Amicus Curiae Brief — Brian E. Frosh, Attorney General of Maryland, et al., Petitioners v. Association for Accessible Medicines

No. 18-546

================================================================

In The

Supreme Court of the United States

-----------------------------------------------------------------BRIAN E. FROSH,

ATTORNEY GENERAL OF MARYLAND, et al.,

Petitioners,

v.

ASSOCIATION FOR ACCESSIBLE MEDICINES,

Respondent.

-----------------------------------------------------------------On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

-----------------------------------------------------------------BRIEF OF LEGAL SCHOLARS AS AMICI

CURIAE IN SUPPORT OF PETITIONERS

-----------------------------------------------------------------DAWINDER S. SIDHU

Counsel of Record

10500 Bit and Spur Lane

Potomac, MD 20854

(301) 633-8313

sidhu@jhu.edu

December 13, 2018

================================================================

COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

i

QUESTION PRESENTED

Does the Commerce Clause prohibit a state from

protecting consumer access to essential off-patent and

generic prescription drugs by requiring manufacturers

to refrain from unconscionably raising the price of

those drugs sold in the state?

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED .....................................

i

TABLE OF CONTENTS ........................................

ii

TABLE OF AUTHORITIES ...................................

iii

INTERESTS OF AMICI CURIAE .........................

1

SUMMARY OF ARGUMENT ................................

2

ARGUMENT ...........................................................

4

I. Is the Extraterritoriality Doctrine an Independent Branch of the Dormant Commerce

Clause? .........................................................

4

A. The Traditional Strands of the Dormant

Commerce Clause ..................................

4

B. A Possible Extraterritoriality Strand ...

5

Should the Extraterritoriality Doctrine Be

Scrapped? .....................................................

9

A. The Doctrine Lacks Textual and Structural Support, and Has Questionable

Historical Support .................................

9

II.

B. The Doctrine May Be at Odds with Wayfair and Modern Economic Realities .... 14

III.

What Does the Extraterritoriality Doctrine

Mean? ........................................................... 19

CONCLUSION .......................................................

22

iii

TABLE OF AUTHORITIES

Page

CASES

Alliant Energy Corp. v. Bie, 336 F.3d 545 (7th

Cir. 2003) ...................................................................8

Am. Beverage Ass’n v. Snyder, 735 F.3d 362 (6th

Cir. 2013) ......................................................... passim

Am. Trucking Ass’ns v. Smith, 496 U.S. 167

(1990) .......................................................................10

Ass’n des Éleveurs de Canards et d’Oies du Québec

v. Harris, 729 F.3d 937 (9th Cir. 2013)............... 20, 21

Ass’n des Éleveurs de Canards et D’Oies du Québec

v. Harris, No. 2:12-cv-05735-SVW-RZ, 2012 WL

12842942 (N.D. Cal. Sept. 18, 2012) .......................20

Ass’n for Accessible Meds. v. Frosh, No. 17-2166,

117-cv-01860-MJG, 2018 WL 3574755 (4th

Cir. July 24, 2018) ....................................... 15, 16, 21

Ass’n for Accessible Meds. v. Frosh, 887 F.3d 664

(2018) ................................................................. 16, 21

Ass’n for Accessible Meds. v. Frosh, No. MJG-171860, 2017 WL 4347818 (D. Md. Sept. 29, 2017) ......21

Bacchus Imports v. Dias, 468 U.S. 263 (1984)..............4

Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511 (1935) ... 4, 6, 7

Brown-Forman Distillers Corporation v. New

York State Liquor Authority, 476 U.S. 573

(1986) .........................................................................8

Byrd v. Tenn. Wine and Spirits Retailers Ass’n,

883 F.3d 608 (6th Cir. 2018) ........................ 14, 19, 20

City of Philadelphia v. New Jersey, 437 U.S. 617

(1978) .........................................................................5

iv

TABLE OF AUTHORITIES—Continued

Page

Comptroller of Treasury of Md. v. Wynne, 135

S. Ct. 1787 (2015) .............................................. 12, 13

Cooley v. Board of Wardens of Port of Philadelphia ex rel. Soc. for Relief of Distressed Pilots,

53 U.S. (12 How.) 299 (1852) ...................................13

Dep’t of Revenue of Ky. v. Davis, 553 U.S. 328

(2008) .........................................................................4

Edgar v. MITE Corporation, 457 U.S. 624 (1982) .........8

Energy & Env’t Legal Inst. v. Epel, 793 F.3d 1169

(10th Cir. 2015).................................................... 6, 20

Gen. Motors Corp. v. Tracy, 519 U.S. 278 (1997) ..........5

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824)...........12

H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525

(1949) .........................................................................7

Healy v. Beer Institute, Inc., 491 U.S. 324 (1989) ..... 7, 8

IMS Health, Inc. v. Mills, 616 F.3d 7 (1st Cir.

