Summary of Reeves Inc v Stake
S. Ct. 1980
Exception to Normal Operation under Commerce Clause.
Fails under Tier I.
Relevant Facts: S. Dakota’s cement plant was built originally to supply S. D. during a previous shortage. The plant maintained a list of out-of-state buyers, including Reeves, who was located in WY. Reeves purchased 95% of its cement from S. D. In 1978, unable to meet the demand, S. D. reaffirmed its policy “supplying all S.D. customers first and to honor all contract commitments, with the remaining volume, on a first come first serve basis." Reeves was forced to cut its production by 76%.
Legal Issue(s): Whether S. Dakota, in a time of shortage, can confine the sale of cement it produces to S. Dakota residents/businesses, without violating C. Clause?
Court’s Holding: Yes
Procedure: D. Ct. S.D (summary judgment) enjoined from practice. App. Ct. reversed a state proprietary activity involving a single industry is not in violation of C. Cl. S. Ct. Affirmed.
Law or Rule(s): Congress shall have the sole power to regulate Commerce. . . . .
Court Rationale: There is no indication of a constitutional plan to limit the ability of the states to operate freely in the free market system. S. Dakota unquestionably fits the market participant label. S. D. doesn’t restrict the ability of private firms to set up their own cement plants. Cement itself is not a natural resource, and S. D. is not limiting a commodity or even regulating the ingredients contained within cement. If a state enters the market as a participant the C. Cl. restrictions do not apply.
Plaintiff’s Argument: The exclusionary preference is economic protectionism through the hoarding of materials necessary for interstate commerce.
Defendant’s Argument: The C. Cl does not forbid a State from participating in the market and exercising the right to favor its own citizens over others when there is no regulation involved.
Alexandria Scrap Rule -approved or exempted a state program to hoard resources ????????/
inimical – adverse or antagonistic.