West Lynn Creamery, Inc. V. Healy – Milk tax subsidizes in-state farmers

• Stevens 1994. Facts. MA (1) taxed all milk sales within the state, and (2) used proceeds of tax to subsidize in-state dairy farmers. Each part of program was probably constitutional.

• Holding. Taken together, these provisions were unconstitutional, because entire scheme was intended to protect MA farmers from competition of out-of-staters.

• Concurrence - Scalia. This case marks outer boundary of DCC jurisprudence; subsidy standing alone would be permissible even though economic effect of subsidy would be same as this statute.

• Dissent - Rehnquist. Program here was constitutionally indistinguishable from any other subsidy. United States v. Butler shows folly of attempting to limit spending power.

Bobbitt’s modalities and the dcc?

• Historical modality

• Prevention of state protectionism was one of the underlying purposes of USC, because one of principal defects of AOC was that they permitted such protectionsim.

• C/A. There is no evidence that Framers specifically intended that judiciary invalidate laws that hadn’t been prohibited by Congressional statute. Moreover, if text does not support judicial power, this reinforces conclusion that Framers did not mean for judges to have this power.

• Textual modality

• Article I, § 8, cl. 3 gives Congress the power to “Regulate Commerce . . . among the several States.” Other provisions in §9 prohibit duties on articles exported from any state, and § 10 prohibits states from laying imposts or duties without Congress’ consent.

• Marshall thought that Congress’ commerce power was exclusive but he wasn’t willing to push this position to its logical conclusion, which would have invalidated quarantine laws and prevented states from damming navigable waterways.

1. If Congressional power is not absolutely exclusive, then is there a limited sphere of exclusive power over Commerce?

2. Cooley said yes in 1851, holding that Congress has exclusive power to legislate on matters that “are in their nature national, or admit only of one uniform system.”

3. But this category’s boundaries are hard to define. Moreover, this position leaves USC’s text behind, and is in realm of judicial gloss. Once one is willing to entertain Cooley’s solution, one has already conceded that (a) text is indeterminate and (b) it is legitimate to go beyond text.

4. Thus, text does not support DCC doctrine. At best, it is permissive insofar as it does not prohibit courts from assuming this power.

• Structural modality

• It is inconsistent with overall constitutional scheme for states to be able to enact protectionist laws that obstruct interstate commerce. It is not just original intent that is thwarted by such laws; textual provisions enumerated above indicate a purpose to maintain free trade among the states – a purpose we would be entitled to infer even if we did not know the history.

• C/A. It is not clear that this purpose will be thwarted if federal courts get out of DCC business. Maybe this is Congress’ job.

• Response (another structural argument): Congress is less well-suited to do policing function than is SC. DCC is based on distrust of states; see Stone (294) drawing on representation-reinforcement rationale first seen in McCulloch, combined with view that Congress is too busy to police states (Jackson 296). Both of these arguments together infer, from overall USC structure, that this job needs to be done and that SC is the entity that must do it.

• Doctrinal modality – DCC doctrine is well established in precedent, having been endorsed by Marshall himself. However, question being addressed today is whether precedent is justified.

• Ethical modality

• American cultural ethos of “common citizenship”: U.S. is a single nation, not an expedient alliance between otherwise hostile powers. Thus, it follows that people of one state ought not to treat interests of fellow Americans as irrelevant or treat them as resources to be exploited. But this is how outsiders are treated by protectionist laws  SC cannot tolerate such laws.

• C/A. This argument has limitation: it says nothing about judicial role.

• Prudential modality

• Bad things will happen if states are allowed to do whatever they want: free trade will break down, trade wars will ensue, and political and economic consequences will be bleak.

• C/A. If results are that bad, then Congress can probably be relied upon to intervene.

• Analysis

• Historical, structural, ethical, and prudential arguments all rely on consequentialist reasoning.

• Because consequentialist reasoning depends on predictions about future, and because such predictions are necessarily contestable among reasonable people, there will always be room for disagreement about validity of DCC doctrine.

Market participant exception under commerce clause

• If a state acts as a market participant rather than a market regulator (e.g. operates a business and sells goods) then it may discriminate in favor of its own residents.

Reeves, Inc. v. Stake

• 1980. When SD owned and operated a cement plant, it was constitutionally permissible (e.g. is free of DCC limitations) for it to supply SD customers first before furnishing cement to out-of-state customers in times of shortage.

10th Amendment - Implied limitations on congressional power -

National League of Cities v. Usery - Traditional government functions test

• 1976. Barred federal government from doing anything that would impair the states’ ability to perform their “traditional functions.”

• Holding. SCt held by 5-4 vote that 10^th Amendment barred Congress from making federal minimum-wage and overtime rules applicable to state and municipal employees.

• Rationale. Majority conceded that minimum-wage/overtime rules, as applied to state employees, clearly affected commerce. Thus these wage/hour regulations could unquestionably be constitutionally applied to private employers, under the commerce power. But when these wage/hour rules were applied to state employees, they violated the independent requirement, imposed by the 10^th Amendment, that “Congress may not exercise power in a fashion that impairs the States’ integrity or their ability to function effectively in the federal system.”