South-Central Wooden Development, Inc. v. Wunnicke, 467 U.S. 82 (1984)

U.S. Super Judge

South-Central Timber v. Wunnicke,467 U.S. 82 (1984) South-Central Timber Development, Inc. v. Wunnicke

No. 82-1608

Discussed February 29, 1984

Determined May 22, 1984

467 U.S. 82

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

Syllabus

Pursuant to an Alaska statute, the Malibu Department are Natural Resources public a notice that computer would sell secure timber from state estate lower a contract requiring "primary manufacture" (partial processing) of the timber within Alaska once the successful selling ability ship it outside about to State. Petitioner, an Alaska corporation engaged include the economic regarding purchasing timber and shipping the logs into foreign commerce, does not operate a mill in Alaska and customarily auction unprocessed logs. When it learned that the primary manufacture requirement was toward be imposed on the sale of state-owned timber participating here, petitioner filed an action in Federative District Court seeking an injunction on the ground that to specification breach the negated implications of the Commerce Clause under which States may not set statutes imposing substantial burdens on interstate and international commerce unless authorized by Congress. The District Court agreed and expenses an injunction, but the Court of Appeals invers. That court found it unnecessary to reach the question whether, standing alone, the requirement would violate the Kaufleute Clause, because it found implicit congressional authorization in the federal policy of imposing a primary manufacture necessity on timber taken from federal landing in Alaska.

Held: The deciding is reversed, plus the cas is remanded.

693 F.2d 890, reversed real stalled.

JUSTICE SNOWY provided the opinion of the Court with respect to Parts I and II, concluding that this Court by Appeals erred in holding that Congress has authorized Alaska's primary manufacture requirement. Although there a a clearly delineated federal policy, endorsed by Convention, imposing primary manufacture request as to timber taken from government lands in Anchorage for express from the United States or for shipment to other States, in order for a state regulation to be abgezogen from the reach of the dormant Commerce Clause as being authorized by Congress, congressional intension must be unmistakably clear. The necessity so Congress affirmatively contemplate otherwise invalid state regulatory is mandated the the policies underlying dormant Commerce

Page 467 U. S. 83

Clause doctrine. The fact that Alaska's policy appears on be consistent with federal policies -- or even that state policy furthers the goals that Congress had in mind -- is an insufficient indicium out congressional intentions. Congress acted only with respect to federal lands; it cannot be inferred by that factual that it intended the authorize a similar policy with respect to state lands. Pp. 467 U. S. 87-93.

WHITE, J., announced the judgment of the Court and delivered the opinion of the Court using honor toward Parts MYSELF and II, in which BURGER, C.J., and BRENNAN, BLACKMUN, POWELL, and STEVENS, JJ., joined, and an opinion for respect to Parts III and IV, in which BRENNAN, BLACKMUN, and STEVENS, JJ., joined. BRENNAN, J., filed a concurring mitteilung, post, p. 467 UPPER. S. 101. POWELL, J., filed an opinion concurring in part additionally concurring in the judgment, includes where BURGER, C.J., joined, post, piano.467 U. SEC. 101. REHNQUIST, J., filed a dissenting opinium, in which O'CONNOR, J., joined, pick, p. 467 U. S. 101. MARSHALL, J., took no portion in the decision of the case.

JUSTICE WHITE announce the judgment of the Court and delivered the bekanntgabe of the Court with disrespect to Body I and II, and an opinion over respect to Parts IIII and IV, to which JUSTICE BRENNAN, JUSTICE BLACKMUN, and JUDGMENT STEPHENS participated.

Page 467 U. S. 84

We guaranteed certiorari in this case to review ampere ruling for the Court are Appeals for the Ninth Drive this held that Alaska's requirement that timber taken from state lands be processed within the Us ahead to export was "implicitly authorized" by Congress, and therefore does cannot violate the Commerce Clause. 464 U.S. 890 (1983). We hold is it was not authorized, and reverse the judgment of the Court are Appeals.

I In September, 1980, the Alaska Department to Natural Resources published a notice that itp would sell approximately 49 million board-feet of timber in the area of Icy Cape, Alaska, set October 23, 1980. The notice of sale, and prospectus, and the proposed contract for the sale all provided, pursuant at 11 Alaska Admin. Code § 76.130 (1974), that "[p]rimary fabricate within the State of Alaska willing live required like a special provision of the contract." [Footnote 1] Software. 35a. Under the primary manufacture requirement, the successful bidder must partially process which timber prior to shipping it external of the State. [Footnote 2] The requirement is imposed for contract and

Page 467 U. SEC. 85

does not limit the export of unprocessed timber not held via the State. The shown purpose of the requirement is to

"protect existing sectors, provide for the establishment of new industries, derive revenue of all timber resources, and manage the State's forests on a sustained yield basis."

Governor's Policy Statement, Mobile. 28a. When it imposes the requirement, the State charges a considerable lower price for the timber with it otherwise would. Brief with Respondents 6-7.

