Constitutional Law Outline I.

Levy

Fall 2011

The Supreme Court’s Authority A. The Power of Judicial Review a. Marbury v. Madison: It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret the rule. If two laws conflict with each other, the Court must decide on the operation of each. If courts are to regard the Constitution, and the Constitution is superior to any ordinary act of the legislature, the Constitution, and not such ordinary act, must govern the case to which they both apply. B. Supreme Court Authority to Review State Court Judgments a. Fletcher v. Peck: held that the Court could review acts of state legislatures and declare them unconstitutional. b. Martin v. Hunter’s Lessee: Established US Supreme court’s power to review and overturn state court’s interpretation of Federal law. i. Supreme court is constitutionally authorized to review the constitutionality of state court decisions. c. Cohens v. Virginia: the Court again affirmed its power to review state court interpretations of federal law. d. Article III, § 1 – “The judicial power of the United States shall be vested in one Supreme Court, and such inferior courts as the Congress may from time to time ordain and establish.” e. Article III, §2 – “The judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority f. Article III, §2, Clause 2: “In all other Cases before mentioned, the supreme Court shall have appellate jurisdiction, both as to Law and Fact, with such exceptions, and under such Regulations as Congress shall make.”

C. Judicial Exclusivity in Constitutional Interpretation a. Cooper v. Aaron: The United States Constitution is the supreme law of the land per the Supremacy Clause of Article VI. The Supreme Court’s interpretation of the Fourteenth Amendment in Brown v. Board of Education case is therefore binding on the states and state officials. b. Political Restraints on the Supreme Court: i. Judicial Selection: President nominates Justices to the S.Ct. but the appointment is not effective without the advice and consent of the Senate Article II, Sec 2, cl 2. ii. Impeachment: Art. III, sec 1- presumptive life tenure, Art. II, sec 4-any officer of the US including judges may be removed from office on
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impeachment for, and conviction of, Treason, Bribery, or other High Crimes and Misdemeanors. iii. Court-packing: Congress sets the size and budget for the Court. iv. Court-stripping: Art. III, Sec. 2- Congress has the power to make exceptions to the S.Ct.’s appellate jurisdiction. “Exception” clause. 1. Ex Parte McCardle: held that Congress had power to remove the Court’s appellate jurisdiction regarding habeas appeals conferred by an 1867 Act. 2. US v. Klein: But congress does not have unlimited power to tamper with the Supreme Court’s appellate jurisdiction. a. Any jurisdictional limitation must be neutral- congress may not decide the merits of a case under the guise of limiting jurisdiction. D. Constitutional and Prudential Limits on Constitutional Adjudication: The case or Controversy Requirements a. Justiciability: In order for a case to be hear by the federal courts, plaintiff must get past a series of procedural obstacles called requirements for justiciability: i. Federal courts cannot issue advisory opinions ii. Federal courts can only hear a case when a plaintiff has standing iii. Federal courts cannot decide political questions iv. Federal courts cannot decide issues that are premature-too early-not sufficiently ripe. v. Federal courts cannot decide issues that are no longer viable- issues that are moot. b. Article III, sec. 2, cl 1= the judicial power shall extend to a list of enumerated cases and controversies. (implies that it cannot cover anything otherwise) i. To qualify as a case or controversy- a matter must be concrete and nonhypothetical, as affirmed by longstanding federal practice barring issuance of merely advisory opinions. ii. Must involve parties, be an actual, personal, concrete, constitutional and prudential injury. iii. Must not be too late or too soon (moot or ripe doctrine). c. Advisory Opinions

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i. Advisory opinions: opinions on the legality of executive or legislative action that do not involve an actual case. ii. Advisory opinions and the political branches: some state supreme cts are authorized to issue advisory opinions to the governor or house of legislature. iii. Advisory opinions and judicial review: Rescue Army v. Municipal Court of Los Angeles- refused to issue advisory opinions-“the most important and delicate of the Courts function compels it. “ iv. BUT declaratory judgments are sometimes allowed when the court is requested to state what legal effect would be of proposed conduct by one or both of the parties. 1. Must be hypothetical and abstract! d. Standing i. The plaintiff must have a significant stake in the controversy. ii. Frothingham v. Mellon: first standing decision. Plaintiff lacked standing in this case. Plaintiff goes to federal court, suing the then us secretary of treasury: an order to stop the secretary from spending money under federal law. Supreme Court ruled against plaintiff because she lacked standing. She could not identify injury as a taxpayer. The fact that a person’s federal taxes are used to fund an unconstitutional or illegal government program is not a sufficient connection with the government action to confer standing on the plaintiff. iii. EXCEPTION- Flast v. Cohen: Taxpayers generally do not have standing based on that status alone subject to a limited exception; that recognizes such taxpayer standing when the taxpayer attacks expenditure under the Taxing and Spending Clause which violates the Establishment clause. Must allege that you are a federal taxpayer + Must show relationship between status as taxpayer and particular law you are challenging. 1. Tightly limited- applies only to congressional spending that violates the Establishment clause (not even to executive branch spending that might violate the clause: Hein v. Freedom from Religion Foundation) iv. Sierra Club v. Morton: standing denied because three plaintiffs did not allege that they were in fact in the Canoe, been there, wanted it to remain pristine, and planned to return there. Must show personal injury- can be aesthetic but not economic. v. Lujan v. Defenders of Wildlife: Constitutional minimum required 1) plaintiffs suffered injury-in-fact (concrete and particular) that 2) was

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caused by the actions of the defendant and not some third party; and 3) that a decision favorable to the plaintiff will redress that harm. vi. Post Lujan Cases: 1. BENNETT v. SPEAR held that the ‘‘zone of interests’’ test is purely prudential, and that prudential standing obstacles may always be negated by express action of Congress. 2. VERMONT AGENCY OF NATURAL RESOURCES v. UNITED STATES addressed the issue of suits under the federal False Claims Act, which permits a private party (the ‘‘relator’’) to sue fraudulent government contractors in the name of the federal government. Where the government’s alleged injury-in-fact would meet Article III requirements, the Congress could legislatively assign the claim for that injury to a private plaintiff, who would then have standing according to ‘‘the doctrine that the assignee of a claim has standing to assert the injury in fact suffered by the assignor”. 3. RAINES v. BYRD involved a challenge to the constitutionality of the Line Item Veto Act of 1996 by four Senators and two Congressmen who had voted against its passage in the 104th Congress. Court held that the legislators ‘‘have no standing to bring this suit”. 4. FEC v. AKINS held that a group of voters had standing to challenge the failure of the Federal Election Commission to treat the American Israel Public Affairs Committee (AIPAC) as a ‘‘political committee’’ subject to certain reporting and disclosure requirements under federal election law, and to seek information about AIPAC’s membership that they claimed would help them evaluate candidates for public office who had received AIPAC support. 5. DEPT. OF COMMERCE v.US HOUSE OF REP Ct never finds HOR have standing…however some other plaintiffs did (states, state residents). 6. HEIN v. FREDOM FROM RELIGIOUS FOUNDATION limited F last to cases which plaintiffs are challenging “exercises of congressional power based on the taxing and spending clause” under specific constitutional limits to those congressional powers, such as the establishment clause. vii. Massachusetts v. Environmental Protection Agency : held that the State of Massachusetts had standing to challenge the EPA’s decision not to regulate emissions of certain greenhouse gases, including carbon dioxide,

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alleged to contribute to global warming because Mass. was acting as a sovereign state protecting interests of its citizens. 1. When the suit is brought by a state, injury in fact and causation requirements are probably interpreted a bit less stringent. e. The constitutional and prudential elements of standing i. Personal injury: Lujan- requirements are personal injury, causation, and redressibility. Personal injury must be concrete, real, and imminent. 1. The harm does not have to be economic in nature - can be esthetic and environmental. 2. If not already suffered, it must be concrete and imminent. 3. Must be remedied by a favorable court decision. 4. Harm suffered or will be suffered has to be individuated. It cannot be suffered by every citizen, or even taxpayer. However, it can be suffered by a large number of people. ii. Causation: Causation requirement puts burden on a plaintiff to show that the harm is fairly traceable to the government. 1. Allen v. Wright- Injury alleged must be fairly traceable to government conduct. 2. The injury would not have occurred unless the challenged action had taken place. iii. Redressability: Redressability focuses on remedy, causation focuses on liability. Note that partial redress is sufficient (Massachusetts case). No need to allege that their harms will be eliminated (reduced is sufficient). iv. Prudential standing doctrines: In addition to the 3 requirements, the Court imposed prudential limits on1. Third party standing: A plaintiff must assert his claim to relief on the legal rights or interests if third parties. Court generally restricts standing to the parties directly injured rather than allowing 3rd parties, no matter how sympathetic, to assert their claims vicariously. a. Exception: Craig v. Boren- sex discrimination, state law imposed higher age threshold on male beer buyers. Standing is more likely allowed if the relationship is closer and the identity of interest is greater etc.

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2. Generalized grievance: Interest is shared with millions of others is comparatively minute and indeterminable. Court does not resolve generalized grievances. 3. Suits outside a law’s zone of interest: interests of the claiming party must be within the zone interest of the agency. v. Congressional power to confer standing: Statute should be sufficiently specific about the nature of the interest and the injury. vi. Legislative standing: Legislators have standing to claim something to which they are personally entitled, such as their seat in the house or senate, or that they have been unfairly singled out for special treatment. f. Mootness and Ripeness i. Mootness- requires that the actual controversy must be extant at all stages of review, not at the time is filed . Art. III requires dismissal of a case when, because of changes, the court’s determination of the legal issue cannot have any practical effect in achieving the desired result. But there are exceptions to the doctrine: 1. voluntary cessation of the allegedly illegal conduct; 2. unsettled collateral consequences; 3. There is a reasonable likelihood that the constitutional issue is “capable of repetition, yet evading review.” A different person might be injured in the same way by the defendant Roe v. Wade ii. Ripeness 1. Typical problems of contingencies and uncertainties. The Art. III requirement of ripeness requires that there be present injury or an imminent threat of injury. In determining if a case is ripe, consider the effect of delay on plaintiffs, the effect of judicial intervention on administrative actors, and whether courts would benefit from the delay. 2. Even if jurisdiction is technically present, judicial self-restraint may dictate dismissal of issues as premature and abstract. iii. Discretionary Abstention 1. Vagueness- If a state statute is capable of a narrow saving construction, federal courts should exercise restraint and abstain from decisions on constitutional issues. 2. Pending State Proceedings-Absent a showing of bad faith harassment, a federal court should abstain in a suit seeking declaratory or injunctive relief if state criminal or analogous civil proceedings are pending.

