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I. Introduction
A. Scope and Purpose of Website
C. Legend
B. About the AuthorII. Commerce Clause and the Internet
1. United States Constitution
2. Federal Cases
3. State Statutory Provisions
4. State Cases1. Books
2. Law Review Articles
3. American Law Reports
4. Newspapers/Magazines
5. Internet Sources
6. Attorneys
A. Scope and Purpose of this Website (back to top)
Tired of driving from dealership to dealership when looking for a new car? Hoping for a pressure-free no-haggle experience? Hoping to eliminate the middleman and buy directly from the manufacturer? Well buying an automobile on the information superhighway directly from the manufacturer is nearly impossible. More than forty states have passed legislation that roadblock Internet sales by auto-manufacturers. States enact these franchise laws to protect the local dealer market.
Under current state regulatory schemes when consumers visit most major manufacturer websites there are a list of possibilities for buying online. Some manufacturers allow customers to configure their automobile online but then consumers are either directed to a local dealer with matching inventory or the custom made car will be sent to a local dealer for completion of the sale. However most manufacturers act like a referral service with links matching customers with local dealer websites.
Despite states' protectionist measures the growth of commercial activity on the Internet has produced challenges to federalist principles on grounds that these state laws interfere with interstate commerce and violate the Commerce Clause of the United States Constitution. When a federally enacted statute applied through the Commerce Clause conflicts with state legislation the federal law trumps state power under the Supremacy Clause. The United States Supreme Court has interpreted the Commerce Clause to grant Congress the power to invalidate state legislation that produces a discriminatory effect or unduly interferes with interstate commerce. However the Constitution fails to express limitations on state economic regulations in the absence of Congressional legislation. Consequently the Supreme Court has interpreted the Commerce Clause to have a negative command known as the dormant commerce clause which forbids states from practicing economic protectionism and blocking interstate trade in the wake of Congressional silence.
This research collection results from work the author did for his law review note entitled The Dormant Internet: Are State Regulations of Motor Vehicle Sales by Manufacturers on the Information Superhighway Obstructing Interstate and Internet Commerce? . This note will appear in the Spring 2002 Georgia State University Law Review volume 18 book 3. The author created this research collection website as part of an Advanced Legal Research project at the Georgia State University College of Law. This project was undertaken to help interested parties understand the arguments for and against the limitations placed upon auto-manufacturer Internet sales and whether change is possible. To provide insight this paper analyzes trends in other businesses such as the wine gasoline and cigarette industries * which have faced similar state protectionist measures.
B. Legend* (back to top)
indicates wine cases
indicates petroleum cases
indicates cigarette cases
indicates regulation of Internet sales by auto-manufacturers
indicates Internet regulation
indicates U.S. Supreme Court interpretation of the Commerce Clause
C. About the Author (back to top)
The author is a candidate for a Juris Doctor degree from the Georgia State University College of Law in May 2002. Any questions comments or other communications should be directed to the author via electronic email.
| Top | Table of Contents | Introduction | Primary Sources | Secondary Sources |
II. Commerce Clause and the Internet
A. Primary Sources (back to top)
1. United States Constitution
The United States Constitution as well as federal statutes may be located in the United States Code (U.S.C.) the United States Code Annotated (U.S.C.A.) and the United States Code Service (U.S.C.S.). The Constitution may also be found free on the following websites: http://www.findlaw.com and http://www.law.cornell.edu.U.S. Const. art. I § 8 cl. 1 2
"The Congress shall have Power . . . [t]o regulate Commerce . . . among the several States. . . ."
"This Constitution and the Laws of the United States which shall be made in Pursuance thereof; . . . shall be the supreme Law of the Land."
"The transportation or importation into any State . . . for delivery or use therein of intoxicating liquors in violation of the laws thereof is hereby prohibited."
2. Federal Cases (back to Primary Sources)
a. Supreme Court Cases
United States Supreme Court cases may be located in the United States Reports (U.S.) the Supreme Court Reporter (S.Ct.) or the United States Supreme Court Reports (L.Ed. and L.Ed.2d). Supreme Court cases can also be found free on the following websites: http://www.findlaw.com and http://www.law.cornell.edu.
This case explains the dormant commerce clause which is the negative command arising from the Commerce Clause forbidding states from practicing economic protectionism and blocking interstate trade in the wake of Congressional silence.
