432 U.S. 33 (1977)
Mr.
Chief Justice Burger delivered the opinion of the Court.
In
1973, North Carolina ennéade a statute which required, inter alia, all
closed containers of apples sold, offered for sale, or shipped into the State
to bear "no grade other than the applicable U.S. grade or standard."
. . ' Washington State is the Nation's largest producer of apples, its crops
accounting for approximately 30% of all apples grown domestically and nearly
half of all apples shipped in closed containers in interstate commerce.
[Because] of the importance of the apple industry to the State, its legislature
has undertaken to protect and enhance the reputation of Washington apples by
establishing a stringent, mandatory inspection program [which] requires all
apples shipped in interstate commerce to be tested under strict quality
standards and graded accordingly. In all cases, the Washington State grades
tare] the equivalent of, or superior to, the comparable grades and standards
adopted by the [U.S. Dept. of] Agriculture (USDA).
[In]
1972, the North Carolina Board of Agriculture adopted an administrative
regulation, unique in the 50 States, which in effect required all closed
containers of apples shipped into or sold in the State to display either the
applicable USDA grade or a notice indicating no classification. State grades
were expressly prohibited. In addition to its obvious consequence-prohibiting
the display of Washington State apple grades on containers of apples shipped
into North Carolina-the regulation presented the Washington apple industry with
a marketing problem of potentially nationwide significance. Washington apple
growers annually ship in commerce approximately 40 million closed containers of
apples, nearly 500,000 of which eventually find their way into North Carolina,
stamped with the applicable Washington State variety and grade. [Compliance]
with North Carolina's unique regulation would have required Washington growers
to obliterate the printed labels on containers shipped to North Carolina, thus
giving their product a damaged appearance. Alternatively, they could have
changed their marketing practices to accommodate the needs of the North Carolina
market, i.e., repack apples to be shipped to North Carolina in containers
bearing only the USDA grade, and/or store the estimated portion of the harvest
destined for that market in such special containers. As a last resort. they
could discontinue the use of the preprinted containers entirely. None of these
costly and less efficient options was very attractive to the industry. .
.
. . [North Carolina] maintains that [the] burdens on the interstate sale of
Washington apples were far outweighed by the local benefits flowing from what
they contend was a valid exercise of North Carolina's [police powers]. Prior to
the statute's enactment, . . . apples from 13 different States were shipped
into North Carolina for sale. Seven of those States, including [Washington],
had their own grading systems which, while differing in their standards, used
similar descriptive labels (e.g., fancy, extra fancy, etc.). This multiplicity
of inconsistent state grades [posed] dangers of deception and confusion not
only in the North Carolina market, but in the Nation as a whole. The North
Carolina statute, appellants claim, was enacted to eliminate this source of
deception and confusion. . .
The
challenged statute has the practical effect of not only burdening interstate
sales of Washington apples, but also discrin-iinating against them. This
discrimination takes various forms. The first, and most obvious, is the
statute's consequence of raising the costs of doing business in the North
Carolina market for Washington apple growers and dealers, while leaving those
of their North Carolina counterparts unaffected. [This] disparate effect
results from the fact that North Carolina apple producers, unlike their
Washington competitors, were not forced to alter their marketing practices in
order to comply with the statute. . . . Second, the statute has the effect of
stripping away from the Washington apple industry the competitive and economic
advantages it has earned for itself through its expensive inspection and
grading system. The record demonstrates that the Washington applegrading system
has gained nationwide acceptance in the apple trade. [The record] contains
numerous affidavits [stating a] preference [for] apples graded under the
Washington, as opposed to the USDA, system because of the former's greater
consistency, its emphasis on color, and its supporting mandatory inspections.
Once again, the statute had no similar impact on the North Carolina apple
industry and thus operated to its benefit.
Third,
by prohibiting Washington growers and dealers from marketing apples under their
State's grades, the statute has a leveling effect which insidiously operates to
the advantage of local apple producers. [With] free market forces at work,
Washington sellers would normally enjoy a distinct market advantage vis-A-vis
local producers in those categories where the Washington grade is superior.
However, because of the statute's operation, Washington apples which would
otherwise qualify for and be sold under the superior Washington grades will now
have to be marketed under their inferior USDA counterparts. Such
"downgrading" offers the North Carolina apple industry the very sort
of protection against competing out-of-state products that the Commerce Clause was
designed to prohibit. . . .despite the statute's facial neutrality, the
commission suggests that its discriminatory impact on interstate commerce was
not an unintended by-product, and are some indications in the record to that
effect . . . however, we need not ascribe an economic protection motive to the
North Carolina Legislature to resolve this case; we conclude that the
challenged statute cannot stand insofar as it prohibits the display of
Washington State grades even if enacted for the declared purpose of protecting
consumers from deception and fraud in the marketplace.
When
discrimination against commerce of the type we ha~e found is demonstrated, the
burden falls on the State to justify it both in terms of the local benefits
flowing from the statute and the unavailability of nondiscriminatory
alternatives adequate to preserve the local interests at stake. North Carolina
has failed to sustain that burden on both scores. [The] States unquestionably
possess a substantial interest in protecting their citizens from confusion and
deception in the marketing of foodstuffs ' but the challenged statute does
remarkably little to further that laudable goal at least with respect to
Washington apples and grades. The statute [permits] the marketing of closed
containers of apples under no grades at all. Such a result can hardly be
thought to eliminate the problems of deception and confusion created by the
multi~ plicity of differing state grades; indeed, it magnifies them by
depriving purchasers of all information concerning the quality of the contents
of closed apple containers. Moreover, although the statute is ostensibly a
consumer protection measure, it directs its primary efforts, not at the
consuming public at large, but at apple wholesalers and brokers who are the
principal purchasers of closed containers of apples. And those individuals are
presumably the most knowledgeable individuals in this area. Since the statute
does nothing at all to purify the flow of information at the retail level, it
does little to protect consumers against the problems it was designed to
eliminate. . . .
In
addition, it appears that nondiscriminatory alternatives to the outright ban of
Washington State grades are readily available. For example, North Carolina
could effectuate its goal by permitting out-of-state growers to utilize state
grades only if they also marked their shipments with the applicable USDA label.
In that case, the USDA grade would serve as a benchmark against which the
consumer could evaluate the quality of the various state grades. . . .
[The
court affirmed the lower court's holding that the North Carolina statute was
unconstitutional.]