Plaintiff was a milk distributor, which distributed to the Massachusetts area. Plaintiff received milk at 3 separate distribution centers from other milk producers/farmers in the New York area. Plaintiff desired to have and applied for a fourth distribution center in New York, and applied to the relevant state board, which denied his license request. His request was denied on the basis of a regulation stating that a license shall not be granted until the state commissioner was satisfied that the license would further the state of New York’s public interest and would not unduly hamper state competition. Plaintiff sued on the grounds that the law/regulation violated the interstate commerce clause, namely stating that the state law took away power from the federal government to regulate commerce between states.
Whether a state regulation with the primary purpose of protecting the particular state’s public interest that leaves license granting to the discretion of a commissioner violates Congressional power of interstate commerce regulation.
No, reversed, the state law is invalidated. The “practical effect” of the regulation would be to hamper interstate commerce. This is true because Plaintiff distributes his milk between state lines; and the competition between state lines would be necessarily hampered if, for reasons of protecting New York’s particular economic interest, he was further denied a license. The license was denied because of the states protectionist desire to insulate its local market from outside competition. This violates the very purpose of the commerce clause. The states’ general police power does not extend to protectionism; the states may regulate and pass laws for the general public welfare, health, and safety, but not for economic insulation from outside competition.