Relied upon by the court in Pataki. Healy involved a Connecticut statute that ordered out-of-state beer distributors to confirm their Connecticut prices did not exceed prices charged in bordering states. The Court declared the statute unconstitutional because it regulated commercial activity outside Connecticut.
Relied upon by the court in Pataki. In Edgar the Court declared an Act which required a tender offeror to notify the Illinois Secretary of State and the targeted company of its intent to make an offer twenty days prior to an attempted takeover unconstitutional under the Commerce Clause. The Court believed the regulation resulted in a "direct restraint on interstate commerce and . . . [had] a sweeping extraterritorial effect."
This case supports states attempts at regulating Internet automobile sales. This case involved a state regulation prohibiting petroleum product producers or refiners from owning or operating gas stations in Maryland. The Court found that the statute neither discriminated against interstate commerce nor favored local producers or refiners because none existed within Maryland.
In this seminal case the Court explained the modern standard for determining whether state regulatory power complies with the dormant commerce clause. Pike involved a facially non-discriminatory statute that banned interstate shipment of cantaloupes that failed to meet Arizona packaging requirements. The Court applied a balancing test and stuck down the law holding that Arizona's interest in having the produce marked as coming from the state did not outweigh the financial burden imposed on the grower in building an unnecessary packing plant.
Justice Johnson introduced in his concurring opinion the negative aspects of the Commerce Clause.
b. Circuit Court Cases (back to Federal Cases)
Circuit court cases may be located in the Federal Reporter (F. F.2d and F.3d). Some circuit court cases may also be found free on the following websites: http://www.findlaw.com and http://www.law.cornell.edu.
A case involving the regulation of wine favoring state regulation. The Seventh Circuit reversed an earlier district court ruling which held an Indiana law criminalizing direct shipments from out-of-state wine sellers to Indiana consumers unconstitutional. The appellate court reinstated the law under the Twenty-first Amendment. The court refused to apply the dormant commerce clause arguing that the Twenty-first Amendment precluded the dormant commerce clause from shielding interstate liquor shipments from regulation.
Followed Pataki in finding state regulation of the Internet unconstitutional on Commerce Clause grounds. Also the court called for federally consolidated Internet regulation due to the Internet's expansiveness.
c. District Court Cases (back to Federal Cases)
District court cases may be found in the Federal Supplement (F. Supp. or F. Supp. 2d). The findlaw website provides links to the various district courts which are sporadic in terms of access to court decisions.
A case involving the regulation of wine favoring state regulation. Like the court in Bridenbaugh II the Bainbridge court upheld a state's direct shipment law under the Twenty-first Amendment.
The district court affirmed its earlier ruling in that the challenged statute violated the dormant commerce clause because the Act would impermissibly control communications beyond Michigan's borders.
A case involving the regulation of wine that could prove useful for parties challenging state regulations that prohibit Internet sales by auto-manufacturers. In analyzing a challenge to Virginia's direct shipment law prohibiting outside alcohol seller from shipping directly to instate residents the court rejected Bridenbaugh II's Twenty-first Amendment approach and determined that state discriminatory laws regulating alcohol must be reviewed under the dormant commerce clause.
A case involving the regulation of wine by Texas that could prove useful for parties challenging state regulations that prohibit Internet sales by auto-manufacturers. Dickenson contained a Texas statute that stopped consumers from receiving direct shipments of wine from out-of-state wineries and distributors. The court found the statute unconstitutional on Commerce Clause grounds as the statute symbolized economic protectionism by facially discriminating against out-of-state wineries and distributors while benefiting local sellers.
Here Ford Motor Company challenged a Texas statute that prohibited automobile manufacturers from competing with dealers for retail sales. Ford raised various constitutional objections including a dormant commerce clause argument asserting the Texas law favored in-state interests. Ford called for federal regulation of the Internet as state regulations subject users to inconsistent obligations. The court rejected Ford's claims asserting that if activities normally regulated by states became untouchable when done through the Internet then all state regulatory schemes would fall before the might alter of the internet.
A case involving the regulation of wine that could prove useful for parties challenging state regulations that prohibit Internet sales by auto-manufacturers. The court granted a preliminary injunction against an Illinois law which regulated transactions between distributors and suppliers and out-of-state players but did not applying a similar standard to instate wineries.
Followed Pataki in finding state regulation of the Internet unconstitutional on Commerce Clause grounds.
