U.S. Supreme Court

Reeves, Inc. v. Stake,447U.S. 429 (1980)Reeves, Inc. v. Stake

No. 79-677

Argued April 16, 1980

Decided June 19, 1980

447U.S. 429

CERTIORARI TO THE UNITED STATESCOURT OF APPEALS

FOR THE EIGHTHCIRCUIT

Syllabus

For more than 50 years, South Dakota has operated a cement plantthat produced cement for both state residents and out-of-statebuyers. In 1978, because of a cement shortage, the State CementCommission announced a policy to confine the sale of cement by thestate plant to residents of the State. This policy forcedpetitioner ready-mix concrete distributor, one of the out-of-statebuyers, to cut its production severely. Petitioner then broughtsuit in Federal District Court, challenging the policy. The courtgranted injunctive relief on the ground that the policy violatedthe Commerce Clause. The Court of Appeals reversed on the groundthat the State had simply acted in a proprietary capacity.

Held: South Dakota's resident-preference program forthe sale of cement does not violate the Commerce Clause. Pp.447 U. S.434-447.

(a) "Nothing in the purposes animating the Commerce Clauseprohibits a State, in the absence of congressional action, fromparticipating in the market and exercising the right to favor itsown citizens over others."Hughes v. Alexandria ScrapCorp.,426 U. S. 794,426 U. S. 810.Pp.447 U. S.434-436.

(b) The Commerce Clause responds principally to state taxes andregulatory measures impeding free private trade in the nationalmarketplace, and there is no indication of a constitutional plan tolimit the ability of the States themselves to operate freely in thefree market. Restraint in this area is also counseled byconsiderations of state sovereignty, each State's role as guardianand trustee for its people, and the recognized right of a trader toexercise discretion as to the parties with whom he will deal.Moreover, state proprietary activities often are burdened with thesame restrictions as private market participants. And, as this caseillustrates, the competing considerations in cases involving stateproprietary action often will be subtle, complex, politicallycharged, and difficult to assess under traditional Commerce Clauseanalysis. Given these factors, the adjustment of interests in thiscontext is, as a rule, better suited for Congress than this Court.Pp.447 U. S.436-439.

(c) The arguments for invalidating South Dakota'sresident-preference program -- that the State, having longexploited the interstate market for cement, should not be permittedto withdraw from it when a shortage

Page 447 U. S. 430

arises; that the program responds solely to the nongovernmentalobjective of protectionism; that hoarding may have undesirableconsequences; that the program places South Dakota suppliers ofready-mix concrete at a competitive advantage in the out-of-statemarket; and that, if South Dakota had not acted, free market forceswould have generated an appropriate level of supply at free marketprices for all buyers in the region -- are weak, at best. Whateverresidual force inheres in them is more than offset bycountervailing considerations of policy and fairness. To invalidatethe program would discourage similar state projects and rob SouthDakota of the intended benefit of its foresight, risk, andindustry. Pp.447 U. S.440-447.

603 F.2d 736, affirmed.

BLACKMUN, J., delivered the opinion of the Court, in whichBURGER, C.J. . and STEWART, MARSHALL, and REHNQUIST, JJ., joined.POWELL, J., filed dissenting opinion, in which BRENNAN, WHITE, andSTEVENS, JJ., joined,post, p.447 U. S.447.

MR. JUSTICE BLACKMUN delivered the opinion of the Court.

The issue in this case is whether, consistent with the CommerceClause, U.S.Const., Art. I, § 8, cl. 3, the State of South Dakota,in a time of shortage, may confine the sale of the cement itproduces solely to its residents.

IIn 1919, South Dakota undertook plans to build a cement plant.The project, a product of the State's then prevailing Progressivepolitical movement, was initiated in response to recent regionalcement shortages that "interfered with and delayed both public andprivate enterprises," and that were "threatening the people of thisstate."Eakin v. South Dakota State Cement Comm'n, 44 S.D.268, 272, 183 N.W. 651, 652

Page 447 U. S. 431

(1921). [Footnote 1] In1920, the South Dakota Cement Commission anticipated "[t]hat therewould be a ready market for the entire output of the plant withinthe state." Report of State

Page 447 U. S. 432

Cement Commission 9 (1920). The plant, however, located at RapidCity, soon produced more cement than South Dakotans could use. Overthe years, buyers in no less than nine nearby States purchasedcement from the State's plant. App. 26. Between 1970 and 1977, some40% of the plant's output went outside the State.

The plant's list of out-of-state cement buyers includedpetitioner Reeves, Inc. Reeves is a ready-mix concrete [Footnote 2] distributor organized underWyoming law and with facilities in Buffalo, Gillette, and Sheridan,Wyo.Id. at 15. From the beginning of its operations in1958, and until 1978, Reeves purchased about 95% of its cement fromthe South Dakota plant.Id. at 15 and 22. In 1977, itspurchases were $1,172,000.Id. at 17. In turn, Reeves hassupplied three northwestern Wyoming counties with more than halftheir ready-mix concrete needs.Id. at 15. For 20 years,the relationship between Reeves and the South Dakota cement plantwas amicable, uninterrupted, and mutually profitable.

As the 1978 construction season approached, difficulties at theplant slowed production. Meanwhile, a booming construction industryspurred demand for cement both regionally and nationally.Id. at 13. The plant found itself unable to meet allorders. Faced with the same type of "serious cement shortage" thatinspired the plant's construction, the Commission

"reaffirmed its policy of supplying all South Dakota customersfirst and to honor all contract commitments,

Page 447 U. S. 433

with the remaining volume allocated on a first come, firstserved basis."

Ibid. [Footnote3]

Reeves, which had no preexisting long-term supply contract, washit hard and quickly by this development. On June 30, 1978, theplant informed Reeves that it could not continue to fill Reeves'orders, and on July 5, it turned away a Reeves truck.Id.at 17-18. Unable to find another supplier,id. at 21,Reeves was forced to cut production by 76% in mid-July.Id. at 20.

On July 19, Reeves brought this suit against the Commission,challenging the plant's policy of preferring South Dakota buyers,and seeking injunctive relief.Id. at 3-10. Afterconducting a hearing and receiving briefs and affidavits, theDistrict Court found no substantial issue of material fact, andpermanently enjoined the Commission's practice. The court reasonedthat South Dakota's "hoarding" was inimical to the national freemarket envisioned by the Commerce Clause.Id. at27-30.

