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05/19/2015

Comptroller v. Wynne: Originalism versus the Dormant Commerce Clause
Michael Ramsey

An interesting orignialist debate in yesterday's opinion in Comptroller v. Wynne, which sustained (5-4) a dormant commerce clause challenge to Maryland's taxation of out of state residents.  Justice Scalia and Thomas in dissent  again assaulted the entire concept of the dormant commerce clause. Here's Scalia:

The fundamental problem with our negative Commerce Clause cases is that the Constitution does not contain a negative Commerce Clause. It contains only a Commerce Clause. Unlike the negative Commerce Clause adopted by the judges, the real Commerce Clause adopted by the People merely empowers Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. I, §8, cl. 3. The Clause says nothing about prohibiting state laws that burden commerce. Much less does it say anything about authorizing judges to set aside state laws they believe burden commerce. The clearest sign that the negative Commerce Clause is a judicial fraud is the utterly illogical holding that congressional consent enables States to enact laws that would otherwise constitute impermissible burdens upon interstate commerce. See Prudential Ins. Co. v. Benjamin, 328 U. S. 408, 421–427 (1946). How could congressional consent lift a constitutional prohibition? See License Cases, 5 How. 504, 580 (1847) (opinion of Taney, C. J.).

The Court’s efforts to justify this judicial economic veto come to naught. The Court claims that the doctrine “has deep roots.” Ante, at 5. So it does, like many weeds. But age alone does not make up for brazen invention. And the doctrine in any event is not quite as old as the Court makes it seem. The idea that the Commerce Clause of its own force limits state power “finds no expression” in discussions surrounding the Constitution’s ratification. F. Frankfurter, The Commerce Clause Under Marshall, Taney and Waite 13 (1937). For years after the adoption of the Constitution, States continually made regulations that burdened interstate commerce (like pilotage laws and quarantine laws) without provoking any doubts about their constitutionality. License Cases, supra, at 580–581. This Court’s earliest allusions to a negative Commerce Clause came only in dicta—ambiguous dicta, at that—and were vigorously contested at the time. See, e.g., id., at 581–582. Our first clear holding setting aside a state law under the negative Commerce Clause came after the Civil War, more than 80 years after the Constitution’s adoption. Case of the State Freight Tax, 15 Wall. 232 (1873). Since then, we have tended to revamp the doctrine every couple of decades upon finding existing decisions unworkable or unsatisfactory. See Quill Corp. v. North Dakota, 504 U. S. 298, 309 (1992). The negative Commerce Clause applied today has little in common with the negative Commerce Clause of the 19th century, except perhaps for incoherence.

Here's Thomas, getting into the details of the case: 

According to the majority, a state income tax that fails to provide residents with “a full credit against the income taxes that they pay to other States” violates the Commerce Clause. Ante, at 1. That news would have come as a surprise to those who penned and ratified the Constitution. As this Court observed some time ago, “Income taxes . . . were imposed by several of the States at or shortly after the adoption of the Federal Constitution.” Shaffer v. Carter, 252 U. S. 37, 51 (1920). There is no indication that those early state income tax schemes provided credits for income taxes paid elsewhere. Thus, under the majority’s reasoning, all of those state laws would have contravened the newly ratified Commerce Clause.

It seems highly implausible that those who ratified the Commerce Clause understood it to conflict with the income tax laws of their States and nonetheless adopted it without a word of concern. ...

Justice Alito, for the majority, responds to Scalia: 

JUSTICE SCALIA would uphold the constitutionality of the Maryland tax scheme because the dormant Commerce Clause, in his words, is “a judicial fraud.” Post, at 2. That was not the view of the Court in Gibbons v. Ogden, 9 Wheat, at 209, where Chief Justice Marshall wrote that there was “great force” in the argument that the Commerce Clause by itself limits the power of the States to enact laws regulating interstate commerce. Since that time, this supposedly fraudulent doctrine has been applied in dozens of our opinions, joined by dozens of Justices. Perhaps for this reason, petitioner in this case, while challenging the interpretation and application of that doctrine by the court below, did not ask us to reconsider the doctrine’s validity.

JUSTICE SCALIA does not dispute the fact that State tariffs were among the principal problems that led to the adoption of the Constitution. See post, at 3. Nor does he dispute the fact that the Maryland tax scheme is tantamount to a tariff on work done out of State. He argues, however, that the Constitution addresses the problem of state tariffs by prohibiting States from imposing “‘Imposts or Duties on Imports or Exports.’” Ibid. (quoting Art. I, §10, cl. 2). But he does not explain why, under his interpretation of the Constitution, the Import-Export Clause would not lead to the same result that we reach under the dormant Commerce Clause.

And he responds to Thomas: 

JUSTICE THOMAS also refuses to accept the dormant Commerce Clause doctrine, and he suggests that the Constitution was ratified on the understanding that it would not prevent a State from doing what Maryland has done here. He notes that some States imposed income taxes at the time of the adoption of the Constitution, and he observes that “[t]here is no indication that those early state income tax schemes provided credits for income taxes paid elsewhere.” Post, at 2 (dissenting opinion). “It seems highly implausible,” he writes, “that those who ratified the Commerce Clause understood it to conflict with the income tax laws of their States and nonetheless adopted it without a word of concern.” Ibid. This argument is plainly unsound.

First, because of the difficulty of interstate travel, the number of individuals who earned income out of State in 1787 was surely very small. (We are unaware of records showing, for example, that it was common in 1787 for workers to commute to Manhattan from New Jersey by rowboat or from Connecticut by stagecoach.) Second, JUSTICE THOMAS has not shown that the small number of individuals who earned income out of State were taxed twice on that income. A number of Founding era income tax schemes appear to have taxed only the income of residents, not nonresidents. For example, in his report to Congress on direct taxes, Oliver Wolcott, Jr., Secretary of Treasury, describes Delaware’s income tax as being imposed only on “the inhabitants of this State,” and he makes no mention of the taxation of nonresidents’ income. Report to 4th Cong., 2d Sess. (1796), concerning Direct Taxes, in 1 American State Papers, Finance 429 (1832). JUSTICE THOMAS likewise understands that the Massachusetts and Delaware income taxes were imposed only on residents. Post, at 2, n.

Scalia and Thomas have interesting points on rebuttal.  Scalia:

The Court adds that “tariffs and other laws that burdened interstate commerce” were among “the chief evils that led to the adoption of the Constitution.” Ante, at 5. This line of reasoning forgets that interpretation requires heeding more than the Constitution’s purposes; it requires heeding the means the Constitution uses to achieve those purposes.

Thomas: 

The majority quibbles that I fail to “sho[w] that the small number of individuals who earned income out of State were taxed twice on that income,” ante, at 28, but given the deference we owe to the duly enacted laws of a State— particularly those concerning the paradigmatically sovereign activity of taxation—the burden of proof falls on those who would wield the Federal Constitution to foreclose that exercise of sovereign power.

Further commentary from Damon Root (at Reason) here.

UPDATE: Michael Greve comments here, with some harsh words for Scalia, Thomas, and originalist dormant commerce clause doubters.