The opinion of the court was delivered by: CALDWELL
WILLIAM W. CALDWELL, UNITED STATES DISTRICT JUDGE
The parties to this declaratory judgment litigation have each filed a motion for summary judgment. At issue is the constitutionality of the Steel Products Procurement Act (73 P.S. § 1881 et seq.), enacted by the Commonwealth of Pennsylvania in 1978 (the Act). The Act requires public agencies, when undertaking the construction of public works, to include a provision in their contracts that the steel used in all projects be produced in the United States.
Plaintiff Trojan Technologies, Inc. is a Canadian corporation engaged in the manufacturing of equipment used in waste water/sewage treatment facilities. Kappe Associates, Inc. is Trojan's representative in Pennsylvania. In March 1988, the Attorney General of Pennsylvania received a request to investigate whether certain equipment manufactured by Trojan and suitable for use in public work projects, was in compliance with the Act. On June 29, 1988, the Attorney General determined that Trojan's equipment was covered by the Act.
He requested that Trojan submit documentation showing that the steel in its product was made in the United States. The Attorney General also requested information from seven municipal authorities concerning their possible purchase of Trojan's UV-2000 system, which could be in violation of the Act. The Attorney General intends to enforce the Act against Trojan, and although no proceedings have been instituted it is not disputed that the Act would preclude the use of the Trojan product in public work projects in Pennsylvania. This suit was filed on August 8, 1988 in the Eastern District Court of Pennsylvania and transferred to this District on February 2, 1989.
Plaintiffs' position that the Act is unconstitutional or invalid is based on the following:
1) The Act violates the Commerce Clause of the United States Constitution.
3) The Act is preempted by federal statutes and foreign trade agreements between the United States and Canada.
4) The Act is void for vagueness.
The Commerce Clause Challenge
Plaintiffs contend that the effect of the Act is to regulate the importing or sale in Pennsylvania of steel made outside the United States. Plaintiffs submit that the regulation of commerce with foreign nations is a subject that is within the exclusive control of the federal government under the commerce clause of the United States Constitution. Citation of authority is not required to affirm this basic principle, and if the Act does, in fact, regulate commerce with foreign countries it is invalid. A state law may violate the commerce clause if its purpose or effect is to discriminate against foreign competition. Examples of such illegal laws are Bacchus Imports Ltd. v. Dias, 468 U.S. 263, 82 L. Ed. 2d 200, 104 S. Ct. 3049 (1984), where the state of Hawaii imposed a tax on the sale of liquor at wholesale but exempted certain locally produced beverages, and Hunt v. Washington Apple Adv. Comm., 432 U.S. 333, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1977), where a North Carolina statute attempted to limit the "grading" information that could be used on closed containers of apples shipped to North Carolina. In both instances the state laws discriminated against foreign products in favor of locally produced goods.
In opposing plaintiffs' motion for summary judgment, and in support of its cross motion, the defendants dispute that the Steel Products Procurement Act regulates commerce or otherwise intrudes in areas reserved to the federal government. The defendants contend that public agencies of the Commonwealth are "market participants", and that the Act does no more than limit the products that may be purchased or used in constructing public projects. Rather than "regulating" or attempting to regulate the sale in Pennsylvania of foreign made steel, the state contends it is legitimately supporting an important local and national industry by restricting steel purchases of public agencies to domestically produced steel.
The rationale for the "market participant" exception is illustrated in Hughes v. Alexandria Scrap Corporation, 426 U.S. 794, 49 L. Ed. 2d 220, 96 S. Ct. 2488 (1976). Maryland enacted a complex statute aimed at reducing the volume of inoperable or junk vehicles in Maryland by offering an incentive to scrap processors. The law provided, among other things, for the payment of a "bounty" to scrap processors who destroyed and processed junk vehicles formerly titled in Maryland. Processors located in Maryland were provided an easy means of proving the origin of such vehicles, while non-Maryland scrap processors were held to a more demanding measure of proof in order to claim the bounty. Plaintiff, a Virginia scrap processor, challenged the statute as violative of the commerce clause. The Maryland District Court agreed, finding that the law imposed "substantial burdens upon the free flow of interstate commerce" and discouraged wreckers from taking vehicles out of Maryland for processing. The Supreme Court, however, reversed and held that the commerce clause does not require independent justification when a state enters the market as a purchaser:
Nothing in the purposes animating the Commerce Clause forbids a State, in the absence of congressional action, from participation in the market and exercising the ...