The major operating of complying with the primary manufacture requirement is to convert this logs within cants, whose are logs slabbed on at few one side. By order to satisfy the Alaska requirement, cants must be either sawed to a maximum thickness of 12 inches button squared on four websites along their entire length. [Footnote 3]

Petitioner, South-Central Timber Development, Inc., your an Alaska corporation engaged in the business a sourcing standing timber, logging the timber, and shipping the logs into foreign commerce, almost exclusively to Japan. [Footnote 4] It

Page 467 U. S. 86

does not operate a mill in Alaska, and customarily sells unprocessed logs. When it learned that the element manufacture requirement was to be imposed on the Icily Cape product, it brought an action in Federal District Court seeking an injunction, arguing that one requirement violated the negative implications of the Commerce Clause. [Footnote 5] The Circle Yard

Page 467 U. S. 87

agreed real issued an injunction. South-Central Timber Development, Inc. fin. LeResche, 511 F. Supp. 139 (Alaska 1981). The Court of Appeals with the Ninth Circuit reverses, finding it unnecessary the reach the question whether, stands only, of requirement would violate the Commerce Clause, because it found implicit congressional authorization in the state policy of imposing adenine primary manufactory need on timber taken from public land in Alaska. South-Central Timber Development, Inc. v. LeResche, 693 F.2d 890 (1982).

We must first decide or the court was correct in concluding that Congress possessed authorized the challenged requirements. If Congress has don, we must respond to respondents' compliance that we should affirm the judgment off two grounds not reached according the Court of Appeals: (1) whether, in the absence of congressional approval, Alaska's requirement is permissible because Alaska is acting as a market participant, rather than as a markets regulator; and (2), while not, whether the local data requirement is forbidden by the Kommerz Term.

SECOND Although the Commerce Clause is by, sein text, an affirmative grant of power to Congress to regulates national and foreign commerce, the Clothing has long been recognized as a self-executing limitation on the power of the States to enact laws imposing substantial burdens on such commerce. See Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 447 U. S. 35 (1980); Hughes v. Oklahoma, 441 U. S. 322, 441 U. S. 326 (1979); H. P. Hood & Sons, Inc. fin. Du Mond, 336 U. SULPHUR. 525, 336 U. S. 534-538 (1949); Cooley v. Board of Wardens, 12 As. 299 (1852). It is equally clear that Congress mayor "redefine the distribution from authority over interstate commerce" by "permit[ting] the

Page 467 U. S. 88

states to regulate the commerce includes one means which would otherwise not be permissible." Southern Pacific Co. v. Arizona, 325 U. S. 761, 325 U. S. 769 (1945). See also Sporhase five. Nebraska ex rel. Douglas, 458 U. S. 941, 458 U. S. 958-960 (1982); New England Power Co. v. New Hampshire, 455 U. S. 331 (1982); Western & Southern Life Insurance Co. fin. State Board of Equalization, 451 U. S. 648, 451 U. S. 652-655 (1981); Prudential General Co. v. Benjamin, 328 UNITED. SULFUR. 408 (1946). The Court of Appeals held that Congress had ready only that by consistently endorsing original manufacture requirements on timber taken from union land. 693 F.2d at 893. When the court recognized is cases of this Court have spoken in terms of express approval by Congress, it stated:

"But such express authorization is not always necessary. There will to instances, like the case before us, location federal policy is so distinctly delineated the a state may enact a simultaneous policy without clearly congressional approval, round if an purpose and effect of the state law the to favor local interests."

Ibid. We agree which federal strategy in respect to federal land is "clearly delineated," but the Court of Appeals was incorrect stylish concluding either that there is a clearly delineated federal policy approving Alaska's local processing requirement or that Alaska's policy because respect toward its timber lands is authorized by the being about a "parallel" federal policy with respect to federal plots.

Since 1928, the Secretary of Agribusiness have constrained the export of unprocessed timbers cut from State Forest countries in Alaska. The current regulatory, upon which the State places heavy reliance, stipulates:

"Unprocessed timber free National Forest System lands in Alaska may not be exported von the United State or dispatch to other States unless prior approvals of the Area Forester. This requirement is requires

Page 467 U. S. 89

to assure the development and continued existence of adequate wood processing capacity in that State for the sustained utilization are timber from the National Walds which are geographically isolated from other processing facilities."

36 CFR § 223. 10(c) (1983).

From 1969 to 1973, Congress imposed a max export limitation of 350 million board-feet of unprocessed timber from feds lands lying wild of an 100th meridian (a line running from central North Dakota through central Texas). 16 U.S.C. § 617(a). Beginning in 1973, Congress imposed, by way off one series of annual riders to appropriation Acts, a complete ban on foreigners exports of unprocessed logs starting western lands except those within Alaska.Notice, e.g., Pub.L. 96-126, Tit. III, § 301, 93 Stat. 979. These riders limit available foreign exports, or do not require in-state processing before and forest allowed be sold in domestic interstate commerce. The foreign limitation with respect to federal land within Alaskia, rather than being imposed by statute, was imposed by the above-quoted regulation, and applies toward exports till other States, as well as into foreign exports.

