After Midterms .docx - I Limitations on the Power of...

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I. Limitations on the Power of Government A. Limitations only on State Power 1. Supremacy Clause 2. Dormant Commerce Clause Where Congress has not enacted legislation regarding the subject matter, states may regulate local transactions even though the transactions affect interstate commerce. However, such regulations generally MAY NOT discriminate or unduly burden interstate commerce . The presence of the Commerce Clause, which confers on Congress the power to regulate interstate commerce, has been held implicitly to limit the power of states to regulate interstate commerce. This implied limitation on state power has been referred to as the dormant commerce clause. Rules: (1)Laws that discriminate against interstate commerce are valid ``only if they advance a legitimate local purpose not adequately served by any reasonable nondiscriminatory alternative. o Discrimination: To discriminate against interstate commerce means simply to treat out of state goods or services less favorably than goods or services provided by private persons in-state. 1) Laws will be treated as discriminatory if on their face they treat out of state interests less favorably than in-state interests. A law that discriminates on its face will not be treated as nondiscriminatory merely because the law may serve a nondiscriminatory purpose. New Energy Co. of Indiana v. Limbach ** Test for Non-Discriminatory Laws Facts: The New Energy company of Indiana has challenged the constitutionality of Ohio Code § 5735.145(B), a provision that awards a tax credit against the Ohio motor vehicle fuel sales tax for each gallon of ethanol sold (as a component of gasohol) by fuel dealers, but only if the ethanol is produced in Ohio or in a state that grants similar tax advantages to ethanol produced in Ohio. New Energy manufactures ethanol in Indiana for sale in several states including Ohio. Thus, by reason of the provision, New Energy’s ethanol sold in Ohio became ineligible for the ohio tax credit. New Energy brought suit, alleging that the provision violated the Commerce Clause by discriminating against out-of-state ethanol producers to the advantage of in- state industry. New Energy appealed in the US Supreme Court after losing in the Ohio Supreme Court. Issue: Whether the provision DISCRIMINATES against interstate commerce in violation of the commerce clause? Rule: The Dormant Commerce Clause prohibits economic protectionism in the form of regulatory measures designed to benefit instate economic interest by burdening out of state competitors. If the state is discriminatory, it is a per se violation unless the state has a justified reason unrelated to economic protectionism and the method it chose was the least restrictive way to achieve the goal.
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Holding: The Court held that the statute was discriminatory on its face because it deprived certain products of generally available tax treatment solely b/c these products were made in certain other states. The two reasons that Ohio offers to demonstrate a legitimate state interest are w/o merit. First
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  • Fall '08
  • HERALD
  • The Court

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