Reeves, Inc. v. Stake

447 U.S. 429 (1980)

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Nature of the Case

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Facts

In 1919, South Dakota undertook plans to build a cement plant. The project, a product of the State's then prevailing Progressive political movement, was initiated in response to recent regional cement shortages that 'interfered with and delayed both public and private enterprises,' and that were 'threatening the people of this state.' The plant, soon produced more cement than South Dakotans could use. Over the years, buyers in no less than nine nearby States purchased cement from the State's plant. Reeves, Inc. (P) is a Wyoming based concrete distributor. Between 1958 and 1978, P. purchased 95 percent of its cement wholesale from the cement plant. When the plant experienced a shortage in its cement supply, it resorted to supplying cement to both its South Dakota customers and contracted customers; all other types of purchasers would receive cement on a first come first serve basis. P did not have a contract. P contends that favoring South Dakota residents is prohibited by the Commerce Clause because it impedes interstate cement sale transactions. The district court held in favor of P and enjoined South Dakota (D) from application of its regulation. The Court of Appeals reversed. It concluded that D had 'simply acted in a proprietary capacity,' as permitted by Hughes v. Alexandria Scrap Corp. The Supreme Court granted the petition, vacated the judgment, and remanded the case for further consideration in light of Hughes v. Oklahoma, and Reeves, Inc. v. Kelley. On remand, the Court of Appeals distinguished that case. Again relying on Alexandria Scrap, the court abided by its previous holding. The Court granted certiorari.