Constitutional Law I, Pages 304–306

Exxon Corp. v. Governor of Maryland

1978

Facts:

Maryland passed a law prohibiting a producer or refiner of petroleum products from operating a retail gas station within the state. A few years before, a petroleum shortage led to such producers to favor their own stations. No petroleum products are produced or refined in Maryland, and refiners only operate ~5% of the Maryland gas stations.

Procedural History:

Court of appeals upheld the statute against a dormant commerce clause challenge.

Issue:

Did the Maryland statute violate the dormant commerce clause?

Reasoning:

While this statute only affects interstate commerce, this does not mean that it is discriminating against interstate commerce. There are several major interstate marketers of petroleum that operate their own gas stations in competition with Maryland stations who are not affected by the act because they do not produce gasoline. It does not place any barriers whatsoever against interstate dealers.

Some interstate dealers may stop selling in Maryland, but other interstate dealers will take their place. This does not subject interstate commerce to an impermissible burden. The Commerce Clause does not protect the particular structure of operation in a retail market. It protects the interstate market, not particular interstate firms.

The consumers may be injured by this statute, but that is an issue of the statute's wisdom, not its burden on commerce.

Holding:

No, the Maryland statute did not violate the dormant commerce clause. Affirmed.

Dissenting Opinion:

Blackmun: The Commerce Clause forbids discrimination against interstate commerce, even if it is not on the face of the regulation. While merely showing a burden on out-of-state actors does not prove unconstitutional discrimination, a significant burden falling on the most numerous and effective group of out-of-state competitors and not on in-state businessmen without a showing that legislative interests cannot be vindicated by more evenhanded regulation does constitute unconstitutional discrimination.

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