1. Gibbons v. Ogden, Part II (1824); pg. 214, briefed 10/1/95
2. Facts: See above Part I.
3. Procedural Posture: See above Part I.
4. Issue: Whether a state has the right to pass laws which affect interstate commerce concurrently with that of Congress.
5. Holding: No.
6. ∏ Argument: The states may severally exercise the same power to regulate commerce within their respective jurisdictions as Congress has with regard to interstate commerce. The states possessed this right before the Constitution, and so it is reserved to them under the 10th amendment to the extent that Congress has not acted on it.
7. ∆ Argument: The full power to regulate interstate commerce rests with Congress. Thus, there is no residual power left to the states because the grant of the whole power is inconsistent with the existence of a residual power. The words “to regulate” require the grant of the full power.
8. Majority Reasoning: Marshall reasoned that a Congressional power could, in some cases, be concurrently exercised by the states. For example, the power to tax was shared by both Congress and the states. However, the power to regulate interstate commerce could not be shared because it is by its very nature, unsharable. The states still have the power to pass “police” laws, such as inspection and quarantine laws and the like which act upon a good in preparation for interstate shipment, but this is quite different from having the power to pass laws which actually regulate interstate commerce. Although the devices by which the power is exercised may appear to be the same between Congress and the states, that does not mean that the power is the same. Even if a state law encroaches upon a commerce area that the Congress has left untouched, the action necessarily interferes with Congress’ commerce power if it regulates interstate commerce. Thus, it is immaterial whether the state law was passed for local “police” purposes if it conflicts with Congress’ ability to exercise the commerce power. The law here is then unconstitutional under the Supremacy Clause.
1. Wilson v. Black Bird Creek Marsh Co., (1829); pg. 216, briefed 10/1/95
2. Facts: The ∆ company was authorized by Delaware law to put a dam across Black Bird creek, which was a navigable waterway flowing into the Delaware river. π crashed through the dam, and was successfully sued by the ∆ company for damages.
3. Procedural Posture: Wilson brought this action to invalidate the Delaware law as being in conflict with Congress’ power under the commerce clause to regulate interstate commerce, which was conducted on the Creek.
4. Issue: Whether the Delaware law authorizing the ∆ to dam up the navigable waterway was constitutional.
5. Holding: Yes.
6. Majority Reasoning: Marshall reasoned that the power to increase the value of the surrounding property, as well as the health of the inhabitants was well within the power of the states as long as it did not conflict with the powers of the federal government. But since Congress had passed no acts over this creek, the repugnancy of the Delaware law must be measured wholly according to its repugnancy to the dormant commerce power. In this case, the Delaware law can not be considered as repugnant to the dormant commerce power.
1. Cooley v. Board of Wardens of The Port of Philadelphia, (1851); pg. 219, briefed 10/1/95.
2. Facts: A Pennsylvania law of 1803 required ships entering or leaving Philadelphia harbor to hire a local pilot. For failure to comply, Cooley was fined. The proceeds from the fines went to a fund used to support retired pilots and their dependents. Also, a 1789 congressional statute stated that all previous piloting laws were expressly adopted, and the states had the right to enact further similar laws until Congress saw fit to enact laws in this area.
3. Procedural Posture: Cooley sued for the penalty, claiming that the law was unconsitutional as being in conflict with the dormant Commerce power.
4. Issue: Whether the law was unconsitutional as being in conflict with the dormant Commerce power.
5. Holding: No.
6. Majority Reasoning: The regulation of pilots is regulation of navigation, and thus regulation of commerce. The 1789 Act, although it expressly adopts existing piloting laws, can not grant any more power to the states than does the constitution. Thus, if the commerce power is exclusive in this area, the Act is inoperative and the local law is unconstitutional. However, since the field of commerce is so diverse, it requires laws of varying scope. Some facets of interstate commerce require uniform national laws by their very nature. Others require purely local legislation to meet diverse needs. Those that require uniform national laws must be said to be exclusively regulated by Congress, thus barring any state action in that area even when the commerce power is dormant. However, in this case, there is a manifested intent of congress to leave this area of commerce to local regulation. Thus, this is an example where the commerce power can coexist between the state and federal government if the federal government has not actuall passed a law in that area. The determinative factor of whether a state law is repugnant to the constitution in the face of the dormant commerce power is the “subject” of the regulation, not the “purpose” behind it.
1. South Carolina State Hwy. Dept. v. Barnwell Bros., (1938); pg. 226, briefed 10/1/95
2. Facts: A 1933 South Carolina law prohibited trucks that were more than 90 inches wide or had a gross weight of over 20,000 pounds from travelling on South Carolina highways. About 85% to 90% of the nations trucks exceeded these limits. The law was passed to preserve the highways from damage.
