Opinion ID: 3023271
Heading Depth: 2
Heading Rank: 3

Heading: Whether the Regulations Are Discriminatory

Text: At the summary judgment stage, when determining the appropriate level of scrutiny, the District Court found that the Regulations are not facially discriminatory.4 Am. Trucking, 136 F. Supp. 2d at 350. The motion judge noted that the Regulations distinguish between trucks with and trucks without an origin or destination in New Jersey, but that the Regulations are not facially discriminatory because they “apply evenhandedly without regard to citizenship of the truck driver or owner.” Id. Perhaps considering himself bound by the motion judge’s ruling, the trial judge did not consider whether the Regulations are facially discriminatory. We conclude that they are. The Regulations state that their purpose is “to limit interstate through travel of large trucks,” defining “interstate through travel” as “a trip with both an origin and destination outside of New Jersey.” N.J. Admin. Code § 16:32-1.1. The Regulations achieve this purpose by mandating that restricted vehicles engaged “in interstate through travel may be operated in New Jersey only on the National Network,” except as necessary to access food, fuel, rest, or repairs. N.J. Admin. Code § 16:32-1.4(a). The text of the Regulations explicitly distinguishes out-ofstate trucks that are passing through New Jersey and imposes additional burdens on these trucks. The Regulations deny trucks of out-of-state businesses that pass through New Jersey access to 3600 miles of New Jersey Network roads. These out-of-state trucks are only exempt from this restriction under limited circumstances – namely, if they doing business in New Jersey that would require the dropping off or picking up of goods in New Jersey, or to access food, fuel, repairs, or rest. Meanwhile, trucks the Regulations merely because they affect interstate commerce, but because they have a discriminatory effect. 4 The question of whether a statute is discriminatory is a question of law, which this Court reviews de novo. See, e.g., Atl. Coast Demolition & Recycling, Inc. v. Bd. of Chosen Freeholders of Atl. County, 112 F.3d 652, 663 (3d Cir. 1997); see also Nat’l Solid Wastes Mgmt. Ass’n v. Meyer, 63 F.3d 652, 656 (7th Cir. 1995). 11 doing business in New Jersey are allowed unlimited access to the New Jersey Network. As was demonstrated at trial by the state officials’ own expert and a New Jersey Department of Transportation study, forcing trucks that are passing through New Jersey to use only the National Network imposes increased costs on those trucks.5 (Appendix (“App.”) at Da491; Plaintiffs’ Supplemental Appendix (“Supp. App.”) at Pa16-Pa22, Pa52-Pa57.) By granting trucks doing business in New Jersey unlimited access to the New Jersey Network while prohibiting trucks serving solely out-of-state interests from accessing the New Jersey Network, the Regulations explicitly impose costs on the citizens and businesses of other states while exempting New Jersey=s own citizens and businesses from those same costs. For this reason, we find the Regulations facially discriminatory. Our holding here is informed by the Supreme Court’s reasoning in Granholm v. Heald, 125 S. Ct. 1885 (2005), in which the Supreme Court found unconstitutional New York statutes imposing additional burdens on out-of-state wineries seeking to ship wine directly to New York consumers.6 In finding the statutes violated the dormant Commerce Clause, the Supreme Court noted that, “[t]ime and again this Court had held that, in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate ‘differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.’” Id. at 1895 (quoting Oregon Waste Sys., Inc. v. Dep’t of Envtl. Quality of Ore., 511 U.S. 93, 99 (1994)). Here, the Regulations explicitly provide for different treatment of in-state and out-of-state economic interests by limiting the access that the latter interest has 5 For example, the New Jersey Department of Transportation study in evidence showed that the trip from Philadelphia to upstate New York was longer in distance and time, and costlier in tolls and fuel, when the driver was forced to use the National Network instead of the New Jersey Network. (App. at Da491; Supp. App. at Pa16-Pa22.) 6 In Granholm, the Supreme Court also invalidated on similar grounds Michigan statutes governing alcohol distribution. Granholm, 125 S. Ct. at 1896. 