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Mabey Bridge Shore v. Allen Biehler, 11-1406 (2012)

Court: Court of Appeals for the Third Circuit Number: 11-1406 Visitors: 51
Filed: Jan. 24, 2012
Latest Update: Feb. 22, 2020
Summary: PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 11-1406 _ MABEY BRIDGE & SHORE, Inc., Appellant v. BARRY J. SCHOCH, Secretary of Transportation of the Commonwealth of Pennsylvania1 _ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA (D.C. Civil No. 10-cv-01474) District Judge: Honorable Sylvia H. Rambo _ Argued: December 6, 2011 _ Before: HARDIMAN, BARRY and VAN ANTWERPEN, Circuit Judges (Opinion Filed: January 24, 2012) _ James M. Campb
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                                          PRECEDENTIAL

          UNITED STATES COURT OF APPEALS
               FOR THE THIRD CIRCUIT
                    ____________

                       No. 11-1406
                      _____________

             MABEY BRIDGE & SHORE, Inc.,
                               Appellant

                              v.

      BARRY J. SCHOCH, Secretary of Transportation of
           the Commonwealth of Pennsylvania1
                   _____________

     APPEAL FROM THE UNITED STATES DISTRICT
                          COURT
    FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
                (D.C. Civil No. 10-cv-01474)
        District Judge: Honorable Sylvia H. Rambo
                       ____________

                 Argued: December 6, 2011
                      ____________

    Before: HARDIMAN, BARRY and VAN ANTWERPEN,
                    Circuit Judges

              (Opinion Filed: January 24, 2012)
                       ____________

James M. Campbell, Esq. (Argued)
Campbell, Campbell, Edwards & Conroy
One Constitution Plaza

1
 Substituted for Allen D. Biehler pursuant to Federal Rule of
Appellate Procedure 43(c)(2).
                              1
Third Floor
Boston, MA 02129
       -and-
Kristen E. Dennison, Esq.
Katherine A. Wang, Esq.
Campbell, Campbell, Edwards & Conroy
690 Lee Road
Suite 300
Wayne, PA 19087
       -and-
Margaret F. Ward, Esq.
Ward & Herzog
102 West Pennsylvania Avenue
Suite 401
Baltimore, MD 21204

Counsel for Appellant


Claudia M. Tesoro, Esq. (Argued)
Office of Attorney General of Pennsylvania
3rd Floor
21 South 12th Street
Philadelphia, PA 19107
       -and-
Patrick S. Cawley, Esq.
Kenneth L. Joel, Esq.
Calvin R. Koons, Esq.
Office of Attorney General of Pennsylvania
Strawberry Square
Harrisburg, PA 17120

Counsel for Appellee
                        ____________

                OPINION OF THE COURT
                     ____________

BARRY, Circuit Judge

      This case presents the question of whether the
                          2
Pennsylvania Steel Products Procurement Act (―Steel Act‖),
73 Pa. Cons. Stat. §§ 1881-1887, is unconstitutional insofar as
it prohibits the use of temporary bridges made out of foreign
steel on public works projects. Appellant Mabey Bridge &
Shore, Inc. (―Mabey‖) appeals the District Court‘s grant of
summary judgment on its claim that the Steel Act (and the
Department of Transportation‘s interpretation thereof) is
preempted by the Buy America Act, 23 U.S.C. § 313, as well
as on its claims that the Steel Act violates the Commerce
Clause, Contract Clause, and Equal Protection Clause of the
United States Constitution. We will affirm.

                               I.

       In 1978, the Commonwealth of Pennsylvania enacted
the Steel Act, which requires that steel products used or
supplied in the performance of a public works contract must
be made in the United States. In particular, the Act provides:

       Every public agency shall require that every
       contract document for the construction,
       reconstruction, alteration, repair, improvement
       or maintenance of public works contain a
       provision that, if any steel products are to be
       used or supplied in the performance of the
       contract, only steel products as herein defined
       shall be used or supplied in the performance of
       the contract or any subcontracts thereunder.

73 Pa. Cons. Stat. § 1884(a). The Act defines the term ―steel
products‖ as ―[p]roducts rolled, formed, shaped, drawn,
extruded, forged, cast, fabricated or otherwise similarly
processed . . . from steel made in the United States.‖ 
Id. § 1886
(emphasis supplied). ―Public works‖ is defined, in
relevant part, as ―[a]ny structure, . . . bridge, . . . or other
betterment, work or improvement whether of a permanent or
temporary nature and whether for governmental or proprietary
use.‖ 
Id. The only
statutory exception to the Act‘s requirement
of steel made in the United States is where the ―head of the
                               3
public agency, in writing, determines that steel products as
herein defined are not produced in the United States in
sufficient quantities to meet the requirements of the contract.‖
Id. § 1884(b).
A Pennsylvania Department of Transportation
(―PennDOT‖) publication provides an additional exception in
situations where the ―steel products are used as a construction
tool and will not serve a permanent functional use in the
project.‖ Pennsylvania Department of Transportation –
Specifications, Publication 408/2007-6 at § 106.01 (Change
No. 6, Effective April 2, 2010).

