Legal Report Interstate Commerce Police Powers

Running head: CLEAN COMPANY REPORT

CLEAN COMPANY REPORT 2

The Case of Clean-n-Shine (Clean) Commercial Cleaning Company

Clean is a commercial cleaning company incorporated in Maryland which uses its line of cleaning products while also selling the same online across all Mid-Atlantic States. The Delaware legislature recently enacted a law banning the importation and sale of the company’s Shine-It floor cleaner. This text demonstrates that the restriction violates the Interstate Commerce Clause and contravenes the ‘police powers’ doctrine from the 10th Amendment of the US Constitution. Clean also faces potential legal action in Virginia after a client threatened to sue for reimbursement of cleaning costs. The report shows that the Virginia court has personal jurisdiction over Clean due to its active marketing directed at residents in the forum state.

Part One

The Interstate Commerce Clause

A state violates the dormant commerce clause if it passes a law that either imposes an undue burden on, or discriminates against interstate commerce (Chapter 4). In the case of Kassel vs Consolidated Freightways, the Iowa District Court found that a law prohibiting double trailers on the state’s highways imposed an undue constitutional burden on interstate commerce (Chapter 4). The state had argued that the trucks posed potential danger to highway travelers and the law was geared at assuring safety (Chapter 4). The Court, however, judged that the law was ‘out-of-step’ with the laws in others states that did not have similar regulations and, hence, it interfered with the smooth flow of interstate commerce. Similarly, in the Clean-It case, the Delaware law does not conform with the laws of all other mid-Atlantic states in which Clean Company operates, which do not have similar legislation. The law, therefore, interferes with the flow of, and impermissibly burdens interstate commerce in contravention of the Commerce Clause.

The Doctrine of Police Powers from the 10th Amendment

The historic police power of states allows states to make their own rules in case Congress fails to legislate under the commerce clause (Chapter 4). States exercise these police powers for various purposes including environmental protection, morals, safety, welfare, and health (Chapter 4). The Delaware legislature claims to have acted within its police powers in banning the importation and sale of Clean-It for its alleged toxicity to humans. In assessing whether the Iowa legislature violated its police powers in its decision to ban double trailers in Kassel vs Consolidated Freightways, the court required the state to prove its claims that the trucks posed a threat to highway users. Statistical studies showed that 65-foor double trucks were comparable in safety to the 55-foot singles and 60-foot doubles (Chapter 4). The state had difficulty justifying its claims as statistical data produced in court indicated that, in fact, single trucks resulted in more fatalities and higher injury rates in the event of accidents (Chapter 4). In essence, double trucks offered more safety than single trucks (Chapter 4). The court ruled that the state had violated its police powers in instituting the ban as the safety argument was illusory (Chapter 4).

Similarly, in the case of Clean, Delaware will be required to justify its toxicity claims to show that the instituted law was geared at protecting the safety and welfare of state residents. The state will be deemed to have acted within its police powers if it could sufficiently prove that the mold produced by the company’s Clean-It product was indeed toxic to humans and caused floor damage. It is unlikely that the state could prove its claim for two reasons. First, none of the other Mid-Atlantic States that use the product have raised concern to the same effect. Moreover, it may be difficult to prove causality - that the toxicity in humans and floor damage is a direct result of the mold resulting from Clean-It. According to the court’s ruling in Kassel, state police powers are exercisable as long as they are non-discriminatory and do not impose an undue burden on interstate commerce. Under the current circumstances, the total effect of the law as a safety measure is so slight that it does not match the national interest in keeping interstate commerce free from interferences that affect its flow (Chapter 4). As such, the state’s institution of the ban was a violation of its police powers under the 10th Amendment.

The Importance of Understanding the Interstate Commerce Clause and State Police Powers

Understanding the effect of the Interstate Commerce Clause and state police powers helps businesses know the constitutional limits of state actions and when to seek recourse from the courts. In the case of North Carolina Board of Agriculture vs Washington State Apple Advertising Commission, the Advertising Commission challenged the state regulation requiring all companies shipping apples into the state in closed containers to either display the USDA grade or nothing at all (Chapter 4). The court found that the regulation had a discriminatory impact on the Washington State apples and imposed a burden on interstate commerce (Chapter 4). By understanding the limits of the state’s police powers, the business was able to put up a successful discrimination case. This way, they were able to obtain recourse through litigation and cut down on potential costs of changing their marketing practices in line with the new regulation or discontinuing the use of preprinted containers entirely (Chapter 4). Understanding the interstate clause and police powers, thus helps businesses make informed decisions and evaluations on whether to pursue litigation or compliance.

Further, businesses that understand the impact of interstate commerce clauses and police powers are better-placed to design their marketing strategies in compliance with regulations, thereby minimizing costs of litigation due to non-compliance.

Part Two

Does the Virginia Court have personal jurisdiction?

A court’s jurisdiction is the extent of its legal authority (Legal Dictionary, 2015). Personal jurisdiction is the jurisdiction that a court has over a person (Legal Dictionary, 2015). The Uniform Interstate and International Procedure Act imposes upon state courts the right to exercise personal jurisdiction over defendants domiciled or organized within the state for tortious activity conducted against other parties within the state (Find Law, 2008). However, the Act grants state courts personal jurisdiction over an out-of-state defendant who has not consented to suit in the forum state if the exercise of such jurisdiction does not contravene the defendant’s due process rights provided under the Fourteenth Amendment to the US Constitution (Find Law, 2008). For constitutional due process to be satisfied, the defendant needs to have established minimum contacts within the forum state such that subjecting them to litigation in the forum state then satisfies the considerations of fair play (Find Law, 2008). The determination of whether or not minimum contacts exist depends on the nature of the relationship between the defendant, the victim in the forum state, and the litigation (Find Law, 2008).

In this regard, a state court in Virginia does not contravene Due Process rights if it asserts personal jurisdiction over an out-of-state defendant who develops minimum contacts in Virginia, delivers their product to these contacts with the expectation that they will purchase the same and the products subsequently cause injury to the contacts (Chapter 3). This is rather straightforward when the defendant purposefully sells goods in the state, enters into a contract to provide services to a party in the state, or maintains a physical store in the state (Find Law, 2008). Clean, however, does not maintain a physical presence in Virginia and merely markets its products and cleaning services across several Mid-Atlantic States, including Virginia, via social media, the internet, mailings, and television.