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g. Political questions i. Political questions, which are non-justiciable, have their origin in classic, functional, and prudential considerations. 1. Constitutional commitment to another branch; 2. lack of judicial resources and capabilities for deciding the case; 3. Prudential or policy considerations relating to the proper use of judicial power. ii. Adequate and Independent State Grounds: Where adequate and independent substantive or procedural state grounds for a lower court decision clearly exist, the Supreme Court will decline to exercise jurisdiction. 1. The state procedural rule must at least meet the requirement of fundamental fairness. iii. Marbury questions, in their political nature, which are, by the constitution and laws, submitted to the executive can never be made in this court. Two strands of modern political question doctrine 1) judicial interpretation 2) judicial discretion. iv. Issues dealing with foreign policy or defense matters present classic political questions h. Baker v. Carr: Held that the Supreme Court does not jurisdiction over questions of legislative apportionment. The Nation and the States in the Federal System A. Federal Immunity From State Taxation a. McCulloch v. Maryland: held that Congress had the power to incorporate the bank and that Maryland could not tax instruments of the national government employed in the execution of constitutional powers. Congress possessed unenumerated powers not explicitly outlined in the Constitution. Marshall also held that while the states retained the power of taxation, "the constitution and the laws made in pursuance thereof are supreme. . .they control the constitution and laws of the respective states, and cannot be controlled by them." i. By the doctrine of implied powers, the federal government may validly exercise power that is ancillary to one of the powers explicitly listed in the Constitution, as long as it does not conflict with specific constitutional prohibition. ii. This is the first case that made an important interpretation of the N&P clause. b. Supremacy and Police Power: The Supremacy Clause immunizes activities of the federal government from state regulation. Yet states may regulate, to some extent, private parties who work for the United States or those who do business with the federal government.
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B. The Background and Meaning of MCulloch a. McCullough’s two holdings/tests i. Two tests: Means and ends test- Congress’ own judgment deserved deference so long as it adopted means which tended directly to the execution of delegated powers or were appropriate and plainly adapted to achieving legitimate ends. Congress’ power to incorporate must be rationally related to one or more enumerated powers. If this is met, then questions of degree of necessity is something the Congress shall decide. (political question). Pre-text- The end must be legitimate. Must be done in furtherance of the purposes of the enumerated power. If it is not within the scope of legitimate purpose then it will be striked down. ii. Maryland lacked the power to tax national bank. This was an inference from the structures and relationships created by the constitution.  The act chartering the national bank was valid because it bore a reasonable relationship to various constitutionally-enumerated powers of the government. iii. Reasoning relied on the destructive consequences of the power of taxation C. Reserved Powers a. The Tenth Amendment provides the support for those who argue for a more expansive state power. b. Police power refers to the state power to legislate to protect the health, safety and welfare of its citizens c. U.S. Term Limits, Inc. v. Thorton: i. The Court articulated different visions of the Tenth Amendment. Five justices argued that the Tenth Amendment reserved to the states only powers they possessed before the Constitution was created. Four justices contended that the states retained all power not denied them ii. The Constitution prohibits States from adopting Congressional qualifications in addition to those enumerated in the Constitution. This would undermine the uniformity and the national character that the framers envisioned and sought to ensure. D. Term Limits and McCulloch a. Majority view: states have no reserved powers over the composition or operation of the federal government, because power may not be reserved over what does not exist yet. b. Dissent: the states have all powers, including powers with respect to activities of the federal government except those the constitution withholds from them… either directly or by necessary implication E. Remember: there is no general federal police power! If the fact pattern tells you that Congress is doing something, be sure it falls within one of the enumerated powers. i. Once you identified an enumerated power, invoke the necessary and proper clause. Congress may use any means that is:  Rationally related to the exercise of the enumerated power AND  Not specifically forbidden by the constitution.

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ii. The clause is VERY broadly construed to give Congress lots of authority to choose the means with which to carry out enumerated power. US. v. Comstock F. Sources of Congressional Power

The Commerce Power and Its Federalism-Based Limits A. Article I §8 cl. 3 granted the Congress the power to “regulate commerce with foreign nations, and among the several states, and with the Indian tribes”. The central purpose of the grant was to suppress the “interfering and unneighborly regulations which if not restrained by national control would prove to be ever more “serious sources of animosity and discord. B. The Commerce Power Before the New Deal (before 1933) a. Gibbons v. Odgen Held: Congress can regulate all interstate commerce under the Commerce Clause (broad interpretation) 1. “Commerce” extended beyond navigation to include commercial intercourse. 2. “Regulate” involved the power to prescribe the rule by which commerce could be governed. 3. “Among the states” did not include “that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or effect other States.” Implicitly, it did include commerce which affected another state even though it did not involve crossing a state line. b. Economic Regulation v. Police Power: The Supreme Court reviewed 2 different types of congressional legislation premised upon commerce power: economic regulatory laws and police power regulations (those directed at moral or general welfareissues) c. Judicial Limits on the Commerce Power
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1. Three principal judicial approaches emerged. Under the first, what mattered was whether the regulated activity had a ‘‘direct’’ or ‘‘indirect’’ effect on interstate commerce. a. UNITED STATES v. E.C. KNIGHT CO. Court said: regulation of commerce applies to the subjects of commerce and not to matters of internal police. Sherman Act did not permit the suit against the Sugar Trust, because the challenged actions ‘‘relate exclusively to the acquisition of the Philadelphia refineries’’ and ‘‘bore no direct relation to commerce between the States.’ INDIRECT EFFECT. Congress can only regulate DIRECT effects. Dissent: This will destroy competition throughout the entire country 2. The ‘‘substantial economic effects’’ test: a. (SHREVEPORT RATE CASE) HOUSTON E. & W. T. RY. CO. v. UNITED STATES- the Court sustained congressional authority to regulate intrastate rail rates that discriminated against interstate railroad traffic. Facts: Several railroads (not the state) had set rates for hauls between points within lower than rates for hauls between points within Texas and Shreveport, Louisiana. ICC found that this rate structure ‘‘unjustly discriminated in favor of traffic within the state of Texas, and against similar traffic between Louisiana and Texas,’’ and ordered the railroads to end the discrimination. b. Held: congressional authority extending to these interstate carriers have the right to control their operations in all matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of that traffic, to the efficiency of the interstate service, and to the maintenance of conditions where commerce is fairly conducted. c. Whenever the interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other, Congress, and not the State, is entitled to prescribe the final and dominant rule. d. The ‘‘stream of commerce’’ test- some local activities could be regulated by Congress because they could be viewed as themselves ‘‘in’’ commerce or as an integral part of the ‘‘current of commerce.’’ SWIFT & CO. v. UNITED STATES. Once the good enters the stream, federal government can regulate it under the commerce clause. e. “Check point Charlie” National ‘‘police’’ regulation- Congress used the commerce power in the late 19th century to deal with problems of morality and criminality.

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1. CHAMPION v. AMES: FED statute made it illegal to use the mail to send lottery tickets from one state to another state. Held: lottery tickets are subjects of traffic and therefore are subjects of commerce’’ and that the prohibition of commerce lay within the regulatory power of Congress. i. Lottery tickets are things you buy and sell. Commerce clauseCongress has a power to regulate. “Check-point Charlie” regulation. Lotteries were clearly an evil that Congress could regulate. Phalen v. Virginia-VA has police power. Suppression of nuisances injurious to public morality is important. This would help the states because the state has the police power to regulate BUT it can only regulate up to its borders.

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2. HIPOLITE EGG CO. v. UNITED STATES: Court said that the means to the end was appropriate to seize and condemn the articles at their destination. Court can regulate commerce within the states for protection. 3. HOKE v. UNITED STATES: Court upheld the Mann Act, prohibiting the transportation of women in interstate commerce for immoral purposes (prostitution). Regulated commercial activity at the border. “Congress has power over transpo among the several states ; that the power is complete in itself, and that Congress, as incident to it, may adopt not only means necessary but convenient to its exercise, and the means may have the quality of police regulation. 4. Hammer v. Dagenhart (Child Labor case) i. Facts: The father of two children employed in a cotton mill in North Carolina obtained an injunction barring enforcement of the law that barred the transportation in interstate commerce of goods produced in factories employing children under the age of fourteen or employing those between the ages of fourteen and sixteen for more than eight hours a day or six days a week or at night on constitutional grounds. (law banned shipment of goods deemed to reflect harmful practices)…but it really just delayed shipping. Court held that the goods shipped are of themselves harmless. These are not bad goods but good goods. The mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control Dissent: Implicitly rejected 10th amendment as a source of limitations on federal authority.

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C. The Commerce Power and the New Deal (1933 +) a. The S. Ct.’s invalidation of the New Deal- In the midst of the Great Depression, Roosevelt enacted the New Deal. Government justified these measures under the commerce clause, using the ‘‘substantially affecting commerce’’ rationale
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in Shreveport and the ‘‘in commerce’’ rational in Swift. Court rejected the arguments i. RAILROAD RETIREMENT BOARD v. ALTON RAILROAD CO. Held: Congress lacked the power to establish a compulsory retirement and pension plan for all carriers subject to the Interstate Commerce Act. The Court said the welfare of railroad workers was remote from commerce. ii. SCHECHTER POULTRY CORP. v. UNITED STATES- Sick chicken case. Held: National Industrial Recovery Act of 1933 (w/c authorized the promulgation of fair codes of competition in various industries) is unconstitutional. There was insufficiently direct regulation of commerce through regulation of wages and hours in the poultry industry). Court distinguishes schreveport. iii. CARTER v. CARTER COAL CO.- Court struck down the Bituminous Coal Conservation Act of 1935 which empowered coal boards to set prices, wages, and hours in the industry. Court said it was only indirectly related to commerce. The Court said that there is no specific grant of power which authorizes the Congress to legislate act. a) Tax on coal companies for mining. Court said that you can’t rely power to tax because this is not a real TAX. Tax=to raise revenue. Not making revenue here. b) Labor provisions=production, which was purely local and thus, not commerce. c) Word direct implies that the activity or condition invoked or blamed shall operate proximately to produce the effect. b. FDR’s Court-packing plan-Roosevelt’s plan to increase number of justices. Congress rejected the bill. In the end Roosevelt said that he won the war. Some believed Justice Roberts had changed his position in the face of the courtpacking plan—famously dubbed the ‘‘switch in time that saved the Nine.’’ D. The Commerce Power After the New Deal (Modern trend) a. NLRB v. Jones & Laughlin Steel Corp “substantial economic effect” Facts: The National Labor Relations Board (NLRB) had found that Jones & Laughlin, a major steel company, had engaged in ‘‘unfair labor practices’’ by discriminatory discharges of employees for union activity. The Court held: that Congress has the power to control activities that may be intrastate in character but when separately considered, have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions. The court looked at the effect of the labor practice on interstate commerce. i. Because of Jones & Laughlin’s multi-state network of operations, a labor stoppage of the Pennsylvania intrastate manufacturing operations would have substantial effect on interstate commerce. Abandoned stream of commerce rationale- activity may occur substantially before the interstate movement.

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b. United States v. Darby “police power regulation” Facts: Darby, a Georgia lumber manufacturer, challenged an indictment charging him with violating the Fair Labor Standards Act of 1938. Held: can deny entrance to borders to any good for any reason- does not need to be economic. Congress

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as gatekeeper under its cc power can stop anyone or anything from crossing the state line. Congress’ commerce power is plenary- no internal limits. i. The power of Congress over interstate commerce extends to activities intrastate, which have a substantial effect on the commerce or the exercise of the Congressional power over it. Court said congress can choose the means reasonably adapted to the attainment of the permitted end, even though they involve control of intrastate activities. Motive irrelevant. Overruled Carter. Can regulate intrastate activities if it passes the substantial effect. Reversed Hammer.

