Wednesday, May 26, 2010

Rare Commerce Clause decision reverses trial court verdict

Everyone in law school learns about the Dormant Commerce Clause, a portion of the Constitution that sets forth governmental authority to regulate commerce. This is one of the most important provisions in our national charter, but relatively few cases actually address this issue, especially at trial.

The case is Francarl Realty v. Town of East Hampton, a summary order decided on May 3. The trial court sided with defendant in this case after a bench trial. The Court of Appeals reverses the judgment and sends it back to the trial judge. It is unusual to see a verdict overturned on summary order, by the way.

Town law regulating ferry service banned "fast" (or high speed) and "vehicle" ferries. The plaintiffs want to operate these ferry services, but Town law prohibits it. The plaintiffs argued that these limitations violated the Commerce Clause because they shifted the burden of traffic from local drivers onto interstate drivers, because local drivers benefit from reduced traffic volume on the local roads while interstate travelers are denied the most direct route to Town through the ferry. If you know the Town of East Hampton, you know that traffic is no picnic, and I guess non-locals were being denied the best way to travel through Town, and ferries from Connecticut to East Hampton are probably a Godsend to motorists who want to reach this resort Town without spending half the weekend driving through New York City and Long Island.

After a bench trial, the district court said that these ferry limitations did not have an incidental burden on interstate commerce and were therefore constitutional. The Court of Appeals (Miner, Cabranes and Wesley) sees it differently, finding that it would be inconsistent for the district court to say that (1) the bans reduce interstate travel in the Town and (2) the bans were effective in mitigating traffic congestion by reducing interstate travel in the Town.

For the Town to win the case, it would have to show that the ferry limitations mitigate traffic congestion. But the Court of Appeals says the evidence shows no real link between the Fast Ferry Ban and the claimed benefit of mitigating traffic congestion, primarily because it would not create a traffic burden on the Town if plaintiff lives up to its promise to limit transportation to 1,342 passengers per day. What this all means is that the Fast Ferry Ban might not actually prevent additional traffic in Town, and any incidental burden on interstate commerce might clearly exceed the benefits under a traditional Commerce Clause analysis.

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