       Appellant Mabey is a Delaware corporation engaged in
the business of supplying temporary steel bridges for
construction projects.2 These bridges are designed to handle
traffic and pedestrians while a construction project is
underway. Mabey‘s bridges are made of steel from the
United Kingdom.

       Mabey has supplied temporary bridges to contractors
for use in public works projects, including PennDOT projects,
for more than 20 years. Over that time, Mabey estimates that
it has provided temporary bridges for use on approximately
fifty PennDOT projects. Mabey asserts that its bridges have
always performed to specification, and it provided
documentation showing PennDOT considered it an ―approved
temporary bridge fabricator.‖ Not until 2010, however, did
PennDOT raise the issue of whether Mabey‘s bridges were
prohibited under the Steel Act.

       In December 2009, Mabey provided a quote for a
temporary bridge to a contractor for purposes of a bid on a
PennDOT project. The contractor‘s bid was accepted and it
subcontracted with Mabey to provide the bridge. The bridge
specifications were submitted to a PennDOT engineer, and
the engineer approved the bridge for use on the project.

2
  Because we are reviewing a grant of summary judgment, we
recite the facts in the light most favorable to Mabey, the
nonmoving party. Couden v. Duffy, 
446 F.3d 483
, 489 n.1 (3d
Cir. 2006).

                               4
       On April 29, 2010, however, PennDOT notified the
contractor that the Steel Act precluded the use of Mabey‘s
temporary bridge on the project because the bridge is made of
foreign steel. The following month, PennDOT‘s Chief Bridge
Engineer sent an e-mail to all district engineers notifying them
that foreign steel is not to be used for the construction of
temporary bridges, and instructing them to review all projects
that specify the use of a temporary bridge and incorporate a
―special provision‖ codifying this requirement. Likewise, on
June 16, 2010, PennDOT sent a letter to the contractor
concluding that a temporary bridge (1) is itself a ―public
work‖ within the meaning of the Steel Act and thus its steel
components must be manufactured in the United States; and
(2) does not qualify for the exception for products used as a
construction tool that will not serve a permanent functional
use in the project. The letter concluded that ―[t]he use of the
Mabey Bridge, to the extent it does not contain steel that is of
domestic manufacture, seems ruled out by the Act.‖ Because
of these actions, Mabey claims it has been forced to cancel
four contracts for temporary bridges on PennDOT projects,
and prevented from giving quotes to contractors for bids on
future projects.

        On July 16, 2010, Mabey filed suit in the United States
District Court for the Middle District of Pennsylvania against
Allen Biehler, Secretary of Transportation for the
Commonwealth of Pennsylvania. Mabey sought a declaration
that the Steel Act, as interpreted and enforced by PennDOT, is
unconstitutional. Mabey also requested a preliminary and
permanent injunction enjoining PennDOT from prohibiting
the use of Mabey‘s temporary bridges on its projects. The
District Court granted the Secretary‘s motion for summary
judgment on all of Mabey‘s claims. This appeal followed.

                              II.

       The District Court had jurisdiction pursuant to 28
U.S.C. §§ 1331 and 1343. We have jurisdiction pursuant to
28 U.S.C. § 1291. We exercise plenary review over a district
court‘s grant of summary judgment, Monroe v. Beard, 536
                               
5 F.3d 198
, 206 (3d Cir. 2008), and will affirm only if ―there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law,‖ Fed. R. Civ. P. 56(a).
We exercise de novo review over the preemption question,
Farina v. Nokia Inc., 
625 F.3d 97
, 115 n.20 (3d Cir. 2010), as
well as over a district court‘s interpretation of the
Constitution, Blackhawk v. Pennsylvania, 
381 F.3d 202
, 206
(3d Cir. 2004). We will address each of Mabey‘s four
constitutional claims in turn.

                              A.

       Mabey‘s primary contention on appeal is that the Steel
Act is preempted by the Buy America Act, 23 U.S.C. § 313,
and related federal regulations. The doctrine of preemption
is rooted in the Supremacy Clause of the United States
Constitution, which declares that the laws of the United States
―shall be the supreme Law of the Land; . . . any Thing in the
Constitution or Laws of any State to the Contrary
notwithstanding.‖ U.S. Const. art. VI, cl. 2; Bruesewitz v.
Wyeth, Inc., 
561 F.3d 233
, 238 (3d Cir. 2009). Courts have
recognized three different kinds of preemption: express
preemption, conflict preemption, and field preemption.
Elassaad v. Independence Air, Inc., 
613 F.3d 119
, 126 (3d
Cir. 2010). As we have explained:

       Express preemption requires that Congress‘s
       intent to preempt be explicitly stated in the
       statute‘s language or implicitly contained in its
       structure and purpose. Conflict preemption
       occurs when state law actually conflicts with
       federal law, such that it is impossible for a
       private party to comply with both state and
       federal requirements, or where state law stands
       as an obstacle to the accomplishment and
       execution of the full purposes and objectives of
       Congress. Field preemption occurs when a field
       is reserved for federal regulation, leaving no
       room for state regulation, and congressional
       intent to supersede state laws is clear and
       manifest.
                               6

Id. (internal alteration,
quotation marks, and citations
omitted). ―In analyzing a potential conflict between federal
and state law, we must be guided by the rule that the purpose
of Congress is the ultimate touchstone in every preemption
case.‖ Deweese v. Nat’l R.R. Passenger Corp., 
590 F.3d 239
,
246 (3d Cir. 2009) (internal alteration and quotation marks
omitted). Furthermore, we ―consider the entire scheme of the
federal statute and identify its purpose and intended effect.‖3
Id. (internal alteration
and quotation marks omitted).

        The Buy America Act provides that the Secretary of
Transportation shall not obligate federal funds for highway
and transit projects ―unless steel, iron, and manufactured
products used in such project[s] are produced in the United
States.‖ 23 U.S.C. § 313(a). In contrast to the Steel Act, the
Buy America Act provides a more extensive set of exceptions
to the domestic production requirement, providing that the
statute‘s provisions do not apply where the Secretary finds:
―(1) that their application would be inconsistent with the
public interest; (2) that such materials and products are not

3
 Generally, in analyzing a preemption question, we are guided
by ―the basic assumption that Congress did not intend to
displace state law‖—referred to as the ―presumption against
preemption.‖ 
Farina, 625 F.3d at 116
. Mabey, however,
disputes the applicability of the presumption in cases
involving foreign commerce issues, relying on decisions
stating that the presumption does not apply when the state law
touches an area ―where state regulation has traditionally been
absent,‖ 
id., or ―when
the State regulates in an area where
there has been a history of significant federal presence,‖
United States v. Locke, 
529 U.S. 89
, 108 (2000). We note that
we have previously applied the presumption in a preemption
challenge to the Steel Act, albeit on other grounds. Trojan
Techs., Inc. v. Pennsylvania, 
916 F.2d 903
, 906 (3d Cir. 1990)
(noting that state procurement policy is a field of traditional
state regulation). Here, however, we have little difficulty
concluding the Steel Act is not preempted without the need to
resort to the presumption.

                              7
produced in the United States in sufficient and reasonably
available quantities and of a satisfactory quality; or (3) that
inclusion of domestic material will increase the cost of the
overall project contract by more than 25 percent.‖ 
Id. § 313(b).
The regulations also provide for a de minimis
exception to the Act, where the cost of the foreign steel or
iron materials does not exceed certain benchmarks. 23 C.F.R.
§ 635.410(b)(4).

        Importantly, the regulations also contain a provision
that indicates that the Buy America requirements are satisfied
when the project ―[i]ncludes no permanently incorporated
steel or iron materials.‖ 
Id. § 635.410(b)(1)
(emphasis
supplied). From this provision, Mabey contends that, while
its temporary bridges are prohibited under Pennsylvania‘s
Steel Act, they are exempted from the domestic steel
requirements of the federal law because they are not
permanently incorporated in the underlying project.4 Mabey
argues that the Buy America Act‘s ―tempered and limited
application‖ of the domestic steel requirement, including its
exception for temporary steel items, preempts the Steel Act‘s
more restrictive requirements. Thus, the relevant question
before us is whether the federal law provides only a ―floor‖—
minimum requirements which the states are free to exceed if
they wish—or whether the federal standards are intended to
be uniform throughout the country, invalidating more
restrictive state requirements.


4
   Mabey‘s position that its temporary bridges would be
exempted from the application of Buy America Act under this
provision finds support in certain Federal Highway
Administration documents.           See FHWA Contract
Administration Core Curriculum Participant‘s Manual and
Reference Guide 2006 at 59 (stating that, ―[f]or the Buy
America requirements to apply, the steel or iron products must
be permanently incorporated into the project. Buy America
does not apply to temporary steel items, e.g., . . . temporary
bridges‖). For the purposes of this appeal, we will assume,
without deciding, that Mabey‘s bridges would be permissible
under the Buy America Act.
                             8
        We conclude that the Buy America Act demonstrates
Congress‘s intent to allow states to enact more restrictive
requirements related to the use of domestic steel and, thus,
that the Steel Act is not preempted. In the same section that
contains the domestic steel requirement, the Buy America Act
also states:

       The Secretary of Transportation shall not
       impose any limitation or condition on assistance
       provided under the Surface Transportation
       Assistance Act of 1982 (96 Stat. 2097) or this
       title that restricts any State from imposing more
       stringent requirements than this section on the
       use of articles, materials, and supplies mined,
       produced, or manufactured in foreign countries
       in projects carried out with such assistance or
       restricts any recipient of such assistance from
       complying        with    such     State   imposed
       requirements.

