United States Constitution

However, once the federal government is granted a certain power, that power is theoretically “concurrent.” Meaning, for example, with the Commerce Clause in place, both the federal government and the state governments have authority in the realm of commerce. The question becomes, then, to what degree does the Commerce Clause actually limit a state’s ability to regulate commerce?

The answer (among other provisions like the Supremacy Clause and the Privileges and Immunities Clause) is what is known as the Dormant Commerce Clause.

The Dormant Commerce Clause does not explicitly stem from any textual provision. It is entirely implied from the Commerce Clause. One of the underlying purposes of the Commerce Clause is to allow the federal government to prevent economic discrimination between states. Selling goods between Alabama and Mississippi should not be as difficult as selling goods between the United States and Russia. While somewhat sovereign, a state should not be permitted to pass laws benefiting itself that also burden another state. The Commerce Clause allows laws passed by the federal government to override state laws that affect interstate commerce. The Dormant Commerce Clause automatically invalidates a protectionist state law, whether or not the federal government has legislated on the issue.

First, if the state or local law is specifically purposed with economic protectionism, it is automatically (or, ‘per se’) unconstitutional.

Second, if the purpose is not economic protectionism – and is otherwise legitimate – the Court will use a balancing test. It will examine the significance of burden that this law places on interstate commerce. It will ask if the value of the benefit outweighs the burden. In other words, as stated in Pike, “Where the statute regulates evenhandedly…it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.”

While the Pike Test may appear complex, is it practically relatively simple. The following cases illustrate the test in operation.

In City of Philadelphia v. New Jersey (1978), New Jersey prohibited out-of-state waste from entering New Jersey landfills. Though the Court did not find this to be per se unconstitutional, it considered the potential burden on interstate commerce if such regulations were allowed. Though a particular state may want to limit its exposure to out-of-state garbage, it may not essentially blockade waste from entering the state. This was economic protectionism, burdening out-of-state interests without enough of an in-state benefit, and therefore invalid.

In West Lynn Creamery, Inc. v. Healy (1994), Massachusetts placed a tax on all milk sales (in-state and out-of-state), but redistributed the money back to in-state milk producers, essentially subsidizing the in-state industry. This practically amounted to a tariff on out-of-state milk and was therefore unconstitutional.

In C&A Carbone, Inc. v. Town of Clarkstown (1994), the city of Clarkstown prohibited businesses from discarding certain waste anywhere but in an in-city private facility, which was actually more expensive to use than other facilities outside of the city. Though this was not a state being protectionist – it was a city – the Court still found this law to be unconstitutional.

For example, in United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority (2007), New York forced private waste management companies to deliver waste to a particular public facility. Since this was a public facility, and not a private facility, the Court held that this protectionist law was constitutional. This case is especially noteworthy because of how similar it is to C&A Carbone, Inc. v. Town of Clarkstown (1994) (see above). Essentially, the only significant difference between the two cases – leading to two different results – was that in United Haulers, New York mandated using an in-state public facility, while in Carbone, Clarkstown mandated using an in-city private facility.