Constitutional Law Class Notes 2/17/04


Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me.


What about the question of why itís constitutional for OSU to charge more for out-of-state students than in-state students?


Letís compare two colleges in the state of Maine.One college in Maine caters to local students only.Call it ďLocal CollegeĒ.ďNational UniversityĒ has mostly out-of-state students.


Could the state of Maine decide that they will give scholarships to folks who attend ďLocal CollegeĒ?Are the scholarships school-specific or student-specific?


Letís say that every student who attends Local College gets the scholarship, but nobody who attends National University gets the scholarship.Does this discriminate against out-of-state students?Is there a Commerce Clause problem here?


What if Local College was a state school, whereas National University was a private school?Would we come to a different result?


Does the Dormant Commerce Clause say you canít discriminate against out-of-state kids with respect to scholarships?More generally, when is it permissible for a state to create benefits for its own citizens that arenít available to citizens from other states?


Is it a form of discrimination to offer scholarships to Ohio students but not to, for example, Nevada students?Sure, but it wouldnít run into a constitutional problem.But why not?


Foley says that the Court doesnít use the same Dormant Commerce Clause analysis when it analyzes a scholarship program compared to a tax exemption program.Even though both programs are discriminatory, handing out money will be treated differently than administering a tax exemption.


Discrimination in the granting of subsidies has different rules because itís just handing out cash.But from economics, we discover that this has exactly the same economic effect as handing out a tax exemption.


We will let states be preferential to their own residents if itís in the form of a subsidy, but not if itís in the form of a tax exemption.


A state cannot impose a tax on goods coming into the state from some other state, but it can subsidize local goods by that same amount.


The way the Court would think of the in-state/out-of-state tuition differential is that it would say that the lower tuition given to in-state students is a subsidy or something akin to a scholarship.Formalism seems to be triumphant!


Rule #1 about the Dormant Commerce Clause: The Supreme Court has probably decided 200-300 Dormant Commerce Clause cases in the 20th century.There is a huge amount of precedent involving this clause.You canít reconcile them all.You canít make them into a body of uniform law such that all of the pieces go together and make sense.Some of the pieces of the ďjigsaw puzzleĒ arenít going to fit.What do we do?If youíre a lawyer, find the precedents that support your side and distinguish the precedents that go against you.Think about the issues that motivate different judges in deciding these cases.


The Court will force Maine to use a pure subsidy.If they fail to do so, their statute will be struck down.


The exchange between Scalia and Stevens muddies the waters because they donít agree on what the scope of the precedents is.


Donít let doctrine lead you to places that donít make sense.


The majority doesnít see this as an easy case.Since itís not an easy case, weíre nervous whenever a state government seems to prefer locals to out-of-staters.They can get away with it when the program is facially neutral.But in this case, we actually have facial discrimination in taxation.Therefore, we donít have to put it in a separate ďsubsidyĒ box.Weíre nervous that this is preferential treatment.Going to camp in Maine carries an economic benefit.The state of Maine makes it cheaper to get the benefit of going to pretty camps in Maine if you happen to be from Maine in the first place than if you happened to be from some other state.


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