Court Opinion

ID: 9429624
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:27:23.118334+00
Date Added: 2024-06-11T17:23:20.554937
License: Public Domain

Justice Rehnquist,
with whom Justice O’Connor joins,
dissenting.
In my view, the line of distinction drawn in the plurality opinion between the State as market participant and the *102State as market regulator is both artificial and unconvincing. The plurality draws this line “simply as a matter of intuition,” ante, at 98, but then seeks to bolster its intuition through a series of remarks more appropriate to antitrust law than to the Commerce Clause.* For example, the plurality complains that the State is using its “leverage” in the timber market to distort consumer choice in the timber-processing market, ibid., a classic example of a tying arrangement. See, e. g., United States Steel Corp. v. Fortner Enterprises, Inc., 429 U. S. 610, 619-621 (1977). And the plurality cites the common-law doctrine of restraints on alienation and the antitrust limits on vertical restraints in dismissing the State’s claim that it could accomplish exactly the same result in other ways. Ante, at 98-99.
Perhaps the State’s actions do raise antitrust problems. But what the plurality overlooks is that the antitrust laws apply to a State only when it is acting as a market participant. See, e. g., Jefferson County Pharmaceutical Assn., Inc. v. Abbott Laboratories, 460 U. S. 150, 154 (1988) (state action immunity “does not apply where a State has chosen to compete in the private retail market”). When the State acts as a market regulator, it is immune from antitrust scrutiny. See Parker v. Brown, 317 U. S. 341, 350-352 (1943). Of course, the line of distinction in cases under the Commerce Clause need not necessarily parallel the line drawn in anti*103trust law. But the plurality can hardly justify placing Alaska in the market-regulator category, in this Commerce Clause case, by relying on antitrust cases that are relevant only if the State is a market participant.
The contractual term at issue here no more transforms Alaska’s sale of timber into “regulation” of the processing industry than the resident-hiring preference imposed by the city of Boston in White v. Massachusetts Council of Construction Employers, Inc., 460 U. S. 204 (1983), constituted regulation of the construction industry. Alaska is merely paying the buyer of the timber indirectly, by means of a reduced price, to hire Alaska residents to process the timber. Under existing precedent, the State could accomplish that same result in any number of ways. For example, the State could choose to sell its timber only to those companies that maintain active primary-processing plants in Alaska. Reeves, Inc. v. Stake, 447 U. S. 429 (1980). Or the State could directly subsidize the primary-processing industry within the State. Hughes v. Alexandria Scrap Corp., 426 U. S. 794 (1976). The State could even pay to have the logs processed and then enter the market only to sell processed logs. See ante, at 99. It seems to me unduly formalistic to conclude that the one path chosen by the State as best suited to promote its concerns is the path forbidden it by the Commerce Clause.
For these reasons, I would affirm the judgment of the Court of Appeals.

The plurality does offer one other reason for its demarcation of the boundary between these two concepts.
“[D]ownstream restrictions have a greater regulatory effect than do limitations on the immediate transaction. Instead of merely choosing its own trading partners, the State is attempting to govern the private, separate economic relationships of its trading partners; that is, it restricts the post-purchase activity of the purchaser, rather than merely the purchasing activity.” Ante, at 99.
But, of course, this is not a “reason” at all, but merely a restatement of the conclusion. The line between participation and regulation is what we are trying to determine. To invoke that very distinction in support of the line drawn is merely to fall back again on intuition.