As our world becomes ever more connected, with a boundless supply of information and products from all over the world readily accessible through the click of a button, consumers are becoming more motivated than ever to spend their money at locally-owned businesses. This “localist” movement is supported by various local organizations around the country, whose memberships are steadily increasing. The localist movement has been particularly visible in Arizona. For instance, Local First Arizona, “a statewide non-profit organization working to strengthen communities and local economies through growing, supporting, and celebrating locally owned businesses throughout the state,” has over 2,000 members in industries ranging from food service to banking and finance. There is growing evidence that spending at local businesses has a significant economic impact. According to one study, for every $100 spent at a locally-owned business, $64 of that money stays within the business’s own community, as compared to only $43 at non-locally owned businesses.
Given the apparent connection between local spending and economic development, it may seem counterintuitive that the Constitution has been interpreted to prohibit many state-level policies that would encourage local growth and spending by giving preference to local businesses. While the Commerce Clause of the Constitution gives Congress the explicit power “to regulate Commerce . . . among the several States,” the Supreme Court has recognized since the days of Chief Justice Marshall that this explicit power comes with an implicit restriction on state-level regulations impacting interstate commerce. This so-called “dormant Commerce Clause” prevents states from enacting legislation that explicitly favors in-state interests or harms out-of-state interests, exerts control over commerce that crosses state lines, or unreasonably burdens interstate commerce in some other way. Although some scholars have argued that the dormant Commerce Clause was originally interpreted as a necessary tool to stave off state-level “protectionism” that could hamper the early states’ cooperation, the key inquiry in Commerce Clause jurisprudence today is whether the law “discriminates” in some way, regardless of whether some protectionist intent exists.