12 to New Jersey roads. It is immaterial that a limited exception is allowed for out-of-state trucks with an origin or destination in New Jersey because, as in Granholm, “[t]he suggestion of a limited exception for [out-of-state economic interests] does nothing to eliminate the discriminatory nature” of the Regulations. Id. at 1896. The Regulations’ explicit distinction and consequent burdening of out-of-state economic interests requires that heightened scrutiny be applied. Also relevant here is the Supreme Court’s decision in Philadelphia v. New Jersey, which held that a New Jersey law that bans the importation of most “solid waste or liquid waste which originated or was collected outside the territorial limits of the State” violated the Commerce Clause. 437 U.S. at 618. In City of Philadelphia, the Court observed that “[on] its face, [the New Jersey law] imposes on out-of-state commercial interests the full burden of conserving the State’s remaining remaining landfill space.” Id. at 628. According to the state, the purpose of the landfill law was to stem the “threat to the quality of the environment of New Jersey,” to protect the State’s diminishing landfill sites. The law was also enacted because “the public health, safety and welfare require that the treatment and disposal within this State of all wastes generated outside of the State be prohibited.” Id. at 625. The Supreme Court held that the purpose of the law would not be relevant to whether the statute was discriminatory because: [T]he evil of protectionism can reside in legislative means as well as legislative ends. Thus, it does not matter whether the ultimate aim of [the statute] is to reduce the waste disposal costs of New Jersey residents or to save remaining open lands from pollution, for we assume New Jersey has every right to protect its residents= pocketbooks as well as their environment. And it may be assumed as well that New Jersey may pursue those ends by slowing the flow of all waste into the State=s remaining landfills . . . . But whatever New Jersey=s ultimate purpose, it may not be accomplished by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently. Both on its face and in its plain effect, [the statute in question] violates this principle of nondiscrimination. 13 Id. at 626-27. Similarly, here, the Regulations, on their face, violate this notion of nondiscrimination. Our holding also parallels our reasoning in Old Coach, in which we held that New Jersey laws providing for separate regulatory schemes for New Jersey land sales to New Jersey residents and for out-of-state land sales to New Jersey residents, imposing tighter and costlier restrictions on the latter, were discriminatory on their face. 881 F.2d at 1232. Like the Regulations here, the statutes at issue in Old Coach did not distinguish between businesses based on citizenship. Id. Regardless, the statutes in Old Coach were facially discriminatory because they explicitly imposed additional costs on interstate land sales that intrastate land sales were not subject to. Id. Similarly, by limiting the access that out-of-state trucks have to the New Jersey Network to only circumstances in which they have an origin or destination in New Jersey, while allowing New Jersey trucks unlimited access to the same network, the Regulations on their face impose additional costs on out-of-state economic interests that New Jersey economic interests are not required to bear. Even if we were to find, as the District Court did, that the Regulations are not facially discriminatory, we agree with the District Court that the Regulations are discriminatory in effect. In finding that the Regulations have a negative impact on interstate commerce, the District Court gave a well-reasoned analysis of the facts in evidence and concluded that, based on a New Jersey Department of Transportation study, many truckers involved in interstate commerce with no origin or destination in New Jersey would be forced to take longer and costlier routes when forced to use the National Network rather than the New Jersey Network. Am. Trucking, 2004 WL 601659, at -6. Commercial interests which rely on imports from and exports to New Jersey are not subject to these increased costs. The District Court properly rejected Spasovic’s conclusion that the Regulations would have a positive net economic impact on interstate trucking despite these added costs because it found no support for the assumption that truckers choose to act against their economic interest. As the District Court concluded, truck drivers act in their economic interest, and that interest is best served by their using the New 14 Jersey Network as opposed to the National Network when doing so results in a net gain of time and money. In these circumstances, the Regulations barring from the New Jersey Network interstate trucks with no origin or destination in New Jersey produce a negative, not a positive, impact on interstate commerce. Moreover, the District Court’s conclusion is consistent with Supreme Court precedent stating that statutes that increase out-ofstate competitors’ costs