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- Rule: federal law is supreme in both its statutes and treaties and any state law that conflicts must give way under the Supremacy Clause in one of the three situations.
- 1. Express Preemption
- 2. Implied Preemption
The federal law explicitly states that all state law is preempted in a particular area. The scope is Congressional intent.
- Involves both field and conflict preemption
- a. Field Preemption: exist where the federal scheme of regulation is so pervasive as to make reasonable inference that Congress left no room for the states to act. Once a "pervasive scheme has been found, a court must determine the scope of the field that has been occupied by the federal government. (usually immigration, copyright, or cigarette law)
- b. Conflict Preemption: Congress has not taken over an entire field (not pervasive scheme or express language of preemption) but federal law is still present.
Dormant Commerce Clause
The presence of the Commerce Clause, which confers on Congress the power to regulate IC, has been held implicity to limit the powers of states to regulate IC. This implied limitation on state power has been referred to as the dormant commerce clause.
The Commerce Clause
- a. Gives the federal government the power to regulate IC
- b. Precludes the states from enacting certain laws
Types of Laws Affecting IC: Evenhanded and Protectionist
- Protectionist: restricting business entry, preferential treatment for in-state business, and preserving state resources for residents
- i. Generally, will be invalid except strict scrutiny applies
- ii. Laws that facially discriminate IC are valid only if:
- 1. Laws serve a legitamate state interest, (i.e., health and safety) AND
- 2. No non-discriminatory alternative
- Laws that evenhandedly discriminate IC is subject to balacing test (Healy)
- i. Laws serve a legitimate staet interest, AND
- ii. The laws will be struck down if they place a burden on commerce that is clearly excessive in relation to the benefits of the local community
- 1. Consider the nature of the benefits (how significant they are)
- 2. The nature of the burden (whether it falls mainly on out-of-state commerce), AND
- 3. Whether the benefits could have been achieved through an alternative that was less burdensome to interstate commerce
- (e.g., cost to companies outweigh "safety" benefits (Kassel))
- iii. But even if law is evenhanded, because its purpose and effect is discriminatory, could argue law is facially discriminatory and apply strict scrutiny
How to avoid the dormant commerce clause
- a. Market Participant
- b. Subsidies
- c. Congressional authorization
- d. Applying evenhandedness
- The dormant commerce clause does not apply to states when they are acting as a market participant (i.e., when the state is the buyer or seller of the goods or services, rather than the regulator of transactions between others)
- i. Downstream regulation-a state may regulate only the transaction in which it is involved and may not regulate conduct that occurs after the transaction is complete downstream (South-Central Timber)
- ii. This exception does not work under P&I
- The dormant commerce clause also may not apply to states when they are exercising their spending power (as opposed to general regulatory power).
- That is, states may be allowed to grant subsidies (cash payments) to local producers, without having to make the same payments to out of state producers, at least where the source of subsidy is general tax revenues)
If Congress authorizes the state to make law affecting IC, the state law will not violate the dormant commerce clause.
When Court applies evenhanded standard, most of the time the law will be upheld.