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White v. Massachusetts Council of Constr. Employers, Inc.

Supreme Court of the United States · 1983 · Constitutional Law

Constitutional LawCommerce ClauseDormant Commerce ClauseMarket Participant DoctrineCommerce Clausedormant Commerce Clausemarket participantlocal hiring preference

Facts

In 1979 the Mayor of Boston issued an executive order requiring that construction projects funded in whole or in part by city funds, or funds the city had authority to administer, be performed by a workforce consisting of at least 50% bona fide Boston residents. Only the residency requirement was challenged. The record before the Court covered projects funded wholly by city funds and projects funded in part with certain federal grants, including UDAG, CDBG, and EDAG funds. Of approximately $54 million in projects affected by the order, about $34 million involved projects funded in part through UDAGs.

Issue

Does the Commerce Clause prevent Boston from enforcing a mayoral order requiring a 50% Boston-resident workforce on construction projects funded wholly by city funds or partly by certain federal grants administered by the city? More specifically, was Boston acting as a market participant on city-funded projects, and were the federally funded applications of the order authorized by Congress?

Rule

When a state or local government enters the market as a participant rather than as a regulator, it is not subject to the restraints of the dormant Commerce Clause. The inquiry is whether the challenged program constituted direct state participation in the market. In addition, where state or local action is specifically authorized by Congress, no dormant Commerce Clause issue is presented even if the action interferes with interstate commerce.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The City of Cleveland uses only municipal tax revenue to renovate several public fire stations. Its contracts require each prime contractor to ensure that at least 40% of labor hours on those city-funded projects are performed by Cleveland residents.

A contractor from Indiana challenges the residency condition under the dormant Commerce Clause. What is the strongest argument for upholding the condition?

Explanation. The majority held that when a state or local government enters the market as a participant rather than as a regulator, the dormant Commerce Clause does not restrain it. For projects funded wholly with city funds, the key inquiry is simply whether the challenged program constitutes direct government participation in the market. A city paying for its own public construction is participating in the market and may demand conditions for that participation.