2010) ..........................................................................6

Int’l Dairy Foods Ass’n v. Boggs, 622 F.3d 628

(1st Cir. 2010) ............................................................6

Kassel v. Consol. Freightways Corp., 450 U.S. 662

(1981) .......................................................................19

Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304

(1816) .......................................................................11

Minn. v. Clover Leaf Creamery Co., 449 U.S. 456

(1981) .........................................................................5

v

TABLE OF AUTHORITIES—Continued

Page

N.W. States Portland Cement Co. v. Minn., 358

U.S. 450 (1959) ........................................................19

Or. Waste Sys., Inc. v. Dep’t of Envt’l Quality, 511

U.S. 93 (1994) ............................................................5

Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) ..... 5, 8, 9

Prudential Ins. Co. v. Benjamin, 328 U.S. 408

(1946) .......................................................................17

Seminole Tribe of Fla. v. Florida, 517 U.S. 44

(1996) .......................................................................13

South Dakota v. Wayfair Inc., 138 S. Ct. 2080

(2018) ............................................................... passim

Tyler Pipe Indus., Inc. v. Wash. State Dep’t of

Revenue, 483 U.S. 232 (1987) ...................... 11, 12, 19

U.S. Bancorp Mortgage Co. v. Bonner Mall

P’ship, 513 U.S. 18 (1994)........................................13

Wardair Canada, Inc. v. Fla. Dep’t of Rev., 477

U.S. 1 (1986) ............................................................12

West Lynn Creamery Inc. v. Healy, 512 U.S. 186

(1994) .......................................................................12

Youngstown Sheet & Tube Co. v. Sawyer, 343

U.S. 579 (1952) ........................................................13

CONSTITUTIONAL PROVISIONS

U.S. CONST. art. I, § 8 ............................................ 10, 18

U.S. CONST. art. I, § 8, cl. 3 .................................. passim

vi

TABLE OF AUTHORITIES—Continued

Page

U.S. CONST. art. I, § 9 ............................................ 10, 11

U.S. CONST. art. I, § 10 .......................................... 11, 12

RULE

S. Ct. Rule 10(a) ............................................................2

OTHER AUTHORITIES

Brannon P. Denning, Reconstructing the Dormant

Commerce Clause, 50 WM. & MARY L. REV. 417

(2008) .........................................................................5

Daniel Farber, Climate Change, Federalism, and

the Constitution, 50 ARIZ. L. REV. 879 (2008) .........20

Donald H. Regan, Siamese Essays: (I) CTS Corp.

v. Dynamics Corp. of America and Dormant

Commerce Clause Doctrine; (II) Extraterritorial State Legislation, 85 MICH. L. REV. 1865

(1987) ............................................................... 7, 8, 20

Donald H. Regan, The Supreme Court and State

Protectionism: Making Sense of the Dormant

Commerce Clause, 84 MICH. L. REV. 1091

(1986) .........................................................................7

ERWIN CHEMERINSKY, CONSTITUTIONAL LAW 445

(4th ed. 2011) ...........................................................19

Functional Analysis, Subsidies, and the Dormant

Commerce Clause, 110 HARV. L. REV. 1537

(1997) .........................................................................4

vii

TABLE OF AUTHORITIES—Continued

Page

Jeffrey M. Schmitt, Making Sense of Extraterritoriality: Why California’s Progressive Global

Warming and Animal Welfare Legislation Does

Not Violate the Dormant Commerce Clause, 39

HARV. ENV’T L. REV. 423 (2015) ..............................20

JOSEPH STORY, COMMENTARY ON THE CONFLICT OF

LAWS § 20 (1834) ........................................................5

Julian N. Eule, Laying the Dormant Commerce

Clause to Rest, 91 YALE L.J. 425 (1982) ..................10

Katherine Florey, State Courts, State Territory,

State Power: Reflections on the Extraterritoriality Principle in Choice of Law and Legislation, 84 NOTRE DAME L. REV. 1057 (2009) ..............20

Mark D. Rosen, State Territorial Powers Reconsidered, 85 NOTRE DAME L. REV. 1133 (2010) .........10

Mark Tushnet, Rethinking the Dormant Commerce Clause, 1979 WISC. L. REV. 125 (1979) .........19

Martin H. Redish & Shane V. Nugent, The Dormant

Commerce Clause and the Constitutional Balance of Federalism, 1987 DUKE L.J. 569 .................11

3 MAX FARRAND, RECORDS OF THE FEDERAL CONVENTION OF 1787, 478 (1911)) ..................................12

Richard A. Epstein, The Proper Scope of the Commerce Power, 73 VA. L. REV. 1387 (1987) ................10

1

INTERESTS OF AMICI CURIAE1

Amici are legal scholars who possess strong

interests in the sound development and consistent

application of legal principles.

Amici names and their institutional affiliations,

which are listed for identification reasons only, are as

follows:

Daniel D. Barnhizer

Professor of Law & The Bradford

Stone Faculty Scholar

Michigan State University College of Law

Loftus Becker

Professor of Law Emeritus

University of Connecticut School of Law

Maurice R. Dyson

Professor of Law

Thomas Jefferson School of Law

Katherine Florey

Professor of Law

UC Davis School of Law

Patrick Garry

Professor of Law

University of South Dakota School of Law

1

No counsel for a party authored this brief in whole or in

part. Neither counsel nor a party made any monetary contribution intended to fund the preparation or submission of this brief.

