Marquette Law Review Volume 100 Article 6 Issue 2 Winter 2016

The Extraterritoriality Doctrine of the Dormant is Not Dead Susan Lorde Martin Frank G. Zarb School of Business, Hofstra University

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Repository Citation Susan Lorde Martin, The Extraterritoriality Doctrine of the is Not Dead, 100 Marq. L. Rev. 497 (2016). Available at: http://scholarship.law.marquette.edu/mulr/vol100/iss2/6

This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion in Marquette Law Review by an authorized editor of Marquette Law Scholarly Commons. For more information, please contact [email protected]. 38800-mqt_100-2 Sheet No. 106 Side A 02/22/2017 09:25:38 ORMANT D * ...... 502 ARTIN ...... 499 M SPECT OF THE LAUSE ...... 503 ORDE A C Abstract L NOT DEAD NOT DEAD USAN ...... 502 ...... S traterritoriality Cases ...... 502 ...... traterritoriality Cases OMMERCE C ...... 498 ) 2/16/17) 11:35 AM LAUSE C ELETE D Edgar v. MITE Corp. Baldwin v. G.A.F. Seelig, Inc. Seelig, G.A.F. Baldwin v. OT N ORMANT XTRATERRITORIALITY O D E 2. 1. (D OMMERCE HE HE NTRODUCTION DOCX T T C A. The Classic Ex Cypres Family Distinguished Professor of Legal Studies in Business, Frank G. Zarb School of Cypres Family Distinguished Professor of Legal Studies in Business, Frank G. Zarb School -P. * In 1895, the Court of Appeals, in refusing to enforce a Kansas in refusing to enforce York Court of Appeals, In 1895, the New M K THE EXTRATERRITORIALITY DOCTRINE DOCTRINE THE EXTRATERRITORIALITY ARTIN C Y OF THE DORMANT COMMERCE CLAUSE IS CLAUSE COMMERCE DORMANT OF THE Business, Hofstra University. Preparation of this article was supported by a Hofstra University Special Business, Hofstra University. Preparation of this article was supported by a Hofstra University Scholarly Leave. II. M III. statute, referred to “a principle of universal application, recognized in all civ- application, recognized in all “a principle of universal statute, referred to have statutes of one state ilized states, that the another.” . . . no force or effect in “[t]he statute of another of Appeals of Kentucky noted that In 1897, the Court old notion describes the no extraterritorial force.” That state has, of course, doctrine of the dormantextraterritoriality Commerce Clause. In recent years, the doctrine has become One, the line between problematic for several reasons. become blurred with many fewer trans- intrastate and interstate business has Two, when Congress does not category. actions falling clearly in the former that creates the impression all, states, it act on issues that affect many, if not a larger role in regulat- to undertake need federalism is not working and states ing commerce. test for the out-of-state-discrim- Three, there is a clear two-part it is easy to confuse Commerce Clause, so ination strand of the dormant it with Therefore, some com- doctrine. an appropriate test for the extraterritoriality mentators doctrine serves no useful pur- have said that the extraterritoriality is a reasonably clear test for extraterrito- pose. This article argues that there important purposes of discouraging undue riality, and the doctrine serves the of not giving preference to one state’s pol- burdens on interstate commerce and states. icy decisions over the decisions of other I I. 38800-mqt_100-2 Sheet No. 106 Side A 02/22/2017 09:25:38 02/22/2017 A No. 106 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 106 Side B 02/22/2017 09:25:38 M K C Y [100:497 504 OCTRINE IN THE D ...... 521 ...... 515 AW L ASE AND ...... 504 C TATE NTRODUCTION S EGULATION INE R ...... 517 ...... W I. I XTRATERRITORIALITY ...... 522 ...... Cases ...... 509 E MARQUETTE LAW REVIEW MARQUETTE ...... MPIRE ) 2/16/17) 11:35 AM E EVERAGE LAUSE B C ...... 526 ELETE D Healy Beer Institute v. Brown-Forman Distillers Corp. v. New York State Liquor York State v. New Corp. Distillers Brown-Forman Authority OT N TRANGE O S 3. 4. (D LCOHOLIC LCOHOLIC OMMERCE HE XTRATERRITORIALITY IN XTRATERRITORIALITY PPOSITION TO THE PPOSITION TO THE DOCX E. 511 ...... The Foie Gras Case 512 ...... F. AnAbortion Case 514 ...... G. 513 ...... Cases AnArtist Royalty Case H. Internet A B. Energy Cases ...... 505 ...... Cases B. Energy C. 507 ...... Loan Bottle Redemption Cases D. Subprime E C ONCLUSION -P. The Commerce Clause in the U.S. Constitution explicitly gives a power to an issue in importantbeen The extraterritoriality doctrine has recent cases description of the negative implica-The first part of the article gives a brief . ARTIN IV the U.S.and implicitly Congress limits states’ powers. The purpose of the Clause in its entirety is to promote a national economy, and its parts contribute ways. The least understood of the parts is to that purpose in several different implication of the Clause that lim- negative the extraterritoriality doctrine of the its the way states can regulate. articles, some of recent of which call and, as a result, has also been the subject for its elimination it already dead. This article demonstrates or pronounce that the doctrine still serves welldual purposes of promoting the interstate com- merce hostility among and discouraging states while each carries out its own policies in its own best interest. tion of the Commerceis an explanation of the extraterrito- Clause. Then there riality doctrine of the Commerce Clause and a review of cases in which courts applied it. The following two sections explain the dormant Commerce Clause’s of New relationship to alcoholic beverage regulation, focusing on the State York’s New York wine business. strange extraterritorial regulation of a retail Next are some examples of state commonlaw references to extraterritoriality. Finally, there is a summary of the opposition to the extraterritoriality doctrine. VIII.C V. T V. VII. O 498 M VI. E 38800-mqt_100-2 Sheet No. 106 Side B 02/22/2017 09:25:38 02/22/2017 B No. 106 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 107 Side A 02/22/2017 09:25:38 4 Beyond the Reach of 499 LAUSE C “[L]ocal needs” should not “[L]ocal needs” 3 OMMERCE C The U.S. SupremeCourt has said that in 1 ORMANT D HE ) 2/16/17) 11:35 AM EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY II. T . 467, 471–75 (2003). ELETE D 6 EV . art. I, § 8, cl. 3. The purpose of the dormant The purpose of the Commerce Clause is to establish a OT 2 N , Or. WasteDep’t of Envtl. Quality of Or., 511 U.S. 93, 98 (1994) (Com- Sys., Inc. v. O .L.R ONST (D E (quoting Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 179 (1995)). DOCX Justice Alito continued that “[a]lthough the Clause is framed as a posi- , 55 M 5 -P. .Id. . See, e.g. 6 5.S. Ct. 1787, 1794 (2015) (quoting Hughes v. Ok- Comptroller of the Treasury v. Wynne, 135 3. Wyoming (1992) (Scalia, J., dissenting). v. Oklahoma, 502 U.S. 437, 469–70 4.U.S. 366, 371 (1976) (quoting Freeman v. Hewit, Great Atl. & Pac. Tea Co. v. Cottrell, 424 2 1. C U.S. In spite of the Supreme for almost Court’s recognition two hundred years The Commerce the power “[t]o regulate Com- Clause grants Congress In a recent Commerce Clause case, Justice Alito, writing for the Court, M K ARTIN C Y lahoma, 441 U.S. 322, 325 (1979)). lahoma, 441 U.S. 322, 325 (1979)). 329 U.S. 249, 253 (1946)). addition to creating this federal poweraddition to creating to regulate interstate commerce, the Commerce dormantto the so-called Clause has negative implications Com- merce Clause. restrict “the overriding requirement of freedomrestrict “the overriding for the national commerce.” free market and localities from the entire nation by restricting states across im- of goods across state lines. peding the free flow 2016] extraterri- a test for defined have adequately that courts article concludes The whichtoriality, states’ attempts to invalidate serves their beyond at regulating commerce burdens on interstate thus, discouraging borders; encouraging and fromstates to refrain imposing their own other states and regulations on policies that may legitimate have different the best way ideas about to govern. M merce . . . among States.” the several tive grant of power to Congress, ‘we have consistently held this language to tive grant of power to Congress, ‘we contain a further, negative command, as the dormantknown Commerce Clause, when Congress has failed to legislate even prohibiting certain state [regulation] on the subject.’” merce “Clause has long been understood to have a ‘negative’ aspect that denies the States the power merce “Clause has long been understood to have the interstate flow of articles of commerce”); Healy v. unjustifiably to discriminate against or burden CourtBeer Inst., 491 U.S. 324, 326 n.1 (1989) (“This long has recognized that this affirmative grant implicit or ‘dormant’ limitation on the authority of the of authority to Congress also encompasses an States to enact legislation affecting interstate commerce.”). Commerce Clause see Peter C. Felmly, For an historical analysis of the dormant noted that “a central concern of the Framersnoted that “a central . . . was . . . to avoid the tendencies had plagued relationstoward economic Balkanization that among the Colo- nies.” States: The Dormant Commerce Clause, Extraterritorial State Regulation, and the Concerns of Fed- States: The Dormant Commerce Clause, Extraterritorial eralism 38800-mqt_100-2 Sheet No. 107 Side A 02/22/2017 09:25:38 02/22/2017 A No. 107 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 107 Side B 02/22/2017 09:25:38 M K C Y [100:497 –79 (1986). ashington apples and Nevertheless, Court Nevertheless, 9 the dormant Commerce 7 “A discriminatory [state] 10 ash. State Apple Advert. Comm’n, 432 In 2015, the late Justice Scalia the late Justice In 2015, 8 Church, Inc., 397 U.S. 137, 142 (1970). The resulting judicial exercise is The resulting judicial 12 14 , Hunt v. W Since the balancing test was named Since the balancing in 1970, Alameda, 768 F.3d 1037, 1043–44 (9th Cir. 2014); Heffner See, e.g. 13 S. 328, 337–38 (2008) (quoting New Energy Co. of Ind. v. Limbach, S. 328, 337–38 (2008) (quoting New Energy MARQUETTE LAW REVIEW MARQUETTE dormant Commerce Clause interpretation also includes ) 2/16/17) 11:35 AM 15 If a state law is not discriminatory If a state law is not “[t]he de- on its face, , 476 U.S. at 579; Pike v. Bruce 11 ELETE balancing test. D , 325 U.S. at 775–76. , 135 S. Ct. at 1807–08 (Scalia, J., dissenting). OT , 135 S. Ct. at 1807–08 (Scalia, J., dissenting); Camps New- Comptroller, 135 S. Ct. at 1807–08 (Scalia, J., dissenting); , Energy & Env’t Legal Inst. v. Epel, 793 F.3d 1169, 1172–73 (10th Cir. 2015); N , Pike O aste Sys., Inc. v. Dep’t of Envtl. Quality of Or., 511 U.S. 93, 101 (1994)); City of aste Sys., Inc. v. Dep’t of Envtl. Quality of (D ep’t of Revenue of Ky. v. Davis, 553 U.S. 328, 338 (2008) (internal citations omitted) ep’t of Revenue of Ky. v. Davis, 553 U.S. 328, nt’l Franchise Ass’n v. City of Seattle, 803 F.3d 389, 399 (9th Cir. 2015) (quoting Dep’t of See, e.g. DOCX .Brown-Forman . .S. Pac. Co. Pac. .S. -P. 5. I 1. D 0. Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 578 . See, e.g. . Comptroller 13 14 1 7.(1945); Gibbons v. Ogden, 22 U.S. 1, 75–77 S. Pac. Co. v. Arizona, 325 U.S. 761, 767 (1824). 8 9 12 1 1 Although, “[m]odern dormant Commerce Clause jurisprudence primarily ARTIN 486 U.S. 269, 273–74 (1988))). U.S. 333, 350 (1977) (holding North Carolina statute discriminated against W U.S. 333, 350 (1977) (holding North Carolina burdened interstate sales of Washington apples). Pharm. Research & Mfrs. of Am. v. Cty. of v. Murphy, 745 F.3d 56, 73–74 (3d Cir. 2014). Revenue of Ky. v. Davis, 553 U. ‘is driven by concern about “economic protectionism—that is, regulatory economicmeasures designed to benefit in-state out-of- interests by burdening state competitors,”’” the notion of extraterritoriality which has been described as “the least under- Clause still remains subject. a controversial law if it ‘advances a legitimate per se invalid,’ and will survive only is ‘virtually nondiscrimina- cannot be adequately served by reasonable local purpose that tory alternatives.’” 500 Commercethat the implications Clause has states, for known as the M it has been referred to in eighty-two federal appellate court cases and in all fed- to in eighty-two federal appellate it has been referred first through eleventh. eral circuit courts called it “a judge-invented rule” that is “a judicial fraud.” rule” that is “a judicial judge-invented called it “a cisive question is whether in the circumstances the total effect of the law [in whether in the circumstances the cisive question is accomplishing the legitimate purpose] is so slight or problematical state as not to outweigh interest in keeping interstate commerce the national free from in- terferences which seriously impede it.” jurisprudence has created a basic two-tiered method state deciding whether for basic two-tiered has created a jurisprudence violates the dormantregulation CommerceClause. found/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 609–20 (1997) (Thomas, J., dissenting); found/Owatonna, Inc. v. Town of Harrison, Tyler Pipe Indus., Inc. v. Wash.