“Does Rhode Island’s Tolling statute impermissibly discriminate against Truckers by requiring them to incur significant additional expenses not required of cars, in violation of the commerce clause?”

The overriding concern of the Commerce Clause is discrimination. “For over 150 years, our courts have rightly concluded – failure by a state to adhere to the “cardinal requirement of nondiscrimination” is almost always fatal. New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 274 (1988). Discrimination, then, is both the beginning and end of the Commerce Clause inquiry, for it ferrets out the protectionism that the clause was meant to proscribe.

In Hughes v. Oklahoma – 441 U.S. 322, 336 (1979) the United States Supreme Court set forth the “general rule” of Commerce Clause inquiry:

[W]e must inquire (1) whether the statute regulates evenhandedly with only “incidental” effects on interstate commerce, or discriminates against interstate commerce either on its face or in practical effect; (2) whether the statute serves a legitimate local purpose; and, if so, (3) whether alternative means could promote this local purpose as well without discriminating against interstate commerce. The initial burden to show discrimination rests with the challenging party, but once that burden is met, “the burden falls on the State to justify it both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake.” Hunt v. Wash. Apple Adver. Comm’n, 432 U.S. 333, 353 (1977).

Furthermore, when considering the purpose of a challenged statute, a Court is not bound by ‘[t]he name, description or characterization given it by the legislature or the courts of the State,’ but will determine for itself the practical impact of the law. Id.at 336 (citations omitted).

There are many forms of discrimination, all of which trigger strict scrutiny. The classic form of discrimination, of course, is where a state flat-out imposes two different sets of fees or requirements. See, e.g., Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318 (1977). Variations on the theme include instances where the state creates a set of fees or regulations, then creates an exemption for in-state industries or products, see, e.g., Bacchus, 468 U.S. 273; Hale v. Bimco Trading, 306 U.S. 375 (1939); where the state creates special burdens for interstate commerce as a condition of doing business in the state, see, e.g., Union Co. v. Kansas, 216 U.S. 1 (1910); and where the state requires the establishment of in-state business operations to enjoy special benefits available to residents. See, e.g., Bethlehem Motors Corp. v. Flynt, 256 U.S. 421 (1921).

“The commerce clause forbids discrimination, whether forthright or ingenious.” Best & Co. v. Maxwell, 311 U.S. 454, 455-56 (1940). It precludes any “differential burden on any part of the stream of commerce.” West Lynn Creamery, 512 U.S. at 202. Therefore, where a law is facially discriminatory, any impact on interstate commerce, no matter how small, is sufficient to invoke strict scrutiny. “The volume of commerce affected . . . is of no relevance to the determination of whether a State has discriminated against interstate commerce.” Wyoming v. Oklahoma, 502 U.S. 437, 455 (1992). “[A]ctual discrimination, wherever it is found, is impermissible, and the magnitude and scope of discrimination have no bearing on the determinative question whether discrimination has occurred.” Assoc. Indus. of Mo. v. Lohman, 511 U.S. 641, 650 (1994).

Moreover, it does not matter for purposes of dormant commerce clause analysis, if the burden on interstate commerce is imposed based upon an exercise of the taxing power or the general police power. Rather, it is held to require a fully level playing field. For that reason, differential tax burdens repeatedly have been struck down. See Maryland v. Louisiana, 451 U.S. 725, 760 (1981) (“we need not know how unequal the Tax is before concluding that it unconstitutionally discriminates”). See also, James B. Beam Distilling Co. v. Ga., 501 U.S. 529 (1991); Bacchus, 468 U.S. at 272; Armco Inc. v. Hardesty, 467 U.S. 638, 645-46 (1984); Granholm v. Heald, 544 US 460 (2005); Boston Stock Exch., 429 U.S. at 332; Halliburton, 373 U.S. at 65-75; Cf. Indeed it is a constitutional maxim that “revenue generation is not a local interest that can justify discrimination against interstate commerce.” C&A Carbone, 511 U.S. at 393. Whether or not the State possesses the tax power, it is plain that what the State cannot do is to discriminate. See Bacchus, 468 U.S. at 270; North Dakota, 495 U.S. at 448 (Scalia, J., concurring) (“That is not to say, of course, that the State may enact regulations that discriminate”). “States have broad discretion to configure their systems of taxation as they deem appropriate. (citations omitted).



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“Legal information offered is for educational purposes only, and does not constitute legal advice/legal opinions.”


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