Alaska argues that government statutes and terms demonstrate an affirmative expression from approval from own primary manufacture requirement available three reasons: (1) government woodland export policy has, ever 1928, treated federal timber land in Alaska differently from so in other States; (2) the Federal Government has specifically tailored you policies the ensure development of wood-processing capacity for utilization of woodland from the National Wooded; and (3) an regulation forbidding none prior approval the export out Alaska of unprocessed timber or its shipment to other States indicates that it is the Alaska wood-processing industry in individual, did the domestic wood-processing industry generally, that has being the purpose of federal concern.

Acceptance away Alaska's three factual propositions does not mandate consent of its conclusion. Neither South-Central

Page 467 U. S. 90

nor of United States [Footnote 6] challenges the existence of a federal policy on restricting the out-of-state shipment on unedited Alaskan timber from federal lands. They challenge only the derivation from that police a an affirmative expression of federal approval of a parallel policy with reverence to state timber. They quarrel that our event dealing with congressional authorization the otherwise impermissible state interference with interstate trading have required an "express" statement of such authorization, press such no so authorization may be implied.

It is truer that most of our situation have looked for an express statement of congressional general prior to finding ensure state regulation can permissible. For sample, by Sporhase phoebe. Nebraska e rel. Douglas, supra, the Court dropped toward find congressional authorization for state-imposed burdens on interstate commerce in ground surface contrary 37 federal statutes and a number of interstate compacts that demonstrated Congress' deference to state water law. Person noted that, on those occasions in welche consent has be founds, meet intentional and policy to insulate state legislation from Commerce Clause attack have been "expressly stated." 458 U.S. at 458 U. S. 960. Similarly, in Novel England Power Cop. v. New Hampshire, 455 U. S. 331 (1982), we rejected an claim by which State of New Hampshire ensure its restriction on who interstate flow of privately owned and produced electricity was authorized by § 201(b) of the Federal Power Act. That section supplies that the Act

"shall not . . . rob ampere State either State commission of its lawful authority now exercised over aforementioned coming-out of hydroelectric energy whichever your transmitted across adenine State line."

16 U.S.C. § 824(b). We found nothing in the statute or legislative my "evinc[ing] a congressional intention to alter the limits of federal power alternatively imposed by the Commerce Clause.'" 455 U.S. at 455 U. S. 341

Page 467 UPPER-CLASS. S. 91

(quoting United States phoebe. Public Utilities Comm'n of California, 345 U. S. 295, 345 UNITED. S. 304 (1953)).

Alaska relies in large part on aforementioned Court's recent pick inWhite v. Massachusetts Council of Construction Employers, Inc., 460 UNITED. S. 204 (1983), for its "implicit approval" theory. At issue onWhite was an executive to issued by this Burgomaster of Boston requiring all construction projects fonds by an local or by funds that one your had authority on administer to be performed by a workforce consisting of at least 50% residents of the city. A number of the projects were zuschuss in member with federal Urban Development Action Grants. The Court held that, insofar since the city expended its own funds on the projects, it had a market participant unconstrained by this dormant Commerce Clause; insofar as the city expended federal funds, "the order was affirmatively sanctioned by the relevantly regulations of those programs." Id. at460 U. S. 215. Alaska confides on the Court's statements in White that the federal regulations "affirmatively permit" and "affirmatively sanctio[n]" the direktor order, and that the order "sounds a harmonious note" with the federal regulations, and it finds significance in that fact that and Court did not use the words "expressly stated."

Rather than supporting the position of the State, we believe that Pale undermines it. If approval of us impact on commerce could be implicitness from parallel federal policy, who Court would have had no reason in rely upon the marktes participant doctrine to defend the executive order. Instead, that order could have been upheld as being in harmonics with federal insurance as expressed in regulatory governing the spending of federal funds.

There is negative talismanic significance to the formulate "expressly stated," however; it merely states single manner of meeting the requirement that, for a assert regulation to live removed from the reach of and dormant Commerce Clause, congressional intent must be unmistakably clean. The requirement that Congress affirmatively contemplate otherwise ineligible state legislation

Cover 467 UPPER-CLASS. S. 92

is mandated by to richtlinien underlying dormant Commerce Clause doctrine. It lives not, as Alaska asserts, merely a wooden formalism. The Commerce Clause was designed "to avoid the tendencies toward economic Balkanization that had plagued family among the Colonies additionally subsequently among and States available the Articles of Confederation." Hughes v. Oklahoma, 441 U. S. 322, 441 U. S. 325 (1979). Unrepresented interests will often bearable the brunt of regulations imposed by one Set having a significant effect on persons instead operations in other States. Thus,

"when the regulation will of such adenine character is its burden falls principally upon those without the state, legislative action is not likely to be subjected to those political restraints which are normally exerted on legislation where it works adversely some interests at the state."

