economic advantage by shifting costs for its local benefits to out-of-state persons or interests, particularly through the elimination of competition. 235 In short, the courts employ the dormant commerce clause to strike down economic special interest legislation that excessively burdens interstate commerce or that discriminates against economic activity by out-of-state parties. As Professor Siegan notes, the courts interpret the "negative commerce clause" as meaning "that a state may not (1) discriminate against interstate commerce, (2) unreasonably burden it, or (3) regulate commerce which is essentially interstate in character. The key question in these cases is whether a local measure inhibiting the flow of interstate commerce can be justified by effectuating a legitimate public purpose. ,,236 As the Supreme Court admitted in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970), the “legitimate public purpose" test leads to an ad hoc balancing approach: Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. Occasionally the Court has candidly undertaken a balancing approach in resolving these issues, but more frequently it has spoken in terms of "direct" and "indirect" benefits and burdens. An argument for some sort of negative commerce clause limitation on the states is difficult to square with the text of the commerce clause alone. The wording of the clause includes no limitation on the states to enact laws impinging on interstate commerce in the absence of legislation; it merely grants Congress the authority to "regulate commerce.' 235 Treatise on Constitutional Law, supra, §11.5, at 588. The scope of the negative commerce clause is surveyed id., §§ 11.1-11.10, at 583-622. 236 B. Siegan, supra note 1, at 243. 237 Accordingly, the negative commerce clause should not, we believe, be relied upon as a significant means of securing economic liberties. Nevertheless, we acknowledge that judicial recognition of the "dormant commerce clause" appears to be well entrenched. C. The Uniformity Clauses The Constitution imposes "uniformity restrictions" on Congress' ability to pass taxation and bankruptcy statutes. With regard to taxation, the Constitution provides that "all Duties, Imposts and Excises shall be uniform throughout the United States". 238 Similarly, the Constitution provides that Congress may enact "uniform Laws on the subject of Bankruptcies throughout the United States", 239 1. Uniformity of Taxation Early Supreme Court decisions held that a tax satisfies the uniformity clause if it operates in a geographically uniform manner. In the Head Money Cases, 112 U.S. 580, 594 (1884), the Court declared that a tax is uniform if it "operates with the same force and effect in every place where the subject of it is found." This test recognized that virtually all indirect taxes have nonuniform effects (for example, a tax on tobacco affects tobacco-growing regions more severely than other regions of the country). Thus what the Constitution required was geographically nondiscriminatory taxes, not uniformity of results. In Knowlton v. Moore, 178 U.S. 41 (1900), the Court built on its Head Money ruling in upholding an inheritance tax that exempted small legacies and taxed larger ones at progressive rates. Here the Court ruled that "intrinsic uniformity" is not required by the Constitution; rather, the Constitution only requires geographic uniformity in the sense suggested by the Head Money rule. Head Money and Knowlton view the uniformity clause as aimed at preventing Congress from using regional taxes to pursue regional favoritism. They do not limit Congress' discretion to select the objects of 237 This conclusion is reinforced by the fact that the negative commerce clause's judicial "balancing" test does not vindicate well-defined constitutional rights; it merely allows judges to give their subjective preferences full play. 238 U.S. Const. art. 1, §8, cl. 1. 239 taxation. In United States v. Ptasynski, 462 U.S. 74 (1983), the Supreme Court unanimously upheld Congress' exemption from the Crude Oil Windfall Profits Tax for certain oil mainly produced in Alaska. Because the exemption neither exempted all Alaskan oil nor only Alaskan oil (a small amount of non-Alaskan oil was covered) it did not discriminate along state political lines. The Court found that the uniformity clause does not prohibit Congress from defining the objects to be taxed in geographic terms, "but where Congress does choose to frame a tax in geographic terms, we will examine the classification closely to see if there is actual geographic discrimination." 462 U.S. at 85. In the case at bar, the classification was deemed reasonable. There was no indication that Congress wrongfully intended to grant Alaska an undue preference (much Alaskan oil was heavily taxed). Moreover, Congress viewed the exempted oil as a unique class meriting favorable treatment, based upon "neutral factors" such as the "disproportionate costs and difficulties" associated with extracting the oil in the exempted region. 462 U.S. at 85. Overall, the opinion manifested substantial deference toward Congress' judgment. A recent commentary criticizes Ptasynski as depriving “the [uniformity] clause of any force as a check on congressional power. ,,240 In place of a deferential inquiry that asks whether there is evidence of "actual geographic discrimination" (public policy rationales invariably can be concocted to show there is no "actual discrimination"), the commentary would apply a new test: "if the definition of the subject of a tax is tailored to serve some significant purpose other than to promote the competitive advantage of goods or services produced in one region over those of another region, the tax should be upheld despite any incidental geographically discriminatory effects that may result from the definition." 