Rhode Island Truck Ctr v. Daimler Trucks North America

Opinion

United States Court of Appeals For the First Circuit

No. 22-1913

RHODE ISLAND TRUCK CENTER, LLC,

Plaintiff, Appellant,

v.

DAIMLER TRUCKS NORTH AMERICA, LLC,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

[Hon. John J. McConnell, Jr., U.S. District Judge]

Before

Barron, Chief Judge, Howard and Gelpí, Circuit Judges.

Edward J. Sackman, with whom Hilary Holmes Rheaume, Bernstein, Shur, Sawyer & Nelson, P.A., Samira Omerovic, and Omerovic Legal, PLLC were on brief, for appellant. Nathan D. Imfeld, with whom Roberta F. Howell and Foley & Lardner LLP were on brief, for appellee.

July 6, 2026 BARRON, Chief Judge. Like many states, Rhode Island

limits a motor vehicle manufacturer's ability to establish a new

dealership near one of its existing in-state dealerships even if

its franchise agreement with that existing dealership does not

impose such a limitation. See R.I. Gen. Laws § 31-5.1-4.2(a)-(b).

We are not aware of any state other than Rhode Island, however,

that extends this limitation to new dealerships outside the state.

In this appeal, we must decide whether Rhode Island's enforcement

of this unusual aspect of its dealer protection law would violate

the "dormant" component of the Commerce Clause of the U.S.

Constitution -- or, as it is often called, the "Dormant Commerce

Clause." We conclude that it would and so affirm the judgment

below.

I.

A.

The Rhode Island law in question, which we shall refer

to as the "Dealer Law,"1 requires, among other things, that a motor

vehicle manufacturer "notify" each one of its franchisees that

qualifies as a "new motor vehicle dealer" that the manufacturer

intends to establish in that dealer's "relevant market area" an

additional "new motor vehicle dealer" for the same "line or make"

1The Dealer Law is located at R.I. Gen. Laws §§ 31-5.1-1 to 31-5.1-21.

- 2 - of vehicle.2 Id. § 31-5.1-4.2(a). The Dealer Law defines

"relevant market area" as the greater of: (1) "the area within a

radius of twenty (20) miles around an existing dealer" or (2) "the

area of responsibility defined in the franchise." Id.

§ 31-5.1-1(13) (emphasis added). It defines "dealer" to include

only entities with "an established place of business . . . in

[Rhode Island]," id. § 31-1-19(b), while its definition of "new

motor vehicle dealer" is not so limited, see id. § 31-5.1-1(11).3

In February 2022, Rhode Island Truck Center, LLC

("RITC") filed a protest pursuant to the Dealer Law with the Rhode

Island Dealers' Hearing Board (the "Board")4 against Daimler Trucks

North America, LLC ("Daimler"). RITC alleged that Daimler had

violated the Dealer Law's notification requirement.

The filings in the protest allege the following facts,

which the parties agree we may accept as true for purposes of this

Specifically, the statute states that a "manufacturer shall 2

in writing by certified mail first notify the department and each new motor vehicle dealer in the same line or make in the relevant market area of the intention to establish an additional dealership[,] to add an additional location for an existing new motor vehicle dealership, or to relocate an existing dealership within or into that market area." Id. § 31-5.1-4.2(a). "New motor vehicle dealer" is defined to include "any 3

person" that has a franchise with the manufacturer "for the retail sale of [its] new motor vehicles." Id. § 31-5.1-1(11). The Board has been assigned by regulation to adjudicate 4

protest actions under the Dealer Law on behalf of Rhode Island's Department of Revenue. See id. §§ 31-5.1-4.2(a), 31-5-1(a); 280 R.I.C.R. 30-20-1.3 (LexisNexis 2026).

- 3 - appeal. RITC is a new motor vehicle dealer with its principal

place of business in East Providence, Rhode Island, near the border

with Massachusetts. Daimler is a motor vehicle manufacturer

incorporated in Delaware with a principal place of business in

Oregon.

Daimler manufactures the Freightliner brand of trucks.

In 2016, it granted RITC a franchise to sell Freightliner trucks

in a non-exclusive "Area of Responsibility" ("AOR") that includes

various Rhode Island counties and Bristol County, Massachusetts.

Around 2021, Daimler similarly granted a Freightliner franchise to

another dealer, Advantage Truck Raynham, LLC ("ATG Raynham"), in

Bristol County, Massachusetts. Daimler, however, "never notified

RITC in writing, or otherwise, that it intended to establish a

Freightliner dealership within RITC's AOR."5

In its protest based on Daimler's alleged violation of

the notification requirement, RITC sought: (1) "[a] finding and

ruling that [Daimler] violated [the notification requirement] by

adding a Freightliner franchisee to RITC's relevant market area

without providing the requisite statutory notice and allowing RITC

5 RITC further alleged that Daimler "d[id] not have good cause to establish" such a dealership because "RITC meets or exceeds [Daimler's] standards for customer care[ and] sales" and because "the market of Bristol County, Massachusetts[,] does not and cannot support two . . . Freightliner dealerships." See R.I. Gen. Laws §31-5.1-4.2(b)(1)-(12) (listing factors for determining whether "good cause" exists for a manufacturer to establish or relocate a dealership within an existing dealer's AOR).

