Opinion ID: 3009773
Heading Depth: 3
Heading Rank: 1

Heading: Triggering Strict Scrutiny: Discriminatory

Text: Purpose or Effect A regulation serving a protectionist purpose is obviously invalid since a discriminatory purpose is a fortiori illegitimate. See Philadelphia v. New Jersey, 437 U.S. at 624, 98 S. Ct. at 2535 (characterizing a statute with a protectionist purpose as virtually per se invalid). More benign purposes, however, do not immunize the statute from the challenge since the evil of protectionism can reside in legislative means as well as legislative ends. Id. at 626, 2536; see also Fort Gratiot Landfill v. Michigan Department of Natural Resources, 112 S. Ct. 2019, 2024 (1992) (invalidating legislation with legitimate goals since even valid purposes may not be accomplished by the illegitimate means of isolating [the county] from the national economy). If a statute's purpose is not manifestly discriminatory, the court must determine how directly [the statute] burdens interstate commerce and how evenhandedly it impacts interstate and intrastate commerce. Stephen D. DeVito, Jr. Trucking v. RISWMC, 770 F. Supp. 775, 781 (D.R.I. 1991); see also Carbone, 104 S. Ct. at 1684 (courts look beyond explicit terms of statute to examine its practical purpose or effect); 21 Hughes, 441 U.S. at 336, 99 S. Ct. at 1736; Taylor, 477 U.S. at 138, 106 S. Ct. at 2447; Fort Gratiot, 112 S. Ct. at 2023-25 (either purpose or effect can trigger strict scrutiny); Norfolk S. Corp. v. Oberly, 822 F.2d 388, 406 (3d Cir. 1987). This court has expressed some doubt whether a showing of discriminatory effect alone could suffice. See Oberly, 822 F.2d at 400-01 n.18. But Carbone and the entire line of recent Supreme Court cases have clarified that either purpose or effect will trigger strict scrutiny analysis. We also note that where the showing of effect is weak, demonstrating discriminatory purpose buttresses the case. As we explained, the purpose of the dormant Commerce Clause is to prevent [s]tate and local governments [from using] their regulatory power to favor local enterprise by prohibiting patronage of out-of-state competitors or their facilities. Carbone, 114 S. Ct. at 1684; see also H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. at 537-38 (What is ultimate is the principle that one state in its dealings with another may not place itself in a position of economic isolation.). The purpose of the dormant Commerce Clause is not to protect individual firms. In Exxon Corp. v. Maryland, 437 U.S. 117, 126, 98 S. Ct. 2207, 2214 (1978), the Supreme Court upheld a statute prohibiting a petroleum producer or refiner from operating retail service stations within the state. The Court explained: While the refiners will no longer enjoy their same status in the Maryland market, in-state independent dealers will have no competitive advantage over out-of-state dealers. The fact that the burden of a state regulation falls 22 on some interstate companies does not, by itself, establish a claim of discrimination against interstate commerce. Id. at 2214. Conversely, the one-time selection of an in-state interest does not by itself establish a discriminatory effect unless the selection confers an unreasonably long-term benefit. This Court has recently rejected attempts to characterize all legislative schemes which award business to a successful bidder as Commerce Clause violations. Atlantic Coast, 48 F.3d at 714-15. Although we recognized that regulations of public utilities (including those that require the utility to secure its capacity within the state) are now subject to the same Commerce Clause scrutiny as non-utility statutes, we found significant precedent for local government authorities to select a single service provider in the public utility context: A gas or electric utility granted a franchise to serve the needs of all residents within a local area is not ordinarily required to commit to producing its electricity or securing its natural gas supply within that area as well. Normally, both in-state and out-of-state interests may, therefore, compete equally for the franchise award and the creation of a captive consumer base does not, under these circumstances, discriminate against electricity and gas generated or produced out of state. 48 F.3d at 715. Carbone explicitly rejected the argument that a disputed statute would have to favor all in-state businesses as a group -- a statute may be invalid if it favors only a single or finite set of businesses. 114 S. Ct. at 1682-83. Consequently, 23 where a challenge is based on the alleged favoritism of a finite set of in-state interests (rather than all in-state businesses), it must be demonstrated that the ordinance actually favors the chosen in-state providers. That the ordinance requires the use of the selected facility, thus prohibiting the use of nondesignated facilities (which may be out of state), does not itself establish a Commerce Clause violation.