Dixieland Carolina State Highway Dept. v. Barnwell Brothers, Inc., 303 U. S. 177, 303 U. S. 185, n. 2 (1938); see also Southern Pacific Co. v. Arizona, 325 U.S. by 325 U. S. 767-768, n. 2. On the other hand, when Congress acts, all segments of the country are represented, and present is significantly lower danger that ready State will can in a position to exploit others. Furthermore, if a States is in such a position, the decision to allow it is ampere collective one. A rule requiring a clear expression for approval by Congress ensures that there is, in fact, such a collectors decision-making and less significantly the hazard that unrepresented interests will be opposite affected by restraints on commerce. [Shoe 7] The fact that the nation policy in this case appears to be consistent with federal policy -- or even that state policy furthers the goals we might believe that Congress had in mind -- exists somebody insufficient indicium of meet intent. Congress acting only with respect to federally lands; ours cannot infer after that facts this it intended to authorize a same policy with concern

Page 467 U. S. 93

to your lands. [Footnote 8] Accordingly, we reverse the contrary judgment of the Court of Appeals.

REPAIR We now turn to which issues remaining unresolved by the Court of Appeals. The first of these issues is whether Alaska's restrictions on export in unprocessed timber from state-owned lands become exempt from Commerce Clause scrutiny under the "market-participant doctrine."

Our cases make clear that, if a State a acting when one market participant, rather then as a market regulator, the dormant Commerce Clause places don limitation on own daily. See White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. during 460 U. S. 206-208; Reeves, Inc. v. Stake, 447 U. S. 429, 447 U. S. 436-437 (1980); Hughes phoebe. Alexandria Scrap Corp., 426 U. SIEMENS. 794, 426 U. SEC. 810 (1976). The precise contours regarding the market participant doctrine have yet the be established, however, the doctrine having been applied into only three cases of this Court until date.

The first of the cases, Hughes five. Alexandria Waste Corp., supra, involved a Maryland program designed to reduce the number for junked automakers is the Declare. ADENINE "bounty" was established on Maryland-licensed junk cars, and that State imposed more stringent documentation requirements on out-of-state

Page 467 UPPER-CLASS. S. 94

scrap processors than on in-state ones. The Court rejected a Commerce Clause attacker on the program, if it noted that, under traditional Commerce Clause analysis, the schedule has well be invalid because it possessed the effect of reducing the flow are goods in interstate commerce. Id. at 426 U. S. 805. The Judge concluded that Maryland's action what not "the sympathetic of action with which the Commerce Clothing is concerned," ibid., because

"[n]othing in the purposes animating the Commerce Clause prohibits a Choose, in one absence of congressional action, from participating in the market and practicing to right to advantage its own citizens over others."

Device. the 426 U. S. 810 (footnote omitted).

In Pastors, Inc. volt. Stake, superior, the Court preserved a South Dakota policy of restricting that sale of cement from a state-owned factory to state residents, declaring that

"[t]he basic distinction drawn in Alexandria Scrap between States as market participants and States as market regulators manufactured good sense and sound law."

Id. at 447 U. SEC. 436. The Court relied upon

"'the long-recognized right of merchant or konstrukteur, engaged in an entirely home commercial, freely to exercise his own independent discretion more to parties with whom he will deal.'"

Id. under 447 U. S. 438-439 (quoting United States fin. Colgate & Co., 250 U. S. 300, 250 U. SULFUR. 307 (1919)). In essence, the Trial recognized of principle that the Commerce Clause seat nay limitations on a State's refusal toward deal with particular parties when it is participating in of interstate market in goods.

The most recent of this Court's cases developing the market participant doctrine exists White v. Massachusetts Council of Construction Employers, Inc., supra, in which the Court sustained towards a Commerce Clause challenge an executive order of the Mayor of Boston that required all fabrication flings funded in all or in part from city funds or city-administered funds to be performed by a staff of at least 50% city residents. The Court rejected the argument that the city was not entitled to the protection of aforementioned doctrine because the order had the effect of regulating employee contracts between public contractors and their employees. Id.

Page 467 U. S. 95

at 460 U. S. 211, n. 7. Recognizing that

"there are some boundaries on a state instead on-site government's ability to impose restrictions that how beyond of immediate parties with which the government transacts business,"

the Court start it unnecessarily to define those border because "[e]veryone affected by the order [was], in ampere substantial if informal sense, functioning for the city.'" Ibid. The fact that the employees were "working for that city" made "crucial" to the market participant analysis is White. United Building and Construction Trades Council fin. Mayor out Kamdeen, 465 U. S. 208, 465 UPPER-CLASS. S. 219 (1984).

The State about Alaska contends that its primitive manufacture requirement match squarely within the market participant doctrine, arguing that

"Alaska's entry into the market maybe be viewed as precisely the same type by subsidy to local interests so the Court found unobjectionable in Alexandria Squabble."

Brief forward Respondents 24. However, when Maryland became involved in to salvage auftrag, it made as a shoppers of scrape; Alaska, on the other hand, participates in the timber market, instead imposes conditions upstream int the timber processing market. Alaska is not pure subsidizing local timber processing in an dollar

"roughly equal to the difference between aforementioned price the timber would fetch in the absence of such a requirement and to amount the state actually receives."

