Several entities including the American Trucking Association are suing Oregon to stop a law that will have major implications on the trucking industry. If implemented, the law would have a direct impact on fuel prices and possibly trucking equipment. The challenge to the law is based on the Commerce Clause of the U.S. Constitution.
Challenged Oregon Law
The Oregon law being challenged was signed into law on March 12, 2015, by Governor Kate Brown. The law gives the Oregon Department of Environmental Quality a mandate to implement Oregon’s Clean Fuels Program. The Clean Fuels Program is a new program that requires all fuel distributors within Oregon to reduce their fuel’s carbon intensity by at least 10% within the next decade. The drafters of the law hope that these changes will increase the use of ‘sustainable’ sources of fuel such as biodiesel, electricity, biogas, natural gas, and propane.
There are many critics of the new law. For one, some are saying that implementing the bill will not do anything to improve the state’s environment, but will be a boon for Oregon’s small biofuel industry. Second, implementing the new law will drastically affect the price of diesel fuel for truckers. Consequently, small and large trucking companies alike will likely see their profit margins get even smaller. This is why the American Trucking Association has chosen to join the suit against Oregon.
The Commerce Clause Challenge
The various organizations are seeking to stop the new law based on the “dormant” Commerce Clause. The Commerce Clause from Article 1 Section 8 of the Constitution states that Congress is given the power to “regulate commerce with foreign nations, and among the several states….” As you can see, the Constitution grants an affirmative power to Congress to regulate commerce among the states. In interpreting this clause over the years, the U.S. Supreme Court has understood it to mean that there is a “dormant” section to the clause. Though not stated affirmatively, the Supreme Court jurisprudence states that the ‘dormant’ Commerce Clause prohibits states from regulating commerce among the states. The American Trucking Association and others feel that in passing its fuel law, Oregon is essentially regulating fuel prices for the truckers that transport commercial items to and through Oregon, and therefore Oregon is regulating interstate commerce.
There are several elements to a ‘dormant’ Commerce Clause case. In order to be successful in their suit the organizations will have to show the following things:
- That the law on its face treats Oregon differently than other states regarding commerce.
- Does the regulation have an affect on interstate commerce?
- Is the regulation intentionally regulating interstate commerce?
- Could the Oregon meet its stated goals in other ways?
Whether the organizations will be successful in their suit remains to be seen. But there is precedent by the Supreme Court that has declared state law affecting the trucking industry at large unconstitutional. In Kassel v. Consolidated Freightways Corporation of Delaware, 450 U.S. 662 (1981) the Court declared an Iowa law unconstitutional that prohibited the use of 65 foot double trailer trucks in its state.
We at Anderson and Yamada, P.C. are here to respond to the needs of trucking companies. We are constantly up to date on the laws and rules affecting the industry, and we want to use our expertise to help you and your company with any legal needs you have.