No person or entity other than the amici curiae or its counsel

made such a monetary contribution. Counsel for amici discloses

that he has provided pro bono legal services to Petitioner on an

unrelated matter. Counsel of record for the parties received timely

notice of amici’s intent to file this brief. Both parties provided

blanket consent for the filing of amicus briefs.

2

Kenneth Lasson

Professor of Law

University of Baltimore School of Law

Tayyab Mahmud

Professor of Law

Seattle University School of Law

Antoinette Sedillo Lopez

Professor Emerita

University of New Mexico School of Law

Dawinder S. Sidhu

Professor of Law (2011-2017)

University of New Mexico School of Law

Seval Yildirim

Visiting Professor of Law

University of California,

Berkeley School of Law

------------------------------------------------------------------

SUMMARY OF ARGUMENT

The open disagreement among at least three federal courts of appeals as to the scope of the extraterritoriality doctrine of the Dormant Commerce Clause,

see Pet. at 25-27, is a sufficient reason for the Court to

grant the instant petition, see S. Ct. Rule 10(a). Amici

support the underlying Petition, as the resolution of

this circuit court conflict will add a measure of clarity

to an area of law marked by significant incoherence.

Amici seek to situate this split within the broader

context of judicial and academic concerns with the

extraterritoriality doctrine as a whole. In particular,

3

courts and scholars alike are expressing doubt as to

(1) whether the extraterritoriality doctrine is truly distinct from the core protectionism, discrimination, and

balancing concepts of the Dormant Commerce Clause;

(2) whether, even if the doctrine is a free-standing

branch of the Clause, it is no longer needed in light of

the remaining branches, South Dakota v. Wayfair Inc.,

138 S. Ct. 2080 (2018), and modern economic realities;

and (3) whether the extraterritoriality doctrine is capable of precise definition or reasoned application.

These questions warrant the Court’s attention.

They strike at the very hallmarks of a sound and stable

legal system, including principled and predictable decisionmaking. State authority and the public good,

other virtues in our constitutional system, may be

additional casualties in extraterritoriality cases. Indeed, the Fourth Circuit below deployed the doctrine—

whose existence, vitality, and meaning are uncertain—

to thwart Maryland’s ability to exercise its police power

and shield its most vulnerable residents from runaway

prices for life-saving drugs. Given the precarious state

of the extraterritoriality doctrine and very real human

costs of its usage, there is no reason to postpone this

first-order reconsideration of the doctrine.

Placing the Petition against this critical backdrop,

amici respectfully submit that the Court should review

the Fourth Circuit opinion and address the critical concerns summarized herein.

------------------------------------------------------------------

4

ARGUMENT

I.

Is the Extraterritoriality Doctrine an Independent Branch of the Dormant Commerce

Clause?

A. The Traditional Strands of the Dormant

Commerce Clause.

The Framers contemplated a national economic

model in which “the peoples of the several states must

sink or swim together.” Baldwin v. G. A. F. Seelig, Inc.,

294 U.S. 511, 523 (1935). The Dormant Commerce

Clause is said to promote this vision by making it impermissible for a State to “place itself in a position of

economic isolation.” Id. at 527.

The primary form of economic isolation, and therefore the chief evil targeted by the Clause, is economic

protectionism. See Dep’t of Revenue of Ky. v. Davis,

553 U.S. 328, 337-38 (2008) (“the dormant Commerce

Clause is driven by concern about economic protectionism”) (internal quotes and citation omitted); Note,

Functional Analysis, Subsidies, and the Dormant Commerce Clause, 110 HARV. L. REV. 1537, 1537 (1997)

(“the guiding principle behind its dormant commerce

clause jurisprudence is the prevention of economic

protectionism”). Under this Court’s framework for processing Dormant Commerce Clause challenges, such

protectionist laws are per se unlawful. See Bacchus Imports v. Dias, 468 U.S. 263 (1984). Relatedly, laws that

discriminate against out-of-state persons or entities

are presumptively outlawed, though this presumption may be overcome if the governmental ends are

5

legitimate, the problem giving rise to the statute is situated out-of-state, and there is no viable alternative to

the discriminatory approach. See City of Philadelphia

v. New Jersey, 437 U.S. 617 (1978). On the other hand,

even-handed laws are presumptively valid, subject to

a balancing of the law’s burden on interstate commerce

and the law’s local benefits. See Pike v. Bruce Church,

Inc., 397 U.S. 137 (1970).

This Court has repeatedly employed this general

two-tiered analytical structure in Dormant Commerce

Clause litigation. See, e.g., Minn. v. Clover Leaf Creamery Co., 449 U.S. 456, 471-72 (1981); Or. Waste Sys., Inc.

v. Dep’t of Envt’l Quality, 511 U.S. 93, 99 (1994). To be

sure, the exact line between discriminatory and nondiscriminatory laws may not always be straightforward, see Gen. Motors Corp. v. Tracy, 519 U.S. 278,

298 n.12 (1997), but there is no doubt that the concepts

and governing standards are distinct, see Brannon P.

Denning, Reconstructing the Dormant Commerce

Clause, 50 WM. & MARY L. REV. 417, 421-22 (2008)

(“Black-letter law . . . could not be more clear,” reciting the twin discriminatory and non-discriminatory

prongs).