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E. Judicial Deference Toward Exercise of the Commerce Power a. The Court’s shift toward deference to New Deal measures- by the time of the Darby decision, all four of the dissenters in Jones & Laughlin had left. The decision in Jones & Laughlin, were unanimous. Jones & Laughlin and Wickard Court waters down the “means and ends” test b. The ‘‘in commerce’’ rationale- first holding of Darby, overruling Dagenhart, permitted Congress to regulate the literal shipment of goods across state lines even if the motive of the regulation was to control aspects of local production. c. The ‘‘substantially affecting commerce’’ rationale- both Jones & Laughlin and the second holding of Darby relied on the substantial effects of local economic activity on interstate commerce as a basis for congressional authority. i. WICKARD v. FILBURN “cumulative effect theory”(still good law) required a showing of ‘‘substantial economic effect on interstate commerce.’’ Dairy farmer sued Wickard (Secretary of Agriculture) to enjoin enforcement of a marketing penalty imposed upon him under the Agricultural Adjustment Act of 1938 for exceeding a market quota for wheat that had been established for his farm. Held unanimously: if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce, and this irrespective of whether such effect is what might at some earlier time have been defined as ‘direct’ or ‘indirect.’  Court said that when Congress regulated a class of activities, no instance of such activity was beyond its reach, no matter how “local” it seemed, if it was rational for Congress to have concluded that, when AGGRAGATED, such activities had a substantial effect on interstate commerce. This waters down the “means and ends” test.  2005 case Gonzales v. Raich relied on this case. d. The commerce power and civil rights i. Title II of the Civil Rights Act of 1964 prohibited discrimination ‘‘on the ground of race, color, religion, or national origin’’ in certain places of public accommodation (even if privately owned and privately operated). Under the law, a facility was covered ‘‘if its operations affect commerce, or if discrimination is supported by State action.’’ ii. Fourteenth Amendment, § 5 only provided regulation of state discrimination NOT private sector. This eventually changed. Relied on

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commerce clause to enact civil rights act. Challenged by the 2 cases bellow. iii. HEART OF ATLANTA MOTEL v. UNITED STATES: Court upheld the law against commerce clause challenge by a motel located in downtown Atlanta that wished to continue its practice of refusing to rent rooms to African Americans. Substantial effect Test: whether the activity sought to be regulated is ‘commerce which concerns more States than one’ and has a real and substantial relation to the national interest. The court said that even if it may appear local, racial discrimination has a substantial and harmful effect on commerce. It deters interstate travel of Af Ams. iv. KATZENBACH v. McCLUNG: Court upheld the application of Title II to Ollie’s Barbecue who could seat 220 people, which only provided takeout services to af ams. It was not close to the highway, did not advertise. However, the restaurant had purchased about $150,000 worth of food, 46% of which was meat bought from a local supplier who had purchased it out of state. Court held that iminutive spending springing from a refusal to serve Negroes and their total loss as customers has, regardless of the absence of direct evidence, a close connection to interstate commerce e. The commerce power and crime- Art. I, § 8 authorizes Congress to punish the counterfeiting of money, piracies and felonies committed on the high seas, and offenses against the law of nations. Organized national crime i. PEREZ v. UNITED STATES- US S Ct rejects cc challenge to the consumer protection act of the state. Perez had lent money to the owner of a butcher shop and threatened violence when the butcher insisted that he could not repay the loan in the amount of the agreed upon weekly installments. Organized crimes get more money from loansharking. Perez=member of the class which engages in ‘extortionate credit transactions’ as defined by Congress. Extortionate credit transactions, though purely intrastate, may in the judgment of Congress affect interstate commerce. Findings of Congress are quite adequate on that ground. a. The Supreme court will uphold the constitutionality of criminal statutes affecting even seemingly local activities, if Congress has shown a clear intent to encompass such activities. F. The Rehnquist Court’s Revival of Internal Limits on Commerce Power a. For 60 yrs, the Court did not strike down a single federal statute as exceeding Congress’s power under the Commerce Clause. Until the Gun–Free School Zones Act of 1990, when Congress made it a federal offense ‘‘for any individual knowingly to possess a firearm at a place that the individual knows, or has reasonable cause to believe, is a school zone.’’ The Court invalidated the law. b. United States v. Lopez: the Court in a 5-4 decision struck down a federal law making it unlawful to possess a gun near a school. The Court held that the legislation did not involve an economic or commercial activity which had a substantial affect on commerce and accordingly was outside the federal commerce power. This is a criminal statute that has nothing to do with ‘‘commerce’’ or any sort of economic enterprise. Lopez represented the first time in nearly 60 years where the Court struck down a federal law as violating the Commerce Clause. i. There were no explicit findings by the Congress that the activity of possessing guns in schools affected commerce. The statute also did not
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have a jurisdictional nexus. Court said that it is not enough the activity regulated affects interstate commerce. It must substantially affect interstate commerce. ii. Three broad categories of activity that Congress may regulate under its commerce power: 1) “Check-point Charlie”- regulate the use of the channels of interstate 2) Shreveport category- Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. Can regulate interstate trains/ transportations. 3) Substantial relations- Congress’ commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce iii. Dissent: Rational basis test- whether Congress could have a rational basis for finding a significant connection between gun-related school violence and interstate commerce.

c. Commerce Clause Review After Lopez i. ii. The role of congressional findings Katzenbach v. McClung: Court considered the hearings that Congress had held on the commercial impacts of racial segregation, but noted that ‘‘formal findings’’ by Congress were ‘‘of course not necessary’’ to sustain legislation as rationally related to substantial effects on commerce. United States v. Morrison: Court struck down civil damages provisions of a federal statute designed to deter gender-motivated violence despite extensive hearings and ‘‘voluminous findings’’ associated with the passage of the law. Regulation and punishment of intrastate violence that is not directed at the instrumentalities, channels, or goods involved in interstate is for the States. 1) Like Lopez, Congress can’t broadly regulate violence against women. 2) Gender-motivated crimes of violence are not economic activity. iv. Economic vs. noneconomic activities- Rehnquist distinguished the statute upheld in Wickard from that struck down in Lopez on the ground that Wickard ‘‘involved economic activity in a way that the possession of a gun in a school zone does not.’’

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d. United States v. Morrison: the Court held that the Commerce Clause did not authorize Congress to adopt the Violence Against Women Act (VAWA). Although Congress had made extensive findings that violence against women impacted the economy, the Court held that the findings were too attenuated from commerce to support the legislation e. The Limits of Lopez and Morrison i. The ‘‘aggregation’’ principle and general schemes of regulation1) Wickard-principle of ‘‘aggregation,’’ which allows Congress to regulate activity that, taken in isolation, does not substantially affect interstate commerce, on the ground that multiple iterations of that same activity would substantially affect interstate commerce. 2) Lopez and Morrison appeared to limit the aggregation principle to cases of ‘‘economic’’ or ‘‘commercial’’ activity. 1. Lopez-government was unable to aggregate incidents of school gun violence, 2. Morrison- unable to aggregate incidents of gendermotivated violence. f. Gonzales v. Raich: The Compassionate Use Act of 1996- creates an exemption from criminal prosecution for physicians, as well as for patients and primary caregivers who possess or cultivate marijuana for medicinal purposes with the recommendation or approval of a physician. When Congress is engaged in broad regulation of commercial activity, it may regulate purely non-commercial and intrastate instances of that activity; if it reasonably believes failure to regulate it would jeopardize the success of the overall regulatory scheme. i. Similar to Wickard. In Wickard- Congress can regulate purely intrastate activity that is not itself ‘‘commercial,’’ in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity. 1) Wickard- controlled volume to avoid surplus. (When viewed in aggregate- it had substantial influence on price and market conditions). “Congress can regulate purely intrastate activity that is not itself commercial , in that it is not produced for sale, if it concludes that failure to regulate would undercut the regulation of the interstate market in that commodity” 2) Here-primary purpose of the Controlled Substance Act is to control the supply and demand of controlled substances in both lawful and unlawful drug markets.

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ii.

Because of the enforcement difficulties in distinguishing between marijuana cultivated locally and marijuana grown elsewhere, and concerns about diversion into illicit channels, Congress had a rational basis for believing that failure to regulate the intrastate manufacture and possession of marijuana would leave a gaping hole in the CSA Concurring: activities that substantially affect interstate commerce are not themselves part of interstate commerce, and thus the power to regulate them cannot come from the Commerce Clause alone but from the Necessary and Proper Clause. Where necessary to make a regulation of interstate commerce effective, Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce

iii.

g. REMEMBER: statutory provisions should be accompanied by congressional findings of fact showing a clear link between the activity being regulated and interstate commerce. i. Summary of modern view. 4 broad categories of activities Congress can constitutionally regulate: 1) The use of channels of interstate commerce. 2) The instrumentalities of interstate commerce, even though the threat may come only from intrastate activities (Lopez). 3) Articles moving in interstate commerce. 4) Activities having a substantial effect on interstate commerce (lopez). 1. Activity is commercial (Raich). 2. Activity is not commercial then there must be a pretty obvious connection between the activity and interstate commerce. h. Commerce Clause Review After Raich i. Economic vs. noneconomic activity- Raich: the majority allowed the federal government to aggregate the effects of homegrown marijuana on the broader scheme of the CSA, even though the cultivation of marijuana at home for personal consumption is a noneconomic activity in itself, because the activities regulated by the CSA as a whole ‘‘are quintessentially economic’’—namely, the ‘‘production, distribution, and consumption of commodities.’’ This extended the economic-non- economic distinction in Morrison. General vs. specific congressional schemes- The Raich majority distinguished the ‘‘comprehensive’’ narcotics regulation Congress had
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created in the CSA from the ‘‘single-subject’’ legislation struck down in Lopez. iii. States as ‘‘laboratories of experiment- In Lopez and Morrison the goals of federal and state policies were shared, even if the policies were implemented differently while in Raich, California’s Compassionate Use Act, enacted by state voters in 1996, conflicted with federal narcotics law. In Raich, majority declined to defer to this exercise of the state’s power to act as a ‘‘laboratory for experiment.’’ State efforts to legalize federal crimes- Raich differs from Lopez and Morrison in that a state law sought to carve out an exception from a federal regulatory regime; the federal laws struck down in Lopez and Morrison, by contrast, arguably duplicated rather than displaced state policies. Federalism-based limits on Necessary and Proper Clause 1) Congress does have the power to make all laws that are necessary and proper for carrying out its enumerated powers. 2) U.S. v. Comstock: Convicted sex offenders moved to dismiss petitions requesting their indefinite civil commitment under the Adam Walsh Child Protection and Safety Act. The Supreme Court held that the Necessary and Proper Clause grants Congress authority sufficient to enact the Adam Walsh Protection and Safety Act. The Court pointed to five considerations that compelled its holding. 1. The Necessary and Proper Clause grants broad authority. 2. The Court recognized that Congress has long delivered mental health care to federal prisoners. 3. Congress had good reason to pass the statute as it has the power to protect nearby communities from the danger prisoners may pose. 4. The Tenth Amendment does not reserve a zone of authority to the states in this context. 5. The Court recognized that the statute was narrow in scope and did not confer on Congress a general police power, which is reserved to the states G. External Limits on the Commerce Power: Federalism and the 10 th and 11th Amendments a. Immunities derive from 10th amendment: “the powers not delegated to the US by the constitution, nor prohibited by the states, are reserved to the States respectively, or to the people” and 11th amendment: “the judicial power of the US
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shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the US by citizens of another state or citizens or subjects of any foreign state.” b. State Autonomy and the Tenth Amendment i. The rise and fall of state autonomy from federal regulation a) Coyle v. Oklahoma-invalidated a condition in the federal enabling act for admission of Oklahoma to the union that had purported to specify the state capital, holding that ‘‘the power to locate its own seat of government and to change the same are essentially state powers beyond the control of Congress.’’ b) UNITED STATES v. CALIFORNIA-upheld a penalty imposed on a state-owned railroad for violation of the Federal Safety Appliance Act. “there is no such limitation upon the plenary power to regulate commerce. The state can no more deny the power if its exercise has been authorized by Congress than can an individual.” c) NEW YORK v. UNITED STATES- upheld against a similar state immunity claim the application of a federal tax to the State of New York’s sale of bottled mineral water from state-owned springs. d) NATIONAL LEAGUE OF CITIES v. USERY- a state autonomy defense to otherwise valid federal regulation finally succeeded. That case involved amendments to the Fair Labor Standards Act (FLSA) that extended minimum wage and maximum hour provisions to employees of state and local governments. The Court held the extension within Congress’s commerce authority, but nonetheless unconstitutional. The challenged amendments operate to directly displace the States’ freedom to structure integral operations in areas of traditional governmental functions; they are not within the authority granted Congress by Art. I, § 8, cl Overruled by Garcia. e) GARCIA v. SAN ANTONIO METROPOLITAN TRANSIT AUTHORITY- overruled National League. Court held a municipal transit authority properly subject to the minimum wage and overtime requirements of the Fair Labor Standards Act. Overruled decision in National League Cities (5-4). 1. the Court held that the guiding principles of federalism established in National League of Cities v. Usery were unworkable and that SAMTA was subject to Congressional legislation under the Commerce Clause. The Court found that rules based on the subjective determination of
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"integral" or "traditional" governmental functions provided little or no guidance in determining the boundaries of federal and state power. The Court argued that the structure of the federal system itself, rather than any "discrete limitations" on federal authority, protected state sovereignty. 2. Dissent: the decision that federal political officials, invoking the Commerce Clause, are the sole judges of the limits of their own power is inconsistent with the fundamental principles of our constitutional system. Marbury. f) Judicial protection of state autonomy after Garcia- The Garcia majority suggested that some judicial intervention might still be appropriate ‘‘to compensate for possible failings in the national political process.’’

