# Amicus Curiae Brief — Moore v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0343%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1973 - **Citation:** 409 U.S. 1108 ## Text S $id a SRP gion Teg ehh ey ip bin 30. 0: Ste eel ih ate OEP Dray: 5 PA % res re ree ‘one 56 Townsend v. Yeomans, 4 Ss EE CART ss 4 0 hs 0 hae cb bd one hes 71, 91 Ungar v. Sarafite, Pe ae Ee Ie bk vcnucneb bos o0bs0 00 dan 24 Union Brokerage Co. v. Jensen, . Be Sag ee CL io vvcbvacsaeses csosees 407-00; 92 United Air Lines v. Mahin, BA 1D. GERI G I ios io ckciawss era, ee | United States v. Carolene’ Products Co., we ae a PE REE a 5 6 aiken en eeahsceusiuses 100 vii United States v. Rock Royal Co-op.., 907 U.S. S33 (1939)... cccccccrvccceccccvves 7 | United States v. South-Eastern Underwriters Assn., Bae Ue Dae CAPE) soiicsvesivocsccenveness 52 United States v. Wrightwood Dairy Co. , PLD Mics LE ELORED CK ie bees cede vetenenees 57 Western Union Telegraph Co. v. Kansas, rel Die Me eit eee pteakessce Te reT eye 85 Wickard v. Filbum, 17 US. LLL (1942) ...ccccccecccvccccccces 52 Willson v.* Black-Bird Creek Marsh Cain 27 U.S. 245 (1829) osc cece eccccceeeereccee 52 Law Reviews Greene, Hybrid State Law in Federal Courts, P G3 Bare: 2... BaP: 209 (IGA 5 a vcowiidasase Fe ha Oe Note, Foreign Corporations — State Boundaries - for National Business, 59 Yale L.J. 737 CPE acs bdancdre tases cite a koe Rabie heed 9 Note, Foreign Corporations: The Siterrelaiionehip 4 Between Jurisdiction and Qualification, ‘ SS Bad . Lids SSB (19SB) gc cw cevecsecistweas 9, 42, 47 | Wolfson and Kurland, Certificates By State Courts of the Existence of a Federal Question, 63 Harv. L. Rev. 111 (1949) ..... ieee eink ees 19, 23 Texts and Treatises A. Cox, Cotton: Demand, Supply, BI Merchandising (1953) ......... Fibpnewes ica 58 7 W. Fletcher, Cyclopedia Corporations (1960) .. 41, 67 F, Frankfurter and J. Landis, The Business of the Supreme Court (1928).......e.e00- pains 21 Hart and Wechsler's, The Federal Courts and the Federal System (Bator, Mishkin, Shapiro, Wechsler ed.) (1973) ......... ties Bae viii SAL IT RFI EEE ON ILE OR OME EM YN MB aE SESS LEE a a A ee en al . : Pi AN TIS bw Sr EE - Restatément 2d of Conflict of Laws .....eeeeee. +48 Robertson and Kirkham, Jurisdiction of the ° Supreme Court of the United States, (Wolfson and Kurland ed. 1951) ..... ostweults Ohe oe R. Stern and E. ‘Gressman, Supreme Court Practice (4th Ed. 1969) ....... sete e eines 20, 21, 34 Miscellaneous Model Business Corporation Act Annotated (2d ed. 1971) 27, 41, 46 1968 U.S. Code Cong. & Admin. News......... 95 1970 U.S. Code Cong. & Admin. News......... 12 1973 U.S, Code Cong. & Admin. News......... 13 U.S. Department of Agriculture, Cotton Situation (Nov. 1973) CS-263 . go cccscccccecs 16 U.S. Department of Agriculture, August 1 (1973) Crop Report (Aug. 9, 1973) ....ccecee 15 U.S. Department of Agriculture Ecomonic Research Service, Statistics on Cotton Related Data 1930-67, Supplement for 1972 (Feb. 1973, Statistical Bulletin No. 417)..... 15, 6° Statutes ‘Mississippi Code Ann. Sections: LNT ind 5h oh se ean cscs ck iv = S500 2200) occ, ceuls Dackucex see sus 4, 26, 54, 84 SP SA KT k ds i whe ke hw ens Duedcn kcebiwes 4 POEs ba be edn ba Oven eee pve seas un 4 te PRO ob vc ak ve jehundes (etnavenket cceeee + RO ce whic oh Ce ackihs cuneeennee ne wu 4, 26, 84 De OEE bw kv ee neck dick nia bee ae 2 ag m 4 SONS 6 bb Sikhs s kes che re Pe Cee Fe — 4 Cen oy Ses «ee vi rT ere deasewnaie 4, 49 SOUAD vcviccris aseese Sg todo caer — 4, 80 ix CERIN ETE RI LIE ERD SNE SOE OT EE ea ams Pic were kc dh bse Seas eee Tie ere eee Lee oe 59, 94 gos cass sane gn neta 41 . 706: CAAA). ones. ES iy oan ne ge 12, 94 OS Sa ape peer ere 12 FUP ks BOIL abet otbescebsoncecsssens> 41, 59, 94 7 Ate BOMOL bn bencésvecsens’ cob nbueneers 94 BP Aes SUBST b0os cb ust eben istbkweareedene 19 i es er ee Orr Eee ee Ste 14 LLRs ii SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1973 NO. 73-628 ALLENBERG COTTON COMPANY, INC., Appellant, BEN E, PITTMAN, Appellee. ON APPEAL FROM THE SUPREME COURT OF THE STATE OF MISSISSIPPI BRIEF FOR THE AMERICAN COTTON SHIPPERS ASSOCIATION AS AMICUS CURIAE - AUTHORITY TO FILE This brief of the American Cotton Shippers Association as amicus curiae in support of the position of-Appellant ~ Allenberg Cotton Company is filed with the consent of the parties. This consent was received by telephone from Mr. George C. Cochran on behalf of Appellee Pittman and from Mr. John McQuiston II on behalf of Appellant Allen - berg. Mr. Cochran and Mr. McQuiston agreed to furnish James F. Blumstein, counsel for amicus, written consent prior to the submission deadline, pursuant to Rule 42(2), 1 \ and such written approval will be filed with the Court upon receipt. If such written consent does not arrive by the submis- sion deadline, amicus requests that this be treated as a Motion for Leave to File, pursuant to.Rule 42(3). The American Cotton Shippers Association submitted a brief as amicus curiae in support of Appellant's Jurisdictional Statement and wants to present its views on the merits to the Court on behalf of its members. INTEREST OF THE AMERICAN COTTON SHIPPERS ASSOCIATION The American Cotton Shippers Association is a trade association of-cotton merchants, shippers and exporters of raw cotton. The association was founded in 1924 and is incorporated under the laws of the state of Tennessee. The association is authorized to cooperate and treat with _ Cotton Exchanges, Cotton Shippers Associations, tton Buyers Associations, Cotton Manufacturers Associations, Compresses, Gins and individuals in the United States and _ in any foreign country in evolving rules, regulations and » practices governing the cotton trade which shall be fair to _ all concerned; and is authorized to engage in all such , activities in connection with the cotton industry as come A see : epREN : + within the province of a trade association including the right to sue and be sued by the corporate name. The 492 members of the association derive their status through membership in one of five federated associations, such associations doing business in sixteen states through- out the cotton belt: Arkansas-Missouri Cotton Trade Association Atlantic Cotton Association Southern Cotton Association : AONE SASSO FULLERENE OURS ELOCL IO PLN DN ORL OLN EES IE PLACE LIE ABEL ASN LBA A SIEVE DEE a GEE BE 2 PR I NARI HE, (MOE Ps LNA OLE OBOE PLIEE TGS SMB A ENS OE LET, BEL PRG IT PUES LLG LAA A RY iP gl ‘ ; 3 Texas Cotton Association Western Cotton Shippers Association Of the total U.S. cotton crop the member firms handle over 70% of the raw cotton sold to domestic textile mills and export 80% of the U.S. crop sold in foreign markets. Four cooperative marketing associations and textile mill buyers control the remaining portions of these markets. The involvement of members of this association in the purchase and sale of cotton directly involves them to a substantial degree in the transacting of business in inter- state commerce. Any possible ruling that directly affects the continued orderly transacting of the business of the members of this association is a matter of concern to the American Cotton Shippers Association. Its interest in this case is therefore manifest, and it therefore requests leave of this Court to file this brief as amicus curiae. CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The lower court used statutory references to Missis- sippi Code 1942 Annotated, and amicus has used the same referencing. However, the Mississippi Code was recom- piled and renumbered in the Mississippi Code 1972 Anno- tated. For the Court's convenience, amicus sets forth herein the corresponding reference sections, especially since the court in Cone Mills Corp. v. Hurdle, 369 F. © Supp. 426(N.D. Miss.,-1974), an important intervening case, uses the 1972 Code numbering. as e till aaah ene | 4 1942 Code (1972 Supp. where bein me 1972 Code § 1437 § 13-3-57 §5309-221(e) ; ' §79-3-211(e) § 5309-225. §79-3-219. §5309-226 § 79-3-221° § 5309 -230 §79-3-229 § 5309-239. §79-3-247 § 5309-312 3 §79-3-289 § 5345 §79-1-27 $5346 §79-1-29 § 9697(i) ; §27-31-1(i) STATEMENT OF THE CASE The facts of this case are adequately detailed in Appel - lant's Jurisdictional Statement, pp. 3-12, and Appellant's Brief. Amicus will therefore refrain from restating the facts herein. ? : | QUESTIONS PRESENTED 1. WHETHER THIS COURTHAS JURISDICTION TU HEAR THIS APPEAL? a. WHETHER THE CERTIFICATE OBTAINED IS _ THAT OF THE MISSISSIPPI SUPREME COURT OR OF THE PRESIDING JUSTICE ONLY, AND IF OF THE COURT WHETHER IT IS ——. SIVE ON THIS COURT? b. WH THER THE MISSISSIPPI QUALIFICATION STATUTE INCORPORATES THE FEDERAL CON- _ STITUTIONAL DEFINITION OF INTERSTATE COMMERCE, THEREFORE MAKING IT A HY- BRID OF STATE AND FEDERAL LAW AND NECESSARILY RAISING THE FEDERAL QUES- ria a, Cea: RENNIE NTR IRR rs By 8 IRES PECL IE POPE R AO DLL LER OILED, Pg IO RELI SALA LONE LOA GE Sith DLA L ALAA AEG Be BSR IIA, cal OME AE LALA LOPE LENE Sia TION IN ITS CONSTRUCTION BY THE MISSIS- SIPPI SUPREME COURT? c. WHETHER IN VIEW OF THE CIRCUMSTANCES THE CONSTITUTIONAL QUESTION WAS EX- PLICITLY RAISED IN A TIMELY MANNER UND8R THE RULE IN MISSOURI EX REL. MISSOURI IN- SURANCE CO. V. GEHNER, 281 U.S. 313 (1930) OR CORN PRODUCTS REFINING CO. V. EDDY, 249 U.S. 429 (1919)? \ AUTRES See: e 2. WHETHER THE TRANSACTION BETWEEN BUYER AND SELLER OF COTTON WAS IN OR AFFECTED INTERSTATE COMMERCE? 