B. A Possible Extraterritoriality Strand.

The extraterritoriality doctrine is predicated on

the general proposition that a State’s authority extends to its borders, but no further. See JOSEPH STORY,

COMMENTARY ON THE CONFLICT OF LAWS § 20 (1834)

6

(“no state or nation can, by its laws, directly affect, or

bind property out of its own territory, or bind persons

not resident therein.”). Put differently, a state “has no

power to project its legislation into” another state.

Baldwin, 294 U.S. at 521. A finding that a statute is

extraterritorial is all but fatal; an exacting, virtual per

se standard applies to such statutes, similar to that

which is applied to protectionist and discriminatory

laws. See Int’l Dairy Foods Ass’n v. Boggs, 622 F.3d 628,

646 (1st Cir. 2010).

On the ground, there is serious doubt as to

whether a separate extraterritoriality prong truly exists. Courts have observed that the extraterritoriality

doctrine may not represent “a distinct line of dormant

commerce clause jurisprudence at all.” Energy & Env’t

Legal Inst. v. Epel, 793 F.3d 1169, 1173 (10th Cir. 2015)

(Gorsuch, J.); see also IMS Health, Inc. v. Mills, 616

F.3d 7, 30 (1st Cir. 2010) (“Those state statutes [invalidated by this Court] raised independent concerns

about protectionism under established strands of the

dormant Commerce Clause.”).

This is a well-founded point. The cases from this

Court seemingly providing the most critical support for

a stand-alone extraterritoriality doctrine may be examples of the traditional anti-protectionism, antidiscrimination, and balancing principles.

In Baldwin, this Court struck down a New York

statute because the State conceded that the purpose of

the statute was “[t]o keep the [in-state] system [of milk

production] unimpaired by competition from afar.” 294

7

U.S. at 519. In other words, the problem with the statute was its root in economic protectionism, and not its

extraterritorial reach. See Donald H. Regan, Siamese

Essays: (I) CTS Corp. v. Dynamics Corp. of America and

Dormant Commerce Clause Doctrine; (II) Extraterritorial State Legislation, 85 MICH. L. REV. 1865, 1905-06

(1987) (“The statute in Baldwin was struck down, not

because it operated extraterritorially (although some

people have read the case that way), but because of the

statute’s clear purpose to protect in-state milk producers[.]”). Likewise, in H. P. Hood & Sons, Inc. v. Du

Mond, this Court invalidated a Massachusetts statute

that permitted a public commissioner to deny a license

to a milk distributor if the license would not “tend to a

destructive competition” in the State. 336 U.S. 525, 538

(1949). Again, the statute was based on an impermissible protectionist purpose. See Donald H. Regan, The

Supreme Court and State Protectionism: Making Sense

of the Dormant Commerce Clause, 84 MICH. L. REV.

1091, 1245-52 (1986) (showing why Baldwin and Hood

are cases tied to economic protectionism).

Similarly, in Healy v. Beer Institute, Inc., this Court

invalidated a Connecticut statute that sought to boost

the in-state market for beer, as residents were traveling out-of-state to purchase cheaper beer, by requiring

brewers to affirm that out-of-state prices were no lower

than in-state prices. 491 U.S. 324, 328 (1989). The

Court wrote that if a brewer opted into the Connecticut

market, the brewer would be locked into the price

that it can charge in border States. Id. at 337-38. In

doing so, the Court invoked language indicative of the

8

extraterritoriality doctrine. But the Court also determined that the statute discriminated against “interstate brewers or shippers of beer,” “essentially

penalizing Connecticut brewers if they seek borderstate markets and out-of-state shippers if they choose

to sell both in Connecticut and in a border State.”

Id. at 341. In other words, Healy falls within in the

anti-discrimination prong of the Dormant Commerce

Clause, and thereby cuts against the existence of or

need for a freestanding extraterritoriality strand. The

same may be said of Brown-Forman Distillers Corporation v. New York State Liquor Authority, 476 U.S. 573

(1986), which involved an almost identical priceaffirming statute.

In Edgar v. MITE Corporation, Illinois required

any company seeking to take over an Illinois corporation to register a tender offer with the Illinois

Secretary of State, who could check the offer for substantive fairness. 457 U.S. 624, 626-27 (1982). A Delaware corporation sought to issue a tender offer for an

Illinois corporation. Id. at 627. A majority of the Court

invalidated the statute, enlisting a Pike balancing

analysis. Id. at 644. Only a plurality would have held

that, because a single shareholder need not be in Illinois for the registration requirement to take effect, the

statute regulated wholly out-of-state conduct. Id. at

641 (plurality). See Regan, 85 MICH. L. REV. at 1868

n.18 (the Pike analysis “received five votes and thereby

became technically the opinion of the Court.”); Alliant

Energy Corp. v. Bie, 336 F.3d 545, 547-48 (7th Cir. 2003)

(applying Pike despite the argument that Edgar calls

9

for a separate analysis for extraterritoriality challenges).

Taken together, these observations support concerns

about the existence of a truly free-standing extraterritoriality doctrine. Accordingly, the Court should address whether the extraterritoriality doctrine plays a

separate role outside of the traditional protectionist,

discrimination, and Pike aspects of the Dormant Commerce Clause.

II.