241 The commentary argues that the new test would allow Congress to pursue "benign geographic discrimination" (such as helping a region that suffers a special handicap). At the same time, it would somewhat restrain Congress from using taxes discriminatorily to favor particular economic special interests. 2. Uniformity of Bankruptcy Laws 240 Comment, The Uniformity Clause, 51 U. Chi. L. Rev. 1193, 1194 (1984). 241 Id. at 1218-19. While this formulation facially appears to resemble the Supreme Court's Ptasynski standard, it differs somewhat in its emphasis on identifying significant purposes other than pure regional economic favoritism. Moreover, the Comment, unlike Ptasynski, eschews any reliance on a "reasonableness" analysis. The Supreme Court recently addressed the uniformity of bankruptcy laws clause in Railway Labor Executives Ass'n v. Gibbons, 455 U.S. 457 (1982). There the Court held that Congress had no authority to pass a bankruptcy law that applied only to a particular regional debtor, the Rock Island Railroad. The Court reasoned that the uniformity clause did not forbid Congress from distinguishing among classes of debtors, nor did it prohibit Congress from recognizing that state laws do not treat commercial transactions in a uniform manner. Thus, Congress could have treated railroad bankruptcies as a distinctive and special problem. Nevertheless, a bankruptcy law that applied to only one named debtor "can hardly be considered uniform. To hold otherwise would allow Congress to repeal the uniformity requirement from . . . the Constitution." 455 U.S. at 473. This holding does not appear to restrain Congress from enacting bankruptcy laws that favor particular groups or have divergent regional impacts. It only prevents particular individuals or entities from being singled out for special benefits under the bankruptcy laws. Thus, the potential for curbing special interest bankruptcy legislation is rather limited, though not totally eliminated, by Gibbons's rationale. 3. Conclusion The uniformity of taxation and uniformity of bankruptcy clauses, as currently interpreted, offer but scant potential for economic liberties challenges to discriminatory congressional statutes. D. Ex Post Facto Clauses 242 Article I, section 9, clause 3 of the Constitution mandates that no "ex post facto law shall be passed" by the federal government. Section 10 of the same article provides that no "state shall... pass any. . . ex post facto Law", 243 In the landmark case of Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798), the Supreme Court held that the ex post facto clauses only prohibited the states and federal government from passing criminal or penal measures that had a retroactive effect. Thus, the clauses did not apply to civil laws. 242 U.S. Const. art. I, §9, cl.3. 243 U.S. Const. art. I, §10, cl. 1. Professor Siegan believes that the framers did not intend to limit the ex post facto clauses to criminal matters. 244 If those clauses had not been so limited, Siegan maintains that they could have been used in lieu of due process to overturn a plethora of laws that infringe economic liberties. Siegan's position, though colorable, seems largely of academic interest. As a practical matter, there is little chance that the Supreme Court would agree to revisit and overturn the holding of Calder v. Bull. Neither Professor Siegan, nor any other scholarly commentator appears to hold out hope that such an outcome could be achieved. Accordingly, the ex post facto clauses are not viable vehicles for furthering economic rights. E. Equal Protection Clause The equal protection clause of the Fourteenth Amendment states that no state shall "deny to any person within its jurisdiction the equal protection of the laws." 245 The Supreme Court's use of the equal protection clause to protect property rights in many respects parallels its reliance on the due process clause to achieve the same goal. At the same time that it retreated from substantive due process, the Supreme Court determined that equal protection did not require that legislation treat all businesses equally. In Railway Express Agency v. New York, 336 U.S. 106 (1949), the Court rejected an equal protection attack on an ordinance preventing owners of delivery vehicles from placing advertisements on their vehicles for any business but their own. The Court employed a permissive "rational basis" test, stating that a discriminatory classification scheme passes muster if it "has relation to the purpose for which it is made and does not contain the kind of 244 See B. Siegan, supra note 1, at 67-82. Siegan admits that Madison's entries at the Constitutional Convention "do not prove that the ex post facto clauses apply to retroactive civil legislation, but clearly they do not foreclose that possibility." Id. at 73. He cites, however, research by several scholars (most notably William Crosskey) that supports his position. See id. at 73-82. Siegan's position is colorable, but far from compelling. For example, during the Constitutional Convention John Dickinson read from Blackstone to prove that the term "ex post facto" applied only to criminal legislation. B. Wright, supra note 3, at 10, n. 21. The safest conclusion is that there was a great deal of confusion at the Constitutional Convention regarding the meaning of the ex post facto clauses. |