Untangling the Market-Participant Exemption to the Dormant Commerce Clause

This article focuses on an important vehicle through which the modern Court has moved to protect local prerogatives: the market-participant exemption to the dormant commerce clause. The core of the Court\u27s dormant commerce clause jurisprudence is well-settled: The commerce clause, by its own force, prohibits discrimination against interstate commerce, whatever its form or method...” Over the past two decades, however, the Court has lifted this prohibition when states act as market participants rather than as market regulators. Invoking this distinction, the Court has shielded from commerce clause attack blatant favoritism of local interests when a state or municipality buys printing services, sells cement, purchases goods, or hires workers. This article explores the market-participant rule. Part I traces the rule\u27s evolution and shows how it has proven less rigid than some initially feared. Part II probes the roots of the rule by challenging justifications for it suggested by other observers. Part III offers an alternative theory of the market-participant doctrine, arguing in particular that it rests on a cluster of rationales that properly have led, the Court to uphold marketplace preferences as the general rule. Part IV builds on Part III to advance a new, four-part framework for evaluating market-participant issues. Part V then uses that framework to apply the market-participant rule to nine key categories of cases. This article rejects an all-or-nothing approach to these cases, advocating instead a sensitive application of the market-participant rule in light of its underlying justifications