South-Western Legal Studies in Business

State Constitution May Not Restrict Out-of-State Land Ownership
Description Federal appeals court held that a new amendment to the South Dakota constitution that prohibited corporations from buying farmland in the state was discriminatory and in violation of the Commerce Clause of the U.S. Constitution.
Topic Constitutional Law
Key Words Commerce Clause; Ownership of Farm Land; Corporations
C A S E   S U M M A R Y
Facts The constitution of South Dakota was amended in 1998 to prohibit corporations, with certain exceptions, from buying or obtaining an interest in land used for farming and otherwise from engaging in farming in South Dakota. A group of plaintiffs joined together to challenge the amendment, contending that it violates the Commerce Clause of the U.S. Constitution. The district court held that the amendment did violate the Commerce Clause and prohibited enforcement of the amendment. The state appealed.

Affirmed. The amendment to the South Dakota constitution was motivated by discriminatory purposes of restricting in-state farming by out-of-state corporations in order to advance perceived local interests in protecting family farms and the environment. Because of the discriminatory intent and effect of the amendment, it violates the Commerce Clause.

Citation South Dakota Farm Bureau, Inc. v. Hazeltine, 340 F.3d 583 (8th Cir., 2003)

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