g) SOUTH CAROLINA v. BAKER- upheld removal of an exemption from federal income tax for interest from bearer bonds issued by the states. The law in effect forced states to switch to issuing taxexempt registered bonds in order to raise debt capital. The Court rejected the State’s argument that this was one of those situations in which state interests were impaired because of ‘‘extraordinary defects in the national political process.’’ h) ‘‘Commandeering’’ state governments. In several decisions the Court suggested in dicta that Congress might not be able to ‘‘commandeer the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program,’’ or ‘‘conscript state agencies into the national bureaucratic army.’’ c. New York v. United States i. NY challenged the three provisions of the federal Low–Level Radioactive Waste Policy Amendments Act of 1985, which required states to provide for the disposal of such waste generated within their borders and provided three ‘‘incentives’’ to states to comply with that obligation. Court held that while Congress has substantial power under the Constitution to encourage the States to provide for the disposal of the radioactive waste generated within their borders, the Constitution does not confer upon Congress the ability simply to compel the States to do so. Congress may not simply ‘‘commandeer the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program.’’ a) The allocation of power contained in the Commerce Clause authorizes Congress to regulate interstate commerce directly; it does not authorize Congress to regulate state governments’
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regulation of interstate commerce by compelling states to regulate. b) However, Congress has the ability to encourage a State to regulate in a particular way, or that Congress may hold out incentives to the States as a method of influencing a State’s policy choices d. The Scope and Limits of the Anticommandeering Principle i. Congressional alternatives to commandeering a) Spending power- Congress may condition the payment of relevant federal funds on a state’s agreement to take title to waste if it has not already provided a waste disposal facility. b) Commerce power/Commerce Clause- Congress may pass federal legislation directly regulating the private producers of low-level radioactive waste to limit their production of any more of it if disposal is unavailable. Congress also may impose a federal tax on interstate commerce and authorize the states to burden outof-state commerce. Justice O’Connor’s opinion upheld the ‘‘monetary’’ and ‘‘access’’ incentives in New York v. United States as reflecting the permissible exercise of these powers. c) Conditional preemption- Congress may threaten to pass federal legislation under the Commerce Clause unless states choose to regulate according to federal standards ii. Commandeering state executive branch officials- PRINTZ v. UNITED STATES: Ct held invalid, by a vote of 5–4, provisions of the Brady Handgun Violence Prevention Act that required state and local law enforcement officers to conduct background checks on prospective handgun purchasers. The Supreme Court held the federal government could not compel the states to enact or administer a federal regulatory program. Thus, the background check provisions of the Act violated this prohibition. States as objects of federal regulation vs. states as regulators’ a) RENO v. CONDON: unanimous Court upheld a federal law limiting the commercial vending of personal data by the states. Unsuccessful bringing 10th amendment challenge. Court rejected the state’s claim of improper commandeering. The court said that this is governed by case is governed by the decision in South Carolina v. Baker. In Baker, ct upheld a statute that prohibited States from issuing unregistered bonds because the law regulated state activities rather than seeking to control or influence the manner in which States regulates private parties. Like the statute at issue in Baker, the DPPA does not require the
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States in their sovereign capacity to regulate their own citizens. DDPA is consistent with NY and Printz. Leaves open the general application requirement (“general applicable laws” that Congress can regulate….applies to individuals as well as states) e. State Sovereign Immunity and the Eleventh Amendment i. 11th amendment specifically bars any federal suit against any one of the states by citizens of another state, or by Citizens or Subjects of any Foreign States. Does not bar federal suits brought by one state against another state. Does not bar most suits for injunctions (only damages)

ii. iii. f.

The origins and meaning of the Eleventh Amendment i. 11th amendment: judicial power of the United States shall not be construed to extend to any suit commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign States. 11th amendment was adopted to overrule Chisholm v. Georgia. Hans v. Louisiana held that the Eleventh Amendment applied not only to cases within federal diversity jurisdiction but also to cases within the federal question jurisdiction of the federal courts. a) 11th amendment was interpreted to apply also to bar a damage suit where the plaintiff is a citizen of the defendant state. iv. Ex parte Young held that a federal court could issue an injunction against state officials who sought to enforce an unconstitutional state law, on the ground that the defendant was not really the state but rather the official, acting beyond his constitutional authority. Fitzpatrick v. Bitzer held that Congress could abrogate the state’s Eleventh Amendment immunity and allow states to be sued directly for retrospective damages pursuant to its enforcement power under section five of the Fourteenth Amendment. Pennsylvania v. Union Gas Co held that ‘‘Congress has the authority to create such a course of action when legislating pursuant to the Commerce Clause.’’

ii. iii.

v.

vi.

g. The Rehnquist Court’s revival of state sovereign immunity in Seminole Tribe: SEMINOLE TRIBE OF FLORIDA v. FLORIDA: overruled Pennsylvania v. Union Gas and held that Congress, when acting under its Art. I, § 8 commerce power, may not abrogate a state’s sovereign immunity without the state’s consent

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i.

Case arose under the Indian Gaming Regulatory Act, imposed upon the states a duty to negotiate in good faith with an Indian tribe toward the formation of a compact, and authorized a tribe to sue the state in a federal court in order to compel performance of that duty 11th amendment restricts the judicial power under Article III, and Article I cannot be used to avoid the constitutional limitations placed upon federal jurisdiction.

ii.

h. Extending state sovereign immunity from federal to state courts: ALDEN v. MAINE extended the state sovereignty immunity bar announced in Seminole Tribe from lawsuits against states in federal court to lawsuits against states in state court i. Affirmed the dismissal of a suit filed in a Maine state court by state probation officers seeking damages for the state’s failure to pay them overtime compensation required by the federal Fair Labor Standards Act. Doctrine of sovereign immunity allowed Maine to avoid hearing the employee’s suit, even if congress

ii.

i.

Extending state sovereign immunity to other federal laws- KIMEL v. FLORIDA BOARD OF REGENTS and BOARD OF TRUSTEES OF UNIV. OF ALABAMA v. GARRETT - Congress lacked the power to abrogate state sovereign immunity insofar as these antidiscrimination laws were enacted under the commerce power and application of these laws to the states could not be justified under § 5 of the 14th Amendment i. Just because Congress cites Sec 5 of 14th amendment to abrogate state immunity, it doesn’t mean they will get away with it.

j.

Federal power vs. federal remedies- Seminole line of cases ‘‘enforce a vision of constitutional federalism not by restricting the reach of congressional authority to regulate the states, but rather by limiting the remedial means by which Congress may enforce regulation of the states that is otherwise within its substantive legislative power.’’

k. Extending state sovereign immunity to federal agency proceedings : FEDERAL MARITIME COMMISSION v. SOUTH CAROLINA STATE PORTS AUTHORITYCourt extended the reach of state sovereign immunity from judicial proceedings to adjudications within federal administrative agencies. i. Involved a cruise ship company’s administrative complaint against a South Carolina port authority, heard before the Federal Maritime Commission, alleging that the state authority had violated the federal Shipping Act by disallowing berths in the state’s ports for gambling vessels. Reiterated the view from Alden that, while the Eleventh Amendment’s text addressed the particular decision in Chisholm v. Georgia, it merely exemplified a much broader principle of state sovereign immunity.
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l.

State sovereign immunity and the Art. I bankruptcy power: CENTRAL VIRGINIA COMMUNITY COLLEGE v. KATZ-Court held that the federalism principles articulated in the state sovereign immunity line of cases did not bar Congress from subordinating a state entity to other creditors in a federal bankruptcy proceeding. i. Good for Federal government, bad for the states. Cut back the broad views in Seminole- congress can’t abrogate in any of their powers.

Federal Limits on State Regulation of Interstate Commerce A. The Dormant Commerce Clause a. Limits on state regulation i. Article I restraints on state regulation of commerce arise in two situations: 1. “Dormant commerce clause,’’ Congress is silent: it has taken no action, express or implied, to make federal policy on a given subject matter. 2. Congress has exercised the commerce power, and the challenge to inconsistent state action rests on both the exercise of the commerce power under Art. I, § 8, cl. 3 and the preemptive effect of the federal legislation under the Supremacy Clause of Art. VI. ii. Another limit on state regulation of interstate commerce: the Privileges and Immunities Clause of Article IV, § 2, which guarantees to the ‘‘Citizens of each State all Privileges and Immunities of Citizens in the several States.’’ b. Under the so-called Dormant Commerce Clause, the Court invalidates some ‘‘protectionist’’ state legislation, even in the absence of congressional preemption. (not explicitly given to the Court by the Constitution) c. Gibbons v. Odgen: Court held that States can enact inspections law to improve the quality of articles produced by the labor of a country etc. State has powers over intrastate activity and NOT interstate. d. The Nascent Dormant Commerce Clause i. Marshall’s dormant commerce clause dicta- Marshall outlined a division of power between Congress over interstate commercial regulation and the states over police regulations designed to protect the health, safety or welfare of their own citizens, distinguishing permissible state ‘‘police’’ regulations from impermissible state ‘‘commerce’’ regulations based on the purpose of the state regulation. ii. Marshall’s ‘‘police’’-‘‘commerce’’ distinction- WILLSON v. BLACK BIRD CREEK MARSH CO.: Although states could exercise their “police powers” to protect health, safety, and welfare of their citizens, despite some