(Scalia, J., State Dep’t of Revenue, 483 U.S. 232, 254–65 (1987) concurring in part and dissenting in part). (1978). v. , 437 U.S. 617, 624 (quoting Or. W 38800-mqt_100-2 Sheet No. 107 Side B 02/22/2017 09:25:38 02/22/2017 B No. 107 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 108 Side A 02/22/2017 09:25:38 , 17 21 IN , ARRIAGES OMESTIC Commen- M D EGARD TO Am. Booksellers Found. R 501 OREIGN AND :F see also . L.Q. 391, 415 (2012). One com- AWS L ONST C SPECIALLY IN E and asserting that Vermont’s Internet regu- But the actual existence of a leg- But the actual existence 18 ONFLICT OF AND , Healy § 20 (1834). ASTINGS C . 545, 550 (2007). , 39 H EMEDIES EV R UDGMENTS J that “no state or nation can, by its laws, directly that “no state or nation .L.R AND , AND ICH The Case for a Commerce Clause Challenge to State The Case for a Commerce Clause Challenge to Antitrust Laws , 22 IGHTS ) 2/16/17) 11:35 AM OMMENTARIES ON THE 106 M , , Is There a Dormant Extraterritoriality Principle?: Commerce Clause Lim- , Is There a Dormant Extraterritoriality Principle?: ,R EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ,C ELETE D UCCESSIONS OT TORY ,S , Healy v. Beer Inst., 491 U.S. 324, 336–37 (1989) (asserting three extraterritoriality , Healy v. Beer Inst., 491 U.S. 324, 336–37 (1989) N S O ONTRACTS , 793 F.3d at 1172. ILLS (D It has just been long and well accepted that a state’s regulatory long and well accepted that a state’s It has just been In 1881, U.S. Supreme Court Chief Justice MorrisonWaite opined C The extraterritorial doctrine applies when a state regulates conduct a state regulates conduct applies when doctrine The extraterritorial 19 20 ,W OSEPH 16 DOCX . See, e.g. .Epel -P. 18. Edgar v. Mite Corp., 457 U.S. 624, 642–43 (1982). 19. Barbara O. Bruckmann, 17 21. Bonaparte v. Tax Court, 104 U.S. 592, 594 (1881). 22. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 522 (1935) (quoting Int’l Textbook Co. v. Pigg, 20. J 16 In 1834, U.S. Supreme Court Justice Joseph Story wrote in his M K ARTIN IVORCES EGARD TO C Y Banning Minimum Resale Price Maintenance taries on the Conflict of Laws taries on the Conflict bind persons not resident out of its own territory, or affect, or bind property therein.” power stops at its own borders. power stops at its lation projects its legislation into other states, directly regulating commerce there and violating dormant regulating commerce there and violating lation projects its legislation into other states, directly Commerce Clause). propositions: (1) state statute may not apply to commerce wholly outside state’s borders; (2) legislative propositions: (1) state statute may not apply to wholly outside state’s borders; (3) Commerce intent is not relevant if regulation controls commerce into another state);Clause prohibits one state projecting its regulation v. Dean, 342 F.3d 96, 103–04 (2d Cir. 2003) (citing v. Dean, 342 F.3d 96, 103–04 (2d Cir. 2003) (citing islative conflict is not a necessary prerequisite for the extraterritoriality doctrine not a necessary prerequisite for the islative conflict is to apply. its on State Antitrust Laws mentator has actually suggested that a state’s extraterritorial regulation should be invalid only if it mentator has actually suggested that a state’s one state in order to follow the law of another.” law of would require “the regulated party to break the MichaelRuttinger, Note J. 217 U.S. 91, 112 (1910)). that is wholly outside its own doctrine, unconstitution- and, under the borders regulation’s discriminating not depend on the ality does against out-of-staters. R D Justice Cardozo noted that “[i]t is the established doctrine of this [C]ourt that a Justice Cardozo noted that “[i]t is the State may form not, in any or under any guise, directly burden the prosecution of interstate business.” 2016] dormant of three strands Court’s of the stood commerce jurispru- clause dence.” that if moreis one state were than the doctrine reason for One articulated to inconsistent sphere, the result could be in the sameregulate extraterritorially of interstate commerce.rules and a stifling M that “[n]o State can legislate except with reference to its own legislate except with reference that “[n]o State can .” 38800-mqt_100-2 Sheet No. 108 Side A 02/22/2017 09:25:38 02/22/2017 A No. 108 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 108 Side B 02/22/2017 09:25:38 M K In C Y infra 23 OMMERCE C and one involved 25 ORMANT [100:497 [100:497 D This section describes a sam- This section describes 24 SPECT OF THE OF THE SPECT LAUSE A C 27 MARQUETTE LAW REVIEW MARQUETTE ) 2/16/17) 11:35 AM 26 A. Classic The Cases Extraterritoriality ELETE D OT , North Dakota v. Heydinger, 15 F. Supp. 3d 891, 899 (D. Minn. 2014) (“Plaintiffs , North Dakota v. Heydinger, 15 F. Supp. 3d , 294 U.S. at 519; Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 , Sawyer v. Mkt. Am., Inc., 661 S.E.2d 750, 751–53 (N.C. Ct. App. 2008). See N XTRATERRITORIALITY O E (D at 519. HE DOCX . See, e.g. . Baldwin .Id. . See, e.g. -P. The Act also prohibited distributors from The Act also prohibited distributors selling milk in New York pur- Baldwin v. G.A.F. Seelig, Inc. Seelig, G.A.F. Baldwin v. 24 25 26. Edgar v. MITE Corp., 457 U.S. 624, 627 (1982). 27. 294 U.S. 511 (1935). 28 23 There are four cases that the U.S. Supreme Court decided between 1935 There are four cases that the U.S. The first of the four involved New York State’s Milk York The first of the four involved New which Control Act, The extraterritoriality doctrine has been applied in a wide variety of cases. in a wide has been applied doctrine The extraterritoriality of cases. variety 28 III. T ARTIN securities regulation. are the State of North Dakota, the Industrial Commission of North Dakota, the Lignite Energy Council, of North Dakota, the Lignite Energy Council, are the State of North Dakota, the Industrial Commission American Coal Corporation, Great Northern Properties Basin Electric Power Cooperative, the North Power Agency d/b/a Missouri River Energy Services, Limited Partnership, Missouri Basin Municipal and Minnkota Power Cooperative, Inc.”). text at note 192 for a description of the case. text at note 192 for a description of the case. U.S. 573, 575 (1986); Healy v. Beer Inst., 491 U.S. 324, 326 (1989). pling of dormant Commerce cases, the heavily cited extraterritoriality Clause of reviewing a The purpose then recent cases. U.S. Supremefirst, Court cases generally have a good idea that courts is to demonstrate variety of recent cases of how serves the constitutional pur- the doctrine and that the doctrine to apply pose of limiting on interstate commerce burdens those burdens do even when not arise from intended or unintended state economic protectionism. for finding a state’s regulation unconsti- and 1989 that set the basic precedents price regulation tutionally extraterritorial: three involved 502 M set minimum had to pay to New York milk that milk prices farm- distributors ers. other extraterritoriality cases, the plaintiff is seeking to be covered by the law cases, the plaintiff is seeking other extraterritoriality and it is the de- has no connection, he or she, arguably, of a state with which fendant who claim. raises the extraterritoriality In most should be struck that a state law plaintiff has argued of those cases, a it attemptsdown because borders. Sometimes the state’s to regulate beyond a resides. he or she been joined by the state in which private plaintiff has 1. 38800-mqt_100-2 Sheet No. 108 Side B 02/22/2017 09:25:38 02/22/2017 B No. 108 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 109 Side A 02/22/2017 09:25:38 503 outside of violating the aking a takeover wholly A Vermont milk pro- 29 inter alia, He asserted that “commerce He asserted Instead, MITE an action filed 30 34 31 s Secretary of State if ten percent of the s Secretary of State The Court held that the Commerce 37 The Court also mentioned that attempts at 39 32 Therefore, the Court concluded that the Illinois Act had Therefore, the Court concluded that ) 2/16/17) 11:35 AM 36 EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY That language has become de facto test for impermis- the 35 ELETE 38 D OT N O (D at 518, 520–21. at 524. at 626–27. at 627–28. at 628. at 642. at 642–43. at 642 (emphasis added). The MITE Corporation made offer for all shares of Chicago a tender d. d. d. d. d. d. d. 33 457 U.S. 624 (1982). DOCX .Id. .Id. .Id. .I .I .I .I .I .I .I -P. 2. Edgar v. MITE Corp. 38 29 30 31 3 33 34 35 36 37 39 The Court reasoned that the Illinois law would affect all of Chicago Rivet’s would affect all of Chicago Rivet’s law The Court reasoned that the Illinois The Illinois Business Take-OverThe Illinois Business Act m required a business M K ARTIN C Y shareholders including those who lived outside of Illinois and had no connec- outside of Illinois shareholders including those who lived that the tender offer would not affect any tion to Illinois; in fact, it is possible Illinois shareholders. between the states is burdened unduly when one state regulates by indirection by indirection one state regulates is burdened unduly when between the states to producers in another.” the prices to be paid offer to register the offer with the Illinoi offer to register the in Illinois and two of the were owned by shareholders takeover target’s shares in Illinois, was its principal office following had conditions existed: the target lawsorganized under the in had at least ten percent of its capital of Illinois, and Illinois. Rivet & Machine Company, company, a publicly held Illinois but MITE did of State. not register with the Illinois Secretary 2. Clause “precludes the application of a state statute to commerce a state Clause “precludes the application of that takes place whether or not the commercewholly outside of the State’s borders, has effects within the State.” ducer challenged the latter requirement, the latter ducer challenged “New said that Justice Cardozo and Vermont its legislation into no power to project York has price by regulating the in that state for milkto be paid there.” acquired 2016] the mini-was at least paid price the unless producers from out-of-state chased mum New York producers. had to be paid to price that M sible extraterritorial regulation: “commercesible extraterritorial regulation: place that takes the [regulating] [s]tate’s borders.” to have the Illinois lawunconstitutional for, declared Commerce Clause. “a sweeping extraterritorial effect.” 38800-mqt_100-2 Sheet No. 109 Side A 02/22/2017 09:25:38 02/22/2017 A No. 109 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 109 Side B 02/22/2017 09:25:38 M K C Y The 43 41 the U.S. [100:497 The State of Con- 48 and the Court’s opin- in its opinion, 40 Baldwin Seelig, Inc., 294 U.S. 511, 521 (1935)). Brown-Forman It could not offer distributors in other It could not offer In addition, the producers had to affirm In addition, the producers 44 42 and , 476 U.S. at 581. 47 MARQUETTE LAW REVIEW MARQUETTE ) 2/16/17) 11:35 AM Citing Justice Cardozo in Citing Justice Cardozo onthly schedule of the prices at which their products would at which their products of the prices onthly schedule 45 Baldwin, Edgar, ELETE D Brown-Forman To remedy Connecticut Legislature enacted that situation, the OT case against the State of Connecticut was very similar case against the State of Connecticut to Brown- 49 N 491 U.S. at 326. , the Court concluded that New York “may not ‘project its legisla- , the Court concluded that New York O (D Citing at 328–29. at 326; at 582–83 (quoting Baldwin v. G.A.F. at 643. at 575. at 576. at 575–76. at 576–78. ealy, ealy, 50 Healy d. d. d. d. d. d. d. in that both were about price affirmation statutes. 46 476 U.S. 573 (1986). 491 U.S. 324 (1989). DOCX .Id. .I .I .I .I .I .I .H .I -P. 7. 1. Healy v. Beer Institute Brown-Forman Distillers Corp. v. Liquor Authority New York State 40 42 4 43 44 45 46 4 48 49 50 The Brown-Foreman, brands of liquor in distiller that sold several different a New York’s Alcoholic Beverage Control Law required alcoholic beverage required alcoholic Control Law Alcoholic Beverage New York’s ARTIN Forman ion in Edgar the price to be paid’ for liquor in those tion into [other States] by regulating States.” necticut determined residents frequently crossed the border that Connecticut into New York, Massachusetts, because it was or Rhode Island to buy beer cheaper there. states special lower prices because of states special lower any marketing in cir- decision or change cumstances. states, challenged NewNew York and other York’s law of the as violative Commerce Clause. producers to file a m producers in New York. be sold to wholesalers that they would not sell their products for a lower price in any other state. sell their products for a lower price that they would not 4. 