South Central Timber v. Wunnicke, 467 U.S. 82 (1984) p.323

SUBJECT

Federal limits on state power

FACTS

Alaska proposed to sel a large amount of timber owned by the State.

ISSUE

Whether Alaska's attempt to control the timber market downstream is constitutional.

RULE

When an entity tries to regulate its product downstream (after the sale) it goes from being a market participant to a market regulator, which is unconstitutional.

HOLDING

We reject the contention that a state's action as a market regulator may be upheld against commerce clause challenge on the ground that the state could achieve the same end as a market participant.

RATIONAL

Alaska was trying to impose restrictions downstream (after the sale). When this happens they move from being market participants to being market regulators. At heart of the dispute in this case is disagreement over the definition of the market. We agree that the state is using a regulatory effect in the processing market, in which it is not a participant. This is not merely subsidizing local timber processing. The market participant exception does not go as far as Alaska wanted it to go.

NOTES

states are allowed to discriminate when they are market participants. In the following cases the states were market participants:
Hughes v. Alexandria Scrap Group - bounty on maryland licensed junk cars, state imposed a more stringent documentation on out of state cars
Reeves, Inc. v. Stake - south dakota policy of restricting the sale of cement from a state owned plant to state residents was upheld
White v. Massachusetts - Boston required all construction projects funded in whole or in part by city funds to be performed by a workforce of at least 50% city residents

Created on: Wednesday, October 20, 1999 at 15:27:58 (PDT)