Question

Question 16

C.T. Balls Cargo incorporated is responsible for the majority of imports brought into New Jersey. In fact, C.T. Balls carries 82 percent of New Jersey's imports. Taking this into consideration, New Jersey lawmakers enacted a law that only allows C.T. Balls Cargo incorporated to bring imports to New Jersey. The New Jersey legislature is aware that the law conflicts with the U.S. Constitution, but believes the law to be valid because there is a rational reason for the law. The New Jersey legislature stated that they passed the law because it is more cost effective and less burdensome for the state to only have to regulate one cargo ship company.

Which of the following statements regarding the above hypothetical scenario is true?

  

The law is valid because their is a rational basis for the law.

The U.S. Constitution has no effect on any state laws, including New Jersery's import law.

The law would be valid if it involved exports, but is void because it pertains to imports.

  

The law is void and has no legal effect

Answer 1

The law is void and has no legal effect.

As per the Clayton Antitrust Act of 1914, which expanded the scope of Sherman Antitrust Act, 'Exclusive dealing agreements' are invalid. Two ascertain if a certain state statute is violating the act. as per legislations, a 2 step analysis has to be followed.
a) Firstly they will check if the state's statute violates the Antitrust law's principles in all cases or pressures private parties into acting in a manner that would violate the act. That is, whether it's authorizing of compelling anti-competitive behavior amongst parties. (Rice v, Norman Williams Co.).
b) Secondly they will check if it's saved by the state action immunity doctrine, for this they'll first check if the restraint is clearly given as the state policy, and secondly if the policy is actively supervised by the state.
In this case, only allowing C.T to bring in imports would not fall under state policy as it's not something for the benefit of people, and it's clear that it's encouraging anticompetitive behavior, ie. violating the Act, hence, the state statute will be void.