Gary Concrete Products, Inc. v. Riley, No. 22330

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtHARWELL; LITTLEJOHN, C.J., and NESS; GREGORY; CHANDLER
Citation331 S.E.2d 335,285 S.C. 498
PartiesGARY CONCRETE PRODUCTS, INC., Appellant, v. Richard W. RILEY, Governor of South Carolina; Grady L. Patterson, Jr., Treasurer of South Carolina; Earle E. Morris, Jr., Comptroller General of South Carolina; Rembert C. Dennis, Chairman, Senate Finance Committee; and Tom Mangum, Chairman, House Ways and Means Committee, constituting the State Budget and Control Board, Respondents. . Heard
Decision Date08 April 1985
Docket NumberNo. 22330

Page 335

331 S.E.2d 335
285 S.C. 498
GARY CONCRETE PRODUCTS, INC., Appellant,
v.
Richard W. RILEY, Governor of South Carolina; Grady L.
Patterson, Jr., Treasurer of South Carolina; Earle E.
Morris, Jr., Comptroller General of South Carolina; Rembert
C. Dennis, Chairman, Senate Finance Committee; and Tom
Mangum, Chairman, House Ways and Means Committee,
constituting the State Budget and Control Board, Respondents.
No. 22330.
Supreme Court of South Carolina.
Heard April 8, 1985.
Decided May 20, 1985.

[285 S.C. 499]

Page 336

Thomas H. Pope, of Pope and Hudgens, Newberry, for appellant.

[285 S.C. 500] Atty. Gen., T. Travis Medlock, Chief Deputy Atty. Gen. Joseph A. Wilson, and Asst. Atty. Gen. Charles W. Gambrell, Jr., Columbia, for respondents.

HARWELL, Justice:

The appellant Gary Concrete Products, Inc. initiated this action against the respondent State Budget and Control Board for a declaratory judgment regarding the constitutionality of S.C.Code Ann. § 11-35-1520(9)(d) (1984 Cum.Supp.). We affirm.

The appellant is a Georgia corporation which manufactures and sells reinforced concrete pipe. The appellant was invited to submit bids for state purchases during the year September 1, 1983 through August 31, 1984. On June 30, 1983, the appellant submitted its bid for pipe to be used in twenty-two counties. It was the low bidder in several counties; however, the State awarded the contracts to resident bidders as authorized by Code § 11-35-1520(9)(d) (1984).

We adopt the Order of the trial judge, as amended.

"The issue before this Court is whether or not S.C.Code Ann. § 11-35-1520(9)(d) violates the Commerce Clause of the United States Constitution or, alternatively, violates the Equal Protection Provisions of the United States Constitution or the South Carolina Constitution.

South Carolina Code § 11-35-1520(9)(d) provides:

Competitive procurements made by any governmental body shall be made from a responsive and responsible vendor resident in South Carolina: (i) for procurements under $2,500,000, if such bid does not exceed the lowest qualified bid from a nonresident vendor by more than two percent of the latter bid, and if such resident vendor has made written claim for such preference at the time the bid

Page 337

was submitted; (ii) for procurements in excess of $2,500,000, if such bid does not exceed the lowest qualified bid from a nonresident vendor by more than one percent of the latter bid, and if such resident vendor has made written claim for such preference at the time the bid was submitted. A vendor shall be deemed to be a [285 S.C. 501] resident of this State if such vendor be an individual, partnership, association or corporation that is authorized to transact business within the State, maintains an office in the State, maintains a representative inventory of commodities on which the bid is submitted and has paid all taxes duly assessed. Preferences under this subsection shall not apply to either prime contractors or subcontractors as relates to the construction industry nor to a vendor of goods whether in quantity or not when the price of a single unit of the item involved is more than ten thousand dollars.

The effect of this section is to give a preference to South Carolinians, under certain circumstances, when the State of South Carolina purchases supplies, services and goods.

COMMERCE CLAUSE

The appellant alleges that S.C.Code Ann. § 11-35-1520(9)(d) imposes an unlawful burden upon interstate commerce, constituting a violation of Article I, § 8 of the United States Constitution. The Commerce Clause gives the federal government the power to regulate interstate and foreign commerce. The states cannot pass any regulations which unduly burden the free flow of commerce between the states or with a foreign country. McCaw v. Fase, 216 F.2d 700 (9th Cir.1954), cert. denied, 348 U.S. 927, 75 S.Ct. 340, 99 L.Ed. 727 (1955).

Admittedly, there are circumstances under which S.C.Code § 11-35-1520(9)(d) will operate to favor South Carolina vendors over out-of-state vendors and thereby arguably burden interstate commerce. However, if a state enters a market in competition with other market participants, the Commerce Clause does not limit the state's ability to operate as freely within the market place as the other participants. Reeves v. Stake, 447 U.S. 429, 437, 100 S.Ct. 2271, 2277, 65 L.Ed.2d 244 (1980). This freedom includes the right to favor the state's own citizens over others. White v. Mass. Council of Construction Employers, 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983); Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976); Carll v. South Carolina Jobs-Economic Development Authority, 327 S.E.2d 331 (S.C.1985).

