Opinion ID: 2511318
Heading Depth: 2
Heading Rank: 3

Heading: Constitutional Avoidance and the Dormant Commerce Clause

Text: Finally, we reject the argument that section 1711-E(2-A)'s application to prescription drug information intermediaries' out-of-state use or sale of opted-in Maine prescribers' identifying data would raise constitutional concerns under the dormant Commerce Clause. [23] Under Maine and federal law, we must avoid an unconstitutional construction of a statute if a reasonable interpretation of the statute would satisfy constitutional requirements. Anderson v. Town of Durham, 895 A.2d 944, 951 (Me.2006) (quoting Bagley v. Raymond Sch. Dep't, 728 A.2d 127, 133 (Me. 1999)) (internal quotation marks omitted). There is no need for constitutional avoidance here. We begin with the Supreme Court's current dormant Commerce Clause jurisprudence, which provides no foundation for plaintiffs' contention that Maine's regulation of their out-of-state use or sale of opted-in Maine prescribers' data would raise constitutional concerns. The dormant Commerce Clause sets two complementary boundaries for states' regulatory powers over commerce. On one hand, states cannot interfere with Congress's constitutional authority over interstate commerce by enacting laws that seriously impede interstate commerce, even when Congress has not acted. See Dep't of Revenue v. Davis, 553 U.S. 328, 337-38, 128 S.Ct. 1801, 170 L.Ed.2d 685 (2008). [24] On the other hand, states retain authority under their general police powers to regulate matters of legitimate local concern, even though interstate commerce may be affected. Maine v. Taylor, 477 U.S. 131, 138, 106 S.Ct. 2440, 91 L.Ed.2d 110 (1986) (quoting Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 36, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980)) (internal quotation marks omitted). Further, in fields traditionally subject to state regulation, federal courts should be particularly hesitant to interfere with [states'] efforts under the guise of the Commerce Clause. United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 344, 127 S.Ct. 1786, 167 L.Ed.2d 655 (2007) (alterations in original). As to the first of these boundaries, the dormant Commerce Clause is driven by concern about `economic protectionism-that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.' Davis, 553 U.S. at 337-38, 128 S.Ct. 1801 (quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273, 108 S.Ct. 1803, 100 L.Ed.2d 302 (1988)). Similar concerns about hidden protectionism and excessive barriers to interstate trade arise when states enact laws likely to subject entities engaged in interstate commerce to incompatible cross-state regulatory regimes, see CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 88-89, 107 S.Ct. 1637, 95 L.Ed.2d 67 (1987); S. Pac. Co. v. Ariz. ex rel. Sullivan, 325 U.S. 761, 767-68, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945), or laws with minimal in-state benefits and a disproportionate impact on interstate commerce, see Pike, 397 U.S. at 142, 90 S.Ct. 844. These concerns are central to the way the Supreme Court has framed the dormant Commerce Clause in its recent opinions. The Maine law implicates none of them. Maine's regulation of prescription drug information intermediaries' out-of-state use or sale of opted-in Maine prescribers' data does not discriminate against out-of-state entities in favor of in-state competitors, nor do plaintiffs so argue. Maine's law does not risk imposing regulatory obligations inconsistent with those of other states. No other states have erected competing regulations, much less opposing regulations requiring the transfer of Maine prescribers' data. [25] This is simply not an example of a state engaged in economic protectionism. Cf. Davis, 553 U.S. at 337-39, 128 S.Ct. 1801. [26] Maine's interests, on the other hand, are precisely the kind of traditional state concerns that the Supreme Court has identified as falling outside the reach of the dormant Commerce Clause. See Davis, 553 U.S. at 342, 128 S.Ct. 1801; United Haulers, 550 U.S. at 344-45, 127 S.Ct. 1786. States are vested with the responsibility of protecting the health, safety, and welfare of [their] citizens. United Haulers, 550 U.S. at 342, 127 S.Ct. 1786. To serve those interests, states exercise the kind of local autonomy essential to federalism. The essence of our federal system is that within the realm of authority left open to them under the Constitution, the States must be equally free to engage in any activity that their citizens choose for the common weal. Davis, 553 U.S. at 338, 128 S.Ct. 1801 (quoting Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 546, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985)) (internal quotation marks omitted). Maine has a uniquely strong interest in protecting Maine prescribers who have invoked Maine's regulatory authority through the opt-in scheme. Cf. CTS, 481 U.S. at 89, 107 S.Ct. 1637. Maine has done so because these commercial transactions also harm the public health and increase Maine's health care costs. In advancing these interests, Maine has regulated in a traditional area of state concern without undercutting other states' regulatory schemes or encroaching on their interests. Maine's choice must be respected. The Maine statute falls outside the central concerns of the Court's dormant Commerce Clause jurisprudence for another reason. Maine has not shifted the costs of regulation to other states whose voters cannot affect its legislative choices, nor does the Maine law hand local businesses a victory they could not obtain through the political process. United Haulers, 550 U.S. at 345, 127 S.Ct. 1786. Maine's political processes produced this statute, and Maine voters can, if they disagree, reverse this policy. Plaintiffs ignore these foundational principles; indeed, plaintiffs ignore virtually every Supreme Court dormant Commerce Clause case after 1989. Instead, plaintiffs say section 1711-E(2-A)'s application to their conduct would violate an infrequently applied strand of the dormant Commerce Clause loosely labeled extraterritoriality. [27] Its central premise is that a statute that directly controls commerce occurring wholly outside