Opinion ID: 2453721
Heading Depth: 1
Heading Rank: 11

Heading: Standard of Review/Framework of Dormant Commerce Clause Analysis

Text: In CIG, this court explained that the issue of whether a statute is constitutional is one of law, and our scope of review on issues of law is unlimited. CIG, 279 Kan. at 866-67, 112 P.3d 138. We further explained that historically the Commerce Clause has been interpreted `not only as authorization for congressional action, but also, even in the absence of a conflicting federal statute, as a restriction on permissible state regulation. [Citation omitted.] This restrictive aspect has been referred to as the dormant Commerce Clause. The dormant Commerce Clause prohibits states, unless authorized by Congress, from attempting to advance their own commercial interests by curtailing the movement of articles of commerce, either into or out of the state. [Citation omitted.]' Water District No. 1 v. Mission Hills Country Club, 265 Kan. 355, 365-66, 960 P.2d 239 (1998). CIG, 279 Kan. at 867, 112 P.3d 138. The CIG decision then discussed the basic framework of the dormant Commerce Clause analysis that applied in that case, which dealt with the constitutionality of a Kansas property tax statute that differentiated between intracounty natural gas gathering systems and interstate and intercounty systems. Because of the tax issue that was present in that case, the court applied the test stated by the United States Supreme Court in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 279, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977). That test is unique to cases dealing with taxes, and several prongs of the Complete Auto test have no application to this case, i.e., that the tax be applied to an activity with a substantial nexus to the state, the tax be fairly apportioned, and the tax be related to services provided in the state. The third prong of the Complete Auto test, however, is common to other strands of a dormant Commerce Clause analysis. That prong, which is the focus of Kanza's argument, requires that the tax not discriminate against interstate commerce. CIG, 279 Kan. at 870, 112 P.3d 138 (citing Complete Auto, 430 U.S. at 279, 97 S.Ct. 1076). The discrimination test was more recently discussed by the United States Supreme Court in Department of Revenue of Kentucky v. Davis, 553 U.S. 328, 338, 128 S.Ct. 1801, 170 L.Ed.2d 685 (2008). In that decision, the Court explained that alleged violations of the dormant Commerce Clause are subject to a two-step inquiry. First, the court asks whether the law discriminates on its face against interstate commerce. A discriminatory law is `virtually per se invalid,' [citations omitted] and will survive only if it `advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.' [Citations omitted.] Davis, 553 U.S. at 338, 128 S.Ct. 1801. The second step applies if the law does not discriminate for a forbidden purpose. In this step, the court engages in a balancing test as set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Davis, 553 U.S. at 338-39, 128 S.Ct. 1801. Here, Kanza does not cite Pike or argue for Pike scrutiny. Nor does Kanza raise any other strand of the dormant Commerce Clause analysis, such as the implications arising because the State of Kansas or local units of government are market participants operating competing recreational trails. See Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 813-14, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976). Issues not briefed by an appellant are deemed waived and abandoned. Kingsley v. Kansas Dept. of Revenue, 288 Kan. 390, 395, 204 P.3d 562 (2009). Consequently, we will not address these other strands of analysis or the Pike test, and our analysis will be limited to the first step of the analysis, i.e., whether the law is discriminatory in a manner prohibited by the dormant Commerce Clause. As discussed in CIG, the threshold consideration is whether a state statute differentiates between similarly situated entities. Generally, entities are similarly situated if they serve the same market. The parties agree that there are trail operators in the same market who are not covered by the KRTA. The next consideration is whether the regulatory measures discriminate against out-of-state competitors in that market. CIG, 279 Kan. at 867-68, 112 P.3d 138. This discrimination can be found (1) from the face of a state law; (2) from the purposes of those enacting the law, i.e., a discriminatory intent, or (3) from its effect. CIG, 279 Kan. at 871, 112 P.3d 138 (citing Amerada Hess Corp. v. N.J. Taxation Div., 490 U.S. 66, 75, 109 S.Ct. 1617, 104 L.Ed.2d 58 [1989]). Kanza argues that the KRTA discriminates in each of the three ways.