The court granted a temporary restraining order against the enforcement of a New York statute that restricted cigarette sales in New York to instate merchants. Although the court temporarily shut down the law it agreed with the Ford Motor Co. opinion and rejected the notion that the Internet could be a tool used to demolish state regulation of the sale of goods.
A case involving the regulation of wine that could prove useful for parties challenging state regulations that prohibit Internet sales by auto-manufacturers. The court reject a motion to dismiss a challenge to a New York statute that allowed only state-licensed businesses to distribute alcoholic beverages to consumer. The court cited to Bridenbaugh I (since reversed) Dickenson and Kendall-Jackson Winery for support.
In district court the judges used the dormant commerce clause in striking down an Indiana law criminalizing direct shipments from out-of-state wine sellers to Indiana consumers. However this ruling was reversed on appeal.
Followed Pataki in finding state regulation of the Internet unconstitutional on Commerce Clause grounds. The case involved a Michigan statute that prohibited the use of computers or the Internet to disseminate sexually explicit materials to children.
Pataki was the first case to find state regulation of the Internet unconstitutional under the dormant commerce clause. The Act made it a crime to knowingly disseminate sexually explicit material to minors. The Court applied the Pike standards and found it violated the dormant commerce clause because the Act's burden on interstate commerce was too severe to justify the local benefit. The court called for federal regulation of the Internet because it feared that state regulation would result in chaos and expose users to inconsistent standards. This statement has stirred debate on both sides.
2. State Statutory Provisions (back to Primary Sources)
a. Statutes
State statutes are available in bound volumes as well as on free Internet sites such as: http://www.findlaw.com and http://www.law.cornell.edu. State statutes may also be available on the corresponding state's website. Below are 45 state statutes and their relevant language that restrict automobile manufacturers from selling directly via the Internet or otherwise to consumers.
| STATE | CODE SECTION | RELEVANT LANGUAGE |
| Alabama | Ala. Code § 8-20-4(3)(s) | "The following acts or conduct shall constitute unfair and deceptive trade practices: . . . For any manufacturer . . . to make direct sales or leases of new motor vehicles to the public in Alabama. . . ." |
| Arizona | Ariz. Rev. Stat. Ann. § 28-4460A B(1)-(2) | "A factory shall not directly or indirectly compete with . . . its dealers. . . . [Which] includes . . .: (1)The factory having an ownership interest or franchise interest in or operating or acting in the capacity of a new . . . or used motor vehicle dealer. . . . (2) The factory . . . selling vehicles . . . to any retail customer. |
| Arkansas | Ark. Code Ann. § 23-112-403(a)(2)(M)(i) | "It shall be unlawful: . . . For a manufacturer . . . [T]o offer to sell or to sell any motor vehicle to a consumer except through a licensed new motor vehicle dealer. . . ." |
| California | Cal. Veh. Code § 11713.3(o)(1) | "It is unlawful and a violation of this code for any manufacturer . . . [t]o compete with a dealer in the same line-make operating under an agreement or franchise from a manufacturer . . . in the relevant market area." |
| Connecticut | Conn. Gen. Stat. Ann. § 42-133cc(8) | "No manufacturer . . . shall: . . . Unfairly compete with a dealer in the same line make operating under an agreement or franchise from such manufacturer or distributor in the relevant market area." |
| Delaware | Del. Code Ann. tit. 6 § 4913(b) (b)(7) | "It shall be a violation of this chapter for any manufacturer: . . . To unfairly compete with a new motor vehicle dealer in the same line-make operating under an agreement or franchise from the . . . manufacturer." |
| Florida | Fla. Stat. Ann. § 320.645(1) | "No licensee . . . [or] manufacturer . . . shall own or operate . . . a motor vehicle dealership in this state for the sale . . . of motor vehicles which have been or are offered for sale under a franchise agreement with a . . . dealer in this state." |
| Georgia | O.C.G.A. § 10-1-664.1(c) | "[N]o manufacturer . . . shall offer to sell . . . any new motor vehicle to a consumer in this state except through a new motor vehicle dealer holding a franchise for the line make covering such new motor vehicle." |
| Idaho | Idaho Code § 49-1613(3)(g) | "It shall be unlawful for any manufacturer licensed under this chapter to: . . . Unfairly compete with a dealer in the same line make operating under an agreement or franchise from the manufacturer in the relevant market." |
