Does California's Regulation of Milk Burden Interstate Commerce?

Decided June 9

Hillside Dairy v. Lyons No. 01-950

The dormant commerce clause is alive and well, as long as you don't talk about it too loudly. In Hillside Dairy, the Justices demonstrated that, despite assertions to the contrary in Pharma, this non-provision of the Constitution can still decide federalism cases. States, Justice Stevens explains, can't pass laws that interfere with interstate commerce unless Congress gives them explicit permission to do so. (Does Congress have the power to authorize state regulations that burden interstate commerce? You bet--see Prudential v. Benjamin for details.) 

Now the facts: California has a nifty milk price stabilization and marketing program that establishes prices for raw milk depending upon its eventual form. The feds, meanwhile, have been regulating raw milk pricing since Ye Olde New Deal. (The California program has same purposes as the federal program, but its provisions are more complex.) Out of state dairies Hillside and Ponderosa objected to the California law, claiming that it discriminated against their milk products. At issue: can these disgruntled out of staters bring a commerce clause challenge against the California program? Or is it insulated from commerce clause challenges because it's covered by the federal program? (The dairies' also claimed the law abridged their privileges and immunities as citizens; don't mess with guys from Nevada.)

The Supremes were sympathetic to the dairies' arguments. Reinstating the suits against California (sorry, 9th Circuit), the Court argued that (1) the California law's adverse effects on commerce can not be saved by the federal law, since the federal law does not give explicit endorsement of pricing discrimination (when in doubt, go with free flowing commerce) and (2) laws with a disparate effect on out of state citizens--even if facially neutral--are fair game for privileges and immunities challenges.  

Not an easy case to understand. For Justice Thomas, not an easy case to stomach. He took the opportunity to remind his brethren of his that the dormant commerce clause is baloney (no offense to the cows) no matter how you slice it.

 Hillside Dairy v Lyons (with Justice Thomas' partial dissent)

click here for the 9th Circuit opinion
 

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