437 U.S. 177 (1978)
In response to the 1973 shortage of petroleum, the Governor of Maryland directed the State Comptroller to conduct a market survey after receiving complaints about inequitable distribution of gasoline among retail stations.1
The survey results indicated that gasoline stations operated by producers or refiners had received preferential treatment during the period of short supply.2 The Maryland legislature then enacted a statute with provisions effective after July 1, 1974, and July 1, 1975, that prohibited any producer or refiner of petroleum products from operating any retail service station within the State.3 The statute also required every producer, refiner, or wholesaler to extend all voluntary allowances uniformly to all retail service station dealers supplied.4
No petroleum products are produced or refined in Maryland.5 Approximately 3,800 retail service stations in the State sell over 20 different brands of gasoline.6 The number of stations actually operated by a refiner or an affiliate represents about 5% of the total.7 All of the gasoline sold in Maryland is transported into the State from refineries located elsewhere.8 Of the 233 company-operated stations, 197 belonged to out-of-state integrated producers or refiners.9 Only one in-state integrated firm operated two stations.10
Appellants are integrated oil companies that refine and market gasoline, including Exxon Corp., Shell Oil Co., Gulf Oil Corp., Phillips Petroleum Co., and others such as Continental Oil Co., Ashland Oil Co., and Commonwealth Oil Refining Co.11 Some appellants sell gasoline exclusively through company-operated stations using trade names such as Red Head and Scot.12 Others sell primarily through dealer-operated stations but also operate at least one retail station each.13 Exxon alone operated 36 company-operated stations in Maryland that it used to test innovative marketing concepts or products.14 Shortly before the effective date of the Act, Exxon filed a declaratory judgment action challenging the statute in the Circuit Court of Anne Arundel County, Maryland.15 During the ensuing nine months, six other oil companies instituted comparable actions.16
The Circuit Court granted the motion.17 The trial then focused on the validity of the divestiture provisions.18 After trial, the Circuit Court held the entire statute invalid, primarily on substantive due process grounds.19 The Maryland Court of Appeals reversed, upholding the statute against all challenges.20 The refiners introduced evidence at trial indicating that their ownership of retail service stations had produced significant benefits for the consuming public.21 At least three refiners might elect to withdraw from the Maryland market altogether if the statute were enforced.22 There was no evidence that the total quantity of petroleum products shipped into Maryland would be affected.23 The Supreme Court noted probable jurisdiction.24
Whether the Maryland statute violates the Due Process Clause of the Fourteenth Amendment?25
No. The Maryland statute satisfies the test because the legislature reasonably concluded that the statute would protect competition and would guard against the economic evils associated with vertical integration.28 The evidence presented by the refiners may cast some doubt on the wisdom of the statute.29 It is absolutely clear that the Due Process Clause does not empower the judiciary to sit as a superlegislature to weigh the wisdom of legislation.30 Responding to evidence that producers and refiners were favoring company-operated stations in the allocation of gasoline and that this would eventually decrease the competitiveness of the retail market, the State enacted a law prohibiting producers and refiners from operating their own stations.31
The statute bears a reasonable relation to the State's legitimate purpose in controlling the gasoline retail market.32
The Maryland statute does not violate the Due Process Clause of the Fourteenth Amendment.33
Whether the Maryland statute violates the Equal Protection Clause of the Fourteenth Amendment?34
No. The legislature could reasonably conclude that the problem of vertical integration was most acute with respect to producers and refiners.37 The classification is not arbitrary. Appellants contend that the statute violates the Equal Protection Clause because it applies only to producers and refiners and not to other oil companies.38 The distinction drawn by the statute rests on a rational basis tied to the evidence of preferential treatment during the shortage.39
The Maryland statute does not violate the Equal Protection Clause of the Fourteenth Amendment.40
Whether the Maryland statute is preempted by the Emergency Petroleum Allocation Act of 1973?41
No. The Maryland statute does not conflict with any express provision of the federal statute, nor does it stand as an obstacle to the accomplishment of federal purposes.44 The federal statute does not occupy the field of gasoline marketing. The Act expresses a preference for competitive market forces but does not preempt state regulation that is consistent with federal policy.45
The Maryland statute is not preempted by the Emergency Petroleum Allocation Act of 1973.46
Whether the Maryland statute is preempted by the Robinson-Patman Act or the federal policy favoring competition reflected in the Sherman Act?47