- 4 - to protest"; (2) a "finding and ruling that [Daimler's] violation

of [the notification provision] must be remedied by [Daimler]

removing the new and unauthorized Freightliner franchise within

RITC's relevant market area"; and (3) civil damages, costs, and

attorneys' fees.

With the parties' assent, the Board addressed RITC's

protest on the pleadings. The Board did not question its authority

to redress a protest that alleges a violation of the notification

requirement by ordering a manufacturer that has already

established a new dealership to terminate its franchise agreement

with that new dealership. It explained, however, that it lacked

jurisdiction over RITC's protest nonetheless.

That conclusion rested on two grounds. First, the Board

concluded that, under our decision in Fireside Nissan, Inc. v.

Fanning, 30 F.3d 206 (1st Cir. 1994), and a decision based on that

ruling by the U.S. District Court for the District of Rhode Island,6

Rhode Island's Dealer Law does not apply to out-of-state conduct

as a matter of state law. It thus concluded that it "lacks the

authority to apply" the Dealer Law "in an extraterritorial manner

and therefore cannot prohibit [Daimler] from establishing or

moving a dealership outside the boundaries of th[e] state."

6That case was County Motors, Inc. v. General Motors Corp., No. CIV.A. 00-108T, 2001 WL 34136693 (D.R.I. Jan. 29, 2001).

- 5 - Second, the Board determined that such enforcement of

the Dealer Law would violate the Dormant Commerce Clause.

Specifically, the Board reasoned:

The Commerce Clause of the United States Constitution precludes the application of a state statute to commerce that takes place wholly outside the State's borders, whether or not the commerce has effects within the State. Edgar v. MITE Corp., 457 U.S. 624, 642-643 (1982). A state statute that "may adversely affect interstate commerce by subjecting activities to inconsistent regulations" may be considered invalid under the Commerce Clause. Morley-Murphy Co. [v.] Zenith Elecs. Corp., 142 F.3d 373, 379 (7th Cir. 1998) (citing CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69, 88 (1987)). Any attempt to apply Rhode Island's dealership, distribution and franchise law in an extraterritorial manner would certainly run afoul of the Commerce Clause.

Based on these reasons, the Board dismissed RITC's

protest for want of jurisdiction.

B.

RITC sought review of the Board's decision in a complaint

that it filed in the Rhode Island Superior Court pursuant to R.I.

Gen. Laws §§ 31-5.1-16 and 42-35-15(b). Those provisions set forth

the procedures under Rhode Island law for seeking judicial review

of a final order of the Board.

Daimler removed RITC's action to the U.S. District Court

for the District of Rhode Island based on diversity jurisdiction.

Daimler thereafter filed a motion to dismiss RITC's complaint.

- 6 - With the parties' assent, the District Court elected to

treat the parties' filings as cross motions for summary judgment.

It then granted Daimler's motion for summary judgment, denied

RITC's motion for the same, and entered judgment in Daimler's

favor.

The District Court first rejected RITC's argument that

the Board could adjudicate RITC's protest without applying Rhode

Island's Dealer Law extraterritorially, concluding that applying

the statute to Daimler's conduct "would have the effect of

extraterritorially regulating conduct in Massachusetts." (Citing

Healy v. Beer Inst., Inc., 491 U.S. 324, 336 (1989).) In reaching

that conclusion, the District Court first reasoned that, under

Fireside Nissan, the Dealer Law's provisions do not apply beyond

Rhode Island's borders as a matter of state law. But even if they

did, the District Court explained that "the statute would still be

subject to the limits imposed by the Commerce Clause." In that

regard, the District Court distinguished the Dealer Law from the

statute that we upheld against a Dormant Commerce Clause challenge

in IMS Health Inc. v. Mills, 616 F.3d 7 (1st Cir. 2010), vacated

on other grounds sub nom., IMS Health, Inc. v. Schneider, 564 U.S.

1051 (2011). It reasoned that here, "unlike in [IMS Health], the

harm did not occur exclusively within the state of Rhode Island"

since "there would be no claim in Rhode Island were it not for the

underlying conduct that took place in Massachusetts."

- 7 - "Accordingly," the District Court concluded, "there was enough

out-of-state activity in this case to merit scrutiny of Rhode

Island's ability to regulate these parties' interactions."

The District Court then concluded that, insofar as the

Board would be required in adjudicating RITC's protest to

"regulat[e] . . . out-of-state firms," it lacked authority to do

so. It explained that, under the Dormant Commerce Clause, "no

State may force an out-of-state merchant to seek regulatory

approval in one State before undertaking a transaction in another"

(quoting Healy, 491 U.S. at 337), and the Dealer Law in effect did

just that by requiring Daimler "to answer to the [Rhode Island]

Board . . . for its decisions to grant or not grant a franchise in

Massachusetts."7

C.

RITC timely appealed. In our prior opinion addressing

the appeal, we concluded that we had subject matter jurisdiction

under 28 U.S.C. §§ 1331 and 1441(a) over RITC's action challenging

the Board's jurisdictional ruling. R.I. Truck Ctr., LLC v. Daimler

Trucks N. Am., LLC ("RITC I"), 92 F.4th 330, 345 (1st Cir. 2024).

That action, we explained, raised a federal question because RITC

7RITC also argued that the Board should have adjudicated its "remaining claims" -- that is, those that did not require extraterritorial application of the Dealer Law. The District Court rejected that argument, reasoning that all of the rights RITC asserted in its protest "r[a]n afoul of the Commerce Clause."