3. Procedural Posture: The trial court found that substantial burdens were put on interstate commerce by this law, and that it was an unreasonable means of protecting the highways because it was tied to gross weight instead of axle weight.
4. Issue: Whether the South Carolina law is unconstitutional as an impermissible conflict with the dormant commerce power.
5. Holding: No.
6. Majority Reasoning: There are matters of local state concern, the regulation of which unavoidably involves some regulation of interstate commerce, but which, because of their local character and diversity, may not be fully dealt with by congress. A state has an adequate local interest in preserving its highways. Thus, it can pass local laws to regulate the size of shipping on those highways. The fact that this necessarily affects interstate commerce is immaterial because, so long as the law does not discriminate, which this one does not, the power is reserved to the states to regulate. It is not the judicial function to determine whether the standard is the best approach or not, but only to determine whether it is without a rational basis.
1. Southern Pacific Co. v. Arizona, (1945); pg. 228, briefed 10/1/95
2. Facts: The Arizona Train Limit Law of 1912 prohibited operating railroad trains of more than a prescribed length. Reducing the length of the trains was said to increase safety because of less “slack action” which caused trains to behave uncontrollably. However, the length limit required the train operators to run about 30% more trains, and cost Southern Pacific about a million dollars/year in extra costs. About 95% of all rail traffic in Arizona was interstate, and so it affected train operations from Texas to California.
3. Procedural Posture: In 1940, Arizona sued Sourthern Pacific for the statutory penalties for violating the law. The trial court found the law to be an unconstitutional burden on interstate commerce, and further found that it was not justified by local safety concerns because the increase in safety by reducing the slack action was offset by the decrease in safety of more trains. The state supreme court reversed, concluding that a state police law, based on safety, could not be overturned even though it had a substantial effect on interstate commerce.
4. Issue: Whether the total effect of the state law as a safety measure in reducing accidents is too small to outweigh the national interest in keeping interstate commerce free of burdens where a uniform national regulation is needed.
5. Holding: Yes.
6. Majority Reasoning: The general rule is that the states do not have the authority to substantially impede the free flow of commerce where the need for national uniformity in laws demand that the regulation be done at the national level. However, this case lies between the two extremes of clearly needing national regulation, and clearly needing a local police measure. Thus, it calls for a balancing of the state and federal interests. The findings show that the increase in safety is small if at all. Also, if the length of trains is to be regulated, it must be done uniformly for efficiency. Since the Arizona Law is a substantial burden on commerce where a need for uniformity exists, and does not have an adequate police justification, it is unconstitutional.
7. Dissent Reasoning: [Black] thought that the balancing test was best left to the legislature and not the judiciary. [Douglas] felt that the state legislation was adequately tied to safety and thus entitled to a presumption of validity.
1. Dean Milk Co. v. Madison, (1951); pg. 247, briefed 10/1/95
2. Fact: Madison, Wis., has a local ordinance which prohibits the sale within Madison of any milk which has not been pastuerized within a 5 mile radius of the city of Madison. The three pastuerizing plants within that radius are subject to rigourous local safety laws. Dean Milk operates out of Chicago, and its facility meets Federal safety standards.
3. Procedural Posture: Dean Milk brought this action to strike down the Madison law after it was denied a license to sell milk there. The state court rejected the commerce clause attack.
4. Issue: Whether the discrimination inherent in the Madison ordinance can be justified in view of the character of the local interests and the available methods of protecting them.
5. Holding: No.
6. ∏ Argument: The regulation of milk in this manner is a substantial burden upon interstate commerce because it plainly discriminates against interstate commerce.
7. ∆ Argument: The ordinance is valid because it is a good-faith attempt to police health of the milk supply. It is valid regardless of its affect on interstate commerce, because the states have the power to enact local police laws that are not in conflict with existing federal legislation.
8. Majority Reasoning: The statute clearly is a barrier to interstate commerce. It has a discriminatory effect, even if it is not purposefully discriminatory. If it were held valid simply because it were related to health, then the Commerce Clause would be powerless because a state could enact a burdensome and protective law on the pretext of health. Since there are alternative methods for assuring the same degree of health protection, the local law’s interest in health does not outweigh the national interests in non-discriminatory interstate commerce practices. It would be just as effective for the local ordinance to require higher standards without requiring local processing. A model federal provision existed that would adequately safeguard the public health.
1. CTS Corp. v. Dynamics Corp. of Am., (1987); pg. 272, briefed 10/1/95
2. Facts: Indiana passed a corporate takeover law which stated that should any party acquire a controlling interest in the number of shares he held, he could only acquire voting rights on those shares to the extent approved by a majority vote of the prior disinterested stockholders.
