I have long argued that other than the 14th Amendment, the most abused part of the Constitution – used to justify heinous judicial overreach – is the commerce clause. Indeed, other than the Court’s odious abortion decisions in Roe and Casey, the worst sustained* Supreme Court decision is Wickard v. Filburn, a case in which the Court declared a farmer eating the bread he produced on his own farm affected interstate commerce. That decision, more than any other, served as the basis for federal intervention into areas of day-to-day life that had no connection to interstate commerce.
Today’s decision in South Dakota v. Wayfair is thus a victory for federalism. South Dakota enacted a law requiring out of state retailers to collect and remit sales taxes on products sold in South Dakota even if the seller did not have a physical presence in the state. Previous Supreme Court decisions held that retailers could not be required to collect sales taxes so long as they did not have a physical presence in the state, but today the Court reversed itself. In fact, two of those who voted in the majority in the 1992 decision (Quill Corp v. North Dakota), Justice Kennedy (who authored the opinion of the Court) and Justice Thomas, voted to overturn their own decision.
As usual, it takes Kennedy 24 pages to say what Thomas does in 1: “Whoops, my bad.” Thomas actually writes, in his concurrence, that he should have voted with the dissent in the 1992 case, and now experience has taught him the error of his ways. To be fair, Kennedy wrote the opinion of the Court and was required to be a bit more verbose.
Essentially the case comes down to fairness: the Court’s jurisprudence created a bizarre environment in which retailers could act as tax havens. So long as they didn’t physically set foot in a state, they didn’t have to collect taxes, while smaller entities with limited activity could be subject to collection activity if they had so much as a warehouse or a salesperson in state. Since the state law in question poses no real commerce clause issue, this inequity could no longer be justified. And as Justice Gorsuch writes in his concurrence, the Court’s jurisprudence had basically mandated state discrimination between out-of-state and in-state firms. As he writes:
For years they have enforced a judicially created tax break for out-of-state Internet and mail-order firms at the expense of in-state brick-and-mortar rivals.
There is no justification for the Court to construct what is in essence a tax shelter. Gorsuch, meanwhile, again hints that he is willing to re-examine the very concept of the dormant commerce clause – a tendentious reading of the Constitution which permits courts to overturn state actions even if Congress had not legislated in this space.
Oddly it’s Chief Justice Roberts, who was joined in the dissent by Justices Breyer, Sottomayor, and Kagan (meaning, yes, Justice Ginsburg voted with the majority), who offered a tepid argument against the majority. He writes:
Ecommerce has grown into a significant and vibrant part of our national economy against the backdrop of established rules, including the physical-presence rule. Any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress.
While I’m normally a sucker for judicial deference to the legislative branch, here deference would not be constitutionally justified, and would prevent a state from enacting otherwise permissible legislation. The economic impact of the decision is not within the Court’s purview.
It’s this last point which makes this case illustrative. Courts must render decisions based on statutory and/or constitutional considerations. In other words, they cannot be concerned about the wisdom of legislation they are reviewing. It may very well be that this decision will open the floodgates for other states to enact similar legislation, and this could have a negative impact on the economy. But that’s not for the Court to decide. So while the Chief is right about Congress being able to intervene, it should do so in a manner consistent with a true understanding of the commerce clause. That Congress could legislate in this arena doesn’t mean the state should be prohibited from doing so in the absence of Congressional action.
Roberts, distressingly, also rests his decision on what I will call super stare decisis. Since the Court has ruled twice already on this issue, there’s no third times the charm, regardless of the wisdom of those prior decisions. I say this is distressing because the constitutionality of abortion bans has been adjudicated twice at SCOTUS. Does this signal that the Chief would not vote to overturn Roe? Hmmmm.
While some might argue this decision is a blow to limited government activists, I’d suggest the opposite – this is a victory for states’ rights and for a plain reading of the Constitution.
* An important distinction, otherwise Dred Scott and Plessy would rank higher, as both were overturned either by amendment or later Court decisions.
The Cranky Conservative 