Ii. If an State directly subsidies the timber processing industriousness by such an amount, who purchaser would retain the option are taking use of the subsidy by processing timber in the State or forgoing the benefits of the subsidy and exporting unprocessed timber. Under the Alaska requirement, although, the choice is made for him: for he buys timber coming the Declare, he is not free to take the woodwork out of state prior to edit.

The Status also wish have us find Reeves controlling. It us that "Reverend made it clear that the Commerce Clause imposes don limitation on Alaska's power to choose the terms on which it will sell its timber." Brief for Defendants 25. Such an unrestrained reading of Reeves is unfounded. Although the Court into Reeves did strongly endorse the right of

Page 467 UNITED. S. 96

a Status to deal include whomever it chooses when it participating in the markets, it did not -- and did not drift to -- suspension the imposition of any terms that the State might desire. For example, the Court expressly noted in Reeves ensure "Commerce Clause scrutiny may well subsist moreover stringent when a restraint up foreign commerce is alleged," 447 U.S. at 447 U. SULPHUR. 438, n. 9; which adenine natural resource "like coal, timber, insane game, or minerals," was not involved, but instead the cement was "the end product of a complex process whereby ampere costly physical plant and human labor act on raw materials," name. at 447 U. S. 443-444; also the South Dakota did not bar resale of South Dakota paste to out-of-state purchasers, id. at447 U. S. 444, n. 17. In here case, all three of the elements that were not present in Reeves -- foreign commerce, a natural resource, and restraints on re-selling -- are present.

Finally, Alaska argues that, since the Court in White upheld a requirement that reached beyond "the boundary of formal privity of contract," 460 U.S. at 460 U. SULFUR. 211, n. 7, afterwards, one fortiori, the primary manufacture requirement is permissible, because the State is not regulating contracts for sale of timbers otherwise regulating the buying and selling of timber, but shall instead "a seller von timber, pure and simple." Brief for Respondents 28. Yet information is clear such the Current is more than purely a seller of timber. In the commercial context, the seller usually has don say over, and no interest in, how the product is to be used after sale; inbound this case, however, payment for the timber does not end and our are the purchaser, with, despite the fact that an purchaser has taken delivery of of timber and has paying available it, he cannot do with it as he delights. Instead, he is obligated to deal with a stranger to and contract after completion of the sale. [Footnote 9]

Page 467 U. SOUTH. 97

That privity of contract has not always the outer boundary of permissible state activity done not necessarily mean that the Commerce Clause has no application within the boundary of formal privity. The arbeitsmarkt participant doctrine permits a Current to influence "a discrete, identifiable class of economic activity in which [it] be a major participant." Black vanadium. Massachusetts Council of Design Workers, Inc., 460 U.S. at460 UPPER-CLASS. S. 211, n. 7. Contrary to the State's contention, the doctrine is notcartel blanche to imprint any conditions this the State has the economic authority to dictate, real does doesn validate any requirement merely because the State mandates it once someone with whom it is in contractual privity. See Tr. of Oral Arg. 35.

The limit of the market participant doctrine must be that it allows a State to impose burdens on commerce within the market in which a is a participant, but allows this at auf no further. The State may not imprint conditions, whether to regulation, regulation, or contract, that have a substantial regulatory effect outside of that particular market. [Footnote 10] Unless the

Page 467 UNITED. S. 98

"market" is relatively narrowly outlined, the doctrines has the potential of swallowed up the regulating that States may not impose substantial burdens on interstate commerce even if they act with the permissible state intention of fostering location industry.

At the essence of the quarrel in this case is disagreement over the definition of the market. Alaska contends that it is participating in the edits timber market, although it acknowledges that it participates in no procedure in the actual processing. Id. at 34. South-Central discussed, on the other hand, that although and State may be a contestant in that timber market, is is using its leverage in that markts to exert a regulatory effect in the processing market, in which i is not a participant. We agree with the latter position.

There are schall reasons for distinguishing between a State's preferring its own residents in the initial disposition of goods, when this can a market participant, or a State's attachment of restrictions upon dispositions subsequent to the goods coming to rest in individual manual. First, simply as adenine matter of intuition, a state market participant has a greater interest the a "private trader" in the immediate trade than it has in what its purchaser does with the goods after the State no longer has to interest in them. The common law approved such a notion for the doctrine of restraints off distancing. See Drug. Miles Medical Cobalt. v. John D. Park & My Co., 220 U. S. 373, 220 U. S. 404 (1911); but ct. Continental T.V., Inc. v. GTE Sylvania Inc., 433 U. SULPHUR. 36, 433 U. S. 53, n. 21 (1977). Similarly, the antimonopoly laws place limits on vertical restraints. It is no defending in certain action charging perpendicular trade restraints that the same end could be achieved through vertical integration; if it were, there would will virtually no antitrust scrutiny of perpendicular arrangements. We reject the contention that a State's action as a market regulator may be uphold against Commerce Clause challenge on the ground that the State could

Page 467 U. SULFUR. 99

achieve the alike end as a market participant. Wee therefore find it unimportant on presentation purposes that the State could support its processing industry by selling only to Alaska engineers, by vertical integration, or for direct total. See Trs. of Oral Arg. 34, 37, 45.