3. Procedural Posture: The lower court held that the law was unconsitutional as being a hindrance to tender offers, and thus an interstate commerce burden.
4. Issue: Whether the Indiana law is unconstitutional as being in conflict with the dormant Commerce Clause.
5. Holding: No.
6. ∆ Argument: Tender offers should generally be favored because they represent a shifting of property rights to their highest value use. Also, the state of Indiana has no interest in protecting non-resident shareholders.
7. Majority Reasoning: A state has the fundamental right ot pass laws concerning the regulation of corporations it establishes. They are only unconsitutional if they discriminate against interstate commerce. Since this law has the same effect on interstate commerce as well as intrastate commerce, meaning that all shareholders and tender offers are treated the same regardless of locality, then it does not discriminate. The state regulation of corporations necessarily has some effect on interstate commerce, since the shares are traded internationally. However, there is stability in knowing that the corporation is subject to one set of regulations - that of its home state.
8. Concurrence Reasoning: [Scalia] stated that there was no consitutional basis for any balancing test when determining whether a local interest outweighs a federal interest. Whether the burden on commerce imposed by a statute is excessive in relation to its benefit is a question for the legislature, not the judiciary.
1. United Building & Constr. Trades v. Camden, (1984); pg. 282, briefed 10/8/95
2. Facts: The city of Camden N.J. passed a municipal ordinance requiring that at least 40% of the employees of contractors and subcontractors working on city construction projects be Camden residents.
3. Procedural Posture: π challenged the constitutionality of that ordinance under the Privileges and Immunities clause. The state supreme court of New Jersey rejected the attack on the grounds that the ordinance discriminates on the basis of municipal residency and not state residency, and thus declined to broaden the interpretation of the privileges and immunities clause beyond the literal language in the constitution.
4. Issue: Whether the Camden ordinance is constitutional under the privileges and immunities clause.
5. Holding: No.
6. ∆ Argument: The clause does not apply to a municipal ordinance. By its own language, it applies only to state laws which discriminate based on state residency. This ordinance discriminates equally against state residents and non-state residents as long as they are non-Camden residents. Even if it does apply to municipal ordinances, in this case the law is necessary to counteract grave social and economic ills, of which the out-of-city employees are a primary cause. Because they “live off of” Camden without residing in Camden, these out-of-city employees promote “middle-class flight” from Camden, resulting in a depleted tax base.
7. Majority Reasoning: First, the privileges and immunities clause does apply to strictly municipal ordinances because what would be unconstitutional if done by the state can be no more readily accomplished by the city acting under the authority of the state. Also, a person who lives out of state will be just as discriminated against regardless of whether the ordinance also discriminates against other state residents. The out-of-state resident has no chance to remedy the law by participating in the local political process. Determination of validity must therefore proceed under the two-step process. First, whether the ordinance burdens a “fundamental” privilege or immunity protected by the clause, and second, whether there is a good balancing reason for allowing it anyway. Although a Commerce Clause analysis can distinguish between cities acting as regulators (conflict with the dormant Commerce Clause) and cities acting as participants (no conflict), the privileges and immunities clause imposes a direct restraint on the local legislature without regard to whether they are acting as a participant. Clearly, the opportunity to seek employment with private employers, whether or not they work “for the city”, is a fundamental right protected by the clause. As to whether the law is nontheless justified, it can only discriminate against out-of-city residents who are shown to “constitute a peculiar source of the evil at which the statute is aimed.” Here, there are no findings as to whether the out-of-city residents are an “evil” with regard to Camden’s law, thus the case must be remanded for trial and specific findings to that extent.
8. Dissent Reasoning: The privileges and immunities clause has long been interpreted as applying only to state laws that discriminate against out-of-state residents. The majority cites no historical basis for broadening its scope. Furthermore, the out-of-state resident’s interests are adequately protected by the voters who are not residents of Camden, but still residents of New Jersey.
9. Notes: In Supreme Ct. of New Hampshire v. Piper (1985), the court struck down a state law prohibiting non-state residents from being admitted to the state bar under the privileges and immunities clause. The court found that Piper’s claim involved a “privilege” because the practice of law is “important to the national economy.” The court also found that there was no substantial justification for the difference in treatment between state residents and others. In Edwards v. California (1941); the court struck down the anti-Okie law which forbade bringing indigent persons into the state. The majority opinion relied entirely on the commerce clause, but a concurrence by Douglas stated that the privileges and immunities clause was a better rationale because the right of mobility of persons is more fundamental than that of products.