The United States Court of Appeals for the Eighth Circuitreversed.Reeves, Inc. v. Kelley, 586 F.2d 1230, 1232(1978). It concluded that the State had "simply acted in aproprietary capacity," as permitted byHughes v. AlexandriaScrap Corp.,426 U. S. 794(1976). Petitioner sought certiorari. This Court granted thepetition, vacated the judgment, and remanded the case for furtherconsideration in light ofHughes v. Oklahoma,441 U.S. 322 (1979).Reeves, Inc. v. Kelley, 441 U.S.939 (1979). On remand, the Court of Appeals distinguished thatcase. [Footnote 4] Againrelying onAlexandria

Page 447 U. S. 434

Scrap, the court abided by its previous holding.Reeves, Inc. v. Kelley, 603 F.2d 736 (1979). We grantedReeves' petition for certiorari to consider once again the impactof the Commerce Clause on state proprietary activity. 444 U.S. 1031(1980). [Footnote 5]

IIA

Alexandria Scrap concerned a Maryland program designedto remove abandoned automobiles from the State's roadways andjunkyards. To encourage recycling, a "bounty" was offered for everyMaryland-titled junk car converted into scrap. Processors locatedboth in and outside Maryland were eligible to collect thesesubsidies. The legislation, as initially enacted in 1969, requireda processor seeking a bounty to present documentation evidencingownership of the wrecked car. This requirement however, did notapply to "hulks," inoperable automobiles over eight years old. In1974, the statute was amended to extend documentation requirementsto hulks, which comprised a large majority of the junk cars beingprocessed. Departing from prior practice, the new law imposed moreexacting documentation requirements on out-of-state than in-stateprocessors. By making it less remunerative for suppliers totransfer vehicles outside Maryland, the

Page 447 U. S. 435

reform triggered a "precipitate decline in the number ofbounty-eligible hulks supplied to appellee's [Virginia] plant fromMaryland sources." 426 U.S. at426 U. S. 801.Indeed,

"[t]he practical effect was substantially the same as ifMaryland had withdrawn altogether the availability of bounties onhulks delivered by unlicensed suppliers to licensed non-Marylandprocessors."

Id. at426 U. S. 803,n. 13;see id. at426 U. S. 819 (dissenting opinion).

Invoking the Commerce Clause, a three-judge District Courtstruck down the legislation.391 F. Supp.46 (Md.1975). It observed that the amendment imposed"substantial burdens upon the free flow of interstate commerce,"id. at 62, and reasoned that the discriminatory programwas not the least disruptive means of achieving the State'sarticulated objective.Id. at 63.See generally Pikev. Bruce Church, Inc.,397 U. S. 137,397 U. S. 142(1970). [Footnote 6]

This Court reversed. It recognized the persuasiveness of thelower court's analysis if the inherent restrictions of the CommerceClause were deemed applicable. In the Court's view, however,Alexandria Scrap did not involve "the kind of action withwhich the Commerce Clause is concerned." 426 U.S. at426 U. S. 805.Unlike prior cases voiding state laws inhibiting interstatetrade,

"Maryland has not sought to prohibit the flow of hulks, or toregulate the conditions under which it may occur. Instead, it hasentered into the market itself to bid up their price,"

id. at426 U. S. 806,"as a purchaser, in effect, of a potential article of interstatecommerce," and has restricted "its trade to its own citizens orbusinesses within the State."Id. at426 U. S. 808.[Footnote 7]

Page 447 U. S. 436

Having characterized Maryland as a market participant, ratherthan as a market regulator, the Court found no reason to "believethe Commerce Clause was intended to require independentjustification for [the State's] action."Id. at426 U. S. 809.The Court couched its holding in unmistakably broad terms.

"Nothing in the purposes animating the Commerce Clause prohibitsa State, in the absence of congressional action, from participatingin the market and exercising the right to favor its own citizensover others."

Id. at426 U. S. 810(footnote omitted). [Footnote8]

B

The basic distinction drawn inAlexandria Scrap betweenStates as market participants and States as market regulators makesgood sense and sound law. As that case explains, the

Page 447 U. S. 437

Commerce Clause responds principally to state taxes andregulatory measures impeding free private trade in the nationalmarketplace.Id. at426 U. S.807-08, citingH. P. Hood& Sons v. Du Mond,336 U. S. 525,336 U. S. 53 (1949)(referring to "home embargoes," "customs duties," and "regulations"excluding imports). There is no indication of a constitutional planto limit the ability of the States themselves to operate freely inthe free market.See L. Tribe, American Constitutional Law336 (1978) ("the commerce clause was directed, as an historicalmatter, only at regulatory and taxing actions taken by states intheir sovereign capacity"). The precedents comport with thisdistinction. [Footnote 9]

Page 447 U. S. 438

Restraint in this area is also counseled by considerations ofstate sovereignty, [Footnote10] the role of each State "as guardian and trustee for itspeople,'"Heim v. McCall,239 U.S. 175,239 U. S. 191(1915), quotingAtkin v. Kansas,191 U.S. 207,191 U. S.222-223 (1903), [Footnote 11] and

"the long recognized right of trader or manufacturer,

Page 447 U. S. 439

engaged in an entirely private business, freely to exercise hisown independent discretion as to parties with whom he willdeal."

United States v. Colgate & Co.,250 U.S. 300,250 U. S. 307(1919). [Footnote 12]Moreover, state proprietary activities may be, and often are,burdened with the same restrictions imposed on private marketparticipants. [Footnote 13]Evenhandedness suggests that, when acting as proprietors, Statesshould similarly share existing freedoms from federal constraints,including the inherent limits of the Commerce Clause.See Statee rel. Collins v. Senatobia Blank Book & Stationery Co.,115 Miss. 254, 260, 76 So. 258, 260 (1917);Tribune Printing& Binding Co. v. Barnes, 7 N.D. 591, 597, 75 N.W. 94, 906(1898). Finally, as this case illustrates, the competingconsiderations in cases involving state proprietary action oftenwill be subtle, complex, politically charged, and difficult toassess under traditional Commerce Clause analysis. Given thesefactors,Alexandria Scrap wisely recognizes that, as arule, the adjustment of interests in this context is a task bettersuited for Congress than this Court.

Page 447 U. S. 440

IIISouth Dakota, as a seller of cement, unquestionably fits the"market participant" label more comfortably than a State acting tosubsidize local scrap processors. Thus, the general rule ofAlexandria Scrap plainly applies here. [Footnote 14] Petitioner argues, however,that the exemption for marketplace participation necessarily admitsof exceptions. While conceding that possibility, we perceive inthis case no sufficient reason to depart from the general rule.

