EXAM 4391

1. Is the Clean Air Act provision above authorized under the United States Constitution?

The issue is whether Congress has authority under the Constitution to legislate the Clean Air Act. If so, does the
law violate another constitutional provision such as infringement on state sovereignty.

OVERALL RULE:

Congress can exercise those powers enumerated in the Constitution plus all auxiliary powers necessary and
proper to carry out all powers vested in the federal government through the Necessary and Proper Clause which
gives Congress powers to make laws which shall be necessary and proper for executing the Commerce Clause.
Article I Section 8 of the constitution gives Congress the power to regulate commerce with foreign nations,
among the several States, and with the Indian tribes.

ISSUE: Whether the Clean Air Act being regulated a valid exercise of Congress’s power under the Commerce
Clause

First Subrule: In United States v. Lopez, the Supreme Court of the United States clarified that Congress may
enact three types of regulations under the Commerce Clause. First, Congress may regulate the channels of
interstate commerce, which are the pathways through which interstate travel and communications pass.
Examples of the channels include interstate highways and phone lines. Second, Congress may regulate the
people and instrumentalities that work and travel in the channels of interstate commerce. Examples include
people such as airline pilots and flight attendants, as well as the airplanes on which they travel. Third, Congress
may regulate activities that substantially affect interstate commerce.

The Act does not fit within either of the first two Lopez categories. First, the statute applies anywhere regardless
of its location, and so it does not narrowly regulate the channels of interstate commerce. Arguably the Act may
apply as an instrumentality since ethanol creates fuel used for motors since 1970, Regardless,, the Act will be
valid only if it regulates an activity that substantially affects interstate commerce.

The key to satisfying the substantial effects requirement is the threshold determination of whether the
regulated activity is economic or commercial in nature. When Congress regulates an economic or commercial
activity, the Court will uphold the regulation if Congress had a rational basis for concluding that the class of
activities subject to regulation, in the aggregate, has a substantial effect on interstate commerce. Aggregation on
a national scale typically makes this an easy standard to meet. On the other hand, if the regulated activity is not
economic or commercial in nature, the Court will not aggregate to find a substantial effect, and the standard
becomes extremely difficult to meet. See Raich, Morrison, Lopez.

In Wickard v. Filburm the produced for his own consumption combined with the amount he sold
exceeded the amount he was permitted to produce. Home-grown wheat accounted for more than 20% of
production. Even though the defendant’s activity is local and though it may not be regarded as commerce, it
may still be reached by Congress if it exerts a substantial economic effect on interstate commerce.

Here, ethanol is a grain alcohol that can be blended with gasoline and used in motor vehicles, considered
a “renewable” fuel when it is produced from sources such as corn and other crops, because those crops can be
replanted to produce additional fuel. In addition, encouraged the use of ethanol in gasoline, both to foster the
goal of energy independence and to support the Nation’s farm economy and rural communities.
 In addition, recent estimates are that approximately 98 percent of U.S. ethanol is made from corn grown
in the United States, called “No. 2 Corn,” which is the type of corn used in animal feed foster the goal of energy
independence and to support the Nation’s farm economy and rural communities therefore the number exceeding
Wickard and evidencing a substantial effect on commerce. In addition, The ACA does not violate federalism
principles because it regulates both public and private employers on the same terms.
The court therefore should conclude that the statute at issue here is an economic regulation and thus is
within the commerce power of Congress because, based on the facts given in the problem, Congress had a
rational basis for concluding that ethanol emissions in the aggregate, has a substantial effect on interstate
commerce.

Second Issue is whether Congress violated state sovereignty.

Second Subrule: Based on the Supreme Court’s 11th amendment and state sovereign immunity, state
defendants including state agencies and state officials sued in their official capacity are immune from suits
brought by private parties in any federal or state court or quasi-judicial federal administrative proceeding
initiated by a private plaintiff. However, If state waiver or congressional abrogation of immunity is valid,
then the plaintiff may sue the state defendants specifically allowed by the waiver or by the congressional
statute and obtain the relief allowed by the waiver.

Here, the State of California applied for and received a waiver from the federal government under
the CAA to prescribe and enforce motor vehicle emission control through regulation of fuel and
fuel additives. Because CARB waived immunity, they are not barred from suit.

In conclusion, through the Necessary and Proper Clause, the Commerce Clause, Congress has power to regulate
economic activities that substantially affect interstate commerce. Here, the ACA regulates amongst other things,
a non-economic aspect of an economic activity (i.e., the fuel omission) that has a substantial effect on interstate
commerce. This regulation probably falls within the scope of the Commerce Clause. The Act does not violate
federalism principles embodied in the Tenth Amendment to the Constitution by improperly commandeering
states or by regulating state employers differently than private employers nor is the federal court lawsuit is
notbarred by the state agency’s Eleventh Amendment immunity, because CARB waived.

