Topic: Dormant Commerce Clause
Facts: Maryland prohibited producers or refiners of petroleum products from operating retail service (gas) stations within the state. Virtually all petroleum producers and refiners were located outside of Maryland, and therefore these companies had to divest themselves of their Maryland gas stations and could not otherwise directly sell their product in Maryland. The oil companies claimed the law had a discriminatory effect on the out-of-state oil companies and impermissibly burdened interstate commerce. At trial, the oil companies prevailed on due process grounds, but the Maryland Court of Appeals reversed, upholding the law against the oil companies attacks. The Supreme Court granted review.
Holding: The law does impose some burdens on the oil companies, but the fact that the burden of the law falls solely on interstate companies does not, but itself, establish a claim of discrimination against interstate commerce. That is because the statute creates no barrier against interstate independent dealers, nor does it prohibit the flow of interstate goods, place added costs upon them, or distinguish between in-state and out-of-state companies in the retail market. The absence of these factors distinguishes this case from those in which a state law was found to be discriminatory. Moreover, the statute does not impermissibly burden interstate commerce, even if some of the oil companies were to stop selling oil products in the state. Interstate commerce is not subjected to an impermissible burden simply because an otherwise valid regulation causes some business to shift from one interstate supplier to another. The Commerce Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.