Opinion ID: 199407
Heading Depth: 3
Heading Rank: 3

Heading: Low Level of Scrutiny: Pike Balancing Test

Text: 63 When a state statute regulates evenhandedly and has only incidental effects on interstate commerce, that statute will be upheld unless the burden on interstate commerce is clearly excessive in relation to the putative local benefits. Pike, 397 U.S. at 142. 64 Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. Occasionally the Court has candidly undertaken a balancing approach in resolving these issues, but more frequently it has spoken in terms of direct and indirect effects and burdens. 65 Id. (internal citations omitted). The Maine Act is neither an impermissible extraterritorial reach nor is it discriminatory; rather, it regulates evenhandedly and only has incidental effects on interstate commerce. Therefore, we apply this lower level of scrutiny, known as the Pike balancing test. 66 The district court found the Maine Act to be per se invalid, and therefore never determined whether it survives the Pike balancing test. Though the district court did not undertake such an analysis, we may conduct the Pike balancing test for the first time on appeal. See Instructional Sys., Inc. v. Computer Curriculum Corp., 35 F.3d 813, 826 (3d Cir. 1994). In Instructional Systems, the Third Circuit considered a facial challenge to the New Jersey Franchise Practices Act after the district court had declared the statute per se invalid under the dormant Commerce Clause. Id. at 826. The court found that the statute, from a facial standpoint, survived the Pike test, and reversed the district court judgment which had declared the statute unconstitutional. Id. at 827. The Third Circuit recognized, however, that the issue of whether the statute, when applied, burdens interstate commerce could not be resolved as a matter of law. Id. 67 Applying the Pike balancing test to the Maine Act, we consider: (1) the nature of the putative local benefits advanced by the statute; (2) the burden the statute places on interstate commerce; and (3) whether the burden is clearly excessive as compared to the putative local benefits. See Pike, 397 U.S. at 142. 68 Arguably, the only burden imposed on interstate commerce by the Maine Act is its possible effects on the profits of the individual manufacturers. As the Third Circuit stated, however, the fact that a law may have 'devastating economic consequences' on a particular interstate firm is not sufficient to rise to a Commerce Clause burden. Instructional Sys., 35 F.3d at 827 (quoting Ford Motor Co. v. Ins. Comm'r, 874 F.2d 926, 943 (3d Cir. 1989)); see also Exxon Corp. v. Governor of Md., 437 U.S. 117, 127-28 (1978) (stating that the [Commerce] Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.). 69 We next consider the local benefits of the Act, which we find to be substantial. The Maine Rx Program will potentially provide prescription drugs to Maine citizens who could not otherwise afford them. The Maine Legislature has decided that without the Maine Rx Program, needy Maine citizens will continue to be deprived of necessary medical care because of rising prescription drug costs. When measuring manufacturers' possible loss of profits against the increased access to prescription drugs for Maine citizens, the local benefits appear to outweigh the burden on interstate commerce. At the very least, the burden on interstate commerce is not clearly excessive as compared to the local benefits. 70 It is necessary to recognize the difficulty in foreseeing what events actually will occur from the enforcement of this Act, which admittedly makes the Pike balancing test more challenging to apply. We are forced to balance the possible effects, instead of the actual effects of the statute in action. For now, it is enough to say that the Act survives the facial challenge under the dormant Commerce Clause. 11