The Dormant Commerce Clause and COVID-19 State-Ordered Business Closures
Parties have begun filing lawsuits seeking to “reopen” their states. These lawsuits challenge business closures and stay-at-home orders mandated by state and local governments. The Supreme Court has acknowledged, in the due process context, “the authority of a State to enact quarantine laws and ‘health laws of every description.’” Beyond due process, however, at least one of these lawsuits has raised dormant commerce clause issues, contending that, by ordering businesses to close, the state is unconstitutionally interfering with Congress’ Article I, Section 8 power to regulate interstate commerce. This argument is unlikely to succeed.
Closing businesses has an inevitable and substantial effect on interstate commerce. But in the absence of any protectionist or discriminatory feature to a law—treating in and out of state interests differently—a closure order is subject to only the forgiving balancing test set forth in Pike v. Bruce Church, Inc. That test weighs the state’s benefits against the burden imposed on commerce.
While arguments have been made that “the cure” of business closures has been worse than “the disease,” there should be little argument that the states have exceptionally strong interests in maintaining the health of their citizens. With almost 100,000 dead (as of May 24, 2020), a state not only may, but should take dramatic steps to reduce infections.
There is, nonetheless, a truly catastrophic burden placed on commerce by these closure orders. The national GDP will decline. Unemployment filings are making records.
Balancing the incommensurable interests of state benefits and interstate commerce burdens is a difficult task. An easy answer is that human life is more valuable than the progress of business. Ultimately, however, a philosophical weighing of one value against the other is unnecessary because the Pike balancing test is not intended to create a ham-fisted, arbitrary weighing of competing interests. It seems concerned, instead, with “smoking out” protectionist laws that may not be facially obvious. Under Minnesota v. Clover Leaf Creamery Co., a state law will fail the Pike test only if the burden on interstate commerce “clearly outweighs” the state’s interest. As such, the dormant commerce clause is not concerned with “burdens on commerce” in a general sense. If a state’s interest in passing a law is weak, and the burden it places on commerce is great, it suggests that the state’s intent was to burden commerce.
In our current situation, state interests in advancing public health and flattening the curve of coronavirus infection are not clearly outweighed by the burden they place on commerce; they are indisputably strong.
Moreover, the states’ stay-at-home orders do not directly harm interstate commerce. Indeed, the effects of these orders are visited predominantly, and devastatingly, on local businesses. The effects on interstate commerce are derivative of the effects on in-state businesses. Out-of-state wholesalers lose business when in-state retailers close. Accordingly, local businesses may provide “virtual representation” to out-of-state interests—by protecting themselves through the in-state political process they protect those who cannot avail themselves of it. Existing political processes therefore ensure non-discriminatory treatment of commerce, in- or out-of-state. When the retailer secures “reopening,” the wholesaler comes along. They are in it together.
Finally, advancing public health is the states’ indisputable motivation, the closure orders are not plausibly motivated by a desire to give a leg up to local industry. The dormant commerce clause is concerned with laws interfering with the Constitution’s commitment to a common market, not laws focused on non-commerce related health interests.
Beyond the inability of a challenge to satisfy the Pike balancing test, there is a long line of Supreme Court cases specifically holding that quarantine laws, in the absence of a federal law to the contrary, do not interfere with Congress’s commerce power. For example, in a 1926 case the Court held that “the exercise of the police power of quarantine, in spite of its interfering with interstate commerce, is permissible under the interstate commerce clause of the federal Constitution ‘subject to the paramount authority of Congress, if it decides to assume control.’”
Many of these cases involve quarantine in the form of impounded livestock—there is, one hopes, very little commerce in human beings. But not all the cases are so limited. The Court has specifically addressed the quarantine of human beings upholding a Louisiana state law providing that “in the case of any town, city, or parish of Louisiana being declared in quarantine, no body or bodies of people, immigrants, soldiers, or others shall be allowed to enter said town, city, or parish.”
Therefore, under existing Supreme Court precedent, challenges to stay-at-home and other closure orders under the dormant commerce clause should fail.
Stephen Smith is an Associate Clinical Professor at Santa Clara University School of Law.