Editing Dormant Commerce Clause (section)

==Exceptions==
There are two notable exceptions to the dormant Commerce Clause doctrine that can permit state laws or actions that otherwise violate the Dormant Commerce Clause to survive court challenges.

===Congressional authorization===
The first exception occurs when Congress has legislated on the matter. See ''Western & Southern Life Ins. v. State Board of California'', {{ussc|451|648|1981}}. In this case the Dormant Commerce Clause is no longer "dormant" and the issue is a Commerce Clause issue, requiring a determination of whether Congress has approved, preempted, or left untouched the state law at issue.

===Market participation exception===
The second exception is "[[market participation exception]]". This occurs when the state is acting "in the market", like a business or customer, rather than as a "market regulator".<ref>''[[South-Central Timber Dev., Inc. v. Wunnicke]]'', 467 U.S. 82, 87 (1984).</ref> For example, when a state is contracting for the construction of a building or selling maps to state parks, rather than passing laws governing construction or dictating the price of state park maps, it is acting "in the market".  Like any other business in such cases, a state may favor or shun certain customers or suppliers.

The Supreme Court introduced the market participant doctrine in  ''[[Hughes v. Alexandria Scrap Corp.]]'', 426 U.S. 794 (1976), which upheld a Maryland program that offered bounties to scrap processors to destroy abandoned automobile hulks. See also ''Wisconsin Dep't of Indus., Labor & Human Relations v. Gould Inc.'', 475 U.S. 282, 289 (1986); ''[[Reeves, Inc. v. Stake]]'', 447 U.S. 429, 437 (1980).  Because Maryland required out-of-state processors, but not in-state processors, to submit burdensome documentation to claim their bounties, the state effectively favored in-state processors over out-of-state processors. The Court held that because the state was merely attaching conditions to its expenditure of state funds, the Maryland program affected the market no differently than if Maryland were a private company bidding up the price of auto hulks.  Because the state was not "regulating" the market, its economic activity was not subject to the anti-discrimination principles underlying the dormant Commerce Clause&mdash;and the state could impose different paperwork burdens on out-of-state processors. "Nothing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others."

Another important case is ''White v. Massachusetts Council of Constr. Employers, Inc.'', in which the Supreme Court held that the City of Boston could require its building contractors to hire at least fifty percent of their workforce from among Boston residents.  460 U.S. at 214&ndash;15. Because all of the employees covered by that mandate were "in a substantial if informal sense, 'working for the city,' " Boston was considered to be simply favoring its own residents through the expenditures of municipal funds.  The Supreme Court stated, "when a state or local government enters the market as a participant it is not subject to the restraints of the Commerce Clause." Id. at 208.  Nothing in the Constitution precludes a local government from hiring a local company precisely because it is local.

Other important cases enunciating the market participation exception principle are ''[[Reeves, Inc. v. Stake]]'', {{ussc|447|429|1980}} and ''[[South-Central Timber Development, Inc. v. Wunnicke]]'', {{ussc|467|82|1984}}. The ''Reeves'' case outlines the market participation exception test. In this case state-run cement co-ops were allowed to make restrictive rules (e.g. rules not to sell out-of-state). Here, this government-sponsored business was acting restrictively like an individually owned business and this action was held to be constitutional. ''South-Central Timber'' is important because it limits the market exception. ''South-Central Timber'' holds that the market-participant doctrine is limited in allowing a State to impose burdens on commerce within the market in which it is a participant, but allows it to go no further. The State may not impose conditions that have a substantial regulatory effect outside of that particular market.

The "market participation exception" to the dormant Commerce Clause does not give states unlimited authority to favor local interests, because limits from other laws and Constitutional limits still apply.  In ''[[United Building & Construction Trades Council v. Camden]]'', {{ussc|465|208|1984}}, the city of [[Camden, New Jersey]] had passed an ordinance requiring that at least forty percent of the employees of contractors and subcontractors on city projects be Camden residents. The Supreme Court found that while the law was not infirm because of the Dormant Commerce Clause, it violated the [[Privileges and Immunities Clause]] of [[Article Four of the United States Constitution|Article IV]] of the Constitution. Justice Rehnquist's opinion distinguishes the market-participant doctrine from the privileges and immunities doctrine.  Similarly, Congress has the power itself under the Commerce Clause to regulate and sanction states acting as "market participants", but it lacks power to legislate in ways that violate Article IV.

In the 21st century, the dormant Commerce Clause has been a frequent legal issue in cases arising under state laws regulating some aspects of Internet activity. Because of the interstate, and often international, nature of Internet communications, state laws addressing internet-related subjects such as [[spam (electronic)|spam]], online sales or online pornography can often trigger Dormant Commerce Clause issues.<ref>{{cite journal |last=Goldsmith |first=Jack L. |author2=Sykes, Alan O. |year=2001 |title=The Internet and the Dormant Commerce Clause |journal=Yale Law Journal |volume=110 |issue=5 |pages=785&ndash;828 |doi=10.2307/797608 |jstor= 797608|url=https://digitalcommons.law.yale.edu/ylj/vol110/iss5/2 }}</ref>