Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976)

MR. JUSTICE POWELL delivered the opinion of the Court.

This case involves a two-pronged constitutional attack on a recent amendment to one part of a complex Maryland plan for ridding that State of abandoned automobiles. The three-judge District Court agreed with appellee, a Virginia scrap processor that participates in the plan, that the amendment violated the Commerce Clause and denied appellee equal protection of the laws. We disagree on both points.

I

The 1967 session of the Maryland Legislature commissioned a study to suggest some way to deal with the growing aesthetic problem of abandoned automobiles. The study concluded that the root of the problem was the existence of bottlenecks in the "scrap cycle," the course that a vehicle follows from abandonment to processing into scrap metal for ultimate re-use by steel mills. At its 1969 session, the legislature responded by enacting a comprehensive statute designed to speed up the scrap cycle by using state money both as a carrot and as a stick.{1} The statute is intricate, but its provisions relevant to this case may be sketched briefly.

The legislative study had found that one of the bottlenecks occurred in the junkyards of wrecking companies, which tended to accumulate vehicles for the resale value of their spare parts. The statute’s stick designed to clear this bottleneck is a requirement that a Maryland wrecker desiring to keep abandoned vehicles on its premises must obtain a license and pay a recurring fine for any vehicle of a specified age retained for more than a year.{2} The study had identified as another cause of sluggishness in the scrap cycle the low profits earned by wreckers and others for delivering vehicles to scrap processors. The carrot written into the statute to remedy this problem is a "bounty" paid by the State for the destruction, by a processor licensed under the statute, of any vehicle formerly titled in Maryland.{3} When a wrecker licensed under the statute to stockpile vehicles delivers one of them for scrapping, it shares the bounty equally with the processor. The processor receives the entire bounty when it destroys a vehicle supplied by someone other than a licensed wrecker.{4}

These penalty and bounty provisions work with elementary laws of economics to speed up the scrap cycle. The penalty for retention of vehicles, plus the prospect of sharing the bounty, work in tandem to encourage licensed wreckers to move vehicles to processors. The bounties to processors on vehicles from unlicensed suppliers also encourage those suppliers to deliver to the processors, because the processors are able to pay higher than normal market prices by sharing the bounties with them.{5}

The penalty and bounty provisions, however, did not remove another impediment to the smooth functioning of the scrap cycle that was legal, rather than economic, in origin. This was the possibility of suits for conversion against a processor by owners who might claim that they had not abandoned their vehicles. To meet this problem, the statute specified several documents with which a processor could prove clear title to a vehicle, and required that a processor obtain one of these documents from its supplier and submit it to the State as a condition of receiving the bounty. One of the documents, called a "Wrecker’s Certificate," can be given only by a wrecker licensed under the statute.{6} It is essentially a clear title that the wrecker secures by following statutory notice procedures at the time it first obtains a vehicle. Suppliers other than licensed wreckers must provide some other document -- either a properly endorsed certificate of title, a certificate from a police department vesting title in the supplier after statutory notices, or a bill of sale from a police auction.{7}

These documentation requirements, although vital for the protection of processors, are themselves some slight encumbrance upon the free transfer of abandoned vehicles to processors. Apparently in recognition of this fact, and the reduced potential for owners’ claims in the case of ancient automobiles, the statute placed vehicles over eight years old and inoperable ("hulks") into a special category. Section 11-1002.2(f)(5) of the statute, as originally enacted, provided, in substance, that anyone in possession of a hulk could transfer it to a scrap processor, and the processor could claim a bounty for its destruction, without delivery to the processor or subsequent submission to the State of any documentation of title.{8}

A

The statute extends its burdens of fines, and its benefits in the form of a share in bounties, only to wreckers that maintain junkyards located in Maryland, and requires a license only of those wreckers. There is no similar residency requirement for scrap processors that wish to obtain a license and participate in the bounty program,{9} and, in fact, seven of the 16 scrap processors that have participated are located in either Pennsylvania or Virginia. Appellee, a Virginia corporation with a processing plant near the Potomac River in Alexandria, was an original licensee under the Maryland statute. Presumably because of its proximity to the southern Maryland and Washington, D.C., areas, appellee attracted enough Maryland-titled vehicles to its plant to rank third among licensed processors in receipt of bounties through the summer of 1974.

