Summary of West Lynn Creamery v. Healy
512 U. S. 186 (1994)
Facts: Healy was the Massachusetts Commissioner Department of Food and Agriculture (respondent) Pl/pet is a milk dealer licensed within Mass. with 97% of the milk it purchases is from out of state farmers. In response to Mass farmers losing market share to lower cost producers from outside, Mass enacted a pricing order. The order required every dealer in Mass. to make a monthly premium payment based on the amount of fluid milk sales into a FUND. Said fund then distributed money to local dairy farmers proportionate to their contribution into the State’s production of raw milk.
Issue: Whether the pricing order unconstitutionally discriminates against interstate commerce?
Procedure: West Lynn Creamery brought the action and the state court granted judgment for the State. Reversed
Rule: Principle under commerce clause is that a state may not benefit in-state economic interests by burdening out-of-state competitors. Art. 1, § 8, cl. 3.
Ct. Rationale: The Commerce Clause also limits the power of the Commonwealth of Massachusetts to adopt regulations that discriminate against interstate commerce. Thus, state statutes that clearly discriminate against interstate commerce are routinely struck down … unless the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism. The “premium payments” are effectively a tax which makes milk produced out of State more expensive. Although the tax also applies to milk produced in Massachusetts, its effect on Massachusetts producers is entirely (indeed more than) offset by the subsidy provided exclusively to Massachusetts dairy farmers. Like an ordinary tariff, the tax is thus effectively imposed only on out-of-state products. The premiums simultaneously burdens interstate commerce and discriminates in favor of local producers.
PL A : The premium payments are effectively a tax which makes milk produced out of the State more expensive.
Def A: [Healy] The State can impose a valid tax on dealers, so long as it is not discriminatory, and it is free to use the proceeds as it chooses, then it is free to subsidize local farmers with the proceeds out of the general fund.
Messianic – characteristic of a savior.
Mollified – appease, calm, pacify.
The “negative” aspect of the Commerce Clause was considered the more important by the “father of the Constitution,” James Madison. In one of his letters, Madison wrote that the Commerce Clause “grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government.”
“This ‘negative’ aspect of the Commerce Clause prohibits economic protectionism–that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors….
Bacchus held that Hawaii’s law was unconstitutional because it “had both the purpose and effect of discriminating in favor of local products.” By granting a tax exemption for local products, Hawaii in effect created a protective tariff. Goods produced out of State were taxed, but those produced in State were subject to no net tax.