CROSBY v. NATIONAL FOREIGN TRADE COUNCIL
In 1996, the Massachusetts Burma Law, which restricted state entities from buying goods or services from companies doing business with Burma, was passed. Afterwards, Congress also imposed mandatory and conditional sanctions on Burma. Businesses with ties to Burma landed on Massachusetts' "restricted trade" list. The list came to include 34 members of the National Foreign Trade Council (Council), a non-profit advocate for American companies that do business abroad. The Council filed suit against Stephen Crosby, the Massachusetts Secretary of Administration and Finance, and other state officials in federal court, claiming that the state act unconstitutionally infringes on the federal foreign affairs power, violates the Foreign Commerce Clause, and is preempted by the Federal Burma Law. The District Court permanently enjoined the state act's enforcement, and the Court of Appeals affirmed. The court also found that the Massachusetts Burma Law violated the Supremacy Clause because the state was acting in an area of unique federal concern, foreign policy, through a balanced, tailored approach.
Is the Massachusetts Burma Law, which restricts the authority of its agencies to purchase goods or services from companies doing business with Burma, unconstitutional under the Supremacy Clause?
Legal provision: Article 6, Section 2: Supremacy Clause
Yes. In a opinion delivered by Justice David H. Souter, the Court held that "the state Act is preempted, and its application unconstitutional, under the Supremacy Clause." Justice Souter wrote for the Court that Massachusetts' law created an obstacle to the President's discretion to control economic sanctions against Burma, interfered with Congress's intention to limit economic pressure against the Burmese Government, and was at odds with the President's authority to speak for the United States among the world's nations to develop a comprehensive, multilateral Burma strategy. Therefore, the Massachusetts Burma Law "is invalid under the Supremacy Clause...owing to its threat of frustrating federal statutory objectives."
Argument of Thomas A. Barnico
Chief Justice Rehnquist: We'll hear argument now in Number 99-474, Andrew S. Natsios v. The National Foreign Trade Council.
Mr. Barnico: Mr. Chief Justice, and may it please the Court:
The Massachusetts law challenged in this case is similar to the selective purchasing policies adopted by many States, cities, and private institutions in the 1980's regarding South Africa.
Through the 1980's and 1990's, Congress addressed both South Africa and Burma, but took no action to expressly prohibit to the States or individuals the right to make choices about their vendors taking into account matters involving a foreign country.
We think that Congress has not expressly denied to us the right to make this choice, because it believes, as we do, that these laws serve important national and local interests.
There is a national interest in vigorous debate over important questions of foreign policy.
There is a local interest as well, the interest in disassociating States and State tax funds from the indirect support of brutal regimes abroad.
Justice O'Connor: Mr. Barnico, would you take the same position if Massachusetts decided it didn't like another State's death penalty policy and wanted to discourage it and said, we're not going to let anybody spend State money to buy anything if the seller has anything to do with the other State?
Mr. Barnico: Not if the law regulated our citizens in that way, but if it were expending our own funds, as it is in this case, we would consider that to be proprietary as well under our definition.
We quickly add that we don't think it would be a usual case at all, given the comity and respect each State ordinarily shows each other.
Chief Justice Rehnquist: Well, isn't the Gould case somewhat against you on this point, or the Wisconsin Department of Labor?
It said that Wisconsin is not going to buy from anyone who has violated an NLRB order and they said, we're just expending our own money, and this Court said, you may be spending your own money but that's... what they said was, tantamount to regulation.
Mr. Barnico: Well, we think there, and the difference with Gould and this case, is the fact that the Court saw a nexus between the regulatory scheme imposed by Federal law and the State action that was at issue.
To give the Court an example of what might be closer to Gould than our case would be if Massachusetts had somehow tied its purchasing decisions to violation of the Federal ban on new investment in Burma.
There, there might be more of a nexus between the regulatory scheme on the one hand... we think it was the close connection between the Wisconsin scheme on the one hand and the Federal complete scheme of regulation of the labor field that made the Court decide that we were regulatory in nature.
Justice Ginsburg: Mr. Barnico, would it make any difference in your analysis if the country with which we were dealing were not Burma but, say, Austria, or Switzerland?
Mr. Barnico: The country wouldn't matter, Your Honor, except insofar as some Federal law or treaty established relations between the United States and the country...
Justice Ginsburg: So that a State would be free to decide what country it believed is violating some human rights norm, be it Austria, be it Burma?
Mr. Barnico: That's right, except insofar as a plausible argument could be made that we were preempted by a Federal law or treaty on the point.
That really is the heart of our case, that absent the force of enacted law through the Supremacy Clause, such a choice by a State should not be displaced by the Foreign Commerce Clause or the dormant foreign affairs power.
Justice Ginsburg: Do you think that Congress...
Justice Kennedy: Would your answer be the same if two States had different policies?
One State says, we will buy not from mainland China but Taiwan, and the others state just the opposite.
Absent Federal legislation on the point, States are free to do that, and to have differing policies?
Mr. Barnico: That's right, Your Honor.
At some point the differing policies becomes to the attention of Congress, and Congress, which has the preeminent voice in foreign affairs, would decide whether the national interest requires a rule of uniformity, but absent that action, or absent some question of a treaty, the States would be free to act indirectly in this way.
Justice Kennedy: I'm not sure it's realistic to expect the Congress to exercise this ongoing supervision over every local ordinance, over every State statute, and it certainly is inconsistent with what the Federalist Papers explain was the purpose of forming the Union itself.
Mr. Barnico: Well, if I might address both of those points, Your Honor, the first is on the question of the proliferation of these laws.
We have to keep in mind that we're acting against our own economic interest here.
