Court Opinion

ID: 9467103
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:38:37.591152+00
Date Added: 2024-06-11T17:40:09.759275
License: Public Domain

RANDALL, Circuit Judge,
dissenting:
Because I believe that the Supreme Court’s decisions in Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976), and Reeves, Inc. v. Stake, - U.S. -, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980), dictate a result contrary to that reached by the majority opinion in this case, I respectfully dissent.
As the district court below pointed out at the close of the evidentiary hearing on the merits of this case, “we need to keep in mind what we are talking about.” 1 Unlike *1087the more typical Commerce Clause case, this case does not involve a State’s regulation of an entire private industry; nor has the State prohibited or limited the flow of trade across its borders. We must keep in mind that we are not dealing with regulation of a “market” in the abstract economic sense: Georgia has not sought to regulate the interstate market for the sale of produce generally. Rather, whatever “regulation” is involved in this case relates only to something that is as concrete as an economic market is abstract-a piece of real estate, owned and operated largely at the expense of the State’s tax revenues, which, for a fee, offers private buyers and sellers of farm produce a physical marketplace of a particular type and quality. The challenged regulations do not even regulate the allocation of space at physical marketplaces generally, but instead reach only those owned and operated by the State.2
Rather, the regulations challenged in this lawsuit amount to no more than selective dealing by the State in its commercial leasing of the choicest spaces at the marketplace owned and operated by the State. For years, when this service was not in such great demand, there was no need to enforce any regulation in allocating the choicest spaces other than a “first-come, first-served” rule. But now, because of changes in the economic market for produce, there are not enough choice spaces in this particular physical marketplace to go around. In other words, the demand for this type of marketplace space at these prices has surpassed the supply, as happened in the cement industry in Reeves, - U.S. at -, 100 S.Ct. at 2275. Indeed, even when Georgia residents are preferred to producers from other states, there are not enough choice spaces to satisfy the Georgia producers.
The majority opinion considers only briefly the threshold-and in my view, dispositive-question of whether this is “the kind of action [by a-state] with which the Commerce Clause is concerned.” Hughes v. Alexandria Scrap Corp., supra, 426 U.S. at 805, 96 S.Ct. at 2495. The majority opinion describes the State’s role in the operation of the Columbus Farmers Market as “hybrid,” noting first that the marketplace is owned and operated at a net loss by the State. But the majority concludes that because the State offers a commercial service rather than actually participating in the buying and selling of goods, the State is acting primarily as a “regulator” rather than a “participant” in the produce market.
I cannot find this distinction in the Supreme Court precedents cited by the majority opinion. The type of activity that was distinguished by the Supreme Court in Alexandria Scrap, 426 U.S. at 805-06, 96 S.Ct. at 2495-96, and in Reeves, - U.S. -, 100 S.Ct. at 2275 n. 4, involved states’ attempts to prevent privately owned articles of trade from being shipped and sold in interstate commerce-the traditional types of Commerce Clause cases. As the Supreme Court itself noted in describing the cases it was distinguishing in Alexandria Scrap, “[t]he common thread in these cases is that the State interfered with the natural functioning of the interstate market either through prohibition or through burdensome regulation.” 426 U.S. at 806, 96 S.Ct. at 2496 (emphasis added). I think that the majority has failed to demonstrate how the case at bar fits within the line of cases distinguished in Alexandria Scrap and Reeves, rather than being controlled by Alexandria Scrap and Reeves themselves.
*1088The majority states that the State’s “essential role is that of market regulator.” Supra at 1083. If by that the majority means that the State is regulating that portion of the interstate produce market (in the abstract, economic sense of that word) that goes on within Georgia’s boundaries, I think that the facts do not support that assertion. If the majority means instead only that the State’s essential role is- that of regulator of this physical marketplace, I fail to see how that takes this case out of the rationale of Alexandria Scrap and Reeves.3 In this case, the State of Georgia has entered into the economic market for the provision of physical marketplaces. It no more seeks to regulate the market for marketplace space than it does the market for farm produce; rather, it is a participant in the market for marketplace space. It is selling a service rather than a good. It does so at a net loss, and that loss is made up through tax revenues. For this reason, as part of its proprietary role in regulating its own operations, the State has chosen to allocate selectively its commercial service, awarding the choicest spaces to its citizens, who indirectly bear the deficits in the operation of the marketplace through their tax dollars. This should end Commerce Clause analysis of the State’s actions: “ ‘Nothing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others.’ ” Reeves, supra, - U.S. at -, 100 S.Ct. at 2277 (quoting Alexandria Scrap, 426 U.S. at 810, 96 S.Ct. at 2498). Following Reeves and Alexandria Scrap, I would hold that the challenged regulation does not offend the Commerce Clause.
Because I would overturn the district court’s Commerce Clause holding, I must continue to a brief analysis of the district court’s alternate ground for granting relief, the Equal Protection Clause. My conclusion regarding the Commerce Clause, however, largely dictates the outcome of the equal protection analysis. The guarantee of equal protection under the United States Constitution is not a source of substantive rights or liberties, but is rather a right to be free from invidious discrimination in statutory classifications and other governmental activity. Where the statutory classification complained of does not impinge on a right or liberty protected by the Constitution, the validity of the classification must be sustained unless the classification rests on grounds wholly irrelevant to the achievement of any legitimate governmental objective. See, e. g., Harris v. McRae, - U.S. -, -, 100 S.Ct. 2671, 2691, 65 L.Ed.2d 784 (1980); McGowan v. Maryland, 366 U.S. 420, 425-26, 81 S.Ct. 1101, 1104-05, 6 L.Ed.2d 393 (1961). Since I would hold that the Commerce Clause is not violated by the challenged regulations in this case, the only question is whether the regulation bears a rational relationship to a legitimate state goal. As the Supreme Court said in rejecting the equal protection claim of the plaintiff in Alexandria Scrap,
[i]t is well established, however, that a statutory classification impinging upon no fundamental interest, and especially one dealing only with economic matters, need not be drawn so as to fit with precision the legitimate purposes animating it. That [the State] might have furthered its underlying purpose more artfully, more directly, or more completely, does not warrant a conclusion that the method it chose is unconstitutional.
426 U.S. at 813, 96 S.Ct. at 2499 (citations omitted). The preference for Georgia producers bears a rational relationship to the legitimate state goal of tailoring its state-subsidized participation in the market for marketplace space most directly to benefit state taxpayers. That is all the Equal Pro*1089tection Clause requires in this situation. See id. at 814, 96 S.Ct. at 2500. I would therefore hold that the challenged regulation does not deny Smith equal protection.
For the foregoing reasons, I would reverse both holdings of the district court below. With apologies to the district judge for stealing his prose while urging that he be reversed, these potatoes and tomatoes do not rise to constitutional proportions.

