Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976)

Hughes v. Alexandria Scrap Corp.

No. 74-1607

Argued January 21, 1976
Decided June 24, 1976
426 U.S. 794

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

Syllabus

As part of a complex plan for ridding the State of abandoned automobiles, a Maryland statute provided that anyone in possession of an inoperable automobile over eight years old ("hulk") could transfer it to a licensed scrap processor, who then could claim a "bounty" from the State for its destruction, without delivery to the processor or subsequent submission to the State of any documentation of title. In 1974, the statute was amended to require a processor to submit title documentation in order to receive a bounty. But the documentation requirements differ as between a processor with a plant in Maryland and an out-of-state processor. The former need only submit an "indemnity agreement" in which an unlicensed hulk supplier certifies his own right to the hulk and agrees to indemnify the processor for any third-party claims arising from its destruction; the non-Maryland processor must submit either a certificate of title, a police certificate vesting title, or a bill of sale from a police auction. Appellee is a Virginia processor participating in the Maryland plan whose supply of bounty-eligible hulks received from Maryland sources declined after enactment of the 1974 amendment. Appellee brought suit claiming that the amendment violated the Commerce Clause, and denied appellee equal protection of the laws. A three-judge District Court granted summary judgment for appellee, and enjoined Maryland from giving further effect to the part of the 1974 amendment that restricts the right to obtain bounties based on indemnity agreements to Maryland processors only.

Held:

1. The amendment does not constitute an impermissible burden on interstate commerce in violation of the Commerce Clause. Pp. 802-810.

(a) Maryland’s amendment of its statute was not the kind of action with which the Commerce Clause is concerned. Maryland has not sought to prohibit the interstate flow of hulks or to regulate the conditions under which the flow may occur, but, rather, has entered into the market itself by offering bounties to bid up the price of hulks; an impact on interstate commerce has occurred only because the amendment made it more lucrative for unlicensed suppliers to dispose of their hulks in Maryland instead of taking them out of the State. Pp. 804-806.

(b) Nothing in the purposes of the Commerce Clause forbids a State’s entry into the market as purchaser of potential articles of interstate commerce where the State restricts its trade to its own citizens. Although the practical effect of the 1974 amendment was to channel the benefits of the bounties to domestic processors, no trade barrier of the type forbidden by the Commerce Clause impedes movement of hulks out of the State. Pp. 807-810.

2. Nor does the 1974 amendment deny appellee equal protection of the laws. The amendment’s distinction between domestic and foreign scrap processors, complemented by the reasonable assumptions that hulks delivered to Maryland processors are likely to have been abandoned in Maryland, and those delivered to non-Maryland processors are likely to have been abandoned outside Maryland, bears a rational relationship to the basic statutory purpose of using state funds to clear Maryland’s landscape of abandoned automobiles. That is all the Constitution requires in the case of economic legislation. That Maryland might have furthered its underlying purpose more artfully, more directly, or more completely does not warrant a conclusion that the method it chose is unconstitutional. Pp. 810-814.

391 F.Supp. 46, reversed.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, BLACKMUN, REHNQUIST, and STEVENS JJ., joined. STEVENS, J., filed a concurring opinion, post, p. 814. BRENNAN, J., filed a dissenting opinion, in which WHITE and MARSHALL, JJ., joined, post, p. 817.