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Market Participant, Exception to the Dormant Commerce Clause

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How does being a market participant affect the right of a state to discriminate against out-of-state businesses? Is such discrimination justified? Also do you know if there are any cases on this?

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Solution Summary

This is a 5,213 word document that explains the concept of "market participant" and how it is an exception to the dormant commerce clause. This document cites and explains three U.S. Supreme Court cases that justifies discrimination against out-of-state businesses.

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Attached is my response to your question regarding the Market Participant theory, an exception to the Dormant Commerce Clause. Please feel free to send me a message if you have any further questions. Thank you again and may this material help you in completing your essay. Good luck!

Note: The justifications for discriminating against out-of-state businesses can be found in the three cases cited below.


A market participant is when a state acts like a business or customer in private commerce instead of as a state governmental body regulating commerce. The central issues in the concept of "market participant" are state rights and local sovereignty. Fundamentally, the U. S. Congress not regulating the states and local governments in their direct, day to day operations.
The seminal case that introduced the concept of "market participant" is Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976).
--- Facts of the Case: The state of Maryland offered money to scrap processors to get rid of junk vehicles. The state of Maryland favored local scrap processors. Because of the monetary incentive, unlicensed suppliers chose to dispose their junk vehicles in Maryland instead of taking them outside of the State. Out-of-state scrap processors challenged the state of Maryland on the grounds that ...

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