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CRS Annotated Constitution

CRS Annotated Constitution

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[p.224]

Regulation.—Much more diverse were the cases dealing with regulation by the state and local governments. Taxation was one thing, the myriad approaches and purposes of regulations another. Generally speaking, if the state action was perceived by the Court to be a regulation of interstate commerce itself, it was deemed to impose a “direct” burden on interstate commerce and impermissible. If the Court saw it as something other than a regulation of interstate commerce, it was considered only to “affect” interstate commerce or to impose only an “indirect” burden on it in the proper exercise of the police powers of the States.910 But the distinction between “direct” and “indirect” burdens was often perceptible only to the Court.911

A corporation’s status as a foreign entity did not immunize it from state requirements, conditioning its admission to do a local business, to obtain a local license, and to furnish relevant information as well as to pay a reasonable fee.912 But no registration was permitted of an out–of–state corporation, the business of which in the host State was purely interstate in character.913 Neither did the Court permit a State to exclude from the its courts a corporation engaging solely in interstate commerce because of a failure to register and to qualify to do business in that State.914

Interstate transportation brought forth hundreds of cases. State regulation of trains operating across state lines resulted in divergent rulings. It was early held improper for States to prescribe charges for transportation of persons and freight on the basis that[p.225]the regulation must be uniform and thus could not be left to the States.915 The Court deemed “reasonable” and therefore constitutional many state regulations requiring a fair and adequate service for its inhabitants by railway companies conducting interstate service within its borders, as long as there was no unnecessary burden on commerce.916 A marked tolerance for a class of regulations that arguably furthered public safety was long exhibited by the Court,917 even in instances in which the safety connection was tenuous.918 Of particular controversy were “full–crew” laws, represented as safety measures, that were attacked by the companies as “feather–bedding” rules.919

Similarly, motor vehicle regulations have met mixed fates. Basically, it has always been recognized that States, in the interest of public safety and conservation of public highways, may enact and enforce comprehensive licensing and regulation of motor vehicles using its facilities.920 Indeed, States were permitted to regulate many of the local activities of interstate firms and thus the[p.226]interstate operations, in pursuit of these interests.921 Here, too, safety concerns became overriding objects of deference, even in doubtful cases.922 In regard to navigation, which had given rise to Gibbons v. Ogden and Cooley, the Court generally upheld much state regulation on the basis that the activities were local and did not demand uniform rules.923

As a general rule, during this time, although the Court did not permit States to regulate a purely interstate activity or prescribe prices for purely interstate transactions,924 it did sustain a great deal of price and other regulation imposed prior to or subsequent to the travel in interstate commerce of goods produced for such commerce or received from such commerce. For example, decisions late in the period upheld state price–fixing schemes applied to goods intended for interstate commerce.925

However, the States always had an obligation to act nondiscriminatorily. Just as in the taxing area, regulation that was parochially oriented, to protect local producers or industries, for instance, was not evaluated under ordinary standards but subjected to practically per se invalidation. The mirror image of Welton v. Missouri,926 the tax case, was Minnesota v. Barber,927 in which the Court invalidated a facially neutral law that in its practical effect discriminated against interstate commerce and in favor of local commerce. The law required fresh meat sold in the State to have been inspected by its own inspectors with 24 hours of slaughter.[p.227]Thus, meat slaughtered in other States was excluded from the Minnesota market. The principle of the case has a long pedigree of application.928 State protectionist regulation on behalf of local milk producers has occasioned judicial censure. Thus, in Baldwin v. G. A. F. Seelig, Inc.,929 the Court had before it a complex state price–fixing scheme for milk, in which the State, in order to keep the price of milk artificially high within the State, required milk dealers buying out–of– state to pay producers, wherever they were, what the dealers had to pay within the State, and, thus, in–state producers were protected. And in H. P. Hood & Sons v. Du Mond,930 the Court struck down a state refusal to grant an out–of–state milk distributor a license to operate a milk receiving station within the State on the basis that the additional diversion of local milk to the other State would impair the supply for the in–state market. A State may not bar an interstate market to protect local interests.931