2. Is California’s LCFS regulation pre-empted by the federal Clean Air Act?

Issue: Whether the LCFS regulation is pre-empted by federal congressional law?

Rule: Under the Supremacy Clause, if there is a conflict between state and federal law, the federal law controls
and the state law is invalidated because federal law is supreme and thus preempts state law. There are two types
of preemption express preemption and implied preemption. Preemption occurs when the federal statute
explicitly states, in the language, or implicitly contains in its structure and purpose, that it preempts any state
law. Conflict Preemption occurs when there is a conflict between federal and state law such that “compliance
with both federal and state regulations is a physical impossibility. Implied preemption will also be found if state
law impedes the achievement of a federal objective. Even though federal law does not expressly preempt state
law, field preemption will be found if there is a clear congressional intent to have a federal law occupy a
particular field or area of law. When the Court is uncertain as to whether Congress intended to preempt the
field, it will look at the nature of the regulated area. If the area regulated by Congress is an area in which the
federal interest is dominant, the Court will be more inclined to presume that Congress intended to occupy the
field.
 In U.S. v. Arizona, a state enacted a statute imposing criminal penalties on noncitizens present or
working in the state who had failed to register with the federal government. However, Congress had already
enacted a full set of standards governing the registration of noncitizens, implying that it intended to occupy the
field for regulation of noncitizen registration. The federal standards therefore implicitly preempted state law
under the doctrine of field preemption.

Similarly here, even though the statute does not explicitly preempt the state from requires companies
that market transportation fuels in California to reduce the “carbon intensity” of the fuels they
sell by 10 percent. However, Congress had also already enacted a full set of standards seeking to encourage the
use of fuels that reduce smog, greenhouse gas emissions, and other pollutants and to use and balance the actions
of the federal government and the States in achieving its goals implying that it intended to occupy the field for
regulation of ethanol emission. In addition, it also falls under implicit conflict preemption because the LCFS
regulation requires companies that market transportation fuels in California to reduce the “carbon intensity” of
the fuels they sell by 10 percent between 2014 and 2025. The carbon intensity score assigned to a given
alternative fuel, such as corn ethanol, is therefore critical to that fuel’s utility in complying with the regulation
Therefore, the implicitly preempted state law under the doctrine of field preemption.

3. Does California’s LCFS regulation violate the dormant commerce clause?

Issue: Does the state or local statute violate the DCC?

RULE: When a law is challenged under the dormant Commerce Clause, the Court determines its
constitutionality by examining its discriminatory effects. First the court will determine if the law is
discriminatory on its face (City of Philadelphia v. New Jersey), (Hughes v. Oklahoma), facially neutral Dean
Milk Co. v. City of Madison or if the law is non-discriminatory Pike v. Bruce Church. The court then applies the
appropriate standard based on the classification to determine if the law is constitutional. Burden falls on state to
justify both in terms of the local benefits flowing from the statute, and the unavailability of nondiscriminatory
alternatives.

Here, the statute is is analogous to the Alaska case (South Central) California is imposing a
downstream regulation because the condition it is imposing goes beyond or past its market
participation. California can authorize the SDDC to favor in-staters or local companies in the sale of
office supplies. But here, California is imposing a condition that is downstream from the sale of the
SDDC’s office supplies because it is requiring the purchasers to do something that is unrelated to
their economic relationship. So this is facially discriminatory and subject to strict scrutiny.

Here, California Air Resources Board (“CARB”) promulgated and adopted the Low Carbon Fuel
Standard (“LCFS”). The LCFS regulates ethanol. The LCFS regulation requires companies
that market transportation fuels in California to reduce the “carbon intensity” of the fuels they
sell by 10 percent between 2014 and 2025. At the heart of the LCFS regulation are carbon
intensity scores for fuels set forth in a grid contained in the regulation. The carbon intensity
score assigned to a given alternative fuel, such as corn ethanol, is therefore critical to that
fuel’s utility in complying with the regulation.

Dormant commerce clause [DCC] is principle that state and local laws are unconstitutional if they place an
undue and excessive burden on interstate commerce. No constitutional provision expressly declares that
states may not burden interstate commerce. Rather, Court has inferred this from the exclusive grant of power
to Congress to regulate commerce among the states.

Here, the statute does not explicitly discriminate

Second, we will apply the discrimination test and determine if the law is facially discriminatory. [See,
Philadelphia, law facially denied out-of-state trash imports].