A

In finding a Commerce Clause violation, the District Courtemphasized "that the Commission . . . made an election to becomepart of the interstate commerce system." App. 28. The gist of thisreasoning, repeated by petitioner here, is that one good turndeserves another. Having long exploited the interstate market,South Dakota should not be permitted to withdraw from it when ashortage arises. This argument is not persuasive. It is somewhatself-serving to say that South Dakota has "exploited" theinterstate market. An equally fair characterization is thatneighboring States long have benefited from South Dakota'sforesight and industry. Viewed in this light, it is not surprisingthatAlexandria Scrap rejected an argument that the 1974Maryland legislation challenged there was invalid because carsabandoned in Maryland had been processed in neighboring States forfive years. As inAlexandria Scrap, we must concludethat

"this chronology does not distinguish the case, for CommerceClause purposes,

Page 447 U. S. 441

from one in which a State offered [cement] only to domestic[buyers] from the start."

426 U.S. 809. [Footnote15]

Our rejection of petitioner's market exploitation theoryfundamentally refocuses analysis. It means that, to reverse, wewould have to void a South Dakota "residents only" policy even ifit had been enforced from the plant's very first days. Such aholding, however, would interfere significantly with a State'sability to structure relations exclusively with its own citizens.It would also threaten the future fashioning of effective andcreative programs for solving local problems and distributinggovernment largesse.See447 U. S. 1,supra. A healthy regard for federalism and good governmentrenders us reluctant to risk these results.

"To stay experimentation in things social and economic is agrave responsibility. Denial of the right to experiment may befraught with serious consequences to the Nation. It is one of thehappy incidents of the federal system that a single courageousState may, if its citizens choose, serve as a laboratory, and trynovel social and economic experiments without risk to the rest ofthe country."

New State Ice Co. v. Liebmann,285 U.S. 262,285 U. S. 311(1932) (Brandeis, J., dissenting).

Page 447 U. S. 442

B

Undaunted by these considerations, petitioner advances four morearguments for reversal:

First, petitioner protests that South Dakota's preference forits residents responds solely to the "non-governmental objectiv[e]"of protectionism Brief for Petitioner 25. Therefore, petitionerargues, the policy isper se invalid.See Philadelphiav. New Jersey,437 U. S. 617,437 U. S. 624(1978).

We find the label "protectionism" of little help in thiscontext. The State's refusal to sell to buyers other than SouthDakotans is "protectionist" only in the sense that it limitsbenefits generated by a state program to those who fund the statetreasury and whom the State was created to serve. Petitioner'sargument apparently also would characterize as "protectionist"rules restricting to state residents the enjoyment of stateeducational institutions, energy generated by a state-run plant,police and fire protection, and agricultural improvement andbusiness development programs. Such policies, while perhaps"protectionist" in a loose sense, reflect the essential andpatently unobjectionable purpose of state government -- to servethe citizens of the state. [Footnote 16]

Page 447 U. S. 443

Second, petitioner echoes the District Court's warning:

"If a state in this union were allowed to hoard its commoditiesor resources for the use of their own residents only, a drasticsituation might evolve. For example, Pennsylvania or Wyoming mightkeep their coal, the northwest its timber, and the mining statestheir minerals. The result being that embargo may be retaliated byembargo, and commerce would be halted at state lines."

App. 29.See, e.g., Baldwin v. Montana Fish & GameComm'n,436 U. S. 371,436 U. S.385-386 (1978). This argument, although rooted in thecore purpose of the Commerce Clause, does not fit the presentfacts. Cement is not a natural resource, like coal, timber, wildgame, or minerals.Cf. Hughes v. Oklahoma,441 U.S. 322 (1979) (minnows);Philadelphia v. New Jersey,supra, (landfill sites);Pennsylvania v. WestVirginia,262 U. S. 553(1923) (natural gas);West v. Kansas NaturalGas

Page 447 U. S. 444

Co.,221 U. S. 229(1911) (same); Note, 32 Rutgers L.Rev. 741 (1979). It is the endproduct of a complex process whereby a costly physical plant andhuman labor act on raw materials. South Dakota has not sought tolimit access to the State's limestone or other materials used tomake cement. Nor has it restricted the ability of private firms orsister States to set up plants within its borders. Tr. of Oral Arg.4. Moreover, petitioner has not suggested that South Dakotapossesses unique access to the materials needed to produce cement.[Footnote 17] Whateverlimits might exist on a State's ability to invoke theAlexandria Scrap exemption to hoard resources which byhappenstance are found there, those limits do not apply here.

Third, it is suggested that the South Dakota program is infirmbecause it places South Dakota suppliers of ready-mix concrete at acompetitive advantage in the out-of-state market; Wyomingsuppliers, such as petitioner, have little chance against SouthDakota suppliers who can purchase cement from the State's plant andfreely sell beyond South Dakota's borders.

The force of this argument is seriously diminished, if noteliminated, by several considerations. The argument necessarily

Page 447 U. S. 445

implies that the South Dakota scheme would be unobjectionable ifsales in other States were totally barred. It therefore proves toomuch, for it would tolerate even a greater measure of protectionismand stifling of interstate commerce than the challenged systemallows.See K.S.B. Technical Sales Corp. v. North Jersey Dist.Water Supply Comm'n, 75 N.J. 272, 298,381A.2d 774, 787 (1977) ("It would be odd indeed to find that,when a state becomes less parochial . . . its purpose becomessuspect under the Commerce Clause").Cf. Pike v. Bruce Church,Inc., 397 U.S. at397 U. S. 142("And the extent of the burden that will be tolerated will ofcourse depend . . . on whether [the state interest] could bepromoted as well with a lesser impact on interstate activities").Nor is it to be forgotten thatAlexandria Scrap approved astate program that "not only . . . effectively protect[ed] scrapprocessors with existing plants in Maryland from the pressures ofcompetitors with nearby out-of-state plants, but [that] implicitlyoffer[ed] to extend similar protection to any competitor . . .willing to erect a scrap processing facility within Maryland'sboundaries." 391 F. Supp. at 63. Finally, the competitive plight ofout-of-state ready-mix suppliers cannot be laid solely at the feetof South Dakota. It is attributable as well to their own States'not providing or attracting alternative sources of supply and tothe suppliers' own failure to guard against shortages by executinglong-term supply contracts with the South Dakota plant.