504 [s]tates.” sister “offend regulation extraterritorial M a statute requiring anyone shipping beer into Connecticut to post its prices and beer into a statute requiring anyone shipping price in Con- for a price lowernot to sell beer in any bordering state than the necticut. Supremeview that a state law that has the its “established Court reiterated 3. latter requirement meant liquor in New York, once it that if a producer sold it was bound for the month to use those New York State, filed its prices with in every other state. prices in its sales 38800-mqt_100-2 Sheet No. 109 Side B 02/22/2017 09:25:38 02/22/2017 B No. 109 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 110 Side A 02/22/2017 09:25:38 57 505 54 2014). was Minnesota’s Next 52 case, the court said that a case, the court said 51 Healy Minnesota would be regulating 58 The federal district court in Minne- The effect of the Connecticut statute The effect of the 56 53 B. Energy Cases B. Energy North Dakota v. Heydinger ) 2/16/17) 11:35 AM EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ELETE , that Minnesota’s NGEA violated the extraterritoriality doc- D The State of North Dakota and electric power cooperatives The State of North Dakota and electric OT 55 N O (D at 332–33, 333 n.9. at 336. (quoting Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 528 (1935)). at 337. at 910. at 910–13. at 916. inter alia d. d. d. d. d. d. DOCX .Id. .I .I .I .I .I .I -P. 5. North (D. Minn. Dakota v. Heydinger, 15 F. Supp. 3d 891, 897 51 52 53 54 5 56 57 58 Applying the principles specifically to the Applying the principles The Court said that the extraterritoriality doctrine of the Commerce doctrine said that the extraterritoriality The Court Clause It is not surprising that state regulations whose purpose is to improveIt is not surprising that state regulations envi- The challenged statute in M K ARTIN C Y state “may ‘a the practical effect of establishing not adopt legislation that has use in other states.’” scale of prices for was to control commerce occurring wholly outside Connecticut. The court concluded that the NGEA would require out-of-state power compa-The court concluded that the NGEA Minnesotanies to seek regulatory approval in doing business in other before states, a classic extraterritoriality situation. 2016] commerce regulating of effect’ ‘practical [s]tate’s that outside wholly occurring Commerce invalid under the borders is Clause.” M alleged, trine of the dormant Commerce conduct Clause because the NGEA controlled occurring wholly outside of Minnesota. is based on three principles: (1) A state statute may statute (1) A state to commerce not apply on three principles: is based if the commerce the state even wholly outside (2) A the state; effects within has un- borders is commercestate statute that regulates outside the state’s wholly not intend for the statute to apply ex- if the legislature did constitutional even must (3) Atraterritorially; and state statute how it be evaluated by considering would interact with legitimatein other states, and what regulation would hap- or every state enacted similarpen if another state laws. sota, after analyzing more than a half dozen cases, agreed with the plaintiffs. sota, after analyzing more the than a half dozen cases, agreed with ronmental conditions would allegations: such regu- engender extraterritoriality state lines and can increase costs for lations would often have effects across energy companies. Generation Energy Act (NGEA), which established standards for carbon diox- ide emissions. 38800-mqt_100-2 Sheet No. 110 Side A 02/22/2017 09:25:38 02/22/2017 A No. 110 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 110 Side B 02/22/2017 09:25:38 , , 67 64 M K C Y reh’g [100:497 , and Healy the U.S. Court of the U.S. Court of The court recognized court recognized The 59 730 F.3d 1070, 1078, 1107 (9th Cir. 2013), , Baldwin, Edgar, Brown-Forman The California legislature outlined the dan- The California legislature 62 61 MARQUETTE LAW REVIEW MARQUETTE Energy Policy, Extraterritoriality, and the Dormant Commerce Clause 68 ) 2/16/17) 11:35 AM After citing 66 65 Rocky Mountain Union v. Corey Farmers ELETE D OT Part of the Act created the Fuel Standard, which required pro- the Fuel Standard, which required Part of the Act created N 63 O , 740 F.3d 507 (9th Cir. 2014). (D at 918–19. at 1079. at 916. at 1080. at 1070, 1077. at 1102–03. at 1103. at 1106–07. Older energy cases with extraterritoriality issues are discussed in Alexandra The court noted that “if other states adopt[ed] similar states adopt[ed] noted that “if other The court it legislation, says nothing at all about ethanol produced, sold, and used out- says nothing at all about ethanol produced, to adopt other side California, it does not require can be sold in Califor- reciprocal standards before their ethanol nia, it makes no effort to ensure the price of ethanol is lower in imposesCalifornia than in other states, and it no civil or crim- inal penalties on non-compliant transactions completed wholly out of state. d. d. d. d. d. d. 60 DOCX .Id. .Id. .Id. .I .I .I .I .I .I -P. 2. Rocky Mountain Farmers Union v. Corey 59 60 63 61 6 64 65 66 67 68 The Fuel Standard created a system credits and caps that merely of encour- In contrast, in ARTIN the Ninth Circuit concluded that the Fuel Standard the Ninth Circuit concluded that the en banc denied could lead to balkanization.” aged the use of cleaner fuels and applied it only to fuel blenders in California. aged the use of cleaner fuels and applied Appeals for the Ninth Circuit upheld a California energy statute in the face of Circuit upheld a California energy Appeals for the Ninth challenge. an extraterritoriality Minnesota’s emissions, carbon dioxide goal of reducing “admirable” nev- but other and regulating in other states legislation into by projecting its ertheless, dormant doctrine of the Commerce violated the extraterritorial states, it Clause. Because the court concluded that the Fuel Standard had only “incidental effects Standard had only Fuel Because the court concluded that the the state,” conduct wholly outside on interstate commerce,” but did not “control was not “an impermissiblethe court held that the California regulation extra- territorial regulation.” More pro- industries involving corn ethanol, gasoline than a dozen plaintiffs in the dormant and petrochemicalsduction, trucking, Act violated alleged that the Commerce Clause. 506 economic to Minnesota. relationship that has no activity M ducers and distributors of transportation fuels to reduce their carbon intensity. of transportation fuels to reduce ducers and distributors B. Klass & Elizabeth Henley, gers of global warming Warming in California and enacted the Global Solutions Act of 2006. 38800-mqt_100-2 Sheet No. 110 Side B 02/22/2017 09:25:38 02/22/2017 B No. 110 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 111 Side A 02/22/2017 09:25:38 70 To 77 Rocky The law The law 69 The U.S. Dis- The U.S. , http://www.bottle- 71 UIDE 507 G A problem arose be- 76 With beverage containers 73 , 730 F.3d at 1106–07). ESOURCE R 72 , http://www.bottlebill.org/legislation/usa/all- ILL Ten states currently have bottle bills Ten states currently have bottle bills B 74 UIDE G OTTLE ESOURCE , B R L. 127 (2014). ILL B C. Bottle Redemption Cases Rocky Mountain Farmers Union NERGY ) 2/16/17) 11:35 AM 75 &E OTTLE EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ELETE , B D OT N LIMATE O (D J. C at 1274, 1276. that an analogous fuel standard did “‘not control conduct wholly out- fuel standard did “‘not control conduct that an analogous at 1275. at 1284 (quoting at 367. DOCX IEGO .Id. .Id. .Id. .Id. . What Is a Bottle Bill? .Id. . All US States .Id. -P. D 69. Am. 1270, 1274 (D. Or. 2015). Fuel & Petrochemical Mfrs. v. O’Keeffe, 134 F. Supp. 3d 70 71 72 73 74 75 76. Am. Beverage Ass’n v. Snyder, 735 F.3d 362, 366–67 (6th Cir. 2013). 77 A law bottle bill is a container deposit deposit on requiring a refundable ’s bottle bill required a ten-cent deposit that is refunded to con- deposit that is Michigan’s bottle bill required a ten-cent A couple of years later, a similar case arose in Oregon after the state legis- the state after Oregon arose in a similar later, of years A couple case M K AN ARTIN C Y side the state,’ and [was] not ‘an impermissibleside the state,’ and [the] extraterritorial regulation,’ plaintiffs’ claim fail[ed] as a matter of law.” Mountain constituting forty to sixty percent of all litter in the United all constituting forty to sixty percent of bottle bills States, were natural resources, and reduce the supposed to reduce litter, conserve amount of solid waste going to landfills. beverage containers to encourage their recycling. beverage containers eliminate the problem, Michigan amended its bottle bill to require, in addition to a “MI 10¢” mark on each redeemable an identifiable symbol container, that and can be ‘used only in this state and 1 or moreis “‘unique to the state,’ other sumers return a container. and distributors when they set fuel standards and established a system and established set fuel standards credits and debits, of clean fuel imported, to fuel “produced, which applied in Oregon.” dispensed, or used that require deposits of two, five, ten, or fifteen cents on containers for a wide that require deposits of two, five, ten, variety of beverages. lature had enacted a law to attempt enacted a law to lature had greenhouse gas emissions to reduce in order to improveOregon’s economy, warming. of life, and global quality 5 S 2016] groups sued the state claimingSeveral energy industry that the law violated the principle of the dormantextraterritoriality Commerce Clause. M trict Court in Oregon because the Ninth Circuit held in concluded that bill.org/about/whatis.htm [https://perma.cc/9ZVF-NDPP] (last visited Feb. 6, 2017). statestable.htm [https://perma.cc/9KRA-ZX8E]7, 2017) (states with bottle bills: Cal- Feb. (last visited ifornia, Connecticut, Hawaii, Iowa, Massachusetts, Maine, Michigan, New York, Oregon, Vermont). cause people would buy beverages out of state (where no deposit was required) cause people would buy beverages out deposit. and then return the containers in Michigan to receive the ten-cent 38800-mqt_100-2 Sheet No. 111 Side A 02/22/2017 09:25:38 02/22/2017 A No. 111 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 111 Side B 02/22/2017 09:25:38 84 86 M K C Y , that [100:497 The court 80 inter alia Two recycling 88 at *2. Id. 78 Similar to the Michigan a New-York-specific product code 85 rdwide, Inc., 239 Cal. App. 4th 983, Thus, the court concluded that Thus, the court 82 The court then found that the reg- The court then found 81 83 § 445.572a(10) (2008)). chigan case, the United District Court for the Southern District chigan case, the United District Court for the AWS The law requires recycling centers to accept only The law requires recycling centers The U.S. Court of Appeals for the Sixth Circuit for the Sixth Circuit Court of Appeals The U.S. 87 .L 79 MARQUETTE LAW REVIEW MARQUETTE OMP ) 2/16/17) 11:35 AM .C ICH ELETE D OT N O (D at 376. at 989. at 373 (quoting Healy v. Beer Inst., 491 U.S. 324, 336 (1989)). at 373 (quoting Healy v. Beer Inst., 491 U.S. Four years before the Mi at 366, 368. at 373, 376. (quoting M at 988–89. at 988. at 989, 991. d. d. d. d. d. d. d. d. DOCX .I .Id. .I .I .I .I .Id. .I .I .I -P. 79 81 80 82 85 83 78 86 87 88 84. Alamo Recycling, LLC v. Anheuser Busch InBev Wo An association of non-alcoholic beverage manufacturers, of non-alcoholic An association marketers, dis- Two years later, a California state court heard a bottle redemptionTwo case that later, a California state court years ARTIN ulation allows Michigan beverages can be sold and requires to dictate where other states to comply with the legislation. noted that an important part of the inquiry was determining what would occur if many enacted similar other states laws. decided that “[t]he relevant inquiry is whether the ‘practical effect of the regu- whether the ‘practical relevant inquiry is decided that “[t]he the State.’” conduct beyond the boundaries of lation is to control California is one of the ten states with a bottle bill. Consumers five cents, when they return a container to receive a refund, usually a certified recycling center. 