American Express Co. v. Iowa

Background

A seller in one State shipped intoxicating liquor C.O.D. to a buyer in Iowa, using a carrier or express company to collect the price on delivery. When the packages arrived in Iowa they were seized under Iowa law. The Iowa Supreme Court upheld the seizure based on a prior state ruling that treated C.O.D. shipments as subject to state control, and that decision formed the basis for the lower court’s judgment in this case.

Reasoning

The central question was whether the Constitution’s protection for trade between the states (the commerce clause) prevents Iowa from treating an out-of-state C.O.D. sale as an in-state sale subject to seizure. The Court reviewed earlier decisions and explained that the contract to sell and ship was completed in the State where the sale was made, and the movement was interstate commerce. Allowing Iowa’s rule would let a State invalidate or interfere with lawful interstate contracts and would cripple the freedom of trade between the States. The Court therefore concluded the Iowa court erred and reversed its judgment.

Real world impact

The ruling protects transactions where goods are sold and shipped across state lines under an agreement made in the seller’s State, including C.O.D. arrangements. Carriers, sellers, and buyers who use interstate shipping arrangements gain protection from state laws that would treat those shipments as in-state sales. The case is sent back to the Iowa court for proceedings consistent with this decision.

Dissents or concurrances

One Justice in the state was noted to dissent from the result below; the opinion does not elaborate that Justice’s reasoning in detail.