Footnotes
910 Sedler, The Negative Commerce Clause as a Restriction on State Regulation and Taxation: An Analysis in Terms of Constitutional Structure, 31 Wayne L. Rev. 885, 924–925 (1985). In addition to the sources already cited, see the Court’s summaries in The Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 398–412 (1913), and Southern Pacific Co. v. Arizona, 325 U.S. 761, 766–770 (1945). In the latter case, Chief Justice Stone was reconceptualizing the standards under the clause, but the summary represents a faithful recitation of the law.
911 See DiSanto v. Pennsylvania, 273 U.S. 34, 44 (1927) (Justice Stone dissenting). The dissent was the precursor to Chief Justice Stone’s reformulation of the standard in 1945. DiSanto was overruled in California v. Thompson, 313 U.S. 109 (1941).
912 Bank of Augusta v. Earle, 13 Pet. (38 U.S.) 519 (1839); Hanover Fire Ins. Co. v. Harding, 272 U.S. 494 (1926); Union Brokerage Co. v. Jensen, 322 U.S. 202 (1944).
913 Crutcher v. Kentucky, 141 U.S. 47 (1891); International Textbook Co. v. Pigg, 217 U.S. 91 (1910).
914 Dahnke–Walker Co. v. Bondurant, 257 U.S. 282 (1921); Allenberg Cotton Co. v. Pittman, 419 U.S. 20 (1974). But see Eli Lilly & Co. v. Sav–on Drugs, 366 U.S. 276 (1961).
915 Wabash, S. L. & P. Ry. Co. v. Illinois, 118 U.S. 557 (1886). The power of the States generally to set rates had been approved in Chicago, B. & Q. R. Co. v. Iowa, 94 U.S. 155 (1877), and Peik v. Chicago & N. W. R. Co., 94 U.S. 164 (1877). After the Wabash decision, States retained power to set rates for passengers and freight taken up and put down within their borders. Wisconsin R. R. Comm. v. Chicago, B. & Q. R. Co., 257 U.S. 563 (1922).
916 Generally, the Court drew the line at regulations that provided for adequate service, not any and all service. Thus, one class of cases dealt with requirements that trains stop at designated cities and towns. The regulations were upheld in such cases as Gladson v. Minnesota, 166 U.S. 142 (1897), and Lake Shore & Mich. South. Ry. v. Ohio, 173 U.S. 285 (1899), and invalidated in Illinois Central R. R. v. Illinois, 142 (1896). See Chicago, B. & Q. Ry. v. Wisconsin R. R. Comm., 237 U.S. 220, 226 (1915); St. Louis & S. F. Ry. v. Public Service Comm., 254 U.S. 535, 536–537 (1921). The cases were extremely fact particularistic.
917 E.g., Smith v. Alabama, 124 U.S. 465 (1888) (required locomotive engineers to be examined and licensed by the State, until Congress should deem otherwise); New York, N. H. & H. Co. v. New York, 165 U.S. 628 (1897) (fobidding heating of passenger cars by stoves); Chicago, R. I. & Pac. Ry. Co. v. Arkansas, 219 U.S. 453 (1911) (requiring three brakemen on freight trains of more than 25 cars).
918 E.g., Terminal Assn v. Trainmen, 318 U.S. 1 (1943) (requiring railroad to provide caboose cars for its employees); Hennington v. Georgia, 163 U.S. 299 (1896) (forbidding freight trains to run on Sundays). But see Seaboard Air Line Ry. v. Blackwell, 244 U.S. 310 (1917) (voiding as too onerous on interstate transportation law requiring trains to come to almost a complete stop at all grade crossings, when there were 124 highway crossings at grade in 123 miles, doubling the running time).
919 Four cases over a lengthy period sustained the laws. Chicago, R. I. & P. R. Co. v. Arkansas, 219 U.S. 453 (1911); St. Louis, Iron Mt. & S. R. Co. v. Arkansas, 240 U.S. 518 (1916); Missouri Pacific Co. v. Norwood, 283 U.S. 249 (1931); Brotherhood of Locomotive Firemen & Enginemen v. Chicago, R. I. & P. R. Co., 382 U.S. 423 (1966). In the latter case, the Court noted the extensive and conflicting record with regard to safety, but it then ruled that with the issue in so much doubt it was peculiarly a legislative choice.