Should the Extraterritoriality Doctrine Be

Scrapped?

Even if the extraterritoriality doctrine can be

separated from the other prongs of the Dormant Commerce Clause, its continued vitality has been questioned for at least two reasons: first, it lacks textual

and structural support, and has questionable historical support; and second, it is out of step with modern

cases and economic circumstances.

A. The Doctrine Lacks Textual and Structural Support, and Has Questionable

Historical Support.

The extraterritoriality doctrine cannot be squared

with the text or structure of the Constitution, and its

historical support is mixed at best. While these points

also may apply to the Dormant Commerce Clause in

general, the Fourth Circuit predicated its decision on

the extraterritoriality doctrine in particular and thus

only the vitality of this specific doctrine should be on

the table.

10

The textual argument against the extraterritoriality doctrine is as follows: Article I, Section 8, Clause

3, the ostensible textual source of the Dormant Commerce Clause, refers only to the power of Congress to

regulate “Commerce . . . among the several States[.]”

U.S. CONST. art. I, § 8, cl. 3. The Clause mentions only

an affirmative authority vested in the Congress and

says nothing at all about the States, let alone restricting the power of the States to act. See Am. Trucking

Ass’ns v. Smith, 496 U.S. 167, 202 (1990) (Scalia, J., concurring) (“The text from which we take our authority

to act in this field . . . is nothing more than a grant

of power to Congress[.]”). It is because of this textual

flaw that some have suggested grafting the Clause

onto other express provisions of the Constitution.

See, e.g., Mark D. Rosen, State Territorial Powers

Reconsidered, 85 NOTRE DAME L. REV. 1133, 1141-42

(2010) (Full Faith and Credit Clause); Julian N. Eule,

Laying the Dormant Commerce Clause to Rest, 91 YALE

L.J. 425 (1982) (Article IV Privileges and Immunities

Clause); Am. Beverage Ass’n v. Snyder, 735 F.3d 362,

380 (6th Cir. 2013) (Sutton, J., concurring) (Due Process

Clause).

The structural argument against the extraterritoriality doctrine is as follows: Article I, Section 8

enumerates the specific things that Congress can do,

while Article I, Section 9 lists specific things that

Congress cannot do. See Richard A. Epstein, The

Proper Scope of the Commerce Power, 73 VA. L. REV.

1387, 1395 (1987) (“Article I, section 8, contains an

extensive list of separate, discrete, and enumerated

11

powers granted to Congress, whereas article I, section

9, contains a comparable list of powers specifically denied to it.”). Article I, Section 10 lists specific things

that the States cannot do. See Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304, 343 (1816) (“[Section 10 is]

a long list of disabilities and prohibitions imposed

upon the states”).

The Dormant Commerce Clause does not fit in

Section 8, as that section defines what Congress has

the power to do—not what the States cannot do. As an

apparent restriction on the authority of the States, the

Dormant Commerce Clause most naturally would be

situated in Section 10. But Section 10 contains no such

prohibition. See Tyler Pipe Indus., Inc. v. Wash. State

Dep’t of Revenue, 483 U.S. 232, 261 (1987) (Scalia, J.,

concurring in part and dissenting in part) (“[T]here is

no correlative denial of power over commerce to the

States in Art. I, § 10[.]”). Accordingly, the Dormant

Commerce Clause is an anomaly in the otherwise

straightforward constitutional design of Article I. See

Martin H. Redish & Shane V. Nugent, The Dormant

Commerce Clause and the Constitutional Balance of

Federalism, 1987 DUKE L.J. 569, 571 (“there is no

dormant commerce clause to be found within the text

or textual structure of the Constitution.”).

The historical argument against the extraterritoriality doctrine is as follows: At the time of the founding, Madison expressed concern about the ability of

States to tax goods imported from other States. He

thus believed that the Commerce Clause contained a

12

dormant dimension “that was intended as a negative

and preventative provision against injustice among

the States themselves, rather than [just] as a power to

be used for the positive purposes of the General Government.” West Lynn Creamery Inc. v. Healy, 512 U.S.

186, 193 (1994) (quoting 3 MAX FARRAND, RECORDS OF

THE FEDERAL CONVENTION OF 1787, 478 (1911)). Justice

Scalia pointed out, however, Madison’s comment was

offered in the context of Article I, Section 10, not Article I, Section 8, the ostensible textual home for the

Dormant Commerce Clause. Tyler Pipe, 483 U.S. at 263

(Scalia, J., concurring in part and dissenting in part).

Justice Scalia concluded ultimately that the “historical

record provides no grounds for reading the Commerce

Clause to be other than . . . an authorization for Congress to regulate commerce.” Id.

This Court subsequently countered, claiming that

the Dormant Commerce Clause has “deep roots” in

that it is responsive to the Framers’ concerns about the

impact of state taxes on a healthy national economy.

Comptroller of Treasury of Md. v. Wynne, 135 S. Ct.

1787, 1794 (2015). But the only founding-era source

cited in Wynne is dicta from Gibbons v. Ogden, 22 U.S.

(9 Wheat.) 1 (1824). Gibbons involved an actual conflict

or “collision” between a license issued pursuant to a

federal statute, on one hand, and a state-issued license,

on the other. See id. at 2. The Dormant Commerce

Clause applies, however, when Congress has stayed its

hand, and the Commerce Clause is “unexercised.”