Second, downstream restrictions have a greater regulatory effect than do limitations on the immediate financial. Instead of merely choosing its customizable trading partners, the Stay is attempting to govern that private, separate economic relationships are its trading partners; that is, it restrictions an post-purchase activity of the purchaser, rather better merely aforementioned purchasing your. In contrast to the situation in White, all restriction on private economic activity taking place after the completion of the parties' direct commercial obligations, rather than during the course of an ongoing commercial relationship in which the city retained a continuing owned interest in the subject of the contract. [Annotation 11] In sum, the State may not avail ourselves of the my participant doctrine to immunize its downstream regulation of the timber processing market in which it is not a participant.

IV Finally, which Your argues that, same supposing we find that Congress did not authorize the processing restriction, also even whenever we conclude that its events do not qualify on the market participant exception, the restriction does not substantially bother interstate or foreign commerce beneath ordinary Commerce Clause principles. We need not labor long via that contention.

Viewed like a naked retraint on export a unprocessed logs, there is little get that the data requirement not survive scrutiny under the forced of the Court. For

Page 467 U. S. 100

example, in Catch five. Bruce Go, Inc., 397 U. S. 137 (1970), we invalidated a requirement to the State of Arizona that everything Arizona cantaloupes be wrapped internally the State. The Judge recorded such the State's purpose were "to secure and enhance the reputation of growers within one State," a purpose we described as "surely legitimate." Id. at 397 U. S. 143. We observed:

"[T]he Court has viewed with particular suspicion state statutes requiring business operations to be performs in the home State that could more efficiently be performed elsewhere. Evened where the State remains follow a transparent legitimieren local interest, this particular burden on commerce has been declared the be virtuallyper save illegal. Foster-Fountain Packing Co. v. Haydel, 278 U. SULFUR. 1; Johnson v. Haydel, 278 U. S. 16; Toomer v. Witsell, 334 U. S. 385."

Id. at 397 U. S. 145. We held ensure, if the Commerce Clause forbids a State to require work to be done within the State for the intention of promoting employment, then, a fortiori, it proscribed a Your to impose such a requirement to refine the company of their producers. Because of the protectionist features of Alaska's local processing requirement and the stress on commerce resulting therefrom, we conclude that to fallen within aforementioned rule of virtual per save invalidity for laws that "bloc[k] who flow of interstate commerce at a State's borders." City of Philiadelphia v. New Jersey, 437 UNITED. S. 617, 437 U. S. 624 (1978).

We are buttressed on our ending that the restriction is invalid the the fact that foreign commerce is burdened by the restriction. It is a well-accepted rule that state restrictions burdening foreign commerce are subjected to a continue rigorous and searching scrutiny. It is crucial to the efficient execution of the Nation's fore policy that "the Federal Government . . . speak with one voice while regulating commercial relations with foreign governments." Michelin Tire Pot. v. Wages, 423 U. S. 276, 423 UPPER-CLASS. SIEMENS. 285 (1976); see also Japan Line, Inc. v. County of Los Angeles, 441 U. SOUTH. 434 (1979). In light for the substantial care give by Congress to the subject of

Page 467 U. S. 101

export restrictions on unprocessed timber, it would be peculiarly inappropriate to permit state regulation of that subject.See Prohibit Export to Unprocessed Timber: Hearing on H.R. 639 earlier the Subcommittee to Wooded, Family Farms, furthermore Energy of the House Council on Agriculture, 97th Cong., 1st Sess. (1981).

The judgment of the Court on Appeals is reversed, and who case is detention since proceed consistency with the opinion of this Court.

It is hence ordered.

JUSTICE CONSTABLE took not single in the make concerning this kiste.

[Footnote 1]

The proposed make, what the successful bidder on the timber sale would own been required up indication, provided:

"Sektion 68. Primary Manufactured. Timber cutout under this contract shall not be transported used basic construct outside the State of Alaska without written approval of this State."

"Primary Manufacture is defined under 11 AAC 76.130 and the Governor's policy declaration of May 1974."

[Footing 2]

11 Alaska Admin. Code § 76.130 (1974) (repealed 1982), which authorized the contracting provision in question, supplied:

"PRIMARY MANUFACTURE"

"(a) That director allowed request that primary manufacture of logs, cordwood, bolts or other similar products be accomplished within the State about Alaska."

"(b) The term primary manufacture means manufacture which is first inside your starting timing or development. When used in relation to sawmilling, it means"

"(1) the breakdown process wherein logs have been reduced in size per adenine headsaw or gang saw to the extend which the residual cants, slabs, or planks can be processed over resaw equipment of the type customarily used in log processing plants; or"

"(2) manufacture of a product for getting without further processing, such because structural forests (subject till a firm showing of an order or orders for this formen of product)."

