Making Sense of Extraterritoriality: Why California’s Progressive Global Warming and Animal Welfare Legislation does not Violate the Dormant Commerce Clause

The dormant Commerce Clause’s extraterritoriality doctrine has long baffled courts and legal scholars. Rather than attempt to make sense of the doctrine, most scholars have instead argued that it should be abandoned as unnecessary and unworkable. Such scholarship, however, is of little use to the lower courts struggling with extraterritoriality issues. The federal courts in California, for example, have recently been forced to rule on challenges to California’s landmark carbon emissions and animal welfare legislation. Plaintiffs in these cases argue that California is regulating extraterritorially by telling ethanol producers and farmers in other states how to run their businesses. In these cases, the litigants and federal courts have struggled to formulate a coherent account of the doctrine, thus throwing California’s progressive legislation into doubt. This article proposes a new test based on existing lower court precedent to clarify the extraterritoriality doctrine. Under this proposal, a state’s regulation of in-state conduct would violate the extraterritoriality principle only when it: (1) inescapably has the practical effect of regulating conduct beyond the state’s borders; and (2) such regulated extraterritorial conduct lacks a corresponding in-state interest. Not only is this test supported by existing precedent, but it would also best serve the policy justification for the extraterritoriality doctrine by properly allocating state power in our federal system. Applying this proposed test to California’s legislation would provide a clear and coherent way to uphold California’s attempt to reduce the carbon emissions caused by Californians and to eliminate California’s role in cruelty to farm animals