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Spotting Constitutional Issues Dormant Commerce Clause

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Spotting Constitutional Issues Dormant Commerce Clause 9/26/2016 Commerce Clause and Spotting Constitutional Issues Dormant Commerce Clause • Congress shall have the power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." • Article 1, Section 8, Clause 3 • Grant of power to Congress; not an express limit on the power of the states Lisa Soronen, State and Local Legal Center Fred Messerer, California Legislative Counsel Dormant Commerce Clause Dormant Commerce Clause • Are in‐state and out‐of‐state economic interests treated differently? • “Negative converse” of the Commerce Clause • Example‐‐milk cases • Not in the text of the Constitution • Dean Milk v. Madison (1951)—Madison could not prohibit the sale of milk • Some people think it is made up (Justice Thomas) bottled more than five miles from the city center • First case: Reading Railroad v. Pennsylvania (1873) • Two tests • State legislation cannot improperly burden or discriminate against • Simple economic protection—virtually per se invalid interstate commerce • Balancing test (burden weighed against benefits) applies where “other legislative objectives are credibly advanced and there is no patent discrimination against interstate trade”—Pike v. Bruce Church (1970) 1 9/26/2016 Dormant Commerce Clause Dormant Commerce Clause • Facially neutral laws aren’t spared • Market Participant and California’s proposed initiative, Proposition 61 • So. Pacific Co. v. Arizona (1945)—Court applied balancing test to Arizona law • Prop 61 has two substantive provisions: prohibiting long trains in the state (balance state’s safety interest with burden • “(a) Notwithstanding any other provision of law and insofar as may be on commerce) permissible under federal law, neither the State of California, nor any state • Market participation exception—state as a market participant may administrative agency or other state entity, including, but not limited to, the California Department of Health Care Services, shall enter into any prefer in‐state customers agreement with the manufacturer of any drug for the purchase of a • Reeves v. Stake (1980)—South Dakota may prefer to sell cement from its prescribed drug unless the net cost of the drug, inclusive of cash discounts, state‐owned cement plant to South Dakota customers free goods, volume discounts, rebates, or any other discounts or credits, as • South‐Central Timber Development v. Wunnicke (1984)—Alaska can’t insist determined by the California Department of Health Care Services, is the that purchasers of state‐owned timber agree to process some of the timber in same as or less than the lowest price paid for the same drug by the United Alaska sawmills (Alaska was attempting to control downstream commerce) States Department of Veterans Affairs.” Dormant Commerce Clause Dormant Commerce Clause • Subdivision (a) is attempting to apply a “market participant” • “(b) The price ceiling described in subsection (a) above also shall apply to all programs where the State of California or any state administrative exception agency or other state entity is the ultimate payer for the drug, even if it did not purchase the drug directly. This includes, but is not limited to, • White paper for the Vermont Legislature suggests even subdivision (a) California's Medi‐Cal fee‐for‐service outpatient drug program, and violates the dormant commerce clause California's AIDS Drug Assistance Program. In addition to agreements for • http://www.scotthemplinglaw.com/files/pdf/ppr_vt_prescription_drug_pricin any cash discounts, free goods, volume discounts, rebates, or any other discounts or credits already in place for these programs, the responsible g1099.pdf state agency shall enter into additional agreements with drug manufacturers for further price reductions so that the net cost of the drug, as determined by the California Department of Health Care Services, is the same as or less than the lowest price paid for the same drug by the United States Department of Veterans Affairs. The requirements of this Section shall not be applicable to drugs purchased or procured, or rates developed, pursuant to or under any Medi‐Cal managed care program.” 