If the law is facially neutral, we must then apply the burden test and determine if the law has the practical
effect of burdening commerce. See, Dean-Milk, law prevented out-of-state sellers from accessing milk market.

Where a state law burdens commerce [or discriminates against out-of-staters] Court will balance the burden
imposed, against the local interest and benefits. If State has a legitimate public interest, the question is of
degree: to what extent should the burden be tolerated. Pike.
California producers of ethanol are assigned lower carbon-intensity scores than any Midwest producers.
CARB’s position is that the LCFS provides the most effective method of encouraging the reduction of motor
vehicle carbon emissions in California, an important State interest that is consistent with the federal CAA.

Is there another reasonable alternative that will protect this interest and impose lesser burden on commerce?

Activities that are intrastate

NLRB v. Jones & Laughlin Steel Corp.— Laughline operated national level iron and steel plant & violated Fair
Labor Standards Act by discharging its employees. Court held that although activities may be intrastate when
separately considered, if they have such a close and substantial relationship to interstate commerce that their
control is essential or appropriate to protect the commerce from burdens and obstructions, Congress has the
power to exercise control under the commerce clause. Congress can regulate purely intrastate activities,
including all aspects of business, if there is a rational basis for believing there is an interstate effect. Multistate
network of operations—75% of product shipped out of PA—thus labor stoppage intrastate (PA) would have
substantial economic effect on interstate commerce.

Wickard v. Filburn— The amount of wheat Filburn produced for his own consumption combined with the
amount he sold exceeded the amount he was permitted to produce. Home-grown wheat accounted for more
 than 20% of production. Even though the defendant’s activity is local and though it may not be regarded as
commerce, it may still be reached by Congress if it exerts a substantial economic effect on interstate
commerce. The appellee’s own contribution to the demand for wheat may be trivial by itself, taken together
with that of many others similarly situated, is far from trivial. Congress is worried about the effect of
aggregate and cumulative impact it could have.

If grown, and then bought or sold in interstate commerce = economic activity

Gonzales v. Raich—Court upheld Congress’ right to ban intrastate cultivation of marijuana for one’s own
medicinal use b/c exemption of such cultivation might damage congress’ scheme banning interstate
marijuana distribution. Intrastate production of a commodity sold in interstate commerce is economic
activity and thus substantial effect can be based on cumulative impact. (Like Wickward) Fear that
homegrown consumption would be drawn into IC. Frustrating Congress’ purpose on banning interstate
commerce in weed/drugs.

Heart of Atlanta Motel Inc. v. United States—discrimination by places of public accommodation. Heart Hotel
was located in downtown Atlanta & had 216 rooms & about 75% of registered guests from out of state.
Regulating heart hotel, place, which concededly serves interstate travelers, is within Congress’ power granted
by the Commerce Clause. This is a hotel, people come from one state to another & it hinders blacks to travel.
Rational basis test. The power of Congress to promote interstate commerce also includes the power to regulate
the local incidents thereof, including local activities, which might have a substantial and harmful effect upon
that commerce regulated in the aggregate. Must be economic activity, but does not have to be sole reason,
moral and social reasons can bolster argument.

Katzenbach v. McClung—Ollie’s BBQ, family-owned restaurant in Alabama— Even though small, & value of
food had insignificant effect on commerce, only 46% of meat purchased annually came from out of state,
restaurants discriminatory conduct was representative of a great deal of similar conduct throughout country, &
this conduct, in the aggregate clearly had an effect on interstate commerce. Court found that restaurants in
such areas sold less interstate goods b/c of discrimination, that interstate travel was obstructed directly by it,
business in general suffered & many new businesses refrained from establishing there as a result of it.”
Unavailability of accommodations dissuades blacks from travelling in interstate commerce. Act upheld b/c
Congress had rational basis necessary to protection of commerce.

Perez v. United States— Case dealing with loan sharking and the commerce clause. The ∆ had been
convicted of violating the law, but argued law could not be constitutionality applied to him b/c his business
wholly operated in NY and no proof he’d engaged in organized crime. It was sufficient that Congress had a
rational belief that even “purely intrastate [loan sharking]…nevertheless directly affected interstate and
foreign commerce b/c funds are used for organized crime in its national setting, holding its guns to the heads
of the poor and the rich alike

