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Reeves, Inc. v. Stake | 447 U.S. 429 (1980)
The Constitution’s Commerce Clause is intended to prevent state governments from imposing regulations or taxes that interfere with national trade. But does the clause apply when states actually go into business? The United States Supreme Court considered this question in the 1980 case of Reeves, Incorporated versus Stake.
In 1919, the South Dakota Cement Commission, a state agency, built a cement plant, intending to sell its output only to South Dakota consumers. But the plant’s output soon exceeded statewide demand, and the commission began selling to out-of-state buyers. That included Reeves, Incorporated, a Wyoming firm that used the cement to make ready-mix concrete. By 1977, Reeves bought 95 percent of its cement from the commission.
In 1978, the plant’s production slowed significantly, just as demand increased. Unable to meet all its orders, the commission renewed its policy of supplying South Dakota customers first and then selling the rest of its output on a first-come-first-served basis. Reeves lost out and, unable to find another supplier, had to cut its concrete production by three-quarters.
Reeves sued commission chairman William Stake and the other commissioners in federal court, arguing that the commission’s preference for South Dakota buyers violated the Commerce Clause. The district court ruled for Reeves and enjoined the commission’s policy. The court of appeals reversed, but the United States Supreme Court vacated that judgment and remanded. On remand, the court of appeals again ruled for the commission, and the Supreme Court again granted cert.
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