272 F.3d 104 (2nd Cir. 2001), 99-9450, Nat'l Elect. Mfr. Ass'n v Sorrell

Docket Nº:Docket No. 99-9450
Citation:272 F.3d 104
Party Name:NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION, PLAINTIFF-APPELLEE, v. WILLIAM H. SORRELL, ATTORNEY GENERAL OF THE STATE OF VERMONT, JOHN KASSEL, VERMONT AGENCY OF NATURAL RESOURCES, DEFENDANTS-APPELLANTS, Page 105 CONSERVATION LAW FOUNDATION, INC., VERMONT PUBLIC INTEREST RESEARCH GROUP, VERMONT NATURAL RESOURCES COUNCIL, INC., NATIONAL WILDLIFE
Case Date:November 06, 2001
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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272 F.3d 104 (2nd Cir. 2001)

NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION, PLAINTIFF-APPELLEE,

v.

WILLIAM H. SORRELL, ATTORNEY GENERAL OF THE STATE OF VERMONT, JOHN KASSEL, VERMONT AGENCY OF NATURAL RESOURCES, DEFENDANTS-APPELLANTS,

Page 105

CONSERVATION LAW FOUNDATION, INC., VERMONT PUBLIC INTEREST RESEARCH GROUP, VERMONT NATURAL RESOURCES COUNCIL, INC., NATIONAL WILDLIFE FEDERATION, LAKE CHAMPLAIN COMMITTEE, NEW HAMPSHIRE, STATE OF, NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES, MERCURY POLICY PROJECT, MOVANTS.

Docket No. 99-9450

United States Court of Appeals, Second Circuit

November 6, 2001

Argued: July 12, 2000

Defendants-appellants William H. Sorrell, Attorney General of the State of Vermont, and John Kassel, Secretary of the Vermont Agency of Natural Resources, appeal from a preliminary injunction of the United States District Court for the District of Vermont (J. Garvan Murtha, Chief District Judge) barring enforcement of a Vermont statute as it applies to manufacturers of mercury-containing light bulbs. VACATED AND REMANDED.

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Ronald A. Shems, Assistant Attorney General, (William H. Sorrell, Attorney General, Rebecca Ellis, Dianne H. Sanford, Assistant Attorneys General, on the brief), Montpelier, Vermont, for defendants-appellants.

Steven J. Rosenbaum, Covington & Burling (Anthony J. Vlatas, on the brief), Washington, D.C., and Geoffrey W. Crawford,

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O'Neill, Crawford & Green, Burlington, Vermont, for plaintiff-appellee.

Bernard D. Lambek, Paterson & Walke, Montpelier, Vermont, for movants.

Maureen F. Leary, Assistant Attorney General of the State of New York (Eliot Spitzer, Attorney General, Preeta D. Bansal, Solicitor General, Daniel Smirlock, Deputy Solicitor General, Christopher Amato, Maureen F. Leary, Assistant Attorneys General, on the brief), Albany, New York, for amici curiae States of New York, Alaska, California, Connecticut, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, New Mexico, and Oklahoma.

Before: Walker, Chief Judge, Pooler and Sotomayor, Circuit Judges.

John M. Walker, Jr., Chief Judge

Defendants-appellants William H. Sorrell, Attorney General of the State of Vermont, and John Kassel, Secretary of the Vermont Agency of Natural Resources ("Vermont defendants"), appeal from a preliminary injunction imposed by the United States District Court for the District of Vermont (J. Garvan Murtha, Chief District Judge) barring enforcement of a Vermont labeling statute as it applies to manufacturers of mercury-containing light bulbs. Because we find that plaintiff-appellee National Electrical Manufacturers Association ("NEMA") failed to show a likelihood of success on the merits of its Commerce Clause and First Amendment claims, we vacate the preliminary injunction and remand for further proceedings.

BACKGROUND

In 1998, the Vermont Legislature enacted a statute, Vt. Stat. Ann. tit. 10, § 6621d(a), that requires manufacturers of some mercury-containing products to label their products and packaging to inform consumers that the products contain mercury and, on disposal, should be recycled or disposed of as hazardous waste.1 Among the products so regulated are mercury-containing flourescent light bulbs, denominated as "lamps" in subsection (5) of section 6621d(a). The Vermont Agency of Natural Resources has promulgated a rule to implement the labeling requirement. See Vt. Code R. 12-036-003, § 6-803.

On July 27, 1999, NEMA, on behalf of its lamp-manufacturer members, sued the Vermont defendants claiming, among other things, that both the statute and its underlying regulations violate NEMA's

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members' rights under the United States Constitution's Commerce Clause and First Amendment. Following an extended hearing, the district court, on November 8, 1999, preliminarily enjoined the defendants from enforcing section 6621d(a) and its accompanying regulations, finding that NEMA had demonstrated irreparable harm and a likelihood of success on the merits. Nat'l Elec. Mfrs. Ass'n v. Sorrell, 72 F.Supp.2d 449, 456 (D. Vt. 1999) (hereinafter "NEMA"). According to the district court, NEMA was irreparably harmed because (1) if NEMA ultimately prevailed, the state defendants would be shielded by the Eleventh Amendment from damages claims, and thus NEMA's members could not recover money spent to comply with the statute, and (2) the statute infringed NEMA's First Amendment rights by forcing its members to speak. Id. at 454.