United States v. Lopez— Congress made it federal offense for any individual knowingly to possess firearm at
school zone, which Lopez violated. Court agreed w/ Lopez that Act was unconstitutional exercise of
Congress’s commerce power b/c possession of gun is not substantially related to interstate commerce finding
relationship to interstate commerce too attenuated & uncertain to uphold law as a valid exercise of
Congress’s commerce power. Act didn’t regulate any economic activity at all or contain any req. that
possession of gun has any connection to past/future commercial activity. No Jdx nexus: If Congress banned
or made crime to possess gun that moved in interstate commerce, then okay, but here congress merely banned
possession of any gun that’d never travelled in or affected interstate commerce. Government argued gun
possession DOES have “substantial effect” b/c (1) possession of gun in school may result in violent crime;
 (2) & violent crime affects functioning of national economy by (a) costs of crime insured (ins. Market)
against being spread across state lines insurance market; (b) reduces individuals’ willingness to travel to
areas; & (c) reduces schools’ ability to educate students, who then become less economically-productive.
Arg. was too much b/c would allow Congress to regulate any activity it found was related to economic
productivity of individual citizens. “It is difficult to perceive any limitation on federal power.” To uphold this
act would have required Court that there never will be a distinction btw what is truly national and what is
truly local.

United States v. Morrison— Morrison, was sued under Violence Against Women Act (Act), which penalized
crimes of violence motivated by gender. Court declared provision unconstitutional b/c gender-motivated
crimes of violence are not, in any sense of the phrase, economic activity. ”We don’t want to continue to see
Congress appropriating state police powers under the guide of regulating commerce. The Constitution
requires a distinction between what is truly national and what is truly local. But, here, unlike in Lopez, there
were legislative findings detailing effect of the conduct being regulated on interstate commerce; such as
Congress found gender-motivated crimes deterred potential victims from traveling interstate or rom being
employed in interstate businesses. But, Court said no b/c it would allow Congress to regulate any crime as
long as the nationwide, aggregated impact of crime had substantial effect on employment, production,
transit…

Further, the Necessary and Proper Clause of Article 1 of the Constitution gives Congress power to enact
legislation that enables it to carry out its enumerated powers and the enumerated powers of the other branches
of the federal government. SCOTUS has interpreted “necessary and proper” to mean Congress can enact
legislation that is appropriate and plainly adapted to achieving goals that fall within its enumerated power.

Since [the statute0 is within Congress’s Commerce Clause power as discussed above, it is also supported by
Congress’s power under the necessary and proper clause.

Limitations on Congress

1. 10th A Limit on Federal Regulation

The 10th amendment provides that the powers not conferred by the Constitution on the national government
nor prohibited to the States are reserved to the States or to the People.
SCOTUS’s recent cases interpret the 10th A as imposing a limit on federal regulation. SCOTUS has stated
this ensures that Congress’s use of its enumerated power does not violate principles of federalism by
encroaching on state sovereignty and independence by commandeering states to act on behalf of the federal
government. Congress can’t use the states as “implements” of the federal government.

Article VI’s Supremacy Clause of the Constitution provides that the Constitution and laws and treaties made
pursuant to it are the supreme law of the land. Under this clause, States cannot act inconsistently with the
purpose of Congress, conflict or interfere with, curtail, or complement the federal law, or enforce additional or
auxiliary regulations. If there is a conflict between state and federal law, the federal law controls and the state
law is invalidated because federal law is supreme and thus preempts state law. There are two types of
preemption express preemption and implied preemption.

It must be determined whether the federal law is unconstitutional violating the Tenth Amendment. The
constitution provides “The powers not delegated to the US by the Constitution, nor prohibited by it to the States,
are reserved to the states respectively or to the people. To preserve state sovereignty courts have held that
Congress may only regulate individuals not states unless provided in the Constitution. Further,
Congress is not authorized to compel, coerce, or commandeer the State to enact or administer a federal
regulatory program

Congress may not directly compel the states to enact or enforce a federal regulatory program.[New York,
Printz] When Congress does this, it violates the Tenth Amendment. But, Congress may single out the states
for regulation when the states are acting as market participants
Cases where Congress did not violate the 10th A: Cases where Congress violated the 10th A
Garcia v. SAMTA N.Y. v. U.S., Congress’s law directed states to
In Garcia, Congress’s statute required state and affirmatively enact legislation to regulate
private employers to pay their employees the radioactive wastes produced by entities in their
minimum wage and OT pay – Congress did not in states or else they would have to take title to the
any way require states to legislate or to regulate its waste. The Court held this was commandeering
own citizens. Congress was directly regulating all states to legislate/regulate their citizens. Congress
employers -- both private and state employers . was not itself directly regulating disposal of
radioactive wastes.
HOLDINGL (Fair Labor Standards Act) that the
congressional statute there did not violate the 10th Congress enacted an Act that forced states to take
amendment because the statutes did not title to waste of low level radioactivity and be liable
commandeer the states in their sovereign capacity to for damages in which they could not dispose of by a
regulate their own citizens. certain date. The court found Congress’ actions
were unconstitutional because it was forcing state
legislatures to adopt federal laws and forcing the
state to take property interest to wastes they did not
personally own. It ruled that Congress cannot
compel the State to enact this federal regulation.
Congress may have to be more clever about how it
accomplishes regulartory purposes & won’t be able
to escape “political heat” for unpopular decisions by
forcing state officials to make those decisions. But
Congress, by use of its enumerated powers (CC,
S&T) can achieve practically any regulatory end it
wants without running afoul of the 10th A.

