460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983)
In 1979 the Mayor of Boston issued an executive order requiring that all construction projects funded in whole or in part by city funds, or funds which the city had the authority to administer, and to which the city was a signatory to the construction contract, be performed by a workforce consisting of at least 50 percent bona fide residents of Boston on a craft-by-craft basis.1
In 1980 approximately $483 million was expended on construction within the city of Boston; of that amount approximately $54 million, or 11 percent, was spent on projects to which the executive order applied by its terms.2 Of the $54 million, approximately $34 million represented projects being funded in part through federal Urban Development Action Grants.3 The parties stipulated that the order also applied to projects funded in part through Community Development Block Grants and Economic Development Administration Grants.4
The case was submitted on an agreed statement of facts that contained no evidence that city funds and private funds were used jointly to finance any projects subjected to the order.5 The Supreme Judicial Court of Massachusetts held the order unconstitutional under the Commerce Clause.6
The Supreme Court granted certiorari to decide whether the Commerce Clause prevents the city from giving effect to the Mayor's order.7 The record before the Court therefore concerned only the application of the order to projects funded wholly with city funds and projects funded in part with the specified federal grants.8
Whether the Commerce Clause prevents the city of Boston from applying the Mayor's 1979 executive order residency requirement to construction projects funded wholly with city funds?9
When a state or local government enters the market as a participant it is not subject to the restraints of the Commerce Clause.10
No. When a state or local government enters the market as a participant it is not subject to the restraints of the Commerce Clause.11 The city expended only its own funds in entering into construction contracts for public projects.12 It was therefore a market participant and entitled to be treated as such under the rule of Hughes v. Alexandria Scrap Corp. and Reeves Inc. v. Stake.13
The Supreme Judicial Court of Massachusetts had expressed reservations about the market participation principle because the order would have a significant impact on firms engaging in specialized areas of construction.14 Even if that conclusion is factually correct, it is not relevant to the inquiry of whether the city is participating in the marketplace when it provides city funds for building construction.15 If the city is a market participant then the Commerce Clause establishes no barrier to conditions such as these which the city demands for its participation.16
The same may be said of the finding that the executive order sweeps too broadly.17 While relevant if the Commerce Clause imposes restraints on the city's activity, this characterization is of no help in deciding whether those restraints apply.18 On the record before the Court the application of the Mayor's executive order to contracts involving only city funds does not represent the sort of attempt to force virtually all businesses that benefit in some way from the economic ripple effect of the city's decision.19 The order does not attempt to bias employment practices in favor of the city's residents in that manner.
The Commerce Clause does not prevent the city of Boston from applying the Mayor's 1979 executive order residency requirement to construction projects funded wholly with city funds.20
Related opinions on this issue
Justice Blackmun agreed with the Court that Congress in creating the grant programs specifically authorized the type of parochial favoritism expressed in the order.21 He also agreed that Congress has the power to authorize state or local discrimination against interstate commerce that otherwise would violate the dormant Commerce Clause.22
Justice Blackmun dissented with respect to projects funded wholly with city funds.23 He argued that the executive order is not immune from Commerce Clause scrutiny because Boston's order goes much further than Alexandria Scrap and Reeves.24 The city has not attempted merely to choose the parties with whom it will deal.25 Instead it has imposed as a condition of obtaining a public construction contract the requirement that private firms hire only Boston residents for 50 percent of specified jobs.26 Thus the order directly restricts the ability of private employers to hire nonresidents and thereby curtails nonresidents' access to jobs with private employers.27
Justice Blackmun would not hold the order immune from Commerce Clause scrutiny even as applied to city-funded projects because it directly impedes free private trade in the national marketplace.28
Whether the Commerce Clause prevents the city of Boston from applying the Mayor's 1979 executive order residency requirement to construction projects funded in part with federal grant funds from programs such as UDAGs, CDBG's, and EDAG's?29
Where state or local government action is specifically authorized by Congress it is not subject to the Commerce Clause even if it interferes with interstate commerce.30
No. The Commerce Clause is a grant of authority to Congress and not a restriction on the authority of that body.3132 Congress unlike a state legislature authorizing similar expenditures is not limited by any negative implications of the Commerce Clause in the exercise of its spending power.33 An examination of the statutes governing the UDAG, CDBG, and EDAG programs reveals that these federal programs were intended to encourage economic revitalization including improved opportunities for the poor minorities and unemployed.34 The federal regulations for each program affirmatively permit the type of parochial favoritism expressed in the order.35
The Mayor's executive order sounds a harmonious note with those regulations.36 The order was affirmatively sanctioned by the pertinent regulations of those programs.37
The Commerce Clause does not prevent the city of Boston from applying the Mayor's 1979 executive order residency requirement to construction projects funded in part with federal grant funds from programs such as UDAGs, CDBG's, and EDAG's.38