Horizontal Federalism and the Big State "Problem"

Abstract

Horizontal Federalism is poorly understood and increasingly important. When a big state regulates products for sale in its own markets, producers nationwide will predictably choose to modify their products to take advantage of the state’s large consumer base. Is this problematic? More importantly, does it offend the Constitution? A sharply divided Supreme Court, offering no single majority rationale, recently rejected dormant Commerce Clause challenges to California’s Proposition 12, which sets requirements for raw pork sold in California. Although the Court left California’s regulation intact, at least five Justices registered discomfort, with one dissenter expressly inviting argument under other clauses that might provide a textual hook for the Court to strike similar regulatory schemes in the future.

This Article argues that the Court reached the right result on the dormant Commerce Clause question and rejects any role for the Constitution’s self-executing horizontal federalism clauses—the largely overlooked, under-taught, and undertheorized Article IV, Section 2 Privileges and Immunities Clause, Import-Export Clause, and Full Faith and Credit Clause. None of these clauses was intended to be or is up to the task of checking a state’s nondiscriminatory regulation of products for sale in its own market. As this Article demonstrates, each was designed with different interstate evils in mind. Under our constitutional scheme, protection against having to comply with unwanted rules governing an irresistible market lies either in a company’s choice to refrain from market participation—something the Court has long posited companies have agency to decide—or with Congress stepping into the breach to impose a uniform rule.

Keywords: Constitutional Law, Federalism, Commerce Clause, Dormant Commerce Clause, Horizontal Federalism