Sunday, March 8, 2009
Professor Edward Zelinsky (Cardozo) just posted on ssrn his very thoughtful take on the Supreme Court's recent turn in its Dormant Commerce Clause jurisprudence, The False Modesty of Department of Revenue v. Davis: Disrupting the Dormant Commerce Clause Through the Traditional Public Function Doctrine. This extraordinarily well written piece will make good reading for anyone with an interest in recent trends on the Court; but it's a must-read for those of us teaching, learning, and writing about the Dormant Commerce Clause.
Recall that last term's Davis upheld against a Dormant Commerce Clause challenge Kentucky's statute exempting interest on Kentucky municipal bonds--but not interest from other states' municipal bonds--from Kentucky residents' income tax.
Kentucky's is a familiar kind of law. In fact, thirty-six other states have laws that mirror Kentucky's, and every other state in the Union supported it at the Court. Lawyers and bond traders made good arguments that the muni market could fall apart if this near ubiquitous practice were overturned. Every pragmatic reason seemed to favor upholding the law.
And yet it seemed plainly to violate the Dormant Commerce Clause, based upon the Court's prior rulings.
The Court in upholding the law seemed to go the pragmatic route. Or, in Zelinksy's language, "By explicitly deferring to established practices and expectations, Davis is, at first blush, the kind of modest, pragmatic decision advocated today by many including, most prominently, Chief Justice Roberts."
But not so fast, argues Zelinsky. Rather than being a "modest, pragmatic decision," Davis in reality effected a revolution in the Dormant Commerce Clause by reinvigorating the indeterminate and practically boundless "traditional public function" category. Zelinsky:
However, on a second look, Davis has broad implications. Indeed, Davis disrupts the Court's preexisting dormant Commerce Clause doctrine by confirming the Roberts Court's use of the "traditional public function" category to immunize government activity from dormant Commerce Clause scrutiny. Over two decades ago, in Garcia v. San Antonio Metropolitan Transit Authority, the Supreme Court rejected for Commerce Clause purposes the "traditional public function" doctrine as unworkable. The Garcia Court's criticism remains persuasive today: There is no principled basis for determining when a government function is old enough to be "traditional" or "public" enough to be public.
As a result, everything a state does--from subsidization of economic development to 529 college savings plans that favor in-state schools--falls into the traditional public function. Zelinsky shows that this can't be squared with the Court's prior Dormant Commerce Clause rulings, especially those cases treating states' discriminatory taxes as per se unconstitutional. Zelinsky:
The expansive traditional public function category undermines the Court's prior case law by extending immunity from dormant Commerce Clause scrutiny to all government activity.
Zelinsky's better solution? "[B]ite the proverbial bullet and scrap the dormant Commerce Clause test of nondiscrimination." This is an unworkable test in any event, as demonstrated by the Davis Court's determination to avoid it.
Zelinsky's article is one of those rare gems that is every bit as useful to the novice just delving into the Dormant Commerce Clause as to the expert: The article in laying its foundation patiently details the doctrine; it then presents a serious and important argument on this practically simple case with doctrinally complex implications. Both foundation and argument should have broad appeal.
Moreover, Zelinsky's smooth, easy writing makes for pleasurable reading for a wide audience. I'm delighted to be able to share the piece with Con Law profs, and I look forward to assigning portions to my first-year students. I highly recommend this article.