The Oyez Project: Economic Activity Issues - State Regulation of Business Decisions

A & P Tea Co. v. Cottrell

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Allied Structural Steel Co. v. Spannaus

Did Minnesota's Private Pension Benefits Protection Act violate the Contract Clause of the Constitution?

The Court found that the Minnesota law did violate the Constitution as it "substantially altered" the provisions of pension agreements which Allied Steel had with its employees. Citing the importance that the Framers placed on private contracts in the conduct of business, Justice Stewart found that the act's effect was "severe" as it nullified terms of t he company's obligations to its employees and imposed an "unexpected liability in potentially disabling amounts." Furthermore, the law was narrowly targeted at employers who had decided to establish employee pension plans, and it did not seek to deal with broad economic and social problems.

American Trucking Assns., Inc. v. Michigan Pub. Serv. Comm'n

Did a Michigan law requiring every truck engaged in intrastate commercial hauling to pay a fee violate burden interstate trade in violation of the dormant commerce clause?

No. In a 9-0 opinion delivered by Justice Stephen Breyer, the Court held that Michigan's fee did not violate the dormant commerce clause because the fee was imposed only on intrastate transactions and did not facially discriminate against interstate or out-of-state activities or enterprises. The dormant commerce clause did not, Breyer wrote, ban such a "neutral" and "locally focused fee."

Brown-Forman Distillers v. N. Y. Liquor Auth.

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C & A Carbone, Inc. v. Town Of Clarkstown, New York

Does a town's "flow control ordinance," which requires that all waste pass through a certain waste processing plant, violate the interstate Commerce Clause by disrupting commerce for waste processing plants in other states?

Yes. Tthe Court held 6-3 that the Commerce Clause invalidates local laws that discriminate against interstate commerce, disrupt the flow of articles of commerce, and grant municipalities disproportionate market gains. In an opinion authored by Justice Anthony Kennedy, the Court found that "the article of commerce...is the service of processing and disposing of [waste]." The Court held that the flow ordinance was discriminatory because "[i]t hoards solid waste...for the benefit of the preferred processing facility." For the ordinance to be constitutional, the municipality would have had to prove that its effects on commerce are nondiscriminatory and justified by a "legitimate local interest."

Carter v. Miller

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Clay v. Sun Ins. Office, Ltd.

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Cts Corp. v. Dynamics Corp. Of America

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Edgar v. Mite Corporation

Is the Illinois Business Take-Over Act unconstitutional under the Supremacy and Commerce Clauses of the U.S. Constitution?

Yes, with regard to the Commerce Clause. The Illinois Act imposes burdens on interstate commerce that are excessive in light of the local interests the Act purports to further. Among the ways a corporation can be covered by the Act is if 10% of the class of equity securities subject to the offer is owned by shareholders located in Illinois. Thus Illinois would have the power to determine whether a tender offer may proceed even if made for a corporation incorporated and having a principal place of business outside of Illinois, with up to 90% of the shareholders residing outside of Illinois. Illinois's asserted interest in protecting resident security holders is insufficient to outweigh the burdens Illinois would impose on interstate commerce. In addition, Illinois's asserted interest in regulating the internal affairs of a corporation incorporated under its laws not only fails to justify the Act's coverage of foreign corporations, but transfers of stock to a third party do not implicate the internal affairs of a corporation.

Eli Lilly & Co. v. Sav-On-Drugs

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Energy Reserves Group v. Kansas Power & Light

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Exxon Corp. v. Governor Of Maryland

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Ferguson v. Skrupa

Did the Kansas regulation of debt adjusting violate the Due Process Clause of the Fourteenth Amendment?

No. The Court reversed the decision of the lower court and affirmed Kansas's right to regulate debt adjusting. The unanimous decision held that the question of whether the law was wise or reasonable was a legislative and not a judicial one. Justice Black argued that the lower court's ruling relied on old law; the Court had moved out of the business of using the "vague contours" of the Fourteenth Amendment to strike down laws which it had deemed economically unwise. Those were issues for state and national legislatures to address and not the courts. As long as state regulations do not offend a "specific federal constitutional prohibition" or a "valid federal law," they are legitimate.

