Opinion ID: 796834
Heading Depth: 3
Heading Rank: 1

Heading: Clear Discrimination Against Interstate Commerce

Text: 30 A clearly discriminatory law may operate in three ways: (1) by discriminating against interstate commerce on its face, see, e.g., Granholm v. Heald, 544 U.S. 460, 466, 125 S.Ct. 1885, 161 L.Ed.2d 796 (2005) (striking down state laws restricting out-of-state wineries, but not instate ones, from selling wine directly to consumers in the state); Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 568, 571, 117 S.Ct. 1590, 137 L.Ed.2d 852 (1997) (striking down statute that denied beneficial tax treatment to entities that were conducted or operated principally for the benefit of persons who are not residents of Maine); City of Philadelphia v. New Jersey, 437 U.S. 617, 618, 629, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978) (striking down statute prohibiting the importation of most waste which originated or was collected outside the territorial limits of the State); (2) by harboring a discriminatory purpose, see, e.g., Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 352-53, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977) (striking down facially neutral statute prohibiting state grading from appearing on apple boxes and noting evidence that it was intended to discriminate against Washington apples carrying state grades); Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 269, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984) (striking down facially neutral statute exempting certain locally-produced alcoholic beverages from the excise tax because legislative history showed it was intended to foster local industry); or (3) by discriminating in its effect, see, e.g., W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186, 194, 114 S.Ct. 2205, 129 L.Ed.2d 157 (1994) (striking down facially neutral law imposing assessment on all milk sold to Massachusetts retailers because its effect on in-state producers was entirely offset by the subsidy provided exclusively to in-state dairy farmers). In our view, the Ferry Law does not offend any of these categories. 31 Initially, the Ferry Law does not facially discriminate against interstate commerce because it is indifferent to the point of origin, destination, and ownership of the restricted types of ferries and applies equally to both in-state and out-of-state ferry operators. Nor is there evidence showing that the Ferry Law was enacted for the purpose of discriminating against out-of-state interests. The record more than supports the District Court's conclusion that the law was not motivated by a discriminatory animus but by the need to address a growing traffic problem in the Town. Town of E. Hampton, 406 F.Supp.2d at 239. As set forth in the law's Findings and Objectives section, [t]he revisions contained in this Local Law are intended to improve and strengthen the Town's zoning regulations as they pertain to ferries, and to thereby reduce the potential traffic and other impacts of such uses. The minutes of the Town Board's meetings and correspondence among Town officials confirm this conclusion since they do not evince an improper purpose and relate primarily to the stated salutary purposes of the law. 32 Cross Sound places great emphasis on the references in the law's Findings and Objectives section and internal Town memoranda to Connecticut casinos and the need to curb additional traffic flowing from them. These references, however, do not establish a discriminatory purpose behind the law when they are viewed in light of myriad studies, reports, and conferences indicating that the traffic problem has been increasing since at least 1966, before these casinos even existed, and attributing the problem to numerous other sources, including tourism and the presence of seasonal homes. Aside from simply reflecting the reality of the Town's traffic situation, the observation that congestion would result from new casino ferry service furnishes additional support for the Town's regulatory measure. Moreover, the Transportation Element raises substantially similar concerns about the potential traffic problem stemming from proposed ferry service from New York City to the Town, suggesting that in-state operators would be restricted by the Ferry Law for the same reasons as operators from Connecticut or anywhere else. 33 In addition, although the Ferry Law distinguishes between ferries and excursion boats, laws that draw distinctions between entities that are not competitors do not discriminate for purposes of the dormant Commerce Clause, because in the absence of actual or prospective competition between the supposedly favored and disfavored entities in a single market there can be no local preference. Gen. Motors Corp., 519 U.S. at 300, 117 S.Ct. 811. Since ferries and excursion boats service different industries, eliminating the distinction in their treatment would not necessarily serve the objective of preserving a national market undisturbed by preferential advantages. 34 Finally, the Ferry Law is not discriminatory in its effect. The law generally prohibits the operation of vehicular and high-speed ferries in the Town and requires any new ferry entering the Town to obtain a docking permit from the Board. Because these restrictions apply equally to all ferry operators, the Ferry Law lacks an important feature common to those regulations that previously have been found to violate the dormant Commerce Clause — it does not confer a competitive advantage upon local business vis-a-vis out-of-state competitors. See, e.g., C & A Carbone, Inc. v. Town of Clarkstown, N.Y., 511 U.S. 383, 392, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994) (finding unconstitutional local ordinance requiring that solid waste processed or handled within town be processed or handled at town's transfer station); South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 84, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984) (finding unconstitutional state law requiring all timber to be processed within the state before export); Dean Milk Co. v. City of Madison, 340 U.S. 349, 353, 71 S.Ct. 295, 95 L.Ed. 329 (1951) (finding unconstitutional city law requiring milk to be pasteurized within five miles of the city); Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1, 13, 49 S.Ct. 1, 73 L.Ed. 147 (1928) (finding unconstitutional state law requiring that local processors remove shrimp heads and hulls before export); Minnesota v. Barber, 136 U.S. 313, 329-30, 10 S.Ct. 862, 34 L.Ed. 455 (1890) (finding unconstitutional state law requiring meat sold within state to be examined by state inspector). Unlike these and similar regulations, the Ferry Law does not give any advantage to local businesses at the expense of out-of-state competitors. That the Ferry Law does not discriminate on the basis of geography is amply demonstrated by the fact that even local businesses operating within the Town itself challenge the validity of this law. See Francarl Realty Corp. v. Town of E. Hampton, No. 05 Civ. 1792 (E.D.N.Y. Sept. 14, 2006). Accordingly, we discern no clear discrimination in this case.