| Illinois | 815 Ill. Comp. Stat. Ann. 710/4(f) | "It is deemed a violation for a manufacturer . . . to own or operate a place of business as a motor vehicle franchisee . . . ." |
| Indiana | Ind. Code Ann. § 9-23-3-23(3) | "It is an unfair practice for a manufacturer . . . to . . . . Establish or acquire wholly or partially a franchisor owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement . . . ." |
| Iowa | Iowa Code Ann. § 322.3(14) | "A manufacturer ... shall not directly or indirectly be licensed as own an interest in operate or control a motor vehicle dealer." |
| Kansas | Kan. Stat. Ann. § 8-2438 | "[A] . . . manufacturer of vehicles . . . may not directly or indirectly: (1) Own an interest in a new vehicle dealer or dealership; (2) operate a new vehicle dealer or dealership; or (3) act in the capacity of a new vehicle dealer or dealership or otherwise sell new vehicles at retail." |
| Kentucky | Ky. Rev. Stat. Ann. § 190.070(2)(j) | "It shall be a violation of this section for any manufacturer . . . . To own operate or control any motor vehicle dealership in the Commonwealth . . . ." |
| Louisiana | La. Rev. Stat. Ann. § 32:1254(N)(6)(1) | "It shall be a violation of this Chapter: . . . For a manufacturer of motor vehicles: . . . To sell or offer to sell a new or unused motor vehicle directly to a consumer . . . ." |
| Maine | Me. Rev. Stat. ann. tit. 10 § 1174(3)(K) | "It shall be unlawful for any: . . . Manufacturer . . . . To compete with a motor vehicle dealer operating under an agreement or franchise from the manufacturer . . . in the relevant market area . . . ." |
| Maryland | Md. Code Ann. Transp. II § 15-305(f) | "A manufacturer . . . may not sell a new vehicle to a retail buyer." |
| Massachusetts | Mass. Gen. Laws Ann. ch. 93B § 4(3)(k) | "It shall be deemed a violation . . . for a manufacturer . . . . To own or operate either directly or indirectly . . . a motor vehicle dealership within the relevant market area of a motor vehicle dealer of the same line make . . . ." |
| Michigan | Mich. Comp. Laws Ann. § 445.1574(1)(i) | "A manufacturer . . . shall not do any of the following: . . . Sell any new motor vehicle directly to a retail customer other than through its franchised dealers . . . ." |
| Minnesota | Minn. Stat. Ann. § 80E.13(i) | "It is unlawful and an unfair practice for a manufacturer . . . to . . . . Compete with a new motor vehicle dealer in the same line make operating under an agreement or franchise from the same manufacturer . . . .") |
| Montana | Mont. Code Ann. § 61-4-208(3)(a) | "[A] manufacturer of new motor vehicles . . . may not own or operate directly or indirectly a motor vehicle dealership in Montana that is for sale or has been for sale under a franchise agreement with a new motor vehicle dealer in Montana." |
| Nebraska | Neb. Rev. Stat. Ann. § 60-1438.01(2) | "[A] manufacturer . . . shall not directly or indirectly: (a) Own an interest in a franchise . . . . (b) Operate or control a franchisee . . . . (c) Act in the capacity of a franchisee." |
| Nevada | Nev. Rev. Stat. Ann. § 482.36385(1) | "It is an unfair act or practice for any manufacturer . . . directly or through a representative to: Compete with a dealer." |
| New Hampshire | N.H. Rev. Stat. Ann. § 357-C:3(III)(k) | "It shall be deemed an unfair method of competition and unfair and deceptive practice for any: . . . Manufacturer . . . to: . . . Compete with a motor vehicle dealer operating under an agreement or franchise from such manufacturer . . . in the relevant market area . . . ." |
| New Jersey | N.J. Stat. Ann. § 56:10-28 | "It shall be a violation . . . for a motor vehicle franchisor directly or indirectly . . . to own or operate a place of business as a motor vehicle franchisee . . . ." |
| New Mexico | N.M. Stat. Ann. § 57-16-5(V) | "It is unlawful for any manufacturer . . . to: . . . [B]e licensed as a dealer . . . ." |
| North Carolina | N.C. Gen. Stat. § 20-305.2(a) | "It is unlawful for any motor vehicle manufacturer . . . to directly or indirectly . . . own any ownership interest in operate or control any motor vehicle dealership in this State . . . ." |
| North Dakota | ND Cent. Code § 39-22-24 | "A manufacturer . . . may not own operate or control a motor vehicle dealership in this state." |
| Ohio | Ohio Rev. Code Ann. § 4517.59(E) | "[N]o franchisor shall: . . . Sell lease or rent goods or motor vehicles . . . in unfair competition with the franchisee . . . ." |
| Oklahoma | Okla. Stat. Ann. Tit 47 § 565(A)(11) | "The Commission may . . . impose a fine . . . against a manufacturer . . . for any of the following reasons: . . . Being a factory that sells directly or indirectly new motor vehicles . . . to any retail consumer in the state except through a new motor vehicle dealer . . . ." |