23 U.S.C. § 313(d) (emphasis supplied). Mabey argues that
this section is inapplicable because ―it is only a restriction on
the power of the Secretary of Transportation, not an
affirmative grant of power to the states.‖ Appellant‘s Br. at
32. This argument, however, misses the point. The
touchstone of the preemption analysis is whether Congress
intended to displace state law. The statutory language, far
from demonstrating an intent to preempt state law, instead
demonstrates that Congress was aware that individual states
may have ―more stringent requirements‖ than the Buy
America Act, and specifically instructed the Secretary of
Transportation not to interfere with those requirements. Such
an instruction is tantamount to congressional authorization for
more stringent state practices to continue. Under such
circumstances, there can be no preemption. See Wyeth v.
Levine, 
555 U.S. 555
, 574-75 (2009) (noting that the case for
federal preemption is particularly weak where Congress has
demonstrated awareness of the operation of state law but has
not acted).

       Mabey seeks to avoid the language of 23 U.S.C. §
                           9
313(d) by instead relying principally on the federal
regulations implementing the Buy America Act, particularly
23 C.F.R. § 635.409(b). That section provides that:

       No requirement shall be imposed and no
       procedure shall be enforced by any State
       transportation department in connection with a
       project which may operate: . . . (b) To prohibit,
       restrict or otherwise discriminate against the
       use of articles or materials of foreign origin to
       any greater extent than is permissible under
       policies of the Department of Transportation as
       evidenced by requirements and procedures
       prescribed by the FHWA Administrator to carry
       out such policies.

23 CFR § 635.409(b) (emphasis supplied). Mabey argues that
this provision shows that federal law ―clearly prohibits states
from imposing Buy America requirements that are
inconsistent with federal policy, including the policy of
expressly exempting temporary bridges from the domestic
steel requirements.‖ Appellant‘s Br. at 33.

       Mabey correctly points out that ―an agency regulation
with the force of law can pre-empt conflicting state
requirements.‖ 
Levine, 555 U.S. at 576
. We are skeptical,
however, as to whether a regulation can be used to support
preemption in contravention of clear statutory language
demonstrating Congress‘s intent not to preempt state law,
such as that found in § 313(d). In any case, we find Mabey‘s
reliance on the regulations unavailing.

       Whatever support § 635.409(b), standing alone, may
provide for Mabey‘s argument, we cannot view that
regulation in isolation but, rather, must examine how it fits
into the larger regulatory scheme. 
Deweese, 590 F.3d at 246
(a court must examine ―the entire scheme‖ of the federal law
at issue). Of particular importance here is another regulation
in the same subpart, 23 C.F.R. § 635.410, entitled ―Buy
America requirements.‖ That regulation provides:

                              10
        (b) No Federal-aid highway construction
       project is to be authorized for advertisement or
       otherwise authorized to proceed unless at least
       one of the following requirements is met:

                (1) The project either: (i) Includes no
       permanently incorporated steel or iron
       materials, or (ii) if steel or iron materials are to
       be used, all manufacturing processes . . . for
       these materials must occur in the United States.
       . . . [or;]

              (2) The State has standard contract
       provisions that require the use of domestic
       materials and products, including steel and iron
       materials, to the same or greater extent as the
       provisions set forth in this section.

Id. § 635.410(b)(1)
–(2) (emphasis supplied). Thus, echoing
the Buy America statute, § 635.410(b)(2) contemplates that
states may have more stringent requirements regarding the use
of domestic steel materials than the federal law, and explicitly
allows these more stringent requirements to satisfy the federal
Buy America requirements.

       We need not decide whether §§ 635.409(b) and
635.410(b)(2) conflict, or how they operate together in
practice. To the extent there is any conflict between the two,
§ 635.410 explicitly provides that ―[t]he provisions of this
section shall prevail and be given precedence over any
requirements of this subpart which are contrary to this
section,‖ thus trumping the operation of § 635.409(b) relied
upon by Mabey. 
Id. § 635.410(a).
Even without the express
precedence of § 635.410, we note that the two regulations
read in conjunction could, at best, be said to be ambiguous on
the issue of more restrictive state requirements.          An
ambiguous regulatory scheme, however, cannot demonstrate
the clear congressional intent necessary to establish
preemption of state law.

       In sum, we conclude that the Buy America Act,
                         11
together with 23 C.F.R. § 635.410(b)(2), demonstrate a
federal legislative and regulatory scheme that takes into
account concurrent state legislation in this area, and
authorizes the states to impose more stringent requirements on
the domestic manufacture of steel products. Congress neither
expressly preempted state law, nor exclusively occupied the
field of regulation of domestic steel requirements in public
works projects. Furthermore, because Congress contemplated
more restrictive state regulations, we cannot conclude that
state law stands as an obstacle to the accomplishment of
congressional objectives. The Steel Act is, therefore, not
preempted by federal law.

