The "New Protectionism" and the American Common Market

By Williams, Norman R.; Denning, Brannon P. | Notre Dame Law Review, November 2009 | Go to article overview

The "New Protectionism" and the American Common Market

Williams, Norman R., Denning, Brannon P., Notre Dame Law Review

For nearly two centuries, the U.S. Constitution through the dormant Commerce Clause has protected the American common market from protectionist commercial state regulations and taxes. During the past two terms, however, the U.S. Supreme Court created a new exception to the dormant Commerce Clause for protectionist state and local taxes and regulations that favor public rather than private entities. In this Article, we describe this "New Protectionism" and argue that the Court's embrace of it is profoundly misguided. As we document, there is no material difference, economically or constitutionally, between public protectionism and private protectionism. As illustrated by the variety of ways in which government and private enterprise interact, there is no coherent distinction between public and private activities, and ensuing efforts to draw such a line will only serve to embroil the courts in tasks for which it is ill suited. Worse, this new exception only encourages state and local governments to engage in protectionism in a variety of contexts, such as education and local economic development, in which the dangers to national economic union are paramount. Coupled with the Court's recently declared unwillingness to subject nondiscriminatory regulations and taxes to minimal judicial scrutiny, this endorsement of public protectionism threatens to emasculate the constitutional protections for the American common market and should therefore be rethought by the Court or legislatively superseded by Congress.


     A. The Pre-United Haulers Dormant Commerce Clause: A
        Doctrinal Summary
     B. United Haulers
     C. Davis

     A. The Court's Proffered Justifications
     B. Evaluating the Proffered Rationales
        1. The Likelihood of Nonprotectionist Motivation.
        2. Traditional Governmental Functions
        3. Virtual Representation
        4. Public vs. Private Protectionism
        5. Municipal Bond Market Exceptionalism

     A. Municipal Garbage Processing and Bond Favoritism
     B. Public Protectionism
     C. Quasi Public-Private Protectionism
     D. Whither the Dormant Commerce Clause?

     A. Summary of the Market-Participant Exception
     B. Davis's Market-Participant Revisionism
     C. The Implications of an Expanded Market-Participant

     A. Davis on Balancing
     B. The End of Balancing? Four Readings of Davis
     C. Against Premature Abandonment of Balancing



For close to two centuries, the United States Supreme Court has actively sought to protect interstate trade from undue disruption by state or local governments. Pursuant to the so-called "dormant Commerce Clause," the Court has reviewed state and local legislation to ensure that local measures do not unreasonably disrupt the American common market. (1) Although the Court has deployed different doctrinal formulas over the years to distinguish between legitimate state commercial regulations and illegitimate measures that unduly interfere with interstate trade, (2) one constant has been a strict prohibition on protectionist measures that seek to insulate in-state economic activity from out-of-state competition. Beginning as early as the middle of the nineteenth century, the Court actively rooted out and invalidated state laws that sought to discourage the sale of out-of-state goods or services so as to favor local economic interests. (3) Since then, numerous "discriminatory" measures have been struck down by the Court. (4) Indeed, as others have noted, this antipathy to local protectionism has been a hallmark of the Court's Commerce Clause jurisprudence. …

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