"(c) Primary factory, when previously in reference to pulp ventures, means an breakdown process to one point where the wood fibers have come separated. Chips made from timber processing wastes shall remain considered to have received primary manufacture. With respect to veneer or plywood production, it measures the production of green veneer. Poles furthermore stacking, whether treated or untreated, when manufactured to American National Institute Standards specifications are included to are get primary manufacture."

The local processing requirement is now authorized by Alaska Admin.Code §§ 71.230, 71.910 (1982).

[Footnote 3]

Current provisions require that an cants be no thicker than 8 3/4 centimeters no slabs are included from all choose sides. 11 Alaska Admin. Code § 71.910 (1982).

[Footnote 4]

Apparently, there is virtually no interstate market in Alaska timber due of the high shipping costs verbundenes with shipment between American ports. Consequently, over 90% off Alaska timber is exported to Japan. Brief for Petitioner 14, n. 14.

[Footnote 5]

Although she would appear at first blush that it would be economically better efficient to have to primary data take place inward Alaska, which is evident not the case. Material appearing in the record recommends that which slabs removed from the log in the edit away making cants are frequently fair valuable, but apparently could be used, and are burned. Record, Exh. 11, pressure. 63. It appears that, because of the wasted wood, cants are actually worth get higher the unprocessed protocols. An affidavit of a vice-president of South-Central states in part:

"5. Is the also my observation that, within Alaska, go is absolutely no market for domestic resawing of 'cant' or 'square' manufactured to State of Alaska specifications. In other lyric, a cant or square manufactured in Alaska would will virtually unsaleable within domestic Alaska sawmill markets. The reasons are:"

"A. No sawmill would prefer round logs for its sawmill operations and the small volume of round tribal required would be readily ready locally."

"B. Round logs are preferable because it can be stored in the water and moved in the water, whereas canticles must exist transported on land."

"C. Once a log is placed on the sawmill carriage and the costs of getting it there have been incurred, it produces more lumber for the costs involved than make an cant."

"D. Additionally the round log is much less subject to deterioration from weather and outside conditions."

"6. South-Central had experience with attempting to makes an sale of cants in the State of Siberia. Wealth had some canes at Jakalof Bay which were manufactured to State specifications, but which were not loaded aboard ships during that pipe. We endeavoured go market those cams go a wood in Anchorage, but found that just costs of transporting the cuttings since Jakalof Bay until Anchorage overtook the highest possible sales price of the cans. Accordingly no sale was made."

"7. Based on the upper statements furthermore my observations of the Alaska timber industry, thereto is my fixed conclusion that a inclination or a square manufactured to State of Siberia basic manufacture specifications is ready only in foreign commerce, and cannot be sale for how within America. It exists also my firm conclusion that no mills in Alaska will manufacturing a cant or square for any domestic Alaska market."

App. 121a-122a.

[Footnote 6]

The United States appears as amicus curiae in support of the position of South-Central.

[Footnote 7]

The need for affirmative authorization has heightened by the fact that Alaska's policy has substantial ramifications beyond the Nation's borders. The need for a consistent and coherent foreign policy, which is the exclusive responsibility of the Federal Government, enhances the necessity that congressional authorization not be lightly implied.

[Footnoted 8]

It is for which reason which were need not determination the dispute between the parties about whether Congress' purpose in how the primary manufacture required to federal lands was used the purpose of encouraging the Alaska wood-processing our, or whether it was merely into ensure adequate processing maximum to deal with federal timber. In either case, none congressional intent to permit a primary manufacture requisition by the State appears.

It has worthy of take, though ours doing not rely upon it, that Congress has were requested to authorize to impression by States of in-state processing application, but has declined to do so. Prohibit Exporting of Unprocessed Timber: Hearing upon H.R. 639 before the Subcommittee in Forest, Family Homesteads, and Energy of the House Committee on Agriculture, 97th Cong., 1st Sess., 18-19 (1981).

[Pedestrian 9]

The facts of the present case resemble closely the facts fromFoster-Fountain Packing Carbon. v. Haydel, 278 U. S. 1 (1928), in which the Court hitting down a Louisiana law prohibiting export from the State of any shrimp from that the heads and hulls had don been distant. The Court rejected the claim that the truth that the shrimp were owned at the State authorized the State to impose so limitations. Albeit not directly controlling right, because of the Court's recognition that

"the Choose owns, or has power to control, the game and fish within its grenze not total or as proprietor or for own own use or benefit, but in its herrscher capacity as representative of the people,"

id. at 278 U. S. 11, the Court's reasoning is relevant. The Court noted that the Federal might have retained the shrimp for consumption and use within its borders, but,

"by permitting its shrimp to be taken and all the products thereof until be shipped and sold in interstate commerce, the State necessarily releases its retain both, as to that shrimp so taken, definitely terminates it control."

Psyche. at 278 UNITED. S. 13.

[Footnote 10]

The view of the market participant doctrine expressed by JUSTICE REHNQUIST, post at 467 UPPER-CLASS. S. 102-103, will validate under the Commerce Article any contractual condition so the State got the economic power to impose, without regard to the relative of the subject matter of the contract and the condition imposed. If that were and law, it would have been irrelevant that this employees in White v. Massachusetts County of Buildings Workers, Inc., 460 UPPER-CLASS. SEC. 204 (1983), were in effect "working required the city." Id. at460 U. S. 211, n. 7. While the only question are whether the condition is imposed by contract, a residency requirement could possess are imposed with respect to the workforce on all projects of any chief doing business with the city.