As is apparently the case with most of the licensed processors, virtually all (96%) of the bounty-eligible vehicles processed by appellee during that period were hulks, upon which appellee did not have to demand title documentation from its suppliers in order later to receive the bounty. In the summer of 1974, however, Maryland changed significantly the treatment of hulks by amending § 11-1002.2(f)(5).{10} Under the law as amended, it is no longer possible for a licensed scrap processor to receive a bounty on a hulk without submitting title documentation to the State. But the documentation required of a processor whose plant is in Maryland differs from that required of a processor, like appellee, whose plant is not in Maryland. The former need only submit a simple document in which the person who delivered the hulk certified his own right to it and agreed to indemnify the processor for any third-party claims arising from its destruction. Hulk processors long had required such "indemnity agreements" from their hulk suppliers as a matter of industry practice. The effect of the 1974 amendment is to give these agreements legal recognition and to require one when a Maryland processor applies for a bounty on a hulk. The non-Maryland processor, however, cannot submit a simple indemnity agreement. For it, receipt of a bounty on a hulk now depends upon the same documentation specified for abandoned vehicles in general: a certificate of title, a police certificate vesting title, a bill of sale from a police auction, or -- in the case of licensed wreckers only -- a Wrecker’s Certificate.

B

The complaint in this case was filed shortly after the effective date of the amendment to § 11-1002.2(f)(5). Papers submitted to the three-judge District Court on summary judgment indicated that enactment of the amendment had been followed by a precipitate decline in the number of bounty-eligible hulks supplied to appellee’s plant from Maryland sources.{11} Appellee attributed the decline primarily to the effect of the amendment upon the decision of unlicensed suppliers as to where to dispose of their hulks.{12} It is easier for an unlicensed supplier to sign an indemnity agreement upon delivering a hulk to a processor than it is for it to secure some form of title documentation. Because only a Maryland processor can use an indemnity agreement to obtain a bounty, the amendment gave Maryland processors an advantage over appellee and other non-Maryland processors in the competition for bounty-eligible hulks from unlicensed suppliers. Such hulks therefore now tend to remain in State instead of moving to licensed processors outside Maryland.

Appellee contended below that the 1974 amendment to § 11-1002.2(f)(5) violated the Commerce Clause by interfering with, or "burdening," the flow of bounty-eligible hulks across state lines, and denied appellee equal protection of the laws by discriminating arbitrarily between it and licensed processors located in Maryland as to the right to claim bounties on hulks by submitting indemnity agreements. The District Court granted summary judgment to appellee on both claims, and enjoined the State of Maryland from giving further effect to that part of the 1974 amendment which restricts the right to obtain bounties based on indemnity agreements to Maryland processors only. 391 F.Supp. 46. The State appealed, and we noted probable jurisdiction. 423 U.S. 819.

II

In this Court appellee relies on the Commerce Clause argument that was adopted by the District Court. The argument starts from the premise, well established by the history of the Commerce Clause, that this Nation is a common market in which state lines cannot be made barriers to the free flow of both raw materials and finished goods in response to the economic laws of supply and demand. See Great A&P Tea Co. v. Cottrell, 424 U.S. 366, 370-371 (1976). Appellee concedes that, until the 1974 amendment, the Maryland system operated in conformity with the common market principle. There was free competition among licensed processors for Maryland hulks from unlicensed suppliers, and an unimpeded flow of such hulks out of Maryland to appellee and other non-Maryland processors. The only effect of the bounty was to enhance the value of hulks, and thus make it more likely that they would be moved to processing plants.

The practical effect of the amendment, however, was to limit the enhanced price available to unlicensed suppliers to hulks that stayed inside Maryland, thus discouraging such suppliers from taking their hulks out of State for processing. The result was that the movement of hulks in interstate commerce was reduced.{13} Appellee contends that this effect of the 1974 amendment is a "burden" on interstate commerce, the permissibility of which must be determined under the test of Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). The Court there stated that

the extent of the burden that will be tolerated will . . . depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.

See also Great A&P Tea Co. v. Cottrell, supra at 371-372.