Massachusetts is paying the price, bearing the burden to speak out on this question.
Since that's the case, our principle will be limiting, because it will limit those instances in which a State or local government which is to act against its own interest and act in the way that's challenged here.
Furthermore, Congress will be aware, presumably, in the event that a controversy arises due to the conflicting actions of the States as you mentioned, and it's also worth noting, finally, on the proliferation question, that even at high tide in the eighties with South Africa it was 20 States, approximately 100 cities, so I think the parade of horribles that's raised by the other side here about the numerous jurisdictions isn't realistic.
Justice O'Connor: Well, here Congress has actually enacted a law dealing with this precise problem, an area of trade with Burma, has it not?
Mr. Barnico: It has enacted a law imposing Federal sanctions on Burma...
Justice O'Connor: Yes.
Mr. Barnico: Restricting new investment by American nationals in that country.
It says nothing, however, about State and local action, and we think the question of preemption...
Justice O'Connor: Oh, but isn't that kind of similar to what happened in the Hines v. Davidowitz case back in '41, when Pennsylvania had a law dealing with what resident aliens had to have to be in that State, and it was possible, certainly, for a resident alien to comply both with the Federal law and the State law, and yet that was stricken, wasn't it?
Mr. Barnico: Yes, Your Honor, but we think that the key phrase from our point of view and Hines would be the reference to a complete scheme of regulations that was in issue there in Hines.
That is, the inference that the field has been occupied by the Federal action, that the Federal action here must be read in light of the experience of the 1980's.
Our point is that Congress knew well that State and local actions of this type were enacted throughout the country in the 1980's.
Then, when the question of sanctions against Burma arose in 1996, it acted against that backdrop.
It had tolerated these types of laws and, in fact, and we think this very interesting evidence, in 1993, when Congress repealed the sanctions against South Africa, it merely encouraged the States to act as to their own laws.
Justice Breyer: Well, think of California, with 30 million people, probably a major textbook buyer, probably buys a lot from Massachusetts.
Suppose the State system said, we won't buy any textbooks from Massachusetts because we don't like their environmental policy in that State.
We don't like their criminal law policy.
We don't like this, we don't like that.
We don't like their labor policy.
How could you run a Federal Government if States, when they're huge buyers, could refuse to buy from some other State because they don't like the State law in something and want it changed.
I mean, is that constitutional?
Mr. Barnico: Well, the Federal Government would be run by Congress stepping in in the event...
Justice Breyer: No, no, I mean, the Federal... in other words, in your view, California could say, we will not buy any textbooks from Addison-Wesley for the reason that we don't like Massachusetts policies in respect to the environment, or we don't like their policy... they have no death penalty.
We think they should.
Mr. Barnico: The action's still proprietary, Your Honor.
It's still a choice by the State acting...
Justice Breyer: But your answer's yes.
Your answer is that the Constitution would permit that under the Commerce Clause.
Mr. Barnico: That's right, because of the safeguard included in the document to allow Congress to act in the event the national interest required.
Justice Scalia: I assume California could, under our decisions, decide to buy textbooks only from California manufacturers.
Could it do that, in its purchasing?
Mr. Barnico: That's right, Your Honor.
Justice Scalia: Yes.
So that's just as destructive of national unity in a way, isn't it?
Mr. Barnico: Right, but the holdings of the Court regarding market participation say that whatever the effects of such a law, whatever the question of national interest or uniformity, the dormant Foreign Commerce Clause in that case is not displacing of that type of State choice.
It resembles that consumer choice.
Justice Kennedy: Well, surely there's a difference in those two cases.
In the hypothetical Justice Scalia proposes, California doesn't propose to regulate activity and policies of other States.
Mr. Barnico: That's right.
Justice Kennedy: So that's different from Justice Breyer's hypothetical.
Mr. Barnico: It is different to the hypothetical, but the underlying point, of course, both as to the dormant Commerce Clause in the hypotheticals and the Foreign Commerce Clause that's at issue here, is that those dormant clauses don't reach a certain limited sphere of State activity in which the States can speak and act as they have here.
That's really the point of our case.
Justice O'Connor: Do you concede that there is a dormant Commerce Clause principle in the international area under the Foreign Commerce Clause?
Mr. Barnico: We concede that the Court has recognized in cases such as Barclays some foreign effect.
Our point here is that it must be considered and applied with extreme caution in this case.
That's because, to return to the historical point, the Framers specifically identified those actions of a State that pose dangers in their view to the national interest, so...
Justice Ginsburg: Mr. Barnico, you mentioned before that this case is different from Massachusetts, preferring itself as an economic actor, that here it is acting for reasons of foreign policy, and there's no doubt that Congress has the control power, but why shouldn't the assumption be that unless Congress says, States, you can do this, that States can't once Congress has occupied the field at least to the extent of having its own Burma law?
Why shouldn't the presumption be exactly the opposite, that is, no State action unless Congress gives them permission?
Mr. Barnico: I think this case shows why that presumption goes too far.
That's because, although I acknowledge the national interest in the control of foreign policy that's at the heart of your question, this case demonstrates why such a presumption would go too far.
There has to be a sphere of State activity so important to the States to speak, to act, to disassociate their funds from this type of regime that the Framers intended to be protected, so as you come to the question of presumption, it seems to me a similar question to the effect of the dormant foreign affairs powers.
That is, is there a sphere of State activity such as a resolution, such as a selective purchasing law, so close to the boycotts that the Framers knew so well, that ought to be protected?
The presumption would go too far, just as it would operate in this case.
It would simply be the fact that Federal Government has acted as to Burma with Federal sanctions, and that's the end of the story, and this particular case also is a demonstration why the presumption would be dangerous.