In its last argument, petitioner urges that, had South Dakotanot acted, free market forces would have generated an appropriatelevel of supply at free market prices for all buyers in the region.Having replaced free market forces, South Dakota should be forcedto replicate how the free market would have operated underprevailing conditions.

This argument appears to us to be simplistic and speculative.The very reason South Dakota built its plant was because the freemarket had failed adequately to supply the

Page 447 U. S. 446

region with cement.Seen 1,supra. There is no indication, and no way toknow, that private industry would have moved into petitioner'smarket area, and would have ensured a supply of cement topetitioner either prior to or during the 1978 construction season.Indeed, it is quite possible that petitioner would never haveexisted -- far less operated successfully for 20 years -- had itnot been for South Dakota cement. [Footnote 18]

C

We conclude, then, that the arguments for invalidating SouthDakota's resident-preference program are weak, at best. Whateverresidual force inheres in them is more than offset bycountervailing considerations of policy and fairness. Reversalwould discourage similar state projects, even though this projectdemonstrably has served the needs of state residents and has helpedthe entire region for more than a half century. Reversal also wouldrob South Dakota of the intended benefit of its foresight, risk,and industry. [Footnote 19]Under

Page 447 U. S. 447

these circumstances, there is no reason to depart from thegeneral rule ofAlexandria Scrap.

The judgment of the United States Court of Appeals isaffirmed.

It is so ordered.

[Footnote 1]

It was said that the plant was built because the only cementplant in the State "had been operating successfully for a number ofyears until it had been bought by the so-called trust and closeddown." Report of South Dakota State Cement Commission 6 (1920). Inits report advocating creation of a cement plant, the Commissionnoted both the substantial profits being made by private producersin the prevailing market and the fact that producers outside theState were "now supplying all the cement used in" South Dakota.Under the circumstances, the Commission reasoned, it would not beto the "capitalists['] . . . advantage to build a new plant withinthe state."Id. at 8. This skepticism regarding privateindustry's ability to serve public needs was a hallmark ofProgressivism.See, e.g., Hofstadter, The Age of Reform227 (1955) ("In the Progressive era, the entire structure ofbusiness . . . became the object of a widespread hostility"). SouthDakota, earlier a bastion of Populism,id. at 50, became aleading Progressivist State.See R. Nye, MidwesternProgressive Politics 217-218 (1959); G. Mowry, Theodore Rooseveltand the Progressive Movement 155, and n. 125 (1946). Rooseveltcarried South Dakota in the election of 1912,id. at 281,n. 69, and Robert La Follette -- on a platform calling for publicownership of railroads and waterpower,see K. MacKay, TheProgressive Movement of 1924, pp. 270-271 (app. 4) (1966) -- ranstrongly (36.9%) in the State in 1924. Congressional Quarterly'sGuide to U.S. Elections 287 (1975).

The backdrop against which the South Dakota cement project wasinitiated is described in H. Schell, History of South Dakota268-269 (3d ed.1975):

"Although a majority of the voters [in 1918] had seeminglysubscribed to a state ownership philosophy, it was a question howfar the Republican administration at Pierre would go in fulfillingcampaign promises. As [Governor] Norbeck entered upon his secondterm, he again urged a state hail insurance law and advocated stepstoward a state-owned coal mine, cement plant, and state-ownedstockyards. He also recommended an appropriation for surveying damsites for hydroelectric development. The lawmakers readily enactedthese recommendations into law, except for the stockyards proposal.. . ."

". . . In retrospect, [Norbeck's] program must be viewed as apart of the Progressives' campaign against monopolistic prices.There was, moreover, the fervent desire to make the services of thestate government available to agriculture. . . . These were basictenets of the Progressive philosophy of government."

[Footnote 2]

"[C]ement is a finely ground manufactured mineral product,usually gray in color. It is mixed with water and sand, gravel,crushed stone, or other aggregates to form concrete, the rock-likesubstance that is the most widely used construction material in theworld."

Portland Cement Association, The U.S. Cement Industry, AnEconomic Report 5 (2d ed.1978). "Ready-mixed concrete is the termapplied to ordinary concrete that is mixed at a central depotinstead of on the construction site, and is distributed in specialtrucks." 4 Encyclopedia Britannica 1077 (1974).

[Footnote 3]

It is not clear when the State initiated its policy preferringSouth Dakota customers. The record, however, shows that the policywas in place at least by 1974. App. 24.

[Footnote 4]

We now agree with the Court of Appeals thatHughes v.Oklahoma does not bear on analysis here. That case involved aState's attempt "to prevent privately owned articles of tradefrom being shipped and sold in interstate commerce.'"Philadelphia v. New Jersey,437 U.S. 617,437 U. S. 627(1978), quotingFoster-Fountain Packing Co. v. Haydel,278 U. S. 1,278 U. S. 10(1928). Thus, it involved precisely the type of activitydistinguished by the Court inAlexandria Scrap.See 426 U.S. at426 U. S.805-806.

[Footnote 5]

During the pendency of this litigation, economic conditions havepermitted South Dakota to discontinue enforcement of itsresident-preference policy. We agree with the parties, however,that the case has not become moot. During at least threeconstruction seasons within as many decades, the cement plant hasbeen unable, or nearly unable, to satisfy demand.See,e.g., Twelfth Biennial Report of the South Dakota State CementCommission (1948); App. 23 (affidavit of C. A. Reeves). Under thesecircumstances,

"(1) the challenged action was in its duration too short to befully litigated prior to its cessation or expiration, and (2) there[is] a reasonable expectation that the same complaining party[will] be subjected to the same action again."

Weinstein v. Bradford,423 U.S. 147,423 U. S. 149(1975).

[Footnote 6]

Maryland sought to justify its reform as an effort to reducebounties paid to out-of-state processors on Maryland-titled carsabandoned outside Maryland. The District Court concluded thatMaryland could achieve this goal more satisfactorily by simplyrestricting the payment of bounties to only those cars abandoned inMaryland.