                             B.

        Mabey argues, next, that the Steel Act is
unconstitutional under the dormant Commerce Clause. The
Commerce Clause ―grants Congress plenary authority to
regulate commerce among the states, and ‗has long been
understood to have a ‗negative‘ aspect that denies the States
the power unjustifiably to discriminate against or burden the
interstate flow of articles of commerce.‘‖ Tri-M Group, LLC
v. Sharp, 
638 F.3d 406
, 418 (3d Cir. 2011) (quoting Oregon
Waste Sys., Inc. v, Dep’t of Envtl. Quality, 
511 U.S. 93
, 98
(1994)).     A state regulation that discriminates against
interstate commerce in favor of local business or investment
is per se invalid, unless it survives rigorous scrutiny.
Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd.,
298 F.3d 201
, 210-11 (3d Cir. 2002). Where, as here, a state
law touches on ―‗the unique context of foreign commerce,‘
[the] State‘s power is further constrained because of ‗the
special need for federal uniformity.‘‖ Barclays Bank PLC v.
Franchise Tax Bd. of Cal., 
512 U.S. 298
, 311 (1994) (quoting
Wardair Can. v. Fla. Dep’t of Revenue, 
477 U.S. 1
, 8 (1986)).
A state law is immune from attack under the Commerce
Clause, however, if certain exceptions apply, including where
the state is acting as a ―market participant‖ rather than a
market regulator, or where Congress ―authorize[s] states to
impose restrictions that the dormant Commerce Clause would
otherwise forbid.‖ Tri-M 
Group, 638 F.3d at 418
, 430.

                             12
        Mabey argues that neither exception to the Commerce
Clause applies in this case, and that the Steel Act cannot
withstand the heightened scrutiny that applies to laws that
facially discriminate against foreign commerce. In particular,
Mabey argues that Congress has not clearly authorized the
states to discriminate against foreign steel, and that the market
participant doctrine is wholly inapplicable in the context of
foreign commerce. Mabey also argues that, even if the
market participant exception is available, PennDOT acts as a
market regulator, not a participant, in implementing the Steel
Act.
                                1.

       In analyzing Mabey‘s claim under the Commerce
Clause, we do not write on a clean slate; indeed, we
previously addressed a Commerce Clause challenge to the
Steel Act in Trojan Techs., Inc. v. Pennsylvania, 
916 F.2d 903
(3d Cir. 1990). In Trojan, appellant Trojan Technologies was
a Canadian corporation that manufactured and supplied
ultraviolet light water disinfection systems, which contained
various steel parts. These devices were sold to municipalities
and authorities for use in public works projects such as waste
water and sewage treatment facilities. The Pennsylvania
Attorney General, however, sought documentation from the
company that the devices complied with the Steel Act. Trojan
responded by filing suit claiming the Act was
unconstitutional, in part because it burdened foreign
commerce in violation of the Commerce Clause.

       On appeal, we agreed with the district court that the
Steel Act did not violate the Commerce Clause. We began by
noting that the Supreme Court had ―expressly reserved the
question of whether state buy-American statutes that affect
foreign commerce violate the commerce clause, or are
permissible under the market participant doctrine or on other
grounds.‖ 
Id. at 910
(citing Reeves, Inc. v. Stake, 
447 U.S. 429
, 437 n.9 (1980)). We independently concluded, however,
that the ―market-participant‖ exception to the Commerce
Clause did apply to the Steel Act, stating: ―we are convinced
that with respect to state buy-American statutes there can be
no commerce clause intrusion even in a foreign commerce
                               13
context where there is no attempt to regulate.‖ 
Id. We rejected
an argument that the exception did not apply to the
Steel Act because the disinfection systems were purchased by
municipalities, rather than directly by the Commonwealth
itself. Relying on the Supreme Court‘s decision in White v.
Massachusetts Council of Construction Employers, Inc., 
460 U.S. 204
(1983), we found it immaterial that the
Commonwealth was not in formal privity of contract with the
suppliers.    Rather, we held that, ―[a]s the ultimately
controlling public purchaser, the Commonwealth enjoys the
same right to specify to its suppliers the source of steel to be
used in any supplies provided as is enjoyed by similarly
situated private purchasers.‖ 
Trojan, 916 F.2d at 911
.
Finally, we acknowledged that statutes affecting foreign
commerce are subject to more searching review.
Nevertheless, we concluded that the Steel Act ―survives even
the most searching review,‖ noting that the Act does not
implicate the concerns of multiple taxation or impairment of
federal uniformity that apply to state statutes affecting foreign
commerce. 
Id. at 912.
        Trojan is directly on-point and forecloses Mabey‘s
claim under the Commerce Clause. Moreover, Mabey‘s
attempts to distinguish Trojan are unpersuasive. First,
Mabey‘s argument that Trojan did not involve the federal Buy
America Act is irrelevant for the purposes of the market
participant analysis. Second, the fact that Trojan involved
ultraviolet water disinfection devices installed at water and
sewage treatment facilities, while this case involves
temporary bridges for road projects, is likewise immaterial.
Mabey contends that Pennsylvania builds and repairs roads
―in its sovereign capacity and in the exercise of its statutory
authority,‖ making it a market regulator under the facts of this
case, not a market participant. Appellant‘s Br. at 40. But
Mabey provides no persuasive reason why the state‘s exercise
of its authority regarding roads should be treated any
differently than its exercise of authority regarding water and
sewage treatment facilities and waste management. Finally,
Mabey argues that PennDOT acts as a market regulator
because it can enforce the Steel Act with powers that are
unavailable to private actors, such as disgorgement
                               14
proceedings and debarment from public contracts. In Trojan,
however, we explicitly cited to those same statutory powers
yet still found that the Commonwealth acted as a market
participant. See 
Trojan, 916 F.2d at 905
(citing 73 Pa. Cons.
Stat. § 1885 and noting that payments made in violation of the
Act are recoverable directly from the contractor or supplier
who did not comply and that willful violators are barred from
bidding on public contracts for 5 years).