Chief Justice Rehnquist: Mr. Barnico, you mentioned the historical approach a few minutes ago.
Is there a historical basis for... say, prior to the 1980's for States taking this sort of position with respect to foreign Governments?
Mr. Barnico: You'd have to go back under our research only to the revolutionary times.
In the interim there were no such actions.
I think the eighties...
Chief Justice Rehnquist: Until the 1980's?
Mr. Barnico: The eighties is what we have in mind.
Justice Scalia: Oh, but there were in the revolutionary times, weren't there?
Mr. Barnico: That's right, and they included...
Justice Scalia: Virginia passed laws that prevented the collection of British debts, and there was litigation over that.
Mr. Barnico: And... but we have a different approach, though, as to the boycotts in particular.
There's such a strong match here between the boycotts of the revolutionary times and...
Chief Justice Rehnquist: When you say revolutionary times, do you mean before the Constitution was adopted?
Mr. Barnico: Absolutely, Your Honor, and before...
Chief Justice Rehnquist: I mean, I don't know that that's a terribly satisfactory basis for analyzing the thing after the Constitution was adopted.
Mr. Barnico: Well, it goes to the intent of the Framers in adopting the foreign affairs clauses, Your Honor, and the question would be, since the Framers enumerated a number of prohibitions regarding treaties and engaging in war and so forth, we'd have to ask ourselves the question, do the affirmative grants of power to the executive and legislative branches in the Constitution have a nullifying force implied?
That is, to what extent does the grant to Congress and the President nullify other State actions that affect foreign affairs, and there we come to the revolutionary times, because the Framers, who knew boycotts well, who held them dear, did not enumerate them as prohibited, and we say it would be highly unlikely to deny to the States the rights that they knew were useful and they knew were so bound up with questions of speech and choice.
Justice Souter: Mr. Barnico...
Chief Justice Rehnquist: If you're right, Mr. Barnico, why were there... have there been no Barnic... no boycotts...
Unidentified Justice: [Laughter]
Chief Justice Rehnquist: between the time the Constitution was adopted and the 1980's?
Mr. Barnico: Well, I think that has to do with the fact that there was very limited global trade for those years.
There was limited information available to State governments about other activities in foreign States.
This is a...
Chief Justice Rehnquist: How about the activities of Stalin in Russia and Hitler in Germany and Mussolini in Italy?
Mr. Barnico: Well, I don't know why, Your Honor, but of course once... in times of war the Federal Government does act to establish a rule of uniformity.
Whether that has to do with neutrality or aiding a resistance group, there's a new set of rules that would kick in which aren't disturbed by our rules.
That is, you need not be concerned that actions of this type would be aid of one side or another in a war, because there is a specific prohibition in Article I, section 10, that the States may not engage in war.
So, too, Congress often acts.
The President sometimes declares that countries are in a State of war, and so neutrality is preserved through the action of the Federal branch with authority to determine the national rule of uniformity, but of course we argue here that branch hasn't acted.
Justice Souter: Mr. Barnico, may I go back to an answer that you gave both to Justice Ginsburg and to the Chief Justice a moment ago in which you emphasized the expressive nature of the boycott activity which Massachusetts is engaging in.
Why doesn't that suggest that the proper way to draw the line is to allow States to express themselves, to express their views solemnly any way they want to, so long as they do not go beyond the point of verbalizing?
Massachusetts or any State could pass, for example, on this theory, resolutions condemning the regime in Burma and, indeed, condemning those who do business with it, but it would be left to the United States to go beyond the expression of views and to regulate actual relationships, including economic relationships.
Wouldn't that be a sensible way of having a theory behind our preemption doctrine under the Foreign Commerce Clause?
Mr. Barnico: Well, of course we agree that we ought to be able to speak in that way, but we don't think the rule is sufficient for this reason.
We think that it leaves us open to the indirect support, through the use of our money, the companies that are doing business in the country.
Justice Souter: Well, it does that, but that is a judgment of the United States that it is not at least inappropriate for that result to occur.
On my proposal, you would get to engage in expression.
You would clear your conscience, and any fault would lie, I suppose, at the door of the national Government that was either permitting or at least refusing to block this kind of trade.
Mr. Barnico: Well, I'm not sure that it would clear our conscience, because our conscience is based on so much history.
To allow us to feel that we were indirectly supporting what's going on in Burma would be so contrary to the principles that underlie our own State constitution, which refers to unalienable rights, the point of view of Massachusetts that it has universal rights at stake here...
Justice Souter: I think I understand your point.
It leads to a second question, and it anticipates a question I was going to ask your friends on the other side, but let's assume for the sake of argument that we accept the position of the other side and we say that the Massachusetts statute is preempted.
What will Massachusetts do then?
Will it start, in fact, trading with companies that do business with Burma, or, conversely, will it continue to follow the policy that it has now, even though that policy is not, as a matter of law, enforceable against anyone because of the preemption?
I guess I'm saying, will you continue to find ways to express yourselves and your conscience, even if there is a preemption or some other source of invalidity in the statute found so that the statute is not, as such, enforceable?
Mr. Barnico: Well, it will always depend on the circumstances in the foreign country.
Justice Souter: Well, I'm assuming the circumstances in the foreign country remain as they are now.
Assume that today you have the statute on the books, tomorrow the statute is preempted.
What does Massachusetts do in fact, if it is preempted?
Mr. Barnico: Well, as a matter of State law we would be bound to accept the proposals of bidders for State contracts.
Justice Souter: So you would go ahead and trade with them?