1. Pacific Gas & Elec. Co. v. State Energy Comm’n., (1983); gp. 292, briefed 10/8/95
2. Facts: A California law imposed a moratorium on the certification of nuclear energy plants until a state agency found that there existed a demonstrated means for disposal of high-level radioactive waste generated by the nuclear power plants. There was evidence in the State legislative record that the law was passed for economical reasons, such as regulating the price of electricity, because an increase in the number of nuclear power plants without an increase in radioactive disposal capacity could result in the shutdown of existing plants and the subsequent instability of electricity prices.
3. Procedural Posture: P.G.&E. brought an action for declaratory judgment against the law, claiming that it was preemted by the federal Atomic Energy Act of 1954. The District Court granted relief, the Court of Appeal reversed, and P.G.&E. appealed to the Supreme Court.
4. Issue: Whether the California statutory moratorium on the certification of nuclear power plants is preemted by the Atomic Energy Act of 1954.
5. Holding: No.
6. ∏ Argument: 1. The state law is preempted because it regulates construction of nuclear plants based on safety reasons. Since the AEA’s primary function is exclusive federal safety regulation, there is no room here for the state to regulate. 2. The statute conflicts with actual decisions made by Congress and the NRC. 3. The statute frustrates the AEA’s goal of the development of nuclear technology.
7. ∆ Argument: Although safety regulation of nuclear plants is forbidden, a state may completely prohibit new construction until its safety concerns are satisfied by the federal government.
8. Majority Reasoning: Historically, the federal government has taken efforts to ensure that nuclear power is developed and operated safely, while leaving police regulations of the economics of electricity generated by nuclear energy to the states themselves. This is evidenced by the AEA’s own language when it states that nothing in it is to be construed as affecting the authority of any local government to regulate the “generation, sale or transmission of electric power produced through the use of nuclear facilities.” Thus, the federal government has explicitly left this power to the states; it is not impliedly preempted by the mere existence of the AEA. However, the federal goverment, by the AEA, has exclusively retained the right to regulate nuclear safety, and so the state has no power to regulate in that specific area. Since there is legislative history evidence that the law was passed as primarily an economic, and not a safety matter, the court accepted California’s representation that they were not attempting to regulate safety. Even though the Congress and the NRC have recently passed legislation that it is safe and permissible to continue to certify new power plants, the state is in no way compelled to do so. Thus, compliance with both the federal and state statutes are possible here, and so the statute is not expressly preempted. Lastly, the even though the AEA’s purpose was to promote the safe development and use of nuclear energy, that was not to be accomplished at all costs. So the statute is not impliedly preempted as being an obstruction of a Congressional purpose.
9. Notes: In Rice v. Santa Fe Elevator Corp., (1947), Justice Douglas stated that the test in whether a local law was preempted was the intent of Congress. In areas that were traditionally state-regulated, any action by Congress was presumed not to preempt unless it was the “clear and manifest purpose of Congress.” There were three ways to divine this purpose: 1. If the federal scheme of regulation was so pervasive as to infer that Congress left no room for state regulation, 2. Where the federal interest is so dominant that it outweighs the state interests, and 3. The state law produces a result inconsistent with the federal objective. Note the similarity between this analysis of preemption by actual legislation, and the Cooley “balancing” analysis with regard to the dormant commerce clause. In Campbell v. Hussey (1961), Justice Douglas’ plurality opinion struck down a local Georgia statute requiring that tobacco that was grown (locally) according to federal regulations be marked with a white tag (tobacco grown out-of-state in Carolina was to be marked with a blue tag). He rejected the argument that the Georgia statute was constitutional because it merely “supplemented” the federal regulations. In this case the question of preemption did not need actual conflict between the federal and state law, because one could draw an inference from the structure of the federal regulation scheme that there was no room for state augmentation. [See point 1 in Rice, above.] Compare this result with the commerce clause rejection under the rationale of local discrimination in the Washington Apple case. However, in Florida Lime & Avocado Growers, Inc. v. Paul, the court distinguished Campbell by stating that there was neither an actual nor presumed conflict based on the federal regulatory design.
1. Barron v. Mayor & City Council of Baltimore, (1833); pg. 397, briefed 10/22/95
2. Facts: Barron was a wharf owner. The city of Baltimore, in an effort to construct some streets, diverted part of the flow of some streams feeding the Baltimore harbor. This caused sandbars to form around Barron’s wharf, making it too shallow for most ships to do business there.
3. Procedural Posture: Barron sued the city for taking his property “for public use, without just compensation” under the 5th Amendment. The trial court awarded him damages, but the court of appeals reversed.
4. Issue: Whether the guarantee in the 5th Amendment that private property shall not be taken “for public use, without just compensation” is applicable to state governments as well as the federal government.