- 8 - could not successfully challenge the Board's jurisdictional ruling

without showing that the Dormant Commerce Clause permitted the

Dealer Law to be enforced to redress Daimler's establishment of

the Massachusetts dealership. Id. at 342. In addition, based on

our supplemental jurisdiction over state law claims under 28 U.S.C.

§ 1367(a), we affirmed the District Court's grant of summary

judgment to Daimler on another of RITC's claims under the Dealer

Law. Id. at 345-46, 354.

We held in abeyance, however, RITC's appeal of the

District Court's grant of summary judgment to Daimler on RITC's

challenge to the Board's Dormant Commerce Clause-based ruling

concerning the Dealer Law's notification provision. Id. at 353.

We did so because we certified to the Rhode Island Supreme Court

an "issue of state statutory construction" concerning the scope of

the Dealer Law that was "antecedent to the questions concerning

the Dormant Commerce Clause on which the parties chiefly focus."

Id. at 346-47.

If the term "relevant market area" in the Dealer Law

does not "encompass an area beyond Rhode Island's borders," we

explained, then the Dealer Law would provide RITC with no basis to

challenge Daimler's failure to notify it of Daimler's intent to

grant a Freightliner franchise to ATG Raynham in Massachusetts.

Id. at 347. And "in that case," we explained, there "would be no

need for us to reach the question of whether the Dormant Commerce

- 9 - Clause would bar" RITC from seeking relief on that basis. Id.

Accordingly, we certified the following question to the Rhode

Island Supreme Court:

1. Can a "relevant market area" in Rhode Island General Laws section 31-5.1-4.2(a) extend beyond Rhode Island's borders?

Id. at 353.8

The Rhode Island Supreme Court has now answered that

question as follows: "[T]he definition of 'relevant market area'

contained in § 31-5.1-1(13), and as used in § 31-5.1-4.2(a), can

extend beyond Rhode Island's borders." R.I. Truck Ctr., LLC v.

Daimler Trucks N. Am., LLC ("RITC II"), 338 A.3d 1056, 1064 (R.I.

2025). And, in doing so, the Rhode Island Supreme Court has

explained that the Dealer Law is unambiguous in defining "relevant

market area" to extend beyond the state's borders, thereby

foreclosing any narrower, in-state-only construction based on

principles of constitutional avoidance. See id. at 1063. As a

result, we must now address the Dormant Commerce Clause issue that

we have held in abeyance.

8 We also rejected Daimler's contention that we should defer to the Board's interpretation of the scope of the Dealer Law, as we were not confident that "the Rhode Island Supreme Court would agree that this specific construction by the Board would be entitled to deference." RITC I, 92 F.4th at 352 n.11.

- 10 - II.

"We review the District Court's grant of summary

judgment to Daimler de novo." RITC I, 92 F.4th at 346 (citation

modified). "A party is entitled to summary judgment only when the

record reveals no genuine issue as to any material fact and it is

clear that judgment is proper as a matter of law." Phila. Indem.

Ins. v. BAS Holding Corp., 78 F.4th 53, 58 (1st Cir. 2023). In

conducting our review, "[w]e are not wedded to the [D]istrict

[C]ourt's rationale but, rather, may affirm . . . on any ground

supported by the record." Burt v. Bd. of Trs. of Univ. of R.I.,

84 F.4th 42, 54 (1st Cir. 2023).

As a threshold matter, Daimler argues that we must defer

to the Board's assessment of whether its enforcement of the Dealer

Law would run afoul of the U.S. Constitution, regardless of how we

might rule on the Dormant Commerce Clause issue on our own. But

we know of no Rhode Island law or precedent that requires a

reviewing court to defer to a Rhode Island state agency's

determination that it lacks jurisdiction to enforce an otherwise

clearly applicable state statute on the ground that it violates

the U.S. Constitution. Nor does Daimler identify any such

authority. We therefore proceed to consider de novo whether the

Board's enforcement of the Dealer Law would violate the Dormant

Commerce Clause, given the parties' agreement that the Board lacks

jurisdiction to undertake enforcement that would do so. As we

- 11 - will explain, we conclude, based on our controlling precedent,

that enforcement of the Dealer Law here would result in such a

violation.

The U.S. Constitution provides that "Congress shall have

Power . . . [t]o regulate Commerce . . . among the several

States." U.S. Const. art. I, § 8, cl. 3. "Although the [Commerce]

Clause is framed as a positive grant of power to Congress," the

Supreme Court of the United States "ha[s] consistently held this

language to contain a further, negative command, known as the

[D]ormant Commerce Clause, prohibiting certain state [regulations]

even when Congress has failed to legislate on the subject."

Comptroller of Treasury of Md. v. Wynne, 575 U.S. 542, 548-49

(2015) (quoting Okla. Tax Comm'n v. Jefferson Lines, Inc., 514

U.S. 175, 179, (1995)); see Tenn. Wine & Spirits Retailers Ass'n

v. Thomas, 588 U.S. 504, 514 (2019).

The Supreme Court's "[m]odern" Dormant Commerce Clause

precedents "rest upon two primary principles." South Dakota v.

