Reeves, Inc. v. Stake

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Reeves, Inc. v. Stake
Seal of the United States Supreme Court.svg
Argued April 16, 1980
Decided June 19, 1980
Full case nameReeves, Inc. v. Stake, et al.
Citations 447 U.S. 429 ( more )
100 S. Ct. 2271; 65 L. Ed. 2d 244; 1980 U.S. LEXIS 40
Prior history Certiorari to the United States Court of Appeals for the Eighth Circuit
Holding
South Dakota's preferential treatment of South Dakota residents in its sale of state-produced cement is not a violation of the negative commerce clause.
Court membership
Chief Justice
Warren E. Burger
Associate Justices
William J. Brennan Jr.  · Potter Stewart
Byron White  · Thurgood Marshall
Harry Blackmun  · Lewis F. Powell Jr.
William Rehnquist  · John P. Stevens
Case opinions
Majority Blackmun, joined by Burger, Stewart, Marshall, Rehnquist
Dissent Powell, joined by Brennan, White, Stevens

Reeves, Inc. v. Stake, 447 U.S. 429 (1980), was a United States Supreme Court case in which the Court held that individual states, when acting as producers or suppliers rather than as market regulators, may discriminate preferentially against out-of-state residents. [1] [2] This "market participant" doctrine is an exception to the so-called negative commerce clause, which ordinarily deems state regulations invalid where they discriminate against interstate commerce in favor of intrastate commerce for the purpose of economic protectionism.

Supreme Court of the United States Highest court in the United States

The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. Established pursuant to Article III of the U.S. Constitution in 1789, it has original jurisdiction over a narrow range of cases, including suits between two or more states and those involving ambassadors. It also has ultimate appellate jurisdiction over all federal court and state court cases that involve a point of federal constitutional or statutory law. The Court has the power of judicial review, the ability to invalidate a statute for violating a provision of the Constitution or an executive act for being unlawful. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The court may decide cases having political overtones, but it has ruled that it does not have power to decide nonjusticiable political questions.

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Contents

Background

In 1919, the state of South Dakota built a cement plant to deal with cement shortages that had been plaguing the state. After several years of production, however, South Dakota was producing more cement than its citizens were using, and began selling excess cement on the national market. Reeves, a ready mix concrete distribution company in Wyoming, relied on the South Dakota state-owned factory for up to 95% of its cement supplies. When South Dakota was hit by a cement shortage in 1978, the State Cement Commission directed the cement plant to first supply all South Dakota customers with cement before taking on customers from out of state. As a result, Reeves lost a substantial portion of cement supply, and filed suit against the South Dakota State Cement Commission in federal district court.

South Dakota State of the United States of America

South Dakota is a U.S. state in the Midwestern region of the United States. It is named after the Lakota and Dakota Sioux Native American tribes, who compose a large portion of the population and historically dominated the territory. South Dakota is the seventeenth largest by area, but the fifth smallest by population and the 5th least densely populated of the 50 United States. As the southern part of the former Dakota Territory, South Dakota became a state on November 2, 1889, simultaneously with North Dakota. Pierre is the state capital and Sioux Falls, with a population of about 187,200, is South Dakota's largest city.

United States district court type of court of the United States federal court system

The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States district court. Each federal judicial district has at least one courthouse, and many districts have more than one. The formal name of a district court is "the United States District Court for" the name of the district—for example, the United States District Court for the Eastern District of Missouri.

Opinion of the Court

At issue was whether South Dakota's preferential treatment of South Dakota residents in its sale of state-produced cement constituted a violation of the negative commerce clause. The Court ruled that South Dakota's preferential treatment of South Dakota residents in its sale of state-produced cement was not a violation of the negative commerce clause because South Dakota was acting as a market participant.

The Supreme Court first promulgated the market participant exception to the negative commerce clause in Hughes v. Alexandria Scrap Corp. , [3] in which Maryland offered a "bounty" for destroying abandoned Maryland automobiles but effectively limited receipt of the bounty to in-state residents. There, the Supreme Court upheld the Maryland law against Commerce Clause objections because the state of Maryland was acting as a participant in the market rather than as a market regulator. [3] “Nothing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others.” [3] Thus, while state laws that prefer intrastate commerce to interstate commerce for economic protectionism are ordinarily invalid per se, states when acting as market participants may engage in such discrimination.

Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976), was a case argued before the Supreme Court of the United States. Maryland created a program that, 1) purchased junked cars, 2) paid a bounty for those with Maryland license plates and, 3) imposed more stringent documentation requirements on out-of-state processors, in an effort to reduce the number of abandoned cars in Maryland.

Here, South Dakota was acting as a market participant where Congress had not taken any regulatory action; thus, South Dakota could favor its citizens in the sale of state-produced cement over the citizens of other states.

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References

  1. ↑ Reeves, Inc. v. Stake, 447 U.S. 429 (1980).
  2. ↑ Russell Korobkin, The Local Politics of Acid Rain: Public Versus Private Decisionmaking and the Dormant Commerce Clause in a New Era of Environmental Law, 75 B.U. L. Rev. 689 (1995).
  3. 1 2 3 Hughes v. Alexandria Scrap Corp. , 426 U.S. 794 (1976).
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