508 laws substantially that have states similar this act.’” to M “the Michiganviolation of the dormant in statute is extraterritorial Commerce impermissiblyClause because it interstate commerce regulates by controlling State of Michigan.”conduct beyond the tributors, and bottlers sued the Governor and bottlers sued tributors, of Michigan claiming, the new legislation was impermissibly con- because it regulated extraterritorial in other states. tainers sold law, California’s law requires beverage containers (containing beverages such containers (containing law, California’s law requires beverage and soft drinks) sold in as beer, wine coolers, carbonated water, California to be markedone of four other similar “CA Redemption markings. Value” or 988 (Cal. Ct. App. 2015). of New York held that it had properly enjoined the State of New York from enforcing a provision of of New York held that it had properly enjoined bill) that required the New York Returnable Container Act (bottle eligible redemptions, is, those purchased in California. that for beverages to be sold exclusively in New York to prevent the redemption of containers purchased for beverages to be sold exclusively in New York in other states. Int’l Bottled Water Ass’n v. Paterson, No. 09 Civ. 4672(DAB), 2009 WL 2482137, at that “the plaintiffs not only have a likelihood of suc- *2–3 (S.D.N.Y. Aug. 13, 2009). The court held law on the question of whether the New York-exclusive cess, they are sure of success as a matter of . . . provisions of the Bottle Bill violate the Dormant Commerce Clause.” had similar bottle-redemptiondifferent procedural circumstance. facts but a 38800-mqt_100-2 Sheet No. 111 Side B 02/22/2017 09:25:38 02/22/2017 B No. 111 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 112 Side A 02/22/2017 09:25:38 91 509 , and Healy , 95 Brown-Forman , 89 The plaintiffs wanted the court to The plaintiffs wanted 90 Edgar D. Subprime Loan Cases ) 2/16/17) 11:35 AM EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ELETE Thus, the court held that prohibiting the beverage producers Thus, the court held that prohibiting D 94 OT N O Because the constitutionality of the California statute was of the California statute Because the constitutionality not at (D 92 at 997–98. (citing BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 572 n.17 (1996) and San Diego Bldg. at 987, 987 n.1, 992. at 997. at 996, 998. at 997. d. d. d. d. DOCX , reiterated the applicable impermissibly-extraterritorial, reiterated the applicable test: if a state -outside-the-state’s-borders test. There are a variety of subprime loan The court cited the U.S. Supreme Court for the propositions that the test .Id. .Id. .Id. .I .I .I .I -P. 93 95 89 92 90 91 93 94 Unlike the Michigan case, the California case was not about the constitu- A comparison of two recent cases about state regulation of subprime loans state regulation A comparison of two recent cases about M K ARTIN C Y Trades Council v. Garmon, 359 U.S. 236, 247 (1959)). Trades Council v. Garmon, 359 U.S. 236, 247 (1959)). from putting the “CA Redemption Value” mark outside of Cali- on containers fornia would violate the dormant Commerce Clause. issue here, the court concluded that “[t]here is no practical difference between “[t]here issue here, the court concluded that statute, and a court’s a state the extraterritorial consequences of issuance of an injunction or a damages award, an injunction or damages because award judg- ment may impermissibly burden interstate commerce as much stat- as a state ute.” tionality of the California container statute. tionality of the California fromenjoin the defendants putting the “CA Redemption Value” or a similar and to pay damages that they sold outside of California mark on beverages to out-of-California expenses they had because of the the recyclers for the sales. provides a good example efficacy of the directly-controlling-commerce- of the wholly return that is higher than that charged by types, but they all involve a rate of traditional commercial lenders because the borrowers are individuals who do The California appellate court, citing The California appellate 2016] companies manufacturers, of beverage a group suit against the brought includ- and Snapple, claiming Cola, Pepsi Cola, Busch, Coca ing Anheuser that the “CA Redemption knowingly sold defendants Cali- outside Value” beverages were redeemed beverage containers that when those fornia and California it in penalties, criminal the recyclers to fines, subjected convictions, and revocation under the California law. of their certification M is whether power state not by the form is being exercised, it takes, and which the form of a state statute as well as by can be by a judge’s or jury’s application the statute itself. Snyder law commerce directly controls the state’s borders, it occurring wholly outside is invalid. 38800-mqt_100-2 Sheet No. 112 Side A 02/22/2017 09:25:38 02/22/2017 A No. 112 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 112 Side B 02/22/2017 09:25:38 . M K ND The , 10 C Y The If the 105 101 The U.S. U.S. The The court 104 106 , May 7, 2007, at 49. said, “The Commerce Commerce “The said, EWSWEEK [100:497 [100:497 , N Healy, Healy, Borrowersup front for pay a fee If borrowers cannot pay the fees If borrowers cannot 98 99 and Even Cars With of room a great deal for abuse in  102 In a typical payday loan arrangement, In a typical payday the 100 Borrowersborrow loans usually getting car-title One the loans, and car-title involves the cases of 97 96 MARQUETTE LAW REVIEW MARQUETTE Dragged Down by Debt: People with Shaky Credit are Getting Suckered Dragged Down by Debt: People with Shaky Credit ) 2/16/17) 11:35 AM . L. 55, (2004). 63–67 IN ELETE D OT .&F text accompanying notes 98 and 101. text accompanying notes 98 and 101. N O If the loan falls under the Code, the lender must If the loan falls under the Code, the get an Indiana ORP (D at 536. at 662. at 665 (quoting Healy v. Beer Inst., 491 U.S. 324, 337 (1989)). at 667–68. 103 J. C DOCX .Id. .Id. .Id. .Id. .Id. .Id. . See infra -P. § 24-4.5-1-201(1)(d)(2007)). 99 100 101. Cash 533, 535–36 (Ind. Ct. App. 2006). in a Flash, Inc. v. McCullough, 853 N.E.2d 102 103. Midwest Loans, Inc. v. Mills, Title 593 F.3d 660, 661–62 (7th Cir. 2010) (quoting I 96. For a brief discussion of subprime loans and predatory lending see Susan Lorde Martin, 104 105 106 98.Bryant Quinn, Jane 97 In a 2010 case, an Illinois car-title lender complainedIn a 2010 case, an that Indiana’s Uni- ARTIN ODE ORDHAM Clause dictates that no State may force an out-of-state merchant to seek regu- an out-of-state Clause dictates that no State may force a transaction in another.” latory approval in one State before undertaking and interest, they lose their cars. and interest, they an above-100% the loan comesthey cannot pay when rate, and if interest due, fee plus interest. they are charged another a few hundred up to a few thousand dollars for thirty days, giving lenders their thirty days, giving thousand dollars for up to a few a few hundred keys as security. a set of duplicate titles and borrower gives the lender a post-dated check for the amountborrower gives the of the loan princi- borrower a loan in cash charge, and the lender gives the pal plus the finance with repayment usually two weeks. next payday, the borrower’s due at C 510 prime for not qualify loans. M license and is subject to a limit on the interest rate it may charge. subprime that states legislate to try to pro- loan transactions, it is not surprising tect their citizens. form Consumer Credit Code deemed as occurring in Indiana “if a resi- a loan . . . loan transaction withdent of the state ‘enters into a consumer a credi- creditortor . . . in another state and the . . . loans in . . . has advertised Indiana.’” Court of Appeals for the Seventh Circuit, citing Litigation Financing Industry: The Wild West of Finance Should Be Tamed Not Outlawed of Finance Should Litigation Financing Industry: The Wild West F other is about payday loans. other is about borrower does not pay the principal and finance charge at the end of the loan pay the principal and finance charge borrower does not cashes the check. period, the lender court explained that “[t]o allow Indiana to apply its law against title loans when that has a different law would be arbi- its residents transact in a different state state over trarily to exalt the public policy of one that of another.” by Risky Loans Against Their Paychecks, Homes 38800-mqt_100-2 Sheet No. 112 Side B 02/22/2017 09:25:38 02/22/2017 B No. 112 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 113 Side A 02/22/2017 09:25:38 109 511 114 108 The law provided The law provided 110 The plaintiffs argued that the 116 § 25982 (West 2012)). During the last two The court noted that the Minnesota Although the Seventh Circuit did not the Seventh Circuit Although ODE 113 C 107 subd. 5 (2014)). The difference between this law and the The section reads, “A product may not be 111 AFETY 115 47.601, &S § . E. Foie Gras Case The TAT § 24-4.5-1-201(1)(d) (2007). EALTH .S ) 2/16/17) 11:35 AM .H ODE EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY INN AL .C Minnesota’s law applied only when the Minnesota resident ELETE D ND 112 OT N O (quoting M (D at 95; I at 669 (quoting Carolina Trucks & Equip., Inc. v. Volvo Trucks of N. Am., Inc., 492 at 669 (quoting Carolina Trucks & Equip., Inc. at 96. (quoting C DOCX .Id. .Id. . See id. .Id. .Id. . Swanson, 870 N.W.2d at 94 (quoting Healy v. Beer Inst., 491 U.S. 324, 337 (1989)). .Id. .Id. -P. 112 107 108 109. Swanson 870 N.W.2d v. Integrity Advance, LLC, 2015). 90, 92 (Minn. 110 111 113 114 115. Ass’n des Eleveurs de Canards et d’Oies du Que. v. Harris, 729 F.3d 937, 942 (9th Cir. 116 Two companies and one in New York, that produce foie gras, one in Canada The Minnesota Supreme the payday loan case in 2015. Court decided M K ARTIN C Y law did not control the terms of loans in other states nor did it require lenders to obtain Minnesota’s when lending approval to borrowers in other states. and a California restaurant that sold foie gras sought to enjoin a section in Cal- and a California restaurant that sold ifornia’s Force Fed Birds statute. weeks of the lives of ducks raised for foie gras, feeders hand-feed the ducks using “a tube to deliver duck the feed to the crop sac at the base of the duck’s esophagus,” to increase the size of the fattened Indiana law is immediately lawThe Indiana attempted apparent. to apply to transactions between resident when the resident was and an Indiana the lender in another state. 2016] may “[a] state that concluded the commercial not ‘take vital to that is speech commerceinterstate to allow as a basis and use it regulation the extraterritorial of such commerce.’”that is destructive Minnesota’sThe court held that law did not violate the extra- payday lending of the dormantterritoriality principle Commerce Clause. M was in Minnesota, clearly not “commercial activity occurring wholly outside the boundary of the [regulating] State.” invoke the “wholly” test specifically, it did in fact when it held that because the fact when it held it did in “wholly” test specifically, invoke the wascar-title loan madethe Indiana law in Illinois, and executed it regulating doctrine of the Commerceviolated the extraterritoriality Clause. that “a consumer short-term loan transaction is deemed to take place in the state of Minnesota if the borrower is a Minnesota the borrower com- resident and while physically lo- either personally or electronically, pletes the transaction, of Minnesota.”cated in the state sold in California if it is the result of force feeding a bird for the purpose of sold in California if it is the result enlarging the bird’s liver beyond normal size.” F.3d 484, 491 (4th Cir. 2007)). 2013). 