8. In this suit, the court should

An insurance company located in the state files suit in federal district court against appropriate state officials to challenge this statute on constitutional grounds. The insurance company wishes to charge customers residing within the same county in the state rates for burglary insurance policies that will vary because they would be based on the specific nature of the customer's business, on its precise location, and on its past claims.

A state statute requires each insurance company that offers burglary insurance policies in the state to charge a uniform rate for such insurance to all of its customers residing within the same county in that state. So long as it complies with this requirement, a company is free to charge whatever rate the market will bear for its burglary insurance policies.

Hold the statute unconstitutional, because the statute deprives the insurance company of its liberty or property without due process of law
Hold the statute unconstitutional, because the statute imposes an undue burden on interstate commerce
Hold the statute constitutional, because the statute is a reasonable exercise of the state's police power
Abstain from ruling on the merits of this case until the state courts have had an opportunity to pass on the constitutionality of this state statute

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The Commerce Clause grants Congress the power to regulate commerce among the states, and that power also creates a limitation on each state's ability to pass laws that affect interstate commerce. That limit is called the Dormant Commerce Clause. When a non-discriminatory state regulation affects interstate commerce (and is not otherwise authorized by a federal law), it must satisfy each of these three elements to avoid violating the Dormant Commerce Clause: (i) the regulation must pursue a legitimate state end; (ii) the regulation must be rationally related to that legitimate state end; and (iii) the regulatory burden imposed by the state on interstate commerce must be outweighed by the state's interest in enforcing its regulation. See, e.g., South Carolina State Highway Department v. Barnwell Bros., Inc., 303 U.S. 177 (1938) (state law controlling weight and width of trucks on its highways was not unconstitutional under the Dormant Commerce Clause).

Courts especially frown on intentional discrimination against out-of-staters. A discriminatory state or local law may be valid, however, if it: (i) furthers an important, non-economic state interest (e.g., health or safety); and (ii) there are no reasonable alternatives available.

The power of state governments is sometimes called «inherent» because a state government, as far as the U.S. Constitution is concerned, holds a general «police power,» i.e., the power to protect the health, safety, or general welfare of state residents. An action by a state government is valid under federal law unless it violates any specific limitation imposed by the U.S. Constitution.

The Supreme Court has held that a state may affect interstate commerce if it is an incidental consequence of its exercise of «police powers.»

Procedural process requires a legitimate claim or «entitlement» to a benefit under state or federal law. Board of Regents v. Roth, 408 U.S. 564 (1972). Examples of protected property interests include: (i) public education when school attendance is required, meaning that a significant suspension (e.g., 10 days) requires procedural due process, Goss v. Lopez, 419 U.S. 565 (1975); (ii) welfare benefits if one has previously been determined to meet the statutory criteria, Goldberg v. Kelly, 397 U.S. 254 (1970); and (iii) continued public employment when there is a state statute or ordinance that creates a public employment contract, or there is some clear practice or mutual understanding that an employee can be terminated only for «cause,» then there is a property interest, Arnett v. Kennedy, 416 U.S. 134 (1974), but if the employee holds his position only at the «will» of the employer, there is no property interest in continued employment. Bishop v. Wood, 426 U.S. 341 (1976).

C is correct. The statute requires in-state insurance companies to charge a uniform rate for burglary insurance for county residents in that state, which may be dictated by the market value. There is no basis for concluding that the state statute is unconstitutional under the federal Constitution. For example, it does not discriminate against out-of-state entities or unduly burden interstate commerce, it does not conflict with specified federal legislation or otherwise trigger preemption, and it is not taking property without due process.

A is incorrect. This is a misapplication of the law. Although under the precedent established by Citizens United v. Fed. Election Comm'n, 558 U.S. 310 (2010), the Due Process Clause may potentially apply to «corporate personhood,» the property interest at issue here is not protected by procedural due process. Those protected rights typically include entitlements to certain benefits under the law, such as public employment, welfare benefits, and public education. The company's ability to charge customers whatever prices it wishes is not this type of «property» that invokes due process protections.

B is incorrect. As explained above, this law does not discriminate against out-of-state companies, and even if it triggered the balancing test to determine whether it otherwise posed an undue burden on interstate commerce, the legitimate interest in regulating the sale of insurance would likely outweigh any incidental burden.

D is incorrect. There are times when federal courts abstain from deciding claims involving state interests, such as when the decision would depend on the answer to an unsettled question of state law. Here, there is no indication of an underlying unsettled issue.

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8. In this suit, the court should

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