Lecture 33 The Commerce Power Part 10: Commerce Power of States II

This lecture This the last part of the Commerce Clause chapter! We will finish up on state discrimination against interstate commerce Pages 510-520

Hunt v. Washington State Apple Advertising Commission (1977) Background North Carolina adopts a regulation saying that all apples shipped into the state either had to say USDA grade or nothing at all Other grading system information was prohibited North Carolina said it was to ensure uniformity no other state had this regulation Apple growers in Washington State challenge this they grow 30% of the apples Their standards are even higher than the USA They asked North Carolina to make an except for their apples They refuse, so the growers sue They lose at the trial court level, so the case is appealed to the Supreme Court

Hunt v. Washington State Apple Advertising Commission- II Question Did this regulation place an unfair burden on interstate commerce and thus violate the Commerce Clause? Arguments For James Hunt (law is constitutional) The State is protecting its citizens from fraud and deception in marketing of apples It applies equally to all apples, no matter their source This is part of the residuum of power left to the states

Hunt v. Washington State Apple Advertising Commission- III Arguments For the Washington State apple growers It reasonably burdens interstate commerce in three ways It discriminates in favor of local apple growers It denies Washington apple growers the marketing advantage their state earned through its higher quality standards for its apples It increases costs in interstate commerce by requiring different labeling in North Carolina than in other states

Hunt v. Washington State Apple Advertising Commission- IV Unanimous opinion by Chief Justice Burger North Carolina does not dispute that it increases costs But they say local benefits outweigh that 7 of the 13 states shipping apples into North Carolina had their own grading system North Carolina says it meant to address uniformity fraud and deception in apples Restriction on state power when its purpose is to discriminate against interstate goods The overriding requirement is a common market Costs are raised for Washington growers, but not those in North Carolina They are not forced to alter their marketing practices, but Washington is This could put the Washington growers at a disadvantage

Hunt v. Washington State Apple Advertising Commission- V More from Chief Justice Burger Washington had earned a reputation for good apples Through its expensive inspection and grading system Under this law, they would effectively be downgraded in North Carolina by having to adhere to the lower USDA standard Burger notes that it was the North Carolina apple growers who pushed this bill to benefit Farmers are a powerful group It also only effects closed containers of apples those shipped in commerce When discrimination in interstate commerce is found, the burden falls on the state to justify it and unavailability of other options The statute aims more at apple wholesalers than consumers If Washington’s apples fell below a certain standard they could be banned from sale

Maine v. Taylor (1986) Maine v. Taylor (1986) Background Maine had a law prohibiting live fish as bait in any state inland waters It was to protect indigenous fish from parasites and diseases common in bait fish and to prevent these fish from getting in state waters The Lacey Act made it a federal crime to transport fish in violation of state laws Taylor was indicted for importing out of state bait under the Lacey Act He loses at the trial court level, but wins at the 1st Circuit The 1st Circuit said this had an “aura of protectionism” Less discriminatory means existed as well

Maine v. Taylor- II Question: Did the law unconstitutionally burden interstate commerce? Arguments For the State of Maine (uphold the law) Congress encouraged such laws in the Lacey Act The law satisfies the purpose and alternative requirements For Taylor (overturn the law) A state law discriminating against interstate commerce must show it serves a legitimate local purpose and no reasonable alternatives exist The state did not show a legitimate local purpose existed overstating the problem Maine did not take advantage of less discriminatory alternatives

Maine v. Taylor- III Justice Blackmun writes for a 8-1 Court The Maine statute restricts interstate trade by a direct ban Hughes v. Oklahoma (1979) says the burden falls on the state to demonstrate The statute serves a legitimate local purpose, and There are no alternative non-discriminatory means available The Court basically buys into Maine’s arguments This does not appear to be designed to shield Maine companies from out of state competition

Maine v. Taylor- IV Justice Stevens, dissenting He sees this as blatant discrimination against out of state products Maine already has golden shiners in the state But they are discriminating against ones produced elsewhere He also sees alternative means to achieve the same result

Granholm v. Heald (2005) Granholm v. Heald (2005) Background Question Instate wineries can legally sell and ship their products directly to residents within the state, but out of state wineries cannot Those challenging the law wanted to purchase win from out of state wineries They challenge the law as discrimination under the commerce clause Question Does this violate the dormant commerce clause in taken in conjunction with the 21st Amendment?

Granholm v. Heald- II Arguments For Granholm (uphold the law) The 21st Amendment gives the states the power to adopt any reasonable regulation in terms of alcoholic beverages The provision in the amendment was designed carve out an exception to the dormant commerce clause Congress reaffirmed this in the Webb-Kenyon Act In state wineries are under the supervision and regulation by the state, but not out of state wineries

Granholm v. Heald- III Arguments For Heald (overturn the law) This law is classic discrimination under the dormant commerce clause by treating instate and out of state companies differently The 21st Amendment does not allow for violations of the commerce clause by states The Webb-Kenyon Act does not confer this power This does not meet the two part test 26 states allow this practice with little problem

Granholm v. Heald- IV Justice Kennedy rules for a 5-4 Court Note Scalia is joining with three of the liberals Stevens is with three conservatives State laws may violate the commerce clause if they provide for differential treatment of instate and out of state interests States must basically stay neutral Avoid tendencies of Balkanization These laws deprive citizens of the right to products from other states This is essentially a low level trade war

Granholm v. Heald- V More from Kennedy Does the 21st Amendment save the law? No, it does not allow discrimination against out of state companies The 21st Amendment does not supersede other parts of the Constitution Two part test States argue this keeps alcohol from minors and facilitates tax collection However, there is little support for either of these The burden is on the state to justify the discrimination and they fail to meet that burden

Granholm v. Heald- VI Thomas, J. dissenting Joined by Rehnquist, O’Connor and Stevens The other dissent is actually Stevens, joined by O’Connor He relies on the Webb-Kenyon Act and the 21st Amendment He says these displace the dormant commerce clause regarding this activity Note they were subsequent to the Commerce Clause

Next lecture We will move into the chapter on the powers to tax and spend Pages 523-533 Overview of the power Constitutional Authority Taxation of Exports