Wardair Canada, Inc. v. Fla. Dep’t of Rev., 477 U.S. 1, 8

(1986). As this Court has repeatedly stressed, dicta is

13

owed no allegiance. See, e.g., Seminole Tribe of Fla. v.

Florida, 517 U.S. 44, 67 (1996) (“We adhere . . . not to

mere obiter dicta, but rather to the well-established rationale upon which the Court based the results of its

earlier decisions.”); U.S. Bancorp Mortgage Co. v. Bonner Mall P’ship, 513 U.S. 18, 24 (1994) (“invoking our

customary refusal to be bound by dicta”). Accordingly,

Gibbons may be a weak foundation on which to rest an

entire constitutional doctrine.

In the other oldest “root” cited in Wynne, the Court

apparently embraced the Dormant Commerce Clause,

but in doing so acknowledged that the “question had

never been decided by this court” or “come before

this court.” Cooley v. Board of Wardens of Port of Philadelphia ex rel. Soc. for Relief of Distressed Pilots, 53

U.S. (12 How.) 299, 318 (1852). In the overall span of

our constitutional republic, the Dormant Commerce

Clause is of relatively recent vintage. What can be said

with any certainty is that the historical support for a

dormant or negative Commerce Clause is far from definitive. See generally Youngstown Sheet & Tube Co. v.

Sawyer, 343 U.S. 579, 634-35 (1952) (Jackson, J., concurring) (extended “debate” and “speculation” about

what the Framers envisioned “largely cancel each

other”).

These textual and structural deficiencies, and this

questionable historical lineage, serve as sufficient reasons to revisit the extraterritoriality doctrine.

14

B. The Doctrine May Be at Odds with Wayfair and Modern Economic Realities.

Doubts as to whether the extraterritoriality doctrine should be part of positive law have increased in

light of this Court’s decision in Wayfair and modern

economic realities.

In Wayfair, the Court held that, consistent with

the Dormant Commerce Clause, States may impose

taxes on out-of-state online merchants regardless of

the merchants’ lack of physical presence in the State.

In several respects, Wayfair cuts against the vitality of

the extraterritoriality doctrine.

First, according to some surveys of constitutional

history, the Dormant Commerce Clause served the important role of patrolling the exclusive power of Congress over commerce and thereby of preventing the

States from stepping into that same sphere of power.

See Byrd v. Tenn. Wine and Spirits Retailers Ass’n, 883

F.3d 608, 629 (6th Cir. 2018) (Sutton, J., concurring in

part and dissenting in part) (“If Congress had authority over a form of commerce, the States usually did

not.”). Today, however, “the National Government and

States largely have overlapping power over most sectors of commerce[.]” Id. at 631 (emphasis in original).

With this shift, federal exclusivity over commerce diminished, so too did the purpose of the extraterritoriality doctrine. As one prominent jurist pointed out, “the

original function of the extraterritoriality doctrine has

been lost to time.” Snyder, 735 F.3d at 378-79 (Sutton,

J., concurring); see also id. at 378 (concluding that the

15

doctrine is a “relic of the old world”). Wayfair clarifies

that, as a historical matter, “the power to regulate commerce in some circumstances was held by the States

and Congress concurrently,” Wayfair, 138 S. Ct. at

2090, suggesting that the justification for the Dormant

Commerce Clause as a safeguard of federal power over

economic matters is lacking both historically and presently.

Second, Wayfair eschews the formalistic fixation

on geographic location (e.g., whether the regulated

drugs are manufactured out-of-state). Instead, Wayfair

instructs that, for purposes of the Dormant Commerce

Clause, attention should be paid to the nature of the

regulated transaction (e.g., whether goods are directed

in-state) and to the nature of today’s economy (e.g.,

that regulated entities easily can reach and advertise

to consumers from across the country). See Wayfair,

138 S. Ct. at 2092-93 (emphasizing the regulated entity’s affirmative decision to enter an in-state market,

not the initial location of the inventory); Ass’n for Accessible Meds. v. Frosh, No. 17-2166, 117-cv-01860MJG, 2018 WL 3574755, *3 (4th Cir. July 24, 2018)

(Wynn, J., dissenting from the denial of rehearing en

banc) (“The majority’s myopic focus on the location of

the transaction is precisely the ‘physical presence’ approach Wayfair rejected as ‘artificial in its entirety.’ ”)

(quoting Wayfair, 138 S. Ct. at 2095; emphasis in original).

Indeed, sophisticated commercial realities served

as the critical context for the Court’s understanding of

the meaning and scope of the Dormant Commerce

16

Clause. “The Internet’s prevalence and power have

changed the dynamics of the national economy,” the

Court recognized. Wayfair, 138 S. Ct. at 2097. The

Court took note of “[t]he dramatic technological and

social changes of our increasingly interconnected economy,” the “continuous and pervasive virtual presence

of retailers today,” which “mean that buyers are closer

to most major retailers than ever before—regardless

of how close or far the nearest storefront.” Id. at 2095

(internal citations and quotes omitted). In light of

these economic conditions, the Court determined that

“[m]odern e-commerce does not align analytically

with a test that relies on . . . physical presence[.]” Id.;

see also Frosh, 2018 WL 3574755, at *3 (Wynn, J.,

dissenting from the denial of rehearing en banc)

(“e-commerce and nationwide distribution chains

rendered the physical presence rule outmoded”). In

the modern economy, territorial limits are meaningless. Cf. Snyder, 735 F.3d at 378 (Sutton, J., concurring)

(“that line has come and gone”).