| Oregon | Or. Rev. Stat. § 650.130(1) | "[I]t shall be unlawful for any manufacturer . . . to: . . . Unfairly compete with a dealer in any matters governed by the franchise including but not limited to the sale or allocation of vehicles . . . ." |
| Pennsylvania | Pa. Cons. Stat. Ann. § 818.12(c)(1) | "[A] manufacturer or distributor shall not: (i) own or hold an interest . . . in a dealer licensed under this act which is engaged in the business of buying selling or exchanging vehicles; or (ii) operate or control a dealer licensed under this act . . . ." |
| Rhode Island | R.I. Gen. Laws § 31-5.1-4(c)(9) | "It is a violation . . . for a manufacturer . . . to: . . . Compete with a new motor vehicle dealer operating under an agreement or franchise from the manufacturer in . . . Rhode Island through the ownership operation or control of any . . . dealers in this state or by participating in . . . any . . . dealer in this state." |
| South Carolina | S.C. Code Ann. § 56-15-45(D) | "[A] manufacturer . . . may not sell directly or indirectly a motor vehicle to a consumer in this State except through a new motor vehicle dealer holding a franchise for the line make that includes the motor vehicle." |
| South Dakota | SD Codified Laws § 32-6B-80 | "[N]o manufacturer . . . may directly or indirectly: (1) Own an interest in a vehicle dealer or dealership; (2) Operate or control a vehicle dealer or dealership; or (3) Act in the capacity of a vehicle dealer." |
| Tennessee | Tenn. Code Ann. § 55-17-114(c)(17) | "[T]he commission may deny an application for a license or revoke or suspend the license of a manufacturer . . . who has: . . . Competed with a dealer in the same line-make operating under an agreement or franchise from a manufacturer . . . in the relevant market area." |
| Texas | Tex. Rev. Civ. Stat. Ann. Art. 4413(36) § 5.02C(c) | "[A] manufacturer may not directly or indirectly: (1) own an interest in a dealer or dealership; (2) operate or control a dealer or dealership; or (3) act in the capacity of a dealer." |
| Utah | Utah Code Ann. § 13-14-201(1)(u) | "A franchisor may not in this state: . . . [D]irectly or indirectly: (i) own an interest in a new motor vehicle dealer or dealership; (ii) operate or control a new motor vehicle dealer or dealership; (iii) act in the capacity of a new motor vehicle dealer . . . ." |
| Vermont | Vt. Stat. Ann. Tit 9 § 4097(8) | "It shall be a violation of this chapter for any manufacturer . . . . [T]o unfairly compete with a new motor vehicle dealer in the same line-make operating under an agreement or franchise from the aforementioned manufacturer in the relevant market area." |
| Virginia | Va. Code Ann. § 46.2-1572 | ("It shall be unlawful for any motor vehicle manufacturer . . . to own operate or control any motor vehicle dealership in the Commonwealth." |
| Washington | Wash. Rev. Code Ann. § 46.96.185(1)(f) | "[A] manufacturer . . . shall not: . . . Compete with a new motor vehicle dealer by acting in the capacity of a new motor vehicle dealer . . . ." |
| West Virginia | W. Va. Code Ann. § 17A-6A-10(2)(i) | "A manufacturer may not . . . directly or indirectly: (i) Own an interest in a dealer or dealership; (ii) Operate a dealership; or (iii) Act in the capacity of a new motor vehicle dealer . . . ." |
| Wisconsin | Wis. Stat. Ann. § 218.012(2m) | "A factory [manufacturer] shall not directly or indirectly. . . . operate . . . a motor vehicle dealership in this state." |
| Wyoming | Wyo. Stat. Ann. § 31-16-108(c)(vii) | "No manufacturer licensed under this act shall: . . . Unfairly compete with a new vehicle dealer in the same line make and operating under an agreement or franchise from the manufacturer in the relevant market area." |
b. Committee Reports (back to State Statutory Provisions)
State legislative committee reports are an excellent source for information providing background and insight behind the purpose of enacted legislation. Unfortunately most states do not maintain organized legislative history. When researching the rationale and history behind a state statute a researcher may try to contact the bill's congressional supporter and ask if he/she has any background on file.California
According to a Westlaw staff research attorney California is one of the only states that maintains legislative history. This committee report serves as insight into why state legislatures enact franchise protection laws. The report states that the reason for a bill regulating conduct between an auto manufacturer and local dealers materializes because the carmaker used a "dealer development exception" to buy and operate dealerships in California.