38800-mqt_100-2 Sheet No. 113 Side A 02/22/2017 09:25:38 02/22/2017 A No. 113 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 113 Side B 02/22/2017 09:25:38 M K 124 C Y The Cal- 117 119 Part of Planned 126 125 Finally, with reference 118 121 [100:497 [100:497 The court stated that “[o]f course, The court stated that “[o]f course, The court noted that the Supreme The court noted 127 122 . § 188.250.3 (2005)). In addition, the farmers In addition, the could produce foie TAT .S 120 F. An Abortion Case EV .R MARQUETTE LAW REVIEW MARQUETTE O ) 2/16/17) 11:35 AM ELETE D OT N O Planned Parenthood of Kan. v. Nixon, 220 S.W.3d 732, 742–43 (Mo. 2007). (quoting Nat’l Ass’n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1151 (9th (quoting Nat’l Ass’n of Optometrists & (quoting S.D. Myers, Inc. v. City & Cty. of San Francisco, 253 F.3d 461, 470 (9th Cir. 253 F.3d 461, (quoting S.D. Myers, Inc. v. City & Cty. of San Francisco, at 950. at 951. (D at 949. at 736 n.2. at 742. at 743 (quoting M 123 at 941–42. DOCX .Id. .Id. .Id. .Id. .Id. .Id. .Id. .See .Id. .Id. .Id. -P. Id. 117 118 119 120 121 122 123 124 125 126 127 The court’s primary basis for its decision was that the plaintiffs did not pro- primaryThe court’s did was that the plaintiffs basis for its decision The Missouri Supreme Court made an interesting maneuver in correctly ARTIN Parenthood of Kansas the constitutionality of the statute. challenged to extraterritoriality, the plaintiffs did not cite any actual competingnot legislation the plaintiffs did to extraterritoriality, indicate balkanization. in other states to U.S. Court of Appeals for U.S. Court disagreed. the Ninth Circuit describing unconstitutional extraterritorial conduct, applying the description to conduct, applying describing unconstitutional extraterritorial then declaring the statute constitutional. a clearly unconstitutional statute, but the statute stated that “[i]t shall not be a defense to a claimthe statute stated that “[i]t shall not brought under this section that the abortion was performed or induced pursuant to a consent to the abortion given in a manner that is otherwise lawful in the state or place where the abortion was performed or induced.” vide evidence that force-feeding was the only way to produce foie gras. way to produce foie was the only that force-feeding vide evidence liver. The Missouri legislature enacted a statute requiring parental consent for a minor requiring parental consent The Missouri legislature enacted a statute civil penalties for violations. seeking an abortion and prescribing 512 commerce “controls statute farmers all requires California;” outside of com- to ply with Californialegislation.” in conflicting and “will result standards; M gras for sale in other states by any methodgras for sale in other they chose. ifornia’s law did not prevent the farmers from prevent the farmersifornia’s law did not selling foie gras in California; it only prevented them from using their most profitable method for doing so, and “‘the dormant Commerce pre- not . . . guarantee [p]laintiffs their Clause does ferred method of operation.’” Court “has never invalidated a state or local law under the dormant a state or local law under Court “has never invalidated Commerce of conflicting legis- mereClause based upon the possibility speculation about lation.” Cir. 2012)). 2001)). 38800-mqt_100-2 Sheet No. 113 Side B 02/22/2017 09:25:38 02/22/2017 B No. 113 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 114 Side A 02/22/2017 09:25:38 133 513 132 134 As the preceding cases indi- 135 because it regulates commerce occurring be- solely G. Artist Royalty Case An ) 2/16/17) 11:35 AM EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ELETE D Nevertheless, the holding stopped the State of Missouri the from holding stopped Nevertheless, the OT When houses, and eBay failed Christies and Sotheby’s, auction 129 N , the court held that “the state statute facially regulates a commer-, the court held that “the state statute The defendants argued that the Act violated the dormant The defendants argued that the Act Com- O 130 (D at 742. at 743, 745. at 1322–23. at 1323. (quoting Healy v. Beer Inst., 491 U.S. 324, 336 (1989)). 131 But then the court held that the statute “is valid only to the extent valid only to the the statute “is the court held that But then 128 DOCX Healy .Id. .Id. .Id. .Id. .Id. .Id. -P. 128 129 130. Sam Francis Found. v. Christies, Inc., 784 F.3d 1320, 1322 (9th Cir. 2015). 131 132 133 134 135. Petition for Writ of Certiorari at § i, Sam Francis Found. v. Christie’s, Inc., 784 F.3d 1320 The plaintiffs filed a petition for a writ of certiorari and, echoing the reluc- The plaintiffs filed a petition for a writ The U.S. Court of Appeals for the Ninth Circuit found it easy to conclude The U.S. Court of Appeals for the If a sale of fine art took place in California or the seller resided in California, or took place in California If a sale of fine art M K ARTIN C Y merce Clause. cial transaction that ‘takes place wholly outside of the State’s borders’” and, outside cial transaction that ‘takes place wholly therefore, it violates the dormant Commerce Clause. cate, so far the answer is, yes, but these plaintiffs are not alone in their opposi- cate, so far the answer is, yes, but these doctrine. tion to the existing extraterritoriality yond the borders of the state that enacted it?” yond the borders of the state that enacted tant concurrence of a Ninth Circuit judge, they said, “The question presented tant concurrence of a Ninth Circuit way discriminateis: If a state statute does not in any against, or impose an ex- cessive burden on, interstate commerce, does the Commerce Clause . . . require the statute’s invalidation that it applies to in-state conduct and not wholly out-of-state conduct,” and, and, conduct,” out-of-state and not wholly to in-state conduct that it applies the dormantthus, the court was Com- did not violate able to hold that the statute that applying the royalty mandate out-of-state sales by California residents to of the dormantviolated the extraterritoriality principle Commerce Clause. merce because it regulated sales that occurred outside of California. Clause Citing 2016] Missouri’sit is beyond outside wholly that occurs conduct regulate to authority of Missouri . . . . Missouri simply authority to make does not have the lawful extraterritorial laws do not have here, for its conduct actionable out-of-state effect.” M to pay the royalties, several artists or their representatives sued to recover the several artists or their representatives to pay the royalties, payments. (9th Cir. 2015) (No. 15-280). California’s Resale Royalty ActCalifornia’s Resale the artist a five per- required the seller to pay cent royalty. applying and enforcing its law extraterritorially, protecting the policy decisions protecting the policy decisions its law extraterritorially, applying and enforcing of bordering states. 38800-mqt_100-2 Sheet No. 114 Side A 02/22/2017 09:25:38 02/22/2017 A No. 114 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 114 Side B 02/22/2017 09:25:38 M K 136 137 C Y Back- [100:497 139 The Internet and Responding to a 141 143 that the law violated the dormant that the law violated 2371, 107th Gen. Assemb. Reg. Sess. § 3(a) Tennessee’s law, however, did not even Tennessee’s law, however, did not inter alia, 142 L.J. 785, 786–87 (2001). ALE H. Internet Cases Cases H. Internet Y The District Court for the Western The United States MARQUETTE LAW REVIEW MARQUETTE 140 , 110 . 979, 1000 (2013); Jack L. Goldsmith & Alan O. Sykes, . 979, 1000 (2013); Jack L. Goldsmith & Alan ) 2/16/17) 11:35 AM EV ELETE The court concluded that “liability could be imposed The court concluded that “liability when D .L.R OT 144 A , 939 F. Supp. 2d at 816 (quoting S. Clearly, states have an interest in protecting minors Clearly, states have by prohib- N O 138 (D at 817. at 841. at 1265, 1268; S. 6251, 62d Leg., Reg. Sess. § 2(1)(a)–(b) (Wash. 2012). , 73 L DOCX .Id. .Id. . McKenna, 881 F. Supp. 2d at 1266–67. .Id. . McKenna , 881 F. Supp. 2d at 1285. .Id. . Cooper -P. 143 144 136. Commerce Clause: A Doctrinal Brannon P. Denning, Extraterritoriality and the Dormant 137. Backpage.com, 939 F. Supp. 2d 805 (M.D. Tenn. 2013); Backpage.com, LLC v. Cooper, 138 139 140 141 142 Tennessee enacted a similar law ads “that would appear to a prohibiting Finally, internet cases have suggested to some cases have Finally, internet commentators the extra- that ARTIN reasonable person to be for the purpose of engaging in what would be a com-reasonable person to be for the purpose mercial sex act . . . with a minor.” District of Washington“the advertisementbecause agreed itself may occur en- take place in the state of Washington state and no act need tirely outside of the it is a statute that regulates con- Therefore to trigger liability under the statute. duct that occurs wholly outside state of Washington.” of the Post-Mortem (Tenn. 2012)). territoriality doctrine of the dormant doctrine of the territoriality Commerce should be eliminated, Clause iting such ads. So, Washingtoniting such ads. So, depicting minors enacted a law prohibiting ads in commercial sex acts that would occur in the Washington.State of Backpage.com challenge, the United constitutional States District Court for the Middle statute was District of Tennessee held that the Tennessee “a per se vio- lation because it likely impermissibly regulates commerce wholly outside the of the statute is there any limitstate’s borders. Nowhere in the language on the what conduct, if any, muststatute’s geographic scope that specifies place take in Tennessee.” 514 works that the doctrine these cases indicate but, in fact, quite well. Two cases Backpage.com,involved Washington one in Tennessee. and the other in Backpage.com services and, despite is one of the largest online advertising online ads involving minors“adult” ads, Backpage.com’s attempts to screen still appear. M limit occur in Tennessee. the prohibition to acts that would the Dormant Commerce Clause page.com the state claiming, sued Commerce took place wholly outside because it regulated conduct that Clause the State of Washington. LLC v. McKenna, 881 F. Supp. 2d 1262 (W.D. Wash. 2012). 38800-mqt_100-2 Sheet No. 114 Side B 02/22/2017 09:25:38 02/22/2017 B No. 114 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 115 Side A 02/22/2017 09:25:38 , 515 re- ELIVER 152 MERICA note 148, . 285, 289 ,D A EMPERANCE :T supra LARK UMAN , H. C 7–8, 25–26 (2010); AMM NTEBELLUM J.L. & H A MENDMENT 145 ORMAN A ALE ROHIBITION , 8 Y P 36 (1976); H EGULATION IGHTEENTH ROHIBITION IN R ALL OF E P F ROHIBITION and to ratify the Eighteenth Amend- P 150 ISE AND R EVERAGE HAPING THE The section below about alcoholic bever- The section below , 1880–1920 20 (1995). B HE ,S 147 MERICAN EMPERANCE TO 151 On the other, over three generations starting On the other, over three generations :T A T OLITY AMM 149 P ALL C ROM F. H :F P LCOHOLIC LCOHOLIC AST U ) 2/16/17) 11:35 AM ,L AND THE , .A Reexamining the Prohibition Amendment ICHARD EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY IV ELETE . amend. XVIII, § 1 (ratified in 1919 and in effect from 1920 until 1933). . amend. XVIII, § 1 (ratified in 1919 and in effect from 1920 until 1933). . amend. XXI, § 1. And second, although policies about child sexual abuse might policies about child sexual abuse And second, although D KRENT NTERPRETATION OF OBERING I O OT ULTURE 146 N N at 842–43. ONST ONST C reflecting very different policies, and, therefore, it is a good indi- and, therefore, it is a policies, reflecting very different ,S O C C Backpage.com LLC v. McKenna, 881 F. Supp. 2d 1262, 1285 (W.D.Backpage.com LLC v. McKenna, 881 F. Supp. Wash. 2012). :A 148 (D at 842. ANIEL EGAL VIL E YRRELL DOCX .Id. . See id. . See . See generally R ,L -P. 152. U.S. 145 146 147 148 151. U.S. 150. By of thirty-one states had prohibition statutes. N 1855 thirteen 149. D These two cases can encourage wrong conclusions with respect to the ex- with respect wrong conclusions cases can encourage These two Alcoholic beverage regulation is a good example of states having very dif- regulation is a good Alcoholic beverage The ratification of the Twenty-First Amendment the Constitution to R. T M K ARTIN S FROM EFORM C Y AN mentmanufacture, to the Constitution prohibiting “the transportation of sale, or and their importation into or ex- States intoxicating liquors” within the United portation from the United States. traterritoriality strand of the dormant strand of the traterritoriality Commerce they involve Clause because a modethe Internet, anywhere and everywherecan be that of advertising the in But a abuse of children. the sexual behavior, a universally hated world, and advertising just as can regulate Internet that first, the states closer look suggests be morethey just have to in other media;they regulate advertising precise in their language. at 20–21; W.J. Rorabaugh, in the mid-nineteenth the temperance century, movement was successful in get- statutes prohibition ting states to enact be universal among fifty states, not every state policy on other subjects would state be universal among fifty states, not every other state. be agreeable to every age regulation illustrates this point. age regulation illustrates U R 2016] whatsoever.” Tennessee to connection has a[ny] no party M I (1996). ferent laws 1800–1860 16–24 (1979). cator for the wisdom of prohibiting states from cator for the wisdom regulating outside their own states of prohibiting regulation in the United States has a his- borders. Alcoholic beverage use and tory of being problematic On the one hand, from and peculiar. the days of the Americanscentury, earliest settlers through the nineteenth were very heavy wine, beer, and rum drinkers. 38800-mqt_100-2 Sheet No. 115 Side A 02/22/2017 09:25:38 02/22/2017 A No. 115 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 115 Side B 02/22/2017 09:25:38 M K 154 C Y 159 [100:497 [100:497 , the United States Supreme, the United States Similarly, the Twenty-First 44 Liquormart, Inc. v. Rhode Is- 44 Liquormart, Inc. 157 In 155 156 The Court concluded that the Twenty-First The Court concluded that the Twenty-First 161 the U.S. Supreme Court had to decide whether state MARQUETTE LAW REVIEW MARQUETTE 517 U.S. at 489. 