Article I, Section 8, Clause 3:
[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .
The Supreme Court first described the principles that would become the dormant Commerce Clause doctrine in 1824. In Gibbons v. Ogden, the Court struck down New York’s grant of a monopoly on steamboat traffic in New York waters.1 The Court decided the case on Supremacy Clause grounds, ruling that the Federal Coastal Act of 1793 preempted the state law. Accordingly, the Court did not decide whether the Commerce Clause barred states from regulating interstate commerce. Chief Justice John Marshall recognized, however, the “great force” of Daniel Webster’s argument that the state law violated the Commerce Clause because that clause conferred upon Congress an exclusive power to regulate national commerce.2 In dicta, Chief Justice Marshall suggested that the power to regulate commerce between the states might be exclusively federal.3 At the same time, he also recognized that any national power to regulate commerce coexisted with state regulatory authority over matters that could affect commerce, such as laws governing inspection, quarantine, and health, as well as “laws for regulating the internal commerce of a State.” 4
Chief Justice Marshall again addressed the nascent Dormant Commerce Clause doctrine in Willson v. Black-Bird Creek Marsh Co.5 In that case, a sloop owner whose vessel ran into a dam across a navigable creek challenged a state law authorizing the construction of the dam, arguing that the law conflicted with the federal power to regulate interstate commerce. The Supreme Court rejected this argument, concluding that the state law could not “be considered as repugnant to the [federal] power to regulate commerce in its dormant state . . . .” 6 The Court did not explain the basis for its holding, however, or attempt to square it with the ruling in Gibbons.
Over time, the Court came to add more nuance than was present in its earliest dicta. In Cooley v. Board of Wardens,7 the Court enunciated a doctrine of partial federal exclusivity that inquired into the subject of a regulation. The Court distinguished between subjects of interstate commerce that “imperatively demand a single uniform rule” nationwide, and subjects of commerce that do not demand such uniformity and which may require “that diversity, which alone can meet the local necessities.” 8 While the Court held that Congress’s power over the former category was exclusive, it also held that Congress and the states could concurrently regulate the latter category. Concluding that the regulation of pilotage was “incapable of uniformity throughout all the states,” the Court upheld a Pennsylvania state law that required ships to hire a local pilot when entering or leaving the Port of Philadelphia.9
The Court first struck down a state law solely on Commerce Clause grounds more than two decades later. In the State Freight Tax Case, the Court held unconstitutional a statute that required every company transporting freight within the state, with certain exceptions, to pay a tax at specified rates on each ton of freight carried.10 Two years later, in Welton v. Missouri,11 the Court held unconstitutional a state law that required a peddler’s license for merchants selling goods that came from other states. In doing so, it identified two separate goals that the dormant Commerce Clause might serve. First, it adopted Cooley's consideration of the goal of uniformity of commercial regulation. It then provided the additional justification that Congress had not enacted specific legislation governing interstate commerce, which was “equivalent to a declaration that inter-State commerce shall be free and untrammelled.” In other words, Congress’s silence on the subject was an indication that states could not regulate it.12
Prior to 1945, the Court considered whether state regulations imposed unreasonable or undue burdens on interstate commerce, but did not generally weigh a regulation’s burdens against its benefits. Instead, the Court distinguished between instances where a state regulated interstate commerce and thus imposed a “direct” and impermissible burden on interstate commerce, and those where it imposed an “indirect” burden or merely “affected” interstate commerce, such as in the course of exercising its police powers.13 The Court indicated that “a state enactment [that] imposes a direct burden upon interstate commerce . . . must fall regardless of federal legislation,” indicating that such laws would be invalid even if they were not actually discriminatory.14
The distinction between direct and indirect burdens was not always clear, however.15 Then-Justice (and later Chief Justice) Harlan Stone criticized the direct-or-indirect framework “too mechanical, too uncertain in its application, and too remote from actualities, to be of value,” and argued that the Court was “doing little more than using labels to describe a result rather than any trustworthy formula by which it is reached.” 16 The same Justice later articulated the modern balancing test for review of state regulations of or affecting interstate commerce.17