The District Court accepted appellee’s analysis, and concluded that the 1974 amendment failed the Pike test. First, the court found that the amendment did impose "substantial burdens upon the free flow of interstate commerce." 391 F.Supp. at 62. Moreover, it considered the disadvantage suffered by out-of-state processors to be particularly suspect under previous decisions of this Court, noting that, to avoid the disadvantage, those processors would have to build new plants inside Maryland to carry on a business which, prior to the amendment, they had pursued efficiently outside the State. See Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1 (1928); Pike v. Bruce Church, Inc., supra at 145. Maryland’s principal argument in support of the amendment was that, by making it difficult for out-of-state processors to claim bounties on hulks delivered by unlicensed suppliers, the amendment tends to reduce the amount of state funds paid for destruction of Maryland-titled hulks abandoned in the States where those processors are located instead of in Maryland. The District Court acknowledged the validity of this interest, but considered the means employed inappropriate under Pike because the same interest could have been furthered, with less impact upon interstate commerce, by amending the statute to condition the bounty upon a hulk’s abandonment in Maryland, instead of its previous titling there.{14}

This line of reasoning is not without force if its basic premise is accepted. That premise is that every action by a State that has the effect of reducing in some manner the flow of goods in interstate commerce is potentially an impermissible burden. But we are not persuaded that Maryland’s action in amending its statute was.the kind of action with which the Commerce Clause is concerned.

The situation presented by this statute and the 1974 amendment is quite unlike that found in the cases upon which appellee relies. In the most recent of those cases, Pike v. Bruce Church, supra, a burden was found to be imposed by an Arizona requirement that fresh fruit grown in the State be packed there before shipment interstate. The requirement prohibited the interstate shipment of fruit in bulk, no matter what the market demand for such shipments. In H. P. Hood Sons v. Du Mond, 336 U.S. 525 (1949), a New York official denied a license to a milk distributor who wanted to open a new plant at which to receive raw milk from New York farmers for immediate shipment to Boston. The denial blocked a potential increase in the interstate movement of raw milk. Appellee also relies upon Toomer v. Witsell, 334 U.S. 385 (1948), in which this Court found interstate commerce in raw shrimp to be burdened by a South Carolina requirement that shrimp boats fishing off its coast dock in South Carolina and pack and pay taxes on their catches before transporting them interstate. The requirement increased the cost of shipping such shrimp interstate. In Foster-Fontain Packing Co. v. Haydel, 278 U.S. 1 (1928), a Louisiana statute forbade export of Louisiana shrimp until they had been shelled and beheaded, thus impeding the natural flow of freshly caught shrimp to canners in other States. Both Shafer v. Farmers Grain Co., 268 U.S. 189 (1925), and Lemke v. Farmers Grain Co., 258 U.S. 50 (1922), involved efforts by North Dakota to regulate, and thus disrupt, the interstate market in grain by imposing burdensome regulations upon and controlling the profit margin of corporations that purchased grain in State for shipment and sale outside the State. And in Pennsylvania v. West Virginia, 262 U.S. 553 (1923), the Court found a burden upon the established interstate commerce in natural gas when a new West Virginia statute required domestic producers to supply all domestic needs before piping the surplus, if any, to other States.

The common thread of all these cases is that the State interfered with the natural functioning of the interstate market either through prohibition or through burdensome regulation. By contrast, Maryland has not sought to prohibit the flow of hulks, or to regulate the conditions under which it may occur. Instead, it has entered into the market itself to bid up their price. There has been an impact upon the interstate flow of hulks only because, since the 1974 amendment, Maryland effectively has made it more lucrative for unlicensed suppliers to dispose of their hulks in Maryland, rather than take them outside the State.{15}

Appellee recognizes that the situation presented by this case is without precedent in this Court. It argues that the 1974 amendment nevertheless must be subjected to the same scrutiny as the state actions in earlier cases, because

[w]hat is controlling . . . is not the means by which Maryland has chosen to discriminate, but the practical effect of that discrimination upon interstate commerce.

Brief for Appellee 63. In short, appellee urges that the alleged burden upon interstate commerce from the 1974 amendment "is not immunized by its novelty." Ibid.

We believe, however, that the novelty of this case is not its presentation of a new form of "burden" upon commerce, but that appellee should characterize Maryland’s action as a burden which the Commerce Clause was intended to make suspect. The Clause was designed in part to prevent trade barriers that had undermined efforts of the fledgling States to form a cohesive whole following their victory in the Revolution.{16} This aspect of the Clause’s purpose was eloquently expressed by Mr. Justice Jackson:

Our system, fostered by the Commerce Clause, is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation, that no home embargoes will withhold his exports, and no foreign state will by customs duties or regulations exclude them. Likewise, every consumer may look to the free competition from every producing area in the Nation to protect him from exploitation by any. Such was the vision of the Founders; such has been the doctrine of this Court which has given it reality. . . .