Mr. Barnico: As a matter of State law, we wouldn't have a choice, provided that the people otherwise qualified for the bid.
Justice Souter: But it's a matter of State law that would bind you, in other words?
Mr. Barnico: The State law governing procurement.
Justice Souter: Yes.
Justice Scalia: But even if that State law didn't exist, I presume that if we said that Massachusetts can't do this by action of its legislature, we would also say that Massachusetts can't do it by action of its Governor, the Governor simply deciding, oh, you know, yes, the Supreme Court has said that the legislature can't bar these companies from our contracts, but just as my... in my capacity as Governor I'm not going to let any contracts to these people.
That would be invalid as well, wouldn't it?
Mr. Barnico: We'd still be here.
We'd be here in the event that an executive official had decided that State law was broad enough to take into account the fact the companies were doing business in Burma.
Chief Justice Rehnquist: Well, you'd be here on a contempt citation.
Unidentified Justice: [Laughter]
Justice Ginsburg: Mr. Barnico, you mentioned globalization, and you say that's why there's been no action since the colonial times up until now, but one feature of at least the U.S. Burma law is concern with the reaction of our neighbors in the world community, the desire to have multilateral action, and you know that sanctions have been a controversial subject.
Mr. Barnico: Right.
Justice Ginsburg: So for Massachusetts to go it on its own when the United States is saying, we want to get together with our world neighbors on that, isn't there a clash with the authority that the Founders wanted the national Government to have to speak with one voice on matters of foreign policy?
Mr. Barnico: There's no clash in the preemption sense, Your Honor, because, of course, the U.S. sanctions are both unilateral and multilateral.
The State sanctions don't clash in that respect.
Justice Ginsburg: But this sanction was considered and deliberately not done by Congress.
Mr. Barnico: By Congress, in its choice as to the Federal sanctions, but the 1996 Federal statute cannot be looked at outside the context of the 1980's and the law I referred to in 1993, that essentially what we're urging here, Your Honor, is, it's unreasonable to conclude on this question of conflict that we have been preempted in light of the history that's gone before.
Justice Stevens: May I ask this question...
Justice Breyer: The word you used previously was, you didn't want to be associated with the regime that seriously interferes with human rights, which is a worthwhile, obviously worthwhile objective, and I can understand that, but the SG says in its brief... you use the word disassociated, all right.
If you're right that you have that right to disassociate yourself, why would we extend that to what is in effect here a secondary boycott?
That is, market participants in many situations cannot engage in secondary boycotts.
Massachusetts is saying, we won't do business with a Swedish firm that buys $15 worth of whatever from the Burmese Government, and why doesn't the secondary boycott just go too far, given Justice Ginsburg's concerns, in respect to the need to disassociate yourself?
Mr. Barnico: Well, we need to disassociate as a practical matter because of the financial interconnections among the companies, but beyond that, we need to disassociate through the boycott of that type because the question of boycott would entail action both against the country that you hypothesized and people who do business there.
Under the Court's precedent in Zschernig, in other words, the secondary boycott as you describe it is less indirect, so we think in the area of law in which we're operating, to the extent that the Court is concerned about effects on international affairs, a secondary boycott is a reasonable means because it's indirect.
Justice Kennedy: Well, we're proceeding on the assumption in the last 10 minutes or so of the argument that Massachusetts has a right to speak on foreign affairs, to dissociate itself from certain actions.
Is there any opinion from this Court which says a State has the same First Amendment rights as a citizen?
Mr. Barnico: No...
Justice Kennedy: Can we have 50 States passing resolutions denouncing different Governments?
I know of no such principle that's been established.
Maybe we'll establish it in this case.
Mr. Barnico: It's not a First Amendment right per se, Your Honor.
I don't know of such a case that you mentioned, but it has to do with the values that underlie the nature of the action here, which...
Justice Stevens: May I ask this question?
You would concede, would you not, that Congress could pass a statute prohibiting this policy?
Mr. Barnico: We assume so.
Justice Stevens: What about the President?
Could the President, by executive order, preclude this type of an activity?
Mr. Barnico: I'd say no, Your Honor, absent a clear delegation from the legis...
Justice Stevens: You don't think his foreign affairs authority would be sufficient for that?
Mr. Barnico: No.
There needed to be a clear statement from Congress to act in that instance, although Congress has delegated to the President important powers in foreign affairs in the past.
If there are no further questions, I'd like to reserve the balance of my time.
Argument of Timothy B. Dyk
Chief Justice Rehnquist: Very well, Mr. Barnico.
Mr. Dyk, we'll hear from you.
Mr. Dyk: Mr. Chief Justice, and may it please the Court:
The first thing I think to make clear is that the purpose of the Massachusetts law is that the district court explicitly found, based on Massachusetts concessions... and that's reflected at page 81 of the appendix to the petition... was to condemn Burma and to change the domestic policies of that nation, and the mechanism that Massachusetts has chosen to accomplish that, as Justice Breyer mentioned, is a coercive secondary boycott, the kind of action which no private individual would engage in, and that's undisputed in the record if you look at pages 32 and 560 of the appendix in the court of appeals.
Massachusetts has $2 billion in purchasing power every year.
If it joined together with the other States and municipalities, the estimates in the briefs are that there's $700 billion...
Justice Stevens: Well...
Justice Souter: May I ask...
Justice O'Connor: without enacting something with the purpose, can it just spend its money the way it wants and buy from the suppliers that it wants?
Mr. Dyk: Well, Justice O'Connor, I assume that that question is is it compelled to do business with Myanmar if it's not attempting to...
Justice O'Connor: Right.
Mr. Dyk: communicate a foreign policy?
