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Market participation exception

The "market participation exception" to the dormant Commerce Clause does not give states unlimited authority to favor local interests, because limits from other laws and Constitutional limits still apply. In United Building & Construction Trades Council v. Camden, 465 U.S. 208 (1984), the city of Camden, New Jersey had passed an ordinance requiring that at least forty percent of the employees of contractors and subcontractors on city projects be Camden residents. The Supreme Court found that while the law was not infirm because of the Dormant Commerce Clause, it violated the Privileges and Immunities Clause of Article IV of the Constitution. Justice Rehnquist's opinion distinguishes the market-participant doctrine from the privileges and immunities doctrine. Similarly, Congress has the power itself under the Commerce Clause to regulate and sanction states acting as "market participants", but it lacks power to legislate in ways that violate Article IV.