3. WHETHER, IF IN OR AFFECTING INTERSTATE COM- MERCE, SUCH TRANSACTION NECESSARILY OR BY ITS EFFECT VIOLATED THE COMMERCE CLAUSE? SUMMARY OF ARGUMENT I, The Supreme Court Has Jurisdiction to Hear This Appeal The law of federal jurisdiction concerns the distribution of power between the states and the federal government. Federal courts do not review federal questions that are not drawn in question in state courts because of fear that decision by the federal courts may intrude on state power to resolve state law questions. Murdock v. City of Mem- phis, 87 U.S. 590 (1875). (a) But where a state court actually decides a federal question, it would be counterproductive and violative of the policy of federal -state comity if the federal courts questioned the propriety of the state court's reaching the federal question. That is a matter for the state courts themselves to resolve. Similarly, it is apparent that the federal courts should accept the statement of the state . Po LE LG LODE RELIED BID ALE EEL ALA BOI EE IGP SALI, LGN DMP IE, EAGLES LEME IGN SREP RI AOD Ea BA Mes o - AE hs OP SPE LED we te he ES Mae 6 court that it actually reviewed the federal question. The certificate is a device that has been used to clarify ambig- uous records and opinions of state cases, but this Court * has given the same deference to state court certificates that it has to state court opinions, and indeed to do other - wise would defeat the very reason for federal restraint. In this case, counsel for Allenberg sought a certificate from the state supreme court, and the court issued such a certificate in language closely paralleling a certificate found in the leading Supreme Court practice book. While Signed by the Presiding Justice, the certificate states that it is modifying the court's order to include the statement in the certificate. This Court should accept the certificate for what it says it is and for what counsel explicity sought —a certificate by the state court and not of a single justice. As a certificate of th@court, it should be conclusive on this Court that the federal question was considered by the state supreme court. (b) Mississippi law exempts transactions in "interstate commerce" from the general qualification requirement for foreign corporations. This exemption reflects a mandatory limitation on state power imposed by the Commerce Clause and therefore uses the federal concept as its own referent. The Mississippi statute therefore adopts and incorporates the federal meaning as a necessary element in construing its own statute. See Cone Mills Corp. v. Hurdle, 369 F.Supp. 426(N.D. Miss. 1974). Cf. United Air Lines v. Mahin, 410 U.S. 623 (1973). When the Mississippi Supreme Court declined to apply the statutory exemption respecting transactions in interstate commerce to the transactions herein, it was necessarily making a determination that the statute was valid and that the federal Commerce Clause was no impediment to such application. Standard Oil Co. v. Johnson, 316 U.S. 481 (1942); State Tax Commission v. ~ A a? ad Van Cott, 306 U.S. 511 (1939). See Robertson and Kirk- ham, Jurisdiction of the Supreme Court of the United States §99 (Wolfson and Kurland ed. 1951); Greene, Hybrid State Law in the Fedeval Courts, 83 Harv. L. Rev. 289 (1969), (c) In normal situations, a litigant must raise the federal question prior to the petition for rehearing. If, contrary to Appellant's contention, it be concluded that. no federal question were presented or decided prior to the petition for rehearing, that would still be timely in the UN Aes ah apt eRe pipe ote OES circumstances of this case. Under the doctrine of Saunders ; v. Shaw, 244U.S. 317(1917), and Missouri ex rel. Mis- souri Insurance Co. v. Gehner, 281 U.S. 313 (1930), a litigant is not required to anticipate deprivation oftéonsti- tutional rights or to seek explicitly to protect them in ad- vance of their actual deprivation. Allenberg won its lawsuit in the trial court, which found Allenberg exempt from the qualification requirement. It was the decision of the Mississippi Supreme Court that resulted in the actual infringement on federal Commerce Clause interests, and Appellant raised this point at the earliest time in the peti- tion for rehearing. The federal question in such circum- stances is timely raised. Cf. Corn Products Refining Co. v. Eddy, 249 U.S. 428, 432 (1919). Il. Application of the Qualification Requirement and the Penalty Sanction Violates the Commerce Clause. (a) The underlying transaction herein is covered by the terms of Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282 (1921). In Dahnke-Walker a purchase was made by an agent of a foreign corporation in Kentucky for shipment to Tennessee. This Court held that the purchase as well as the actual transportation constituted interstate commerce and held invalid the state's qualification require - ment in its application. Allenberg is a cotton merchant SE PRES LICE PGE SERRE RM PS = ee a ae o ‘. a oS Santee i . ee We as a JG whose business is the facilitation of interstate commerce in cotton. The market for cotton is worldwide, and it is universally recognized that the market for agricultural commodities most closely resembles the classical market ‘structure. Congress has confirmed this reality and the national interest in maintaining a smooth operating and privately run market system in cotton. It has adopted in legislative findings the concept of commerce embodied in Dahnke-Walker and related cases that encompasses the negotiation, purchase, and sale as well as the actual trans- | portation of the cotton out of state. The findings of Congress should be accorded great weight, and this Court should be very wary of interfering with a pattern of commercial development fostered by Dahnke-Walker and subsequent state and federal legislation adopting its concepts. Cf. Flood v. Kuhn, 407 U.S. 258 (1972). (b) The nature of the Mississippi statutes as applied herein impermissibly intrude on the Commerce Clause. It is inconsistent with the free trade concept embodied in the Commerce Clause that a state be able to require a foreign corporation to secure a license to transact inter - ‘state commerce within its borders. Requiring a certificate of authority for interstate transactions manifests a restric- tion on interstate commerce at war with the precepts of a national marketplace and assured access to local markets for interstate commercial activities. Dahnke-Walker and its progeny state explicity that the nature of such a regula - tion violates the Commerce Clause. Moreover, the statute is uneven in its application to Mississippi residents and to foreign corporations. Con- tracts entered into by foreign corporations are not void, but merely unenforceable by the foreign corporation. On the other hand, if a Mississippi resident seeks to maintain a bargain, he can sue on the contract. ‘This is the kind ES PALE GRRE IAN ee NN PORE IE ORY: ERE A : * til 9 of parochialism that fosters retaliation and recrimination among states and undermines the free trade area foreseen by the Founding Fathers and certainly a major reason for i: ( our national prosperity today. TUR AR RN EEN (c) The actual effect of the Mississippi statutes in : their application herein is to unduly burden interstate com- _ merce, ‘The state's primary interest is in protecting its citizens against fraud by overreaching foreign corporations. The qualification requirements were designed to provide accountability to local citizens by establishing a basis for acquiring jurisdiction. NAACP. v. Alabama, 377 U.S. 288, 305 (1964); Cone Mills Corp. v. Hurdle, 369 F.Supp. at 431. But since International Shoe Co. v. Washington, 326 U.S. 310 (1945), wherein the "minimum contacts" doctrine was formulated for purposes of allowing state jurisdiction over foreign corporations, all states have adopted long arm statutes. See Note, Foreign Corpora- tions — State Boundaries for National Business, 59 Yale L.J. 737 (1959). Mississippi has a long arm statute and a specific provision for permitting service on local agents of foreign corporations. oa: 5346 Miss. Code 1942 Ann. Since Allenberg could eaSily have been served, the interests of the state are somewhat diminished. Moreover, the Mississippi statute, unlike the Model Business Corporation Act from which it is adopted and un- like the vast majority of other states, requires that a foreign corporation have qualified at the time the contract is actual - ly made in order for it to maintain an action in state court. This is obviously a severe penalty which can no longer be justified in light of modern rules of service of process and jurisdiction. See Note, Foreign Corporations: The Inter- relationship Between Jurisdiction and Qualification, 33 Ind. L.J. 358 (1958). By absolutely barring foreign corpora- tions from state courts, the Mississippi law also promotes pees ' " SERS RN EER NET ER ROT EE ER i cas chk eid . amount of business they do in a particular state does not _-warrant it. Or it could deter a new entrant into the market- place (e.g. a Japanese corporation) from, buying in a state. The United States balance of payments, situation can ‘ill afford the imposition of insular qualification requirements on a state by state basis where the effect may well be re- ducing the ease with which prospective buyers enter the American agricultural marketplace. Moreover, imposi- tion of state by state qualification requirements for inter - state cotton transactions would allow highly capitalized and big-volume brokers and buyers to gain a protected position in the cotton market,’ with excessively ' concentrated power. This would inherently open up the opportunity for abuses, such as artificially controlled supply and lower prices for individual farmers, by limiting the number of potential purchasers of his produce. 7 Finally, it is important to understand peecisely how the forward contract operates in an individual situation. ~ ~ ; 2 4 hon LOLITA LL. EA REGLL LINC LAS LE VO LLEL LLY EMT LLL EEO LE LE DAE EN OLR ne .' " 3 , ; Ty . ¢ i ; ke AG 18 The Allenberg-Pittman transaction involved in this case adequately demonstrates the commercial consequences of a”breach of contract, The most important point to bear in mind is that Allenberg stood to gain nothing from the improved market price for cotton between planting and harvest. Allenberg makes,commitments to furnish cot - ton at a specified future time at a certain price, The terms of this commitment reflect the market situation at the time the contract is made, By the time of harvest, Allenberg has long since committed itself to -_ the cotton it has agreed to buy from farmers, | - in reality, Allenberg is in the same situation as the farmer, having committed itself to sell at a low market price while the price went up. But Allenberg's contractual ~ obligation must be met; If it, cannot enforce its original con- tract with the farmer, then Allenberg must purchase spot cotton at the time it must deliver, .The $18,000 price differ - ential in this case comes directly out_of Allenberg's pocket as a disruptive business loss, Quite on the contrary for Pittman, his planning and commitments, like Allenberg's, were all based on the lower’ price; enforcement of the Allen- berg-Pittman contract will bring about no dislocation for ‘Pittman as a result, This is therefore not a case of which party will benefit from a fortuitous rise in price —that is, 4} among competing claimants for windfall gain, Rather, this is a case where one party (Pittman) seeks windfall profit by saddling the other party (Allenberg), which had already locked itself into a commitment based in good faith on the deal with Pittman, with substantial out of pocket, disruptive losses. Moreover, if the price of cotton had declined, the contract under Mississippi law would be entirely en- forceable by Pittman against Allenberg. Miss, Code 1942 | Ann, §5304-234, This is important background in under - standing the commercial realities among the parties as well as the institutional interests.in a "sound, —? * i le atin a sat dis tn remap PRE thy YG hit MOD, tty by a et ser congo ge. A F OA it GURL 6 A Pca ARETE, ABE LIE CD AA OO AE. i RES CB et PUNE, es, and privately operated system for distributing and market - ing agricultural products..." 