Well, there's no obligation to deal with any particular country, but if it tries to make foreign policy by saying, we're doing this to condemn Myanmar to change its policies...
Justice Stevens: Mr. Dyk... oh, excuse me.
What if it was just the opposite?
Instead of trying to discourage something, they want to encourage the change in policy in a different State.
Could they offer extra purchases from that community in order to encourage...
Mr. Dyk: Justice Stevens, I think it would be the same thing.
It makes no difference whether it's...
Justice Stevens: And what if the motivation was, for example, disaster in a particular country?
Could they try to promote recovery from the disaster by fostering purchases from a company that went through a bad famine or hurricane, something like that?
Mr. Dyk: I think it could do that.
The question is, is it trying to influence the Government of a foreign country, and that's the essence of foreign affairs.
Justice Stevens: It all depends on trying to influence their policies?
That's the key to it?
Mr. Dyk: Trying to influence it and attaching consequences to it, in the sense that they're using one of the tools of foreign policy.
Justice Scalia: Do we have to undertake this subjective inquiry in every case, what was the purpose of... let's assume a State has a law against bigamy, and the king of some Muslim country is visiting the United States.
He wants to stay in that State, and the State says, I'm sorry, you know, you can't bring your... you know, any more than one of your wives...
Unidentified Justice: [Laughter]
Justice Scalia: and he takes umbrage at this, and it's going to seriously impede our relations with this foreign country.
Mr. Dyk: Well, Justice...
Justice Scalia: Can the State enforce its law?
Mr. Dyk: Justice Scalia, if it has a neutral law like that and it's not designed to target a foreign country...
Justice Scalia: So we have to look at the motive.
Mr. Dyk: that's a very different question.
Justice Scalia: The...
Mr. Dyk: No.
Justice Scalia: The State's motive can't be to influence...
Mr. Dyk: No, I don't think it's a question of motive.
I think it's a question of objective, and what you have with these selective purchasing laws is an objective.
They only work if you communicate disapproval, or communicate a desire to change.
Justice Scalia: Well, this is quite neutral, just like the bigamy law.
We don't buy from anybody who violates human rights.
Mr. Dyk: Well, I think that that... if they said, we don't buy from anybody who violates human rights, that again looks like a foreign policy decision.
That's exactly the kind of foreign policy decision that the United States Government makes repeatedly.
Justice Scalia: What is it that prevents the States from making foreign policy decisions, in the Constitution?
Mr. Dyk: Well, Justice Scalia, I think first of all the... to go back to the questions that you and the Chief Justice had, before the Constitution was adopted, States went their own way on sanctions, and that was a severe problem.
I think there's a consensus that that was one of the things that led to the adoption of the Constitution, that that was an intolerable situation, and that was designed to be dealt with by the Constitution.
Justice Scalia: Well, it is dealt with.
Congress, everybody concedes, can pass a law.
If the horrible occurs that you have 50 States doing these things and upsetting foreign relations, Congress can pass a law and stop it.
Isn't that enough to solve the problem that they were concerned about?
Mr. Dyk: No, I think it is not enough, because if Congress had to intercede every time there was a problem here, as the briefs suggest, it's just not capable of doing that, and that kind of institutional concern was addressed by the Framers.
They were concerned about that.
Justice Scalia: Where?
Where was it addressed?
I don't see any... in fact, I see provisions in the Constitution prohibiting the States from entering treaties with foreign countries, from engaging in war, from... let's see, entering into any treaty, alliance, or confederation.
All of these things would have been unnecessary if there is some overriding, unexpressed principle in the Constitution that the States cannot get involved in foreign affairs.
You wouldn't need these things.
Mr. Dyk: Justice Scalia, I think it was an attribute of sovereignty and, indeed, if you go back and look at the Articles of Confederation, you find that the Articles of Confederation was much more explicit about the things that States could not do in the area of foreign policy.
For example, the Articles of Confederation denied the States the power to send ambassadors.
There's no such prohibition in the Constitution as adopted.
There are other examples, the power to deal with captures, to punish piracies.
If you look, if you compare the Articles of Confederation with the Constitution, you find that the articles were much more explicit.
The working assumption, we suggest, and it's reflected in the Federalist Papers and in the debates in the Constitution, was that that kind of specificity was not necessary, that the Constitution was designed to give the foreign policy power to the United States as a sovereign nation.
Justice O'Connor: Well, Mr. Dyk, how does your theory play out in the context of the eighties, when a number of States were adopting investment policies designed to encourage a change in South Africa from its apartheid Government to a more democratic society?
These were widespread practices by States then, were they not?
Mr. Dyk: They were.
Justice O'Connor: Now, how does that play... the very purpose of it was to change something going on in South African Government...
Mr. Dyk: Well...
Justice O'Connor: to affect foreign policy.
Mr. Dyk: My answer to that, Justice O'Connor, is, to the extent that those States and municipalities used selective purchasing against South Africa, they were unconstitutional and, of course, this Court never ruled on that.
Justice Scalia: Now, the Solicitor General takes a different view, I gather, in the brief about that.
Mr. Dyk: I don't think on the selective purchasing.
Now, what they had in connection with South Africa was two kinds of laws, the selective purchasing law, such as the one we have before the Court today, and I've just said that our view is that was clearly unconstitutional.
They also had divestiture laws, such as came before the Maryland Court of Appeals in the Board of Trustees case.
What the Solicitor General suggests is that divestiture laws, that is, we're not going to invest in companies, we're going to sell our stocks and bonds, could present a different question.
Justice O'Connor: You think it turns on purpose.
Mr. Dyk: Well, purpose plus effect.
We don't agree.
