“The Third Circuit’s decision allows States to violate horizontal federalism principles by legislating outside their borders.”
—John Masslon, WLF Senior Litigation Counsel

Click here for WLF’s brief.

WASHINGTON, DC— Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to hear a case in which the U.S. Court of Appeals for the Third Circuit permitted Pennsylvania to apply its usury laws across state lines. In an amicus brief, WLF argues that the Supreme Court’s review is needed to clarify how the dormant Commerce Clause limits States’ extraterritorial application of their laws. Online Lenders Alliance joined WLF on the brief.

The case arises from a declaratory action filed by TitleMax after Pennsylvania subpoenaed lending records. Despite TitleMax’s lack of presence in the Commonwealth, Pennsylvania insists that TitleMax’s servicing loans for Pennsylvania residents and accepting Pennsylvania-registered vehicles as collateral subjects it to Pennsylvania’s usury laws.

In its brief supporting TitleMax, WLF argues that the Third Circuit’s decision conflicts with core horizontal federalism principles. The Founders decided that States could not regulate interstate commerce because it stymies economic growth. Yet here the Third Circuit blessed Pennsylvania’s regulating outside its borders.

WLF’s brief also explains why this case is a good vehicle to pair with National Pork Producers v. Ross—another dormant Commerce Clause case in which the Court will hear arguments in its October Term 2022. Finally, WLF’s brief highlights the human costs of allowing States to regulate lending outside their borders. It decreases access to credit for the most vulnerable Americans.

Celebrating its 45th year, WLF is America’s premier public-interest law firm and policy center advocating for free-market principles, limited government, individual liberty, and the rule of law.