the boundaries of a State exceeds the inherent limits of the enacting State's authority and is invalid regardless of whether the statute's extraterritorial reach was intended by the legislature. Healy v. Beer Inst., Inc., 491 U.S. 324, 336, 109 S.Ct. 2491, 105 L.Ed.2d 275 (1989) (emphasis added); see also Alliance of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 35 (1st Cir.2005). Plaintiffs further suggest that this doctrine applies not to the Maine law as applied to prescription drug information intermediaries but to their atomized transactions only. Plaintiffs make no attempt to square these principles with the Court's current dormant Commerce Clause jurisprudence or to explain how these principles fit with its central concerns. In any event, this doctrine is inapplicable. Whatever the present scope of the extraterritoriality doctrine, it clearly does not require per se invalidation of all extraterritorial applications contained within state statutes regulating commerce. [28] Section 1711-E(2-A) does not regulate wholly extraterritorial commercial transactions. Its regulation of plaintiffs' use or sale of opted-in Maine prescribers' data affects only Maine prescribers and regulates transactions that impact Maine, with incidental effects elsewhere. It is instead one of an infinite variety of cases in which regulation of local matters may also operate as a regulation of commerce, requiring appraisal and accommodation of the competing demands of the state and national interests involved. S. Pac. Co., 325 U.S. at 768-69, 65 S.Ct. 1515. [29] The Supreme Court has applied the so-called extraterritoriality doctrine sparingly, and in ways that only reinforce the conclusion that Maine can regulate plaintiffs' out-of-state use and sale of Maine prescribers' identifying data. The Court has only struck down two related types of statutes on extraterritoriality grounds. The first are price-affirmation statutes that force regulated entities to certify that the in-state price they charge for a good is no higher than the price they charge out of state. See Healy, 491 U.S. at 337-40, 109 S.Ct. 2491; Brown-Forman, 476 U.S. at 582-84, 106 S.Ct. 2080; Baldwin, 294 U.S. at 521-22, 55 S.Ct. 497. The second are statutes that force an out-of-state merchant to seek regulatory approval in one State before undertaking a transaction in another. Healy, 491 U.S. at 337, 109 S.Ct. 2491; see also Edgar v. MITE Corp., 457 U.S. at 627, 642-43, 102 S.Ct. 2629 (plurality opinion). Even these statutes are not invariably struck down. See CTS, 481 U.S. at 88-89, 107 S.Ct. 1637 (upholding a statute regulating takeovers of corporations with a strong in-state nexus by limiting the acquisition of control shares). The Maine law is easily distinguishable from the invalidated statutes. Those state statutesunlike section 1711-E(2-A) raised independent concerns about protectionism under established strands of the dormant Commerce Clause. [30] Moreover, unlike the Maine law, none of the invalidated statutes dealt with harms caused exclusively inside the regulating state. Nor were the invalidated statutes limited to regulating transactions with a significant inherent connection to the regulating state, and involving its own professional licensees. Those differences, and not the mere fact that those statutes directly regulated out-of-state transactions, explain why the Supreme Court deemed those statutes wholly extraterritorial. [31] Plaintiffs' attempt to analogize the Maine law to these cases fails. The Supreme Court has previously distinguished and upheld a state statute that regulated out-of-state commercial transactions with a clear in-state nexus and impact. See CTS, 481 U.S. at 93, 107 S.Ct. 1637. [32] Other circuits have upheld similar laws on this basis. See, e.g., Quik Payday, Inc. v. Stork, 549 F.3d 1302, 1308-09 (10th Cir. 2008); S. Union Co. v. Mo. Pub. Serv. Comm'n, 289 F.3d 503, 507-08 (8th Cir. 2002); Baltimore Gas & Elec. Co. v. Heintz, 760 F.2d 1408, 1421-27 (4th Cir. 1985); cf. Am. Booksellers Found. v. Dean, 342 F.3d 96, 103-04 (2d Cir.2003). That reasoning, not the broad rule plaintiffs try to derive from Healy and its antecedents, governs here. [33] Under these circumstances, we hold that section 1711-E(2-A)'s regulation of plaintiffs' conduct does not raise constitutional concerns under the extraterritoriality branch of the dormant Commerce Clause. Finally, we reject plaintiffs' alternate contention that section 1711-E(2-A) would raise constitutional concerns under Pike if applied to plaintiffs' out-of-state transactions. [34] Plaintiffs did not make this argument to the district court; their brief on appeal cursorily asserts that the law has no in-state benefits and only out-of-state costs. That is waiver. See Mass. Museum of Contemporary Art Found. v. Büchel, 593 F.3d 38, 65 (1st Cir.2010). This claim is also meritless. State laws frequently survive this Pike scrutiny, Davis, 553 U.S. at 339, 128 S.Ct. 1801, and section 1711-E(2-A) is no exception. To date, 259 Maine prescribers out of Maine's 7,500 total prescribers have opted in to Maine's confidentiality protections. Section 1711-E(2-A)'s regulation of plaintiffs' transactions would confer clear in-state benefits by enabling those prescribers to avoid unwanted targeting in Maine. Nothing suggests that the costs to interstate commerce would be disproportionate in relation to these benefits. The loss of several hundred data points in Maine, out of some 7,500 total Maine prescribers and 1.5 million prescribers nationwide, is unlikely to seriously impact the marketability of plaintiffs' products. Nor have plaintiffs shown that the costs of complying with section 1711-E(2-A)'s protections meaningfully burden interstate commerce. There is no obvious reason why cross-referencing the Maine Health Data Organization's list of opted-in Maine prescribers to avoid using or selling this data would prove particularly costly or difficult, let alone enough to warrant invalidation of a state law. We also heed the cautionary note the Court sounded in Davis : federal courts have less institutional competence than states in measuring the costs and benefits of particular state regulatory schemes. See 553 U.S. at 355-57, 128 S.Ct. 1801.