Wayfair, Inc., 585 U.S. 162, 173 (2018). "First, state regulations

may not discriminate against interstate commerce," id., either "in

purpose or effect," Wine & Spirits Retailers, Inc. v. Rhode Island,

481 F.3d 1, 10 (1st Cir. 2007). If a state law discriminates

against interstate commerce, it is subjected to "a virtually per

se rule of invalidity." Wayfair, 585 U.S. at 173 (quoting Granholm

- 12 - v. Heald, 544 U.S. 460, 476 (2005)). "Under this rigorous form of

review, a statute [will be held] invalid unless it furthers a

legitimate local objective that cannot be served by reasonable

non-discriminatory means." Wine & Spirits Retailers, 481 F.3d at

10-11. Second, even a facially neutral state law may be struck

down if the "burden" it imposes on interstate commerce "is clearly

excessive in relation to [its] putative local benefits." Pike v.

Bruce Church, Inc., 397 U.S. 137, 142 (1970).

Here, however, in rejecting RITC's challenge to the

Board's jurisdictional ruling, the District Court -- like the Board

itself -- appeared to rely on an arguably distinct principle, which

we have referred to in IMS Health as being rooted in "the

extraterritoriality branch of the [D]ormant Commerce Clause." 616

F.3d at 25. Daimler asks us to affirm the District Court's ruling

on that basis. We thus start and, for reasons that we will explain,

end our analysis by considering that request.

In its most recent decision about the Dormant Commerce

Clause, which was issued during the pendency of this appeal, the

Supreme Court of the United States expressly addressed this

"extraterritoriality" branch of Dormant Commerce Clause doctrine.

The Court did so in rejecting the Dormant Commerce Clause challenge

in National Pork Producers Council v. Ross ("Pork Producers"), 598

U.S. 356, 371 (2023), which concerned a California law that

- 13 - required all pork sold in that state to be sourced from pigs that

were not "confined in a cruel manner" or born to breeding pigs so

confined, id. at 365-66.

Following oral arguments in our Court in this case, we

allowed the parties to provide supplemental briefing to address

Pork Producers's discussion of the extraterritoriality issue.

Having reviewed that briefing, we agree with RITC that Pork

Producers calls into question some of the reasoning in the District

Court's decision rejecting the challenge to the Board's

jurisdictional determination.

Specifically, the Supreme Court made clear in Pork

Producers that its precedents in Healy v. Beer Institute, Inc.,

491 U.S. 324 (1989), Brown-Forman Distillers Corp. v. New York

State Liquor Authority, 476 U.S. 573 (1986), and Baldwin v. G.A.F.

Seelig, Inc., 294 U.S. 511 (1935), do not support a rule that state

laws that affect out-of-state conduct are per se invalid under the

Dormant Commerce Clause. Pork Producers, 598 U.S. at 371. The

Court explained that those cases instead involved the Dormant

Commerce Clause's "familiar concern with preventing purposeful

discrimination against out-of-state economic interests." Id.

Thus, the District Court's reliance on Healy,

Brown-Forman, and Baldwin in finding a Dormant Commerce Clause

violation here is problematic. After all, the District Court did

not find that the Dealer Law manifested the kind of discriminatory

- 14 - purpose that, after Pork Producers, we must understand those cases

to have identified.

In addition, Pork Producers rejected any notion that its

prior precedents could support the conclusion that the Dormant

Commerce Clause per se forbids "enforcement of state laws that

have the practical effect of controlling commerce outside the

State." 598 U.S. at 371 (emphasis added) (internal quotations

omitted); see also id. at 374 ("[M]any (maybe most) state laws

have the 'practical effect of controlling' extraterritorial

behavior."). Thus, to the extent that the District Court could be

understood to have relied on such a principle -- such as when it

emphasized that enforcing the Dealer Law here "would have the

effect of extraterritorially regulating conduct in

Massachusetts" -- we cannot agree that there is any such broad-form

principle.

We do not understand the District Court, however, to

have rested its Dormant Commerce Clause ruling merely on the

"practical effects" that enforcement of the Dealer Law would have

on an out-of-state transaction. We understand the District Court

to have concluded that enforcement of the Dealer Law here would

directly regulate an out-of-state transaction -- namely, Daimler's

transaction with its new Massachusetts franchise operating within

RITC's relevant market area -- by requiring Daimler "to seek

regulatory approval" in Rhode Island regarding its decision to

- 15 - establish such a franchise in Massachusetts. (Quoting Healy, 491

U.S. at 337.)

Notably, RITC does not dispute that the Dealer Law,

unlike the measure in Pork Producers itself, does "directly

regulate[] out-of-state transactions," 598 U.S. at 376 n.1, when

enforced as RITC seeks to have it enforced here with respect to

Daimler's termination of its franchise agreement with ATG Raynham.9

And we can see why, given the Court's decision in Edgar v. MITE

Corp., 457 U.S. 624, and Pork Producers's discussion of that

precedent, see 598 U.S. at 376 n.1.

