Revenge Of The States

If the nation’s pork producers thought a conservative U.S. Supreme Court would protect their business interests, they got a rude awakening in May. Justice Neil Gorsuch wrote for a unanimous court that California could dictate to farmers in Iowa how to raise their pigs, upholding the state’s ban on selling pork from pigs confined in pens smaller than its standards allow. 

The decision in National Pork Producers Council v. California reflects a solidifying consensus among the court’s liberals and conservatives that the so-called “Dormant Commerce Clause” doesn’t prevent states from passing laws and regulations that reach far beyond their borders. The practical effect for businesses is they must contend not only with federal regulations but also a far larger body of state laws and regulations dictating, often in minute detail, what they can sell and how they can operate around the country. 

Stating the Case 

A 2020 report by the Mercatus Center at George Mason University put California at the top of the list, with more than 395,000 regulations, and Idaho at the bottom with 38,961. In total, the states had five times as many regulations as the entire U.S. Code of Federal Regulations. 

A company based in New Jersey or Kentucky understands it must comply with the laws of its own state. But the legal questions become murkier when a state far away purports to tell them how to do business. 

That’s where the Dormant Commerce Clause comes in—or did. Article 1 of the U.S. Constitution states that Congress has the exclusive power to “regulate commerce… among the several states.” But the Constitution also grants the states broad police powers to protect their citizens against unsafe products and unsavory business practices. The Dormant Commerce Clause—“dormant” because it isn’t actually spelled out in the Constitution—was a judicial attempt to balance those two interests, by striking down 

Competing Legislation 

Before the Constitution was ratified in 1788, states engaged in outright economic warfare. When New York put heavy duties on imported goods to retaliate against British trade policies, neighboring states opened duty-free ports to draw shipping traffic their way. New York responded with a law imposing equivalent duties on any goods imported from Connecticut, New Jersey or Rhode Island. New Jersey fired back by taxing the lighthouse at Sandy Hook. 

“Our liberties, our rights and property have become the sport of ignorant unprincipled State legislators!” wailed New Hampshire politician William Plumer in the 1780s. 

The Commerce Clause was the solution, only it quickly created its own problems. Practically any law regulating in-state commerce has out-of-state effects. Chief Justice John Marshall first enunciated the principle in his 1824 decision Gibbons v. Ogden, striking down a New York law giving a monopoly on steamboat traffic to Robert Fulton. The court went on to strike down state laws setting minimum and maximum prices on beer and milk and an Arizona law requiring cantaloupes grown in-state to be processed and packed there as well. 

Then, conservatives began questioning the doctrine, citing states’ rights and the fact it is written nowhere in the Constitution. Justice Antonin Scalia likened balancing state powers and interstate commerce to “being asked to decide whether a particular line is longer than a particular rock is heavy.” 

Out-of-state pork producers ran head-on into this resistance when they argued it was unfair for California to dictate how large their pens must be to sell their products in the Golden State. Justice Gorsuch was unsympathetic: “While the Constitution addresses many weighty issues,” he wrote, “the type of pork chops California merchants may sell is not on that list.”