Commerce Clause questions

Respond to statements in regard to case (The State of Organic recently adopted new milk safety standards that are stricter than any other state in the United States. The standards are designed to assure the safety of the milk supply and protect the health of adults and children who consume milk. The standards have been scientifically proven to make the milk supply 9% safer than the milk safety standards used by other states and as a result fewer people drinking the milk will suffer adverse health effects. The new standards also create and impose an expense on companies that sell milk in Organic. Estimates suggest that compliance with the new standards will cost companies that sell milk in Organic $50,000,000 a year. 20% of the milk sold in Organic originates out-of-state. Therefore, $10 million of the financial burden will fall on out-of-state companies. A lawsuit is initiated by a GMO Milk, a large Milk company located outside the State of Organic. GMO Milk sells thirty percent of its milk in Organic. GMO's lawsuit claims that Organic's new milk standards violate the Dormant Commerce Claus):

1. The State of Organic adaption of new milk safety standards are intended to enhance the safety of its citizens. The imposition of this new standard brings to question whether the dormant commerce clause is being violated. The dormant commerce clause is defined as "a restriction on states' authority that is implied in the commerce clause of the U.S. Constitution: The power given to Congress to enact legislation that affects interstate commerce in effect prohibits a state from passing legislation that improperly burdens interstate commerce". Since GMO Milk is an out of state provider, they believes the new standard would improperly burdens their ability to interstate commerce. In addition, GMO could further contend that the new law is unconstitutional by discriminating economically through differential treatment of in-state verses out-of-state commerce. Hence, this financial increase can be viewed on the face as a burden; impractical, discriminatory and unfair treatment.

However, GMO Milk may have overlooked the fact that the new standard imposed on businesses applies to everyone who sells milk in Organic. These impositions include those businesses in or out of state which are expected to share the financial responsibility equally. Moreover, if the State of Organics' estimates are correct out-of-state businesses will only bear 20% of the burden while in state business sellers will carry 80% of the economic burden. This further adds that discrimination of unfair treatment due to improperly burdening out-of-state businesses may be difficult to substantiate. Therefore, the State of Organic does not appear to treat in-state and out-of-state dissimilarly.
2. States are granted powers to pass laws and regulations to safeguard the health and welfare of its citizens. This is referred to as police powers. The restriction on states' authority to pass laws that substantially interfere with interstate commerce is the dormant commerce clause. If a law passed by a state significantly interferes with interstate commerce it will be likely be found unconstitutional. A law could also be found unconstitutional if it favors the interest of in-state companies over out-of-state companies.

When deciding a case using the dormant commerce clause, courts have to balance the states' interest in protecting its citizens against the effects on interstate commerce. If the benefits to the citizens under the law outweigh the effects on interstate commerce, then most likely the law will be upheld. When deciding the case, courts may also ask if there is a viable alternative to achieve the purpose of the law.

In the case of the State of Organic, the new milk standards were passed to protect the health of adults and children in the state that consume milk. The research had shown that milk produced under the new standards was 9% safer than standards in other states. When passing the new standards, Organic, had the best interest of its citizens in mind. The new standards for milk production were not only being imposed on out-of-state distributors, but all milk distributors in the state. Only 20% of the milk supply in Organic comes from out-of-state companies and both in-state and out-of-state companies will share the financial burden to be compliant with the new standards.

Organic's new milk safety standards do not violate the dormant commerce clause. The standards do not discriminate against out-of state producers since they also apply to in-state distributors. I also feel that the interest in Organic protecting its citizens outweighs any effects on interstate commerce.

3.The dormant commerce clause is the restriction on states' authority to pass laws that affect interstate commerce In this case, it is understandable the new standards will make organic milk 9% safer, but this is a safety standard adopted by one state and not by all states. It keeps out-of-state providers from coming in due to the investment to meet the standards which will most likely have local companies mainly providing the milk. GMO Milk has a great reason for the lawsuit since 20% of its milk sold in Organic is out-of-state.
The case is almost similar to the Dean vs. City of Madison, Wisconsin. In this case, all milk sold in Madison had to be pasteurized at an approved plant within 5 miles of the city of Madison. This only allowed local companies to provide milk to the city which was considered to be against the interstate commerce. Dean Foods of Illinois sued because they were denied license to sell in the city of Madison. The reasoning the city of Madison adopted this requirement was for the safety of the milk and being able to inspect the facilities. The new standards for Organic milk in that one state will be overturned since it is a requirement adopted by one state and affects various companies that provide milk in that state.