The state law in Edgar was an Illinois corporate takeover

statute that required registration of certain tender offers, even

if those offers were made between entities outside the state. See

457 U.S. at 626-27. In concluding that the statute "directly

regulate[d]" out-of-state transactions, the plurality in that case

explained that the Illinois law purported to bar an offeror from

9 In its supplemental brief, RITC does suggest that its request for damages due to Daimler's alleged violation of the notification provision would only amount to an indirect regulation of Daimler's conduct. However, the Board appeared to presume that its jurisdiction over RITC's protest action as a whole turned on whether the Board had authority to enjoin Daimler to act (or not act) outside Rhode Island. On appeal, RITC does not argue that that presumption was in error. Nor does it develop an argument that we should partially vacate and remand with respect to some of the forms of relief it sought, even if we disagree with the District Court's Dormant Commerce Clause ruling as to others. Thus, any argument to that effect is deemed waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

- 16 - executing even out-of-state transactions unless the offeror had

first complied with the statute's terms. See id. at 641-42

(plurality opinion). By contrast, the plurality explained, the

"blue-sky" laws that the Court had previously upheld against

Dormant Commerce Clause challenges required filing information

regarding securities issued outside the state only when there was

a disposition of such securities "within the State," and in that

sense, those laws "only regulated transactions occurring within

the regulating States." Id. at 641 (quoting Hall v. Geiger-Jones

Co., 242 U.S. 539, 557-58 (1917)).

Like the Illinois takeover statute in Edgar, the

requested enforcement of the Dealer Law would, "unless complied

with," seek to "prevent" a franchisor-manufacturer with an

in-state dealer-franchisee from "concluding interstate

transactions not only" within that state, "but also with those

living in other States and having no connection with [that state]."

Id. at 642. To be sure, the Dealer Law's notification provision

applies only once a manufacturer has entered into a franchise

agreement with a Rhode Island dealer. See R.I. Gen. Laws

§§ 31-5.1-4.2(a), 31-5.1-1(13). That provision, though, is not,

like the blue-sky laws discussed in Edgar, triggered only in

response to in-state transactions. Cf. 457 U.S. at 641.

Of course, Pork Producers does not hold that a state law

that directly regulates an out-of-state transaction is, for that

- 17 - reason alone, invalid under the Dormant Commerce Clause. The Court

explained there that, although the plurality in Edgar concluded

that the law at issue there was per se invalid on Dormant Commerce

Clause grounds, that law not only "directly regulated out-of-state

transactions" but also did so as to "transactions by those with no

connection to" the regulating state. Pork Producers, 598 U.S. at

376 n.1. The Court then reserved the question as to whether a

state law of that kind was per se invalid under the Dormant

Commerce Clause, see id., as the Court's majority opinion in Edgar

ultimately invalidated the state law only under the balancing test

set forth in Pike v. Bruce Church, Inc., 397 U.S. at 142, and not

on the ground that it was per se invalid because of its

extraterritorial reach, see Edgar, 457 U.S. at 643 (majority

opinion).

It is not entirely clear what Pork Producers means by

its reference to "those with no connection to" the regulating state

(there, Illinois) in describing the out-of-state transactions that

the law in Edgar directly regulated. Pork Producers, 598 U.S. at

376 n.1. All of the out-of-state transactions regulated by that

law concerned shares in a company that itself had some ties to

Illinois.10 But, regardless, we do not understand Pork Producers

10 The Act regulated tender offers made for shares of a "target company," which was defined as any corporation (1) with ten percent of the securities subject to the offer owned by

- 18 - to resolve how we must address a Dormant Commerce Clause challenge

to the enforcement of a law that, like the enforcement of the

Dealer Law at issue here, directly regulates out-of-state

transactions. Cf. Styczinski v. Arnold, 727 F. Supp. 3d 821, 825

(D. Minn. 2024) (distinguishing Pork Producers on this ground),

cert. denied, 146 S.Ct. 1452 (2026) (mem.). And that is

significant because, as the District Court and the parties

recognize, we did address such a challenge in IMS Health. See 616

F.3d at 23-32. We thus see no reason not to apply our analysis

there to this case.11

shareholders in Illinois or (2) which satisfied two of three conditions: had its principal executive office in Illinois, was incorporated in Illinois, or had ten percent or more of its stated capital and paid-in surplus represented in the state. Edgar, 457 U.S. at 627 (majority opinion). 11In Pork Producers, the majority observed in a footnote that some commentators had suggested that the law at issue in Edgar did not test the limits of the Dormant Commerce Clause so much as "the territorial limits of state authority under the Constitution's horizontal separation of powers." Pork Producers, 598 U.S. at 376 n.1. But cf. Edgar, 457 U.S. at 643 (plurality opinion) (observing that, for Dormant Commerce Clause purposes, "any attempt directly to assert extraterritorial jurisdiction over persons or property would offend sister States and exceed the inherent limits of the State's power" (citation modified)); H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 535 (1949) (stating that the Court, through its Dormant Commerce Clause jurisprudence, "has advanced the solidarity and prosperity of this Nation"). But the majority in Pork Producers explained that, either way, the law before it there was distinguishable because it did not "directly regulate[] out-of-state transactions by those with no connection to the State." Pork Producers, 598 U.S. at 376 n.1. Here, of course, the law does directly regulate an out-of-state transaction but, because the parties address only the Dormant Commerce Clause,

- 19 - C.

