Also known as: discriminating against interstate commerce · discrimination against interstate commerce · discriminates against interstate commerce · dormant commerce clause discrimination
Written by attorneys — see sources below.
A state regulatory measure that favors in-state economic interests over out-of-state competitors by imposing differential burdens or benefits based on the geographic origin of goods or services. Such measures are presumptively invalid under the Dormant Commerce Clause unless Congress has expressly authorized the discrimination.
Dwight Dorsey operates a hatchery in Maine that raises live baitfish for sale. State officials enact a statute barring all export of the fish to out-of-state buyers in order to keep the entire supply available for local anglers. Dorsey's attempt to fill an order from an out-of-state retailer is blocked by the statute. The prohibition discriminates against interstate commerce by reserving the resource exclusively for in-state purchasers.
Duffy Construction collects solid waste generated inside a municipality. A local ordinance requires every load to be delivered to a designated in-state facility for processing before any material may leave the area. The company seeks to ship unprocessed waste directly to an out-of-state recycler offering lower rates. The ordinance erects a protectionist barrier that discriminates against interstate commerce by forcing all processing to occur locally.
Denise Donovan purchases state-owned timber at a public auction. The sale contract contains a clause requiring all initial milling and processing to occur inside the state before any shipment across state lines. Donovan plans to truck the raw logs to a lower-cost out-of-state mill. The downstream condition discriminates against interstate commerce by regulating post-sale commercial activity beyond the state's role as market participant.
Dominic Drake ships nuclear waste generated in another state to a disposal site in State Omega. Congress has enacted a statute expressly permitting states to impose higher fees on out-of-state nuclear waste. State Omega adopts the authorized surcharge schedule. The fee discriminates against interstate commerce yet remains valid because Congress has expressly consented to the differential treatment.
Derek Douglas owns an out-of-state trucking firm that hauls freight through State Omega. Congress has passed legislation allowing states to impose higher highway access fees on carriers based outside the state. State Omega enacts the authorized fee schedule. The tax discriminates against interstate commerce but is upheld because Congress has expressly permitted the differential treatment.
Danielle Dixon produces films through out-of-state coproductions. State tax authorities deny her application for production credits because the projects fail a local-content test that reserves benefits for wholly in-state productions. The denial discriminates against interstate commerce by conditioning tax advantages on the geographic origin of financing and creative inputs.
A state law violates the clause when it discriminates against interstate commerce on its face or in practical effect by protecting local economic interests from out-of-state competition. The discrimination is presumptively invalid unless the state shows a legitimate local purpose that cannot be served by nondiscriminatory means.
…negligence of an employee engaged in an intrastate movement, the fixing of rates for intrastate transportation which unjustly discriminate against interstate commerce. But where the effect of intrastate transactions upon interstate commerce is merely indirect, such transactions remain within the domain of state power. If the commerce clause were…
…not result in an operation of these facilities, even by privately owned companies, which unconstitutionally interferes with and discriminates against interstate commerce. Port Richmond Ferry v. Hudson County, supra , 234 U. S. at 326 and cases cited, pp. 328-329 ; cf. South Carolina Highway Dept. v. Barnwell Bros. , 303 U. S. 177 . Had the corporation…
…required destruction as soon as possible because their very movement risked contagion and other evils. Those laws thus did not discriminate against interstate commerce as such, but simply prevented traffic in noxious articles, whatever their origin. The New Jersey statute is not such a quarantine law. There has been no claim here that the very movement…
…thus erecting an economic barrier protecting a major local industry against competition from without the State, Madison plainly discriminates against interstate commerce
…by such agreement when made.” : 42 Stat. 159. : 42 Stat. 998. : §§ 416, 422, 41 Stat. 484, 488; Interstate Commerce
No. A state may favor its own residents in the immediate transaction but may not attach conditions that control subsequent commercial activity in a way that discriminates against interstate commerce. Such downstream requirements exceed the market participant exception.
Congress may expressly authorize states to impose discriminatory fees, taxes, or surcharges on out-of-state goods or services. Once Congress clearly consents, the Dormant Commerce Clause objection disappears because the doctrine is an implied limit that operates only in the absence of federal legislation.
An export ban discriminates by closing state borders to out-of-state buyers while reserving the entire supply for local purchasers. The measure constitutes impermissible economic protectionism even when framed as a conservation effort.