Substantive Law Study Support

Questions for Analysis and Responses

1. Review the Living with the Constitution situation presented at the beginning of this chapter. Do you think that a state can tax all goods sold to its residents over the Internet? Is there a difference between an Internet Web site where the owner of the site sells items to the public and an Internet Web site that provides a forum for individuals to sell items to the public?
Tax on goods sold to residents would be legal if a use tax was imposed on the residents. If an out-of-state business is taxed, then constitutional issues arise, and the court must consider the following factors: (1) Does the business have nexus with the state; (2) Is the tax reasonably related to services provided by the state; (3) Does the tax pose an unfair burden on interstate commerce; and (4) Is there the possibility of a double tax?
Student answers may vary regarding the second question, whether they believe being a business owner is different from selling items as a “hobby” through other sites such as E-Bay. But they may note that the IRS will likely not see a difference since businesses must pay taxes on all personal and business income, including sales through sites such as E-Bay.

2. Answer the following regarding the case of Hillsborough County v. Automated Medical Laboratories:
a. In arguing that the Hillsborough County ordinances and regulations are preempted, the Court said that the appellee faced an uphill battle. What was this battle, and did the appellee succeed in its argument?
The first hurdle was the statement from the FDA that it did not intend its regulations to be exclusive. Appellee argued that an intent to preempt could be inferred from the comprehensiveness of the FDA’s regulations at issue here. They did not succeed in their argument.
b. Why did the Court think that the extensiveness of the federal rules did not result in preemption?
This was an agency regulation, and agency regulations are always detailed: “As a result of their specialized functions, agencies normally deal with problems in far more detail than does Congress. To infer preemption whenever an agency deals with a problem comprehensively is virtually tantamount to saying that whenever a federal agency decides to step into a field, its regulations will be exclusive. Such a rule, of course, would be inconsistent with the federal-state balance embodied in our Supremacy Clause jurisprudence.”
c. What was the Court’s holding in this case?

Hillsborough County Ordinances 80-11 and 80-12, and their implementing regulations, were not preempted by the scheme for federal regulation of plasmapheresis.

3. Answer the following regarding Geier v. American Honda Motor Co.

a. Why did the Court feel there was no express preemption?

There was a savings clause.

b. What was the language of the saving clause?

“Compliance with a federal safety standard does not exempt any person from any liability under common law.”
c. Why did the Court believe that there was a conflict between state and federal law?
The 1984 standard deliberately sought a gradual phase-in of passive restraints; the state law would have imposed mandatory and present duty to do so. This was a conflict.

4. What are the factual differences between the Geier and Williamson cases? Why are those differences important?
In Geier, the state law stood as an obstacle to the accomplishment of a significant federal regulatory objective, namely, giving manufacturers a choice among different kinds of passive restraint systems. This conclusion was supported by the regulation’s history, the agency’s contemporaneous explanation, and the government’s current understanding of the regulation.
In Williamson, the DOT rejected a regulation requiring lap-and-shoulder belts in rear seats in 1984. But by 1989, changed circumstances led the DOT to require

manufacturers to install lap-and-shoulder belts for rear outer seats but to retain a manufacturer choice for rear inner seats. Its reasons for doing so differed considerably from its 1984 reasons for permitting a choice of passive restraints. It was not concerned about consumer acceptance; it thought that lap-and-shoulder belts would increase safety and did not pose additional safety risks; it was not seeking to use the regulation to spur development of alternative safety devices. Instead, DOT thought that the requirement would not be cost-effective. That fact alone cannot show that the DOT sought to forbid common-law tort suits. For one thing, the DOT did not believe that costs would remain frozen. For another, many federal safety regulations embody a cost-effectiveness judgment. To infer preemptive intent from the mere existence of such a cost-effectiveness judgment would eliminate the possibility that the agency seeks only to set forth a minimum standard. Finally, the solicitor general represents that the DOT’s regulation does not preempt this tort suit.
The differences are important because they contribute to the decision on whether a federal statute should preempt a tort suit.

5. Answer the following regarding the case of Cooley v. Board of Wardens.

a. According to the Court, when should states be allowed to regulate Interstate Commerce?
The Court determined that states have the right to regulate their harbors and ports and that for this subject, local rules would be better than one national rule. Additionally, the Court stated in its opinion, “We are of opinion that this state law was enacted by virtue of a power, residing in the state to legislate; that it is not in conflict with any law of Congress; that it does not interfere

with any system which Congress has established by making regulations, or by intentionally leaving individuals to their own unrestricted action; that this law is therefore valid, and the judgment of the Supreme Court of Pennsylvania in each case must be affirmed.”
b. How did the Act of 1789 impact the Court’s decision?

The Court determined that in 1789 Congress had enacted some federal laws regulating pilots, but the laws did not regulate the specific area covered by Philadelphia law. The Court determined that the Commerce Clause prohibits some state laws, but not all.
6. Answer the following regarding the case of Southern Pac. Co. v. Arizona.

a. What factors did this case ultimately depend on? Quote language from the Court.
The Court found that there would be a large burden on interstate commerce because of the amount of interstate traffic and relatively little benefit to the state:
“In Arizona, approximately 93% of the freight traffic and 95% of the passenger traffic is interstate. The additional cost of operation of trains complying with the Train Limit Law in Arizona amounts for the two railroads traversing that state to about $1,000,000 a year. The reduction in train lengths also impedes efficient operation. More locomotives and more manpower are required; the necessary conversion and reconversion of train lengths at terminals and the delay caused by breaking up and remaking long trains upon entering and leaving the state in order to comply with the law, delays the traffic and diminishes its volume moved in a given time, especially when traffic is heavy.”
The Court then noted that the regulations did not improve the accident rate in Arizona, the intent of the law:
“We think, as the trial court found, that the Arizona Train Limit Law, viewed as a safety measure, affords at most slight and dubious advantage, if any, over unregulated train lengths, because it results in an increase in the number of trains and train operations and the consequent increase in train accidents of a character generally more severe than those due to slack action. Its undoubted effect on the commerce is the regulation, without securing uniformity, of the length of trains operated in interstate commerce, which lack is itself a primary cause of preventing the free flow of commerce by delaying it and by substantially increasing its cost and impairing its efficiency.”
b. Why did Justice Douglas disagree with the majority?

Justice Douglas believed that courts should intervene only when the state legislation discriminated against interstate commerce or was out of harmony with laws that Congress enacted. State laws should be presumed valid, and there was nothing in this case to overcome that presumption.