Many early Dormant Commerce Clause cases addressed regulation of interstate transportation, including trains and motor vehicles. For example, in the Minnesota Rate Cases, the Supreme Court applied the direct/indirect burden test to invalidate Minnesota’s adoption of maximum charges for freight and passenger transportation.18 Other transportation-related cases did not yield a uniform application of the doctrine. In one case, the Court held that states could not set charges for the transportation of persons and freight because such regulation must be uniform.19 In another case, the Court struck down a Louisiana law requiring that all businesses engaged in interstate transportation of passengers provide equal treatment to all passengers regardless of race or color when transiting through Louisiana.20 In other cases, the Court upheld a variety of state regulations of trains that had been justified on public safety grounds.21
Similarly, the Court recognized that states may enact and enforce comprehensive schemes for licensing and regulation of motor vehicles,22 though it did not uphold all such schemes.23 As with regulation of trains, the Court was particularly deferential towards laws that were rooted in safety concerns.24 The Court also upheld state regulations related to navigation on the basis that the activities were local and did not require nationally uniform rules.25 By contrast, the Court tended to invalidate facially neutral laws that had an impermissibly protectionist purpose or effect, such as the protection of local producers or industries.26 For example, in Minnesota v. Barber, the Court invalidated a law requiring fresh meat sold in Minnesota to have been inspected in the state within 24 hours of slaughter, effectively excluding meat slaughtered in other states from the Minnesota market.27
Finally, the Supreme Court’s early Dormant Commerce Clause jurisprudence also shows an effort to grapple with what constituted “commerce.” In some cases, the Court found that a state action had not violated the Dormant Commerce Clause because interstate commerce had not yet begun. For example, the Court upheld a municipal tax that covered cut logs that floated in a river until the spring thaw permitted them to be floated to another state, reasoning that interstate commerce did not begin until the logs were committed to a common carrier for transportation or transport actually began.28 In a case regarding limitations on the manufacture and sale of “intoxicating liquors,” the Court distinguished between the purchase, sale, and incidental transportation of manufactured goods including alcohol, which constituted commerce; and the manufacture of alcohol, which was “the fashioning of raw materials into a change of form for use” and did not constitute commerce.29
- 22 U.S. 1 (1824).
- Id. at 209.
- Id. at 17–18.
- Id. at 2.
- 27 U.S. 245, 251 (1829).
- Id. at 252.
- 53 U.S. 299 (1851).
- Id. at 319.
- Id. at 306.
- Case of the State Freight Tax, 82 U.S. 232 (1873).
- 91 U.S. 275 (1875).
- Id. at 282.
- E.g., The Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 400 (1913) ( “The principle which determines this classification underlies the doctrine that the states cannot, under any guise, impose direct burdens upon interstate commerce. For this is but to hold that the states are not permitted directly to regulate or restrain that which, from its nature, should be under the control of the one authority, and be free from restriction, save as it is governed in the manner that the national legislature constitutionally ordains.” ); Hall v. DeCuir, 95 U.S. 485, 488 (1877).
- The Minnesota Rate Cases, 230 U.S. at 396; see also W. Union Tel. Co. v. Kansas ex rel. Coleman, 216 U.S. 1, 37 (1910) (invalidating a Kansas state fee on Western Union for the benefit of in-state schools).
- See James M. McGoldrick, Jr., The Dormant Commerce Clause: The Origin Story and the “Considerable Uncertainties” —1824 to 1945, 52 Creighton L. Rev. 243, 276–284 (2019) (surveying the Court’s varying approaches to the direct/indirect test).
- Di Santo v. Pennsylvania, 273 U.S. 34, 44 (1927) (Stone, J., dissenting).
- S. Pac. Co. v. Arizona, 325 U.S. 761 (1945); ArtI.S8.C3.7.8 Facially Neutral Laws and Dormant Commerce Clause.
- 230 U.S. at 396–97.
- Wabash, St. Louis & Pac. Ry. v. Illinois, 118 U.S. 557 (1886). After Wabash, the Court still upheld states’ authority to set rates for passengers and freight taken up and put down within their borders. R.R. Comm’n of Wis. v. Chi., Burlington & Quincy R.R., 257 U.S. 563 (1922).
- Hall v. DeCuir, 95 U.S. 485 (1877). Some scholars have drawn a connection between Hall v. DeCuir and the Court’s decision in Plessy v. Ferguson, 163 U.S. 537, to uphold the segregation of railroad accommodations under the Equal Protection Clause of the Fourteenth Amendment. Joseph William Singer, No Right to Exclude: Public Accommodations and Private Property, 90 Nw. U. L. Rev. 1283, 1396 (1996). The Court later distinguished DeCuir from Plessy by explaining that, in the latter case, the state laws requiring segregated railway cars “applied only between places in the same state.” The Roanoke, 189 U.S. 185, 198 (1903).
