Nahmod Law

Background

Dormant Commerce Clause issues arise out of Congressional silence about the particular subject matter being regulated by the state to the possible detriment of interstate commerce.  Since the Commerce Clause confers power only on Congress to regulate interstate commerce, one wonders why there should even be a  so-called “dormant” Commerce Clause enforceable by the judiciary.

There are two extreme positions possible as to the Court’s  role. At one extreme, the Court could stay out of it altogether and leave it to Congress to regulate in the area and possibly preempt. A  disadvantage of this position is that Congress may never get around to many state statutes that adversely affect interstate commerce. At the other extreme, the Court could keep the playing field clear for future Congressional regulation by striking down every state statute this is shown to adversely affect interstate commerce, regardless of its merits, on the theory that Congressional power over interstate commerce is exclusive. A disadvantage of this position is that it may amount to federal judicial interference with a state’s legitimate health and safety concerns as well as undermine state experimentation, an important function of federalism.

As it turns out, the Court has staked out a middle position: it reviews challenged state statutes under the dormant Commerce Clause, upholding some and overturning others. This directly raises the question of the justifications for judicial intervention and the related question of what the standards of dormant Commerce Clause review should be. Thus, the dormant Commerce Clause provides an excellent opportunity for the teacher to review the purposes of the Commerce Clause and related federalism concerns, and to introduce in a preliminary way the Equal Protection Clause and its various levels of scrutiny, ranging from strict scrutiny to rational basis review.

A Taxonomy

Although dormant Commerce Clause cases often present complicated fact patterns, I think that the cases can analytically (even if not always in the real world) be broken down into four categories, with differing standards of review for each. When I teach the dormant Commerce Clause, I use hypotheticals (more interesting and more efficient than marching through the cases), but here I’ll just describe the categories.

1. State legislation that is explicitly protectionist.

Such legislation is per se invalid because its purpose and effect are directly contrary to the core purpose of the Commerce Clause. This might be analogized to invidious racial discrimination directed against racial minorities where per se invalidity is effectively the Equal Protection standard of review.

2. State legislation that facially discriminates against interstate commerce for an ostensibly legitimate state purpose.

Such legislation is subject to strict scrutiny for several reasons. One is that we suspect that the state’s motives are really protectionist and so we insist that the state carry the heavy strict scrutiny burden.  Another reason is reminiscent of McCulloch v. Maryland, Part II (see my previous Post on McCulloch): the national interest is not really represented in state legislatures. From a process perspective, therefore, strict scrutiny is appropriate.

3. State legislation that does not facially discriminate against interstate commerce but has a discriminatory effect on interstate commerce.

Such legislation is similarly subject to something like strict scrutiny. The reasons are similar to those in category #2. Here, we suspect that even though the state has legislated in an ostensibly neutral way, its real target–to judge by the discriminatory effect of the statute–is interstate commerce. We use strict scrutiny in an attempt to smoke out what is really going on. [The Hunt case is a good example]. An interesting question: why does discriminatory effect trigger something like strict scrutiny in this setting but only rational basis review in the equal protection setting? When the teacher gets to Washington v. Davis, this question could profitably be discussed.

4. State legislation that neither facially discriminates nor has a discriminatory effect on interstate commerce, but still burdens it.

This is perhaps the most controversial category. Here, a heightened scrutiny/balancing test in used in which, in effect, the state statute is put on trial in federal court and the resulting state interest is balanced against the federal interest. The question arises: why should the Court get involved here at all since there is far less suspicion of an improper motive, and both intrastate and interstate interests are similarly burdened? In addition, weighty federalism interests are more obviously implicated here. Should not the standard of review be rational basis? Nevertheless, the Court remains involved in such cases and continues to use a heightened scrutiny/balancing test. [The Kassel case is a good example].

One last doctrinal point: when the Court strikes down a state statute under the dormant Commerce Clause, it is not a typical constitutional decision binding on Congress per Marbury v. Madison. Instead, Congress can overrule such a decision by using its Commerce Clause power to permit such state legislation, even if, for example, the state statute discriminates against interstate commerce for protectionist reasons.