                              2.

       Even if we were not constrained by Trojan, Mabey‘s
Commerce Clause claim would fail because the Steel Act is
subject to the congressional authorization exception. ―‗When
Congress so chooses, state actions which it plainly authorizes
are invulnerable to constitutional attack‘ since Congress‘s
commerce power in such instances is ‗not dormant, but has
been exercised by that body.‘‖ Tri-M 
Group, 638 F.3d at 430
(quoting Ne. Bancorp, Inc. v. Bd. of Gov’rs of Fed. Reserve
Sys., 
472 U.S. 159
, 174 (1985)); see also Norfolk S. Corp. v.
Oberly, 
822 F.2d 388
, 392-93 (3d Cir. 1987) (―One defense to
a dormant Commerce Clause challenge is Congressional
consent. By its actions, Congress may . . . permit[] the states
to regulate the commerce in a manner which would otherwise
not be permissible.‖ (internal quotation marks omitted)).5

5
  Mabey points out that, in order to invoke this exception, a
state typically must prove congressional authorization that is
―unmistakably clear.‖ Tri-M 
Group, 638 F.3d at 430
. The
Supreme Court has stated, however, that in the case of foreign
commerce, ―unmistakable clarity‖ is not required. See
Barclays 
Bank, 512 U.S. at 323
(―Congress may more
passively indicate that certain state actions do not impair
federal uniformity [in foreign commerce] . . . it need not
convey its intent with the unmistakable clarity required to
permit state regulation that discriminates against interstate
commerce . . . .‖). Instead, it may be enough where the
federal government ―has at least acquiesced‖ to the state
activity in question. See 
Wardair, 477 U.S. at 12
. In this
case, however, the question of the precise standard to apply is
immaterial given that the congressional authorization here is
                             15
        We conclude that Congress has plainly authorized
restrictions of the kind contained in the Steel Act. As noted in
the discussion of 
preemption, supra
, 23 U.S.C. § 313(d)
shows that Congress was aware that state laws imposed more
stringent requirements on the use of foreign materials and
specifically commanded the Secretary of Transportation not to
restrict any state from imposing more stringent requirements.
Likewise, 23 C.F.R. § 635.410(b) allows a state to exceed the
federal baseline for the use of domestic steel by ―requir[ing]
the use of domestic materials and products, including steel
and iron materials, to the same or greater extent as the
provisions set forth in this section.‖ These provisions show
the type of unequivocal congressional authorization needed to
avoid Commerce Clause scrutiny.            The District Court
correctly granted summary judgment against Mabey on its
Commerce Clause claim.

                               C.

        Mabey next contends that PennDOT‘s actions violated
the Contract Clause, which provides that ―[n]o State shall . . .
pass any . . . Law impairing the Obligation of Contracts.‖
U.S. Const. art. I, § 10, cl. 1. In order to prove a violation of
this constitutional provision, Mabey must demonstrate that a
―change in state law has ‗operated as a substantial impairment
of a contractual relationship.‘‖ Gen. Motors Corp. v. Romein,
503 U.S. 181
, 186 (1992) (quoting Allied Structural Steel Co.
v. Spannaus, 
438 U.S. 234
, 244 (1978)). ―This inquiry has
three components: whether there is a contractual relationship,
whether a change in law impairs that contractual relationship,
and whether the impairment is substantial.‖ 
Id. Thus, under
the Contract Clause, the contract in question must preexist the
passage of the state law. See id.; see also Fabri v. United
Techs. Int’l, Inc., 
387 F.3d 109
, 124 (2d Cir. 2004) (―The
Contract Clause prohibits the impairment by the state of
existing contracts. . . . [T]he statute must have been passed
after the contract was executed.‖). Only if these elements are
met do we ―further inquire whether the law at issue has a

unmistakably clear.

