Untangling the Market-Participant Exemption to the Dormant Commerce Clause

This article explores the market-participant rule. Part I traces the rule’s evolution and shows how it has proven less rigid than some initially feared. Part II probes the roots of the rule by challenging justifications for it suggested by other observers. Part III offers an alternative theory of the market-participant doctrine, arguing in particular that it rests on a cluster of rationales that properly have led· the Court to uphold marketplace preferences as the “general rule.” Part IV builds on Part III to advance a new, four-part framework for evaluating market-participant issues. Part V then uses that framework to apply the market-participant rule to nine key categories of cases. This article rejects an all-or-nothing approach to these cases, advocating instead a sensitive application of the market-participant rule in light of its underlying justifications.

Many observers have attacked the market-participant rule. This article seeks to show that these challenges are misplaced. The Court’s market-participant decisions reflect a sound, if complex, accommodation of competing constitutional values. This article lays bare those values and details the course they suggest courts should follow in deciding future market-participant cases.