Opinion ID: 212854
Heading Depth: 2
Heading Rank: 3

Heading: Congressional Authorization of the Discriminatory Regulatory Scheme

Text: Finally, we consider DDOL's argument that Congress and the United States Department of Labor (USDOL) expressly approved the challenged state regulation, thus removing any objection under the dormant Commerce Clause. The District Court rejected this argument, finding DDOL's assertion that Congress's empowerment of the USDOL with `regulatory power' somehow nullifies the dormant commerce clause issue presented in this case is, at a minimum, not compelling. Tri-M Group, 705 F.Supp.2d at 343. We agree. It is well established that Congress can authorize states to impose restrictions that the dormant Commerce Clause would otherwise forbid. Cloverland I, 298 F.3d at 210 n. 13; see also Pic-A-State Pa., Inc. v. Reno, 76 F.3d 1294, 1304 (3d Cir.1996) (Congress may consent to state regulation that discriminates against interstate commerce.) (citation omitted). When Congress so chooses, state actions which it plainly authorizes are invulnerable to constitutional attack since Congress's commerce power in such instances is not dormant, but has been exercised by that body. Northeast Bancorp, Inc. v. Bd. of Gov'rs of Fed. Res. Sys., 472 U.S. 159, 174, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985); see also Life Partners, Inc. v. Morrison, 484 F.3d 284, 291 (4th Cir.2007) (Congress holds the authority to `redefine the distribution of power over interstate commerce' by `permit[ting] the states to regulate the commerce in a manner which would otherwise not be permissible.') (quoting So. Pac. Co. v. Arizona, 325 U.S. 761, 769, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945)). Importantly, however, congressional consent must be express, and is only evidenced where Congress has `affirmatively contemplate[d] otherwise invalid state legislation,' and `[w]here state or local government action is specifically authorized by Congress.' Norfolk So. Corp. v. Oberly, 822 F.2d 388, 393 (3d Cir.1987) (internal citations omitted). Because of the important role the Commerce Clause plays in protecting the free flow of interstate trade, [the Supreme] Court has exempted state statutes from the implied limitations of the Clause only when the congressional direction to do so has been `unmistakably clear.' Maine, 477 U.S. at 138-39, 106 S.Ct. 2440 (quoting Wunnicke, 467 U.S. at 91, 104 S.Ct. 2237); see also Arab African Intern. Bank v. Epstein, 10 F.3d 168, 172-73 (3d Cir.1993) (Congress must manifest its unambiguous intent before a federal statute will be read to permit or approve . . . a violation of the Commerce Clause.) (quoting Wyoming, 502 U.S. at 458, 112 S.Ct. 789). Moreover, the state has the burden of demonstrating a clear and unambiguous intent on behalf of Congress to permit the discrimination against interstate commerce. Wyoming, 502 U.S. at 458, 112 S.Ct. 789. DDOL presents the Fitzgerald Act, 29 U.S.C. § 50 et seq., as reflecting Congress's intent to remove from Commerce Clause scrutiny State regulations implemented pursuant to the Act, including the discriminatory regulations at issue here. The Act authorized and directed the Secretary of Labor to formulate and promote the furtherance of labor standards necessary to safeguard the welfare of apprentices. . . [and] to cooperate with State agencies engaged in the formulation and promotion of standards of apprenticeship. 29 U.S.C. § 50. The implementing regulations provide a detailed regulatory scheme defining apprenticeship programs and their requirements, and establish a review, approval, and registration process for proposed apprenticeship programs administered by State Apprenticeship Councils under the aegis of the United States Department of Labor. Hydrostorage, Inc. v. N. Cal. Boilermakers Local Joint Apprenticeship Comm., 891 F.2d 719, 731 (9th Cir.1989), abrogated in part on other grounds as stated in Engine Mfrs. Ass'n v. S. Coast Air Quality Maintenance Dist., 498 F.3d 1031, 1044 (9th Cir.2007). [31] While DDOL is correct that the Fitzgerald Act provides for state regulation of apprenticeship standards and authorizes the Department of Labor to cooperate with state agencies in their regulation of apprenticeship programs, DDOL failed to establish that the Act and the implementing regulations expressly authorized the states to enact apprenticeship regulations that discriminate against out-of-state interests, let alone in an unmistakably clear manner. DDOL references several of the implementing regulations, each of which relate only to eligibility for federal registration. See Hydrostorage, 891 F.2d at 731; see also Assoc. Bldrs. & Contractors v. Perry, 817 F.Supp. 49, 53 (E.D.Mich. 1992) (same). Notably, none of the referenced regulations clearly and unambiguously manifests Congress's intent to empower the State to discriminate against interstate commerce; the same may be said of the Act itself. In fact, a comparison of the cases relied upon by DDOL is instructive. In Norfolk Southern Corporation v. Oberly , the district court examined whether developmental restrictions in the Delaware Coastal Zone Act were specifically authorized under the federal Coastal Zone Management Act of 1972, 16 U.S. § 1454 et seq. 632 F.Supp. 1225, 1245 (D.Del.1986). After careful review, the court found that Congress deliberately and repeatedly spoke of `choices' to be made by the states, and expressly committed to the states the power to resolve choices among competing uses in a manner that might otherwise be subject to Commerce Clause challenge. Id. at 1248. Similarly, in Prudential Insurance Company v. Benjamin, in the context of the McCarron Act, 15 U.S.C. § 1011 et seq., the Supreme Court observed that Congress intended to declare, and in effect declared, that uniformity of regulation, and of state taxation, are not required in reference to the business of insurance. 328 U.S. 408, 431, 66 S.Ct. 1142, 90 L.Ed. 1342 (1946). Finding Congress's determination that state taxes, which in [Congress's] silence might be held invalid as discriminatory, do not place on interstate insurance business a burden which it is unable generally to bear, the Court concluded that rejection of a state tax would flout the expressly declared policies of both Congress and the state. Id. at 431, 433, 66 S.Ct. 1142. Finally, DDOL's citation to White is also inapposite, for in that instance, the federal regulations for each program affirmatively permit[ted] the type of parochial favoritism expressed in the order. 460 U.S. at 213, 103 S.Ct. 1042 (noting that the Housing and Urban Development Act of 1968 required that opportunities for training and employment be given to lower-income residents of the project area). This jurisprudence makes clear that courts will find congressional authorization to discriminate against interstate commerce only where such behavior is clearly and affirmatively contemplated by Congress, and expressly authorized in the statutory language. See Oberly, 822 F.2d at 393. The regulatory language defining eligibility for apprenticeship program registration that DDOL relies upon does not manifest in an unmistakably clear manner that Congress expressly envisioned or authorized a state to exercise its cooperative apprenticeship regulatory power to discriminate in favor of in-state parties. Accordingly, we reject DDOL's argument that the United States Secretary of Labor's recognition of the Delaware apprenticeship agency as conforming with the pertinent implementing regulations immunizes the regulation in dispute from dormant Commerce Clause review. Only Congress may authorize the States to engage in regulation that the Commerce Clause would otherwise forbid. Maine, 477 U.S. at 138, 106 S.Ct. 2440. The Fitzgerald Act did not explicitly endow the Secretary with authority to permit discrimination against interstate commerce, and DDOL provided no other basis to conclude that discriminatory regulation may be authorized by a federal agency. Because Congress did not authorize the discrimination at issue, DDOL's regulatory scheme constitutes impermissible discrimination under the dormant Commerce Clause.