7U.S,C, §1621. ARGUMENT I, VHE COURT HAS JURISDICTION TO HEAR THIS APPEAL The jurisdiction of this Court is invoked pursuant to 28 U.S.C. $1257(2), which permits appeals from final judg - ments of the highest court of a state "where is drawn in question the validity of a statute of any state on the ground of its being repugnant to the Constitution . . . and the decision is in favor of its validity." While it has been argued that "[i]f there is any area of the law which should be crystal-clear, it is the jurisdiction of the Supreme Court of the United States,". Wolfson and Kurland, Certifi- cates By State Courts of the Existence of a Federal Ques- tion, 63 Harv. L. Rev, 111 (1949), this clarity, unfortun- ately, has not always been attained. + A, A. Appeal or. Certiorari The critical question here is whether Allenberg drew in question the constitutionality of the Mississippi statute as applied so as to justify the exercise of appellate juris- Giction by this Court, As an initial matter, there is an issue whether the ''validity" of a state statute is sustained within the meaning of §1257(2). When the state court holds the statute applicable to a particular set of facts as against a contention that such an application is invalid on federal grounds, Citing Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282 (1971), Stern and Gressman arsue that such a state court decision— the kind under review here — does fall within the jurisdictional statute: * This is true even though the statute on its face bears no federal impediment. Thus where the court holds that eye D A ESS EE € PPE OAD RIE LIC RR EL LE EN Lt —— 20 a particular transaction is intrastate rather than inter- state commerce and that on such basis the state statute may be applied and enforced, the validity of the statute has been sustained as to those facts. R. Stern and E. Gressman, Supreme Court Practice (4th Ed.) 85 (1969) (hereinafter cited as Sterm and Gressman). - Of course, Dahnke-Walker is a case heavily relied upon by Appellant with respect to the merits of this Cause; its jurisdictional significance is especially important also because, upon reargument, the Court found an appeal the appropriate method of review. a , Updan piads Sites This Court's decision in Internationl Shoe Co. v. State of Washington, 326 U.S. 310(1945) discarded the "doing business — presence or implied consent" rationale for jurisdiction "and its mechanistic determinations in favor of a more flexible and realistic jurisdictional basis of reasonableness in view of the activity within the state." Note, Foreign Corporations: The Interrelation of Juris- diction cnd Qualification, 33 Ind. L.J. 358, 373 (1958). Chief Justice Stone described "certain minimum contacts" within the state ''such that the maintenance of suit does not offend ‘traditional notions of fair play and substantial justice.""" 326U.S, at 316. Relevant factors included the character of the corporation's activities and not just their quanti.,. Hebe oat: PY In the subsequent case of Perkins v. Benquet Consoli- dated Mining Co., 342 U.S. 437 (1952), this Court indi- cated an expansion \n the constitutionally permissible ex- tent of state jurisdiction over a non-qualified foreign corporation. International Shoe reduced the limitations on the basis of and) Perkins reduced the limitations on the extent of jurisdiction over non-qualified foreign corpora - tions, and these jurisdictional criteria are now embodied in the Restatement, 2d of Conflict of Laws. See sections 42, 52, and 43-51} They are also reflected in the juris- \ dictional and service of process statutes of Mississippi. = : . i= ~~ 49 Mississippi corporate law allows service of process on foreign corporations even if they have not qualified to do business in the state. Section 5309-230 provides for service of process on foreign corporations that are au- thorized to transact business, but the last sentence notes that "Nothing herein contained shall limit or affect the right to serve any process, notice or demand, required - or permitted by law to be served upon’a corporation in any other manner now or hereafter permitted-by law." \ And § 5345 states that "Any corporation claiming existence under the laws of any other state ..., found doing business in this state, shall be subject to suit here to the same ex- tent that corporations of this state aré...."* Section 5346 then sets out the basis for serviee of process on foreign corporations which do not qualify to do business in Mis- sissippi pursuant to 5309-221, -225, and -226. Section 5346 provides in pertinefit part as follows: Process may be served upon any agent of such foreign corporation found within the county where the suit is brought, no matter what character of agent such person may be; and in the absence of an agent, it shall be suf- ficient to serve the process upon any person, if found within the county where the suit is brought, who repre- sented the corporation at the time of the transaction out of which the suit arises took place, or if the agency through which the transaction was had be itself a corpo- ration, then upon any agent of that corporation upon whom process might have been served if it were the defendant. In the instant case plaintiff was represented in its deal - ings with all defendants herein by a Mr. Hayward Coving- ton. Mr. Covington has a residencé in Marks, Mississippi, and by the terms of § 5346 plaintiff Allenberg could have been served, in case of any breach on its part, through SES ACRS METS HSM LACE A iad HAE: ANA AAR NR RII ASG TUR lB a a a a i oe _ Se ar Oe ae 50 service on Mr. Covington. Section 5346 is perfectly ade- quate to assure cotton growers their day in court in case of a prospective breach by a cotton purchaser. See also § 1437, Mississippi's long arm statute. The supposed protection against fraud ernbodied in § 5309-239, the bar to access to Mississippi courts, is quite clearly overkill in the context of the cotton producer/cotton purchaser re- lationship. Section 5346 offers a mutch less intrusive means of protecting Mississippi farmers against fraud by foreign corporate purchasers. P _ The diminished limitations on the exercise of state jurisdiction over foreign corporations have spawned vastly expanded jurisdictional statutes not oniy in Mississippi. but elsewhere, as reflected by the 1971 edition, Restate - ment 2d of Conflicts. It is therefore fair to conclude that _ “insofar as qualification sought jurisdiction through actual consent and sought to induce compliance by a negative, self-enforcing, no-suit sanction, the present rules and the results thereunder are without reason. A non-complying foreign corporation is denied access to the courts through the application of a no-suit sanc- tion on the ground that by its failure to qualify it has not made itself available to the local forum. But in truth, if the state or a private party plaintiff sought to bring an action against the corporation, jurisdiction could be had. . . The result is that defendants to actions brought by corporate plaintiffs are often re- lieved of their just obligations, a result that should be permitted only if necessary to serve a greater public interest. Such justification is lacking now and perhaps © always has been." Note, Foreign Corporations: The Interrelation of Juris- diction and Qualification, 33 Ind. L.J. 358, 376 (1958). ol The existence of a satisfactory alternative to the penalty provision——an alternative which has a much less harmful effect on interstate commerce and does not chill such commerce — is relevant in determining the constitutional validity of the Mississippi statute in this case. See gen- erally Pike v. Bruce Church, 397 U.S. 137, 142 (1970) (The extent of the burden on interstate commerce that will be tolerated depends in part on whether the state's, inter - ests "could ‘be promoted as well with a lesser impact on interstate activities."'); Dean Milk Co. v. Madison, 340 U.S. 349, 354 (1951) (Economic barriers to interstate commerce cannot be erected under the police power "if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available.") The existence of alternate means of protecting against fraud, by serving process on a foreign corporation's agent, or through the long-arm statute, highlights exactly what is: at stake ini this litigation. Defendant seeks not to vindicate the interests of the state in guarding against fraud. That is a masquerade, a smokescreen, a sham. Defendant, rather, risks undermj ing the national system of commerce so necessary to the economic welfare of the nation, not for the noble purpose of defending the interests of Mississip- pians against overreaching foreign corporations but for self-aggrandizement, pure and simple. There is and can be no inference of wrongdoing on the part of plaintiff in this transaction; but if defendant should claim some griev- ance against plaintiff, he has his remedy in the courts of the state of Mississippi pursuant to § 5345 and §5346 or § 1437. Clearly, it is not a fair day in court that defend- ant seeks but rather an absolute roadblock to an impartial hearing on the merits. Indeed, on that hearing on the merits, the trial court has-already ruled against defend- ant. This is not protection against fraud; it is sheer venality. 3 ‘ nate bik Gp Be RAE ewes 52 B. The Issues Under the Commerce Clause The Commerce Clause has long been viewed as a major source of federal power. Since the days of the New Deal, the courts have found increasingly broad Congressional authority to protect and promote an integrated national market. See, e.g., National Labor Relations Board v. Jones &Laughlin Steel Corp., 301 U.S. 1 (1937); Wickard v. Filburn, 317 U.S. 111 (1942); Heart of Atlanta Motel v. United States, 379 U.S, 241 (1964); Katzenbach v. MgClung, 379 U.S. 294 (1964). But as this Court noted in Wickard, it was Chief Justice John Marshall who @e- scribed the federal commerce power with a "breadth never yet exceeded."" 317U.S, at 120. Itwas Marshall who held an organic concept of commerce, and that view has held pre-eminence for at least thirty-five years. Cf. United States v. South-Eastern Underwriters Assn., 322 U.$. 