Also known as: protectionist · trade protection · import barriers
Written by attorneys — see sources below.
Economic favoritism by which a state shields its residents from out-of-state competition through discriminatory regulations or barriers on interstate commerce. Such measures trigger strict scrutiny under the Dormant Commerce Clause and are presumptively invalid when they lack a nonprotectionist justification.
Pavel Petrov operates a bait shop in State A and purchases live baitfish from State B suppliers. State B enacts a statute that prohibits any export of the fish to out-of-state buyers. Petrov cannot obtain his usual supply and loses sales. The ban prevents interstate movement solely to reserve the resource for in-state purchasers.
Pulse Media generates solid waste at its printing facility in State C. A municipal ordinance requires all local waste to be processed at a designated in-state plant before any shipment elsewhere. Pulse Media must pay higher fees and cannot use a lower-cost out-of-state processor. The rule blocks access to interstate waste markets.
Preston Pratt owns an out-of-state winery that seeks to ship directly to consumers in State D. State D permits in-state wineries to make such shipments but denies the same right to out-of-state producers. Pratt loses direct sales and must route product through in-state distributors. The distinction reserves market access for local wineries.
Precision Tools disposes of industrial waste generated at its plant in State E. A county ordinance directs all commercial waste to a newly created public authority facility and bars contracts with private or out-of-state processors. Precision Tools must pay the authority's rates even though cheaper private options exist. The measure favors the government-owned site over interstate competitors but receives lenient review as likely motivated by legitimate public objectives.
Pedro Pacheco owns a landfill in State F that accepts solid waste from neighboring states. State F enacts a statute that forbids private landfills from receiving any out-of-state garbage. Pacheco loses a major revenue stream and must turn away interstate haulers. The prohibition blocks importation to protect local disposal capacity.
In 1973 the New Jersey Legislature enacted chapter 363 of the 1973 N.J. Laws. The law took effect in early 1974. It provided that no person shall bring into the state any solid or liquid waste which originated or was collected outside the territorial limits of the state. The statute excepted garbage to be fed to swine and other limited categories later permitted by the Commissioner of the Department of Environmental Protection. The Commissioner promulgated regulations permitting four categories of waste to enter the state while barring all others. The statute immediately affected operators of private landfills in New Jersey that had agreements with cities in other states for waste disposal. Several landfill operators and out-of-state cities brought suit in New Jersey state court against the State of New Jersey and its Department of Environmental Protection. They attacked the statute and regulations on multiple state and federal grounds. The trial court granted the plaintiffs' motion for summary judgment in an oral opinion declaring the law unconstitutional because it discriminated against interstate commerce. The New Jersey Supreme Court consolidated the case with a similar action and reversed. The plaintiffs appealed to the United States Supreme Court. The Court noted probable jurisdiction, heard argument, and then remanded for reconsideration of the preemption claim in light of the Resource Conservation and Recovery Act of 1976. On remand the New Jersey Supreme Court again found no federal preemption. The United States Supreme Court noted probable jurisdiction a second time. The New Jersey Supreme Court found that existing landfill sites in the state would be exhausted within a few years. Continued use or development of new sites would impose heavy environmental costs from pollution and loss of open lands. New disposal techniques were under development but would require time. Excluding out-of-state waste could extend the lifespan of existing landfills and thereby help avoid devoting additional virgin wetlands to landfill purposes.
View casePhilip Powell is a qualified attorney licensed in State G who seeks admission on motion in State H. State H's bar rule grants admission without examination only to residents of State H. Powell maintains his practice and residence in State G and is denied admission solely on that basis. The residency rule reserves professional opportunity for local lawyers under the Privileges and Immunities Clause.
Kathryn Piper resided in Lower Waterford, Vermont, approximately 400 yards from the New Hampshire border. In 1979 she applied to take the February 1980 New Hampshire bar examination and included a statement of intent to become a New Hampshire resident. After an investigation the Board of Bar Examiners determined that Piper possessed good moral character and satisfied the remaining admission criteria. She took and passed the examination but was advised that she must establish a home address in New Hampshire before being sworn in. On May 7, 1980, Piper asked the Clerk of the New Hampshire Supreme Court for an exemption from the residency requirement. She explained that she had a possible job with a lawyer in Littleton, New Hampshire, yet becoming a resident would be inconvenient because her Vermont house carried a favorable mortgage interest rate and she and her husband had recently become parents. The Clerk denied the request on May 13, 1980. Piper then formally petitioned the New Hampshire Supreme Court for admission, asserting that her circumstances were unique enough to warrant an exception without creating precedent. The court denied her petition on December 31, 1980. On March 22, 1982, Piper commenced an action in the United States District Court for the District of New Hampshire against the Supreme Court of New Hampshire, its five Justices, and its Clerk. She challenged Rule 42, which excludes nonresidents from the bar, on the ground that it violates the Privileges and Immunities Clause. The District Court granted her motion for summary judgment on May 17, 1982. An evenly divided Court of Appeals for the First Circuit, sitting en banc, affirmed the judgment in 1983. The Supreme Court of New Hampshire appealed, and the United States Supreme Court noted probable jurisdiction.
View caseA state measure constitutes impermissible economic protectionism when it discriminates against interstate commerce to favor in-state economic interests over out-of-state competitors. Courts apply a virtually per se rule of invalidity to such laws. The measure is invalid unless the state demonstrates a legitimate non-economic purpose and the absence of reasonable nondiscriminatory alternatives.
Supporting sources
The market participant doctrine permits a state to favor its own citizens when the state acts as a buyer or seller in the market rather than as a regulator. Such proprietary actions do not trigger strict Dormant Commerce Clause scrutiny. When the state imposes downstream conditions or regulates the broader market, the protectionist character reappears and the measure loses the doctrine's protection.
Supporting sources
The Twenty-First Amendment does not shield state liquor laws from Dormant Commerce Clause review when those laws discriminate against out-of-state producers. A state may not allow in-state wineries to ship directly to consumers while denying the same right to out-of-state wineries. Such discrimination remains subject to invalidation as economic protectionism.
Supporting sources
…isolation.’ ” The opinions of the Court through the years have reflected an alertness to the evils of “economic isolation” and protectionism, while at the same time recognizing that incidental burdens on interstate commerce may be unavoidable when a State legislates to safeguard the health and safety of its people. Thus, where…