What Would Happen if the Dormant Commerce Clause Were Overruled?

With the debate in the Wynn case over the Dormant Commerce Clause, Michael Greve has once again criticized originalists for their views on the matter.  Michael likes the Dormant Commerce Clause.  As a policy matter, so do I.  What’s not to like about a doctrine that prohibits or restricts states from engaging in protectionist and other similar actions?

But I am not so sure how important the doctrine really is as a practical matter.  Unlike other constitutional law doctrines, that of the Dormant Commerce Clause does not restrict Congress.  If Congress wants to authorize states to engage in protectionist legislation, it can do so.  And Congress has, most famously in the case of insurance with the McCarran-Ferguson Act.

So the Dormant Commerce Clause Doctrine only has effect when Congress is silent.  Is this a big deal?  After all, what stops the states from getting Congress to approve their discriminations?  Presumably, two things.  First, it is difficult to get a busy Congress to act regularly to do anything, let alone state discriminations.  Second, it is easier to stop Congress from passing a law than to get it to pass one.  Only a single vetogate can stop a law – not only one house (or a presidential veto), but a single committee can often do the job.  So the Dormant Commerce Clause is consequential, because it is too difficult for states to get Congress to act to approve their discriminations.

What are the implications of all this for the elimination of the Dormant Commerce Clause?  It means that the Clause is really no different than a statute passed by Congress that prohibits or restricts discrimination by the state.  So, if the doctrine were eliminated, all that would be necessary is for Congress to pass a single law re-establishing the doctrine.  How likely would that be?

There is no way of knowing for sure, but I think there is a pretty strong argument for concluding that such a law would pass if the Supreme Court eliminated the Doctrine.  First, there would be strong incentives for the people and even the states to enact such a law.  It is true that different states have specific incentives for their particular discriminations, but as a general matter the states lose from this arrangement and the people as a whole certainly do.  So by considering the issue as a whole – where each state can see the overall benefits from stopping the other states from discriminating as well as the harm to them from not being allowed to discriminate – the benefits should be seen as outweighing the costs, for the states presumably and for the people certainly.

Second, the ability to pass a Dormant Commerce Clause statute would be helped by the existence of a focal point – the prior Dormant Commerce Clause doctrine.  One problem with negotiating a new statute would be figuring out what it should look like.  What should be the protection that it provides?  What exceptions should be allowed?  Different states would have different interests.  But if there were an obvious rule to enact – one that stood out and above those different interests – what game theorists call a focal point – this would greatly enhance the ability of the different interests to agree on a single result, the focal point.

Third, the pyschological phenomenon of loss aversion and the endowment effect also suggest that a Dormant Commerce Clause statute would be enacted.  These psychological characteristics say that people place great value on what they already have and will often be motivated to prevent the loss of these things.  As a result, a political debate following the elimination of the Dormant Commerce Clause would be likely focused on the people retaining their lost rights.  This case for replacing the Dormant Commerce Clause – much like the case for the Religious Freedom Restoration Act – would have a strong appeal.

In the end, it is quite likely that a Dormant Clause Clause statute would be enacted and would accomplish much of what the Clause does now.  Perhaps I am wrong, but this is a question that must be addressed.  We should not assume that the sky will fall, unless we have good reason to believe it will.