533, 547 (1944) (Insurance contracts, though local in nature, are part of a "chain of events which becomes interstate commerce."’) That the Commerce Clause grants extensive power to the federal government, however, has not precluded all state exercise of regulation that might have some bearing on commerce. Since the decision in Wilson v. Black- Bird Creek Marsh Co., 27 U.S. 245 (1829), this Court has recognized that there is some room for legitimate state regulatory power, even where there is an incidertal effect on interstate commerce. See Cooley v. Board of Port Wardens, 53 U.S. 299 (1851). Of course, where Congress chooses to exercise its authority, inconsistent state legislation affecting commerce must fall. See gen- erally Southern Pacific Co. v. Arizona, 325 U.S. 761, 767 (1945). But even in the absence of Congressional action, state legislation will be held invalid under the negative implication of the Commerce Clause,where there ~ 53 is a need for national uniformity or where the burden on commerce is direct or substantial. See Cooley; Southern . Pacific, Pike v. Bruce Church, 397 U.S. 137 (1970). As the Court stated in Southern Pacific, 325 U.S. at 769: For a hundred years it has been accepted constitutional doctrine that the Commerce Clause, without the aid of Congressional legislation, thus affords some protection from state legislation inimical to the national commerce, and that in such cases, where Congress has not acted, this Court, and not the state legislature, is under the Commerce Clause the final arbiter of the competing demands of state and nationa] interests. See also Freeman v. Hewit, 329 U.S. 249, 252 (1946). In analyzing any particular state statute in light of the Commerce Clause, the Court will examine both the nature _and the effect of the burden on commerce. Southern Pacific, 325 U.S. at 770; Pike, 397 U.S. at 145. It will determine whether Congress has spoken on the issue since Congress has the undoubted power to redefine the distribu - tion of power over interstate commerce." Southern Pacific, 325 U.S. at 769; cf. Union Brokerage Co. v. Jensen, 322 U.S. 202, 209 (1944). It will determine whether uniformity of regulation is necessary, for if it is then state power must yield. See Bibb v. Navajo Freight Lines, 359 U.S. 520(1959). It will examine the exist- ence of alternatives available to the states that have a .* lesser impact on interstate commerce. See Pike, 397 U.S. at 14; Dean Milk Co. v. Madison, 340 U.S. 349, 354 (1951); Parker v. Brown, 317 U.S. 341, 367 (1943) (state's measure "appropriate to the end sought"); Duck- worth v. Arkansas, 314 U.S. 390, 393, 396 (1941) (statute “reasonably necessary" to achieve state's goals). And finally, even if the effect of the state law on commerce is a Thus, in United Air Lines the Court viewed Edelman and Nashville as cases involving an indirect and remote burden on interstate commerce. Contra: Southern Pacific Co. v. Gallagher, 306 U.S, 167, 176(1939). Yet these two cases certainly lend themselves to the same analytical ambiguity as Federal Compress and Chassaniol. That is, they can be seen either as holding that the tax was on intra state commerce or constituted an indirect burden on inter - state commerce. The modern and analytically preferable approach is to interpret the scope of interstate commerce broadly and then to determine whether the effect on such commerce is excessively burdensome. See Evco v. Jones, 409 U.S. 91 (1972). Language in Federal Compress itself indicates that the balancing approach was the one employed hv Justice Stone. _ He noted that property withdrawn from transportation, "whether intrastate or interstate, until restored to a transportation movement interstate, has often been held subject to local taxation." 291 U.S. at 21.’ He concluded that the privilege tax created an indirect and remote burden on interstate commerce and therefore did not transgress constitutional limitations. 291 U.S, at22. Cf. Edelman, 289 U.S. at 252; Nashville, 288 U.S. at 267. It is this balancing analysis that most nearly conforms to the subse- quent developments in Commerce Clause jurisprudence and should be applied herein, despite some admittedly confusing references to taxation of intrastate activity in Federal Compress, Chassaniol, Edelman and Nashville. In United Air Lines Justice Blackmun acknowledged that this area of state taxation law is cloudy and complicated, but he went on to attribute this primarily to “the varied nature of interstate activities" which make line drawing difficult. 410U.S. at 629. From that statement, it would appear that this Court now views the early state Shey at PARA IEG TENS EEE ENS AT ALLE: AOE IT REET EN HG sia tng OPE A ae ETI, oer, | SG imei ades GE PIT LTT A MOH 74 tax cases as involving or affecting interstate commerce but not so directly or burdensomely as to be —eet Moreover, tax cases raise somewhat different and spe- cialized issues. See Lemke v. Farmers' Grain Co., 258 U.S. 50, 55(1922). Interstate commerce is not im- munized from bearing its fair share of taxation, provided the tax is non-discriminatory and equitably apportioned. See B. Schwartz, Constitutional Law 121-22 (1972); Cf. Eli Lilly & Co. v. Sav-on-Drugs, Inc. , 366 U.S, 276, 289 (1961) (Douglas, J., dissenting); Evansville-Vander- burgh Airport Authority, supra; United Air Lines, supra. As the Court has said, the state has a legitimate and im- portant interest in securing revenue from activities that derive govermentally conferred benefits. At the same time, the Court will be vigilant to minimize the danger of double taxation of interstate commerce. The objective is to achieve fiscal fairness so that businesses contribute tor the maintenance of such governmental services as police and fire protection, maintenance of access roads, and maintenance of instrumentalities of interstate com - merce. See United Air Lines; Evansville-Vanderburgh Airport Authority. Since taxation 1s the ouly means of raising revenue, state taxation cases are somewhat ,su generis and must be decided on anad hoc basis. Even in the taxation area, however, Justice Frankfurter often warned of the potential dangers of state intrusion on fed- eral interests. For example, in Freeman v. Hewitt, 329 U.S, 249 (1946), in determining the limitations on a state income tax, the Court found an impediment on the "cur - rents of commerce across the State line, while the aim of the Commerce Clause was precisely to prevent States from exacting toll from those engaged in national commerce." 329 U.S, at 254, Yet in Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450 (1959), the Court upheld a fairly apportioned tax concededly on interstate activities, 75 These tax cases reflect the difficulty the Court has had in accommodating state revenue interests with federal interests in preserving an integrated national marketplace. See Freeman v. Hewit, 329 U.S. at 252. The states have legitimate claims on interstate commerce to pay its fair share of local costs, and governmental revenue, for better or worse, must derive from some form of taxation. Local 1 i interests are therefore served only when revenue can be collected (though there are of course different types of taxation), and this then brings about the delicate balancing this Court has undertaken: to minimize the danger of _ double or excessive taxation while simultaneously allow- ing the states a source of revenue “having a relation to l the event taxed."" United Air Lines v. Mahin, 410 U.S, at 630. The goal is to achieve a "fair result," | In this section, amicus is urging that the transaction involved herein be declared in interstate commerce. The question whether this is then an undue burden on commerce is addressed in the next section. While the tax cases are decided within a Commerce Clause framework, the out- come often turns on different factors, enumerated above Federal Compress and Chassaniol must be viewed with these considerations in mind.’ Tit is instructive in this regard to examine the concurring opinions of = Justice Harlan in Northwestern States Portland Cement Co. v. Minnesota, 358 U.S, 450, 468 (1959) (Harlan, J. concurring) and Eli Lilly and Co. v. Sav-on-Drugs, Inc., 366 U.S, 276, 284 (1961) (Harlan, J. concurring), Northwestern Cement held that a state could constitutionally tax net income from the exclusively interstate operations of a foreign corporation. Justice arlan‘s concurrence expressly rejects the view that prior cases allowed state taxation only on interstate business, 358 U.S, at 466. He concluded that this was “both novel doctrine and unreal analysis... because this Court has never held that activities... performed solely in aid of interstate sales, are intrastate Commerce,” Id, at 468. In Eli Lilly, however, Justice Harlan explicitly noted that the basis for exerting state regulatory authority (quali- fication to do business) was that the activity of the foreign corporation was localized and wholly separate from interstate commercé.~366 U.S, at 285, 227, His clear understanding is that a qualification requirement for inter- staie. transactions would be unconstitutional, even though a tax might pass muster, my Nee PUNE AMES arn ty Met os age i OPO Patel Weta Lie to. ae ta ee ae ee Let Leen EAN YET AN Hee a ea 76 In any event, even assuming the relevance of the tax cases and the ongoing vitality of the "mechanical test" of Federal Compress and Chassanio], they are distinguishable on their facts from the situation involved in the present contrcversy and certainly cannot support the conclusion that the transaction herein was not in or did not affect interstate commerce, As the court in Pike noted, the early Mississippi cases involved cotton that had come to rest in Mississippi, and "“[b]efore shipping orders [were] given, it [had] no ascer- tainable destination without the state." 291 U.S, at 21. In Pike Arizona had imposed cértain packing standards on cantaloupes grown in the state.) The grower, however, sought to send the cantaloupes td its packing plant outside the state, and therefore the Court noted that they "were destined to be shipped to an ascertainable location in Cali - fornia immediately upon harvest,"" 397 U.S. at 141, Like- wise, Allenberg bought the cotton here in question for the purpose of shipping it to its customers without the state of Mississippi. Justice Stewart's citation of Lemke and Shafer in support of his conclusion indicates the Court's continued reliance on their view of interstate commerce. Not only didn't the cotton in Federal Compress and Chassaniol have an ascertainable destination outside the state at the time the tax was levied, but indeed there had not yet been an interstate transaction of any kind, The Court in Dahnke-Walker, Lemke, and Shafer held that an interstate purchase for transportation across state lines constitutes an interstate transaction, but in Federal Com- press and Chassaniol there had been no interstate sale at the time the tax became due. The Court in Chassaniol makes this point explicitly, 291 U.S. at 587: Ginning cotton, transporting it to Greenwood, and ware - housing, buying and compressing it there, are each, c \ mugen ati ~ Af j = 77 like the growing of it, steps in preparation for the sale and shipment in interstate or foreign commerce. But each step prior to the sale and shipment is a transaction local to Mississippi... (Emphasis supplied) The critical significance of this distinction is made manifest in Parker v. Brown, 317 U.S. 341 (1943), where the Court applied the "mechanical test" of Chassaniol to a California statute that restricted the marketing of raisins, The Court observed that a state could tax a sale where the purchaser ultimately intended to reseil in inter - state commerce if the original transaction were itself intrastate, That is, the Court found that no case had held that a state could not regulate the sale of an article within the state because the buyer, after processing and packing would sell and ship that article in interstate com- merce, Importantly, however, the Court in Parker noted that before the packing and processing of raisins they were not in the stream of commerce. On this very basis, the Court distinguished Lemke and Shafer, as the Court sub- sequently did in Pike, on the ground that the regulation in those cases was of purchasers of grain within the state for immediate shipment out of state without resale or pro- cessing. For that reason the purchase itself in Lemke and Shafer was a part of commerce. 