                               16
legitimate and important public purpose and whether the
adjustment of the rights of the parties to the contractual
relationship was reasonable and appropriate in light of that
purpose.‖ Transp. Workers Union of Am., Local 290 v.
SEPTA, 
145 F.3d 619
, 621 (3d Cir. 1998).

       We agree with the District Court that Mabey has failed
to show a ―change in state law‖ that impaired its contracts.
The Steel Act was enacted in 1978 and was in effect at the
time Mabey entered into its contracts to provide temporary
bridges for PennDOT projects. Thus, even Mabey concedes
that the passage of the statute itself cannot be the ―change in
law‖ that impaired Mabey‘s existing contracts. Rather,
Mabey argues that ―PennDOT‘s change in its interpretation of
[the Steel Act] meets the purposes behind the requirement of a
change in state ‗law.‘‖ Appellant‘s Br. at 54.

        The Supreme Court has made clear that the language
of the Contract Clause (i.e., ―pass any . . . law‖) means that
the clause applies only to exercises of legislative power. As
the Court noted in Ross v. Oregon, ―[t]he prohibition is aimed
at the legislative power of the state, and not at the decisions of
its courts, or the acts of administrative or executive boards or
officers, or the doings of corporations or individuals.‖ 
227 U.S. 150
, 162 (1913) (quoting New Orleans Waterworks Co.
v. La. Sugar Ref. Co., 
125 U.S. 18
, 30 (1888)). The Court has
cautioned, however, that the application of the Contract
Clause is not limited solely to formal enactments and statutes
of the state legislature. Instead, it ―reach[es] every form in
which the legislative power of a state is exerted, whether it be
a constitution, a constitutional amendment, an enactment of
the legislature, a by-law or ordinance of a municipal
corporation, or a regulation or order of some other
instrumentality of the state exercising delegated legislative
authority.‖ 
Id. at 162-63.
       There is no simple formula for determining whether a
government act is an exercise of legislative authority. In
Ross, however, the Supreme Court provided some guidance to
courts for purposes of making that determination. In
particular, the Court stated that an act bears the hallmarks of
                               17
legislative authority when it ―changes existing conditions by
making a new rule to be applied thereafter to all or some part
of those subject to its power.‖ 
Id. at 163.
In contrast, an act
is likely not legislative when ―its purpose was not to prescribe
a new law for the future, but only to apply to a completed
transaction laws which were in force at the time.‖ 
Id. Thus, there
is no violation of the Contract Clause when the act in
question ―investigates, declares, and enforces liabilities as
they stand on present or past facts and under laws supposed
already to exist.‖ 
Id. Although Ross
was decided in a much
earlier time, and the line between legislative and non-
legislative acts has arguably blurred since that time, the
guidance provided by that case remains helpful in analyzing
the legislative character of exercises of state power.

       We are troubled by the fact, and fact it appears to be,
that because PennDOT and Mabey had a long course of
dealing, Mabey could justifiably believe that its bridges made
with foreign steel were acceptable. Nevertheless, in light of
Ross, we conclude that PennDOT‘s actions were not an
exercise of legislative authority. Although those actions had
great consequences for Mabey, PennDOT‘s decision
regarding temporary bridges was not truly a ―new rule.‖
Rather, at least since 1978, the applicable ―rule‖ is, and has
been, the Steel Act.         PennDOT‘s actions are better
characterized as interpretive. PennDOT was not exercising its
authority to create regulations. It did not engage in formal,
notice-and-comment rule making. Instead, PennDOT, in the
words of Ross, simply ―declare[d], and enforce[d] liabilities
as they stand on present or past facts and under laws supposed
already to exist.‖ 
Id. Indeed, PennDOT‘s
written action letter
discussing the issue of Mabey‘s bridges clearly indicates that
it was applying and interpreting the rule set forth in the Steel
Act:

       A temporary bridge is explicitly included in the
       [Steel] Act‘s definition of ‗public works.‘
       (Section 6 of the Act, 73 P.S. § 1886, defines
       ‗public works‘ as ‗any structure, building,
       highway, waterway, street, bridge, transit
       system, airport, or other betterment, work or
                             18
       improvement whether of a permanent or
       temporary nature . . . .‘ (Emphasis added).)
       The temporary bridge . . . is; therefore, not
       merely a tool used in the construction of a
       ‗public work‘ (i.e., the permanent replacement
       bridge), but it is a ‗public work‘ in its own right.
       . . . All steel products used in the construction of
       either bridge must, under the Act, be
       manufactured from steel made in the U.S. . . .
       The use of the Mabey Bridge, to the extent it
       does not contain steel that is of domestic
       manufacture, seems ruled out by the Act.

(JA 73-74.)