are subject to heightened scrutiny under the Commerce Clause. In Carbone, the Supreme Court found that an ordinance requiring that solid waste processed or handled within the town be processed or handled at the town’s transfer station was discriminatory in effect and thus subject to heightened scrutiny. Carbone, 511 U.S. at 392. The Supreme Court determined that, although the ordinance’s immediate effect was to direct local transport of solid waste to a designated site within the local jurisdiction, its economic effects were “interstate in reach” because, among other things, the requirements of the ordinance had the effect of driving up the cost for out-of-state interests to dispose of their solid waste. Carbone, 511 U.S. at 389. In American Trucking Ass’ns, Inc. v. Scheiner, 483 U.S. 266 (1987), the Supreme Court invalidated a state’s flat tax levied on all trucks that used its roads because data showed that the fees imposed a cost per mile on interstate trucks that was nearly five times as heavy as the cost borne by local trucks, and did “not even purport to approximate fairly the cost or value of the use of Pennsylvania’s roads.” See Scheiner, 483 U.S. at 284-86, 290. In these cases, the Supreme Court interpreted the dormant Commerce Clause to invalidate “local laws that impose commercial barriers or discriminate against an article of commerce by reason of its origin or destination out of state.” Carbone, 511 U.S. at 390; see also Am. Trucking Ass’ns, Inc. v. Mich. Pub. Serv. Comm’n, 125 S.Ct. 2419, 2423 (2005); Scheiner, 483 U.S. at 284. This is precisely what the Regulations do by discriminating against trucking services by reason of their out-of-state origin and destination. Because the Regulations are discriminatory both on their face and in effect, the District Court did not err in applying heightened scrutiny. D. The Availability of Nondiscriminatory Alternatives The state officials argue that, even if heightened scrutiny is 15 appropriate, the District Court erred in finding that there is an available non-discriminatory alternative to the Regulations that would accomplish the goal of improving highway safety by reducing the number of restricted vehicles on the New Jersey Network. We review the District Court’s finding of an available non-discriminatory alternative for clear error. See Atl. Coast, 112 F.3d at 663, 665. The District Court found that a non-discriminatory alternative was available in the form of a regulation that would prohibit all trucks, regardless of origin or destination, from using the New Jersey Network except as needed to reach the National Network from a New Jersey origin, to reach a New Jersey destination from the National Network, or to access food, rest, fuel, or repairs. Am. Trucking, 2004 WL 601659, at -7. The state officials argue that this alternative would be impossible to enforce because: 1) it would require police to stop restricted vehicles on the New Jersey Network randomly to determine compliance with the statute, and 2) such a determination would require the officer making the stop to make difficult calculations regarding whether the truck needed to be on that road to reach a specific New Jersey destination from the National Network or to access the National Network from a New Jersey origin. It was not clear error for the District Court to reject this argument and to find that a non-discriminatory alternative was available. Both the Regulations and the non-discriminatory alternative would require that the police randomly stop trucks on the New Jersey Network to ensure compliance with the applicable law. Moreover, as the District Court noted, the police are regularly entrusted with the responsibility to make complex determinations when stopping a vehicle to ensure compliance with the law, such as the “nuanced determinations” inherent in finding probable cause or the calculations necessary for the enforcement of similar needsbased exemptions to other highway regulations. Id. The Regulations themselves would have involved such determinations in order to allow interstate trucks to leave the National Network to the extent necessary for fuel, food, rest, or repairs. The District Court’s conclusion that a non-discriminatory alternative was available was based on solid reasoning and grounded in the evidence. This is a far cry from clear error, in 16 which a district court’s finding is “completely devoid of minimum evidentiary support displaying some hue of credibility” or bears “no rational relationship to the supporting evidentiary data.” Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 104 (3d Cir. 1981) (quotation marks and citation omitted). We therefore affirm the District Court’s determination that the Regulations do not survive heightened scrutiny.