317 U.S. at 361. Similarly, the contracts in the instant situation expressly identify Allenberg as the purchaser. The forward contract Pee cui defendant and Allenberg was itself a transaction “~in interstate commerce, and it was clear that Allenberg, the purchaser, was going to transport the cotton into another state as soon as practicable after it obtained legal possession, There was no processing in Mississippi while the cotton was in Allenberg's possession; users of Mississippi cotton are almost invariably located outside of Mississippi. Even if ginning and compressing be deemed RCS Ae SG REDE SANG ii abba Ain % | Sa on GG Reus yee tis 78 processing, that was carried out before delivery of the cotton to Allenberg and therefore was not carried out by it or under its supervision. (A-7, 943). Moreover, from the outset the cotton has a destination outside Mis - sissippi, and that location became specifically ascertain- able as soon as the grade and staple length of the cotton were determined by government classifiers, For these reasons, the situation in the present case is distinguish- able from Federal Compress and Chassaniol, See Cone Mills Corp., 369 F. Supp. at 436-37, There may also be some question of the relevance of the recent decision in Kosydar v, National Cash Register Co... 42 U.S.L.W. 4767 (U.S. May 20, 1974), which in- volved the validity of a state taxation statute under the Import-Export Clause, Article I, §10, clause 2, Kosydar represents both the differences between Commerce Clause and Import-Export Clause analysis and the differences between taxation and regulatory measures. Justice Stewart in Kosydar recognized that by its terms the prohibition on state taxation contained in the Import- Export Clause is absolute: "no duties or imports are allowed ‘except what may be absolutely necessary for executing [a state's] inspection laws.'" 42 U.S.L.W. at 4768. Aconclusion that a commodity has entered the stream of export thereby immunizes it automatically from State taxation. The Import-Export Clause is designed to promote uniformity throughout the nation. Thus, even Congress is constrained by Article I, §8, Clause 1 to im- pose duties and imports uniformly throughout the country. This uniformity is important to prevent unwanted competi - tion among states and to enable the United States to present a united front in foreign trade affairs. In Kosydar the Court granted certiorari “because the case involved im- portant questions touching the accommodation of state and 79 federal interests under the Constitution." 42 U.S.L.W. at 4768. It is understandable, then, that given the absolute prohibition on state taxation imposed by the Import-Export Clause, the Court would be extremely sensitive to the need to narrow the definition of "export" so as to protect only those federal interests underlying the clause. For this reason, imposition of a strict threskoid test for determining when a commodity enters the streair of export is appropriate. A broader interpretation neces - sarily would mean rigid limitations on state revenue raising powers, and as Justice Frankfurter noted, the purpose of the Import-Export Clause was “not to relieve property eventually to be exported from its share of the cost of local services,"' Joy Oil Co. v. State Tax Commission, 337 U.S. 286, 288 (1949), cited in Kosydar, 42 U.S.L.W. at 4769-70. No similar absolute rule exists with respect to interstate commerce, State power with an indirect effect on commerce has long been held constitutional, Pike v. Bruce Church, 397 U.S. 137 (1970), and states are constitutionally entitled to tax net revenues derived from interstate business, provided they are fairly appor- - tioned, not discriminatory and not excessive, See Evans- ville-Vanderburgh Airport Authority District v. Delta Air- lines, Inc., 405 U.S. 707 (1972); Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450 (1959). Moreover, federal interests in commerce are broader, and it is reasonable that threshold definitions of interstate commerce will be broader, especially since the impact of such a finding is not generally conclusive in limiting state power, Kosydar, like Federal Compress and Chassaniol, is a taxation, not a regulation case, National Cash Register has its corporate headquarters in Dayton, Ohio and the warehouse was located there as well. Toa great degree 3 s 4 As : 4 : 4 a et | en tA # 80 it had localized its business and drew heavily on the ser - vices of the community, Cf. Union Brokerage Co. v. Jensen, 322 U.S. 202 (1944). As Justice Blackmun pointed out in United Air Lines v. Mahin, supra, a state has a substantial interest in securing revenue for service rendered to a corporation, and allowance of the Ohio state tax in Kosy- dar would not defeat the federal interest in uniformity nor discriminate against exports. An analogous issue could arise if the case under review involved an attempt by Mississippi to tax Pittman’s cotton while in its possession at the compress, It might be a reasonable and equitable accommodation of federal and State interests if such a tax were exacted (though Missis - sippi specifically exempts cotton in the possession of producers from personal property taxation for a period of two years subsequent to harvest). (Miss. Code 1942 Ann. $9697 (i).) But that is not what is involved in this case, Rather the question is the enforccability through suit of an admittedly valid contract. The comparable Situation in Kosydar would be the following: the foreign corporation negotiates a deal with National Cash Register (NCR); an ofticer of the toreign corporation flies to this country to close the deal by signing a contract at NCR's headquarters in Dayton, Otio-for delivery of the contracted machines nine months hence; because it can sell its machines to another prospective customer at a higher price, NCR refuses to deliver and claims that the foreign corporation, which had not qualified to do business in Ohio at the time the contract was signed, cannot maintain an action on its otherwise valid contract. Statement of the above case demonstrates the very different considera- tions in a tax case like Kosydar and those involved herein. It is almost inconceivable that this Court would deny the foreign corporation in Kosydar access to an American 81 judicial forum to enforce the contract in the previous hypothetical. For the same reasons, the ability of Allen- berg to sue on its contract should now be vindicated. Although the Supreme Court's decision in Eli Lilly Co. v. Sav-on-Drugs, Inc., 366 U.S. 276 (1961), is characterized by such a different factual situation from the case herein, some mention should be made of that ruling because the underlying issues bear similarity. In Lilly the Court upheld the application of a New Jersey statute that required a foreign corporation doing inter - state business to obtain a certificate of authority in order to maintain an action in a state court. Lilly, an Indiana corporation dealing in pharmaceutical products, manufactures ‘and sells these products in interstate commerce to certain seledted wholesalers in New Jersey. These wholesalers then sell the Lilly products in intrastate commerce to New Jersey hospitals, physicians, and retail drug stores, and these retail stores in turn sell them, again in intra- state commerce to the general public. 366 U.S. at 278. Lilly operated an office in New Jersey with eighteen "detail - men", whose job it was to visit retail pharmacists, physi- cians and hospitals in order to acquaint them with the products of the company and to encourage them to use Lilly's products,- These detailmen serve a promotional function and sometimes even take an order but in all cases the ultimate sales to the customers visited by the detail - men are made by the wholesalers who have bought from Lilly. The facts of Lilly are so strong that the majority found that "[t]o hold, . . that plaintiff [Lilly] is not doing busi- ness in New Jersey is to completely ignore reality." 366 U.S. at 280.° Nevertheless, four justices dissented on 8Note, however, that New Jersey's qualification statute, unlike Missi- ssippi’s had a saving provision for subsequent qualification. 82 even those strong facts for fear of inhibiting a robust flow of interstate commerce, Furthermore, Justice Harlan, concurring, expressly stipulated that if Lilly were to fill ‘directly the orders drummed up by its detailmen that that activity would be interstate commerce and not subject to state regulation or licensure. 366 U.S. at 286. But the" promotional function performed by the Lilly detailmen involved them deeply in the everyday intrastate commerce of the state of New Jersey, and the Court held that the state was under those circumstances entitled to require the cor- poration to qualify to do business if it were to maintain an . action in state court. The facts of the instant case are hardly comparable to those in Lilly, Allenberg is an out of state corporation that was purchasing cotton by forward contract with cotton growers for sale to customers all located outside the state of Mississippi. Allenberg did not employ a sales force to promote intrastate sales of its products, and its entire function is the promotion of and facilitation of interstate commerce in cotton, Its activity is hardly localized in Mississippi and the factual reality more nearly comports with Justice Harlan's statement in Lilly that a foreign corporation need not qualify when selling directly interstate. Justice Holmes once remarked that "interstate commerce is a practical conception." Eureka Pipe Line v. Hallanan, 257.U.S. 265, 272 (1921). As a practical matter.and also as a matter of principle, the totality of the circumstances shows that the transactions in the instant case were in interstate commerce and significantly affected such com- merce, The consequences of any other holding herein would risk the most serious curtailment of federal interests in an area in which federal regulation has been pervasive and deemed necessary to safeguard national concerns in 6% eiiion 1 83 agricultural marketing. The facts, as stated by Congress in 7 U.S.C. 82101, indicate that interstate commerce is involved, and controlling Supreme Court precedent in Dahnke-Walker and subsequent cases supports this view. ee ee er 84 C. Determining the Validity of §5309-221 and $5309-239 Under the Commerce Clause Once the court concludes that the transactions involved in this case were in or affected interstate commerce, a constitutional analysis requires a determination whether the state statute as applied has such an insubstantial or indirect effect on such commerce-as'‘to withstand scrutiny under the negative force of the Commerce Clause. 