400 U.S. 433, 436 (1971); 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 400 U.S. 433, 436 (1971); 44 Liquormart, Inc. ) 2/16/17) 11:35 AM , Wisconsin v. Constantineau 400 U.S. at 436. The Court decided that the states’ differential treatment The Court decided that the states’ ELETE . amend. XXI, § 2. D 160 The most recent well-publicized confrontation between states’ Section Two states: “The transportation or importationTwo states: “The transportation Section into any ,377 U.S. 324, 331–32 Hostetter v. Idlewild Bon Voyage Liquor Corp., (1964); OT N 158 ONST 153 O C Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 107 n.10 Cal. Retail Liquor Dealers Ass’n v. Midcal rule of invalidity.” Granholm v. Heald, 544 U.S. 460, 466 (2005). e.g. , (D at 465–66. at 466, 476 (quoting City of Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978)). DOCX . Constantineau, . 44 Liquormart, Inc., .See .See .Id. .Id. .See .See .See Granholm v. Heald, -P. per se , the Court held that Rhode Island’s ban on price advertising for liquor vi- Rhode Island’s ban on price advertising , the Court held that 156 157 158. Craig v. Boren, 429 U.S. 190, 204–05 (1976) (holding that Oklahoma’s statute prohibiting 159 160 161 155 153 154. U.S. In For example, in ARTIN power to regulate alcoholic beverages and the U.S. Constitution pitted the power to regulate alcoholic Twenty-First Amendment the dormant against Commerce Clause in cases in- volving the direct shipment of wine to out-of-state consumers. laws Michigan in and New York that allowed wineries in-state to ship wine wineries from prohibited out-of-state do- directly to consumers but in the state, ing likewise (either literally or by imposing extra economic requirements), were unconstitutional. land olated the First Amendment’sgive way protection, which does not free speech Amendmentto states’ Twenty-First power. 516 Amendment the Eighteenth pealed lan- but the end to Prohibition, an putting meaning,guage, the the Twenty-First Amend- Section Two of and the intent of ment remains ambiguoustwenty- litigation in the to give rise to and continues first century. power to regulate alco- the states this language giving The cases that consider are about how this mandateholic beverages often interacts with other federal requirements.interests and constitutional M Amendment does not overcome the Fourteenth Amendment’s equal protection requirements. Court held that the Twenty-FirstCourt held that the Amendment not overcome does Fourteenth Amendment requirements. due process State, Territory, or possession of the United States for delivery or use therein delivery or use therein States for of the United or possession State, Territory, is hereby prohibited.” in violation of the laws thereof, of intoxicating liquors, was explicit discrimination against interstate commerce“a virtu- and fell under ally Wisconsin v. Constantineau 484, 489 (1996). sale of 3.2% beer to males under twenty-one and females under eighteen was unconstitutionally dis- criminatory and not saved by Twenty-First Amendment). (1980) (noting records of state conventions do not (1980) (noting records of state conventions do of Section Two). indicate consensus on meaning 38800-mqt_100-2 Sheet No. 115 Side B 02/22/2017 09:25:38 02/22/2017 B No. 115 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 116 Side A 02/22/2017 09:25:38 517 Granholm , http://www.shipcom- so far , http://www.wineinsti- (Jan. 30, 2008), at F7, 166 applies to retailers as well at 1039. The court held that IMES Id. NSTITUTE I at 1040. Thus, the court held the XTRATERRITORIALITY It is that fact that has given It is that fact that Granholm E Id. HIPCOMPLIANT INE 168 , N.Y. T N.Y. , , S , W Id. Only fourteen states allow out-of- Only fourteen states 167 ASE AND ASE AND The six stay within the constitutional C 164 INE W It is not a stretch to assume It is not Twenty- that the almostout- states changed their laws so that all by not allowing in-state wineries to ship directly by not allowing in-state 162 MPIRE E Although someotherwise, argue Only six states remain that do not allow out-of-state ) 2/16/17) 11:35 AM 165 A Befuddlement of Liquor Laws 163 EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY Granholm Siesta Vill. Mkt., 596 F. Supp. 2d 1035 (E.D. Mich. LLC v. Granholm, 2008). ELETE D , 544 U.S. at 467. TRANGE OT , Wine Country Gift Baskets.com v. Steen, 612 F.3d 809, 821 (5th Cir. 2010) (hold- , Wine v. Steen, Country Gift Baskets.com S N O But see HE (D (Alabama, Delaware, Kentucky, Mississippi, Oklahoma, and Utah). (Alabama, Delaware, Kentucky, Mississippi, at 487–88 (relying on Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 275 (1984), for v. Dias, 468 U.S. at 487–88 (relying on Bacchus Imports, Ltd. Granholm v. Heald, DOCX .Id. . Granholm . See, e.g. .Id. . Direct by State for Wineries Shipment Laws . Retail-to-Consumer Direct Wine Shipping Guide V. T V. -P. 164 165 166. Asimov, Eric 167 162 163 168 After After M K The court also held that allowing out-of-state retailers to comply with Michigan law by establishing retailers The court also held that allowing out-of-state ARTIN C Y pliant.com/media/40066/retail_to_consumer_updated.pdf [https://perma.cc/DYC9-75R4] (last visited [https://perma.cc/DYC9-75R4] pliant.com/media/40066/retail_to_consumer_updated.pdf New Hampshire, Missouri, Nebraska, Nevada, Feb. 7, 2017) (Alaska, California, Idaho, Louisiana, New , North Dakota, Oregon, Virginia, West Virginia, Wyoming, and D.C.). wineries to direct-ship to consumers.wineries to direct-ship tute.org/files/direct_shipping_laws_map.pdf [https://perma.cc/F6VZ-W6AG]tute.org/files/direct_shipping_laws_map.pdf (last visited Feb. 7, 2017). of-state wineries would be allowed to ship wine to consumers, directly all with tax, and reciprocity requirements and a variety of limitations including permit, maximum amounts. boundaries set by boundaries set by http://www.nytimes.com/2008/01/30/dining/30pour.html (noting that [https://perma.cc/T97F-N25R] Specialty Wine Retailers Association, a trade group, that asserts as to wineries). the Supreme Court approved the three-tier system, The federal district court in Michigan said although against out-of-staters. it did not approve a system that discriminates ing that the limited rights Texas gives its in-state retailers to make deliveries do not discriminate against ing that the limited rights Texas gives its in-state Clause); Arnold’s Wines, Inc. v. Boyle, Commerce out-of-state retailers and do not violate dormant that New York subjects both in-state and out-of- 571 F.3d 185, 186, 191–92 (2d Cir. 2009) (holding state liquor retailers to its three-tier system, a system upheld by U.S. Supreme Court, and, therefore, does not violate dormant Com- to consumers directly prohibiting out-of-state retailers from shipping merce Clause). does not generally apply to wine retailers. does not generally 2016] Amendment of the requirements overcome not does the anti-discrimination dormant Commerce Clause. M First Amendment not overcome does requirements extraterritoriality the of the dormant Commerce either. Clause state wineretailers to ship directly to consumers. foreclosing “any contention that § 2 of the Twenty-[F]irst Amendment immunizes discriminatory di- foreclosing “any contention that § 2 of the Twenty-[F]irst rect-shipment laws from Commerce Clause scrutiny”). the Twenty-First Amendment did not save rules that discriminated against out-of-statethe Twenty-First Amendment did not save rules wine retailers. to consumers either. Id. a location in Michigan was discriminatory because the “prohibitive” expense of opening physical stores in multiple states gave a clear advantage to in-state retailers. Michigan violated the dormant Commerce Clause. laws 38800-mqt_100-2 Sheet No. 116 Side A 02/22/2017 09:25:38 02/22/2017 A No. 116 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 116 Side B 02/22/2017 09:25:38 , M K C Y 177 APITOL § 79-c C [100:497 AW § 23661.2 L . J., Dec. 10, T NION S ODE U .C ALL ONTROL IMES ROF at 3. A discussion of C , W So, the New York the So, , T Id. 174 .&P US note 168. EVERAGE .B B AL C also § 102(1)(a) (LexisNexis 2016). LCOHOLIC ee S AW L a.cc/C2QR-H3CF]; Lauren Halligan, Wine Industry . tit. 9, § 53.1(n) (2011). EGS ONTROL C &R 169 (Sept. 24, 2014), http://www.dpf-law.com/blogs/lex-vini/empire- ULES MARQUETTE LAW REVIEW MARQUETTE case. R This is the strange part: New This is the York is one of thirty-six EVERAGE It is unclear what New York’sinterest is in enforcing B ) 2/16/17) 11:35 AM Lex Vini—21st Amendment Litigation: NY Wine Retailer Sues NYSLA Lex Vini—21st Amendment Litigation: NY Wine 170 Empire Wine’s Lawsuit Against SLA is Dismissed The New York Supreme Court dismissed the case with- OGARTY 175 ODES Interstate Shipping Flap Rattles N.Y. Wine Retailers 176 &F ELETE .C D OT All but two of them from prohibit out-of-state retailers shipping LCOHOLIC OMP N O (Nov. 20, 2014), http://blog.timesunion.com/capitol/archives/224803/empire-wines- 173 EATMAN (D Retail-to-Consumer Direct Wine Shipping Guide, supra Empire WineEmpire P Empireadmitted that it shipped wine to retail customers in sixteen DOCX .Id. however, New York does not have a law that prohibits anyone in New does not have a law that prohibits however, New York -P. 172 172 173. Memorandum of Law in Support of Verified Petition and Complaint at 4, Empire Wine & 169. 835, 837 (N.Y. Sup. Liquor Auth., 988 N.Y.S.2d Empire Wine & Spirits LLC v. N.Y. State 170. & Spirits LLC v. N.Y. State Liquor Auth., Verified Petition & Complaint at 4, Empire Wine 171. N.Y. A 177. Bashan, Yoni 176. Verified Petition & Complaint Auth., & Spirits LLC v. N.Y. State Liquor at 6, Empire Wine 174. Trinidad, John 175. N.Y. C Empire Wine & the State in and licensed by located Spirits LLC, (Empire) In response, Empire the NYSLA from brought an action to enjoin proceed- 171 ARTIN ICKENSON ONFIDENTIAL states that prohibits retailers from prohibits retailers states that beverages into New any alcoholic shipping does not have a licenseYork to anyone who to sell them, that is, to consum- ers; vagueness is beyond the scope of this article. N.Y. A winedirectly to in-state consumers, and one of the two would not permit ship- ping from State because it is a reciprocity state. New York other states. Empire’s (NYSLA) threatened to revoke State Liquor Authority license for “improper conduct.” wine-nysla-lawsuit [https://perma.cc/FK5X-M5NB]. out prejudice requiring Empire first to exhaust its administrative remedies. C 518 the rise to M Spirits LLC v. N.Y. State Liquor Auth., (N.Y. Sup. Ct. filed Sept. 22, 2014). 2014, at A21; Casey Seiler, Ct. 2014). 988 N.Y.S.2d 835 (N.Y. Sup. Ct. 2014). lawsuit-against-SLA-is-dismissed [https://perm (West 2005). of New York, uses the Internet to sell and deliver wine to consumers to sell and uses the Internet of New York, in and New York. outside of (West 2014); 988 N.Y.S.2d 835 (N.Y. Sup. Ct. 2014). Empire also asserted988 N.Y.S.2d 835 (N.Y. Sup. Ct. 2014). Empire that the regulation allowing the NYSLA to revoke a license for “improper conduct” was unconstitutionally vague. York from shipping wine or other alcoholic beverages to anyone in another beverages to anyone in another alcoholic York from wine or other shipping state. laws of other states against a New York business when the business did not against a New York business when laws of other states violate any New York laws. the grounds that the NYSLA’s on ing with the license revocation hearing asser- tion of authority over wine shipments to another state violated the dormant Commerce Clause. D 38800-mqt_100-2 Sheet No. 116 Side B 02/22/2017 09:25:38 02/22/2017 B No. 116 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 117 Side A 02/22/2017 09:25:38 180 519 The 181 PECTATOR S INE Oregon v. Meyer, , W The Supreme Court 185 reh’g denied; 182 (Feb. 23, 2015), http://www.saratogian.com/arti- New Cause to “Wine” about New York Business Cli- New Cause to “Wine” about New York Business or any other out-of-state retail wine ship- retail wine out-of-state or any other 178 and use it to severely penalize a New York and use it to severely ARATOGIAN , 819 N.W.2d at 252–53 (quoting State v. Mueller, 171 N.W.2d S 183 The Supreme Court of Wisconsin noted that has § 23661.2 (West 2014). 184 ODE .C ) 2/16/17) 11:35 AM ROF EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY ELETE D .