Hunt v. Washington State Apple Advertising Commission, 432 U.S. 33

Supreme Court of the United States

1997

Chapter

2

Title

Federalism At Work

Page

259

Topic

State Regulation of Interstate Commerce

Quick Notes

North Carolina required all closed apple containers to be labeled under USDA grades.  Washington used a superior grading system challenged the requirement as unconstitutional. 

Rule

o         States may regulate matter of local concern, particularly food sales, even is such regulation affects of effectively regulate interstate commerce, UNLESS the regulation is discriminatory OR unduly burdensome.

Book Name

Constitutional Law : Stone, Seidman, Sunstein, Tushnet.  ISBN:  978-0-7355-7719-0

Issue

o         Whether states can regulate matters of local concern even if the regulation affects interstate commerce?  Yes, as long it is not discriminatory and unduly burdensome, which would be unconstitutional.

Procedure

District

o         The United States District Court for the Eastern District of North Carolina invalidated the statute and granted injunctive relief. Appellant sought review.

Supreme

o         The Court finally held that the statute both burdened and discriminated against the interstate sale of apples and that appellant did not meet the burden of demonstrating substantial local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve local interests.

Facts

Discussion

Key Phrases

Rules

Pl Hunt

Df Washington State Apple Advertising Commission

Description

o          North Carolina enacted a statute which required all closed containers of apples sold, offered for sale, or shipped into the State to bear "no grade other than the applicable U.S. grade or standard.

o         Washington was the countrys largest apples producer.

o         Washington used a superior grading system.

o         North Carolina agreed it would place a substantial financial burden on Washington apple producers, who could comply ONLY by altering the altering the packaging and labeling.

District Court

o         Held that the regulation was unconstitutional.

District Court

o         Held that the regulation was unconstitutional.

Burden interstate sales and discriminating agains them

o         The challenged statute has the practical effect of not only burdening interstate sales of Washington apples, but also discriminating against them.

3 Forms of Discrimination

(1)   Raising costs of doing business for Washing apple growers

o         The statute's consequence of raising the costs of doing business in the North Carolina market for Washington apple growers and dealers,

Leaves North Carolina unaffected

o         While leaving those of their North Carolina counterparts unaffected.

o          North Carolina apple producers were not forced to alter their marketing practices in order to comply with the statute.

o         They were still free to market their [apples] under the USDA grade or none at all as they had done prior to the statute's enactment.

Shields local apply industry from Washington Competition

o         The increased costs imposed by the statute would tend to shield the local apple industry from the competition of Washington apple growers and dealers who are already at a competitive disadvantage because of their great distance from the North Carolina market.

Stripping away Washingtons competitive and economic advantages

o         The statute has the effect of stripping away from the Washington apple industry the competitive and economic advantages it has earned for itself through its expensive inspection and grading system.

o         Washingtons apple-grading system has gained nationwide acceptance in the apple trade.

o         Apple brokers and dealers located both inside and outside of North Carolina who state their preference, and that of their customers, for apples graded under the Washington, as opposed to the USDA system, because of the [Washingtons] greater consistency, 

(2)   No Similar Impact on Local Industry

o         Once again, the statute had no similar impact on the North Carolina apple industry and thus operated to its benefit.

(3)   The Statute has a leveling effect that is advantageous to local producers.

o         Washington sellers would normally enjoy a distinct market advantage vis-a-vis local producers in those categories where the Washington grade is superior.

o         Washington grades will now have to be marketed under their inferior USDA counterparts.

Downgrading the grade is prohibited by the Commerce Clause

o         Such "downgrading" offers the North Carolina apple industry the very sort of protection against competing out-of-state products that the Commerce Clause was designed to prohibit.

Embargo and Deprivation effect against Washington

o         At worst, it will have the effect of an embargo against those Washington apples in the superior grades as Washington dealers withhold them from the North Carolina market.

o         At best, it will deprive Washington sellers of the market premium that such apples would otherwise command.

Statute does not protect against confusion and marketing deception

o         The several States unquestionably possess a substantial interest in protecting their citizens from confusion and deception in the marketing of foodstuffs

Can Market under not grades at all

o         The statute permits the marketing of closed containers of apples under no grades at all.

o         [This statute] can hardly be thought to eliminate the problems of deception and confusion created by the multiplicity of differing state grades

o         It magnifies them by depriving purchasers of all information concerning the quality of the contents of closed apple containers.

Could have used nondiscriminatory alternatives

o         North Carolina could effectuate its goal by permitting out-of-state growers to utilize state grades only if they also marked their shipments with the applicable USDA label.

o         In that case, the U.S.D.A. grade would serve as a benchmark against which the consumer could evaluate the quality of the various state grades.

Courts Holding

o         The Court finally held that the statute both burdened and discriminated against the interstate sale of apples and that appellant did not meet the burden of demonstrating substantial local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve local interests.

Rules

Rule

o         States may regulate matter of local concern, particularly food sales, even is such regulation affects of effectively regulate interstate commerce, UNLESS the regulation is discriminatory and unduly burdensome.

Class Notes