Now, we think the divestiture laws are unconstitutional, but we recognize they're quite different.
Justice O'Connor: What happened during the Civil War years, if you know?
Did States take action to try to not deal with people who were using slaves?
What did they... weren't there actions taken by States in those years along the lines that Massachusetts is taking now, or do we know?
Mr. Dyk: Against the rebellious States?
Justice O'Connor, I'm not sure, but I... what I do know is that the briefs of the petitioners and all their amicus briefs who go into this long history about this have not found a single instance between the time the Constitution was adopted and the next 150 years in which States asserted the right to exercise a concurrent authority in the area of foreign policy...
Justice Scalia: Mr. Dyk...
Mr. Dyk: and under the Printz case...
Justice Scalia: what about Ware v. Hilton, which involved the Virginia laws that I mentioned earlier, that erected obstructions to the collection of debts by English creditors, and hostility towards England after the revolution?
A Federal case, involved a challenge to those laws.
No one asserted that the laws were invalid because Virginia had no authority to muck around in foreign affairs.
The entire case was argued and decided on the basis of whether the treaty with England forbade this, and it was accepted that if the treaty did not forbid it, the Virginia laws were okay.
Mr. Dyk: Well, I can't speak to what issues were raised in that case and weren't raised in that case.
What I do know is that the practice of refusing to honor debts to British citizens was a central concern of the Framers of the Constitution.
They did not want the States to be able to go their own way on that issue, on the issue of sanctions, those were the things that concerned...
Justice Scalia: They handled it by a treaty... by a treaty, which the Constitution expressly says the States must respect, but there's no provision there that the States can't do anything that affects foreign affairs.
Mr. Dyk: You could... Justice Scalia, a treaty depends upon the agreement of the United States and a foreign power.
I cannot believe that the Framers of the Constitution intended that if there were no treaty, that the States could go their own way, and I believe that the constitutional history, the Federalist Papers, and the debates in the Constitution, support the view that they did not intend that...
Justice Scalia: There's also Article VI, of course.
Without a treaty, Congress, if it passed a law, could pass a law that would be the law of the land that would prevent the States to do it, but certainly those two protections are entirely adequate to prevent all of the horribles that we're concerned about, that the States are going to go running off with our foreign affairs power.
Mr. Dyk: Justice Scalia...
Justice Scalia: If that's a problem, the remedy is there.
Mr. Dyk: Justice Scalia, as this Court made clear in Curtiss-Wright and in other cases, the President has an important role to play in foreign affairs.
It seems quite unlikely that the Framers intended to say that Congress had to step in and eliminate these State laws, otherwise the President's conduct of foreign affairs could...
Chief Justice Rehnquist: Well...
Mr. Dyk: be hampered just as much as the States wanted...
Chief Justice Rehnquist: you're not talking just about States, either.
I take it you're talking about the possibility of cities adopting this policy.
Mr. Dyk: 39,000 municipalities, and this Court... and we're not just relying on the Zschernig case, as important as that is, but in the Pink case, in the Belmont case, in the Sabbatino case, this Court has assumed again and again and again that State action may be precluded without the necessity of a formal congressional...
Justice Stevens: But that's why affirmative action by the President... I asked your opponent.
He thinks affirmative action by the President wouldn't be enough, but perhaps affirmative action by the President would be, but the question is, with or without either congressional action or presidential action, is this foreclosed, and I'm curious to know, if it all turns on the motive to impact on the foreign country, would it also prevent the State from making its own direct decisions?
It just would refuse to buy anything itself from Burma.
Mr. Dyk: Oh, I think that would be a very different case, Justice Stevens.
Justice Stevens: It would be different, but would it not be decided the same way under your analysis of motive?
Mr. Dyk: If they're intending to communicate a message...
Justice Stevens: Yes.
They say, we're not going to buy from you because we don't like your policy toward certain minorities, or something of that kind.
Mr. Dyk: That would be forbidden, but Justice Stevens, it's not a question of motive, it's a question of objective.
It's not trying to get into the minds of the legislators.
We have here a situation in which these things only work if you communicate disapproval.
That is the objective of the statute, and they do it through this very coercive secondary...
Justice Kennedy: Do we have...
Justice Souter: So in effect, in... the only case in which it would be true on your theory that the State could, as you said a moment ago, decide who to deal with, would be the case in which the State says, we are simply going to deal with domestic companies.
We're going to keep the money within the State borders.
Because the moment the State said, well, we'll deal with people outside the State, but we're not going to deal with California, or we're not going to deal with Burma, there will always be a policy reason behind that, and it will always, as I understand it, be forbidden on your view.
Mr. Dyk: I don't think, Justice Souter, that there'll always be a policy reason behind that.
I think that States and municipalities constantly make purchasing decisions based on price and...
Justice Souter: Oh, exactly, but I'm assuming that... I mean, I think the whole assumption of the case is that there is a departure from the usual purchasing regime of generally accepting the lowest responsible bid, and if there's going to be a departure from that regime, and it's going to be for any reason other than merely favoring domestic producers, I presume there's always going to be a noneconomic policy reason for it and it will always be unconstitutional, in your view.
Mr. Dyk: If they announce that they are trying to change the policies of a foreign Government, to condemn the policies of a foreign Government, and they take action, yes, in our view it would be unconstitutional, but that is a different case.
Justice Souter: When you say condemn, I... would it be condemnation if the State simply said, look, we realize we're not running the foreign affairs of the United States, and we realize that we're not running Burma, but we do have responsibility for keeping our own hands clean, and we are not going to buy any goods derived from Burma.
Would that be a condemnation sufficient to violate the Constitution, in your view?
