Dormant Commerce Clause - Effect of The Doctrine

Effect of The Doctrine

In order to determine whether a law violates this so-called "dormant" aspect of the Commerce Clause, the court first asks whether it discriminates on its face against interstate commerce. In this context, "discrimination" simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.

Thus, in a dormant Commerce Clause case, a court is initially concerned with whether the law facially discriminates against out-of-state actors or has the effect of favoring in-state economic interests over out-of-state interests. Discriminatory laws motivated by "simple economic protectionism" are subject to a "virtually per se rule of invalidity," City of Philadelphia v. New Jersey 437 U.S. 617 (1978), Dean Milk Co. v. City of Madison, Wisconsin, 340 U.S. 349 (1951), Hunt v. Washington State Apple Advertising Comm., 432 U.S. 333 (1977) which can only be overcome by a showing that the State has no other means to advance a legitimate local purpose, Maine v. Taylor, 477 U.S. 131(1986). See also Brown-Forman Distillers v. New York State Liquor Authority, 476 U.S. 573 (1986).

On the other hand, when a law is "directed to legitimate local concerns, with effects upon interstate commerce that are only incidental" (United Haulers Association, Inc.), that is, where other legislative objectives are credibly advanced and there is no patent discrimination against interstate trade, the Court has adopted a much more flexible approach, the general contours of which were outlined in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970) and City of Philadelphia v. New Jersey, 437 U.S. at 624. If the law is not outright or intentionally discriminatory or protectionist, but still has some impact on interstate commerce, the court will evaluate the law using a balancing test. The Court determines whether the interstate burden imposed by a law outweighs the local benefits. If such is the case, the law is usually deemed unconstitutional. See Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). In the Pike case, the Court explained that a state regulation having only "incidental" effects on interstate commerce "will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." 397 U.S. at 142, 90 S.Ct. at 847. When weighing burdens against benefits, a court should consider both "the nature of the local interest involved, and ... whether it could be promoted as well with a lesser impact on interstate activities." Id. Thus regulation designed to implement public health and safety, or serve other legitimate state interests, but impact interstate commerce as an incident to that purpose, are subject to a test akin to the rational basis test, a minimum level of scrutiny. See Bibb v. Navajo Freight Lines, Inc. In USA Recycling, Inc. v. Town of Babylon, 66 F.3d 1272, 1281 (C.A.2 (N.Y.), 1995), the court explained:

If the state activity constitutes "regulation" of interstate commerce, then the court must proceed to a second inquiry: whether the activity regulates evenhandedly with only "incidental" effects on interstate commerce, or discriminates against interstate commerce. As we use the term here, "discrimination" simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter. The party challenging the validity of a state statute or municipal ordinance bears the burden of showing that it discriminates against, or places some burden on, interstate commerce. Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979). If discrimination is established, the burden shifts to the state or local government to show that the local benefits of the statute outweigh its discriminatory effects, and that the state or municipality lacked a nondiscriminatory alternative that could have adequately protected the relevant local interests. If the challenging party cannot show that the statute is discriminatory, then it must demonstrate that the statute places a burden on interstate commerce that "is clearly excessive in relation to the putative local benefits." Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471(1981) (quoting Pike, 397 U.S. at 142, 90 S.Ct. at 847).