The dormant Commerce Clause, or negative Commerce Clause, in American constitutional law, is a legal doctrine that courts in the United States have inferred from the Commerce Clause in ArticleI of the US Constitution.Williams, Norman. "Why Congress May Not Overrule the Dormant Commerce Clause", 53 UCLA L. Rev. 153 (2005). The primary focus of the doctrine is barring state protectionism. The dormant Commerce Clause is used to prohibit state legislation that discriminates against, or unduly burdens, interstate or international commerce. Courts first determine whether a state regulation discriminates on its face against interstate commerce or whether it has the purpose or effect of discriminating against interstate commerce. If the statute is discriminatory, the state has the burden to justify both the local benefits flowing from the statute and to show the state has no other means of advancing the legitimate local purpose.
For example, it is lawful for Michigan to require food labels that specifically identify certain animal parts, if they are present in the product, because the state law applies to food produced in Michigan as well as food imported from other states and foreign countries; the state law would violate the Commerce Clause if it applied only to imported food or if it was otherwise found to favor domestic over imported products. Likewise, California law requires milk sold to contain a certain percentage of milk solids that federal law does not require, which is allowed under the Dormant Commerce Clause doctrine because California's stricter requirements apply equally to California-produced milk and imported milk and so does not discriminate against or inappropriately burden interstate commerce.California Department of Food and Agriculture – Milk Standards "".
The doctrine was initially envisioned by Chief Justice John Marshall in the 1820s.
Origin of the doctrine
The idea that regulation of interstate commerce may to some extent be an exclusive Federal power was discussed even before adoption of the Constitution. On September 15, 1787, the Framers of the Constitution debated in Philadelphia whether to guarantee states the ability to lay duties of tonnage without Congressional interference so that the states could finance the clearing of harbors and the building of lighthouses.2 M. Farrand, Records of the Federal Convention of 1787, p. 625 (1937) (1787-09-15). James Madison believed that the mere existence of the Commerce Clause would bar states from imposing any duty of tonnage: "[Madison] was more and more convinced that the regulation of Commerce was in its nature indivisible and ought to be wholly under one authority." Roger Sherman disagreed: "The power of the United States to regulate trade being supreme can control interferences of the State regulations when such interferences happen; so that there is no danger to be apprehended from a concurrent jurisdiction." Sherman saw the commerce power as similar to the tax power, the latter being one of the concurrent powers shared by the federal and state governments. Ultimately, the Philadelphia Convention decided upon the present language about duties of tonnage in Article I, Section 10, which says: "No state shall, without the consent of Congress, lay any duty of tonnage..."
The word "dormant", in connection with the Commerce Clause, originated in dicta of Chief Justice John Marshall. For example, in the case of Gibbons v. Ogden, Marshall wrote that the power to regulate interstate commerce "can never be exercised by the people themselves, but must be placed in the hands of agents, or lie dormant." In concurrence, Justice William Johnson was even more emphatic that the Constitution is "altogether in favor of the exclusive grants to Congress of power over commerce." Later, in the case of Willson v. Black-Bird Creek Marsh Co., Marshall wrote: "We do not think that the [state] act empowering the Black Bird Creek Marsh Company to place a dam across the creek, can, under all the circumstances of the case, be considered as repugnant to the power to regulate commerce in its dormant state, or as being in conflict with any law passed on the subject.".
If Marshall was suggesting that the power over interstate commerce is an exclusive federal power, the Dormant Commerce Clause doctrine eventually developed very differently: it treats regulation that does not discriminate against or unduly burden interstate commerce as a concurrent power, rather than an exclusive federal power, and it treats regulation that does so as an exclusive federal power. Thus, the modern doctrine says that congressional power over interstate commerce is somewhat exclusive but "not absolutely exclusive".Pommersheim, Frank. Landscape : Indians, Indian Tribes, and the Constitution: Indians, Indian Tribes, and the Constitution, p. 41 (Oxford University Press 2009). 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."Cooley v. Board of Wardens, 53 U.S. 299 (1851). 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. Pennsylvania.Reading Railroad v. Pennsylvania, 82 U.S. (15 Wall.) 232 (1873).