1, As Applied to This Case, $5309-221 and §5309-239 by Their Necessary Operation Unconstitutionally Impose a Direct Effect on Interstate Commerce, The Supreme Court's decision in Dahnke-Walker is not only determinative on the issue of defining interstate com- merce, it is also conclusive with regard to the consequences of a finding that there is interstate commerce. As the Court there held, 257 U.S. at 291: A corporation of one state may go into another without obtaining the leave or license of the latter, for all the legitimate purposes of such commerce; and any Statute of the latter state which obstructs or lays a burden on the exercise of this privilege is void under the Commerce Clause, The Dahnke-Walker Court noted that the Tennessee corpora- tion had purchased grain in Kentucky at other times and had a prior practice of purchasing for shipment to its plant in Tennessee, The Court found the Kentucky requirement that the Tennessee corporation qualify to do business in Kentucky excessively burdensome on commerce and held that "direct" effect unconstitutional. The decision in Dahnke - Walker relied on well-developed precedent, Inthe so-called "drummer" cases it had been established that a corporation is entitled to send salesmen ARAL AS I LOLI NEEL LITEM OME LOG CNIS LEY GEA GIL LEG OEE: gion Ret Pea es v eT SG SEAN Ba 9 PV A OED TOE — 7 inom cas : ' ; 85 into a foreign state to promote direct interstate trade with- out interference by regulations imposed by that state. See Robbins. v. Shelby County Taxing District, 120 U.S. 489 (1887), This principle was forcefully reaffirmed in the majority and concurring opinions in Lilly. 366 U.S. at 278-79, 284-85. In Crutcher v. Kentucky, 141 U.S. 47 (1891), the statute prohibited an agent of a company, which was not incorporated in Kentucky, from carrying on business without first obtaining a license from the state. The Court struck down the statute holding that a state can- not require a license for carrying on interstate business, unless Congress should see fit to interpose some other regulation on the subject matter, 141U.S. at 57. The Court in Crutcher referred to the standards set out in Cooley v. Board of Port Wardens, 53 U.S. 299 (1851), acknowledging that sonre state police power regulations might be permissible even if they had an indirect effect on commerce, but went on to note that the effect of such regulations must be local in character in order to be sus- tained, 141 U.S. at 58. Crutcher was followed in Western Union Telegraph Co. v. Kansas, 216 U.S. 1 (1910), where the Court invalidated a statute requiring a foreign corporation to pay a tax in order to do business in Kansas. While recognizing that some type of local regulations affecting commerce might’ pass muster, 216 U.S. at 26, citing Cooley, the Court held that: a corporation of one State, authorized by its charter to engage in lawful commerce among the States, may not be prevented by another State from coming into its limits for all the legitimate purposes of such cgmmerce, It may go into the State without obtaining a license from it for the purposes of interstate business . . . & ‘ % = ee GOELLER IRIEL AE ONE ALLER l 2 EV ORT AER TINT EPSTEIN SENT RT oe | : SPER LOBE UII eT Te SOOT {ROTTER ERO LEME HT 86 Thé Court further noted that a benign legislative purpose would not save a statute if by its necessary operation it had an unconstitutional effect on interstate commerce, "If the statute, reasonably interpreted, either directly or by its necessary operation, burdens interstate commerce, it must be adjudged to be invalid, whatever may have been the purpose for which it was enacted..." 216 U.S. at aie Another Kansas statute was held unconstitutional in , 1910. The statute, similar in operation to the Mississip- pi statute here when viewed narrowly as the Mississippi Supreme Court has done, required a foreign corporation to qualify before doing business in Kansas, and any cor- poration doing business without authorization could not maintain any action in state court. See International Textbook Co. v. Pigg, 217 U.S, 91 (1910). International Textbook offered correspondence courses from its office in Scranton, Pennsylvania. It had a local traveling agent who procured business and forwarded en- rollments to Scranton, The Solicitor in Kansas operated an office there at his own expense. Under the terms of the Kansas statute, International Textbook was found to be doing business, The Vourt found that the business was in interstate commerce and then proceeded to determine whether the statute by its necessary speration materially or directly burdened International Textbook's interstate business, In analyzing whether the effect was "direct", e Court observed that filing a detailed statement was a oo. precederg to authorization for a foreign corpora - tion to do business in Kansas. The statute denied a cor- poration access to the courts unless it first obtained certification, 217 .U.S. at 107-08, The Court concluded that a state is not competent to impose the duty to register ona foreign corporation as a condition precedent, Even 87 though no formal license was required, the effect was the same: "[I]t imposes a condition upon a corporation of zg another State seeking to do business in Kansas, which in 4 the case of interstate business, is a regulation of inter - state commerce and directly burdens such commerce,” 217 U.S. at 111. The Court noted that courts serve as an alternative to resolving conflict through force, and if a state cannot require filing it Certainly cannot bar access to its courts to a foreign corporation engaged in interstate commerce, Id, at 112, Cf. Mitchell v. W.T. Grant, 42 U.S.L.W. 4671, 4677 (U.S. May 13, 1974). : In Sioux Remedy Co. v. Cope, 235 U.S. 197 (1914), another broad state statute regulating foreign corporations was declared unconstitutional. A South Dakota statute barred foreign corporations from transacting business within the state or from maintaining any action in any state courts until it filed a copy of its charter and designated an agent for purposes of service of process. Id. at 200. An Iowa corporation shipped merchandise to a South Dakota corporation under a contract entered into in South Dakota. _ The state court held that the lowa corporation could not maintain ar action on its contract since it had not subjected itself to the jurisdiction of the South Dakota courts. On appeal this Court addressed the question whether the statute, as construed by the state court, by its necessary operation materially or directly burdened interstate commerce, Id. at 200-01. The Court concluded that the right to en- force payment on a contract (or delivery.in the case’ of Allenberg) was so closely related with commerce and so essential to the existence and continuance of such commerce that the imposition of these conditions necessarily consti - tuted a direct restraint on interstate commerce. Id. at 202-03. Thus,’ when a corporation goes into a state to enforce a contract, a state cannot interfere consistent with the Commerce Clause, ow Pa tt: @ Rmapapiatarn a POI, cals. PRR bres ke eR mer Be eae ie ie a Oe ne a | > Ss a in risers Pe me tte coe i ’ § . en ee beastie ngs lg eet Shite, Bical cea git hain PwWr Ke he Ce et 88 "If it were otherwise, the purpose of the constitution to secure and maintain the freedom of commerce by whomsoever conducted could be largely thwarted by the States and the commerce itself seriously crippled. . . . If one State can impose such a condition others can, and in that way corporations engaged in interstate commerce can be subjected to greatembarrassment / and serious hazards in the enforcement of contractual rights directly arising out of and connected with such commerce." 235 U.S. 197. Cf. Adams Express Co, v. New York, 232 U.S. 14, 31 (1910). ; In Furst v. Brewster, 282 U.S. 493 (1931), a case de- cided a decade after Dahnke-Walker, the Supreme Court expressly relied on the line of cases just discussed, Furst involved an Arkansas statute that denied any foreign corporation the right to sue in state court unless it filed a copy of its articles of incorporation and a financial state - ment, and designated a local agent upon whom process could be served, Furst was an Illinois corporation which shipped goods from a location in Memphis, Tennessee, to Brewster, who lived in Arkansas, Noting that the order - ing and shipping of the goods was interstate commerce, the Court found that "according to established principle," any state statute that imposes a direct burden on interstate commerce is void under the Commerce Clause, Accordingly, when a corporation goes into a State other than that of its origin to collect, according to the usual or prevailing methods, the amount which has become due in transactions in interstate commerce, the state cannot, consistently with the Commerce-Clause, ob- struct the attainment of that purpose. 282 U.S. at 498. . - Seige er BERS WY ERE AP PRET OA CLE RIOU EE PRCT DA mr 89 TT ASR Ie, . The rule derived from Furst, Dahnke-Walker,, Sioux Remedy, International Textbook, Western Union Telegraph, Crutcher, and Robbins is that broad licensure and quali- fication requirements applied to interstate transactions of foreign corporations directly burden interstate commerce by their necessary operation and are therefore in viola- tion of the Commerce Clause, The continuing vitality of that principle was explicitly reaffirmed in the Lilly case where, citing Crutcher, International Textbook,, and Sioux Remedy, the Supreme Court acknowledged that "[i]t is well established that [a state ] cannot require [a foreign corporation] to get a certificate of authority to do business in the State if its participation in this trade is limited to its wholly interstate sales..." 