Quiz 4: Constitutional Authority to Regulate Business
In the case, the court determined legislative intent by looking at the effect of the law. On its face, the Massachusetts law seems to be neutral. It does not say explicitly that there are limitations on out-of-state wineries selling wine within the state of Massachusetts. However, by design, the Massachusetts law puts out-of-state wineries at a disadvantage. This is because the out-of-state wineries are bigger and are limited to either selling in a wholesale capacity or selling directly to consumers. All in-state wineries are smaller and thus, they have an economic advantage because they can sell in the wholesale market and directly to consumers. Since, the demarcation of gallon caps so clearly separates out-of-state and in-state wineries, the court determined legislative intent by the effect of the law.
The Commerce Clause refers to the Article 1, Section 8, Clause 3 of the US Constitution which gives "Congress the power of regulating trade between United States and other countries, interstate trade and trade with Indian Tribes". Case summary : The state law of GR enforces trucks and trailers operating within the state lines to use contoured rear-fender mudguards. The state further makes it illegal to use straight mud-guards. Based on certain evidences, contoured mudguards might be a little safer than straight mudguards. Case analysis: The positive aspect of the commerce clause is the power to congress to regulate the trade which ensures a good market scenario in the country. It helps to bring coordination and let the states trades freely. Commerce clause beside giving exclusive rights to national government for regulating commerce among the states, restricts the state from doing so. In certain cases, it is found that state impositions or regulations create an unnecessary burden on the public. Thus, for this reason this clause is also called as "negative or dormant" clause. In this case, state law seems to violate the law of national government under the interstate commerce act. This is for the reason that the state law explicitly requires the use of straight mudguards while this law is active in other states. Thus, the GR state violates the constitutional provision as it restricts trade.
In the case where most small wineries are located out-of-state and thus, out-of-state wineries reap a competitive advantage over in-state wineries, the law would still be discriminatory. The law allows out-of-state wineries to market to wholesalers as well as directly to consumers, whereas the large in-state wineries would not have that ability. This would not violate the traditional Commerce Clause, as the state is not reaping any benefit by affording preferential treatment to out-of-state wineries.
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