In IMS Health, we considered a Dormant Commerce Clause

challenge to a Maine statute that prohibited the sale of certain

data -- namely, data regarding the prescribing practices of Maine

health care providers who opted into the law's

protections -- irrespective of whether such sales took place within

Maine.12 Id. at 12-13. Despite expressly acknowledging that the

Maine law in that case regulated "out-of-state transactions," id.

at 14, we held that the law "d[id] not raise constitutional

concerns under the [D]ormant Commerce Clause," id. at 25. We

explained:

The Supreme Court's current [D]ormant Commerce Clause jurisprudence is concerned with preventing economic protectionism and inconsistent regulation, not with enforcing geographical limits on states' exercise of their police power that necessarily regulate commerce. Even under the extraterritoriality branch of the [D]ormant Commerce Clause, the Supreme Court has not barred states from regulating any commercial transactions beyond

we have no occasion to consider whether it raises independent concerns regarding the horizontal separation of powers. 12 Specifically, the statute provided that prescribers of pharmaceutical drugs in Maine may opt out of the sale of identifying data regarding their prescribing practices if the sale of their data would be for "any marketing purpose." IMS Health, 616 F.3d at 12-13 (quoting Me. Rev. Stat. Ann. tit. 22, § 1711-E(2-A)). The law provided the Maine Attorney General with authority to enjoin violations of the law and to impose civil penalties of up to $10,000 per violation. Id. at 18.

- 20 - their borders that involve their own citizens and create in-state harms.

Id. As to that "extraterritoriality branch," we explained, state

laws "that 'force an out-of-state merchant to seek regulatory

approval in one State before undertaking a transaction in another'"

"are not invariably struck down." Id. at 30 (quoting Healy, 491

U.S. at 337). We identified as support for that conclusion a law

"with a strong in-state nexus" that the Court, after Edgar, had

upheld against a Dormant Commerce Clause challenge. See id.

(citing CTS Corp., 481 U.S. at 88-89); see also id. at 30 n.29

(stating that "States' interests may justify extraterritorial

regulation").

We also identified various features of the Maine law

that spared it from invalidation under the Dormant Commerce Clause,

even though it directly regulated out-of-state transactions.

Those features were the following.

First, we explained (repeatedly) that there was no basis

for concluding that the Maine law raised concerns about economic

protectionism. See id. at 25, 27-28, 30 & n.30. Indeed, we

pointed out that the Maine law prevented the sale of Maine

prescriber data by any business if that data would be used "for a

marketing purpose." Id. at 12. It therefore did not protect any

business (let alone any business in Maine) against competition

from any other business. See id. at 27-28.

- 21 - We further explained that Maine's law "dealt with harms

caused exclusively inside the regulating state." Id. at 30. That

was so, we reasoned, because the law was "concerned only with

prescribers in the health care system of Maine," id. at 25

(citation modified), and sought to remedy "specific

harms . . . occurring in Maine," including "invasions of

prescribers' privacy, increased health care costs, and harms to

public health," id.

In addition, we explained that the Maine law was "limited

to regulating transactions with a significant inherent connection

to the regulating state, and involving its own professional

licensees." Id. at 30. As we noted, the law "targets a series of

underlying transactions that . . . start and end in Maine," as

"Maine prescribers' prescriptions are primarily, if not

exclusively, filled at Maine pharmacies," with the data from those

prescriptions ultimately intended to be used in marketing

practices "that target[] Maine prescribers in Maine." Id. at

25-26. Moreover, we explained, because the law was "limited to

transactions involving" "Maine prescribers [who] affirmatively

indicate that they want Maine to protect the confidentiality of

their identifying information," "[e]very intermediate step" of the

transaction involved Maine prescribers' identifying data. Id. at

26.

- 22 - In identifying those features of the Maine law, we

emphasized that, together, they distinguished Maine's statute from

laws like the one struck down in Edgar. See id. at 30-31; see

also id. at 31 ("Those differences, and not the mere fact that

those statutes directly regulated out-of-state transactions,

explain why the Supreme Court deemed th[e] statutes [in Healy,

Brown-Forman, and Edgar] wholly extraterritorial."); id. at

31 n.31 (describing Edgar as "reach[ing] conduct in which Illinois

had no conceivable interest"). And, we explained, those last two

features of the Maine law, together, made it more like the Indiana

takeover statute that the Supreme Court upheld against a Dormant

Commerce Clause challenge in CTS Corp. v. Dynamics Corp. of

America, 481 U.S. 69. IMS Health, 616 F.3d at 31. Unlike the

takeover law at issue in Edgar, we emphasized, the one at issue in

CTS Corp. was upheld because of its "clear in-state nexus and

impact." Id.

Finally, we explained that the Maine statute was like

the measure in CTS Corp. in still one additional respect: It was

not "likely to subject entities engaged in interstate commerce to

incompatible cross-state regulatory regimes." Id. at 28; see also

CTS Corp., 481 U.S. at 88 (distinguishing the statute there from

laws that, like the one in Edgar, risked "subjecting activities to

inconsistent regulations"). We explained that the reason that the

Maine statute did "not risk imposing regulatory obligations

- 23 - inconsistent with those of other states" was that "[n]o other

states have erected competing regulations, much less opposing

regulations requiring the transfer of Maine prescribers' data."

IMS Health, 616 F.3d at 28.

RITC argues that IMS Health affirmatively "compel[s]

reversal here" because it cannot be distinguished from this case.

