Bendix Autolite Corp. v. Midwesco Enterprises, Inc.

486 U. S. 888

June 17, 1988

Ohio had a 4 year statute of limitations on contract disputes. But that time limit was tolled if the corporation being sued was out-of-state, unless the corporation had a designated agent in Ohio. When an Illinois corporation without an Ohio agent was sued six years after a contract, it argued that Ohio’s strange law discriminated against interstate commerce. It forced a choice between being subject to Ohio’s general jurisdiction, or being subject to contract disputes without any time limit.

The Supreme Court ruled 8-1 that Ohio was violating the Commerce clause. Kennedy said that being subject to general Ohio jurisdiction was a significant burden, and that not being able to take advantage of a statute of limitations was another significant burden. Because only out-of-state corporations had to choose between these two burdens, and because there was little compelling interest for Ohio’s law, there was clear discrimination against interstate commerce, and the law had to go.

Scalia concurred in judgment. He had difficulty assessing just how burdensome the alleged burdens were. He absolutely hated the ‘balancing’ that the Supreme Court did in state commerce cases. “[T]he scale analogy is not really appropriate, since the interests on both sides are incommensurate. It is more like judging whether a particular line is longer than a particular rock is heavy.” He would leave all balancing to Congress, where it belonged. Nonetheless, he did agree that in this case Ohio’s law did blatantly discriminate against foreign corporations.

Rehnquist filed a cryptic dissent, which argued that Ohio’s law had some non-obvious similarities to other state laws that the Supreme Court had upheld. His argument is a bit too subtle and underdeveloped for me to fairly evaluate it.

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