Caseflicks

Supreme Court of the United States • 1984

United Building & Constr. Trades Council of Camden Cty. v. Mayor and Council of Camden

465 U.S. 208 | 104 S. Ct. 1020 | 79 L. Ed. 2d 249 | 1984 U.S. LEXIS 26 | 52 U.S.L.W. 4187

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Takeaway

In short, this case holds that a city cannot avoid Article IV scrutiny by labeling a hiring preference as municipal rather than statewide; preferences burdening nonresidents' pursuit of work must be justified by a substantial, closely tailored reason.

Background

Camden adopted an ordinance requiring contractors and subcontractors on city-funded construction projects to make every good-faith effort to ensure that at least 40% of the workforce consisted of Camden residents. The ordinance was adopted under a statewide affirmative-action framework and received approval from the New Jersey Treasury Department. The United Building and Construction Trades Council, whose membership included some out-of-state residents, challenged the resident-hiring preference.

The New Jersey Supreme Court upheld the ordinance. It held that the Commerce Clause did not apply because Camden was acting as a market participant, and it rejected the Article IV Privileges and Immunities claim because the ordinance favored municipal residents rather than New Jersey residents and burdened non-Camden New Jersey residents as well as out-of-state residents. It also rejected an equal-protection challenge to a one-year durational-residency requirement.

By the time the case reached the Supreme Court, the Council had abandoned its Commerce Clause claim after White v. Massachusetts Council of Construction Employers, and Camden had removed the one-year residency condition, mooting the equal-protection claim. The remaining question was whether the resident-hiring preference violated the Privileges and Immunities Clause.

Issues

Issue #1

Whether the Article IV Privileges and Immunities Clause applies to a municipal ordinance rather than only to a state statute.

Holding

Yes. A municipal resident-hiring preference is subject to the Privileges and Immunities Clause.

Reasoning

A municipality is a political subdivision of the State and derives its authority from the State. A State therefore cannot accomplish through a city what it could not constitutionally do itself. This principle applies to the Privileges and Immunities Clause just as it applies to other constitutional limits on state action.

The connection to state action was especially strong here because Camden adopted its plan under a statewide affirmative-action program and the State Treasurer approved it. But the Court made clear that state approval was not essential: even a purely municipal ordinance must comply with the Clause.

Issue #2

Whether the Privileges and Immunities Clause applies when an ordinance discriminates on the basis of municipal residence rather than expressly on the basis of state citizenship or state residence.

Holding

Yes. The Clause can reach a municipal-residency preference that disadvantages out-of-state citizens, even though it also disadvantages in-state residents who live outside the municipality.

Reasoning

The Clause protects citizens of one State who enter another State from being denied privileges enjoyed by favored residents. An out-of-state person necessarily does not reside in Camden, so Camden's preference excludes that person from an advantage available to Camden residents.

The fact that non-Camden New Jersey residents are also disadvantaged does not remove the ordinance from constitutional scrutiny. Those in-state residents may seek relief through New Jersey's political processes, whereas out-of-state residents lack that direct political remedy.

A rigid rule exempting every substate classification would permit easy evasion of the Clause. A State could divide itself into regions and give residents of each region preferences over outsiders, while effectively favoring state residents as a whole at the expense of citizens from other States.

Issue #3

Whether access to jobs with private contractors and subcontractors performing city-funded construction work is a fundamental privilege protected by the Privileges and Immunities Clause.

Holding

Yes. The opportunity to seek such employment falls within the Clause's protection of the pursuit of a common calling.

Reasoning

The pursuit of a common calling is among the fundamental privileges protected by Article IV because it is basic to a person's livelihood and to interstate harmony. Employment with the private firms working on Camden's public projects remains part of that protected opportunity.

The Court declined to import the Commerce Clause market-participant analysis into the Privileges and Immunities context. Although Camden could favor its residents as a market participant without violating the dormant Commerce Clause, the two Clauses serve different purposes: the Commerce Clause limits state interference with Congress's authority over interstate commerce, while the Privileges and Immunities Clause directly restrains discrimination that threatens interstate comity.

Camden's control over public funds was relevant, and potentially very important, to whether its preference could ultimately be justified. But public ownership or funding did not automatically place the ordinance beyond the Clause, just as Alaska's ownership of its natural resources did not automatically justify the resident preference invalidated in Hicklin v. Orbeck.

Issue #4

Whether Camden's 40% resident-hiring preference was justified under the applicable Privileges and Immunities standard.

Holding

The Court did not decide the ordinance's ultimate validity and remanded for factual findings on whether Camden had a substantial reason for the discrimination and whether the degree of discrimination closely related to that reason.

Reasoning

Once a law burdens a fundamental privilege, discrimination against nonresidents may survive only if the government shows a substantial reason for the difference in treatment and a close relationship between the discrimination and the asserted objective. Nonresidents ordinarily must be shown to constitute a peculiar source of the problem the law addresses.

Camden asserted that severe unemployment, population loss, business decline, falling property values, and a shrinking tax base justified preferring residents who lived in the city rather than nonresidents who worked there. It also argued that the preference was tailored because non-Camden residents remained eligible for 60% of the jobs.

The existing record contained no trial, factual findings, or adequate basis for the Supreme Court to assess Camden's economic justifications and the fit of its ordinance. The Court therefore reversed the New Jersey Supreme Court's categorical rejection of the claim and remanded for proceedings to develop and apply the proper constitutional standard.

Dissents

Justice Blackmun

Reasoning

Justice Blackmun agreed that a municipality, as an arm of the State, cannot evade constitutional limits merely by acting through a local ordinance. But he rejected the majority's central conclusion that the Privileges and Immunities Clause reaches discrimination based solely on municipal residence. In his view, the Clause's text, history, and settled purpose concern discrimination by one State against citizens of other States on the basis of state citizenship.

The Framers adopted the Clause to secure interstate comity and prevent state parochialism from burdening politically powerless outsiders. Nothing in the text or historical record, he argued, suggests that the Clause was intended to regulate intrastate distinctions among municipal residents. States historically possessed both the authority and the practical capacity to correct local protectionism through their own political institutions.

Blackmun read prior cases as assuming that Article IV protects benefits shared by citizens of a State generally, not benefits conferred only on residents of one locality. He regarded the majority's approach as difficult to reconcile with Zobel v. Williams, where the Court declined to apply the Clause to an Alaska law that discriminated among classes of Alaska residents even though the law also disadvantaged newcomers from other States.

In his view, the political-process rationale did not support extending the Clause. Non-Camden New Jersey residents were harmed by the same preference as out-of-state workers, and their ability to press the State legislature for relief would also protect outsiders. The majority's rule, he warned, paradoxically gave non-New Jersey residents a federal constitutional claim that the many New Jersey residents excluded from Camden jobs did not possess.

Blackmun did not defend municipal economic protectionism as wise policy. He maintained instead that the constitutional question was one of allocation of authority: absent a classification practically equivalent to discrimination based on state citizenship, municipal preferences should be left to state political control rather than invalidated under Article IV.