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incidental effect on interstate commerce, any state regulation of interstate commerce qua commerce was impermissible. iii. The Dormant Commerce Clause and the Taney Court- lack of consensus in the court. Blackbird case- state regulations of ‘‘commerce’’ were prohibited because of the ‘‘exclusive’’ commerce power, but ‘‘police’’ regulations were constitutional. 1. Mayor of the City of New York v. Miln- upheld a New York statute requiring the master of a vessel arriving in the port of New York from any point out of the state to report the names and residences of the passengers. 2. The Passenger Cases- Court invalidated two other state laws under Dormant Clause holding. 3. The License Cases- Court sustained state laws requiring licenses for the sale of intoxicating liquors e. Cooley v. Board of Wardens: upheld a Pennsylvania statute requiring vessels to use a local pilot. Cooley took an intermediate course between those who argued that the Commerce Clause precluded any state action within its bounds and those who argued that absent congressional action, states could regulate without restraint within areas covered by the Commerce power. Cooley held that states could not regulate matters needing a uniform national approach but could regulate local matters. i. Court distinguished between direct and indirect - a state regulation having a direct impact was not acceptable while one only having an indirect impact was. f. The Meaning and Implications of Cooley i. Cooley’s ‘‘national’’-‘‘local’’ distinction- Cooley recognized some concurrent state regulatory power over commerce. The determinative factor is the ‘‘subject’’ of regulation: some subject are ‘‘of such a nature’’ as to require ‘‘a single uniform rule’’ by Congress; others are local, ‘‘imperatively demanding that diversity which alone can meet the local necessities.’ ii. The effect of congressional consent-Congress is now viewed as having authority to consent to state regulations of commerce that would otherwise be barred by the Dormant Commerce Clause under Cooley. (was overruled by Prudential Insurance Co.) iii. The aftermath of Cooley and the rise and fall of the ‘‘direct’’-‘‘indirect’’ distinction 1. Wabash, St. Louis & P. Ry. Co. v. Illinois- Court held unconstitutional an early state ban on freight rate discrimination by
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railroads, reasoning that regulations of interstate shipments were of a ‘‘national,’’ not ‘‘local,’’ character. 2. Smith v. Alabama- justified the state regulation of railroad engineers on the ground that the law rested on safety considerations and that its impact on commerce was merely ‘‘indirect,’’ not ‘‘direct.’’ a. State law survives the dormant commerce clause because rates were different. Purpose between the two laws were different. 3. Di Santo v. Pennsylvania- Court held unconstitutional as a ‘‘direct burden’’ on commerce a state law imposing a license fee of $50 on travel agents selling steamship tickets for foreign travel. 4. Buck v. Kuykendall- Court held unconstitutional the state of Washington’s denial of a certificate of convenience and necessity to an applicant seeking to operate an ‘‘auto stage line’’ to carry passengers and freight between Portland and Seattle. The reason was because of “too much competition” a. Opposite, same facts but this time the reason was safety not competition: Bradley v. Public Utilities Comm’n- upheld Ohio’s denial of a certificate to operate between Cleveland, Ohio, and Flint, Michigan because the highway to be used was ‘‘so badly congested by established motor vehicle operations, that the addition of the applicant’s proposed service would create and maintain an excessive and undue hazard to the safety and security’’ iv. Modern Approach. A state regulation which affects interstate commerce must meet each of the following requirements in order to be upheld: 1. Regulation must pursue a legitimate state end a. State acts to further health, safety or general welfare objectives. Protection of a state’s economic interest of its own residents is generally not legitimate. 2. Regulation must be rationally related to that legitimate end (means and ends); and 3. The regulatory burden imposed by the state on interstate commerce, and any discrimination against it must be outweighed by the state’s interest in enforcing its regulation (Pike balancing). v. Three modern categories of Dormant Commerce Clause challenge (abandoned distinctions between exercises of ‘‘police’’ and ‘‘commerce’’

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powers, between ‘‘local’’ and ‘‘national’’ subject matters, or between ‘‘indirect’’ and ‘‘direct’’ effects 1. State laws that facially discriminate against out-of-state commerce are almost always struck down under a virtually per se rule of invalidity. 2. State laws that are facially neutral as between in-state and out-ofstate interests but that have an impermissibly protectionist purpose or effect are also typically invalidated on the ground that they in fact favor local economic interests at the expense of out-ofstate competitors. 3. State laws that are facially neutral but that have a disproportionate adverse effect on interstate commerce may also be struck down, under the balancing approach canonically set forth in Pike v. Bruce Church: a. Pike Balancing Approach: ‘Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. b. Under the Pike balancing test, the burden is on the party challenging the statute to show that it imposes too great a burden on commerce. vi. Similar categories in cases under dormant commerce clause according to Prof Howard 1. state law regulating interstate transportation 2. State law that regulate access to in-state buyer by out of state sellers. 3. State laws that regulate access to out of state buyers by in-state sellers. vii. Discriminatory or protectionist legislation is presumed invalid, subject to strict scrutiny, and nearly always invalidated. 1. State will have the burden of proving a. A legitimate end (nondiscriminatory or nonprotectionist end) b. The lack of any less discriminatory alternatives to effectuate that end.

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viii. If facially neutral and the purpose and effects are equally untainted by protectionism, a balancing test is used. Must prove that the burden on interstate commerce clearly exceeds the local benefits claimed for the law g. Facial Discrimination Against Out-of-state Commerce i. Philadelphia v. New Jersey(Garbage case): operators of private landfills in New Jersey and by several cities in other states that had agreements with these operators for waste disposal challenged a 1973 New Jersey waste ban law that prohibited the importation of most ‘‘solid or liquid waste which originated or was collected outside the territorial limits of this State.’’ 1. Virtually per se rule of invalidity where simple economic protectionism is affected by state legislation. Ex. law that overtly blocks the flow of interstate commerce at a State’s borders. But use Pike ‘‘balancing’’ formulation when legislative objectives are credibly advanced and there is no patent discrimination against interstate trade. 2. Only if no less discriminatory alternatives are available will the court uphold statutes that control their environment. 3. Dispute about ultimate legislative purpose is not relevant to the constitutional issue to be decided in this case. Whatever New Jersey’s ultimate purpose, it may not be accomplished by discriminating (facially) against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently. 4. State is without power to prevent privately owned articles of trade from being shipped and sold in interstate commerce on the ground that they are required to satisfy local demands or because they are needed by the people of the State. 5. The New Jersey law is off limits to state regulation under Commerce Clause because the State has visibly moved to slow or freeze the flow of commerce for protectionist reasons. 6. Court said this is not quarantine law. There has been no claim here that the very movement of waste into or through New Jersey endangers health, or that waste must be disposed of as soon and as close to its point of generation as possible. Harms caused by waste arise after disposal in landfill sites so there is no basis to distinguish out-of-state waste from domestic waste. h. The Nondiscrimination Principle i. The historical origins of the Dormant Commerce Clause- Framers centralized the power to regulate interstate commerce in the Congress
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because they viewed destructive trade wars among the states as a major problem under the Articles of Confederation. 1. Framers expressly adopted the Import–Export Clause of Art. I, § 10, cl. 2, which provides, ‘‘No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws.” Court said this applies to o goods coming from or going to nations outside the United States, not to imports or exports among the states. ii. The political foundations of a presumption against discriminatory state laws- Discrimination against outsiders may be expected predictably to result from the normal operation of in-state politics- Southern Pacific Co. v. Arizona iii. The economic foundations of a presumption against discriminatory state laws: 1. On this view goods, labor and investments can be allocated most efficiently if free to flow across state borders to the place where they are most highly valued. Such a view is parallel to arguments against protectionism at the national level. 2. Relative costs and benefits to determine that the law it invalidated involved a net decrease in social welfare UNDER Philadelphia v. N.J. a. Local costs and benefits b. Foreign costs and benefits iv. Permissible facial discrimination: 1. “Certain quarantine laws’’ are permissible. 2. MAINE v. TAYLOR- another notable exception to the rule of ‘‘virtually per se invalidity.’’ a. Upheld a law banning the importation of out-of-state baitfish from out of state because the ban had a legitimate environmental purpose stemming from ‘‘uncertainty about possible ecological effects on the possible presence of parasites and nonnative species’’ in shipments of out-ofstate baitfish, and that that purpose ‘‘could not be served as well by available nondiscriminatory means.’’ b. Dissent- State has not carried its substantial burden of proving why it cannot meet its environmental concerns in the same manner as other States with the same interest in the health of their fish and ecology.
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v. State hoarding of natural resources 1. Preference to state natural resource-Geer v. Connecticut-upheld a law that prevented the killing of certain game birds for the purpose of shipment out of the state, even though intrastate commerce in game birds was permitted because the birds were collectively owned by the people of the state. 2. HUGHES v. OKLAHOMA- overruled Geer and held invalid under the Dormant Commerce Clause an Oklahoma law forbidding any person to ‘‘transport or ship minnows (fish) for sale outside the state which were seined or procured within the waters of this state.’’ a. Facts: Hughes was a Texan engaged in the commercial minnow business who was charged with violating the law for transporting from Oklahoma to Texas a load of natural minnows purchased from an Oklahoma minnow dealer. b. Court stated that Oklahoma had failed to resort to nondiscriminatory alternatives. Must prove that there was no other nondiscriminatory way to further legitimate objective. c. Court said that when a wild animal ‘becomes an article of commerce, its use cannot be limited to the citizens of one State to the exclusion of citizens of another State’. The law facially discriminates against out of state commerce. Environmental concern is legitimate but the means here discriminates out of state commerce. d. Dissent: Yes, wild animals but this is still different from other animals found in the wild. They are more like chickens. Farm animals. This law in no way prohibited this guy from buying minnows in Oklahoma and then selling it. vi. Facially discriminatory taxes 1. WEST LYNN CREAMERY, INC. v. HEALY- Ct invalidated a Massachusetts law that imposed an assessment on all sales of milk to Massachusetts retailers, but rebated all proceeds from this assessment to Massachusetts dairy farmers. Impermissibly discriminatory when the state taxes all producers of a product rebates part of the proceeds to in-state producers, effectively lowering their costs. vii. PS NEWFOUND/OWATONNA, INC. v. TOWN OF HARRISONdiscriminatory tax exemption is not considered a permissible subsidy. Maine statute provided a property tax exemption to ‘‘benevolent and charitable institutions incorporated’’ in the State, but denied the full
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exemption to any institution ‘‘conducted or operated principally for the benefit of persons who are not residents of Maine.’’ Court rejected the argument that the tax exemption amounted to a permissible discriminatory subsidy 1. Dissent: the Maine tax law did not constitute ‘‘facial discrimination’’ against interstate commerce merely compensated or subsidized those organizations that contribute to the public fisc by dispensing public benefits the State might otherwise provide i. Home Processing Requirements- Court has repeatedly invalidated state requirements that products be inspected, processed or treated inside the state before they may be shipped out-of-state. i. Dean Milk Co. v. Madison: The ordinance barred the sale of pasteurized milk unless it had been processed and bottled at an approved pasteurization plant within five miles of the central square of Madison, Wisconsin. Court held that in erecting an economic barrier protecting a major local industry against competition from without the State, Madison plainly discriminates against interstate commerce. 1. The flow control ordinance no differently than any other facially discriminatory law requiring local processing of some good to benefit local interest. 2. Safety objective could have been achieved in a less burdensome way. ii. C & A Carbone, Inc. v. Clarkstown: The town of Clarkstown agreed to close its landfill and build a new solid waste transfer station. The town adopted was the flow control ordinance which required all nonhazardous solid waste within the town to be deposited at the transfer station to meet a minimum waste flow of 120,000 tons per year. Carbone, a private recycler with a sorting facility in Clarkstown, sought to ship its nonrecyclable waste to cheaper processors outside the state rather than to the new facility as required. 1. By preventing everyone except the favored local operator from performing the initial processing step, the ordinance deprives outof-state businesses of access to a local market. 2. Discrimination against interstate commerce in favor of local business or investment is per se invalid , unless, a narrow class of cases in which the municipality can demonstrate, under rigorous scrutiny, that it has no other means to advance a legitimate local interest iii. BUT if the government owns the facility, Carbone does not apply- United Haulers Ass’n v. Oneida-Herkimer Solid Waste Management Authority: ‘‘Flow control’’ ordinances require trash haulers to deliver solid waste to a
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particular waste processing facility. Difference from Clarkstown is that, there the haulers were required to bring waste to a private processing facility. Here the ordinance required haulers to bring waste to facilities owned and operated by a state-created public benefit corporation. 1. The state has important responsibilities that set the state and local government apart from a typical private business. The court said that it is not the office of the Commerce Clause to control the decision of the voters on whether government or the private sector should provide waste management services. 2. Waste disposal is a local government function and the flow-control laws do not discriminate against interstate commerce because they ‘‘treat in-state private business interests exactly the same as outof-state ones. j. Dean Milk-Carbone-United Haulers Trilogy i. Intrastate discrimination and interstate discrimination- Carbone, like Dean Milk, treated as immaterial the fact that a town rather than the state had passed the flow control ordinance. ii. ‘‘Reasonable nondiscriminatory alternatives.’’ 1. Dean Milk, the Court inquired into whether Madison had ‘‘reasonable nondiscriminatory alternatives’’ for protecting milk safety.