Fitzgerald v. Racing Association of Central Iowa

Do different tax rates levied against racetrack and casino gambling violate the Fourteenth Amendment's Equal Protection Clause?

No. In a unanimous opinion delivered by Justice Stephen G. Breyer, the Court held that Iowa's differential tax rate, which distinguishes between adjusted revenues from slot machines at racetracks and revenues from riverboat slot machines, does not violate the Equal Protection Clause. The Court found that the facts did not preclude an inference that the reason for the different tax rates was to help the riverboat industry or the river communities. Thus, the Court reasoned there was a rational basis for the law.

Florida Avocado Growers v. Paul

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Fort Gratiot Sanitary Landfill, Inc. v. Michigan Department Of Natural Resources

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G. D. Searle & Co. v. Cohn

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General Motors Corp. v. Romein

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Gordon v. Texas

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Granholm v. Heald

Does a state law that allows in-state wineries to directly ship alcohol to consumers, but restricts the ability of out-of-state wineries to do so, violate the dormant commerce clause in light of the 21st Amendment?

Yes. In a 5-4 opinion delivered by Justice Anthony Kennedy, the Court held that both states' laws violated the commerce clause by favoring in-state wineries at the expense of out-of-state wineries and did so without the authorization of the 21st Amendment. State authority to engage in such economic discrimination was not the purpose the 21st Amendment. Moreover, in modern cases, that amendment did not save state laws violating other provisions of the Constitution.

Healy v. The Beer Institute

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Hillside Dairy Inc. v. Lyons

Does the Federal Agriculture Improvement and Reform Act of 1996 exempt California's milk pricing and pooling regulations from scrutiny under the Commerce Clause? Are individual claims under the Privileges and Immunities Clause against California's required contributions to the price equalization pool on some out-of-state purchases foreclosed because those regulations do not discriminate on their face on the basis of state citizenship or state residence?

No and no. In an opinion delivered by Justice John Paul Stevens, the Court held, 8-1, that, because the Federal Agriculture Improvement and Reform Act of 1996 did not clearly express an intent to insulate California's pricing and pooling laws from a Commerce Clause challenge, the Court of Appeals erred in relying on it to dismiss the case. The Court also held, 9-0, that the appellate court erred in rejecting the Privileges and Immunities Clause claim on the ground that the California laws did not, on their face, create classifications based on any individual's residency or citizenship. The Court reasoned that the absence of an express statement identifying out-of-state citizenship as a basis for disparate treatment was not a sufficient basis for rejecting the claim. Justice Clarence Thomas concurred in part and dissented in part.

Hudson Distributors v. Eli Lilly

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Hughes v. Alexandria Scrap Corp.

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Hunt v. Wash. State Apple Ad. Comm.

Did the North Carolina regulation violate the Commerce Clause by placing an unreasonable burden on interstate commerce?

The Court voted unanimously that the North Carolina regulation was an unconstitutional exercise of the state's power over interstate commerce. Although the regulation was facially neutral, it had a discriminatory impact on the Washington growers while shielding the local growers from the same burden. The regulation removed the competitive advantage gained by the Washington apples from stricter inspection standards. The regulation produced a leveling effect that works to the local advantage by "downgrading" apples from other states unjustly. Therefore, the regulation places an unreasonable burden on interstate commerce.

Kassell v. Consolidated Freightways Corp. of DL

Did the law pose an unconstitutional burden on interstate commerce?

The Court held that the law violated the Commerce Clause for two reasons. First, Iowa could not prove that the vehicles it targeted posed potential danger to highway travelers. The safety interest was "illusory." Second, the law was "out of step with the laws of all other Midwestern and Western States" which did not have similar regulations. This placed significant burdens on the flow of interstate commerce

Lewis v. Bt Investment Managers, Inc.

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Marquette Nat. Bank v. First Of Omaha Corp.

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Martin v. Walton

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Minnesota v. Clover Leaf Creamery Co.

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Morey v. Doud

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New England Power Co. v. New Hampshire

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New Orleans v. Dukes

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North Dakota Pharmacy Bd. v. Snyder's Stores

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Northwest Cent. Pipeline v. Kan. Corp. Comm'n

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Pharmaceutical Research v. Walsh

Is a Maine statute providing for affordable prescription drugs pre-empted by the Supremacy Clause? Does the statute violate the Commerce Clause?