[Footnote 7]

The Court invoked this rationale after explicitly reiteratingthe District Court's finding that the Maryland program imposed"substantial burdens upon the free flow of interstatecommerce.'" 426 U.S. at426 U. S. 804.Moreover, the Court was willing to accept the Virginia processor'scharacterization of the Maryland program as "reducing in somemanner the flow of goods in interstate commerce."Id. at426 U. S. 805.Given this concession, we are unable to accept the dissent'sdescription ofAlexandria Scrap as a case in which "wefound no burden on commerce,"post at447 U. S. 451,"concluded that the subsidies . . . erected no barriers to trade,"post at447 U. S. 452,and determined that the Maryland program did not "cut off,"ibid., or "impede the flow of interstate commerce,"post at447 U. S. 450.Indeed, even the dissent in the present case recognizes that theMaryland subsidy program "divert[ed] Maryland `hulks' to in-stateprocessors."Post at447 U. S. 451.To be sure,Alexandria Scrap rejected the argument that"the bounty program constituted animpermissible burden oninterstate commerce."Ibid. (emphasis added). It did so,however, solely because Maryland had "entered into the marketitself." 426 U.S. at426 U. S. 806.Thus, the two-step analysis distilled by the dissent fromAlexandria Scrap, see post at447 U. S.451-453, collapses into a single inquiry: whether thechallenged "program constituted direct state participation in themarket."Post at447 U. S. 451.The dissent agrees that that question is to be answered in theaffirmative here.Ibid.

[Footnote 8]

The dissent's central criticisms of the result reached here seemto be that the South Dakota policy does not emanate from "the powerof governments to supply their own needs," and that it threatens"the natural functioning of the interstate market.'"Post at447 U. S. 450.The same observations, however, apply with equal force to thesubsidy program challenged inAlexandria Scrap.

[Footnote 9]

Alexandria Scrap does not stand alone. InAmericanYearbook Co. v. Askew, 339 F.Supp. 719 (MD Fla.1972), a three-judge District Court upheld aFlorida statute requiring the State to obtain needed printingservices from in-state shops. It reasoned that "state proprietaryfunctions" are exempt from Commerce Clause scrutiny.Id.at 725. This Court affirmed summarily. 409 U.S. 904 (1972).Numerous courts have rebuffed Commerce Clause challenges directedat similar preferences that exist in "a substantial majority of thestates." Note, 58 Iowa L.Rev. 576 (1973).City of Phoenix v.Superior Court, 109 Ariz. 533, 535,514 P.2d454, 456 (1973) (citingAmerican Yearbook to reaffirmSchrey v. Allison Steel Mfg. Co., 75 Ariz. 282,255 P.2d 604(1953));Denver v. Bossie, 83 Colo. 329, 266 P. 214(1928);In re Gemmill, 20 Idaho 732, 119 P. 298 (1911);People ex rel. Holland v. Bleigh Constr.Co., 61 Ill. 2d258, 274 275,335 N.E.2d469, 479 (1975) (citing American Yearbook);State ex rel.Collins v. Senatobia Blank Book & Stationery Co., 115Miss. 254, 76 So. 258 (1917);Allen v. Labsap, 188 Mo.692, 87 S.W. 926 (1905);Hersey v. Neilson, 47 Mont. 132,131 P. 30 (1913);Tribune Printing & Binding Co. v.Barnes, 7 N.D. 591, 75 N.W. 904 (1898).See alsoDixon-Paul Printing Co. v. Board of Public Contracts, 117Miss. 83, 77 So. 908 (1918);Luboil Heat & Power Corp. v.Pleydell, 178 Misc. 562, 564, 34 N.Y.S.2d 587, 591 (Sup.1942). The only clear departure from this pattern,People exrel. Treat v. Coler, 166 N.Y. 144, 59 N.E. 776 (1901), drew astrong dissent, and has been uniformly criticized in laterdecisions.See, e.g., State ex rel. Collins v. Senatobia BlankBook & Stationery Co., supra; Allen v. Labsap, supra.

One other case merits comment. InBethlehem Steel Corp. v.Board of Commissioners, 276 Cal. App.2d 221, 80 Cal. Rptr. 800 (1969), the court struck down aCalifornia statute requiring the State to contract only withpersons who promised to use or supply materials produced in theUnited States. In Opinion No. 69-253, 53 Op.Cal.Atty. Gen. 72(1970), the State's Attorney General reasoned thatBethlehemSteel similarly prohibited, under the "foreign commerce"Clause, statutes giving a preference to California-produced goods.We have no occasion to explore the limits imposed on stateproprietary actions by the "foreign commerce" Clause or theconstitutionality of "Buy American" legislation.CompareBethlehem Steel Corp., supra, with K.S.B. Technical Sales Corp. v.North Jersey Dist. Water Supply Comm'n, 75 N.J. 272,381 A.2d774 (1977). We note, however, that Commerce Clause scrutiny maywell be more rigorous when a restraint on foreign commerce isalleged.See Japan Line, Ltd. v. County of Los Angeles,441 U. S. 434(1979).

[Footnote 10]

See American Yearbook Co. v. Askew, 339 F. Supp. at 725("ad hoc" inquiry into burdening of interstate commerce"would unduly interfere with state proprietary functions, if notbring them to a standstill"). Considerations of sovereigntyindependently dictate that marketplace actions involving "integraloperations in areas of traditional governmental functions" -- suchas the employment of certain state workers -- may not be subjecteven to congressional regulation pursuant to the commerce power.National League of Cities v. Usery,426 U.S. 833,426 U. S. 852(1976). It follows easily that the intrinsic limits of the CommerceClause do not prohibit state marketplace conduct that falls withinthis sphere. Even where "integral operations" are not implicated,States may fairly claim some measure of a sovereign interest inretaining freedom to decide how, with whom, and for whose benefitto deal. The Supreme Court, 1975 Term, 90 Harv.L.Rev. 1, 56, 63(1976).

[Footnote 11]

See Foster-Fountain Packing Co. v. Haydel, 278 U.S.278 U. S. theState might have retained the shrimp for consumption and usetherein");Toomer v. Witsell,334 U.S. 385,334 U. S. 409(1948) (concurring opinion) (state power to provide for owncitizens by developing food supply distinguished from interferencewith private transactions in food products);Helvering v.Gerhardt,304 U. S. 405,304 U. S. 427(1938) (concurring opinion) ("The genius of our government providesthat, within the sphere of constitutional action, the people . . .have the power to determine as conditions demand, what services andfunctions the public welfare requires").

[Footnote 12]

When a State buys or sells, it has the attributes of both apolitical entity and a private business. Nonetheless, the dissentwould dismiss altogether the "private business" element of suchactivity and focus solely on the State's political character.Post at447 U. S. 450.The Court, however, heretofore has recognized that,

"[l]ike private individuals and businesses, theGovernment enjoys the unrestricted power to produce its ownsupplies, to determine those with whom it will deal, and to fix theterms and conditions upon which it will make needed purchases."