2. Carbone suggested that the town had available nondiscriminatory alternatives, such as ‘‘uniform safety regulations.’ This involves intensive judicial scrutiny. iii. Traditional governmental function- United Haulers (like Justice Souter in his Carbone dissent), emphasized that waste hauling is a traditional function of municipal governments. iv. Differential taxation of municipal bonds- DEPARTMENT OF REVENUE OF KENTUCKY v. DAVIS- Kentucky exempted interest on its own public bonds from state income taxes but imposed such taxes on bond interest from other States. A majority of the Court rejected the challenge and upheld the law under United Haulers legitimate objectives. 1. Applies to laws favoring a State’s municipal bonds, given that the issuance of debt securities to pay for public projects is a quintessentially public function, with a respected history. 2. Bonds place the cost of a project on the citizens who benefit from it over the years, and they allow for public work beyond what current revenues could support.

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3. Dissent: case is not an extension of United Haulers; it is a rejection of its principal rationale—that in monopolizing the local market, the ordinance applied equally to interstate and local commerce. k. EXCEPTION to DCC: Market Participant i. A series of decisions has established such an exception, where a state or city discriminate in favor its own residents, even for overt, facial discrimination, when government acts as a “market participant” buyer or seller of goods or services or engages in a program of subsidies or other economic incentives to aid in-state businesses. ii. The market participant doctrine allows the state or municipality to favor its own residents in the course of its own dealings; it does not permit that government to regulate other private parties in their dealings with the state-owned entity. iii. South-Central Timber Development, Inc v. Wunnicke: Alaska proposed to sell state-owned timber subject to the condition that the purchaser process the timber in Alaska before it was shipped out of state to protect and promote the state’s timber-processing industries. Court held that Alaska could favor its own in selling the timber but could not impose regulations which discriminated in favor of its own citizens regarding conduct in a downstream market 1. If a State is acting as a market participant, rather than as a market regulator, the dormant Commerce Clause places no limitation on its activities. State may not impose conditions, whether by statute, regulation, or contracts, that have a substantial regulatory effect outside of that particular market. Court said that However, when (alexandra scrap) Maryland became involved in the scrap market it was as a purchaser of scrap; Alaska, on the other hand, participates in the timber market, but imposes conditions downstream in the timber-processing market. 2. Hughes v. Alexandria Scrap case (still good law)- involved a Maryland program designed to reduce the number of junked automobiles in the State by imposing stringent documentation requirements on out-of-state scrap processors than on in-state ones.. Court concluded that Maryland’s action was not ‘‘the kind of action with which the Commerce Clause is concerned,’’ because ‘‘Commerce Clause does not prohibit a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others. 3. Reeves, Inc. v. Stake case- State sold excess cement to buyers out of state. Court upheld the state law because it recognized right of trader or manufacturer, engaged in an entirely private business,
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freely to exercise his own independent discretion as to parties with whom he will deal. 4. White v. Massachusetts Council of Construction Employers, IncMayor of Boston that required all construction projects funded in whole or in part by city funds or city-administered funds to be performed by a work force of at least 50% city residents. Court found it unnecessary to define those limits because ‘‘everyone affected by the order was in a substantial if informal sense, ‘working for the city.’ ’’ l. The Theory and Limits of the Market Participant Exception i. Justifying state preferences for in-staters through subsidies rather than regulation. the following possible defenses of the market participant exception: 1. Text: The Commerce Clause, Art. I, § 8, cl. 3, confers upon Congress the power to ‘‘regulate’’ commerce among the several states. 2. Economic effect: the argument that discriminatory subsidies leave outsiders no worse off because they would not exist at all if the local preference were not allowed, and are self-limiting because, unlike regulation, they require the expenditure of general public funds and thus will face in-state political safeguards. 3. Parity with private actors: a state government should be immune from constitutional concerns when acting as a seller of cement or bidder for auto hulks or construction services because it can be expected to behave similarly to private actors, who are free contractually to pick and choose their counterparties. 4. Federalism: Exempting state from judicial scrutiny when it acts as a market participant may be a means of respecting state sovereignty and the role of the states as laboratories for experiment. 5. Investment capture: argument that ‘‘it is fair for state citizens to decide to restrict the benefits of state-created resources to state residents because they are the ones who paid for such benefits,’’ and they will not engage in the ‘‘optimal degree of public investment’’ unless that can exclude out-of-state” ‘free riders’ ’’ from ‘‘receiving the benefits of programs for which they have not paid.’’ m. Facially Neutral Laws With a Disproportionate Adverse Effect on Commerce i. Facial discrimination against interstate commerce is ‘‘virtually per se invalid.’’

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ii. Baldwin v. Seelig- states offered as a justification for law purposes that the court found as protectionist. Case arose from a state effort, prompted by the Depression of the 1930s, to stabilize milk prices. The Act provided that the minimum price requirement applied both to milk produced locally and to milk imported from other states. Seelig purchased milk from a Vermont producer at prices below the minimum price established by the Act. 1. Statutes, as applied to out-of-state sellers or buyers, that protected local economic interests by limiting access to local markets, even in the absence of any facial discrimination by the state was held invalid. 2. A state in who deals with another may not place itself in a position of economic isolation. 3. The police power may not be used by the state of destination with the aim and effect of establishing an economic barrier against competition with the products of another state. iii. H.P. Hood & Sons v. Du Mond: Hood was a Boston milk distributor who obtained milk from New York producers and had maintained three receiving depots there. Hood sought a New York license to establish a fourth depot but was denied the license on the basis of a New York law stating that licenses for new plants could not be issued unless the Commissioner was satisfied that ‘‘issuance of the license will not tend to a destructive competition in a market already adequately served, and that the issuance of the license is in the public interest.’ 1. The Supreme Court has consistently refused attempts of states to advance their own commercial interests by curtailing the movement of articles of commerce, either into or out of the state, while generally supporting their right to impose even burdensome regulations in the interest of local health and safety. 2. While the state power is applied in this case to limit expansion by a handler of milk who already has been allowed some purchasing facilities, the argument for doing so, if sustained, would be equally effective to exclude an entirely new foreign handler from coming into the State to purchase. n. Identifying Protectionism in Facially Neutral Laws i. HUNT v. WASHINGTON STATE APPLE ADVERTISING COMM’N: the Court unanimously invalidated a North Carolina law requiring that closed containers of apples offered for sale or shipped into the State bear ‘‘no grade other than the applicable U.S. grade or standard.’’ The North Carolina ban, which required the display of either the USDA grade or a ‘‘not graded’’ label, explicitly prohibited the display of any state grades. This made it hard for Washington State to market its apples in NC. Court
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is much more likely to strike down a statute whose clear purpose is to favor local economic interests by discriminating against out of state interests. ii. BACCHUS IMPORTS, LTD. v. DIAS: Court invalidated a Hawaii statute that exempted from the State’s 20% wholesale liquor tax okolehao, a brandy distilled from the root of the ti plant, a shrub indigenous to Hawaii. Ct said it ‘‘violated the Commerce Clause because it had both the purpose and effect of discriminating in favor of local products.’’Any effort to confer a benefit upon local industry not granted to out-of-state industry is presumptively invalid as discrimination under the Commerce Clause iii. EXXON CORP. v. GOVERNOR OF MARYLAND: Court upheld against Dormant Commerce Clause challenge a law prohibiting producers or refiners of petroleum products from operating retail service stations in Maryland because it did not discriminate against interstate goods, nor favored local producers and refiners. It did not prohibit the flow of interstate goods, place added costs upon them, or distinguish between instate and out-of-state companies in the retail market. Court said that the primary purpose was national solidarity and not national efficiency. 1. Where the disproportionate impact is truly accidental, and does not directly derive from the fact that the burdened firms are out-ofstaters, the court will normally uphold the statute. iv. MINNESOTA v. CLOVER LEAF CREAMERY CO: The court rejected a discriminatory effects claim, upholding a state law that banned the retail sale of milk products in plastic nonreturnable containers but permitted sales in nonreturnable containers made of pulpwood. Environmental purpose. Plastic presents environmental problems. Majority said that the law was not ‘simple protectionism,’ but ‘regulated evenhandedly’ by prohibiting all milk retailers from selling their products in plastic, nonreturnable milk containers, without regard to whether the containers, or the sellers are from outside the State. o. Facially Neutral Laws with a Disproportionate Adverse Effect on Commerce i. Court treats as ‘‘virtually per se invalid’’ laws that facially discriminate against interstate commerce and laws that are ‘‘protectionist’’ in purpose or effect ii. Law that is neither discriminatory nor protectionist still may be reviewed and struck down under the Court’s residual balancing test. iii. PIKE v. BRUCE CHURCH, INC.: Involved a home processing requirement. An Arizona statute required that Arizona-grown cantaloupes advertise their State of origin on each package. Church was an Arizona grower of high quality cantaloupes that were packed in CA and were not
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identified as AZ grown. Arizona issued an order prohibiting Church from shipping uncrated cantaloupes from the company’s Arizona ranch, and requiring that the cantaloupes be packed in Arizona and identified as coming from an Arizona packer. Court invalidated the requirement under the balancing test that the law did not have the ‘‘purpose and design’’ to promote safety or protect consumers from unfit goods, but instead was enacted ‘‘simply to protect and enhance the reputation of growers within the State. 1. Pike balancing test: a. If the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. b. If a legitimate local purpose is found, the extent of the burden that will be tolerated will depend on the nature of the local interest involved, it could be promoted if there is a lesser impact on interstate activities. c. State interest is legitimate but the State’s tenuous interest in having the company’s cantaloupes identified as originating in Arizona cannot constitutionally justify the requirement that the company build and operate an unneeded$200,000 packing plant in the State. iv. Kassel v. Consolidated Freightways Corp.: Iowa law prohibited tractor-trailers in excess of 60 feet. Regulated interstate instrumentalities. Court applied the Pike balancing test in upholding a district court finding that the harm to interstate commerce exceeded the safety benefit to the state. Regulations designed for that salutary purpose nevertheless may further the purpose so marginally, and interfere with commerce so substantially, as to be invalid under the Commerce Clause. The court concluded that the Iowa truck-length limitations unconstitutionally burden interstate commerce. 1. Court is quick to strike down any transpo regulation that seems to be motivated by protectionist impulses. p. Balancing Interstate Harm Against Local Benefit (Balance benefit of the law to the cost of interstate commerce) i. Regulation of transportation when states have regulated instrumentalities of interstate commerce, they have usually done because of public safety objectives, rather than protection of local economic interest. Courts either use the rational relationship test or balancing test. ii. Deference to local safety concerns
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1. SOUTH CAROLINA STATE HIGHWAY DEPARTMENT v. BARNWELL BROS.: the Court had upheld a 1933 South Carolina law prohibiting the use on state highways of trucks that were over 90 inches wide or that had a gross weight over 20,000 pounds. About 85 to 90% of the nation’s trucks exceeded these limits. Safety as a justification. S.C. owns highways and maintains them. To conserve highway, the law was enacted. (Cited Cooley for local v. national concerns). Court said both were justifications were legitimate and as long as the state action does not discriminate, the Constitution permits this burden because it is an inseparable incident of the exercise of a legislative authority, which, under the Constitution, has been left to the states. Satisfied the test: a. Legitimate purpose b. Rational means. 2. SOUTHERN PACIFIC CO. v. ARIZONA: the Court had invalidated the Arizona Train Limit Law of 1912, which prohibited railroad trains of more than 14 passenger or 70 freight cars. The findings show that the operation of long trains is standard practice over the main lines of the railroads of the United States, and that, if the length of trains is to be regulated at all, national uniformity in the regulation adopted, such as only Congress can prescribe, is practically indispensable to the operation of an efficient and economical national railway system. 3. BIBB v. NAVAJO FREIGHT LINES, INC.: Court said that even in trucking cases, it would invalidate facially neutral laws with a disproportionate effect on interstate commerce. Illinois law requiring the use of contour mudguards on trucks and trailers operating on Illinois highways conflicted with an Arkansas rule requiring straight mudguards and forbidding contoured ones and was inconsistent with 45 states that authorized the use of straight mudguards. State burdens on business entry. a. When an actual conflict between 2 or more regulations is shown. the court is likely to strike down at least one on the grounds that the need for national uniformity outweighs the individual state’s interest in regulating its own highways etc. iii. State burden on business entry 1. LEWIS v. BT INVESTMENT MANAGERS, INC. : The court used the Pike Balancing approach invalidate state limits on business entry and regulation of corporate affairs. Court struck down a Florida law prohibiting ownership of local investment advisory businesses by out-of-state banks, bank holding companies and