In Printz, the Court held that Congress violates 10th

A state sovereignty when it directs or compels
state/local officials to help implement or administer
federal programs (i.e., Congress’s Brady Gun Act
required local law enforcement officers to help
conduct background checks on people who wanted
to buy handguns).

2. Section 5 14th A

The 11th Amendment provides that suits against a state by its own citizens or another state’s citizens is
prohibited are federal court. However, this does not bar citizens from bringing suit in state court, suing state
officers for injunctive relief for prospective relief, having the state waive immunity, or bar Congress pursuant to
Section 5 authorize suits against the state government.

Limits on State Regulatory and Taxing Power: Is the state/local action constitutional?

I. When Congres has NOT acted

a. Dormant Commerce Clause & Market Participant Doctrine Exception
b. Privilèges and Immunités Clause

II. When Congress Acted

a. Preemption of state regulation

A. Dormant Commerce Clause and Its Exceptions

Does the state/local statute violate the DCC?

Art 1 sec 8 cl 3 assigns Congress the power to regulate interstate commerce. The Supreme Court of the United
States has long held that the Constitution’s grant to Congress of the power to regulate interstate commerce also
limits, by implication, the right of state or local governments to adopt laws that regulate interstate commerce. 

When a law is challenged under the dormant Commerce Clause, the Court determines its constitutionality by
examining its discriminatory effects.

First the court will determine if the law is discriminatory on its face (City of Philadelphia v. New Jersey),
(Hughes v. Oklahoma), facially neutral Dean Milk Co. v. City of Madison or if the law is non-discriminatory
Pike v. Bruce Church. The court then applies the appropriate standard based on the classification to determine if
the law is constitutional.
i. State/local statute discriminates on its face against ISC or out of staters (“facially discriminatory’)
If a law expressly discriminates between in staters and out of staters,, the law is per se invalid. In order for the
law to be upheld, the court reviews the law with the strictest scrutiny.

ii. facially neutral but has a discriminatory purpose or effect (i.e., has disproportionate negative effect on
out of staters)
If the law is facially neutral it can still be found to be discriminatory if it has a discriminatory purpose OR
discriminatory effect. There is a strong presumption of invalidating the law.

However the law will be upheld if there is a legitimate local interest, its narrowly tailored, and the interest
cannot be served as well by non-discriminatory alternatives. The Court is more likely to find discrimination
if it believes that a law is motivated by a protectionist purpose, helping in-staters at the expense of out-of-
staters.

 Pike Balancing Factors (LOREN J PIKE V BRUCE CHURCH, INC.S (dormant CC)
 iii. Regulates even-handedly and have an incidental burden on interstate commerce= \
If the court decides a particular law is not discriminatory against out-of-staters, that is, it treats in-staters and
out-of-staters the same, then a simple balancing test is used: The court balances the law’s burdens on interstate
commerce against its benefits. There is a presumption in favor of upholding the law, however the law will be
found unconstitutional if the court decides that the burdens from the law exceed its benefits. (Legitimate local
interests) Also, the court looks to see if other alternatives will work just as well.

(a) Legitimate local purpose (how strong/relationship to core state sovereign power)- i.e. reputation v.
public health safety.
(b) Extent of the burden on interstate commerce- i.e.forcing a private company to go to a different state-
costly.
(c) If legitimate local purpose could be promoted with lesser impact on interstate commerce.

Burden falls on state to justify both in terms of the local benefits flowing from the statute, and the unavailability
of nondiscriminatory alternatives