H. P. Hood & Sons v. Du Mond, supra at 539. In realizing the Founders’ vision, this Court has adhered strictly to the principle "that the right to engage in interstate commerce is not the gift of a state, and that a state cannot regulate or restrain it." Id. at 535.{17} But, until today, the Court has not been asked to hold that the entry by the State itself into the market as a purchaser, in effect, of a potential article of interstate commerce creates a burden upon that commerce if the State restricts its trade to its own citizens or businesses within the State.

We do not believe the Commerce Clause was intended to require independent justification for such action. Maryland entered the market for the purpose, agreed by all to be commendable as well as legitimate, of protecting the State’s environment. As the means of furthering this purpose, it elected the payment of state funds -- in the form of bounties -- to encourage the removal of automobile hulks from Maryland streets and junkyards. It is true that the state money initially was made available to licensed out-of-state processors as well as those located within Maryland, and not until the 1974 amendment was the financial benefit channeled, in practical effect, to domestic processors. But this chronology does not distinguish the case, for Commerce Clause purposes, from one in which a State offered bounties only to domestic processors from the start.{18} Regardless of when the State’s largesse is first confined to domestic processors, the effect upon the flow of hulks resting within the State is the same: they will tend to be processed inside the State, rather than flowing to foreign processors. But no trade barrier of the type forbidden by the Commerce Clause, and involved in previous cases, impedes their movement out of State. They remain within Maryland in response to market forces, including that exerted by money from the State. Nothing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action,{19} from participating in the market and exercising the right to favor its own citizens over others.{20}

III

The District Court also found the 1974 amendment to be violative of the Equal Protection Clause.{21} Appellee supports this holding by contending that no difference between the operations of foreign and domestic processors justifies denying to the former the right to use indemnity agreements, and that this discriminatory denial furthers no legitimate state purpose. Maryland, having licensed out-of-state processors, does not justify the amendment’s distinction on the basis of any difference in the manner of operation. But Maryland does insist that several state interests are served by it. We agree with Maryland with respect to its primary justification for the 1974 amendment, and thus find it unnecessary to consider other interests that also may be furthered.

Maryland argues that the distinction between domestic and foreign processors in the 1974 amendment is related to the basic statutory purpose of clearing Maryland’s landscape of abandoned automobiles. Underlying this argument are the complementary assumptions that hulks delivered to Maryland processors are likely to have been abandoned in Maryland, and those delivered to non-Maryland processors are likely to have been abandoned outside Maryland. Based upon those assumptions, the State contends that the 1974 amendment, by making it easy for an in-state processor to receive bounties but difficult for an out-of-state processor to do so, tends to ensure that the State’s limited resources are targeted to hulks abandoned inside Maryland as opposed to some contiguous State.

The District Court rejected this argument with the observation that Maryland had

not proffered a scintilla of factual support for [its] assumption that nonresident processors are more likely than in-state processors to claim bounties for vehicles abandoned outside of Maryland.

391 F.Supp. at 57. The District Court demanded too much. Maryland’s underlying assumptions certainly are not irrational: in terms of likelihood, the Maryland Legislature reasonably could assume that a hulk destroyed by a non-Maryland processor is more likely to have been abandoned outside Maryland than is a hulk destroyed by a Maryland processor, and vice versa. The State is not compelled to verify logical assumptions with statistical evidence.{22}

Appellee contends that the alleged relationship of the amendment to the statutory purpose is belied by a "loophole" in the statute that remains even after the amendment. This "loophole" results from the fact that the statute conditions the payment of bounty upon previous titling of a vehicle in Maryland, rather than upon proof of its abandonment in that State. Thus, even after the 1974 amendment, an in-state processor remains free to recover bounties on hulks previously titled in Maryland but delivered to it after abandonment elsewhere. A more discriminating effort to achieve the statutory purposes, according to appellee, would have changed the statute to condition the bounty upon proof of abandonment in Maryland.{23}

It is well established, however, that a statutory classification impinging upon no fundamental interest, and especially one dealing only with economic matters, need not be drawn so as to fit with precision the legitimate purposes animating it. Williamson v. Lee Optical Co., 348 U.S. 483, 489 (1955). That Maryland might have furthered its underlying purpose more artfully, more directly, or more completely, does not warrant a conclusion that the method it chose is unconstitutional. See Katzenbach v. Morgan, 384 U.S. 641, 657 (1966).