Mr. Dyk: In our view it would, but we would say that's a very different case.
This is not... this is not limited to goods coming from Burma.
Justice Souter: I realize... I realize...
Mr. Dyk: It's highly doubtful that Massachusetts buys anything from Burma.
What they're trying to do...
Justice Souter: Well, let's... we want super hands clean so we're not going to deal with any... anyone who does deal with Burma, and so on.
Mr. Dyk: Right.
We're not going to buy computers from a German company because they sell pencils to Burma.
That is highly coercive, and it has nothing to do, in our view, with the notion of disassociation.
Justice Scalia: It shouldn't turn upon the coercion.
I mean, if we can't... if States cannot muck around in foreign affairs, I assume that you would have to say that the Governor of New York could not condemn the policies of South Africa, or the policies of Nazi Germany.
Mr. Dyk: If he coupled that with a remedy, with a coercive sanction, no, he could not do that.
Justice Scalia: Why do you need the coercive sanction?
Justice Souter: Yeah.
Justice Scalia: Doesn't it interfere with our foreign affairs to have 50 State Governors going around, you know, condemning Adolph Hitler as a fiend if, indeed, the Federal Government is trying to... I don't know, accommodate him, or whatever?
Mr. Dyk: If...
I think it's highly undesirable.
It may possibly, under some circumstances, cause foreign policy problems that could create an issue.
That could never come before this Court, and our view is that...
Justice Souter: Why?
Mr. Dyk: A mere speech by the Governor?
I don't see how that...
Justice Souter: Well, if that cannot be the subject of legal action, then it seems to me that this is not an expressive case, as I... as you implied a moment ago.
It's a case about dollars and cents.
Mr. Dyk: No.
I think it's a question of making foreign policy, Justice Souter.
If you say, this is our position with respect to Burma, we're trying to change the Burmese policies, and here's the remedy that we're imposing, we're doing something which has a consequence.
Justice Souter: But... right, but you're saying it only becomes foreign policy subject to cognizance in a court if, in fact, there is a dollar figure attached to it.
Mr. Dyk: If the... well, I don't know dollar figures is what... I would accept it, that it has consequences.
There's something behind there.
If you take...
Justice Scalia: 50 State legislatures, not just the Governors.
50 State legislatures with the signature of the Governor pass a bill saying Taiwan is independent from China.
50 State legislatures.
Mr. Dyk: Justice Scalia, let me use a homey analogy, if I could.
If we look at the States as though it were a dog that is barking, what the Constitution intended to do was to take the teeth away from the dog, and if the dog continues to bark, if the States and municipalities continue to say things on the issue of foreign policy, there is not the same danger of interfering with Federal policy if there are no teeth to enforce it.
Justice Kennedy: Well, I'm not sure... I don't... I agree one case is justiciable, the other isn't.
The hypothetical would be, you are the legal advisor to the Governor.
He asks you, may I, in my official capacity, make this foreign policy announcement, and I would think your answer would be no.
Mr. Dyk: I think that from the point... that it is highly undesirable to do that, and that may constitute the impermissible making of foreign policy.
Chief Justice Rehnquist: Well, but...
Mr. Dyk: But I think as far as the Constitution is concerned, what it was intending to do was to strip the enforcement mechanisms from the States, and if you go down the lists in Article I, that's what it did.
Justice Kennedy: Don't you think that under your theory of this case, if the legislature and the Governor together come to you as their counsel and say, may we constitutionally, not because we're going to be sued, but just to obey our constitutional constraints and duties, join 50 other, or 49 other legislatures in condemning Taiwan, or mainland China, or something?
What is your answer?
Mr. Dyk: Well, I think that my answer would be that raises a very significant...
Justice Kennedy: Why?
Mr. Dyk: It may be unconstitutional, but the core purpose here in allocating foreign affairs to the Government was to say... to the Government of the United States was to say, if you're going to speak on foreign policy, and you're going to try to enforce that foreign policy, that's something that's forbidden to you.
Chief Justice Rehnquist: Well, Mr. Dyk, certainly a good part of your argument is based on the Commerce Clause, and no one could suggest that the resolution hypothesized by... involves commerce.
It's just speech.
Mr. Dyk: Right.
Under the Commerce Clause that would not be an issue, and under the Commerce Clause the primary issue is whether the action of the State of Massachusetts is proprietary, and it seems to us that it can't possibly be proprietary.
It has no economic benefit to Massachusetts and its citizens.
It's admittedly not something that any private purchasers of goods and services...
Justice Kennedy: In our negative Commerce Clause cases, do we have statements to the effect that we look to the purpose of the legislation?
Mr. Dyk: My...
Justice Kennedy: It's usually the purpose to just prefer your own goods.
Is there anything else?
Mr. Dyk: Well, as I understand the Commerce Clause jurisprudence, you look to purpose and effect, but in these market participant cases, my understanding is that the line the Court is trying to draw is between regulation and proprietary action.
And under cases like Gould, which, while it's not a Commerce Clause case, is highly relevant, if you find that this looks like regulation through market participation, then it's invalid, and we think if you look at this Massachusetts law, it doesn't look anything like... for a number of reasons it doesn't look anything like purchasing.
It looks very much like regulation accomplished through purchasing, and therefore it's invalid.
Justice Ginsburg: Mr. Dyk, may I ask you about one case of ours that's said to be very close to this, that is, the Barclays case?
This Court said, it's okay for California to go its own way, to have its worldwide income tax measure, even though the Feds didn't, and even though most States didn't, and that was okay.
It has been argued that this is the same, that there's no difference.
Mr. Dyk: But the difference between the combined reporting in the California case was... first of all was nondiscriminatory from the point of view of the Commerce Clause and, most important, it had no foreign policy objective.