Violated DCC Did not violate DCC

Philadelphia v. NJ (garbage) South Carolina v. Barnwell (highway and
NJ law prohibited importation of solid or liquid waste from outside trucks)
of the State until Commissioner determined that it could be imported South Carolina passed a law that prohibited
without endangering the public health, safety, and welfare of the use of trucks on state highways that were
State. The law was imposed in response to Philadelphia and NY wider than 90 inches or heavier than
using the NJ landfills for the disposal of their waste. Philadelphia and 20,000 pounds. Trucks couldn’t travel on
other out-of-state cities sued to have the statute invalidated as South Carolina roads if they exceeded
discriminating against interstate commerce. these limits.
Rule: State laws may not discriminate on their face against articles of RULE: If the burden of interstate
commerce against out-of-state interests in favoring in-state interests. commerce falls on in-state and out-of-state
Reasoning: This was a protectionist or discriminatory statute. NJ has persons, the Court is more likely to uphold
a right to protect its residents and their environment by slowing the it.
flow of waste into its landfills, but not by discriminating against Reasoning: Although burden on interstate
articles of commerce from outside the State commerce (most trucks exceeded state
limits so would have to travel with more,
Hughs v. Oklahoma (minnows) smaller trucks) may outweigh safety
Oklahoma statute provided that “no person may transport or ship interest in protecting the highway, the
minnows for sale outside the state which were procured within the choice of a weight limitation is a legislative
waters of this State.” The purpose of the statute was to conserve issue. Additionally, the law burdened in-
natural resources. state drivers just as much as out-of-state
RULE: When a state law discriminates against interstate commerce drivers.
on its face, State then has burden of showing that Law is valid due to
local benefits and unavailability of non-discriminatory alternatives
adequate to preserve local interests at stake.
Reasoning: The statute discriminates against out-of-state commerce
on its face since it forbids transportation of minnows outside of the
State for purposes of sale and overtly blocks the flow of interstate
commerce. The state has an interest in conservation and protection of
wild animals, but cannot burden other States with these costs when
equally effective non-discriminatory conservation measures are
available.

Dean Milk v. Madison (milk in Wisconsin)

The City of Madison, Wisconsin barred the sale of pasteurized milk
unless it was processed and bottled at an approved pasteurization
plant within 5 miles of Madison. Dean Milk, a milk distributor,
bought its milk from farms in IL and WI and pasteurized it at 2 plants
that were 65 and 85 miles from Madison and was denied a license to
sell milk. Dean Milk’s farms and plants were licensed and inspected
by Chicago public health officials who operated under a rating and
inspection system recommended by the US Public Health Service.

Even in the exercise of its power to protect the health and safety of its
people, the state cant enact such a law if reasonable, non-
discriminatory alternatives, adequate to conserve legitimate local
interests, are available.

Reasoning: The ordinance poses an undue and discriminatory burden

on interstate commerce. There are reasonable non-discriminatory
alternatives: 1) Madison could send its inspectors to out-of-state
plants to pass the cost of the inspections onto producers, 2) rely on
US Public Health Service inspections, 3) use other out-of-town
ratings and inspections. This ordinance still discriminates against out-
of-staters although it also discriminates against those outside city of
Madison.

In any regulation of transportation or other aspect of commerce, the

existence of an intent to discriminate against interstate commerce, or
even an unintended discriminatory effect, will make it dramatically
more likely the Court will strike the measure as violating the dormant
Commerce Clause.

Kassal v. Consolidated Freight Corp (65 foot double trucks)

Iowa law unconst - banned 65-foot double trailers caused π to use
smaller trucks, detach trailers when driving through Iowa, or divert
trucks around Iowa. Court weighed “asserted safety purpose against
degree of interference w/ interstate commerce.” State failed to
present any persuasive evidence that 65-ft doubles are less safe than
55-ft singles. Statistical studies supported view that 65-ft doubles at
least as safe overall as 55-ft single & 60-ft doubles.” Iowa law
“substantially burdens interstate commerce” by forcing trucks to
avoid Iowa or detach trailers & ship them separately. Upon balancing
test, too much burden on interstate commerce. Law incompatible w/
other laws of all other States. Claimed safety measures, but no
evidence 55-foot singles are safe or safer as 65-foot doubles. Greater
economic burden than Bibb (2 million)
Rule: If the safety reasons for barring certain activities outweigh the
burden on commerce, the regulation will be valid and constitutional
 under the CC.

Reasoning: The Iowa truck length limitations unconstitutionally

burden interstate commerce without a significant countervailing
safety interest involved. There is no evidence that 65-ft doubles more
dangerous to restrict them. The burden is high bc Consolidated

There are two exceptions where laws that otherwise would violate the dormant commerce clause will be
allowed. One exception is if Congress approves the state law. Even a clearly unconstitutional, discriminatory
state law will be allowed if approved by Congress because Congress has plenary power to regulate commerce
among the states. The second exception is termed the “market participant exception”: A state may favor its own
citizens in receiving benefits from government programs or in dealing with government-owned businesses.