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trust companies. The law prevents competition in local markets by out-of-state firms with the kinds of resources. 2. EDGAR v. MITE CORP: Court held a sharply unconstitutional the Illinois Business Take–Over Act, designed to regulate tender offers made to target companies that had certain specified business contacts with Illinois. 3. CTS CORP. v. DYNAMICS CORP. OF AMERICA: involved a Dormant Commerce Clause challenge to an Indiana law providing that a purchaser who acquired ‘‘control shares’’ in an Indiana corporation could acquire voting rights only to the extent approved by a majority vote of the prior disinterested stockholders q. EXCEPTION: Congressional intent (more below)- The Dormant Commerce Clause does not apply when Congress authorizes state action, which would otherwise be invalid under the strict scrutiny, or Pike balancing tests. The Commerce Clause is primarily a grant of power to Congress to regulate commerce. The Dormant Commerce Clause reflects an inference that so long as Congress is silent it will only allow states to regulate consistent with those two tests. But Congress may rebut that inference by authorizing the states to regulate in a manner that would otherwise be forbidden. Of course, Congress cannot authorize state action which would violate some other part of the Constitution. r. DCC limits on state and local taxation i. Complete Auto Transit v. Brady: few features that would render a tax vulnerable under the DCC: 1. The tax is applied to an activity with a substantial nexus with taxing the state 2. Is fairly apportioned 3. Does not discriminate against interstate commerce, and is fairly related to the services provided by the state

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B. The Interstate Privileges and Immunities Clause of Article IV a. Privileges and Immunities i. Article IV provides in part that “[t]he citizens of each state shall be entitled to all Privileges and Immunities of citizens in the several states.” The Clause basically precludes a state from treating out-of-staters worse than instaters with respect to privileges and immunities 1. Interstate P&I clause prevents states from discriminating against out of state individuals. 2. Corporations and aliens are NOT protected, ii. The Privileges and Immunities Clause accordingly resembles the Dormant Commerce Clause. There are, however, important differences including the following: 1. The Privileges and Immunities Clause applies only to individual citizens, not to corporations, for instance. 2. The Privileges and Immunities Clause only addresses discriminatory measures; it does not have a test parallel to the Pike balancing test

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3. The Privileges and Immunities Clause only protects privileges and immunities. 4. The market participant exception does not apply. iii. The threshold issue is whether an activity is a Privilege and Immunity. These relate to activities which are “sufficiently basic to the livelihood of the Nation.” These would include the right to police and fire protection when out of state, the right to medical care, the right to pursue a trade and the right to engage in political speech and religious worship. iv. Test for P&I: 1. Only fundamental rights are covered. Examples: a. right to be employed (Hicklin v. Orbeck) b. The right to practice one’s profession c. The right to engage in business. 2. Non-economic rights are generally NOT protected; example- right to engage in recreational activity (Baldwin v. Montana: license for hunting for out of staters cost way more than in staters. Court said the right to recreation is not a right that is fundamental to national immunity.) 3. Once you determine fundamental right is at stake, apply 2-part test to determine whether acceptable: a. Discrimination will not violate P&I if non-residents are a “peculiar source of the evil” which the law was enacted to remedy. (Hicklin v. Orbeck: Alsaska hire case, violated P&I because access to employment is fundamental). b. Discrimination will not violate P&I if the discrimination bears a “substantial relationship” to the problem that statute is trying to solve. v. A state may only discriminate against out-of-staters regarding a Privilege and Immunity if it has a substantial reason for the difference in treatment and discrimination against nonresidents bears a substantial relationship to the state’s objectives. b. United Building & Construction Trades Council v. Mayor and Council of Camden: Privileges and Immunities clause imposes direct restraint in the interest of interstate harmony. i. In any case where out-of-staters are discriminated by the state acting as a market-participant, state’s actions may be vulnerable to an attack based

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on the privileges and immunities clause. (There is no market participant exception to the P&I clause.) ii. P&I bars discrimination based on municipal residence just as it bars discrimination based on state residence. c. The Scope and Limits of Interstate Privileges and Immunities i. The threshold requirement of an Art. IV ‘‘privilege.’’ SUPREME COURT OF NEW HAMPSHIRE v. PIPER, 470 U.S. 274: Court held that a state rule limiting bar admission to in-state residents violated the Privileges and Immunities Clause. The Court found none of the state’s asserted justification for the discrimination sufficient under the standard of the Camden case. 1. Right to practice law is fundamental. ii. Justifying differential treatment of outsiders under Art. IV: Unlike the Dormant Commerce Clause, which permits facial discrimination only if the government has a compelling interest for which the law is the least restrictive means (recall Maine v. Taylor, the baitfish case), privileges and immunities review requires only a substantial interest to which the government’s reason is closely related.

C. Congressional Ordering of Federal-State Relationships By Preemption and Consent

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a. Congressional Preemption of State Regulation: The Court’s preemption rulings often turn on a determination of congressional intent in the setting of the particular text, history and purposes of the federal legislation involved. i. If there is a conflict between federal and state law, the state law is simply invalid under the Supremacy Caluse of article VI. b. Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Development Comm’n: Congress may preempt state authority by so stating in express terms. Absent explicit preemptive language, Congress’ intent to supersede state law altogether may be found from a ‘‘scheme of federal regulation so pervasive as to make reasonable the inference that Congress left no room to supplement it,’’ ‘‘because the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject,’’ or because ‘‘the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose.’’ i. Court will look at the goals of the federal and state policies to see if there is a true conflict. Federal system of licensing aimed at safety issues while the CA law aimed at economic problems of storing and disposing waste. Thus, the CA regulatuin does not conflict with federal objectives. c. Modes of Preemption Analysis i. Types of preemption. As the Court acknowledged in PG&E, Congress may preempt state power to regulate in three ways: by express statement, by implied occupation of a regulatory field, or by implied preclusion of conflicting state regulations: 1. Express preemption: When preemption is express, the only issue is whether a state statute falls within the area preempted. a. Express occurs when a federal law specifically says ut preempts state law. b. The two types of implied preemption (field and conflict), however, require further analysis. 2. Field preemption: Court requires a clear showing that Congress meant to occupy a field and so displace the states from regulation on that subject matter. Congressional intent is paramount. a. RICE v. SANTA FE ELEVATOR CORP: Court states that the question in each case is what the purpose of Congress was. Congress legislated here in a field which the States have traditionally occupied [grain warehousing practices]. Court said to start with the assumption that the historic police powers of the States were not to be superseded by the

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Federal Act unless that was the clear and manifest purpose of Congress. 3. Conflict preemption: a. HINES v. DAVIDOWITZ: Court barred enforcement of Pennsylvania’s Alien Registration Act of 1939 because of the federal Alien Registration Act of 1940. Held that the federal government, in the exercise of its superior authority in this field, has enacted a complete scheme of regulation and has provided a standard for the registration of aliens, states cannot inconsistently with the purpose of Congress, conflict or interfere with, curtail or complement, the federal law, or enforce additional or auxiliary regulations.

b. FLORIDA LIME & AVOCADO GROWERS, INC. v. PAUL: Florida Lime involved avocados certified as mature under the federal regulations but containing less than the minimum California oil content. Court said that CA code was not invalid under the Supremacy Clause, because there is neither such actual conflict between the two schemes of regulation that both cannot stand in the same area, nor is there evidence of a congressional design to preempt the field. Impossibility preemption. i. Congress will be deemed to have preempted an area only where either the intent is unmistakable or where the nature of the regulated matter permits no other conclusion. c. GADE v. NATIONAL SOLID WASTES MANAGEMENT ASS’N: Court found several Illinois provisions for licensing workers who handle hazardous waste preempted by federal Occupational Safety and Health Administration regulations, even though the federal regulations aimed only at worker safety and the state regulations aimed both at worker safety and public health. d. WYETH v. LEVINE: Court upheld against implied conflict preemption challenge a state-law failure- to-warn judgment where an anti-nausea bearing a label approved by the Food and Drug Administration was administered intravenously in a way that caused a musician to suffer amputation of her arm. Court held that Wyeth has failed to demonstrate that it was impossible for it to comply with both federal and state requirements. ii. Preemption and the foreign affairs power- CROSBY v. NATIONAL FOREIGN TRADE COUNCIL: Court unanimously struck down a
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Massachusetts law barring state entities from buying goods or services from companies doing business with Burma. Congress’s passage of a federal law imposing mandatory and conditional sanctions on Burma preempted the Massachusetts law, since Massachusetts’s more stringent and inflexible provisions presented ‘‘an obstacle to the accomplishment of Congress’s full objectives under the federal Act.’’ d. Congressional Consent to State Regulation i. The McCarran Act and state discrimination in insurance. Congress enacted the McCarran Act of 1945, which not only limited the applicability of antitrust laws to the business, but also sought to assure continued state authority over insurance. Court can allow Congress to authorize a state to discriminate overtly against out0of0state corporations. 1. PRUDENTIAL INSURANCE CO. v. BENJAMIN: New Jersey Insurance Corporation objected to the continued collection of a longstanding tax of 3% of the premiums received from all business done in South Carolina. Court assumed that the tax was ‘‘discriminatory’’ and hence invalid under commerce clause decisions. Nevertheless, the Court held that the McCarran Act validated the tax. ii. Federal development grants and local-hire rules- WHITE v. MASSACHUSETTS CONSTRUCTION COUNCIL: the Court upheld a an executive order by the Mayor of Boston reserving 50 percent of jobs on public works projects to Boston residents. The facial discrimination was upheld against Dormant Commerce Clause challenge as to city-funded projects under the market participant exception. The Commerce Clause is a grant of authority to Congress, and not a restriction on the authority of that body. Where state or local government action is specifically authorized by Congress, it is not subject to the Commerce Clause even if it interferes with interstate commerce. iii. Other devices for congressional ordering of federal-state relationships: Additional examples include: the congressional role in determining the scope of intergovernmental immunities; federal incorporation or adoption of state common law either expressly or by implication, as in many areas of tax, copyright and bankruptcy law; and state administration of federal law, as in the unemployment compensation scheme of the Social Security Act or the distribution of Aid to Families with Dependent Children, or in the varied exercises of the federal spending power through conditional grants to the states. D. Other Aspects of Federal-State Relationships a. State Taxation of Interstate Business