        The fact that PennDOT‘s application of the Steel Act
in 2010 reversed or contradicted its previous interpretation of
the Act is insufficient. The Supreme Court has rejected the
argument that the Contract Clause is violated when there is a
new interpretation of an antecedent state statute. See Fleming
v. Fleming, 
264 U.S. 29
, 30-32 (1924) (finding no Contract
Clause violation based on the alleged reversal in interpretation
of an Iowa state statute, even where the party had relied on
the earlier interpretation, and holding that a ―statute in force
when a contract was made cannot be made a subsequent
statute through new interpretation by the courts‖ (citing Tidal
Oil Co. v. Flanagan, 
263 U.S. 444
(1924))); Stockholders of
Peoples Banking Co. v. Sterling, 
300 U.S. 175
, 182 (1937)
(―Change by judicial construction of antecedent legislation
does not impair a contract, at least in the forbidden sense, if it
be granted arguendo that such a change can be discovered.‖).
Because PennDOT‘s actions interpreted and applied a law
that had been in force for over 30 years, it did not exercise
legislative authority subject to scrutiny under the Contract
Clause. The District Court thus properly granted summary
judgment on the Contract Clause claim.

                               D.

       Mabey‘s final claim is that PennDOT‘s application of
the Steel Act violates the Equal Protection Clause. Mabey‘s
                               19
argument is two-fold. Based on Metropolitan Life Ins. Co. v.
Ward, 
470 U.S. 869
, 882 (1985), Mabey argues that
discriminating against out-of-state business does not serve a
legitimate state purpose. As we noted in Trojan, however,
Metropolitan Life has been ―sharply limited to its 
facts.‖ 916 F.2d at 915
(discussing Ne. 
Bancorp., 472 U.S. at 180
).
Because Trojan considered the Steel Act in the context of
Metropolitan Life and found ―no basis for concluding that the
Steel Act contravenes the equal protection clause,‖ 
Trojan, 916 F.2d at 915
, Mabey‘s argument is unavailing.

        Mabey also argues that PennDOT‘s ―distinction
between temporary bridges and other temporary items is not
rationally related to a legitimate purpose, in violation of the
Equal Protection Clause.‖ Appellant‘s Br. at 58. In other
words, Mabey claims that PennDOT impermissibly allows an
exception to the domestic steel requirement ―for scaffolding,
construction trailers, or cranes used in PennDOT projects,‖
id. at 59,
but does not allow a similar exception for Mabey‘s
bridges.

        Because Mabey concedes that the distinction drawn by
PennDOT does not touch on a suspect class or infringe
fundamental constitutional rights, it must be upheld ―if there
is any reasonably conceivable state of facts that could provide
a rational basis for the classification.‖ Alexander v. Whitman,
114 F.3d 1392
, 1407 (3d Cir. 1997) (quoting F.C.C. v. Beach
Commc’ns, Inc., 
508 U.S. 307
, 313 (1993)). This is a
―relatively relaxed standard reflecting the Court‘s awareness
that the drawing of lines that create distinctions is peculiarly a
legislative task and an unavoidable one.‖ 
Id. at 1407-08
(quoting Mass. Bd. of Ret. v. Murgia, 
427 U.S. 307
, 314
(1976)). Under rational basis review, a ―statute is presumed
constitutional . . . and the burden is on the one attacking the
legislative arrangement to negative every conceivable basis
which might support it, whether or not the basis has a
foundation in the record.‖ Heller v. Doe, 
509 U.S. 312
, 320-
21 (1993) (internal citations and quotation marks omitted).

      Mabey has not met its heavy burden of overcoming the
presumption of constitutionality, and surely has not negated
                             20
every possible justification for the distinction. Appellee notes
that temporary bridges are specifically-required items in
certain PennDOT projects, whereas scaffolding, trailers and
cranes are items that are used or not at the discretion of the
contractor. A state agency could rationally determine that
application of domestic steel requirements to items used at the
discretion of the contractor is too onerous and difficult to
enforce. Ultimately, the kind of fine distinctions drawn by
PennDOT with respect to the Steel Act are precisely the kind
of judgments that the Supreme Court has instructed courts not
to second-guess. As the Court has stated:

       [R]estraints on judicial review have added force
       where the legislature must necessarily engage in
       a process of line-drawing. Defining the class of
       persons subject to a regulatory requirement . . .
       inevitably requires that some persons who have
       an almost equally strong claim to favored
       treatment be placed on different sides of the
       line, and the fact [that] the line might have been
       drawn differently at some points is a matter for
       legislative, rather than judicial, consideration.

Beach 
Commc’ns, 508 U.S. at 315-16
(internal citations and
quotation marks omitted). In sum, we find no basis for
concluding that the distinction drawn by PennDOT
contravenes the Equal Protection Clause.

                              III.

      For the foregoing reasons, we will affirm District
Court‘s grant of summary judgment.




                              21

Source:  CourtListener

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