Constitutional Law September 16, 2004

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Constitutional LawSeptember 16, 2004

• DCC
• Overview
• Discrimination
• Neutral Measures
• Burden Export
• Exceptions
• Generally
• Congressional Authorization
• Market Participation
• Subsidies

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Supreme Court Opinions

• Terminology
• Fragmentation
• Outcome
• Rationale
• Assessing Weight
• Controlling Concurrence (link)
• Counting Votes (link)
• Influence Over Time

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General DCC Observations

• Framework clear, not application
• Identifying discrimination
• Burden export
• Application of balancing
• PP reasoning is everywhere!
• Relevant to many doctrinal components
• Implications not always clear
• Why burdens-benefits balancing?
• Isnt this Congresss job? (Scalia view)
• Hidden discrimination?

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V. ExceptionsA. Generally

• DCC Restrictions do not Apply
• Discriminatory Laws Upheld
• Other Provisions May Apply
• MP and Subsidies as Focus
• Similar considerations
• Less Coercive
• More Justified
• Similar problems
• Uncertain Rationale
• Difficult Line-Drawing

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B. Congressional Authorization

• Reverse Preemption
• Historic Uncertainty
• Rationale?
• Examples
• In re Rahrer (1891) (liquor)
• Western Southern Life (insurance)
• Met. Life v. Ward
• DCC Inapplicable (insurance)
• But EP Violation

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C. Market Participation1. Introduction

• Market Participation vs. Regulation
• Buying and Selling
• Goods Services
• Rationales
• State is not regulating or taxing
• Historical Rationale for DCC
• Less Impact
• State is like other market actors
• State can reap benefits of investment

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2. Examples

• Alexandria Scrap
• Bounty for junk cars (purchaser)
• More documentation for nonresidents
• Reeves
• State-owned cement company (seller)
• Preference for in-state purchases
• White
• City construction projects (purchaser)
• Local hiring quotas

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3. Regulatory Impact

• Use of Market Power
• Conditions on Contracts
• DCC Applies
• South Central Timber
• State timber Ks require in-state processing
• Market participation inapplicable
• No burdens beyond immediate market
• Downstream regulation (post-purchase)
• Compare White

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C. Subsidies

• No DCC violation
• South Central Timber and West Lynn
• Discriminatory
• Anti-Competitive (Protectionist)
• Rationales
• Less damaging to free trade/less coercive
• Not w/in historical purposes
• Dont have to subsidize nonresidents
• No burden export

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3. Limits/West Lynn

• Neutral tax is valid
• Rebate is a subsidy and valid
• But tax rebate discriminatory tax
• Same as a discriminatory exemption
• Political process failure
• Scalias Typology

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Scalias Typology

• Discriminatory tax/tariff
• invalid
• Neutral tax exemption
• invalid
• Neutral tax subsidy from proceeds
• close case but invalid
• Subsidy from general revenues
• valid
• Why are 1-3 invalid, but not 4? (link)

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Controlling Concurrence
Bakke Illustration
AA Invalid
AA Valid
4 Justices
4 Justices
1 Justice
Quotas Invalid Race OK as Factor
Back
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Counting Votes -- Kassel
Back
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S3
S1
Neutral Tax Subsidy
Tariff
Subsidy
Tax
Tax (GT)
No Tax
Tax
In State Interests
Out of State Interests
In State Interests
Out of State Interests
Less Net Tax
Less Net Tax
S4
S2
Neutral Tax Exemption
General Revenue Subsidy
Subsidy
No Tax
Tax
Tax (GT)
Tax
Out of State Interests
Out of State Interests
In State Interests
In State Interests
Less Net Tax
Less Net Tax
Back