Pike v. Bruce Church, Inc.
(1970)
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Rule of Law:
Where a state statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.
Facts:
- The appellee company engages in extensive commercial farming in Arizona and California.
- The company developed approximately 6,400 acres of land in Parker, Arizona, where it grew a large crop of high-quality cantaloupes.
- Because the company had no packing facilities in Parker, it transported its perishable cantaloupes in bulk loads 31 miles to its centralized packing facility in Blythe, California.
- In California, the cantaloupes were sorted, packed in containers that did not identify them as being from Arizona, and shipped to markets nationwide.
- The appellant, an Arizona official, issued an order under the Arizona Fruit and Vegetable Standardization Act prohibiting the company from shipping its cantaloupes out of state unless they were packed in state-approved containers within Arizona.
- Compliance with the order would require the company to build a new packing facility in Arizona at a cost of approximately $200,000.
Procedural Posture:
- The appellee company brought an action in a federal court to enjoin the state official's order as unconstitutional.
- A three-judge district court was convened.
- The district court first granted temporary relief to the company.
- After reviewing an agreed statement of facts, the district court issued a permanent injunction, finding the order constituted an unlawful burden upon interstate commerce.
- The appellant state official filed a direct appeal of the district court's decision to the U.S. Supreme Court.
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Issue:
Does a state administrative order, which prohibits a company from shipping its high-quality, state-grown produce to an adjacent state for packing and requires the company to build costly packing facilities within the state, impose an unconstitutional burden on interstate commerce?
Opinions:
Majority - Justice Stewart
Yes, the state administrative order imposes an unconstitutional burden on interstate commerce. While the state's interest in promoting and preserving the reputation of its growers is legitimate, that interest is tenuous and minimal in this case and cannot justify the significant financial burden of requiring the company to build an unneeded in-state packing facility. The Court's precedents view with particular suspicion state statutes that require business operations to be performed in the home state when they could be more efficiently performed elsewhere, viewing such burdens as virtually per se illegal. The state's interest in having its name placed on a superior product to enhance the reputation of other growers does not outweigh the direct and substantial burden placed on the appellee company and its interstate operations.
Analysis:
This case is significant for establishing the modern balancing test used in dormant Commerce Clause analysis, often referred to as the 'Pike test.' It provides the framework for evaluating facially neutral state laws that have an incidental impact on interstate commerce. The decision clarifies that courts will weigh the legitimacy and strength of the local interest against the severity of the burden on commerce. By striking down the Arizona order, the Court strongly disfavored state laws that create economic inefficiencies by requiring business operations to be localized, setting a high bar for states to justify such regulations.