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i. COMPLETE AUTO TRANSIT, INC. v. BRADY: Court upheld against commerce challenge a Mississippi tax on a shipper of automobiles for the ‘‘privilege of doing business’’ in the state. Held that interstate commerce is not immune from state taxation and set forth the currently governing four-part test. A state tax may be sustained against Commerce Clause challenge when: 1. The tax is applied to an activity with a substantial nexus with the taxing State, 2. is fairly apportioned, 3. does not discriminate against interstate commerce, and 4. Is fairly related to the services provided by the State. ii. QUILL CORP. v. NORTH DAKOTA: Court clarified that the substantial nexus with a state required under the Commerce Clause is greater than the minimum contacts with a state required under the Due Process Clause. Court held it permissible under due process, but impermissible under the Auto Transit test, for a state to tax out-of-state businesses that had no physical presence in the state and whose only contacts with the state were by common carrier or the mails. b. Intergovernmental Tax Immunities i. The principle that the federal government is immune from taxation derives from McCullogh. ii. Graves v. New York ex rel. O’Keefe: held that the salaries of the employees of one government are not immune from income taxes imposed by the other. BUT in recent years, intergovernmental tax immunities have continued to wane, although the Court continues to enforce a few constitutional tax immunities, as when states impose property taxes directly on federal property. iii. Scope of federal immunities depends upon Congress. Congress may, whenever it wishes, explicitly confer additional immunity from state taxation upon other persons or entities. iv. United States v. New Mexico: Narrow approach- a State may not, consistent with the Supremacy Clause, lay a tax ‘directly upon the United States.’ c. Intergovernmental Regulatory Immunities i. Johnson v. Maryland: relied on McCulloch in reversing the conviction of a post office employee for driving a truck without a state license. ii. Leslie Miller, Inc. v. Arkansas: federal immunity from state regulation may be claimed by a close relationship with the government such as the
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state tax area, where the scope of the immunity turns largely on congressional policy. iii. North Dakota v. United States: several state laws were evidently enacted to slow down or control federal acquisition of easements pursuant to the Migratory Bird Conservation Act. Court found that the state laws were ‘‘hostile to federal interests.’’ d. Mutual Obligation Among the States i. The major constitutional source of interstate obligations, Article IV, § 2, contains two important restraints: 1. The interstate privileges and immunities clause 2. The Extradition Clause- which obligates rendition of fugitives from justice. ii. The major device for interstate collaboration recognized in the Constitution is the interstate compact: 1. Article I, § 10 states that no state ‘‘shall, without the Consent of the Congress, enter into any Agreement or Compact with another State.’’ 2. Virginia v. Tennessee: The compact clause is directed at the formation of any combination ‘‘which may tend to increase [the] political influence of the contracting States’’ so as to ‘‘impair the supremacy of the United States,’’ and that there are ‘‘many matters upon which different States may agree that can in no respect concern the United States.’’ a. Not every agreement between states require congressional consent e. Remember the general rule: the only real state immunity (exceptionally narrow) from federal taxation is that the federal government may not tax in a way which substantially interferes with a state’s performance of its basic governmental functions. (such as schools and public parks) Separation of Powers A. Executive Discretion in Times of War or Terrorism a. Early cases: Ex Parte Milligan: Court held unconstitutional the use of military tribunals to try civilians where civilian courts were open and operating. BUT in Ex Parte Quirin: Court upheld the use of military commissions to try eight Nazi saboteurs sent ashore to engage in espionage and sabotage against US during WWII. b. The executive response to the events of 9/11- RASUL v. BUSH: Supreme Court held that those held at Guantanamo Bay could invoke the federal habeas corpus
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statute because the statute’s scope extended to the military base there, which although in a foreign country, was considered sovereign territory. c. Hamdi v. Rumsfeld: Hamdi, a Louisiana-born Saudi–American, was detained by the U.S. military as an‘‘enemy combatant’’ for fighting against American forces. Court held that although Congress authorized the detention of combatants in the narrow circumstances alleged here, due process demands that a citizen held in the United States as an enemy combatant be given a meaningful opportunity to contest the factual basis for that detention before a neutral decision maker. Court said that unless Congress suspends writ of habeas corpus, a citizen detained as an enemy combatant is entitled to this process. i. Scalia and Stevens on the same side. d. The Scope of Hamdi i. Application off the immediate battlefield: The plurality in Hamdi emphasized the context of the case, namely that Hamdi was a U.S. citizen who had been captured in an active combat zone on foreign soil. Would it make a difference if he had been apprehended on American soil? ii. The Padilla case: U.S. citizen was arrested by federal law enforcement officials in Chicago’s O’Hare Airport for allegedly helping in a plot to detonate a ‘‘dirty bomb,’’ and then turned over to the Department of Defense when he was declared an ‘‘enemy combatant’’ by the President. The Court reversed the decision on jurisdictional grounds, determining that Padilla had not properly filed his habeas petition against the Secretary of Defense in the Southern District of New York, and should instead have brought his action against the commander of the brig in the district of South Carolina where he was incarcerated. iii. Military tribunals for enemy combatants: In addition to detaining enemy combatants at Guantanamo Bay, the U.S. government announced plans after 9/11 to try certain noncitizen enemy combatants by military tribunals 1. DETAINEE TREATMENT ACT- Congress limited jurisdiction to review CSRT determinations to the court of appeals for the D.C. Circuit, which was permitted to review only whether determination complied with Defense Department procedures and, to the extent applicable, U.S. statutes and the Constitution. e. Hamdan v. Rumsfeld: the Court held that the DTA did not strip it of jurisdiction over existing appeals from denial of habeas in existing cases, and, on the merits of such an appeal, found the President’s unilateral military tribunal procedures unauthorized by statute and contrary to international law. The executive branch had no authority to establish military commissions, they were barred by the Geneva Convention, and the authority to establish them- and thus override the treaty obligations- could not be inferred from various acts of congress.

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i. Neither an act of Congress nor the inherent powers of the Executive laid out in the Constitution expressly authorized the sort of military commission at issue in this case. Absent that express authorization, the commission had to comply with the ordinary laws of the United States and the laws of war. f. The Aftermath of Hamdan i. Congressional response to Hamdan: After the decision in Hamdan, Congress enacted the MILITARY COMMISSIONS ACT provides the President with authority to try such alien unlawful enemy combatants by military commissions, for any offense made punishable by the law of war. g. Boumediene v. Bush: Because the procedures laid out in the Detainee Treatment Act are not adequate substitutes for the habeas writ, the MCA operates as an unconstitutional suspension of that writ. The detainees were not barred from seeking habeas or invoking the Suspension Clause merely because they had been designated as enemy combatants or held at Guantanamo Bay. h. Assessing Hamdi, Hamdan and Boumediene i. The interplay between the executive, legislative and judicial branchesHamdi, Hamdan and Boumediene together represent a remarkable judicial response to executive action during a period of national security concern. ii. Inherent presidential authority in military affairs? The Youngstown majority found no such exclusive or preclusive authority conferred by the Vesting, Take Care, or Commander-in-Chief Clauses. The fact that the President is Commander in Chief of the military does not make him ‘‘also Commander in Chief of the country, its industries and its inhabitants.’’ iii. The Vesting Clause and inherent executive power- Article II specifies some presidential powers, such as the power to issue pardons and the powers to make treaties and appointments, but unlike Article I, it does not limit presidential powers to any enumerated list. Instead, it simply ‘‘vests’’ the executive power in ‘‘a President of the United States.’’ B. Congressional Violation of the Separation of Powers a. Congressional Control over Actions of the Executive Branch b. INS v. Chadha: Congress authorized either House of Congress to invalidate and suspend deportation rulings of the United States Attorney General. Court held that it violated the presentment clause and bicameralism. Court said to determine whether the Legislative veto was to look if it was legislative in nature. i. When it acts in legislative behavior it must comply with its delegation of authority.

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Constitutional Law Outline I. Levy

Fall 2011

ii. Disagreement with the Attorney General’s decision on Chadha’s deportation—that is, Congress’ decision to deport Chadha—no less than Congress’ original choice to delegate to the Attorney General the authority to make that decision, involves determinations of policy that Congress can implement in only one way: bicameral passage followed by presentment to the President. c. Bicameralism and Presentment i. The impact of Chadha: summary decisions by the Supreme Court soon after Chadha struck down not only one-House veto provisions in regulatory statutes involving independent agencies but also two-House vetoes as in the Federal Trade Commission Improvements Act of 1980. ii. Presidential vetoes 1. Raines v. Byrd: d. Clinton v. New York: President Clinton exercised his authority under the Line Item Veto Act of 1996 by canceling a provision of the Balanced Budget Act of 1997 allowing New York to keep certain funds it would otherwise have had to repay to the federal government under the Medicaid program, and a provision of the Taxpayer Relief Act of 1997 giving a tax benefit to food processors acquired by farmers’ cooperatives. i. The Line Item Veto Act gives the President the power to ‘‘cancel in whole” three types of provisions that have been signed into law: 1. Any dollar amount of discretionary budget authority; 2. Any item of new direct spending; or 3. Any limited tax benefit.’ ii. Appointments clausee. Congressional Control Over Executive Officers i. Appointment of executive officers 1. Art. II, § 2, cl.2, the Appointments Clause, provides that the President ‘‘shall nominate, and by and with the Advice and Consent of the Senate, shall appoint [Ambassadors], Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.’

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Constitutional Law Outline I. Levy

Fall 2011

2. BUCKLEY v. VALEO: Court’s per curiam opinion relied on the Appointments Clause in holding unconstitutional, for most purposes, the composition of the Federal Election Commission [FEC] established by the Federal Election Campaign Act. Under the law, a majority of the FEC members was appointed by the President pro tempore of the Senate and the Speaker of the House. Court held that such powers could be exercised only by ‘‘Officers of the United States’’ appointed in accordance with the Appointments Clause. ii. Removal of executive officers: Granting Executive Functions to Legislative Officer: Congress cannot grant executive functions to an officer Congress can remove. f. Bowsher v. Synar: As part of Balanced Budget Act, Congress enacted legislation requiring the Comptroller General to determine specific spending reductions in the event that Congress failed to do so, then require the President to implement Comptroller General’s decisions. Held, Act is unconstitutional because it bestows on the Comptroller General, “an officer controlled by Congress,” executive powers.

g. No Unconstitutional Encroachment : A Congressional Act is constitutional encroachment when Congress is essentially delegating power, thus the fundamental balance is not upset. h. Morrison v. Olson: The Independent Counsel Law-Independent Counsel established by Congress was an inferior officer whose appointment could be vested by congress other than in the president. i. The Aftermath of Morrison v. Olson i. Federal Sentencing Guidelines: Federal sentencing guidelines do not encroach upon judicial authority. [Mistretta v. United States (1989): Held, Using flexible, functional approach, Congress giving power to US Sentencing Commission to develop sentencing guidelines is not unconstitutional separation of powers. Also, Federal Rules of Civil Procedure help explain why Congress gives Commission power.] 2 questions: 1. Associate in the law firm, partner in the firm ask that you prepare opinion letter that will analyze all constitutional 1 issues. Should the law firm bring suit on behalf of the client? 2. Role of counsel to the legislature, proposed bill that your boss has been asked to cosponsor, before deciding whether to do so, write a memorandum of law that analyzes all constitutional 1 law problems with the proposed bill. No need to cite authority, think of the doctrines. Number: 9772781 office 205.

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Constitutional Law Outline I. Levy

Fall 2011

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Constitutional Law Outline I. Levy

Fall 2011

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Constitutional Law Outline I. Levy

Fall 2011

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Constitutional Law Outline I. Levy

Fall 2011

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