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Ohio Law Governing Out-of-State Truck Builders Stricken
Description Appeals court held that an Ohio law requiring out-of-state builders of specialty trucks, such as garbage trucks, to have binding service agreements with local dealers, is a violation of the Commerce Clause because it restricts interstate commerce without providing a clear benefit to Ohio consumers.
Topic Constitutional Law
Key Words Commerce Clause
C A S E   S U M M A R Y
Facts An Ohio statute states: "No remanufacturer shall engage in the business of selling at retail any new motor vehicle without having written authority from the manufacturer or distributor of the vehicle to sell new motor vehicles and to perform repairs ... unless, at the time of the sale of the vehicle, each customer is furnished with a binding agreement ensuring that the customer has the right to have the vehicle serviced or repaired by a new motor vehicle dealer who is franchised to sell and service vehicles of the same line-make as the chassis of the remanufactured vehicle purchased by the customer...." McNeilus, which buys truck chassis from various manufacturers, and installs concrete mixers or trash collection boxes on the chassis for resale, sued, contending the statute effectively blocks the company from selling its output in Ohio. The district court held for the state; McNeilus appealed.
Decision Reversed. The Ohio statute discriminates against interstate commerce in violation of the dormant (or negative) Commerce Clause. "Under dormant-Commerce-Clause analysis, courts take a two-tiered approach in determining the permissibility of state economic regulations not authorized by Congress." First, "we must ask whether Ohio's statute is a protectionist measure. If Ohio's statute directly discriminates against interstate commerce in favor of Ohio business, it is 'per se invalid'" except in a narrow line of situations. The statute does discriminate against out-of-state remanufacturers, such as McNeilus, compared to companies in the state who buy from Ohio dealers. Second, because the statute "is protectionist, we must next ask whether the law falls within that narrow group of such laws that the state might show to be justified by factors unrelated to protectionism." Ohio does not meet that burden because its claims of protecting consumers have been shown to be false since warranties are provided to buyers of the trucks.
Citation McNeilus Truck and Manufacturing, Inc. v. Ohio, - F.3d - (2000 WL 1227898, 6th Cir., 2000)

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