Third, some courts weigh the impact of multiple,

interlocking regulations in the context of Dormant Commerce Clause challenges. See Ass’n for Accessible Meds.

v. Frosh, 887 F.3d 664, 673 (2018); Snyder, 735 F.3d at

375-76. Similarly, the Court in Wayfair acknowledged

that “State taxes differ, not only in the rate imposed

but also in the categories of goods that are taxed and,

sometimes, the relevant date of purchase” and that

“[t]hese burdens may pose legitimate concerns in some

instances, particularly for small businesses that make

a small volume of sales to customers in many States.”

17

Wayfair, 138 S. Ct. at 2098. But the Court asserted

that “software that is available at a reasonable cost

may make it easier for small businesses to cope with

these [compliance] problems.” Id. Put differently,

modern economic conditions have enabled merchants

to be able to navigate successfully these various regulatory systems, and have made it less likely that instate regulations will adversely impact interstate

commerce necessitating judicial involvement. Thus, a

major justification for the extraterritoriality doctrine—

to mitigate the impact of diverse regulatory policies—

is less applicable in today’s sophisticated economy.

Fourth, under Wayfair, the Dormant Commerce

Clause and the requirements of the Due Process

Clause converge. This suggests that the work of the

latter may be sufficient to encompass the considerations of the former, and that the former is not needed.

Accord Snyder, 735 F.3d at 380 (Sutton, J., concurring).

An out-of-state entity that claims that it is subject to

an impermissible tax may turn, therefore, to the Due

Process Clause for potential relief.

Fifth, in Wayfair, the Court wrote that, at the end

of the day, “Congress may legislate to address these

problems if it deems it necessary and fit to do so.” Id.;

accord Prudential Ins. Co. v. Benjamin, 328 U.S. 408,

424-25 (1946). The Court therefore placed renewed focus on Congress to negate State laws through affirmative legislation (e.g., knocking out state laws by way of

preemption), and not on the courts invoking the

Dormant Commerce Clause (e.g., negating state laws

18

even in the absence of congressional action).2 This

would seem to signal the Court’s movement away from

the Dormant Commerce Clause as a means of dealing

with actual or potential regulations that may impact

or implicate interstate commerce.

There is ample reason to suspect that, as Judge

Sutton suggested, the extraterritoriality doctrine’s time

has come and gone. Should the doctrine be scrapped,

nothing may be lost. The concerns underlying it still

may be served by other constitutional principles. As

noted above, scholars and others have sought to find

alternative textual homes, such as the Due Process

Clause, for the extraterritoriality doctrine. Moreover,

the work of the extraterritoriality doctrine may be accomplished by way of the core protectionist, discrimination, and balancing concepts without resort to an

independent extraterritoriality analysis. See Snyder,

735 F.3d at 381 (Sutton, J., concurring) (“I am not

aware of a single Supreme Court dormant Commerce

Clause holding that relied exclusively on the extraterritoriality doctrine to invalidate a state law.”).

2

The preference for Congress to remove the physical presence

rule, see Wayfair, 138 S. Ct. at 2101 (Roberts, C.J., dissenting),

may not apply to amici’s suggestion that the extraterritoriality

doctrine be revisited as a whole. While it is up to Congress to develop economic policy, amici are placing before the Court an issue

of constitutional interpretation. Congress cannot revisit the

Court’s construction of Article I, Section 8. That responsibility lies

with this Court’s and this Court’s alone.

19

This Court should take the opportunity to determine whether, especially in light of Wayfair, the extraterritoriality doctrine is worth retaining.

III. What Does the Extraterritoriality Doctrine

Mean?

Even if the doctrine is to play a role in today’s sophisticated borderless economy, the courts’ ongoing

confusion with respect to the doctrine suggests that

the doctrine seems incapable of precise definition or

reasoned application.

The incoherence of the Dormant Commerce

Clause has been well-established by this Court and

leading scholars alike.3 The extraterritoriality doctrine, “the least understood” aspect of the Dormant

3

See, e.g., N.W. States Portland Cement Co. v. Minn., 358 U.S.

450, 458 (1959) (acknowledging past Dormant Commerce Clause

decisions are a “quagmire”); Kassel v. Consol. Freightways Corp.,

450 U.S. 662, 706 (1981) (Rehnquist, J., dissenting) (“[T]he jurisprudence of the ‘negative side’ of the Commerce Clause remains

hopelessly confused.”); Tyler Pipe Indus., Inc. v. Wash. State Dep’t

of Revenue, 483 U.S. 232, 260 (1987) (Scalia, J., concurring in part

and dissenting in part) (“our applications of the [Dormant Commerce Clause] doctrine, not to put too fine a point on the matter,

made no sense”); Byrd, 883 F.3d at 631 (Sutton, J., concurring in

part and dissenting in part) (in the modern era, the Dormant

Commerce Clause “is much more difficult to articulate and police”); see also Mark Tushnet, Rethinking the Dormant Commerce

Clause, 1979 WISC. L. REV. 125 (1979) (describing the “incoherence,”

“confusion,” and “conceptual muddle” of the Supreme Court’s

Dormant Commerce Clause jurisprudence); ERWIN CHEMERINSKY,

CONSTITUTIONAL LAW 445 (4th ed. 2011) (observing that the

Court’s Dormant Commerce Clause cases are “inconsistent”).