&P note 177, at A25 (mentioning that legal experts say states are generally lax supra note 177, at A25 (mentioning that legal experts OT US N (Apr. 10, 2015), http://nypost.com/2015/04/10/new-cause-to-wine-about-new-york- O .B Wis. Indus. Energy Grp., Inc. v. Pub. Serv. Comm’n, 819 N.W.2d 240 (Wis. 2012); (D at 2–3. OST AL P DOCX . Wis. Indus. Energy Grp., Inc. .Id. . See In fact, California, which In fact, allows retail wine out-of-state into shipping -P. 185 180. C 182 183. & Spirits LLC v. N.Y. State Liquor Auth., Verified Petition & Complaint at 3, Empire Wine 184 179. Bashan, 178. RobertMerchants Taylor, New York State Cracks Down on Its Top Wine 181. Stipulation, Agreement, and Order at 2, Knightsbridge Wine Shoppe, Ltd. v. Jolly, No. 5:06- If California’s regulatory agency deemsIf California’s regulatory of its rule to be of too the violation There is no indication that any of the states to which Empirestates to wine shipped of the that any is no indication There 179 M K ARTIN C Y 53 P.3d 940 (Or. Ct. App. 2002). Coca-Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671 (Tex. 2006), about enforcing out-of-state wine shipping laws). about enforcing out-of-state wine shipping laws). cv-02890-JF (N.D. Cal. filed Nov. 15, 2006). 988 N.Y.S.2d 835 (N.Y. Sup. Ct. 2014). business? If other states do not see it as in their interest to prosecute Empire states do not see it as in their interest business? If other laws,for violating their it would seem be an unconstitutional extraterritorial to dormant Commerce for the NYSLA to do so. Many Clause violation court opinions suggest as much. business-climate/ [https://perma.cc/SFL4-R94T] (noting that Empire has not been charged with or con- business-climate/ [https://perma.cc/SFL4-R94T] shipped wine, nor had any state investigated it has victed of any wrongdoing in any state to which Empire until asked for help by New York). little consequence to act on, howlittle consequence does it serve New York’s to deem interest the behavior “improper conduct” California only by retailers in states that allow reciprocal shipping privileges, reciprocal shipping in states that allow only by retailers California took any action against Empire,took any Keeping Eye on Empire Wine Dispute, 2016] its Department Beverage of Alcoholic that in a court proceeding has stipulated taken any enforcementControl has never any retail licensees in action against California adults. sold and shipped wine directly to other states that have M cle/ST/20150223/NEWS/150229926 [https://perma.cc/QSY3-KPVJ]. a state lacks the authority to regulate a person’s activities in another state be- a a state lacks the authority to regulate is that the laws of a state have no cause “‘[t]he general rule, unquestionably, limitedextraterritorial effect.’ . . . Although exceptions to this general rule might exist, explicitly prohibiting ‘persons’ fromactivities outside engaging in those exceptions.” the state does not fall within one of Department that it devotes its limited explained priorities resources to higher that directly impactsafety. Californians’ health and per. (Oct. 9, 2014), http://www.winespectator.com/webfeature/show/id/50661 (“Empire Wine(Oct. 9, 2014), http://www.winespectator.com/webfeature/show/id/50661 or cease-and-desistowner . . . said that [he] had never received a complaint order from any of the states to which [he] had shipped wine.”); Tom Wark, , N.Y. mate, 38800-mqt_100-2 Sheet No. 117 Side A 02/22/2017 09:25:38 02/22/2017 A No. 117 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 117 Side B 02/22/2017 09:25:38 M K 189 C Y [100:497 [100:497 A.5920, http://assembly.state.ny.us/leg/?de- AWS .L ESS S Letter from New York Governor Andrew Cuomo to the New S.4446, http://assembly.state.ny.us/leg/?term=2015&bn=S04446 MARQUETTE LAW REVIEW MARQUETTE (Dec. 12, 2015, 5:26 AM), https://twitter.com/poozer87/sta- AWS ) 2/16/17) 11:35 AM .L Different states have made different judgments about what ESS ELETE S D , 218 S.W.3d at 680–81. WITTER 190 notes 164 and 171 and accompanying text. 187 OT N , 53 P.3d at 945–46. , T O (D The Court of Appeals in Oregon held that Oregon officers cannot Oregon officers cannot Oregon held that of Appeals in The Court 186 The governor vetoed the bill explaining it would The governor vetoed the bill explaining signal send “a clear DOCX . See supra .Coca-Cola . Meyer -P. 188 186 187 188. 2015 N.Y. 190 189. David Lombardo (@poozer87), State alcoholic beverage laws make a good case for the importance of the As far as can be determined,As far as enforce its New York to no state has asked case, the New York AssemblyIn response to this passed and Senate both ARTIN is and is not importantregulation of alcoholic beverages. One state in the of ap- its borders because its perception should not be able to regulate beyond propriate regulation and enforcement could be completely different from that of its neighbors. issue traffic violations in a state outside of of that state authorized Oregon unless state outside violations in a issue traffic such an action. that New York is a haven for entities intent on breaking other states’ laws.” tus/675668081700691969/photo/1 [https://perma.cc/E4S2-UEUT] (citing N.Y. Executive Chamber, tus/675668081700691969/photo/1 [https://perma.cc/E4S2-UEUT] (citing N.Y. Executive Opinion Letter on Veto to Assembly Bill 5920 (Dec. 11, 2015)). 414, 416 (Wis. 1969)). He might states do not consider important have added, even those which other enough to enforce themselves. extraterritoriality doctrine of the Commerce Clause because the laws are so var- ied across states. 520 argued similarly has of Texas attempting states against their govern beyond to borders. M [https://perma.cc/LCD4-CFHJ]; 2015 N.Y. fault_fld=&bn=A05920&term=2015&Summary=Y&Actions=Y&Memo=Y&Text=Y [https://perma.cc/R4KC-L565]. York Assembly alcoholic beverage retail shipping laws. Withoutalcoholic beverage request, what would such a New other shipping law when the York’s state’s enforcing another interest be in York is burdening inter- enough to enforce it itself? New state is not interested state commerce impermissibly and acting a extraterritorially by undertaking Empire’sprocedure to revoke license based on Empire’s actions in other states. Control Law (NYABCL) to Beverage bills amending New York’s Alcoholic eliminate the NYSLA’s on possible vio- authority to penalize licensees based a specific provision of laws unless the conduct violates lations of other states’ conduct resulted in a criminalNYABCL or the licensee’s conviction in another state. 38800-mqt_100-2 Sheet No. 117 Side B 02/22/2017 09:25:38 02/22/2017 B No. 117 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 118 Side A 02/22/2017 09:25:38 521 197 The court ex- 198 AW L For example, an Oregon 191 TATE S 195 The North appellate court held that Carolina 193 In 1897, the Court of Appeals of Kentucky noted that In 1897, the Court of Appeals of Kentucky XTRATERRITORIALITY IN XTRATERRITORIALITY ) 2/16/17) 11:35 AM E 196 EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY In 1894, the North Carolina Supreme Court noted that “[i]t Carolina Supreme Court noted that In 1894, the North The worker then sued the company The worker then for violating the North ELETE VI. 194 D 192 OT N O (D at 752. at 754 (quoting McCullough v. Scott, 109 S.E. 789, 796 (N.C. 1921)). DOCX .Id. .Id. -P. 191. the laws of 541 (N.H. 1899) (“It is universally agreed that Crippen v. Laighton, 44 A. 538, 192. Sawyer v. Mkt. Am., Inc., 661 S.E.2d 750, 751–52 (N.C. Ct. App. 2008). 193 194 195. State v. Hall, 19 S.E. 602, 602 (N.C. 1894). 196. Marshall 42 N.E. 419, 423 (N.Y. 1895). v. Sherman, 197. Louisville & N.R. Co. v. Whitlow’s Adm’r, 43 S.W. 711, 713 (Ky. 1897). 198. Anschutz Corp. v. Merrill Lynch & Co., 690 F.3d 98, 111 (2d Cir. 2012) (quoting Norwest In the twenty-firstsame century, courts continue to cite the principle. In The extraterritoriality doctrine exists not only in Commerce exists not only doctrine The extraterritoriality consti- Clause The following year, 1895, the New York Court of Appeals, in refusing to The following year, 1895, the New M K ARTIN C Y tutional jurisprudence but also in state but also tutional jurisprudence . plained that in the case at hand, the plaintiff was a Kansas plaintiff plained that in the case at hand, the corporation with its enforce a Kansas statute, referred to “a principle of universal application, rec- principle of universal “a enforce a Kansas statute, referred to have . . . no force of [one] state statutes ognized in all civilized states, that the or effect in another.” 2016] M resident signed an independent contractor agreement contractor signed an independent resident Carolina with a North company for the companybut did all his work North Carolina in outside of North Carolina. is a general principle of universal accepta[nce] that one state . . . cannot enforce of universal accepta[nce] that one is a general principle the penal or criminal laws crimes of another, or punish or offenses committed state or .” in and against another a state have, ex proprio vigore [of its own force], no extraterritorial force; that is to say, no state ‘can a state have, ex proprio vigore [of its own force], of its own territory, or bind person not resident out by its laws, directly affect or bind property therein.’”). Mortg., App. 1999)); Sullivan v. Oracle Corp., Inc. v. Superior Court, 85 Cal. Rptr. 2d 18, 25 (Cal. Ct. the Act does not provide a cause of action for someonethe Act does not provide neither lived nor who jurisdiction, Carolina because states have no extraterritorial worked in North Court the North Carolina Supreme and according to “[t]he presumption is al- ways any intention to attempt against oper- to the act an extraterritorial giving ation and effect.” Carolina Wage and Hour Act. 2012, the U.S. Court of Appeals for the Second Circuit opined that “California 2012, the U.S. Court of Appeals for courts have long recognized a presumption against the extraterritorial applica- statutory remediestion of state law,” are not availa- and therefore, “California residents, caused by conduct occur- ble ‘for injuries suffered by non-California by defendants whose headquarters and ring outside of California’s borders, outside of California.’” principal places of operations are “[t]he statute of another state has, of course, no extraterritorial force.” 38800-mqt_100-2 Sheet No. 118 Side A 02/22/2017 09:25:38 02/22/2017 A No. 118 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 118 Side B 02/22/2017 09:25:38 M K 207 .L. C Y and ARV 204 H , 126 Recent Cases, supra some argue that With the broad 205 203 OCTRINE IN THE D [100:497 [100:497 extraterritoriality rule); , 700 F.3d 796 (6th Cir. 2012) LAUSE The plaintiff did not allege any in- allege any did not plaintiff The ]. C Some the argue that the only use for 199 per se 206 XTRATERRITORIALITY Recent Cases E OMMERCE C 201 Therefore, California law could not control the could not control California law Therefore, MARQUETTE LAW REVIEW MARQUETTE 200 ) 2/16/17) 11:35 AM note 136, at 980–81. , 690 F.3d at 111. Dormant Commerce Clause—Extraterritoriality Doctrine—Sixth Circuit In- ELETE D supra , n.1 (1971) (applying federal Perez v. United States, 402 U.S. 146, 146–47, 147 , Cities Serv. Gas Co. v. Peerless Oil & Gas Co., 340 U.S. 179, 180 (1950) (state , Cities Serv. Gas Co. v. Peerless Oil & Gas Co., OT , Am. Beverage Ass’n v. Snyder, 735 F.3d 362, 377–78 (6th Cir. 2013) (Sutton, J., American Beverage Ass’n v. Snyder N O PPOSITION TO THE PPOSITION TO THE (D at 112. ; Sam Francis Found. v. Christie’s, Inc., 784 F.3d 1320, 1332–34 (9th Cir. 2015) (Rein- ; Sam Francis Found. v. Christie’s, Inc., 784 F.3d 1320, 1332–34 An impetus for the criticism federal and is the increasing overlap of DOCX . Anschutz Corp. .Id. .Id. .Id. . See, e.g. . See, e.g. . See, e.g. 202 VII. O -P. 199 200 201 203. Recent Cases, 202. Denning, 207 204 205 206 In spite of its long-standing acceptance as a way of organizing regulation, acceptance as a way of organizing In spite of its long-standing . 2435, 2438–39 (2013) [hereinafter ARTIN EV state jurisdiction in mattersstate jurisdiction having interstate implications. note 203, at 2438. the boundary between territorial and extraterritorial regulation has blurred too extraterritorial the boundary between territorial and much make to the doctrine workable. jury or communication by the or any conduct defendant in California with the in California. defendant the extraterritorial doctrine has been the subject of much doctrine has been the extraterritorial criticism recent in years. dormant Commerce Clause now is to prevent in-state favoritism, and the extra- territoriality strand of Commerce Clause jurisprudence should be eliminated. transactions betweentransactions them. 254 P.3d 237, 248 (Cal. 2011). to Use Unique Mark on All Bottles Sold validates Michigan Statute Requiring Bottle Manufacturers Within Michigan— 522 in Colorado. of business place principal M states regulating commerce that has great interstate impact, R concurring). law to local loan shark because of money flowing to and from interstate criminal enterprise); Katzen- law to local loan shark because of money flowing law to local restaurant because of pur- federal bach v. McClung, 379 U.S. 294, 304 (1964) (applying chase of foodstuffs from out of state). state but mostly shipped and used out of state). fixing price of gas drilled and purchased within hardt, J., concurring in part and dissenting in part) (asserting that in extraterritoriality cases, the Su- hardt, J., concurring in part and dissenting in part) (asserting that in extraterritoriality cases, recom- preme Court wrongly ignores primary dormant Commerce Clause issue of protectionism and mending that Supreme Court should reconsider its interpretation of interstate commerceinterpretation of interstate 1970s enabling the fed- in the 1960s and eral government to regulate commercewas seemingly that intrastate, 38800-mqt_100-2 Sheet No. 118 Side B 02/22/2017 09:25:38 02/22/2017 B No. 118 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 119 Side A 02/22/2017 09:25:38 210 523 211 208 Instead, it has a 213 balancing test has been Pike Dormancy Versus Innovation: A Next balancing test, which does not balancing test, . 