Law Class Notes
This is the latest word out of the Supreme Court!† Itís relatively short.† Itís a narrow decision.† Itís almost unanimous except for a dissent in part by Thomas.† Itís an example of where the Court looks at an act of Congress and says that it makes certain state laws permissible (milk content and labeling), but they wonít construe that act of Congress to immunize discriminatory state pricing laws from a Dormant Commerce Clause challenge.† The Court will immunize some state rules, but not others.
is an example of Congress would draft language to protect a state law.† They cut out an exemption that is just for the state of
But, thereís a separate Privileges
and Immunities Clause claim in the case.†
Congress does not have the
last word on this Clause.† That claim
goes forward on its merits regardless of what Congress says or wants.† Thereís a holding about whether it matters that
the state law isnít written explicitly
in terms of discriminating against out-of-state citizens.† The Court says no matter what has been said
in the past, ďthe absence of an express statement in the
There are a couple of general points to be made.† Discrimination, when youíre talking out in-state versus out-of-state citizens, involves three different constitutional provisions:
1. Dormant Commerce Clause Ė discrimination against out-of-state citizens is presumed as a violation.
2. Privileges and Immunities Clause
3. Equal Protection Clause of the Fourteenth Amendment
You do all three analyses whenever youíre confronted with a question of cross-state discrimination.† You canít answer the question until youíve thought about all three provisions.
The Equal Protection Clause, like the Privileges and Immunities Clause, is a right that belongs to individual people.† Congress canít override it.† The only one they can override is the Dormant Commerce Clause; they canít override the other two.
There is more than one Privileges and Immunities Clause.† There is a Privileges and Immunities Clause of the Fourteenth Amendment as opposed to the Privileges and Immunities Clause of Article 4, Section 2.† They function differently!
The Privileges and Immunities Clause of the Fourteenth Amendment is not primarily designed to stop discrimination, unlike the Privileges and Immunities Clause of Article 4, Section 2.
has not specifically passed a law authorizing Maine Rx.† How can we tell whether we have a Dormant
Commerce Clause problem?† What claims are
the drug companies making?† The companies
behavior does the drug companies claim is being regulated outside of the state?† They make an extraterritoriality claim.†
They claim that
the companies were right, they would win.†
But the Court unanimously rejects this idea.† They say that
A syllogism is a proposition of logic consisting of two premises: a major premise and a minor premise.† The major premise is more general, while the minor premise is more specific.† For example, major premise: ďAll persons are mammals.Ē† Minor premise: ďSocrates is a person.Ē† Conclusion: ďSocrates is a mammal.Ē† If both premises are valid, then the conclusion necessarily follows as a matter of logical reasoning.† Itís very good to be able to walk into a courtroom and be able to say: ďThis is true, that is true, put them together and we win.Ē† Identify syllogistic reasoning when you see it.† The way to destroy syllogistic reasoning is to show that one of the premises is invalid.† When you see a syllogism, ask which premise you can attack.† You canít attack the deductive conclusion given the two premises given that theyíre structured in that form.† You can also string syllogisms together.† Your conclusion to one syllogism could be either the major or minor premise of yet another syllogism.
going on here is the drug companies say: ďNo state can control prices outside a
Major premises tend to be more doctrinal, while minor premises tend to be more facts of reality.
In almost all Dormant Commerce Clause cases, you should hire an economist because youíre not going to understand everything (or will you?).† Sometimes the key point in a case isnít in a major premise but rather a minor premise (a point of fact).
Whatís the economic truth thatís going on here?
drug companies say that the in-state price is being controlled.† If pharmacies can only charge a certain
amount from the consumer, they wonít be willing to pay as much to the
wholesaler, and thus there will be a limit to what the wholesaler is willing to
pay to the manufacturer.† And there is no
drug manufacturer in the state of
Why doesnít the Court say that the squeeze donít matter because itís not a legal insistence that the drug be a certain price?† It puts a squeeze on you as a manufacturer, but the idea is that you can eat some of the cost out of your profit.† There is no necessarily one-to-one correlation between the retail discounted price and the wholesale discounted price.† Maybe the manufacturer can squeeze the wholesalers!
Court therefore says that they donít think the state of
burden of the program goes onto out-of-state business.† It is designed to benefit in-state consumers
at the expense of out-of-state businesses.†
Why isnít that discrimination even if it isnít necessarily
extraterritorial control?† The law would
operate exactly the same way if every drug manufacturer moved to the state of
Letís compare this to the West Lynn Creamery situation:
In Exxon v. Maryland, if you donít own a
To what extent should bad motive on the part of the state legislature that enacts the law cause the state law to flunk the Dormant Commerce Clause analysis?