366 U.S. at 278&n. 7. From this it can readily be seen that the interstate com- merce exemption contained in 309-221 (e) Miss. Code 1942 Ann., as adapted from the Model Act, is constitutional - ly mandated, See Cone Mills Corp. v. Hurdle, 369 F, Supp. at 432, As a consequence, since the federal consti - tutional interests shaped the state statutory provision, cf. %309-312 Miss, Code 1942 Ann,, these interests must be preserved, even as against restrictive interpretations of state law. ORE nS PA RPE * The Supreme Court has acknowledged that by their nature certain kinds of state restrictions constitute almost per se violations of the Commerce Clause. See Pike v.. Bruce Church, 397 U.S. 137, 145 (1970). The conclusion to be drawn from the cases discussed in this section and from the response contained in $124 of the Model Business Cor- poration Act is that a comprehensive qualification require - ment as a condition for maintaining an action in state court, where the action arises out of an interstate transaction, is by its nature a direct burden on interstate commerce because so intimately connected with the right of a foreign corporation to have access to local markets free of local LOSER TRIS NE IRENE err NRT Am cAI ASP ame, So, | . ~™| 90 controls. Cf. Lilly, 366 U.S, at 285 (Harlan, J., con- curring). Since, as amicus has argued, the underlying transactions herein were in and affected interstate com -. merce, it necessarily foltows that the state is not consti- tutionally permitted to bar plaintiff from the Mississippi courts to enforce its concededly valid contracts, By its nature the qualification requirement, as applied to an inter - state transaction, necessarily affects interstate commerce “directly” and is therefore invalid under the Commerce Clause. If in this situation the qualification requirement is void then the bar of access to the courts must also fall. See International Textbook, 217 U.S. at 112. The previously discussed cases, however, do not es - tablish that all state regulation of foreign corporations is invalid, See Lilly (state can require a foreign corpora - tion to qualify to do intrastate business). Where the state has\paxticularized interests, local in character, they can act undey the police power, provided that the effect of the state statilte is not such as to materially or directly affect interstate commerce, The Court's decisions in cases like Lemke and Shafer, discussed in the section defining interstate commerce, reflect the Court's conclusion on anad hoc, case by case basis of the relative importance . of the local versus the national interests at stake. For example, in Lemke and Shafer the Court found it determina- tive that over 90% of the grain produced in North Dakota was shipped in commerce out of state. For that reason, the impact of the North Dakota regulatory scheme on inter - state commerce was significant. Indeed, that factor was seen in a later case as a distinguishing characteristic when the Court upheld a milk regulatory statute in a state where ‘only 10% of the milk traveled in interstate commerce, See Milk Control Board v. Eisenberg, 306 U.S. 346 (1939). Thus, there is a significant area of state power, even where state action might have some indirect and inconse- PROT BHAA TR LOT ER EET RRO ENIAS, HOR aye en guts AGP REO REA SERGI P'S . _ map taserreanetn Noa - | a 43 “| seyret 91 quential impact on interstate commerce, However, as the Court stated in Southern Pacific Co. v. Arizona, 325 U.S. 761, 780 (1945): The principle that, without controlling Congressional action, a state may not regulate interstate commerce so as substantially to affect its flow or deprive it of needed uniformity in its regulation is not to be avoided by ‘simply invoking the convenient apologetics of the police power, '"' . The cases that have upheld the exercise of state power examine the character of the local interest involved and weigh local and national interests, sometimes ina frank balancing process, See Pike, 397 U.S. at 142; Southern Pacific, 325 U.S, at 770-71. But in cases sustaining state legislation, the particular state interest has been defined with great specificity, Thus, in Huron Cement Co. v. Detroit, 362 U.S. 440 (1960), the Court held constitutional a city smoke emission ordinance as applied to a ship when docked within the city. The Court found the ordinance an evenhanded regulation and the subject matter of legitimate local public concern, with the impact on interstate com - merce not unduly burdensome, Id. at 443, Similarly, the Court has sustained local regulation over such specific subject matters as tobacco (Townsend v. Yeomans, 301 U.S. 441 (1937)), raisins (Parker v. Brown, 317 U.S. 341 (1943)), liquor transportation (Duckworth v. Arkansas, 314 U.S. 390 (1941)), interstate transportation (California v. Thompson, 313 U.S. 109 (1941)), and sale of insurance (Robertson v. Califomia, 328 U.S. 440 (1946)). But in all those situations the state regulation was specifically — aimed at a particularized local concern that might not draw the attention of a national legislative body. The state statutes involved were not general state regulatory measures | —— . . & . — —— et wEcmemogemtysiasace. ee | al SRT Si a Bo 0) — 92 but narrowly tailored provisions to deal with localized ‘problems relating to an individual industry. And even when such local interests are specifically regulated, the Court will engage in an independent review to weigh the local and national interests. Thus, despite the ruling in Eisenberg, supra, and its recognition of the "eccentric" localized character of the milk industry, the Court in- validated a New York milk licensure law because of its undue impact on interstate commerce. H. P. Hood and Sons, Inc. v. DuMond, 336 U.S. 525 (1949). Similarly, despite the states’ primary and immediate concern with the safety of its highways, that interest cannot subvert the national interest in unencumbered interstate transporta- tion. Compare South Carolina State Highway Dept. v. Barnwell Bros., 303 U.S. 177 (1938) with Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520 (1959). The Court's decision in Union Brokerage Co. v. Jensen, 322 U.S. 202 (1944) represents both a similar and a differ - ent basis for sustaining local regulation. The Minnesota statute there involved was a broad regulatory measure, not the specific, particularized statutes as in the other cases mentioned above. But the Court in Union Brokerage noted that Petitioner's customhouse business operated in Minnesota much like any other corporation. It was local - ized within the state, it bought materials from people in the state, and entered into business relationships "wholly outside of the arrangements it makes with importers or exporters,'’ 322 U.S. at 208. Union Brokerage could be required to qualify to do business for that portion of its operations that were intrastate, and the Court expressly found that it had many "dealings quite outside transactions immediately connected with import and export." Id. Since the business was so localized and had to have a wide variety of dealings with the people in the community, the Court found that the state had an interest in regulation & aeatiniieds al i enneennes empath erm amar ensereeeTen enete prepara yaaRNCERRERIRESO a t f 4 + a + i i i 4 STEAL OME YO 93 that outweighed the indirect impact of foreign commerce. The decision in Union Brokerage can be squared with the Court's ruling subsequently in Lilly. in which a general - § regulatory statute was upheld with respect to intrastate transactions of a foreign corporation, REP Th Moreover, the Union Brokerage opinion makes it abundant- ly clear that where a foreign corporation comes into the state for the purpose of contributing to or concluding a unitary interstate transaction that it would be free of such comprehensive regulatory provisions. To make its point, the Court expressly cited approvingly its previous decisions in Dahnke-Walker, Sioux Remedy and International Text- book, 322 U.S. at211. In addition, the Union Brokerage opinion placed emphasis on the understanding that the fed- eral government implicitly recognized the legitimacy of and need for local supervision of customhouse brokers. In its regulations, the federal government allowed a custom - house broker in one federal district to transfer to another district provided that it was authorized to do business by the state or states where the other district was situated. For the Court, this was explicit recognition by the federal government of the need for local regulation and authoriza- tion of such state action, 322 U.S. at 209, For these reasons Union Brokerage is not inconsistent with the rule that comprehensive, general regulatory measures of for- eign corporations involved in interstate transactions by their necessary operation have an impermissible substan- tial and direct effect on commerce, 2. The Actual Effect of §5309-221 and 249 as Applied Materially Burdens Interstate Commerce and Local Interests Can Be Promoted By Alternatives Which Affect Interstate Commerce Less Severely, Congress has often stated its belief that the market in agricultural commodities is national and even international ¥ oo . ORR IOe PEER HADES LEE GG LS REIS LENE SR RE ee POY waste ~~ (-_- Nig Nei iSC US aS AGRA SSSR EISLER Si RAE ANI RS AE NEL NMOS SSE DO AER PEP IT LG eet DET 94 in scope. See, e.g., 7 U.S.C. $3, 1621, 2101, 2301. As previously discussed, this is the view also held by Professor A. B, Cox, an expert on the cottontrade, There are !9 cotton-producing states in this country, and cotton purchasers frequently buy in the vast majority of these states during.the course of business, As the Court ack- nowledged in Wickard v. Filburn, supra., small alterations in the terms of trade can have significant effects on over- all markets, Allowing each cotton-growing state to re- quire cotton pérchasers to qualify to do business would put a significant burden on these buyers and make the access to local markets less free. Yet it is the reduction and elimination of artificial barriers to entry that brings about maximum economic efficiency. Erection of bureauctatic obstacles of red-tape will re- duce the numbers of potential purchasers in the market. Also, because of the time lag necessary to process quali- fication papers, new entrants into the market will be un- able to transact business because of the unenforceability of contracts, The result will be that bigger firms may be able and find it worthwhile to qualify to do business, but smaller firms will not. This will mean that the big cotton buyers will have a more concentrated market position with respect to the sellers and will be better able to ex- ercise this power in dealing with the producers. The predictable consequence of such a situation would be an increased concentration among buyers with more market power with respect to sellers. In turn these buyers would have more concentrated power on the national markets. The likely result would be lower prices for farmers in the long run and higher prices for consumers. That this result is net fanciful gains support from a Congressional committee finding that there is a growing concentration of power in the hands of fewer and larger 95 buyers. This was the basis on which Congress enacted the Agricultural Fair Practices Act of 1967, 7 U.S.C. } §2301 et seq. The Act excluded cotton from its coverage because it concluded that there was sufficiently active competition in that market so that the terms of the. Act did not have to cover cotton transactions, See U.S. Code Cong. & Admin. News, 1968, p. 1869-70. But that situation could turn around quickly if impediments to free entry were permitted to arise. Moreover, the Mississippi statute is not drawn with specific reference to cotton fraud, It is not particularized to any localized interest and therefore the national interests in maintaining an efficient private market, see 7 U.S.C. §1621, should prevail. Uniformity of regulation, under the control of a single authority, is vital to the smooth functioning of the marketing system, and local barriers to entry can have only pernicious effects. In M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), the Chief Jusaice recognized the importance for international trade of upholding freely bargained for con- tracts where there is no evidence of fraud or overreaching. Uncertainty about enforcement of contracts and barriers to the judicial forum have the most serious consequences in undermining trace and commerce. 