Perkins v. Lukens Steel Co.,310 U.S. 113,310 U. S. 127(1940) (emphasis added). While acknowledging that there may belimits on this sweepingly phrased principle, we cannot ignore thesimilarities of private businesses and public entities when theyfunction in the marketplace.

[Footnote 13]

See, e.g., National League of Cities v. Usery, 426 U.S.at426 U. S. 854,n. 18;New York v. United States,326 U.S. 572 (1946);United States v. California,297 U. S. 175(1936).See also Lafayette v. Louisiana Power & LightCo.,435 U. S. 389(1978).

[Footnote 14]

The criticism received byAlexandria Scrap, in part,has been directed at its application of the proprietary immunity tostate subsidy programs.See Note, 18 B.C.Ind. &Com.L.Rev. 893, 924-925 (1977).But see The Supreme Court,1975 Term, 90 Harv.L.Rev. at 60-61. We have no occasion here toinquire whether subsidy programs unlike that involved inAlexandria Scrap warrant characterization as proprietary,rather than regulatory, activity.Cf. 18 B.C.Ind. &Com.L.Rev. at 913-915.

[Footnote 15]

Alexandria Scrap explained:

"It is true that the state money initially was made available tolicensed out-of-state processors as well as those located withinMaryland, and not until the 1974 amendment was the financialbenefit channeled, in practical effect, to domestic processors. Butthis chronology does not distinguish the case, for Commerce Clausepurposes, from one in which a State offered bounties only todomestic processors from the start. Regardless of when the State'slargesse is first confined to domestic processors, the effect uponthe flow of hulks resting within the State is the same: they willtend to be processed inside the State, rather than flowing toforeign processors. But no trade barrier of the type forbidden bythe Commerce Clause, and involved in previous cases, impedes theirmovement out of State. They remain within Maryland in response tomarket forces, including that exerted by money from the State."

426 U.S. at426 U. S.809-810. (Footnote omitted.)

[Footnote 16]

Petitioner would distinguishAlexandria Scrap asinvolving state legislation designed to advance thenonprotectionist goal of environmentalism. This characterization isan oversimplification. The challenged feature of the Marylandprogram -- the discriminatory documentation requirement -- was notaimed at improving the environment; indeed, by decreasing theprofit margin a hulk supplier could expect to receive if hedelivered to the most accessible recycling plant, it is likely thatthe amendment somewhat set back the goal of encouraging hulkprocessing. The stated justification for the discriminatoryregulation -- reducing payments to out-of-state processors forrecycling of hulks abandoned outside Maryland -- was not evenmentioned by the Court in rebuffing the Virginia processor'sCommerce Clause challenge. Indeed, the central point of the Court'sanalysis was that demonstration of an "independent justification"was unnecessary to sustain the State's program.See Note,18 B.C.Ind. & Com.L.Rev. at 927-928. At bottom, thediscrimination challenged inAlexandria Scrap wasmotivated by the same concern underlying South Dakota'sresident-preference policy -- a desire to channel state benefits tothe residents of the State supplying them. If some underlying"commendable as well as legitimate" purpose, 426 U.S. at426 U. S. 809,is also required, it is certainly present here. In establishing theplant, South Dakota sought the most unstartling governmental goal:improvement of the quality of life in that State by generating asupply of a previously scarce product needed for local constructionand governmental improvements. A cement program, to be sure, may bea somewhat unusual or unorthodox way in which to utilize statefunds to improve the quality of residents' lives. But

"[a] State's project is as much a legitimate governmentalactivity whether it is traditional, or akin to private enterprise,or conducted for profit. . . . A State may deem it as essential toits economy that it own and operate a railroad, a mill, or anirrigation system as it does to own and operate bridges, streetlights, or a sewage disposal plant. What might have been viewed inan earlier day as an improvident or even dangerous extension ofstate activities may today be deemed indispensable."

New York v. United States, 326 U.S. at326 U. S. 591(dissenting opinion).

[Footnote 17]

Nor has South Dakota cut off access to its own cementaltogether, for the policy does not bar resale of South Dakotacement to out-of-state purchasers. Although the out-of-state buyerin the secondary market will undoubtedly have to pay a markup notborne by South Dakota competitors, this result is not whollyunjust. There should be little question that South Dakota at leastcould exact a premium on out-of-state purchases to compensate itfor the State's investment and risk in the plan. If one views theadded markup paid by out-of-state buyers to South Dakota middlemenas the rough equivalent of this "premium," the challenged programequates with a permissible result. The "bottom line" of the schemeclosely parallels the result inAlexandria Scrap:out-of-state concrete suppliers are not removed from the marketaltogether; to compete successfully with in-state competitors,however, they must achieve additional efficiencies or exploitnatural advantages such as their location to offset the incrementaladvantage channeled by the State's own market behavior to in-stateconcrete suppliers.

[Footnote 18]

Petitioner also seeks to distinguishAlexandria Scrapon the ground that there, unlike here, the State "created" therelevant market.See 426 U.S. at426 U. S.814-817 (concurring opinion). It is clear, however, thatAlexandria Scrap could not, and did not, rest on thenotion that Maryland had created the interstate market in hulks.Id. at426 U. S. 809,n. 18.See id. at426 U. S. 824-826, n. 6 (dissenting opinion); Note, 18B.C.Ind. & Com.L.Rev. at 927; The Supreme Court, 1975 Term, 90Harv.L.Rev. at 62, n. 27; Note, 34 Wash. & Lee L.Rev. 979, 995(1977).

[Footnote 19]

The risk borne by South Dakota in establishing the cement plantis not to be underestimated. As explained inn 1, supra, the cement plant was one of severalprojects through which the Progressive state government sought todeal with local problems. The fate of other similar projectsillustrates the risk borne by South Dakota taxpayers in setting upthe cement plant at a cost of some $2 million. Thus,

"[t]he coal mine was sold in early 1934 for $5,500 with anestimated loss of nearly $175,000 for its fourteen years ofoperation. The 1933 Legislature also liquidated the state bondingdepartment and the state hail insurance project. The total loss tothe taxpayers from the latter venture was approximately$265,000."

H. Schell, History of South Dakota 286 (3d ed.1975).

MR. JUSTICE POWELL, with whom MR. JUSTICE BRENNAN, MR. JUSTICEWHITE, and MR. JUSTICE STEVENS join, dissenting.

