Professor James McGoldrick, “The Dormant Commerce Clause: The Endgame” — Pace Law Review (forthcoming)

September 30, 2019 | Professor James M. McGoldrick‘s article, “The Dormant Commerce Clause: The Endgame — From Southern Pacific to Tennessee Wine and Spirits — 1945 to 2019” (SSRN), will be published in the Pace Law Review (forthcoming 2019). The article examines the key factors involved in the Supreme Court’s undue burden’s balancing approach and the attempt to define and determine when a state might be allowed to discriminate against interstate commerce.

Abstract of “The Dormant Commerce Clause: The Endgame”

This article attempts to develop the undue burdens balancing and the virtually per se discrimination tests of the modern Dormant Commerce Clause starting with the 1945 case of Southern Pacific v. Arizona and moving to Tennessee Wine & Spirits Retailers Ass’n v. Thomas, a case decided by the United States Supreme Court in June of 2019. The Commerce Clause, Article I, Section 8, Clause 3 gives Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Our most famous Chief Justice of the United States Supreme Court, John Marshall, defined Congress’s commerce power “among the several states” to be plenary and complete, setting the stage for Congress to use this power over interstate commerce as the basis for much of Congress’ power to pass legislation. Out of this immense federal power, Chief Justice Marshall deduced that since Congress had plenary power over interstate commerce, the states had none. Only Congress could regulate interstate commerce. Marshall called the implied limitations of the Commerce Clause “dormant” leading to what we now call the Dormant Commerce Clause. There are two main aspects to the modern Dormant Commerce Clause. First, states may pass evenhanded laws that impact interstate commerce, but even evenhanded laws may not impose undue burdens on interstate commerce. Second, states may not discriminate against interstate commerce by treating commerce from other states differently than in-state commerce simply because it is out of state. Under the undue burdens test, the Court will consider a number of factors, but primarily the Court will undertake a factual evaluation of the importance of the state interest in passing the law that impacted interstate commerce versus a practical consideration of the harm to interstate commerce. Under the discrimination rule, the Court will almost certainly find the discriminatory state law to violate the Dormant Commerce Clause, but the Court uses an almost tortuous series of approaches to reach what is close to a foregone conclusion. This tortious approach has led some to say that it is impossible to know which of the two tests to apply. This article attempts to identify the key factors involved in the Court’s undue burden’s balancing approach and to closely explore the Court’s attempt to define discrimination and to determine when a state might be allowed to discriminate against interstate commerce. The hope is that at the very least students, lawyers, and lower courts might have some guidance in applying the two tests and in knowing the difference between the two.