[285 S.C. 502] In Reeves, Inc. v. Stake, supra, the Supreme Court discussed the rights of a state as a market participant. South Dakota owned and operated a cement plant. In 1978 a cement shortage occurred and the state adopted a policy of supplying all South Dakota customers first and, thereafter, any out-of-state commitments would be met on a first come, first served basis. The plaintiff was an out-of-state distributor who had purchased cement from the South Dakota cement plant on a regular basis for twenty years. The Supreme Court held that the state had acted as a market participant and had not violated the Commerce Clause. It stated that the distinction drawn in Alexandria Scrap between states as market participants and market regulators was good law since the Commerce Clause is aimed principally at limiting state taxes and regulatory measures which impede free private trade, but places no similar limitations on the ability of states to operate freely in the open market. Id., 447 U.S. at 437, 100 S.Ct. at 2277. The Court...

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17 practice notes
  • Sloan v. Sc Bd. of Physical Therapy ex'Mnrs, No. 26209.
    • United States
    • United States State Supreme Court of South Carolina
    • September 25, 2006
    ...be sustained against constitutional attack if there is any reasonable hypothesis to support it. Gary Concrete Products, Inc. v. Riley, 285 S.C. 498, 504, 331 S.E.2d 335, 338-39 (1985) (citing Thomas v. Spartanburg Ry., Gas Elec. Co., 100 S.C. 478, 85 S.E. 50 (1915)). The Court must give gre......
  • Retail Servs. & Sys., Inc. v. S.C. Dep't of Revenue, Appellate Case No. 2014-002728
    • United States
    • United States State Supreme Court of South Carolina
    • March 29, 2017
    ...Order of Police v. S.C. Dep't of Revenue , 352 S.C. 420, 430, 574 S.E.2d 717, 722 (2002) (quoting Gary Concrete Prods., Inc. v. Riley , 285 S.C. 498, 504, 331 S.E.2d 335, 338–39 (1985) ) (internal quotation marks omitted). Regardless of how Appellant defines the classifications at issue, be......
  • C.S. McCrossan Const., Inc. v. Rahn, No. CIV. 97-896 JP/JHG.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • February 25, 2000
    ...109 S.Ct. 706, 102 L.Ed.2d 854 (1989); Bristol Steel and Iron Works v. State, 507 So.2d 1233 (La.1987); Gary Concrete Prods. v. Riley, 285 S.C. 498, 331 S.E.2d 335 (1985); and Galesburg Constr. Co. v. Board of Trustees, 641 P.2d 745 (1982); with Lynden Transport, Inc. v. State, 532 P.2d 700......
  • Big D Const. Corp. v. Court of Appeals for State of Ariz., Div. One, Nos. CV-89-0304-S
    • United States
    • Supreme Court of Arizona
    • March 28, 1990
    ...a non-resident bidder that would be given to that bidder in his home state (LSA-R.S. 38:2225(B)); Gary Concrete Prods., Inc. v. Riley, 285 S.C. 498, 331 S.E.2d 335 (1985) (upholding statute, S.C.Code Ann. § 11-35-1520(9)(d) (1984 Cum.Supp.), which grants preference to vendors if they mainta......
  • Request a trial to view additional results
17 cases
  • Sloan v. Sc Bd. of Physical Therapy ex'Mnrs, No. 26209.
    • United States
    • United States State Supreme Court of South Carolina
    • September 25, 2006
    ...be sustained against constitutional attack if there is any reasonable hypothesis to support it. Gary Concrete Products, Inc. v. Riley, 285 S.C. 498, 504, 331 S.E.2d 335, 338-39 (1985) (citing Thomas v. Spartanburg Ry., Gas Elec. Co., 100 S.C. 478, 85 S.E. 50 (1915)). The Court must give gre......
  • Retail Servs. & Sys., Inc. v. S.C. Dep't of Revenue, Appellate Case No. 2014-002728
    • United States
    • United States State Supreme Court of South Carolina
    • March 29, 2017
    ...Order of Police v. S.C. Dep't of Revenue , 352 S.C. 420, 430, 574 S.E.2d 717, 722 (2002) (quoting Gary Concrete Prods., Inc. v. Riley , 285 S.C. 498, 504, 331 S.E.2d 335, 338–39 (1985) ) (internal quotation marks omitted). Regardless of how Appellant defines the classifications at issue, be......
  • C.S. McCrossan Const., Inc. v. Rahn, No. CIV. 97-896 JP/JHG.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • February 25, 2000
    ...109 S.Ct. 706, 102 L.Ed.2d 854 (1989); Bristol Steel and Iron Works v. State, 507 So.2d 1233 (La.1987); Gary Concrete Prods. v. Riley, 285 S.C. 498, 331 S.E.2d 335 (1985); and Galesburg Constr. Co. v. Board of Trustees, 641 P.2d 745 (1982); with Lynden Transport, Inc. v. State, 532 P.2d 700......
  • Big D Const. Corp. v. Court of Appeals for State of Ariz., Div. One, Nos. CV-89-0304-S
    • United States
    • Supreme Court of Arizona
    • March 28, 1990
    ...a non-resident bidder that would be given to that bidder in his home state (LSA-R.S. 38:2225(B)); Gary Concrete Prods., Inc. v. Riley, 285 S.C. 498, 331 S.E.2d 335 (1985) (upholding statute, S.C.Code Ann. § 11-35-1520(9)(d) (1984 Cum.Supp.), which grants preference to vendors if they mainta......
  • Request a trial to view additional results

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