3. State Cases (back to Primary Sources)
State case law may be found in bound volumes. Selected state court cases are also available free on the following websites: http://www.findlaw.com and http://www.law.cornell.edu. Each states' official state website may also provide access to court opinions.California
Rejected Pataki and noted that the statute at issue in Pataki was broad and "not limited to persons attempting to seduce minors."
Rejected the Pataki ruling finding that a statute reaching Internet use did not automatically burden the Commerce Clause. The court asserted federalist principles holding that absent opposing federal regulation states retain jurisdiction "to regulate matters of legitimate local concern" by virtue of their general police powers.
New York
Distinguishing a New York statute which regulated predatory pedophile activity containing a "luring" prong from the law struck down in Pataki as the upheld statute did not burden interstate commerce. The court believed the conduct sanctioned by the law deserved no economic protection but rather fell under a state's general police power.
Washington
The Washington Supreme Court distinguished Pataki when it ruled that a statute banning the use of misleading information in the subject line of commercial emails sent to Washington residents or from a Washington computer did not violate the dormant commerce clause. The court's decision emphasized that Washington's law covered only acts directed toward Washington residents or from Washington computers.
| Top | Table of Contents | Introduction | Primary Sources | Secondary Sources |
B. Secondary Sources (back to top)
1. Books
Treatises and nutshells serve as excellent secondary starting points to gain understanding about a specific area of law.
This treatise provides background on the commerce clause and restrictions on state regulatory powers. The treatise also explains the creation of the dormant commerce clause from its introduction in Gibbons to its current use in interpreting the scope of permissible state regulation in the wake of congressional silence.
This nutshell reviews state power to regulate commerce and the limitations placed upon it by the dormant commerce clause.
2. Law Review Articles
Law review articles focus on a distinct legal issue and provide useful citations sources and further research leads on an area of law. They can be found easily through word searches on pay websites LexisNexis and Westlaw. Unfortunately most law reviews do not provide back issues online. Law review articles can also be located in bound volumes in libraries through use of the Index to Legal Periodicals or the Current Law Index.
This article argues that the Internet should be relegated to state regulation and consequently Pataki goes too far in calling for federal regulation. The authors based their analysis on a study involving the federal government's control over traditional state criminal laws which showed an unimpressive track record of cases actually brought. The authors concluded that like the criminal law example the government would not dedicate "the time resources or interest . . . to become cyber-consumer advocates."
This briefing paper is an excellent source discussing state limits on Internet automobile sales. It identifies some of the reasons behind these state restrictions and suggests the regulations may be unconstitutional.
This article provides in-depth analysis on both dormant commerce clause jurisprudence the Edgar line of cases and the Pataki decision. The author predicts that the Supreme Court will use the First Amendment rather than the dormant commerce clause in its Internet extraterritoriality analysis.
This article examines direct shipment laws and their validity under the Commerce Clause and Twenty-first Amendment. The author argues that direct shipment laws are protectionist legislation and thus a per se violation of the Constitution. The author extends his analysis to wine Internet sales and predicts that a federal court will likely strike down statutes banning such sales because they discriminate against out-of-state commerce.
This article provides a good overview on the development of the Internet. It contains a good description of the dormant commerce clause and a thorough analysis of the Pataki case.
This article provides a good explanation of the dormant commerce clause as well as background on the development of the Internet. The author draws similarities between the Internet and the national transportation network and believes like traditional transportation channels the Internet should be subject only to federal regulation.
This article provides an indepth analysis of the Pataki decision. The author agrees with the Pataki ruling that state regulation of the Internet violates the Commerce Clause because such laws burden interstate commerce extend beyond a state's borders and subject users to inconsistent obligations.
