Reeves, Inc. v. Stake

447 U.S. 429, 100 S. Ct. 2271 (1980)

 

RULE:

The Commerce Clause responds principally to state taxes and regulatory measures impeding free private trade in the national marketplace. U.S. Const. art. 1, § 8, cl. 3. There is no indication of a constitutional plan to limit the ability of the states themselves to operate freely in the free market. 

FACTS:

Procedural Posture

The United States Court of Appeals for the Eight Circuit entered judgment for defendant state in plaintiff out-of-state buyer's action alleging that the state's reaffirmation of a policy to sell cement to in-state residents first violated the Commerce Clause, U.S. Const. art. I, § 8, cl. 3. The buyer appealed.


Defendant state constructed a cement plant in response to a regional cement shortage. The plant began producing more cement than the state's residents could use, so it began selling the cement to out of state buyers. Plaintiff, an out-of-state,  buyer purchased cement from the plant. The demand for cement rose, while production was slowed. The state then reaffirmed its policy of supplying in-state customers first. Plaintiff initiated an action against the state alleging that the policy violated the Commerce Clause. The appellate court entered judgment for defendant.

ISSUE:

Did defendant state's policy violate the Commerce Clause?

ANSWER:

No.

CONCLUSION:

The state had simply acted in a proprietary capacity. There was nothing in the Commerce Clause that prohibited the state from participating in the market and exercising such right in favor of its citizens. The state was not hoarding its resources. Cement was made from a combination of other raw materials. The state did not seek to limit access to those resources and materials used to make cement.

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