The South Dakota Cement Commission has ordered that, in times ofshortage, the state cement plant must turn away out-of-statecustomers until all orders from South Dakotans are filled. Thispolicy represents precisely the kind of economic protectionism thatthe Commerce Clause was intended to prevent. [Footnote 2/1] The Court, however, finds no violation ofthe Commerce Clause, solely because the State produces the cement.I agree with the Court that the State of South Dakota may providecement for its public needs without violating the Commerce Clause.But I cannot agree that South Dakota may withhold its cement frominterstate commerce in order to benefit private citizens andbusinesses within the State.

IThe need to ensure unrestricted trade among the States created amajor impetus for the drafting of the Constitution. "The power overcommerce . . . was one of the primary objects for which the peopleof America adopted their government. . . ."Gibbons v.Ogden, 9 Wheat. 1,22 U. S. 190(1824). Indeed, the Constitutional Convention was called after anearlier convention on trade and commercial problems provedinconclusive. C. Beard, An Economic Interpretation of the

Page 447 U. S. 448

Constitution 61-63 (1935); S. Bloom, History of the Formation ofthe Union Under the Constitution 14-15 (1940). In the subsequentdebate over ratification, Alexander Hamilton emphasized theimportance of unrestricted interstate commerce:

"An unrestrained intercourse between the States themselves willadvance the trade of each, by an interchange of their respectiveproductions. . . . Commercial enterprise will have much greaterscope, from the diversity in the productions of different States.When the staple of one fails . . . , it can call to its aid thestaple of another."

The Federalist, No. 11, p. 71 (J. Cooke ed., 1961) (A.Hamilton);see id. No. 42, p. 283 (J. Madison).

The Commerce Clause has proved an effective weapon againstprotectionism. The Court has used it to strike down limitations onaccess to local goods, be they animal,Hughes v. Oklahoma,441 U. S. 322(1979) (minnows); vegetable,Pike v. Bruce Church, Inc.,397 U. S. 137(1970) (cantaloupes); or mineral,Pennsylvania v. WestVirginia,262 U. S. 553(1923) (natural gas). Only this Term, the Court heldunconstitutional a Florida statute designed to exclude out-of-stateinvestment advisers.Lewis v. BT Investment Managers, Inc.,ante, p.447 U. S. 27. As weobserved inHughes v. Alexandria Scrap Corp.,426 U.S. 794,426 U. S. 803(1976),

"this Nation is a common market in which state lines cannot bemade barriers to the free flow of both raw materials and finishedgoods in response to the economic laws of supply and demand."

This case presents a novel constitutional question. The CommerceClause would bar legislation imposing on private parties the typeof restraint on commerce adopted by South Dakota.SeePennsylvania v. West Virginia, supra; cf. Great A&P Tea Co. v.Cottrell,424 U. S. 366(1976);Foster-Fountain Packing Co. v. Haydel,278 U. S. 1 (1928).[Footnote 2/2] Conversely,

Page 447 U. S. 449

a private business constitutionally could adopt a marketingpolicy that exclude customers who come from another State. Thiscase falls between those polar situations. The State, through itsCommission, engages in a commercial enterprise and restricts itsown interstate distribution. The question is whether theCommission's policy should be treated like state regulation ofprivate parties or like the marketing policy of a privatebusiness.

The application of the Commerce Clause to this case should turnon the nature of the governmental activity involved. If a publicenterprise undertakes an "integral operatio[n] in areas oftraditional governmental functions,"National League of Citiesv. Usery,426 U. S. 833,426 U. S. 852(1976), the Commerce Clause is not directly relevant. If, however,the State enters

Page 447 U. S. 450

the private market and operates a commercial enterprise for theadvantage of its private citizens, it may not evade theconstitutional policy against economic Balkanization.

This distinction derives from the power of governments to supplytheir own needs,see Perkins v. Lukens Steel Co.,310 U. S. 113,310 U. S. 127(1940);Atkin v. Kansas,191 U. S. 207(1903), and from the purpose of the Commerce Clause itself, whichis designed to protect "the natural functioning of the interstatemarket,"Hughes v. Alexandria Scrap Corp., supra at426 U. S. 806.In procuring goods and services for the operation of government, aState may act without regard to the private marketplace and removeitself from the reach of the Commerce Clause.See AmericanYearbook Co. v. Askew, 339 F.Supp. 719 (MD Fla.),summarily aff'd, 409 U.S. 904(1972). But when a State itself becomes a participant in theprivate market for other purposes, the Constitution forbids actionsthat would impede the flow of interstate commerce. These categoriesrecognize no more than the "constitutional line between the Stateas government and the State as trader."New York v. UnitedStates,326 U. S. 572,326 U. S. 579(1946);see United States v. California,297 U.S. 175 (1936);Ohio v. Helvering,292 U.S. 360 (1934);South Carolina v. United States,199 U. S. 437(1905).

The Court holds that South Dakota, like a private business,should not be governed by the Commerce Clause when it enters theprivate market. But precisely because South Dakota is a State, itcannot be presumed to behave like an enterprise "engaged in anentirely private business.'"See ante at447 U. S. 439,quotingUnited States v. Colgate & Co.,250 U.S. 300,250 U. S. 307(1919). A State frequently will respond to market conditions on thebasis of political, rather than economic, concerns. To use theCourt's terms, a State may attempt to act as a "market regulator,"rather than a "market participant."See ante at447 U. S. 436.In that situation, it is a pretense to equate the State with aprivate economic actor. State action burdening interstate trade isno less state action because it is

Page 447 U. S. 451

accomplished by a public agency authorized to participate in theprivate market.

IIThe threshold issue is whether South Dakota has undertakenintegral government operations in an area of traditionalgovernmental functions, or whether it has participated in themarketplace as a private firm. If the latter characterizationapplies, we also must determine whether the State Commission'smarketing policy burdens the flow of interstate trade. Thisanalysis highlights the differences between the state action hereand that before the Court inHughes v. Alexandria ScrapCorp.

A

InAlexandria Scrap, a Virginia scrap processorchallenged a Maryland program to pay bounties for every junk carregistered in Maryland that was converted into scrap. The programimposed more onerous documentation standards on non-Marylandprocessors, thereby diverting Maryland "hulks" to in-stateprocessors. The Virginia plaintiff argued that this diversionburdened interstate commerce.

