Beyond the Reach of States: The Dormant Commerce Clause, Extraterritorial State Regulation, and the Concerns of Federalism

The Commerce Clause of the United States Constitution provides that “[t]he Congress shall have Power ... [t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Interpreting this explicit grant of power to Congress, the Supreme Court has long recognized the existence of an implied limitation on the power of a state to legislate in areas of interstate commerce when Congress has remained silent. Under what is referred to as the negative or “dormant” Commerce Clause, the federal courts have thus scrutinized state legislation for well over one hundred years. In the past several decades, countless articles and numerous concurring and dissenting opinions have addressed the issues involved with the use of the Commerce Clause to strike down state legislation. Like many of those materials, this Comment generally disagrees with an expansive use of the Commerce Clause as a vehicle to invalidate state legislation. Unfortunately, the abundance of criticism of the United States Supreme Court\u27s current approach to restraining state legislation has yielded no solution to the mounting problems faced by state legislatures, law students, counselors, and those on the bench in discerning any sense of modern dormant Commerce Clause jurisprudence. In fact, the courts have recently struck out at state legislation to a greater degree by adding the extraterritoriality principle to the dormant Commerce Clause analysis. Under this principle, a variety of state regulations dealing with waste disposal, college athletics, price affirmation, tender offers, and the Internet have been invalidated on the grounds that the regulations had effects beyond the borders of the enacting state. The rationale for the decisions of the federal courts in this regard is not clear. The objectives of this Comment are not only to argue in favor of separating the extraterritoriality principle from the dormant Commerce Clause, but also to strike a delicate balance between ensuring that states act within their respective spheres and allowing them the opportunity to respond to pressing social problems with innovative legislative initiatives. Most importantly, however, this Comment seeks to shed light on the extraterritoriality principle in order to achieve not only a greater level of understanding, but also more predictable decisions. Difficult as the task may be, it is imperative that the extraterritoriality principle be clarified, for, as one commentator has expressed, “clarity is a virtue that cannot be valued too much in constitutional law.