United Building Council v. Camden- No market participant exception for PIC

t SCt has held that there is no “market participant” exception to PIC. Facts. Camden ordinance required that at least 40% of employees of contractors and subcontractors on city projects be Camden residents.

t Grounds for distinction of commerce clause. Commerce clause challenge to this kind of discrimination had previously been rejected by SCt under “market participant” exception, which held that state can burden interstate commerce when it does so in its capacity as a “participant,” rather than as “regulator” of market. Majority reasoned that the rationale for a “market participant” exemption in the PICcontext was not nearly as strong as in the Commerce Clause context. The Commerce Clause deals only with regulation, and a state acting as “market participant” is simply not regulating. But PIC bars any type of state conduct, regulatory or otherwise, which discriminates against out-of-staters on matters of fundamental concern.

t Holding: SCt held that Camden statute was discrimination against out-of-state residents.

n Discrimination against municipal residence barred: SCt broke major new ground by holding that PICbars discrimination based on municipal residence, just as it bars such discrimination based on state residence. SCt conceded that a regulation that discriminates against out-of-towners burdens some in-staters as well as out-of-staters. But it reasoned that while in-staters “at least have a chance to remedy at the polls any discrimination against them, out-of-state citizens have no similar opportunity,” so there is violation of PIC as to them.

n Two-step inquiry: This discrimination triggers 2-step inquiry.

(1) Did the law burden a privilege that is sufficiently fundamental to be protected by the clause? [yes, because “pursuit of common calling” is a fundamental privilege.]

(2) Is there “substantial reason” justifying the difference in treatment? [need to remand case for findings of fact on this question.]:

(a) SCt emphasized that ban on discrimination against out-of-staters is not absolute; all that is required is that there be a tight fit between the particular discrimination used and a significant evil that the state is combating.

(b) Here, Camden claimed that it was attempting to reverse wide-spread local unemployment and “middle-class flight.” SCt remanded to TC for consideration of whether this was an appropriate purpose, and whether the particular discriminatory measure chosen was sufficiently closely linked to attainment of that objective. But SCt implied that, especially since the City was spending its own funds, the City would prevail if it could show that emigration was indeed a “peculiar source” of the City’s economic decline.

t Dissent - Blackmun. PICdid not prohibit discrimination among state residents because Ely’s process theory (45, and Stone’s long quotation on 294) did not indicate any representational failure that warranted judicial intervention.

Date: 2015-01-02; view: 1023