920 Hendrick v. Maryland, 235 U.S. 610 (1915); Kane v. New Jersey, 242 U.S. 160 (1916).
921 E.g., Bradley v. Public Utility Comm., 289 U.S. 92 (1933) (State could deny an interstate firm a necessary certificate of convenience to operate as a common carrier on the basis that the route was overcrowded); Welch Co. v. New Hampshire, 306 U.S. 79 (1939) (maximum hours for drivers of motor vehicles); Eichholz v. Public Service Comm., 306 U.S. 268 (1939) (reasonable regulations of traffic). But compare Michigan Comm. v. Duke, 266 U.S. 570 (1925) (State may not impose common–carrier responsibilities on business operating between States that did not assume them); Buck v. Kuykendall, 267 U.S. 307 (1925) (denial of certificate of convenience under circumstances was a ban on competition).
922 E.g., Mauer v. Hamilton, 309 U.S. 598 (1940) (ban on operation of any motor vehicle carrying any other vehicle above the head of the operator). By far, the example of the greatest deference is South Carolina Highway Dept. v. Barnwell Bros., 303 U.S. 177 (1938), in which the Court upheld, in a surprising Stone opinion, truck weight and width restrictions prescribed by practically no other State (in terms of the width, no other).
923 E.g., Transportation Co. v. City of Chicago, 99 U.S. 635 (1879); Williamette Iron Bridge Co. v. Hatch, 125 U.S. 1 (1888). See Kelly v. Washington, 302 U.S. 1 (1937) (upholding state inspection and regulation of tugs operating in navigable waters, in absence of federal law).
924 E.g., Western Union Tel Co. v. Foster, 247 U.S. 105 (1918); Lemke v. Framers Grain Co., 258 U.S. 50 (1922); State Corp. Comm. v. Wichita Gas Co., 290 U.S. 561 (1934).
925 Milk Control Board v. Eisenberg Co., 306 U.S. 346 (1939) (milk); Parker v. Brown, 317 U.S. 341 (1943) (raisins).
926 91 U.S. 275 (1875).
927 136 U.S. 313 (1890).
928 E.g., Brimmer v. Rebman, 138 U.S. 78 (1891) (law requiring postslaughter inspection in each county of meat transported over 100 miles from the place of slaughter); Dean Milk Co. v. City of Madison, 340 U.S. 349 (1951) (city ordinance preventing selling of milk as pasteurized unless it had been processed and bottled at an approved plant within a radius of five miles from the central square of Madison). As the latter case demonstrates, it is constitutionally irrelevant that other Wisconsin producers were also disadvantaged by the law. For a modern application of the principle of these cases, see Fort Gratiot Sanitary Landfill v. Michigan Natural Resources Dept., 112S.Ct.2019 (1992) (forbidding landfills from accepting out–of–county wastes).

Supplement: [P. 227, add to n.928:]

And see C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 391 (1994) (discrimination against interstate commerce not preserved because local businesses also suffer).

929 294 U.S. 511 (1935). See also Polar Ice Cream & Creamery Co. v. Andrews, 375 U.S. 361 (1964). With regard to products originating within the State, the Court had no difficulty with price fixing. Nebbia v. New York, 291 U.S. 502 (1934).
930 336 U.S. 525 (1949).

Supplement: [P. 227, add to n.930:]

For the most recent case in this saga, see West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994) .

931 And the Court does not permit a State to combat discrimination against its own products by admitting only products (here, again, milk) from States that have reciprocity agreements with it to protect its own dealers. Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S. 366 (1976).
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