SW Legal studies in Business

State Law Prohibiting Price Discrimination Does Not Burden Interstate Commerce
Description Appeals court upheld the constitutionality of a Missouri law that prohibits price discrimination in the sale of livestock sold in Missouri. Since the law applies equally to all, and the industry is highly competitive, it does not unduly burden interstate commerce.
Topic Constitutional Law
Key Words Commerce Clause; Burden on Commerce; Local Benefits
C A S E   S U M M A R Y
Facts Cattle and hogs raised in Missouri are often sold at feedlots to out-of-state packers who buy the animals and send them out-of-state to be slaughtered. The feedlot industry is highly competitive. Four different pricing methods are used when buying cattle and hogs. The parties to the sale agree on the pricing method used. The Missouri legislature enacted a statute to prohibit price discrimination in the purchase of Missouri livestock. A livestock seller who believes he has not received the highest price paid by a packer for livestock of comparable quality may sue for treble damages and attorneys fees. Feedlot operators sued to have the statute declared to be unconstitutional as a burden on interstate commerce. The trial court held in their favor, finding that livestock buyers were more likely to avoid doing business in Missouri. The state of Missouri appealed.
Decision Reversed. When a state law regulates even-handedly to effect a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld under the commerce clause unless the burden imposed on commerce is clearly excessive in relation to the local benefits. This statute "affects the flow of interstate commerce but it does not burden interstate commerce." Livestock buyers can easily buy livestock from feedlots in surrounding states and the law does not discriminate between in-state and out-of-state livestock buyers.
Citation Hampton Feedlot, Inc. v. Nixon, 249 F.3d 814 (8th Cir., 2001)

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