As the Court today notes,Alexandria Scrap determinedthat Maryland's bounty program constituted direct stateparticipation in the market for automobile hulks.Ante at447 U. S. 435.But the critical question -- the second step in the opinion'sanalysis -- was whether the bounty program constituted animpermissible burden on interstate commerce. Recognizing that thecase did not fit neatly into conventional Commerce Clause theory,426 U.S. at426 U. S. 807,we found no burden on commerce.

The Court first observed:

"Maryland has not sought to prohibit the flow of hulks, or toregulate the conditions under which it may occur. Instead, it hasentered into the market itself to bid up their price. There hasbeen an impact upon the interstate flow of hulks only because . . .Maryland effectively

Page 447 U. S. 452

has made it more lucrative for unlicensed suppliers to disposeof their hulks in Maryland. . . ."

Id. at426 U. S.806.

We further stated

"that the novelty of this case is not its presentation of a newform of 'burden' upon commerce, but that appellee shouldcharacterize Maryland's action as a burden which the CommerceClause was intended to make suspect."

Id. at426 U. S. 807.The opinion then emphasized that "no trade barrier of the typeforbidden by the Commerce Clause, and involved in previous cases,impedes th[e] movement [of hulks] out of State."Id. at426 U. S.809-810. Rather, the hulks "remain within Maryland inresponse to market forces, including that exerted by money from theState."Id. at426 U. S. 810.The Court concluded that the subsidies provided under the Marylandprogram erected no barriers to trade. Consequently, the CommerceClause did not forbid the Maryland program.

B

Unlike the market subsidies at issue inAlexandriaScrap, the marketing policy of the South Dakota CementCommission has cut off interstate trade. [Footnote 2/3] The State can raise such a bar when itenters the market to supply its own needs. In order to ensure anadequate supply of cement for public uses, the State can withholdfrom interstate commerce the cement needed for public projects.Cf. National League of Cities v. Usery, supra.

The State, however, has no parallel justification for favoringprivate, in-state customers over out-of-state customers. [Footnote 2/4]

Page 447 U. S. 453

In response to political concerns that likely would beinconsequential to a private cement producer, South Dakota has shutoff its cement sales to customers beyond its borders. Thatdiscrimination constitutes a direct barrier to trade "of the typeforbidden by the Commerce Clause, and involved in previous cases. .. ."Alexandria Scrap, 426 U.S. at426 U. S. 810.The effect on interstate trade is the same as if the statelegislature had imposed the policy on private cement producers. TheCommerce Clause prohibits this severe restraint on commerce.

IIII share the Court's desire to preserve state sovereignty. Butthe Commerce Clause long has been recognized as a limitation onthat sovereignty, consciously designed to maintain a nationalmarket and defeat economic provincialism. The Court today approvesprotectionist state policies. In the absence of contrarycongressional action, [Footnote2/5] those policies now can be implemented as long as the Stateitself directly participates in the market. [Footnote 2/6]

By enforcing the Commerce Clause in this case, the Court wouldwork no unfairness on the people of South Dakota. They still couldreserve cement for public projects and share in whatever return theplant generated. They could not, however, use the power of theState to furnish themselves with cement forbidden to the people ofneighboring States.

The creation of a free national economy was a major goal of theStates when they resolved to unite under the Federal Constitution.The decision today cannot be reconciled with that purpose.

[Footnote 2/1]

By "protectionism," I refer to state policies designed toprotect private economic interests within the State from the forcesof the interstate market. I would exclude from this term policiesrelating to traditional governmental functions, such as education,and subsidy programs like the one at issue inHughes v.Alexandria Scrap Corp.,426 U. S. 794(1976).See infra at447 U. S.451-453.

[Footnote 2/2]

The Court attempts to distinguish prior decisions that addressthe Commerce Clause limitations on a State's regulation of naturalresource exploitation.E.g., Hughes v. Oklahoma,441 U. S. 322(1979);Pennsylvania v. West Virginia,262 U.S. 553 (1923). The Court contends that cementproduction, unlike the activities involved in those cases, "is theend product of a complex process whereby a costly physical plantand human labor act on raw materials."Ante at447 U. S. 444.The Courts distinction fails in two respects. First, the principlesarticulated in the natural resources cases also have been appliedin decisions involving agricultural production, notably milkprocessing.E.g., H. P. Hood & Sons v. Du Mond,336 U. S. 525(1949);Pike v. Bruce Church, Inc.,397 U.S. 137 (1970). More fundamentally, the Court'sdefinition of cement production describes all sophisticatedeconomic activity, including the exploitation of natural resources.The extraction of natural gas, for example, could hardly occurexcept through a "complex process whereby a costly physical plantand human labor act on raw materials."

The Court also suggests that the Commerce Clause has noapplication to this case because South Dakota does not "posses[s]unique access to the materials needed to produce cement."Ante at447 U. S. 444.But in its regional market, South Dakota has unique access tocement. A cutoff in cement sales has the same economic impact as arefusal to sell resources like natural gas. Customers can seekother sources of supply, or find a substitute product, or dowithout. Regardless of the nature of the product the State hoards,the consumer has been denied the guarantee of the Commerce Clausethat he "may look to . . . free competition from every producingarea in the Nation to protect him from exploitation by any."H.P. Hood & Sons v. Du Mond, supra at336 U. S.539.

[Footnote 2/3]

One distinction between a private and a governmental function iswhether the activity is supported with general tax funds, as wasthe case for the reprocessing program inAlexandria Scrap,or whether it is financed by the revenues it generates. In thiscase, South Dakota's cement plant has supported itself for manyyears.See Tr. of Oral Arg. 27. There is thus no need toconsider the question whether a state-subsidized business couldconfine its sales to local residents.

[Footnote 2/4]

The consequences of South Dakota's "residents-first" policy weredevastating to petitioner Reeves, Inc., a Wyoming firm. For 20years, Reeves had purchased about 95% of its cement from the SouthDakota plant. When the State imposed its preference for SouthDakota residents in 1978, Reeves had to reduce its production byover 75%.Ante at447 U. S. 432-433. As a result, its South Dakotacompetitors were in a vastly superior position to compete for workin the region.

[Footnote 2/5]

The Court explicitly does not exclude the possibility that,under the Commerce Clause, Congress might legislate againstprotectionist state policies.See ante at447 U. S.435-436.

[Footnote 2/6]

Since the Court's decision contains no limiting principles, aState will be able to manufacture any commercial product andwithhold it from citizens of other States. This prerogative couldextend, for example, to pharmaceutical goods, food products, oreven synthetic or processed energy sources.