Opinion ID: 2801022
Heading Depth: 1
Heading Rank: 3

Heading: Challenge Under the Dormant Commerce Clause.

Text: Dolphin asserts that the Board understands Iowa Code chapter 499A to impose a residency requirement, namely, that a majority of the initial members must be Iowa residents and that this provision violates the dormant Commerce Clause. Dolphin cites cases that stand for the general proposition that if a statute discriminates against interstate 18 commerce, it may be constitutionally infirm. See Brown-Foreman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 578–79, 106 S. Ct. 2080, 2084, 90 L. Ed. 2d 552, 559 (1986); Smithfield Foods, Inc. v. Miller, 367 F.3d 1061, 1064–65 (8th Cir. 2004); S.D. Farm Bureau, Inc. v. Hazeltine, 340 F.3d 583, 592–93 (8th Cir. 2003). Dolphin urges us to avoid an interpretation that gives rise to potential constitutional infirmities. See Simmons v. State Pub. Defender, 791 N.W.2d 69, 88 (Iowa 2010). We do not base our decision, however, on the citizenship provisions of Iowa Code section 499A.1(1) or any “residency requirement.” Cf. Jones v. Gale, 470 F.3d 1261, 1269 (8th Cir. 2006) (finding prohibition of corporations from farming in Nebraska invalid when there was evidence of discriminatory intent against out-of-state corporations). Instead, we base our decision on our interpretation of the “organize themselves” provision of the statute. Iowa Code § 499A.1(1). While Dolphin in its briefing challenges any residency requirement as violating the commerce clause, our “organize themselves” interpretation does not require residency. In Krupp, we expressly stated there is no requirement that members occupy their units. 801 N.W.2d at 15–16. We have held, however, that organizers must have some skin in the game when they organize residential cooperatives. No party claims that such an interpretation runs afoul of the dormant Commerce Clause, and in any event, such a challenge does not discriminate against interstate commerce and would thus lack merit under dormant Commerce Clause analysis. 19