NY milk dealer bought milk from VT milk producer at prices lower than the NY minimum ; the NY law prohibited NY sales of out-of-state milk
o DO- NY milk dealers have to pay a minimum wherever he purchase milk
- Held - the NY law unconstitutional as applied to out-of-state milk producers (constitutional as to NY producers)
Reasoning
- Provision of New York Milk Control Act prohibiting dealer from selling, within the state, milk produced without the state, where such milk was purchased from producer at less than minimum price fixed for similar milk produced within the state,, held unconstitutional,, as undue burden on interstate commerce,, as applied to dealer bringing wholesome milk from VT into NY
- State may not directly burden inter-state commerce ; and burden or obstruction is “direct” when avowed purpose thereof as well as its necessary tendency (DO- effect ?) is to suppress or mitigate consequences of competition between the states
- “Original package” test, as applied to validity of burden imposed by state in respect of goods brought into state, … ; the ultimate principle being that one state in its dealings with another may not place itself in position of economic isolation, regardless of form of package.
- State may not use its taxing power or police power, with aim and effect of establishing economic barrier against competition with products of another state or labor of its residents, ; and restrictions so imposed are undue burden on interstate commerce; ; it being immaterial in such circumstances whether packages are original or broken at the moment state's restrictions are imposed
o They set up what is the equivalent of a rampart of customs duties designed to neutralized advantages belonging to the place of origin ; they are thus hostile in conception as well as burdensome in result
H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525
- The milk processor was a MA corporation that received milk in NY and shipped it to MA for processing ; The NY Commissioner denied the milk processor's application for an additional receiving facility in NY
- Held - the NY licensing statute, as applied, violated the Commerce Clause ;
o the statute was an attempt to protect NY's commercial interests by restricting the export of milk to milk processors in other states that competed with NY milk processors (DO- effect protectionism) ; The statute's primary purpose was not regulation with a view to safety but the prohibition of competition
reasoning
- States have broad powers to protect inhabitants against perils to health, safety, fraudulent traders, and highway hazards, even though the use of measures might have adverse impact on interstate commerce ; but not to promote its own economic advantage
- A state cannot accord to its own consumers a preferred right of purchase over consumers in other states
- A state has no power to prevent privately owned articles of trade from being shipped and sold in inter-state commerce, on the ground that they are required to satisfy local demands or because they are needed by the people of the state
- One state in its dealing with another may not place itself in a position of economic isolation
- A state may not use its admitted powers to protect health and safety as a basis for suppressing competition
- Restraint by state on interstate commerce in milk could not be justified, on ground that limitation of competition would itself contribute to safety ; and therefore indirectly serve an end permissible to the state
- The economic system of the nation, 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, that no home embargoes will withhold his export, and no foreign state will by customs duties or regulations exclude them, and under that system every consumer may look to the free competition from every producing area in the nation to protect him from exploitation by any. U.S.C.A.Const. art. 1, § 8, cl. 3; Amend. 14
- State which had denied to distributor a license for a fourth milk receiving depot which would have given distributor additional facilities to acquire and ship milk in interstate commerce, could not overcome constitutional objection, by its argument that denial of license did not restrict or obstruct interstate commerce because distributor had been licensed at other plants without condition or limitation as to the quantities it might purchase
Identifying protectionism in facially neutral laws p.212
Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, p.212
- NC law that requires that closed containers of apples bear no grade other than the applicable US grade
- Held – the law could not stand in light of its discriminatory effect, even if the purpose was to protect consumers
- Noted that non-discriminatory alternatives were readily available
Bacchus Imps. v. Dias, 468 U.S. 263
- Exemption of liquor tax ; invalidated
- We need not guess at the legislature’s motivation, for it is undisputed that the purpose of the exemption was to aid Hawaiian industry
Exxon Corp. v. Governor of Maryland, 437 U.S. 117, p.214
- A case where there are no equivalent economic actors on either side of the state border
- MD law prohibiting producers or refiners of petroleum products from operating retail service stations in MD ; no gasoline was produced or refined in MD ; all of gasoline was imported from out-of-state refineries ; Upheld the law
Reasoning
- The law does not discriminate against inter-state goods ; nor does it favor local producers and refiners ; claim of disparate treatment b/w inter-state and local commerce would be meritless
Minn. v. Clover Leaf Creamery Co., 449 U.S. 456, p.215
- Upheld the state law that banned the retail of sale of milk products in plastic non-returnable containers but permitted sales in non-returnable containers made of pulpwood