The district court determined that NEMA had demonstrated a likelihood of success on the merits of its Commerce Clause claim because (1) the statute's burdens outweighed its benefits, and (2) as a practical matter, Vermont was regulating conduct that would occur entirely beyond its borders. Id. at 454-55. The district court also found that Vermont was unable to justify the labeling law under the First Amendment. Id. at 455-56.

The Vermont defendants appealed. The State of New York filed an amicus brief in support of the appeal, joined by the States of Alaska, California, Connecticut, Maine, Minnesota, New Hampshire, New Jersey, New Mexico, and Oklahoma.

DISCUSSION

Insofar as pertinent to our disposition, the Vermont defendants argue in support of section 6621d(a) that, in finding a likelihood of success on the merits, the district court erred (1) by applying heightened scrutiny under the Commerce Clause to a nondiscriminatory statute and balancing a hypothetical label against hypothetical costs, and (2) by applying heightened scrutiny to the First Amendment compelled speech claim. The amici argued in addition that the labeling law was authorized by Congress in the federal hazardous waste management statute, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, and thus the state statute is not vulnerable to challenge under the Commerce Clause. Because we conclude that NEMA has not demonstrated a likelihood of success on the merits of its Commerce Clause and First Amendment claims, we vacate the injunction.

I. Commerce Clause

A statute may violate the well-established "dormant" aspect of the Commerce Clause, U.S. Const. art. I, § 8, cl. 3, in one of two ways: it may clearly discriminate against interstate commerce, in which case it is virtually invalid per se, see Wyoming v. Oklahoma, 502 U.S. 437, 454, 112 S.Ct. 789 (1992), or even if it does not evince such discriminatory effect, it may still be unconstitutional if it imposes a burden on interstate commerce incommensurate with the local benefits secured, see Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 (1970). NEMA argues that section 6621d violates the Commerce Clause in the latter manner. We disagree and thus conclude that NEMA cannot show likely success on the merits of its Commerce Clause claim.

In Pike, the Supreme Court adopted a balancing test to determine whether state statutes that incidentally burden interstate commerce violate the Commerce Clause. The Court held that

[w]here the statute regulates even-handedly to effectuate a legitimate local public

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interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.

Id. (citations omitted). For a state statute to run afoul of the Pike standard, the statute, at a minimum, must impose a burden on interstate commerce that is qualitatively or quantitatively different from that imposed on intrastate commerce. See Automated Salvage Transp., Inc. v. Wheelabrator Envtl. Sys., Inc., 155 F.3d 59, 75 (2d Cir. 1998); Gary D. Peake Excavating Inc. v. Town Bd. of Town of Hancock, 93 F.3d 68, 75 (2d Cir. 1996) (quoting N.Y. State Trawlers Ass'n v. Jorling, 16 F.3d 1303, 1308 (2d Cir. 1994)); USA Recycling, Inc. v. Town of Babylon, 66 F.3d 1272, 1287 (2d Cir. 1995); see also Pac. Northwest Venison Producers v. Smitch, 20 F.3d 1008, 1015 (9th Cir. 1994); Old Bridge Chem., Inc. v. N.J. Dep't of Envtl. Prot., 965 F.2d 1287, 1295 (3d Cir. 1992); K-S Pharmacies, Inc. v. Am. Home Prods. Corp., 962 F.2d 728, 731 (7th Cir. 1992). Under Pike, if no such unequal burden be shown, a reviewing court need not proceed further.

The focus of our disparate burden analysis is a state's shifting the costs of regulation to other states. See S.C. State Highway Dep't v. Barnwell Bros., 303 U.S. 177, 184-85 n.2 (1938) ("State regulations affecting interstate commerce, whose purpose or effect is to gain for those within the state an advantage at the expense of those without, or to burden those out of the state without any corresponding advantage to those within, have been thought to impinge upon the constitutional prohibition even though Congress has not acted."); see also 2 Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional Law: Substance and Procedure § 11.7, at 150 (3d ed. 1999); Laurence H. Tribe, American Constitutional Law § 6-5, at 409 (2d ed. 1988). Such circumstances raise the risk that state policymakers will not bear the true political costs of their decisions, because those costs will fall in some measure on the residents of other political jurisdictions. See S. Pac. Co. v. Arizona, 325 U.S. 761, 767-68 n.2 (1945) ("[T]he Court has often recognized that to the extent that the burden of state regulation falls on interests outside the state, it is unlikely to be alleviated by the operation of those political restraints normally exerted when interests within the state...

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