This article explains where Internet regulation stands today and where it is likely going. The article provides an indepth discussion on Pataki and gives arguments both for and against federal regulation of the Internet. The author concludes that the Internet needs federal regulation which would not infringe on state powers.
The author argues that the Internet's unique nature commences constitutional limitations when states start regulating online activity that begins outside their borders. The author concludes that the Due Process Clause of the Fourteenth Amendment and the dormant commerce clause significantly limit a state's ability to regulate Internet activities. The article gives a good review of the dormant commerce clause and provides analysis of the Healy and Edgar decisions.
This article provides an excellent analysis covering the pros and cons of the dormant commerce clause. The author concludes that the doctrine should be abandoned by the Court because it is not supported by the Constitution's text and infringes on Congressional power.
3. American Law Reports (back to Secondary Sources)
The American Law Reports (A.L.R.) can serve as an excellent starting point for research. The annotation provides information by legal topic and includes useful citations to other sources on point such as case law and law review articles.
This annotation analyzes cases addressing the validity construction and effect of state laws designed to regulate the relationship between franchisors and franchisees.
This annotation collects and analyzes the state and federal cases dealing with the validity construction and application of state statutes regulating arrangements between automobile manufacturers and dealers/franchisees.
This annotation collects and analyzes United States Supreme Court cases that discuss the validity under the commerce clause of the Federal Constitution of state regulation or taxation of alcoholic beverages.
4. Newspapers/Magazines (back to Secondary Sources)
Newspapers and magazines can provide background and commentary on various legal issues; they are useful tools but should never be used as a primary argument. Concerning state regulations against direct sales by auto-manufacturers newspaper articles were useful in discovering legislative intent and resistent to such legislation. Both electronic databases LexisNexis and Westlaw provide comprehensive coverage to the nation's major newspapers. Individual newspapers also provide access to past articles via their webpages but usually charge a fee. Past articles may also be located at local libraries on microfiche or other storage mechanisms.
This newspaper article discusses a new website sponsored by Ford that would help customers find Ford vehicles at fixed prices at dealerships nationwide. The website is www.FordDirect.com.
An editorial written by Arizona representative Mark Steele opposing the Arizona legislature's approval of House Bill 2101 which protected local dealers from competition by manufacturers.
This newspaper article provides good information regarding a South Carolina bill enacted during the 2000 legislative session forbidding auto-manufacturers from selling new cars directly over the Internet.
A good secondary source discussing recent attempts by state legislatures to strengthen franchise laws in response to auto-manufacturers buying and operating dealerships.
This newspaper article provides good background on an Arizona bill presented during the 2000 legislative session that prohibited auto-manufacturers from competing with dealers.
A secondary source discussing the Internet's increasing popularity among consumers for researching and buying cars.
This newspaper article discusses Georgia bill passed during the 1999 legislative session that prohibited carmakers from directly selling to the public.
This newspaper article provides good background pertaining to a Georgia bill passed during the 1999 legislative session that prohibited carmakers from directly selling to the public.
5. Internet Sources (back to Secondary Sources)
Cornell Law School Legal Information Institute
This website links to Constitutions Codes Rules and federal cases.
This website allows free research to state and federal cases and statutory law.
This website gives access to current legal news and links to state sites.
For cases using the "Search Advisor" tab select "Constitutional Law" and then "Congressional Powers & Duties" followed by "Commerce Clause". Then select whether you want to research federal or state cases and use the following search terms: "dormant commerce clause and franchise." This will get you started and Shepardizing appropriate cases will help you find more cases on point.
For state statutes addressing manufacturers sales to consumers select "All Sources" from the main menu then choose States Legal - US, Combined States, Statutes & Legislative Materials, Codes, Constitutions, Court Rules and ALS, and "All State Statutes." Enter the search terms: "manufacturer and own or operate w/15 franchise or dealership."
For law review and ALR articles select All Sources, Secondary Legal, and "Law Reviews and ALR." Enter the search terms: "dormant commerce clause w/p franchise or dealer."
This website provides links and extensive background on various where customers can buy cars from US New Manufacturers. All the sites listed appear to incorporate a dealer into the purchase query.
6. Attorneys (back to Secondary Sources)
Office of the Attorney General
P.O. Box 12548
Austin TX 78711-2548Baker & Hostetler LLP (Houston Office)
1000 Louisiana Suite 2000
Houston TX 77002-5009
| Top | Table of Contents | Introduction | Primary Sources | Secondary Sources |
