The Dormant Commerce Clause is a confusing and made-up doctrine crafted by the Court to prevent states from isolating themselves from the rest of the country for their own pecuniary benefit. The doctrine attempts to honor the delegation to Congress in Article I to regulate interstate commerce by preempting a state’s ability to pass laws regulating interstate commerce. However, states may be able to pass laws that favor the state in one particular scenario.
Facially Neutral, Discriminatory Impact
Generally, if a law patently or facially advantages a state at the expense of its peers, the law will receive strict scrutiny, essentially dooming the law. However, laws that do not discriminate on their face, but nevertheless have a discriminatory impact, may not run afoul of the dormant commerce clause. In Pike v. Bruce Church., the Court stated what has become the test for whether a given law violated the dormant commerce clause:
Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefit.
In simpler terms, if the law purports to benefits the state or local economy more than it burdens interstate commerce, the law is constitutionally sound.
Now, since this is a circuit splits blog, you’re probably asking yourself why this all matters since the Supreme Court already spoke on the subject. Well, states are split on what legislatures have to do to save their law: Do they need to simply assert putative local benefits? Or, does there need to be some evidence that the law will in fact create local benefits?
Well—the circuits are, you guessed it, split! The Second, Third, Eighth, and Tenth Circuits have a more substantive requirement, hoping to assure that the putative benefits are both “genuine and credibly advanced.” Inapposite—the First, Fifth, Ninth, and D.C. Circuits only require the assertion of local benefits—no matter how credible or genuine.
In Kassel v. Kassel v. Consol. Freightways Corp., perhaps the most recent Supreme Court case on point, the Court’s reasoning indicates that the Second, Third, Eighth, and Tenth Circuits’ interpretation is correct, insofar that there is a substantive requirement on the state to ensure the asserted benefits are genuine and not just speculative. With seemingly more burgeoning issues on the Court’s horizon, it seems hopeful to wish this split will be resolved anytime soon; but, with the incoming administration’s alleged concern for federalism, perhaps precedent will trend towards allowing more state laws burdening interstate commerce.