2 9/26/2016 Dormant Commerce Clause Special Issues • Subdivision (b) implementation: • State tax • How will “ultimate payer” be determined? • Complete Auto Transit v. Brady (1977) (four factors to judge if a tax violates the Commerce Clause) • State reimbursed by the federal government? • International tax • State employee benefit packages? • Japan Lines v. County of Los Angeles (1979) (state taxes on international commerce cannot create a substantial risk of multiple taxation or prevent the federal government from speaking with one voice) Special Issues Hot Topic • Local processing requirements • Overturning Quill v. North Dakota (1992) (out‐of‐state retailers don’t • Tons of these cases over the years have to collect use tax) • United Haulers Association v. Oneida‐Herkimer (2007) (okay to require solid • South Dakota, Alabama, (and Colorado) are well on their way waste to be delivered to a publicly owned and operated local facility) • California requires use tax to be collected if the retailer has a • Health and safety requirements substantial nexus to the state (Sec. 6203, Cal. Rev. & Tax Code), aka • States get more leeway to regulate the “Amazon Tax.” • Where is the line? Exxon v. Maryland (1978) (Maryland could bar petroleum • Implemented a one‐year delay in exchange for Amazon opening multiple producers from operating retail service stations) fulfillment centers within California 3 9/26/2016 Due Process Due Process • Four protections: • Fifth and Fourteenth Amendments say: • Procedural due process (in civil and criminal proceedings) • “[N]or shall any person . be deprived of life, liberty, or property, • Substantive due process without due process of law . .” • Prohibition against vague laws • Vehicle for incorporating the Bill of Rights Due Process Due Process • Must be a deprivation of life, liberty, or property • Required procedures vary • Property interests come from state law and common law • Mathews v. Eldridge (1976): “Due process, unlike some legal rules, is • Liberty interests come from the constitution—are vague not a technical conception with a fixed content unrelated to time, • Procedures are required place, and circumstances.” • Importance of the interest to the individual • Will additional procedures increase accuracy of fact finding? • Governments interest in administrative efficiency • Circuit court precedent is relevant 4 9/26/2016 Due Process Due Process • Check your state constitution! • Generally required—Goldberg v. Kelly (1970) • California’s Due Process requirement has been interpreted to add to • Notice the Matthews standards: • Hearing • The “dignitary interest in informing individuals of the nature, grounds, and • Impartial decision maker consequences of the action and enabling them to present their side of the • Confront and cross examine story before a responsible government official” • Decision on the record • Saleeby v. The State Bar of California (1985) 39 Cal.3d 547, 565 • Counsel Hot Topic: Incarcerating the Poor Because DOJ Ferguson Investigation They Can’t Pay Fines & Fees • People can’t be incarcerated solely because of inability to pay a fine • Court system exists to maximize revenue not accomplish justice or fee • Have to appear before the court for many offenses • Bearden v. Georgia (1983) (due process and equal protection • Don’t “appear” you get a high fine, your ability to pay isn’t determined, and a principles of the Fourteenth Amendment prohibit “punishing a warrant is issued for your arrest person for his poverty”) • If you are arrested, you may be jailed just because you can’t pay without your ability/inability determined • Turner v. Rogers (2011)(due process requires notice that the ability to pay is a critical issue, and a meaningful opportunity to be heard about financial circumstances) 5 9/26/2016 Dear Colleague Letter Dear Colleague Letter • Courts must not incarcerate a person for nonpayment of fines or fees • Courts must not use arrest warrants or license suspensions as a without first conducting an indigency determination and establishing means of coercing the payment of court debt when individuals have that the failure to pay was willful not been afforded constitutionally adequate procedural protections • Courts must consider alternatives to incarceration for indigent • Courts must not employ bail or bond practices that cause indigent defendants unable to pay fines and fees defendants to remain incarcerated solely because they cannot afford • Courts must not condition access to a judicial hearing on the to pay for their release prepayment of fines or fees • Courts must safeguard against unconstitutional practices by court • Courts must provide meaningful notice and, in appropriate cases, staff and private contractors counsel, when enforcing fines and fees Drafting Tips Anyone Seeing Legislation Over this Issue? • Account for the ability or inability to pay: • “A chief probation officer may charge persons on probation for the costs of any form of supervision that utilizes continuous electronic monitoring devices that monitor the whereabouts of the person pursuant to this chapter, upon a finding of the ability to pay those costs. However, the department shall waive any or all of that payment upon a finding of an inability to pay.” • Sec. 1210.15, Cal. Penal Code • Prohibit the court from denying protections based on financial status: • “[N]o defendant shall be denied probation
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