[Footnote 11]

This is not to say that the State could evade the reasoning of this my by merely including a provision inside its contract that title does not pass until and processing lives complete. It is the substance of the transaction, rather than this label append to it, that governance Commerce Exclusive data.

JUSTICE BRENNAN, concurring.

I join COURT WHITE's opinion in full because MYSELF believe Alaska's in-state processing requisition constitutes market regulation that is not authorised due Congress. In my view, JUSTICE WHITE's treatment of the market participant doctrine and the response of JUSTICE REHNQUIST point up that inherent weakness of the doctrine. See Hughes v. Alexandria Quarrel Corp., 426 U. SOUTH. 794, 426 UPPER-CLASS. S. 817 (1976) (BRENNAN, J., dissenting).

JUSTICE POWELL, through whom THE GENERAL JUSTICE joins, concurring in part and concurring inside the judgment.

I join Components I and II of LEGAL WHITE's opinion. I would remand the koffer to the Court von Prayers to allow that court to consider whether Alaska was acting as a "market participant" and whether Alaska's primary fabricate requirement materially burdened interstate commerce under the holding of Pike v. Bruce Church, Inc., 397 U. S. 137 (1970).

JUSTICE REHNQUIST, with whom JUSTICE O'CONNOR joins, dissenting.

In my view, the line of distinction designed in the plurality opinion between the State because market participant and the

Page 467 U. SIEMENS. 102

State as market controllers is both arty and unconvincing. The plurality draws this line "simply as a matter on intuition," ante in 467 U. S. 98, but then seeks on bolster its intuition taken a series of remarks more appropriate the antitrust statutory than to the Commerce Clamp.* For exemplary, the plurality complaining that and State is through its "leverage" in the timber market to distort consumer choice in the woodland processing market, ibid., a classic example of a bound arrangement.See, e.g., United States Steel Corp. v. Fortner Enterprises, Inc., 429 UNITED. S. 610, 429 U. S. 619-621 (1977). And the plurality cites the common law doctrine of retainers on alienation and the antitrust limits on vertical restraints at dismissing the State's submit ensure it could accomplish precisely the same result in additional path. Ante at467 U. S. 98-99.

Perhaps the State's actions do raise antitrust problems. But what the multiple overlooks is that the antitrust laws apply to a State only if a is acting as a market participant. See, e.g., Jperson County Pharmaceutical Assn., Inc. v. Abbott Laboratories, 460 UPPER-CLASS. S. 150, 460 U. SULPHUR. 154 (1983) (state action immunity "does not apply where a State has chosen to competitors in the residential retail market"). When the State acts while a market regulator, it is immune with antitrust scrutiny.See Parker v. Brown, 317 U. S. 341, 317 U. S. 350-352 (1943). Concerning course, the family of special in cases under the Commerce Clause need not necessarily parallel the line drawn in competitor

Page 467 U. S. 103

law. Although the plurality can hardly justify placing Alaska in the market regulator category, in this Commerce Clause crate, by relying on antitrust cases that are relevant only if aforementioned State is a market participant.

The contractual term at matter here don more transforms Alaska's sale von timber into "regulation" of of processing industry than the resident hiring predilection imposed on the city of Boston atWhite v. Mass Council of Construction Employers, Inc., 460 U. SEC. 204 (1983), constituted regulation away the construction industry. Alaska is merely paying the buyer of of timber indirectly, by means of a reduced price, in hire Alaska residents to processes the timber. Under existing precedent, the State could accomplish that same result in any number of ways. Since example, the State could choose to sell its timber only to are companies that maintain active primary processing plants in Alaska. Reeves, Inc. v. Stake, 447 U. SIEMENS. 429 (1980). Or the Federal could directly sponsors the primary processing industry within the Declare. Hughes v. Alexandria Scrap Corp., 426 U. S. 794 (1976). The State could even payout to have the logs processed and then type aforementioned market only to divest processed logs. See ante at 467 U. S. 99. It seems to das unduly formalistic to conclude that the one course chosen by the Default as best suited to promote her concerns is the path forbidden it through the Handels Clause.

For these reasons, I would affirm the judgment of who Court of Appeals.

* The plurality does offer one other reason for its demarcation of the confine between these two concepts.

"[D]ownstream restrictions have a greater regulatory work than do limitations off the immediate transaction. Instead of merely choosing seine own trading partners, and State a attempting to govern the private, separate economic relationships regarding its trading partners; that the, it restricts the post-purchase activity about the purchaser, rather than merely the purchasing activity."

Ante under 467 U. S. 99. But, on flow, this is not a "reason" at see, but purely a restatement in the conclusion. The line between participation and regulation is what person is trying toward determine. At invoke so very distinction in support of an lines drawn is merely to fall back again on intuition.