RITC asserts that "the Dealer Law does not purposefully

discriminate against out-of-state interests" because "it applies

evenhandedly to both in-state and out-of-state manufacturers" and

therefore "does not advantage in-state businesses or disadvantage

out-of-state rivals." RITC further contends that the Dealer Law

is like the Maine statute in IMS Health because the Dealer Law,

too, "was designed to protect against harms occurring in-state and

written to ensure that it only appl[y] to matters with a strong

[in-state] connection." Finally, RITC contends that the Dealer

Law is like the Maine law in that it "does not risk imposing

regulatory obligations inconsistent with those of other states,"

IMS Health, 616 F.3d at 28, because Daimler could have "provided

[RITC with] notice and the opportunity to protest . . . without

violating Massachusetts law because Massachusetts law does not

prohibit notice."

We cannot agree. Instead, we agree with Daimler that

the Dealer Law, if it were enforced to order Daimler to terminate

its franchise agreement with ATG Raynham in Massachusetts, would

- 24 - exhibit each of the characteristics that we explained the Maine

law in IMS Health did not.

First, although the Dealer Law treats in-state and

out-of-state manufacturers the same, see R.I. Gen. Laws

§ 31-5.1-1(8), it differs from the Maine law in that it operates

to restrict competition, as demonstrated by RITC's efforts here to

prevent its direct competitor from doing business in the same

county as RITC. See RITC II, 338 A.3d at 1061 (stating that the

Dealer Law's "broad sweep establishes the legislature's intent to

provide dealers with a minimum area of protection against

manufacturer competition"). Moreover, as Daimler also points out,

in advancing that interest, the Dealer Law treats out-of-state

dealers disparately from in-state dealers because it "gives Rhode

Island dealers the ability to block the appointment of a competing

dealer in another state while denying that same out-of-state dealer

an equivalent right in Rhode Island." Contrast Fireside Nissan,

30 F.3d at 209 (affirming constitutionality of excluding an

out-of-state dealership from protest proceedings regarding an

in-state dealership), with RITC II, 338 A.3d at 1064 (holding that

the "relevant market area" protected under § 31-5.1-4.2(a) can

extend beyond the state's borders). Thus, the Dealer Law raises

the specter of economic protectionism in a way that the Maine law

did not. Cf. United Haulers Ass'n v. Oneida-Herkimer Solid Waste

Mgmt. Auth., 550 U.S. 330, 338 (2007) ("In [the Dormant Commerce

- 25 - Clause] context, discrimination simply means differential

treatment of in-state and out-of-state economic interests that

benefits the former and burdens the latter." (citation modified));

Fireside Nissan, 30 F.3d at 214 (concluding that Rhode Island's

Dealer Law, which was there presumed not to apply outside the

state, did not have a discriminatory purpose in part because it

was "not designed to promote local dealers at the expense of

out-of-state dealers").

The Dealer Law also differs from the Maine law because

it does not regulate exclusively in-state harms, at least if

enforced against Daimler to block it from establishing a dealership

in Massachusetts. In IMS Health, we explained that the Maine law

prevented advertising "that targets Maine prescribers in Maine,"

616 F.3d at 26, in order to prevent "invasions of [those]

prescribers' privacy, increased health care costs, and harms to

public health . . . in Maine," id. at 25. Here, in contrast,

RITC's requested enforcement of the Dealer Law to bar Daimler's

out-of-state dealership would directly prevent vehicle sales

across the border, in Massachusetts. By defining a dealer's

"relevant market area" to extend beyond the state's borders, in

other words, the Dealer Law purports to protect against harmful

invasions of that area of protection even where those invasions

would occur outside the state. See RITC II, 338 A.3d at 1062

- 26 - (describing the "relevant market area" defined in the dealer law

as providing a "protective circle").

Of course, we recognize that, as a Rhode Island dealer,

RITC would experience whatever harms flow from such out-of-state

sales within Rhode Island. But we explained in Fireside Nissan

that the Dealer Law was "designed to protect existing dealers and

consumers from the detrimental effects of aggressive franchising

practices by . . . automobile manufacturers" that "are considered

to be potentially 'injurious to the public welfare' if not properly

regulated." 30 F.3d at 211 (emphasis added) (quoting R.I. Gen.

Laws § 31-5.1-4.2(b)(4)). Similarly, the Dealer Law's

implementing regulations state that their purpose is "to protect

the interest of the public when dealing with motor vehicle dealers

in Rhode Island." 280 R.I.C.R. 30-20-1.2(A) (LexisNexis 2026)

(emphasis added). Thus, while the Dealer Law protects in-state

dealers like RITC from the in-state harms resulting from certain

business practices by their franchisors, that protection is

provided at least in part to prevent harms to consumers in the

market for new motor vehicle dealers. For that reason, unlike in

IMS Health, the harms sought to be prevented are not harms

occurring only within Rhode Island's borders. Indeed, the state's

own definition of "relevant market area" appears to recognize that

the harms that arise in that market do not stop at state lines.

See RITC II, 338 A.3d at 1061; see also New Motor Vehicle Bd. of

- 27 - Cal. v. Orrin W. Fox Co., 439 U.S. 96, 102 (1978) (explaining that

state dealer laws "protect[] the equities of existing dealers by

prohibiting automobile manufacturers from adding dealerships to

the market areas of its existing franchisees where the effect

of . . . intrabrand competition would be injurious to existing

franchisees and to the public interest" (emphasis added)).

