426 U.S. 794 (1976)
In August 1967 the Maryland Legislature commissioned a study of the growing number of abandoned automobiles.1 The study identified bottlenecks in the scrap cycle and prompted the 1969 legislature to enact a statute that imposed annual license requirements and fines on Maryland wreckers who retained old vehicles.2 The statute also paid state bounties to licensed processors for destroying Maryland-titled vehicles.3
The statute required processors to submit one of several title documents before receiving a bounty, but it initially exempted hulks—vehicles more than eight years old and inoperable—from any documentation requirement.4 Wreckers could be licensed only if their junkyards were located in Maryland, yet scrap processors from any state could obtain licenses and participate in the bounty program.5 Seven of the sixteen participating processors were located in Pennsylvania or Virginia.6
Alexandria Scrap Corp., a Virginia corporation with a processing plant in Alexandria, became an original licensee and ranked third among all processors in bounties received through the summer of 1974.7 Ninety-six percent of the vehicles it processed were hulks supplied without title documents.8 In the summer of 1974 Maryland amended the statute so that hulks also required title documentation.9 Maryland processors could satisfy the requirement with a simple indemnity agreement while out-of-state processors had to submit a certificate of title, police certificate vesting title, bill of sale from a police auction, or Wrecker's Certificate.10
The complaint in this case was filed shortly after the effective date of the amendment to § 11-1002.2 (f) (5).11 Shortly after the amendment took effect the number of Maryland-sourced hulks delivered to Alexandria Scrap fell from 14,253 in the preceding six months to 9,723.12 The decline was concentrated among deliveries from unlicensed suppliers.13 Appellee contended that the amendment interfered with interstate commerce and denied equal protection.14 A three-judge District Court granted summary judgment to Alexandria Scrap on both claims, entered an injunction, and the State appealed.15 The Supreme Court noted probable jurisdiction.16
Whether Maryland's 1974 amendment to its abandoned vehicle bounty statute, which required out-of-state processors but not in-state processors to submit specified title documents rather than indemnity agreements to claim bounties on hulks, violates the Commerce Clause?17
The Commerce Clause prevents states from erecting barriers that prohibit or burden the free flow of goods in interstate commerce through regulation or prohibition.18 A state does not violate the Clause when it enters the market itself as a purchaser offering subsidies and elects to restrict those subsidies to in-state participants.19 Such action does not regulate or obstruct the interstate market but instead participates in it through the expenditure of state funds.20
No. Maryland's 1974 amendment did not prohibit the export of hulks or impose burdensome regulations on their movement out of state.21 The established facts show that the statute originally allowed out-of-state processors like Alexandria Scrap to participate equally in the bounty program. The amendment merely altered the documentation required for hulks, permitting Maryland processors to use indemnity agreements while requiring out-of-state processors to supply certificates of title or equivalent documents.22 This change made it more convenient for unlicensed suppliers to deliver hulks to in-state processors.23 The observed decline from 14,253 to 9,723 Maryland-sourced hulks at Alexandria Scrap's plant resulted, yet the hulks remained free to move interstate if suppliers chose to forgo the enhanced price.24 Unlike the statutes invalidated in Pike v. Bruce Church, Inc. and H. P. Hood & Sons v. Du Mond, which blocked or conditioned interstate shipments, Maryland here simply made its own subsidy more attractive for in-state processing without blocking any channel of commerce.25 The practical effect arose solely from market response to the state's selective largesse rather than from any regulatory restraint.26
The rule therefore applies directly to the established facts because the amendment left suppliers free to transport hulks across state lines and merely withheld the easiest documentation option from out-of-state processors.27 No trade barrier of the type forbidden by the Commerce Clause was created.28
The 1974 amendment does not violate the Commerce Clause.29
Related opinions on this issue
Justice Stevens concurred on the ground that the interstate commerce at issue existed only because of Maryland's subsidy program.30 Therefore the commerce could not be characterized as burdened when the state later confined the subsidy to in-state processors.31 He emphasized that the program created the market for processing abandoned Maryland vehicles by artificially enhancing hulk values.32
Maryland could have limited the subsidy to domestic processors from the outset without constitutional objection.33 Because the commerce would never have arisen absent the state payments, limiting those payments later does not constitute an impermissible burden under the Commerce Clause.34
Joined by Justice White And Justice Marshall
Justice Brennan dissented on the Commerce Clause issue.35 He contended that the amendment effected a facial discrimination against interstate commerce by requiring out-of-state processors to meet more stringent documentation requirements.36 He argued that established principles from Pike v. Bruce Church, Inc. and H. P. Hood & Sons, Inc. v. Du Mond required balancing the local interest against the burden on commerce.37
The summary-judgment record was inadequate to determine whether reasonable nondiscriminatory alternatives existed or whether the restriction truly advanced the goal of limiting bounties to Maryland-abandoned vehicles.38
Whether the same amendment denies equal protection of the laws to licensed out-of-state processors by restricting their access to bounty payments on hulks?39
The Equal Protection Clause requires only that a statutory classification bear a rational relationship to a legitimate state purpose when no fundamental right or suspect class is involved.40 Economic classifications receive deferential review and need not be drawn with precision so long as the distinction is not arbitrary.41
No. The classification between in-state and out-of-state processors is rationally related to Maryland's legitimate purpose of directing limited state funds toward the removal of vehicles abandoned inside Maryland.42 The established facts demonstrate that the legislature could reasonably assume hulks delivered to Maryland processors were more likely to have been abandoned in Maryland while those reaching out-of-state processors were more likely to have originated elsewhere.43 The amendment therefore channels bounty payments accordingly by easing documentation for domestic processors.44 Although the statute still conditions bounties on prior Maryland titling rather than proof of in-state abandonment, the Equal Protection Clause does not demand that the classification fit the purpose with mathematical exactitude.45
The state was not required to verify its assumptions with statistical evidence.46
The 1974 amendment does not deny equal protection of the laws.47