Dormant Commerce Clause

[7] The approach began in the 1851 case of Cooley v. Board of Wardens, in which Justice Benjamin R. Curtis wrote for the Court: "Either absolutely to affirm, or deny that the nature of this [commerce] power requires exclusive legislation by Congress, is to lose sight of the nature of the subjects of this power, and to assert concerning all of them, what is really applicable but to a part.

"[8] The first clear holding of the Supreme Court striking down a state law under the Dormant Commerce Clause came in the 1873 case Reading Railroad Company v.

Discriminatory laws motivated by "simple economic protectionism" are subject to a "virtually per se rule of invalidity",[12] which can only be overcome by a showing that the State has no other means to advance a legitimate local purpose.

[16] 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".

"[18]Over the years, the Supreme Court has consistently held that the language of the Commerce Clause contains a further, negative command prohibiting certain state taxation even when Congress has failed to legislate on the subject.

The Court's taxation decisions thus "reflected a central concern of the Framers that was an immediate reason for calling the Constitutional Convention: the conviction that in order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation.

The history is described in Oklahoma Tax Commission v. Jefferson Lines, Inc., 514 U.S. 175 (1995): The command has been stated more easily than its object has been attained, however, and the Court's understanding of the dormant Commerce Clause has taken some turns.

Although the assessment could have been sustained solely on prior precedent, Justice Stone added a dash of the pragmatism that, with a brief interlude, has since become our aspiration in this quarter of the law.

The rule reflects an underlying philosophy that interstate commerce should enjoy a sort of "free trade" immunity from state taxation.

Complete Auto Transit is the last in a line of cases that gradually rejected a per se approach to state taxation challenges under the commerce clause.

In addition to satisfying the four-prong test in Complete Auto Transit, the Supreme Court has held state taxes which burden international commerce cannot create a substantial risk of multiple taxations and must not prevent the federal government from "speaking with one voice when regulating commercial relations with foreign governments".

Considering an Equal Protection Clause challenge, the Iowa Supreme Court held that the use of the federal government's definitions of income were convenient for the state and was "rationally related to the goal of administrative efficiency".

The Court has defined "protectionist" state legislation as "regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors".

Some states and localities sought to promote private investment in these costly technologies by guaranteeing a longterm supply of customers.

One common theme was the decision to fund local infrastructure by guaranteeing a minimum volume of business for privately constructed landfills, incinerators, composters or other costly disposal sites.

If a county or other municipality issued general obligation bonds for construction of a costly incinerator, for example, state laws might require a special approval process.

The private character of flow control regimens can thus be explained in part by the desire to utilize particular kinds of public financing devices.

The scheme had the following aspects: The Town of Clarkstown's ordinance was designed and written right in the teeth of the long line of Supreme Court cases which had historically struck down local processing requirements.

A long line of Supreme Court case law had struck down local processing requirements when applied to goods or services in interstate commerce.

As the Court in Carbone wrote: We consider a so-called flow control ordinance, which requires all solid waste to be processed at a designated transfer station before leaving the municipality.

As the Court wrote: "The case decided today, while perhaps a small new chapter in that course of decisions, rests nevertheless upon well-settled principles of our Commerce Clause jurisprudence."

The "only salient difference is that the laws at issue here require haulers to bring waste to facilities owned and operated by a state-created public benefit corporation."

These important responsibilities set state and local government apart from a typical private business.The Court's further explained: By the 1980s, the Counties confronted what they could credibly call a solid waste "'crisis.'"

The Counties had an uneasy relationship with local waste management companies, enduring price fixing, pervasive overcharging, and the influence of organized crime.

Dramatic price hikes were not uncommon: In 1986, for example, a county contractor doubled its waste disposal rate on six weeks' noticeThe Court would not interfere with local government's efforts to solve an important public and safety problem.

The contrary approach of treating public and private entities the same under the dormant Commerce Clause would lead to unprecedented and unbounded interference by the courts with state and local government.

The citizens could have left the entire matter for the private sector, in which case any regulation they undertook could not discriminate against interstate commerce.

It is not the office of the Commerce Clause to control the decision of the voters on whether government or the private sector should provide waste management services.

Camps Newfound/Owatonna v. Town of Harrison, 520 U.S. 564, 596 (1997) (Scalia, J., dissenting) (citing Okla. Tax Comm'n v. Jefferson Lines, 514 U.S. 175, 180–183 (1995)); see generally Boris I. Bittker, Regulation of Interstate and Foreign Commerce § 6.01[A], at 6–5 ("[T]he boundaries of the [State's] off-limits area are, and always have been, enveloped in a haze.").

Because all of the employees covered by that mandate were "in a substantial if informal sense, 'working for the city,' " Boston was considered to be simply favoring its own residents through the expenditures of municipal funds.