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It is strongly recommended that you include your outline in the body of your essay by using the outline as section titles. The headings below are there to remind you how section and subsection titles are formatted. | | | -- By AndrewCascini - 24 Feb 2010 | |
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< | A Folksy Anecdote
My mother bought a Honda coupe in 1975. With some hesitation, she drove it home to see her parents one Christmas. When she brought her luggage out to her car the next morning she noticed the “BUY AMERICAN” bumper sticker my grandfather had applied to the back-end of the car during the night. Granddad had worked on the line at GM for thirty-six years up to that point. “What an asshole Dad was,” my mom says.
Granddad was an asshole, but he had a point. My mother’s participation in the car market had, in the aggregate with thousands of other like-minded decisions, regulated the American automobile market. | | | A Distinction is Made...
The Commerce Power and the Dormant Commerce Power | | | The Takeaway | |
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< | The dormant commerce power and the market participation exception, working together, flesh out a tidy doctrine. When states pass legislation that affects interstate commerce, that legislation is subject to Constitutional review. If the legislation merely enables the state to “participate” in the market, it is acceptable. If, however, it “regulates” the market, it is to be treated entirely differently and struck down. | >
> | The dormant commerce power and the market participation exception, working together, appear to flesh out a cohesive doctrine. When states pass legislation that affects interstate commerce, that legislation is subject to Constitutional review. If it is found to “regulate” the market, it is to be struck down pursuant to dormant commerce clause doctrine. If, however, the legislation merely enables the state to “participate” in the market, it is acceptable. | | | ...but What Does It Signify? | |
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< | THE DISCRETE LABELS, WHAT THEY SIGNIFY BUT WHAT THEY REALLY DO
All Participation Creates Market Changes
GOALS:
Dictating behavior with your dollar.
The Individual Model
GOALS:
Talk about how an individual, through his participation, creates changes in the market
The State Model
GOALS:
Talk about how a state, through its market participation, creates widespread industry changes
PARTICIPATION as a Label | >
> | Participation versus regulation – a tidy verbal distinction indeed, but how do these two categories of behavior actually differ? The word “participate” has a flavor of passivity. If I run in a race and am awarded a medal for being a “participant,” the strong implication is that I didn’t really affect the outcome in any meaningful way. The word “regulate,” however, has a more active nature. To regulate is to create changes; it implies control and agency. If we accept these notions, the distinct treatment of market participation as opposed to market regulation seems well in step with dormant commerce clause doctrine as a whole, for it is the domain of the federal government to make changes in the realm of interstate commerce and not the states. Directing attention away from the transcendental legal terminology and towards the actual economic effects reveals a categorical breakdown, however. | | | | |
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< | GOALS: | >
> | Two Terms, One Effect | | | | |
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< | Just a label for a category of changes in a market, instead of a discrete action. THIS HAS BEEN CHANGED FROM REGULATION - the idea here is that all market participation creates market changes, so the court has just labeled consideration of certain factors "participation" and contrasted them, perhaps arbitrarily. | >
> | Imagine that a state decided to pass a law dictating that all state departmental offices may only purchase assets from companies or individuals who had not violated the National Labor Relations Act. Would this be a “regulatory” decision – Constitutionally impermissible – or a simple act of “market participation?” On the one hand, the state can make a claim that it is simply participating in the market as any other economic actor could. Perhaps the state has acknowledged that its employees are happier with products from NLRA-compliant manufacturers, or that products manufactured by NLRA-compliant industries tend to be of higher quality. Either rationale would be an acceptable exercise of market participation for an individual. On the other hand, the legislation could be seen as an attempt to regulate the market by forcing industries across the nation to comply with the NLRA or lose their asset supply contracts with the state. The Court, in Wisconsin Dept. of Labor Relations v Gould, deemed the legislation to be an overreaching attempt to regulate commerce, and struck it down. Suppose, however, that the Wisconsin legislature had never passed the offending statute but had still bought assets from the same manufacturers that it had turned to as a result of the ban on NLRA violators - perhaps because these companies offered their goods at the lowest price. Such a decision would doubtlessly be deemed an exercise in market participation, but the economic effect would have been precisely the same. | | | | |
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< | FINAL THOUGHTS | >
> | Participation as a Label | | | | |
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< | GOALS: | >
> | If it is accepted that the latter hypothetical would be deemed mere market participation, two possible conclusions emerge. The first is that the Court simply decided Gould incorrectly. While such a conclusion may indicate that the distinction between market regulation and market participation is much too fuzzy to practically use as a jurisdictional tool, there is otherwise little analytical value in such a conclusion. The second possibility is that the Court is basing their distinction not on the possible effects of the legislation, but rather upon some unspoken assumption about how a reasonable actor will choose to participate in a free market. Perhaps, then, “market participation” is a merely a label for an economic action taken while considering only a particular range of economic considerations. If a state makes a decision based on price or quality of a good, that state is participating in the market. If it is compelled to act by other means, this action will be deemed regulatory. | | | | |
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< | This definitely needs a conclusion, and you might want to distinguish some of the external reasons that might force the court to distinguish "regulation" from participation in states. Either way we need to expand this. | >
> | Final Thoughts | | | | |
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> | All state economic behavior has consequences in interstate commerce. Yet if market participation is not able to be differentiated from market regulation by an analysis of actual market effect, making a dormant commerce clause exception for the former while still diligently restricting the latter seems unnecessary and arbitrary. Either the market participation exception must be only the first effort in a larger doctrinal shift to erode the dormant commerce clause, or the market participation exception should be deemed an unnecessary departure from dormant commerce clause doctrine and should be eliminated. | | |
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