No and no. In an opinion delivered by Justice John Paul Stevens, the Court held, 9-0, that the Pharmaceutical Research and Manufacturers of America had not carried its burden of showing a probability of success on the merits of its Commerce Clause claims and, 6-3, that their showing was insufficient to support a finding that the Medicaid Act pre-empts Maine's Rx Program insofar as it threatens to coerce manufacturers into reducing their prices on non-Medicaid sales. The Court's decision upheld the Court of Appeal's reversal of the District Court's injunction. Justice Sandra Day O'Connor, joined by Chief Justice William H. Rehnquist and Justice Anthony M. Kennedy, dissented from the plurality's opinion. "By imposing prior authorization on Maine's Medicaid population to achieve wholly non-Medicaid related goals, Maine Rx 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives' of the federal Medicaid Act," argued Justice O'Connor.

Philadelphia v. New Jersey

Did New Jersey's waste importation law violate the Commerce Clause?

Yes. The Court held that the law violated the principle of nondiscrimination as it treated out-of-state waste differently than waste produced within the state. Since New Jersey could not demonstrate a legitimate reason for distinguishing between foreign and domestically produced waste, it was clear to the Court that the state had "overtly moved to slow or freeze the flow of commerce for projectionist reasons."

Polar Co. v. Andrews

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Raymond Motor Transportation, Inc. v. Rice

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Reeves Inc. v. Stake

Did South Dakota's preferential system violate the Commerce Clause?

In a 5-to-4 decision, the Court reaffirmed its holding in Hughes v. Alexandria Scrap Corp. and found that "'[n]othing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others.'" The Court found that South Dakota was acting as a "market participant" rather than a "market regulator," and was capable of withdrawing from the interstate market if an in-state shortage arose. The Court rejected arguments that cement was a "natural resource" to which South Dakota had sought to limit outside access.

Rice v. Norman Williams Co.

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Safeway Stores v. Oklahoma Grocers

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Seagram & Sons v. Hostetter

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Service Transfer Co. v. Virginia

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United States Trust Co. of NY v. New Jersey

In repealing the 1962 agreement, did the states violate the Contract Clause?

The repeal violated the Constitution. Justice Blackmun argued that the states could have implemented a less drastic solution to encourage people to use commuter train services in lieu of driving their cars. (State leaders thought the increase in bridge fares that would occur with the agreement's repeal would cause this to occur.) Furthermore, since the need to facilitate mass transportation in the New York metropolitan area had been a concern long before 1962, the states could not justify their action as a response to unforeseen circumstances.

White v. Mass. Council Of Constr. Employers

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Williamson v. Lee Optical of Oklahoma

Did the Oklahoma law violate the Due Process Clause of the Fourteenth Amendment?

In a unanimous decision, the Court held that while the law may have been "needless" and "wasteful," it was the duty of the legislature, not the courts, "to balance the advantages and disadvantages of the new requirement." The Court emphasized that "[t]he day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought."

Yellow Transportation, Inc. v. Michigan

Did the Michigan Supreme Court err in holding that, under the Intermodal Surface Transportation Efficiency Act of 1991, only a State's generic fee is relevant to determining the fee that was collected or charged as of November 15, 1991?

Yes. In a 9-0 opinion delivered by Justice Sandra Day O'Connor, the Court held that, because the ICC's interpretation of ISTEA's fee-cap provision that States may not renounce or modify a reciprocity agreement so as to alter any fee charged or collected as of that date was permissible reading, the Michigan Supreme Court erred in declining to enforce it. "Under the ICC's rule, where a State waives its registration fee, its 'fee?collected or charged' is zero and must remain zero," wrote Justice O'Connor. Justice O'Connor concluded," to allow States to disavow their reciprocity agreements so as to alter any fee charged or collected as of November 15, 1991, would potentially permit States to increase their revenues substantially under the new system, a result that the ICC quite reasonably believed Congress did not intend." Justice John Paul Stevens concurred in the judgment.