Question

A state owned and operated a silver processing plant located within the state. Because a recent war led to a reduction in the availability of the silver ore as well as a vast increase in the price for silver, the state enacted a statute requiring that the plant sell the processed silver to residents of other states only if there were no outstanding orders from residents within the state. An out-of-state resident who lived closer to the processing plant than any such plant in his own state was prevented from purchasing silver from the plant due to the statute. He sued to have the statute struck down. Should the court strike down the statute?

Answer 1

Answer: D. No, because the state owns and operates the metal plant.

Explanation:

The State owns and operates the plants and so is allowed to discriminate against non residents.

This principle was established by the United States Supreme Court in Reeves, Inc. v. Stake, 447 U.S. 429 (1980).

In the judgement, the Court held that South Dakota had a right to give it's residents preferential treatment in buying cement from a state owned plant.