Effect of the doctrine Justice Anthony Kennedy has written that: "The central rationale for the rule against discrimination is to prohibit state or municipal laws whose object is local economic protectionism, laws that would excite those jealousies and retaliatory measures the Constitution was designed to prevent."C&A Carbone, Inc. v. Town of Clarkstown, N.Y., 511 U.S. 383 (1994) (quoting The Federalist No. 22, pp. 143–145 (C. Rossiter ed. 1961) (A. Hamilton); Madison, Vices of the Political System of the United States, in 2 Writings of James Madison 362–363 (G. Hunt ed. 1901)). In order to determine whether a law violates a so-called "dormant" aspect of the Commerce Clause, the court first asks whether it discriminates on its face against interstate commerce. In this context, "discrimination" simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.
Thus, in a dormant Commerce Clause case, a court is initially concerned with whether the law facially discriminates against out-of-state actors or has the effect of favoring in-state economic interests over out-of-state interests. Discriminatory laws motivated by "simple economic protectionism" are subject to a "virtually per se rule of invalidity",City of Philadelphia v. New Jersey 437 U.S. 617 (1978), Dean Milk Co. v. City of Madison, Wisconsin, 340 U.S. 349 (1951), Hunt v. Washington State Apple Advertising Comm., 432 U.S. 333 (1977). which can only be overcome by a showing that the State has no other means to advance a legitimate local purpose.Maine v. Taylor, 477 U.S. 131 (1986). See also Brown-Forman Distillers v. New York State Liquor Authority, .
On the other hand, when a law is "directed to legitimate local concerns, with effects upon interstate commerce that are only incidental", that is, where other legislative objectives are credibly advanced and there is no patent discrimination against interstate trade, the Court has adopted a much more flexible approach, the general contours of which were outlined in Pike v. Bruce Church, Inc.397 U.S. 137, 142 (1970). If the law is not outright or intentionally discriminatory or protectionist, but still has some impact on interstate commerce, the court will evaluate the law using a balancing test. The Court determines whether the interstate burden imposed by a law outweighs the local benefits. If such is the case, the law is usually deemed unconstitutional.See Pike v. Bruce Church, Inc., . In Pike, the Court explained that a state regulation having only "incidental" effects on interstate commerce "will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits".397 U.S. at 142, 90 S.Ct. at 847. 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". Thus regulation designed to implement public health and safety, or serve other legitimate state interests, but impact interstate commerce as an incident to that purpose, are subject to a test akin to the rational basis test, a minimum level of scrutiny.See Bibb v. Navajo Freight Lines, Inc. In USA Recycling, Inc. v. Town of Babylon, 66 F.3d 1272, 1281 (C.A.2 (N.Y.), 1995), the court explained:
If the state activity constitutes "regulation" of interstate commerce, then the court must proceed to a second inquiry: whether the activity regulates evenhandedly with only "incidental" effects on interstate commerce, or discriminates against interstate commerce. As we use the term here, "discrimination" simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter. The party challenging the validity of a state statute or municipal ordinance bears the burden of showing that it discriminates against, or places some burden on, interstate commerce. Hughes v. Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 1736, 60 L.Ed.2d 250 (1979). If discrimination is established, the burden shifts to the state or local government to show that the local benefits of the statute outweigh its discriminatory effects, and that the state or municipality lacked a nondiscriminatory alternative that could have adequately protected the relevant local interests. If the challenging party cannot show that the statute is discriminatory, then it must demonstrate that the statute places a burden on interstate commerce that "is clearly excessive in relation to the putative local benefits."Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471(1981) (quoting Pike, 397 U.S. at 142, 90 S.Ct. at 847)
State taxation 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.Examples of such cases are Quill Corp. v. North Dakota, 504 U.S. 298 (1992); Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 (1959) and H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949).
More recently, in the 2015 case of Comptroller of the Treasury of Maryland v. Wynne,Comptroller of Treasury of MD. v. Wynne, 575 U.S. 542 (2015). the Court addressed Maryland's unusual practice of taxing personal income earned in Maryland, and taxing personal income of its citizens earned outside Maryland, without any tax credit for income tax paid to other states. The Court held this sort of double-taxation to be a violation of the dormant Commerce Clause. The Court faulted Justice Antonin Scalia's criticism of the dormant Commerce Clause doctrine by saying that he failed to "explain why, under his interpretation of the Constitution, the Import-Export Clause would not lead to the same result that we reach under the dormant Commerce Clause".