Moreover, the Dealer Law, as enforced against Daimler

here, would not directly regulate only those out-of-state

transactions that have "a significant inherent connection" to

Rhode Island. IMS Health, 616 F.3d at 30. As we explained above,

in IMS Health, Maine's statute targeted only transactions that

"start and end in Maine." Id. at 25. And we further observed

that "[e]very intermediate step" regulated by Maine's law was

"limited to transactions involving" the data of its in-state

prescribers. Id. at 26. Here, in contrast, RITC asked the Board

to order Daimler to terminate its franchise with a Massachusetts

dealer that no party has asserted is licensed in Rhode Island and

which sells vehicles outside Rhode Island, including to non-Rhode

Island consumers. Those transactions do not in any sense "start

and end" in Rhode Island. Nor is it the case that every such

transaction has an intimate connection with in-state entities in

the way that the sales of Maine's prescriber data did in IMS

Health. Cf. id. at 29 (stating that the Maine statute regulates

sales of prescriber data that "affect[] only Maine prescribers").

- 28 - Finally, unlike in IMS Health, there is a "risk" here of

"imposing regulatory obligations inconsistent with those of other

states." Id. at 28. In that regard, RITC concedes that "it may

be true that [Daimler] would be subject to a potential claim from

the Massachusetts dealer if it terminated its dealership" in that

state. (Referencing Mass. Gen. Laws ch. 93B, § 5.) We thus must

proceed on the understanding that Daimler could be found in

violation of Massachusetts law if it terminated its franchise

agreement with ATG Raynham. Under these circumstances, then, it

is plain that an order from the Board forcing Daimler to do just

that would "subject[ Daimler's] activities to inconsistent

regulations." CTS Corp., 481 U.S. at 88; see also Healy, 491 U.S.

at 336-37 ("[T]he practical effect of the statute must be

evaluated . . . by considering how the challenged statute may

interact with the legitimate regulatory regimes of other

States . . . .").

RITC responds that "it is not conflicting regulatory

regimes that create the alleged catch-22" that Daimler faces. It

contends that this consequence results from Daimler's "own

actions" in granting a franchise to ATG Raynham within RITC's AOR

without first providing RITC an opportunity to protest. But we

rejected a similar argument in Hyde Park Partners, L.P. v.

Connolly, which concerned a Dormant Commerce Clause challenge to

- 29 - a Massachusetts corporate takeover law. See 839 F.2d 837, 840

(1st Cir. 1988).

The law at issue in Hyde Park Partners (1) required

prospective takeover bid offerors to make certain disclosures and

(2) if they failed to do so, barred them from "mak[ing] a takeover

bid for th[e] target [company] until one year after the failure to

disclose." Id. There, the parties defending the law argued that

the second requirement was not unduly burdensome because "one who

fails to comply with" the first, "minimally burdensome disclosure

requirement has little basis on which to complain of the penalty

for noncompliance." Id. at 847. In rejecting that argument, we

explained that a state is not at liberty to fashion a deterrent

that places undue burdens on interstate commerce merely because a

regulated party may avoid those burdens by complying with an

antecedent provision. See id. at 847-48.

Thus, unlike the statute we upheld against Dormant

Commerce Clause challenge in IMS Health, the statute here does

"raise[] independent concerns about protectionism," 616 F.3d at

30, and does "risk imposing regulatory obligations inconsistent

with those of other states," id. at 28. In addition, unlike the

statute in IMS Health, the Dealer Law neither "deal[s] with harms

caused exclusively inside the regulating state," nor is "limited

to regulating transactions with a significant inherent connection

- 30 - to the regulating state, and involving its own professional

licensees." Id. at 30.

For these reasons, by directly regulating Daimler's

out-of-state transactions absent a sufficiently "strong in-state

nexus" like that which we found sufficient in IMS Health, id., we

conclude that enforcing the Dealer Law under the facts of this

case would violate the Dormant Commerce Clause. That is not to

say that a state law will survive constitutional scrutiny only

when an out-of-state transaction's connections to the regulating

state are identical to those in IMS Health. But the connections

here are not sufficient under that precedent, given how they differ

from the connections in that case and the risks of both economic

protectionism and inconsistent regulation that enforcement of the

Dealer Law in this case would pose. Accordingly, we reject RITC's

challenge to the District Court's ruling granting summary judgment

to Daimler.13

We note that, in the typical Dormant Commerce Clause case, 13

the state is often the party that endeavors to justify the constitutionality of the challenged law. See, e.g., Hunt v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 353 (1977). Here, however, the Rhode Island Office of Attorney General opted not to intervene in this appeal after our Court certified to that office the fact that the constitutionality of the Board's enforcement of Rhode Island's Dealer Law had been drawn into question under the facts of this case. See 28 U.S.C. § 2403(b) ("In any action, suit, or proceeding in a court of the United States to which a State or any agency, officer, or employee thereof is not a party, wherein the constitutionality of any statute of that State affecting the public interest is drawn in question, the court shall certify such

- 31 - III.

We therefore affirm the District Court's order granting

summary judgment to Daimler.

fact to the attorney general of the State, and shall permit the State to intervene . . . ."). Thus, RITC's burden was only to show that the District Court erred in concluding that the Board could not constitutionally apply the Dealer Law to Daimler's conduct under the facts here, and we therefore do not address whether Rhode Island in another case could meet the burden that RITC failed to meet in this one.

- 32 -