Moreover, the statute in its present form still allows payment of bounty on a hulk to a non-Maryland processor upon proper documentation of title. The logic in support of the 1974 amendment -- that Maryland processors are more likely than out-of-state processors to destroy hulks abandoned inside the State suggests the rationality of Maryland’s discontinuing bounties to out-of-state processors altogether. If Maryland could do that, we are not prepared to say that it is forbidden to go part of the way by an amendment that has the practical effect, through the distinction as to documentation of title, of substantially curtailing bounty payments to out-of-state processors.{24}

Few would contend that Maryland has taken the straightest road to its goal, either in its original drafting of the statute or in the refinement introduced by the 1974 amendment. But in the area in which this bounty scheme operates, the Equal Protection Clause does not demand a surveyor’s precision. The 1974 amendment bears a rational relationship to Maryland’s purpose of using its limited funds to clean up its own environment, and that is all the Constitution requires. See Dandridge v. Williams, 397 U.S. 471, 486 487 (1970); San Antonio School Dist. v. Rodriguez, 411 U.S. 1, 44 (1973); McGinnis v. Royster, 410 U.S. 263, 270, 276-277 (1973).

We hold that the District Court erred in finding the 1974 amendment invalid under either the Commerce Clause or the Equal Protection Clause. Accordingly, its judgment is reversed.

So ordered.

1. 1969 Md.Laws, c. 556. The law, as amended, is codified at Md.Ann.Code, Art. 66 1/2, § 5-201 et seq. (1970 ed. and Supp. 1975).

2. Md.Ann.Code, Art. 66 1/2, §§ 5-202, 5-203(d) (Supp. 1975).

3. Md.Ann.Code, Art. 66 1/2, § 5-205 (Supp. 1975).

4. In addition to receiving vehicles from licensed wreckers, processors receive them from the owners of the vehicles themselves and, more frequently, from unlicensed wreckers who tow an abandoned or wrecked vehicle directly to a processor rather than retaining it for its spare-part value.

5. The bounty started at $10 per vehicle and moved up to $16 by the time of this suit. As noted in the text, supra, a licensed wrecker receives half of this sum directly from the State. A profit margin for unlicensed suppliers is assured by the willingness of processors, who need a fairly constant supply of hulks to run their expensive machinery efficiently, to "rebate" most of the bounty. Appellee, for example, regularly pays $14 of the current $16 bounty to its unlicensed suppliers.

6. Md Ann.Code, Art. 662, § 203(b), (c) (1970 ed. and Supp. 975).

7. Md.Ann.Code, Art. 66 1/2, §§ 203.1, 11-002.2(f)(1-4), 11-1002.2 (a-d) (1970 ed. and Supp. 1975).

8. Maryland Ann.Code, Art. 66 1/2, § 11-1002.2(f)(5) (1970), as originally enacted, read as follows:

Notwithstanding any other provisions of this section, any person, firm, corporation, or unit of government upon whose property or in whose possession any abandoned motor vehicle is found, or any person being the owner of a motor vehicle whose title certificate is faulty, or destroyed, may dispose of the motor vehicle to a wrecker or scrap processor without the title and without notification procedures of subsection (c) [subsections (a) and (b)] of this section, if the motor vehicle is over eight years old and has no engine or is otherwise totally inoperable.

(Emphasis supplied.)

9. A participating processor must meet statutory requirements relating to its storage area for vehicles, its records and books of account, and its processing equipment. Md.Ann.Code, Art. 66 1/2, § 5-202 (Supp. 1975). An administrative regulation promulgated pursuant to the statute requires that a licensed non-Maryland processor maintain an "office" within the State approved by the State Motor Vehicle Administration. Md. A.R.R. § 11.02.05.45.

10. 1974 Md.Laws, c. 465. The amendment did not change the wording of the original section, n. 8, supra, but added the following language:

In those cases only, a scrap processor whose plant is physically located and operating in this State shall execute an indemnity agreement that shall be filed with the Motor Vehicle Administration. The indemnity agreement shall contain the name, address and signature of the person delivering the vehicle. The indemnity agreement and the manufacturer’s serial or identification number shall be satisfactory proof that the vehicle has been destroyed and shall be acceptable for payment of the full bounty authorized.by section 5-205 if the vehicle identified in the indemnity agreement was titled in this State. Otherwise, for the purpose of administering the provisions of this section, the provisions of section 5-205 shall not apply.