407 U.S. at 13-14, Agricultural commcdities provide the United States with — a balance of trade surplus on world markets, If this Court gives the green light to states to impose absolute barriers to its courts to foreign corporations to enforce valid contract rights, it will endanger national interests in marketing agricultural commodities, Moreover, the Mississippi statutes are far from neutral in their impact on foreign corporations. One of the most disfavored forms of state legislation is a statute that discriminates against interstate activity. Pike v. Bruce 2 ROAR LORS R OS Me coe en las RES ER oh EH PEI aes Pp 96 Church, 397 U.S. 137 (1970). Under the Mississippi law a foreign corporation must already be qualified at the time a transaction is entered into in order to maintain an action. But if such a contract helps the Mississippi party, then it can fully enforce the contract against the foreign corporation, Thus, if this contract had been signed in 1972, when cotton prices fell, and Allenberg had sought to renege, Pittman could have successfully bound Allen- berg to the terms of the contract, When the shoe is on the other foot, when the Mississippi resident seeks to renege, the foreign corporation is unable to use the courts at all. Good faith is no defense; fair dealing is irrelevant. The absolute barrier exists in all cases, even when the state's interest is defeated, not promoted, by its enforce- ment, as herein, Furthermore, any interest that Mississippi seeks to promote by its qualification requirement and by barring access to its courts could be achieved in ways that have a lesser effect on interstate commerce. Of course, the state has a very important and legitimate interest in pro- tecting against fraud, But prevention of fraud is not a magical incantation that automatically justifies any state enactment no matter what other alternatives are available and no matter how severely the measure in question tram- mels on other constitutionally protected interests —in this case robust interstate commerce, : For example, this Court has invalidated state applica- tion of its qualification requirement when it interfered with basic associational freedoms, NAACP v. Alabama, 377 U.S. 288 (1964); NAACP v. Alabama, 357 U.S. 449 (1958). Justice Harlan noted, the registration requirements were designed to ensure that foreign corporations be amenable to suit in state courts so as to protect state citizens from fraud. 377 U.S. at 305. Nevertheless, got yo sempre eerste arom EERE — 97 not all such regulation is benign when it has significant impacts on federal constitutional interests. In Pike v. Bruce Church, 397 U.S. 137, 142 (1970), the Supreme Court expressly stated that the existence of alter - natives which promoted state interests with less impact on. commerce were an important consideration under Com- merce Clause analysis. To similar effect is Dean Milk Co. v. Madison, 340 U.S. 349, 354 (1951), im which the Court held that economic barriers could not stand even under the police power "if reasonable nondiscriminatory alternatives" were available. By analogy, in Dunn v. Blumstein, 405 U.S. 330 (1972), this Court invalidated durational residency requirements for voting despite the claim by Tennessee that they helped combat voter fraud, As Justice Marshall indicated, pro- tection against fraud "is a formidable sounding state inter - est." Nevertheless, despite the importance of this interest the state could not justify durational residency laws because “such sweeping laws" are not "necessary to prevent fraud." 405 U.S. at 345. Thatis, they were not the "least drastic means necessary for preventing fraud."" 405 U.S. at 353. Cf. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12 (1972) (an arm's -length negotiation by businessmen should be enforced by the courts ‘‘absent some compelling and countervailing reason,") , , t % 4 ’ 4 i $ He RRA EPO i anal Similarly, as outlined in an earlier section, Mississippi can achieve its goal of making plaintiff subject to service of process pursuant to $346 Miss. Code 1942 Ann.; which authorizes service on the foreign corporation's agent who transacted business within the state. Or the state could obtain service under the provisions of its long-arm statute, $1437 Miss. Code 1942 Ann. These broader jurisdictional Statutes are permissible in wake of developments subse - LEGG LIE DEAE BILE IIE MELEE PIRES ELIS ELLE LSE ILE. LIIILO SLES EAT NIGP LORE eae oe ” 98 quent to International Shoe Co. v. Washington, 326 U.S. 310 (1945), and, somewhat like registration requirements for voting, serve the function the penalty statutes once might have, And the federal court in Mississippi, Cone Mills Corp. v. Hurdle, 369 F, Supp. at 431, and Justice Harlan in NAACP v. Alabama, 377 U.S. 288, 305 both : have recognized that protection against fraud by subjecting foreign corporations to suit locally is the primary goal of the qualification statutes. rR N OE In the present case, as a factual matter, defendant could have gained service on Allenberg by service on its agent living in Marks, Mississippi, under existing Mis- sissippi law. Certainly the availability of that procedure negates the state's interest in protecting against over- reaching foreign corporations in the current controversy and makes the potential harmful consequences on inter - state commerce unjustifiable. But even if, for the sake of argument only, one were to Vg conclude that the qualification statute were justifiable, the state would have a burden to justify the failure to in- . clude a curative provision in its law as does the Model Business Corporation Act. Certainly that strikes a more equitable balance between the local interests in protecting against fraud and the national interests in interstate com- merce, The draftsmen of the Model Act evidently were sensitive to the need to balance these competing values, but the state legislature chose not to give adequate weight _ to the Commerce Clause values, This was a choice re- viewable by this Court, and was a choice that the legislature was not entitled to make in light of the deleterious effects oncommerce,. If there were a curative provision in the Mississippi law, then plaintiff would be able to maintain this action since it has now qualified to do business in Mississippi. While not conceding that even the qualification REE LEG IE LE TE ELE OLE CLL AES YESS PE SGI TAPE RAL WALI NIE Se eI SIE LOL ONT 1 PLLA S hata) PY 99 requirement is the least intrusive meaiis of assuring ac - countability by foreign corporations, a7 ticus urges that the lack of a curative provision is at minimum a fatally defective flaw in the Mississippi statute. As a minimal recognition of the critical Commerce Cia sé values at stake, and of the potential for chilling a sw..$tantial amount of interstate commerce, the state is required-by the Com- merce Clause to allow a foreign corporation to maintain an action if it subsequently subjects itself to the jurisdic-. tion of the state as Allenberg has done here. | This gives effect to the basic interests in permitting access to the courts, Boddie v. Connecticut, 401 U.S. 371/(1971), in deterring self-help, Mitchell v, W.T,.GrantCo., 42 U.S.L.W. 4671, 4677 (U.S. May 13, 1974), in giving effect and certainty to interstate and international com- mercial transactions, M/S Bremen y. Zapata Off-Shore Co., 407 U.S. 1 (1972), and in subjecting foreign corpora - tions to accountability to Mississippi residents. | When unpacked, defendant's legal argument can be seen . for what it is —a high- sounding, but hollow, resort to principle to camouflage the thrust for immediate addition- al profit and windfall gain. ‘The! state's interest in pro- tecting its citizens against overreaching foreign corpora- tions is adequately met here, and so is defendant's interest in maintaining any action against Allenberg. The existence - of these safeguards against fraud reveals the underlying foundation for defendant's claim —not prevention against fraud but legalized disobedience of concededly valid con- tractual agreements, This court should be especially unwilling to lend its support to such a nefarious scheme where the burden falls not only on interstate commerce but on interests outside the state. As Justice Stone recog- nized, such interests normally cannot protect themselves adequately through the internal political process of a state. Og ORF IT ICL I IE EB IESE Nghe PE Ml if TE MaDe LIF ob "le STIG OO ei ag Nh ates _— aeenen PAPERS SIT 100 See Southern Pacific Co. v. Arizona, 325 U.S. 761, 767 n. 2(1945). For that reason, courts should give especial deference to. such interests. United States v. Carolene Products Co. ,'304 U.S. 144, 152-54 n. 4 (1939). “Cf. Gordon v, Lance, 403 U.S. 1 (1971). Such concern is warranted by the widespread reneging currently occurring on all too many forward cotton contracts. CONCLUSION There is no allegation of bad faith on the part of plain- tiff, and the state's interests are amply protected by alternatives both actually and potentially available. In light of the nature of the regulation involved and its neces - sary direct impact on interstate commerce, and in light of the actual effect on such commerce, in light of the alter - natives open to defendants and to the state to protect the legitimate local interests claimed, amicus urges that Appellant Allenberg be allowed to maintain this action on its concededly valid, freely bargained for contract. Respectfully submitted, American Cotton Shippers Association _ Neal P, Gillen General Counsel American Cotton Shippers Association 1707 L Street, N.W. Suite 460 Washington, D.C. 29036 James F, Blumstein 200 Cantrell Avenue Nashville, Tennessee 37205 615-322-3535 615-385-2875 ‘By: James F, Blumstein TET Me PTET! mop eP --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386414_0343%3A09. Public record. Not legal advice.