. The district court’s remarks at the close of the hearing bear repeating:
Well, as I previously noted, what we have involved here is not any effort on the part of one State to prevent citizens of another State from coming into the State. No effort to prevent citizens of another State from doing business in the State. We have not got anything like that. As I said it has been made to appear from some sources that that is what it’s all about but that is obviously not what it’s all about.... We are just dealing with the way a State decides to regulate the use of the tax supported Farmers Market. That’s all we are doing.
Of course, it’s got to where everything these days rises to constitutional proportions. Doesn’t make any difference whether its potatoes or tomatoes, everything rises to constitutional proportions. But, all I’m saying is, we need to keep in mind what we are talking about.
Transcript at 95.
I will hereinafter use the word “market” to refer only to the sort of abstract construct used by economists to describe the operation of the *1087forces of supply and demand on the aggregate sales of a good or service (e. g„ the interstate market comprising sales of all farm produce; or, the market for commercial rental space in Georgia). I will use the word “marketplace” to describe the physical property where individual sales of goods take place (e. g., the Columbus State Farmers Market).

. Even these regulations, limited as they are in scope, demonstrate significant evenhandedness: the State has not issued a complete prohibition of out of state sellers at its state-owned marketplaces; though the State requires a license of both in -state and out of state sellers, in neither instance does it charge a fee for the license; the State makes no distinctions among any sellers based on the quality of their produce; and the entry fee it requires of all producers is keyed to the size of each seller’s truck, without regard to whether the seller is from Georgia or elsewhere.

. Surely the State of South Dakota had regulations governing the operations of its state-owned cement plant, and the incidental effect of those regulations upon interstate commerce was much more drastic than in this case, since the South Dakota regulations effectively stopped goods from even crossing state borders. Yet according to Reeves, that did not mean that South Dakota was regulating interstate commerce, or the market for concrete. Rather, South Dakota was acting primarily as a market participant-a seller of goods.