Section 5-205, mentioned in the amendment, is the only statutory provision authorizing bounty payments. See supra at 797. Without the benefit of § 11-1002.2(f)(5) following the 1974 amendment, out-of-state processors must depend upon other sections that authorize a § 5-205 bounty only upon more elaborate title documentation. See supra at 798.

11. Appellee submitted an affidavit of its general manager containing statistics that showed the decline. During the six-month period immediately preceding the effective date of the amendment, appellee received 14,253 hulks from Maryland sources. In the six months immediately thereafter, the total was 9,723. This marked a decline of 31.8% in the number of bounty-eligible hulks, at a time when appellee’s figures showed an increase of 11.9 % in the number of vehicles supplied from non-Maryland sources.

12. Appellee’s figures showed that the number of hulks delivered by licensed wreckers, which before and after the amendment tended to use Wrecker’s certificates almost exclusively, more than doubled in the six months following the amendment (from 1,934 vehicles in the preceding six months to a total of 4,161 vehicles). The number of hulks delivered by unlicensed suppliers, however, plummeted by 54.9%, from 12,319 during the six months before the amendment to 5,561 in the comparable period thereafter.

13. The amendment did not accomplish this effect directly. After the amendment, it still was possible for licensed non-Maryland processors to receive bounty-eligible hulks from unlicensed Maryland suppliers. But because it was significantly easier for those suppliers to obtain an enhanced price from Maryland processors, they tended to deliver inside the State. The practical effect was substantially the same as if Maryland had withdrawn altogether the availability of bounties on hulks delivered by unlicensed suppliers to licensed non-Maryland processors. Indeed, this is the way appellee characterized the operation of the amendment:

Old and inoperable hulks continued to fetch an "artificially enhanced value" for their suppliers, but only if delivered intrastate to "a scrap processor whose plant is physically located and operating" in Maryland. Old and inoperable hulks exported for processing in contiguous states were ineligible for bounty, and sold at much lower prices prevailing on the free market for scrap metal. For towing services and other unlicensed suppliers, in business for profit and attracted by high prices, transactions with licensed processors beyond Maryland’s borders now entailed financial sacrifice. Accordingly, their hulks were withdrawn from interstate commerce and delivered for processing within Maryland for the bounty-generated rebates which only Maryland-based processors could provide.

Brief for Appellee 34.

14. Cf. infra,Part III.

15. Again, we emphasize that the 1974 amendment, by its terms, does not require unlicensed suppliers to deliver hulks in State to receive enhanced prices. This is simply its effect in practice, and this is the way appellee itself views the amendment as operating. Seen. 13, supra. To whatever extent unlicensed suppliers still take hulks from Maryland to appellee and other non-Maryland processors, of course, there has been no interruption of interstate commerce.

16.

It was . . . to secure freedom of trade, to break down the barriers to its free low, that the Annapolis Convention was called, only to adjourn with a view to Philadelphia. Thus, the generating source of the Constitution lay in the rising volume of restraints upon commerce which the Confederation could not check. They were the proximate cause of our national existence down to today.

As evils are wont to do, they dictated the character and scope of their own remedy. This lay specifically in the commerce clause. No prohibition of trade barriers as among the states could have been effective of its own force or by trade agreements. . . . Power adequate to make and enforce the prohibition was required. Hence, the necessity for creating an entirely new scheme of government.

W. Rutledge, A Declaration of Legal Faith 25-26 (1947). See H. P. Hood & Sons v. Du Mond, 336 U.S. 525, 533-535 (1949).

17. The cases upon which appellee primarily relies, and which are discussed in the text, supra at 805-806, illustrate that this principle makes suspect any attempt by a State to restrict or regulate the flow of commerce out of the State. The same principle, of course, makes equally suspect a State’s similar effort to block or to regulate the flow of commerce into the State. See, e.g., Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511 (1935); Dean Milk Co. v. Madison, 340 U.S. 349 (1951); Polar Ice Cream & Creamery Co. v Andrews, 375 U.S. 361 (1964). See generally Great A&P Tea Co. v. Cottrell, 424 U.S. 366 (1976).

18. We note that the commerce affected by the 1974 amendment appears to have been created, in whole or in substantial part, by the Maryland bounty scheme. We would hesitate to hold that the Commerce Clause forbids state action reducing or eliminating a flow of commerce dependent for its existence upon state subsidy instead of private market forces. Because the record contains no details of the hulk market prior to the bounty scheme, however, this issue is not clearly presented.