1. Congress approved the legislation The Supreme Court consistently has held that the Constitution
empowers Congress to regulate commerce among the states and that therefore state laws burdening
commerce are permissible, even when they otherwise would violate the dormant commerce clause, if
they have been approved by Congress. Thus, if congress has approved of the legislation, then the law
does not violate the dormant commerce clause even if the law is discriminatory. The idea behind the
dormant commerce clause is that it regulates when congress has not. If Congress has given the states
permission, then the dormant commerce clause is not violated.

Of course, if Congress has acted, the commerce clause no longer is dormant. The issue would be
whether the federal law is a constitutional exercise of the commerce power; if so, the law must be
followed even if it means upholding laws that otherwise would violate the Constitution. If the Court
deems a matter to violate the dormant commerce clause, Congress can respond by enacting a law
approving the action, thereby effectively overruling the Supreme Court. However, although the law
will not violate the dormant commerce clause, it still can be challenged under other constitutional
provisions.
1. Market Participation Exception
Under the Market participation exception, if the state acts like a business or company and not a state or
regulator, then the law does not violate the dormant commerce clause. Thus, the market participant
exception makes it constitutional for the state to favor its citizens over citizens from other states. There
are limits to the market participant doctrine however where the state may not impose conditions,
whether by statute, regulation, or contract, that have a substantial regulatory effect outside of that
particular market.

Exception Applied Exception Did Not Apply

Reeves (cement) MPD Exception South Central Timber (Alaska) – acting as market regulator
SD may favor and give preference to in-state and not as MP when required purchasers of Alaska timber to
buyers as a “market participant.” process in-state before export
South Dakota built & operated cement plant Whether Alaska’s restrictions on export of unprocessed
selling to in-state and out-of-state buyers since timber from state‐owned lands are exempt from Commerce
1919 to respond to cement shortages. 40% of Clause scrutiny under the “market‐participant doctrine.”
plant’s output went outside the State since plant A state offered to sell timber to any buyers who agreed to
produced more cement than State could use. State have the timber processed within the state before shipping
policy that plant give to in-state buyers first, then the timber out of the state. A plaintiff challenged the in-state
to out-of-state buyers if more left cement left processing requirement under the Dormant Commerce
over. Clause. Although the state was a market participant in selling
Rule: Market participant exception: States that the timber, the state was not a participant in the subsequent,
are “market participants” in buying or selling or downstream, market for the processing of timber. Thus,
goods, instead of “market regulators” may favor the state was subject to the Dormant Commerce Clause as to
in-state customers w/o violating the CC. the downstream processing, and the processing requirement
Reasoning: The CC relates to state taxes and was unconstitutional for discriminating against interstate
regulatory measures that impede free private commerce.
trade in the national marketplace, BUT does not
limit the ability of the States to operate freely inThe limit of the market‐participant doctrine must be that it
the free market (that is a Congressional limit). allows a State to impose burdens on commerce within the
States should share freedoms from federal market in which itis a participant, but allows it to go no
constraints. further. The State may not impose conditions, whether by
statute, regulation, or contract, that have a substantial
Court upheld cement company owned by South regulatory effect outside of that particular market.
Dakota who in times of shortages turned away Unless the “market” is relatively narrowly defined, the
out-of-state customers until all orders from SD’s doctrine hasthe potential of swallowing up the rule that
were filled. “Basic distinction btw States as States may not imposesubstantial burdens on interstate
market participants & States as market regulators commerce even if they act with the permissible state purpose
makes good sense & sound law.” No indication of of fostering local industry.”
constitutional plan to limit ability of States to
operate freely in free market. SD, as seller of South-Central Timber Development, Inc. v. Wunnicke—
cement, was clearly market participant & able to Alaska law unconst that required purchasers of state-owned
favor in-state purchasers over out. Fits market timber to have timber processed in AK before it shipped out
participant label as seller of cement. State of state. AK argued they were “market participant.” Court
proprietary activities may & often are burdened said, (1) “limit of market-participant doctrine must be that it
w/ same restrictions imposed on private market allows State to impose burdens on commerce w/in market in
participants. Should have similar freedoms of fed which it is participant, not to broader one. State may not
restraint impose conditions, whether by statute, regulation, or K, that
have substantial regulatory effect outside of particular
United Haulers (Public Function Exception) market.” Court drew distinction btw ability of state to prefer
United Haulers Association, Inc. sued the its own citizens in “initial disposition of goods when it is a
Counties and the Authority, alleging that the flow market participant” & “State’s attachment of restrictions on
control laws violate the Commerce Clause by dispositions subsequent to goods coming to rest in private
discriminating against interstate commerce. hands.” State was acting as regulator, trying to engage in
“downstream regulation” of timber-processing market, &
They submitted evidence that without the flow market-participant exception ø apply to immunize
control laws and the associated $86-per-ton downstream regulation from dormant CC.
tipping fees, they could dispose of solid waste at
out-of-state facilities for between $37 and $55 per
ton, including transportation.

