The Impact of the Garcia Decision on the Market-Participant Exception to the Dormant Commerce Clause

In National League of Cities v. Usery, the Supreme Court recognized a strong state-sovereignty-based limit on Congress\u27s exercise of its commerce power. In Garcia v. San Antonio Metropolitan Transit Authority, however, the Court overruled National League of Cities, relying in part on past difficulties in trying to distinguish between protected state “governmental” activities and unprotected state “proprietary” activities. In the wake of Garcia, commentators have urged that its reasoning undermines the Court\u27s longstanding exemption of state proprietary activities from dormant Commerce Clause challenge under the so-called “market-participant” doctrine. In this article, Professor Dan Coenen refutes this argument by showing that the rule forged in Garcia with respect to the range of congressional power should not affect the scope of state power to pass laws consistent with the principle of free interstate trade. Indeed, according to Coenen, the concerns that gave rise to Garcia support, rather than undermine, the market-participant exception. This is so, Coenen argues, whether one views Garcia as resting mainly on concerns about the enhancement of doctrinal workability, the facilitation of state innovation, or the forging of rules responsive to structural protections of state interests built into the national political process. For these reasons-as well as others-Coenen contends that the decision in Garcia should not affect the continuing vitality of the market-participant exception to the dormant Commerce Clause