We also note that appellee undertook to build no new plant nor add additional machinery in reliance upon the prospect of receiving additional hulks under the Maryland bounty scheme. Instead, appellee stipulated in the District Court that participation in the program has caused no alteration in its method of operation. We intimate no view as to the consequences, if any, in a Commerce Clause case of a different state of facts in this respect. Cf. Pennsylvania v. West Virginia, 262 U.S. 553, 587 (1923); F. Ribble, State and National Power over Commerce 219 (1937).

19. Our reference to the absence of congressional action implies no view on whether Congress could prohibit the type of selective participation in the market undertaken by Maryland. It is intended only to emphasize that this case involves solely the restrictions upon state power imposed by the Commerce Clause when Congress is silent.

20. Appellee and the other licensed non-Maryland processors are free to withdraw from the bounty program should they decide that the benefits they receive from it after the 1974 amendment do not justify the annual license fee. They are not in the position of a foreign business which enters a State in response to completely private market forces to compete with domestic businesses, only to find itself burdened with discriminatory taxes or regulations. See, e.g., Best & Co. v. Maxwell, 311 U.S. 454 (1940); Nippert v. Richmond, 327 U.S. 416 (1946); Memphis Steam Laundry v. Stone, 342 U.S. 389 (1952); West Point Grocery v. Opelika, 354 U.S. 390 (1957); Halliburton Oil Well Co. v. Reily, 373 U.S. 64 (1963).

21. Maryland argued in this Court that appellee, a Virginia corporation, cannot claim the protection of the Fourteenth Amendment, which prohibits a State’s denial of equal protection to persons "within its jurisdiction." Maryland relies upon Blake v. McClung, 172 U.S. 239 (1898), where a Virginia corporation was held unprotected by the Equal Protection Clause against a Tennessee statute that subordinated its claims as a creditor to those of Tennessee corporations. But the situation here differs significantly from McClung. The Court in that case noted that the Virginia corporation was not

doing business in Tennessee under the statute here involved, or under any statute that would bring it directly under the jurisdiction of the courts of Tennessee by service of process on its officers or agents.

Id. at 261. Appellee, however, paid a fee to become licensed under Maryland law, maintains an office in Maryland as required by Maryland regulation, and has been found by the District Court to be subject to the jurisdiction of Maryland courts under the State’s "long arm" statute. Although appellee carries on no active business inside Maryland (all vehicles are brought by others to its plant in Virginia), it is "within [Maryland’s] jurisdiction" at least for the purposes of this licensing and bounty program. We think this entitles appellee to claim Fourteenth Amendment protection with respect to that program. Cf. WHYY v. Glassboro, 393 U.S. 117, 119 (1968); Wheeling Steel Corp. v. Glander, 337 U.S. 562, 571-572 (1949).

22. As noted earlier, n. 12, supra, licensed wreckers use primarily Wrecker’s Certificates when delivering hulks to processors. The 1974 amendment did not affect the ability of foreign processors to claim bounties on an equal footing with domestic processors by submitting such certificates. That was consistent with Maryland’s effort to reduce the amount of bounty payments for hulks that had rested in some other State: since all licensed wreckers are inside Maryland, see supra at 796-797, 799, hulks delivered with certificates always will have been eyesores in Maryland junkyards.

23. In fact, appellee argues that the statute, as it now stands, conditioning payment of bounties only upon previous Maryland titling, manifests no policy to restrict the payment of bounties to vehicles abandoned in Maryland. This comes close to an argument that this intricate statutory scheme was instituted not for the purpose of clearing Maryland’s environment of abandoned vehicles, but for the purpose of destroying Maryland titled hulks wherever they might be found -- even if it happened to be Virginia or Pennsylvania. Appellee’s argument is especially unpersuasive in light of the legislative history of this statute which appellee itself discussed in its brief. That history shows beyond question Maryland’s purpose to use the bounty to clear its own streets, lots, and junkyards of abandoned vehicles. That the bounty is conditioned upon previous Maryland titling, rather than proof of abandonment in Maryland, is probably a decision made in the interest of administrative convenience. Determining the place of abandonment would present problems of proof, as well as invite fraudulent claims.

24. It is worth emphasizing that appellee and other out-of-state processors are subject to Maryland licensing, with its annual fee requirements and other nominal burdens, only if they choose to participate in the bounty. If they feel their benefits from such participation after the 1974 amendment do not merit the expense, they are free to withdraw entirely.