20

Commerce Clause, Epel, 793 F.3d at 1172 (Gorsuch, J.),

is even less coherent.4

A cursory examination of recent extraterritoriality

cases uncovers the depth of the confusion inherent in

the extraterritoriality context. For example, to give

meaning to the doctrine, courts may probe whether the

reviewed statute precludes an out-of-state regulated

entity from complying with out-of-state laws, Ass’n des

Éleveurs de Canards et D’Oies du Québec v. Harris, No.

2:12-cv-05735-SVW-RZ, 2012 WL 12842942, at *8 (N.D.

Cal. Sept. 18, 2012), or whether it precludes an out-ofstate entity from participating in an in-state commercial activity partially or completely, see Ass’n des

Éleveurs de Canards et d’Oies du Québec v. Harris, 729

F.3d 937, 948 (9th Cir. 2013). Or, the relevant inquiry

may be whether the in-state statute precludes or

frustrates federal policy. See Byrd, 883 F.3d at 629

(Sutton, J., concurring in part and dissenting in part)

4

See, e.g., Katherine Florey, State Courts, State Territory,

State Power: Reflections on the Extraterritoriality Principle in

Choice of Law and Legislation, 84 NOTRE DAME L. REV. 1057, 1060

(2009) (observing that the scope of the extraterritoriality doctrine

“remains notoriously unclear”); Daniel Farber, Climate Change,

Federalism, and the Constitution, 50 ARIZ. L. REV. 879, 899 (2008)

(“the ban on extraterritoriality is logically incoherent”); Regan, 85

MICH. L. REV. at 1884 (“[W]e have no acceptable account of the

constitutional underpinnings of the principle.”); id. at 1896 (“For

the most part, states may not legislate extraterritorially, whatever exactly that means.”); Jeffrey M. Schmitt, Making Sense of

Extraterritoriality: Why California’s Progressive Global Warming

and Animal Welfare Legislation Does Not Violate the Dormant

Commerce Clause, 39 HARV. ENV’T L. REV. 423, 424 n.3 (2015) (collecting cases and articles suggesting that the extraterritoriality

jurisprudence is “confusing and seemingly inconsistent”).

21

(“Whatever else this [state] requirement does, it does

not purport to displace or contradict congressional regulation of commerce among the States.”). Perhaps it

may be, as in the case below, whether the regulated activity is situated “upstream” and therefore located outof-state, Frosh, 887 F.3d at 671, or whether it is in the

“stream of commerce” and therefore construed to be in

state, id. at 680 (Wynn, J., dissenting). Another possibility is whether a statute is no longer extraterritorial

because the regulated entity voluntarily enters into the

in-state market. See Epel, 43 F. Supp. 3d at 1179, 1181;

Ass’n for Accessible Meds. v. Frosh, No. MJG-17-1860,

2017 WL 4347818, at *6 (D. Md. Sept. 29, 2017). Courts

also have concerned themselves with hypothetical situations in which other states adopt statutes similar or

identical to the one under consideration. See Frosh, 887

F.3d at 673; Snyder, 735 F.3d at 375-76. Yet a further

consideration is whether the state considered other alternative solutions to the issue giving rise to the law

in question. See Snyder, 735 F.3d at 375. There may

even be industry-specific rules, as courts have asked

whether the statute implicates a commercial sector

that requires a uniform or national regulatory standard. See Ass’n des Éleveurs de Canards et d’Oies du

Québec v. Harris, 729 F.3d 937, 950 (9th Cir. 2013).

This small universe of cases demonstrates that

the courts are unclear as to what extraterritoriality

means in the first place. That these federal courts

launched various, conflicting inquiries in reviewing extraterritoriality challenges raises many questions: Which

of these considerations, individually or collectively,

22

should courts apply? Which considerations, if any,

should be given greater or determinative weight compared to the others? Do the relevant considerations

change depending on the industry involved? Given the

diversity of approaches invoked across the country to

give meaning to the extraterritoriality doctrine, the

single approach utilized by the Fourth Circuit to invalidate Maryland’s anti-price-gouging statute may not

be correct. Worse, this area of law as a whole may be

incapable of any reasoned application.

This Court should address the widespread incoherence of the extraterritoriality doctrine, and either

identify the proper touchstone of extraterritoriality

cases or admit that the extraterritoriality doctrine is

not susceptible to consistent or principled application.

------------------------------------------------------------------

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

DAWINDER S. SIDHU

Counsel of Record

10500 Bit and Spur Lane

Potomac, MD 20854

(301) 633-8313

sidhu@jhu.edu

December 13, 2018