B.

Preemption Rule Checklis

Article VI’s Supremacy Clause of the Constitution provides that the Constitution and laws and treaties made
pursuant to it are the supreme law of the land. Under this clause, States cannot act inconsistently with the
purpose of Congress, conflict or interfere with, curtail, or complement the federal law, or enforce additional or
auxiliary regulations. If there is a conflict between state and federal law, the federal law controls and the state
law is invalidated because federal law is supreme and thus preempts state law. There are two types of
preemption express preemption and implied preemption.

Preemption – is the state or local statute preempted by federal congressional law?

What is the Scope of Preemption? – no clear scope, look to clear congressional manifestation of intent

1. State and define the four ways in which a congressional statute might preempt state/local law (there is
express preemption and then there are three types of implied preemption)

 Express Preemption occurs when the federal statute explicitly states, in the language, or implicitly
contains in its structure and purpose, that it preempts any state law.

 Conflict Preemption occurs when there is a conflict between federal and state law such that “compliance
with both federal and state regulations is a physical impossibility. In this situation, the state law is
deemed preempted.

 Conflict Preemption
Implied preemption will also be found if state law impedes the achievement of a federal objective. Even if
federal and state laws are not mutually exclusive and even if there is no congressional expression of a desire to
preempt state law, preemption will be found if state law “stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.” Essentially, the state and federal laws are not
regulating the same thing, yet the state law obstructs the federal government’s objective and the state law will
be deemed preempted.

 Field Occupation – field is occupied by comprehensive, extensive federal regulation

e.g., foreign affairs; immigration
– (Immigration/foreign affairs/broad = preemption, Local, “traditionally left to states, health/safety = no
preemption)

Even though federal law does not expressly preempt state law, preemption will be found if there is a clear
congressional intent to have a federal law occupy a particular field or area of law. When the Court is uncertain
as to whether Congress intended to preempt the field, it will look at the nature of the regulated area. If the area
regulated by Congress is an area in which the federal interest is dominant, the Court will be more inclined to
presume that Congress intended to occupy the field.

Preemption Found Preemption Not Fund

 Virginal Uranium v. Warren
 U.S. v. Arizona (held portions of (Virginia statute banning uranium
Arizona law relating to immigration mining on private lands not
are preempted by federal preempted by federal Atomic
immigration laws base on obstacle Energy Act)
preemption & field preemption)
 Petitioner Virginia Uranium, Inc., wants to
A state enacted a statute imposing criminal mine raw uranium ore from a site near
penalties on noncitizens present or working Coles Hill, Virginia, but Virginia law flatly
in the state who had failed to register with prohibits uranium mining in the
the federal government. However, Commonwealth.
Congress had already enacted a full set of
standards governing the registration of The company filed suit, alleging that,
noncitizens, implying that it intended to under the Constitution’s Supremacy
occupy the field for regulation of Clause, the Atomic Energy Act (AEA)
noncitizen registration. The federal preempts state uranium mining laws like
standards therefore implicitly preempted Virginia’s and ensconces the Nuclear
state law under the doctrine of field Regulatory Commission (NRC) as the lone
preemption. [Adapted from Arizona v. regulator in the field.
United States, 567 U.S. 387 (2012). Both the District Court and the Fourth
Circuit rejected the company’s argument,
Arizona v. United States— AZ enacted finding that while the AEA affords the
S.B. 1070 in 2010 to discourage/deter NRC considerable authority over the
unlawful entry & presence of aliens & nuclear fuel life cycle, it offers no hint that
economic activity by persons unlawfully Congress sought to strip States of their
present in U.S. Est. state policy of attrition traditional power to regulate mining on
through enforcement. U.S. argued S.B. private lands within their borders
1070 was preempted. Court found,
w/respect to alien registration (§3),
Congress intended to preclude States from
“complementing federal law, or enforcing
additional or auxiliary regulations;” §5,
found ordinary principles of preemption
include well-settled proposition that state
law is preempted where it “stands as
obstacle to accomplishment & execution of
full purposes & objectives of Congress.”
AZ law, by getting misdemeanor if alien
seeks or works in State would interfere
w/careful balance struck by Congress
w/respect to unauthorized employment of
aliens. §6 preempted b/c Fed gov is only
one to make determination of whether
foreign national may continue living in
U.S. as decisions of this nature touch on
foreign relations & must be made w/one
voice (ø arrest on probable cause to
deport); but, §2(B), ø conflict with law b/c
law has not gone into effect yet, no
definitive interpretation from state courts.