A state statute is not preempted by the Robinson-Patman Act or the Sherman Act if there is no clear conflict requiring a violation of federal law. The state statute does not create an irreconcilable conflict with federal policy. The basic purposes of the state statute and the federal antitrust laws are similar in favoring equal treatment of customers.48
No. Compliance with the Maryland statute may cause appellants to violate the Robinson-Patman Act only in hypothetical situations that are entirely too speculative to warrant preemption.49 The alleged conflict is in the possibility that the Maryland statute may require uniformity in some situations in which the Robinson-Patman Act would permit localized discrimination.50 This sort of hypothetical conflict is not sufficient to warrant preemption.51 The proviso in section 2(b) created no new federal right to engage in discriminatory pricing.52
The Maryland statute is not preempted by the Robinson-Patman Act or the federal policy favoring competition reflected in the Sherman Act.53
Whether the Maryland statute violates the Commerce Clause by discriminating against interstate commerce?54
The Commerce Clause does not protect the particular structure or methods of operation of a particular interstate company.55 It protects the interstate market from prohibitive or unduly burdensome regulation.56 The statute does not prohibit the flow of interstate goods, place added costs upon them, discriminate against out-of-state companies in favor of local ones, or cause local businesses to be favored over out-of-state businesses.57
No. The absence of any Maryland-based independent refiners does not create an impermissible burden on interstate commerce, since the statute does not prohibit the flow of interstate goods or place added costs upon them, discriminate against out-of-state companies, or cause local businesses to be favored over out-of-state businesses.58 The fact that the burden of the statute falls solely on interstate companies is not sufficient to establish a Commerce Clause violation.59 The statute regulates evenhandedly and has only incidental effects on interstate commerce.60 All producers and refiners are treated alike.61
The fact that there happen to be no Maryland-based refiners or producers does not transform the statute into one that discriminates against interstate commerce.62
The Maryland statute does not violate the Commerce Clause by discriminating against interstate commerce.63
Related opinions on this issue
Justice Blackmun concurred in the due process and antitrust holdings but dissented from the Commerce Clause analysis.64 He concluded that the divestiture provisions preclude out-of-state competitors from retailing gasoline within Maryland.65 The effect is to protect in-state retail service station dealers from the competition of the out-of-state businesses.66
This protectionist discrimination is not justified by any legitimate state interest that cannot be vindicated by more evenhanded regulation.67 Sections (b) and (c) therefore violate the Commerce Clause.68 Of the 233 company-operated stations, 197 belonged to out-of-state integrated producers or refiners.
Of the class of stations statutorily insulated from the competition of the out-of-state integrated firms, more than 99% were operated by local business interests.69 Of the class of enterprises excluded entirely from participation in the retail gasoline market, 95% were out-of-state firms.70
Whether the Maryland statute violates the Commerce Clause by unduly burdening interstate commerce?71
The Commerce Clause prohibits a state from imposing burdens on interstate commerce that are clearly excessive in relation to the putative local benefits.72 The statute may cause some companies to withdraw from the Maryland market, but the Commerce Clause does not protect the right of an interstate company to do business in a particular way in a particular state.73
No. Some refiners may choose to withdraw entirely from the Maryland market, but there is no reason to assume that their share of the entire supply will not be promptly replaced by other interstate refiners.74 The source of the consumers' supply may switch from company-operated stations to independent dealers, but interstate commerce is not subjected to an impermissible burden simply because an otherwise valid regulation causes some business to shift from one interstate supplier to another.75 The statute regulates evenhandedly and has only incidental effects on interstate commerce. It is not the kind of statute that the Commerce Clause prohibits.76
The Maryland statute does not violate the Commerce Clause by unduly burdening interstate commerce.77
Related opinions on this issue
Joined by Justice Stewart
Justice Rehnquist dissented because the Maryland statute imposes a burden on interstate commerce that the Commerce Clause does not permit.78 The practical effect of the statute is to protect local independent dealers from competition by out-of-state integrated oil companies.79 The burden is substantial because the statute forces major oil companies to divest themselves of valuable retail outlets and disrupts the normal operation of the interstate market in gasoline.80
The local benefit asserted by the State is the protection of small independent dealers. But that interest is not sufficient to justify the substantial burden that the statute imposes upon interstate commerce.