- E.g., Smith v. Alabama, 124 U.S. 465 (1888) (upholding Alabama law requiring locomotive engineers to be examined and licensed by the state); N.Y., New Haven & Hartford R.R. v. New York, 165 U.S. 628 (1897) (upholding New York law forbidding heating of passenger cars by stoves). In some very fact-specific rulings, the Court considered regulations that imposed requirements that trains stop at designated cities and towns. Compare Gladson v. Minnesota, 166 U.S. 427 (1897), and Lake Shore & Mich. S. Ry. v. Ohio, 173 U.S. 285 (1899) (upholding such regulations), with Ill. Cent. R.R. v. Illinois, 163 U.S. 142 (1896) (invalidating such a law as an unconstitutional burden on interstate commerce). Many other challenged regulations were “full-crew laws” that regulated the number of employees required to operate a train. E.g., Chi., Rock Island & Pac. Ry. v. Arkansas, 219 U.S. 453 (1911); St. Louis, Iron Mtn. & S. Ry. v. Arkansas, 240 U.S. 518 (1916); Mo. Pac. R.R. v. Norwood, 283 U.S. 249 (1931). The connection of state train regulations to public safety was not always apparent. E.g., Terminal R.R. Ass’n of St. Louis v. Brotherhood of R.R. Trainmen, 318 U.S. 1 (1943) (upholding law requiring railroad to provide caboose cars for its employees); Hennington v. Georgia, 163 U.S. 299 (1896) (upholding law forbidding freight trains to run on Sundays). But see Seaboard Air Line Ry. v. Blackwell, 244 U.S. 310 (1917) (voiding as too onerous a law requiring trains to come to almost a complete stop at all grade crossings, which would have doubled trains’ running time over a 123-mile stretch of track that contained 124 highway crossings at grade).
- E.g., Hendrick v. Maryland, 235 U.S. 610 (1915) (upholding state vehicle registration requirement); Kane v. New Jersey, 242 U.S. 160 (1916) (upholding law requiring imposition of various fees and requirements on nonresident drivers); Bradley v. Pub. Util. Comm’n, 289 U.S. 92 (1933) (holding that a 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); H. P. Welch Co. v. New Hampshire, 306 U.S. 79 (1939) (upholding maximum hours for drivers of motor vehicles); Eichholz v. Pub. Serv. Comm’n of Mo., 306 U.S. 268 (1939) (allowing reasonable regulations of traffic).
- E.g., Mich. Pub. Util. Comm’n v. Duke, 266 U.S. 570 (1925) (holding that a state could not impose common-carrier responsibilities on a business operating between states that did not hold itself out as a carrier for the public); Buck v. Kuykendall, 267 U.S. 307 (1925) (holding that a requirement that common carriers for hire obtain a certificate of public convenience and necessity was an unconstitutional ban on competition).
- E.g., Maurer v. Hamilton, 309 U.S. 598 (1940) (upholding ban on the operation of any motor vehicle carrying any other vehicle above the operator’s head); S.C. Highway Dep’t v. Barnwell Bros., 303 U.S. 177 (1938) (upholding truck weight restrictions and width restrictions even though such restrictions were not in effect in most other states).
- Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1 (1888); Kelly v. Washington, 302 U.S. 1 (1937).
- Best & Co. v. Maxwell, 311 U.S. 454, 457 (1940) ( “The freedom of commerce . . . is not to be fettered by legislation, the actual effect of which is to discriminate in favor of interstate businesses, whatever may be the ostensible reach of the language.” ) (footnote omitted).
- Minnesota v. Barber, 136 U.S. 313 (1890). See also Buck, 267 U.S. at 315; see also Baldwin v. G.A.F. Seelig, 294 U.S. 511 (1935) (striking down a regulation on the price of interstate milk purchases that kept the price of milk artificially high within the state).
- Coe v. Errol, 116 U.S. 517, 525 (1886). In general, the Court did not permit states to regulate a purely interstate activity or prescribe prices of purely interstate transactions. E.g., W. Union Tel. Co. v. Foster, 247 U.S. 105 (1918); Lemke v. Farmers Grain Co., 258 U.S. 50 (1922); State Corp. Comm’n of Kan. v. Wichita Gas Co., 290 U.S. 561 (1934). But the Court sustained price and other regulations 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 early period of the Court’s jurisprudence upheld state price-fixing schemes applied to goods intended for interstate commerce. Milk Control Bd. v. Eisenberg Co., 306 U.S. 346; Parker v. Brown, 317 U.S. 341 (1943).
- Kidd v. Pearson, 128 U.S. 1, 20 (1888).