381, 421 (2013) (asserting that extraterri- impermissible; less than “wholly” EV Pike .L.R That seems as like an easy test as long per se 214 KLA , 65 O Courts will mistakenly that the test for statutes apply Cases described above suggest that the distinction is Cases described above suggest that Section III. One commentator test that an appropriate has opined notes 17–18 and accompanying text. 209 215 ) 2/16/17) 11:35 AM 216 note 136, at 979–80; Sam Kalen, supra EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY note 2, at 492. ELETE The doctrine of extraterritoriality has become The doctrine of extraterritoriality a Commerce D supra OT supra 212 N O North Dakota v. Heydinger, 15 F. Supp. 3d 891, 916 (D. Minn. 2014). discussion at 643. (D at 492–93 (citing Nat’l Solid Wastes Mgmt. Ass’n v. Meyer, 63 F.3d 652, 658 (7th Cir. DOCX .Id. .See .See . note 14 and accompanying text. See supra . See generally supra .Id. . See -P. 209. Felmly, 208. Denning, 210 211 212 213 214. Edgar v. MITE Corp., 457 U.S. 624, 642–43 (1982). 215 216 One way the limiting principle of pro- purpose is served is the better-known One specific problem that commentators mention is that extraterritoriality M K ARTIN C Y and the statute stands. Generation Dormant Commerce Clause Clause step-child merely because it is not specifically about discrimination but more not putting an undue burden on interstate commerce generally about and and it does not have a neatly not contributing to legislative balkanization, nameddoes or does not apply. test for deciding when it 2016] Somethe extraterritoriality that assert dead. is already doctrine That argument The is not very persuasive. doctrine is an im- extraterritoriality portant element responsibility right and in preserving the federal government’s commerceto regulate interstate infringement states. Although by the without in the modern economy, it would be impossiblefor states to regulate without having some on interstate commerce, effect dormant the Commerce Clause serves the important that regulation. The extrater- purpose of putting limits on from also keeps states ritoriality principle and enforcing regulations enacting that would promoteare differences of opinion among when hostility them there policies to pursue, about appropriate notion of balkanization. the untoward M toriality notion “is an abandoned nineteenth-century relic”). toriality notion “is an abandoned nineteenth-century a court resists confusing the issue with the a court resists confusing the issue with apply. “Wholly” makes the statute hibiting a state from discriminating against out-of-staters in economic regula- out-of-staters hibiting a state from discriminating against the use of the tion. Applying this principle through discriminate extraterritorially. to statutes regulating out-of-staters against well-accepted. simpler method for application: deciding whether the state regulation at issue regulates “wholly outside” the state. fairly easy to discern. does not fit well within accepted Commercefit well within accepted does not of discrimination Clause notions get confused. so courts 1995)). 38800-mqt_100-2 Sheet No. 119 Side A 02/22/2017 09:25:38 02/22/2017 A No. 119 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 119 Side B 02/22/2017 09:25:38 , M K 221 AME C Y D case, test. OTRE Pike , 85 N ” regulates be- ” regulates Then the court Sam Francis , explained that in , explained that in 220 outside their borders. Healy [100:497 [100:497 inescapably wholly and It is unclear why “inescapably” why “inescapably” It is unclear U. L.J. 713, 727–28, 730 (2007). What is missingfrom this anal- “A state, in other words, cannot “A state, in other 217 223 OUIS 219 .L Baldwin violation not subject to the violation not subject T does not indict the tests and principles. In does not indict the , 51 S 218 per se MARQUETTE LAW REVIEW MARQUETTE Making Sense of Extraterritoriality: Why California’s Progressive State Extraterritorial Powers Reconsidered: A Reply State Extraterritorial Powers Reconsidered: ) 2/16/17) 11:35 AM “Hard” or “Soft” Pluralism?: Positive, Normative, and Institutional Con- . 423, 425 (2015). ELETE EV D OT N . L. R O (D at 730. at 645–46. NVTL An asserted reason for this position is that there are legitimate state test by arguing that only extraterritorial regulations that discriminate test by arguing that only extraterritorial .E DOCX .Id. .Id. .Id. 222 . 1157, 1160 (2010). -P. 223 217. Jeffrey M. Schmitt, 219. Dairy Foods Ass’n v. Boggs, 622 F.3d 628, 645 (6th Cir. 2010). Int’l 220 221 222. Mark D. Rosen, 218. Katherine Florey, That judges are not necessarily careful in applying tests and principles, as tests and principles, careful in applying are not necessarily That judges Unfortunately, some commentators have encouraged the misapplication of Pike ARV EV ARTIN yond the state’s borders as a practical matter.state’s borders as yond the Global Warming and Animal Welfare Legislation Does Not Violate the Dormant Commerce Clause Global Warming and Animal Welfare Legislation addition to protectionist regulations, a second category that is invalid under the regulations, a second category addition to protectionist dormant Commerce that control commerce Clause includes regulations wholly of the regulating state. outside the borders cited the First, Second, Third, Fourth, Seventh, Eighth, Ninth, and Eleventh Ninth, Third, Fourth, Seventh, Eighth, cited the First, Second, doctrine of the dormant the extraterritoriality Circuits for recognizing Com- mercedistinct Clause as being a is an improvement and un- accepted which has been generally over “wholly,” by courts. derstood suggested by some commentators, fact, and putting to lie assertions that courts do not understand extraterritoriality lie assertions that courts do not understand fact, and putting to Sixth Circuit, citing jurisprudence, the interests that occur beyond a state’s borders. interests that occur beyond a state’s siderations of States’ Extraterritorial Powers against out-of-staters are unconstitutional; extraterritorial regulation that does extraterritorial regulation that does against out-of-staters are unconstitutional; be subjected to balancing and held should not prefer in-staters to out-of-staters outweighconstitutional if the state benefits on interstate com- the burden merce. L. R This recitation indicates that courts are not having unusual difficulty applying This recitation indicates that courts extraterritoriality principles. the 524 “ regulation if a state is invalidity for extraterritorial M ‘project its legislation’ into another state,” the court said. into another state,” the court ‘project its legislation’ That is a high standard, and meeting it is an indication that a state is attempting to regulate beyond the scope of its legitimate interest. In the ysis is the requirement for a finding of unconstitutional extraterritoriality, indi- are regulating cated in the cases above, that states for example, that a California resident with a the Ninth Circuit hypothesized 39 H 38800-mqt_100-2 Sheet No. 119 Side B 02/22/2017 09:25:38 02/22/2017 B No. 119 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 120 Side A 02/22/2017 09:25:38 , . EV 525 L. R AME D OTRE 228 . 1057, 1065–66 (2009). EV As others have con- , 85 N 227 L. R , 593 F.3d at 668. AME D extraterritoriality in a Due extraterritoriality Pro- OTRE 226 , 84 N But if Congress is not acting, then it is not But if Congress is not acting, then ; Midwest Title Loans 229 If the sculpture, the artist, the buyer, and the location the buyer, and the the artist, If the sculpture, State Courts, State Territory, State Power: Reflections on the Extraterri- State Extraterritorial Powers Reconsidered 224 ) 2/16/17) 11:35 AM It is unclear why this is a problem at all when two the EXTRATERRITORIALITY IS NOT DEAD IS NOT EXTRATERRITORIALITY 225 note 226, at 1137–38 ELETE D OT supra N O Am. Beverage Ass’n v. Snyder, 735 F.3d 362, 380 (6th Cir. 2013); Midwest Title Loans (D DOCX . See -P. 228 229. Crippen 1899). v. Laighton, 44 A. 538, 541 (N.H. 226. Mark D. Rosen, 224. Sam 1323 (9th Cir. 2015). Francis Found. v. Christie’s, Inc., 784 F.3d 1320, 225. Katherine Florey, 227. Rosen, Finally, there is the problem of a dysfunctional Congress. Some of the Another cited problemdormant that there is not only a is the perception M K ARTIN C Y 593 F.3d at 668. cess context has as its purpose protecting individuals without sufficient state cess context has as its purpose protecting contacts from subjected to its laws. being unreasonably problems addressed in cases described above, like advertising sex acts involv- problems addressed in cases described ing minors clean energy, would be better resolved with or encouraging national regulation. In 1899, the Supreme New HampshireCourt of said, “If it is an evil another, the mischief be directly enforced in that the laws . . . of one state cannot can be easily cured by congress.” surprising that states attempt to do so and, in so doing, sometimessurprising that states attempt to do go beyond do not indicate a problemtheir geographic authority. Those facts with consti- tutional requirements; they indicate a problem with will the current political of Political willthe people and their political parties. comes and goes, flows and ebbs; that should not be the case with constitutional principles. 2016] part-time apartment York New from New York in a sculpture bought a North Dakotafurnish her New artist to York apartmentsculpture to and then sold the New York. a friend in M cluded, these two at odds with uses of extraterritoriality are not necessarily each other, but merely different and may complement each other. toriality Principle in Choice of Law and Legislation doctrines apply in different situations and have different purposes. Unlike the different situations and have different doctrines apply in dormant Commerce the Clause, which is preventing states from purpose of put- on interstate commerce,ting undue burdens 1133, 1138 (2010); Midwest Title Loans, Inc. v. Mills, 593 F.3d 660, 668 (7th Cir. 2010). of the transaction have absolutely no connection to California, why should Cal- to California, no connection have absolutely of the transaction decision to makeifornia’s to the North seller pay royalties the Dakota artist not to require such Dakota’s decision overcome or North New York’s decision art to be an undesir- a required “tax” on other states view a payment? Perhaps able impediment to commerce a more in art objects, important than concern sale of their works. royalties for artists beyond the first providing ongoing Commercedoctrine, but also a Due extraterritoriality Clause Process extrater- ritoriality doctrine. 38800-mqt_100-2 Sheet No. 120 Side A 02/22/2017 09:25:38 02/22/2017 A No. 120 Side Sheet 38800-mqt_100-2 38800-mqt_100-2 Sheet No. 120 Side B 02/22/2017 09:25:38 M K C Y [100:497 [100:497 ONCLUSION VIII. C MARQUETTE LAW REVIEW MARQUETTE ) 2/16/17) 11:35 AM ELETE D OT N O (D DOCX -P. The demise of the dormant Commerce doctrine extraterritoriality Clause’s ARTIN has been greatly exaggerated. The cases above indicate that states, unsurpris- indicate that The cases above greatly exaggerated. has been ingly, sometimes attempt When beyond their borders. to regulate disad- those declare sought to have courts have regulation by the extraterritorial vantaged relied on several prece- courts have routinely the regulation unconstitutional, the principled decisions on whether dential U.S. Supreme to make Court cases is im- so, then the regulation If wholly outside its borders. state is regulating permissibly Merely extraterritorial. and one because a state has a good purpose that it should as well, does not suggest states to embrace it would like its sister be able to impose its will on other states whose voters may pri- have different is a orities. Invalid extraterritoriality systembedrock of a federalist seems that when the federal part unnecessary only systemof that is underperforming. 526 M 38800-mqt_100-2 Sheet No. 120 Side B 02/22/2017 09:25:38 02/22/2017 B No. 120 Side Sheet 38800-mqt_100-2