Massachusetts didn't care what the consequences were.
The question was whether, even though Massachusetts didn't care what the consequences were, that nonetheless made it unconstitutional.
Argument of Seth P. Waxman
Chief Justice Rehnquist: Thank you, Mr. Dyk.
General Waxman, we'll hear from you.
Mr. Waxman: Thank you, Mr. Chief Justice, and may it please the Court:
Chief Justice Rehnquist, I'd like to follow up on your suggestion and talk first about the Foreign Commerce Clause, because I think that what... the effect of what Massachusetts has done here in many ways exemplifies precisely what the Framers of the Constitution were trying to accommodate and to accomplish and avoid in enacting the Foreign Commerce Clause.
The problem that the Framers were addressing was first and foremost the refusal by States in the Union under the Articles of Confederation to honor debts that they owed to British sympathizers and British citizens notwithstanding the treaty of 1783, and what Massachusetts has done here, and the purpose therefore in the clause, was to keep other States and the Union from being held accountable for decisions and unilateral actions for which they didn't have the responsibility, and what Massachusetts has done here is precisely the same.
The United States has had for a long time, at least since 1990, a policy with respect to Burma... and I want to emphasize here that this is a case about means, not goals with respect to the Burmese regime.
We have had a policy that has emphasized in resolutions, in executive orders, in the Federal Burma Act, and in the President's 1997 executive order, the importance of a coordinated, multinational effort, because in the view of the national Government it's the only way we can have an effective voice with respect to Burma.
But Massachusetts, by choosing to extend sanctions to foreign companies, has created a considerable source of irritation with our trading partners and our allies, and has directly hampered our efforts to achieve multilateral action.
Instead of our conversations with the EU and ASEAN and other countries that had been taking place about what to do about Burma, our conversations now are what to do about Massachusetts, and we have been treated to the spectacle of delegations of EU officials and other foreign officials writing to and visiting along with our trade representatives, Boston, Massachusetts in order to decide what the best means is to accomplish reform in Burma, and I think that that's just what the Framers were trying to avoid in enacting the Foreign Commerce Clause.
Justice O'Connor: General Waxman...
Justice Scalia: The question is whether they were trying to avoid it by giving Congress the power to prevent it, which everybody concedes they have here.
If this is indeed a big deal, a big problem, nobody questions that under Article VI Congress can pass a law which Massachusetts would have to obey, but the question is, what is there in the Constitution that suggests that the President, by snapping his finger, can make Massachusetts...
Justice O'Connor: Well, General Waxman, Congress has passed a law, hasn't it?
Mr. Waxman: Indeed it has passed a law, and I guess rather than choosing favorites I'll try and...
Justice O'Connor: Is there preemption?
Mr. Waxman: We think that there is preemption under the Hines-Boyle international paper articulation because, as I was starting to suggest, the Federal law... the Massachusetts act stands as an obstacle to... I'm quoting now from many, many opinions of this court.
The test is, stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, and I've pointed out one of three ways, and I will elucidate the other two, if I may, in which what Massachusetts has done has interfered.
Now, Justice Scalia, your point, if I recall it, was that, well, that's fine, we were really concerned about it and we gave Congress the power to say, no, we don't like that, you can't do that, and I have... I think that's incorrect for two reasons.
First of all, the Foreign Commerce Clause of its own force preempts State laws surely... and this Court has decided it many times... that discriminate on their face against a particular country.
That was a principle that was elucidated as... by this Court as far back as Cooley v. Board of Wardens, where the Court pointed out that one of the main objects of the Constitution was, quote, preventing discriminations favorable or adverse to commerce with particular foreign nations that might be created by State laws, and I know that there is considerable uncertainty about the scope of the operation of what has been called the dormant Foreign Commerce Clause, but in essence the scope, the preemptive scope of the Commerce Clause itself, absent positive legislation.
But there has never been a question from the start that... with respect to a law like this that singles out and punishes and sanctions commerce with a particular foreign country, that there is preemption by the Foreign Commerce Clause of its own force.
Now, secondly, it would be a regime that would be highly inimical both to the national Government and to our States and the Federal system to require Congress or the Federal executive to expressly keep track of and preempt each one of these actions, and I'd like to just explain...
Justice Stevens: No, but the answer to that, it seemed to me... Mr. Dyk made the same point... couldn't they pass a general statute making into positive law the very position you're asserting here today?
Mr. Waxman: Yes, I think they could.
I believe that they could.
I don't think that they could do the converse, or I'd question whether they could do the converse...
Justice Stevens: Will you state... what I'm suggesting is...
Mr. Waxman: but they... if I can just...
Justice Stevens: that the constitutional rule that you advocate today could be enacted by Congress as a statute.
Mr. Waxman: Yes.
In fact, I mean, our position is that at least with respect to Burma, where there is one voice, and the voice has spoken, and the voice has spoken quite clearly with respect to means, it is preempted in any event, either by operation of the Foreign Commerce Clause or by the Federal action.
But if I can just go to the point, Justice Scalia's point about what's so bad, what would be so bad about requiring the national Government to act, I would just say first of all, with respect to the national Government's ability to regulate foreign commerce and conduct foreign affairs, it is well-known that... first, that effective diplomacy often, probably usually requires that things be done and not be done publicly, and expressly, and the Austria example that I think Justice Breyer gave is, I think we are being treated to a vision of that point precisely.
Secondly, as this Court recognized in Curtiss-Wright, and as the IEPA statute recognizes, fast action is required by the time... the problem may have festered and come to a head by the time the national Government can go through the processes necessary to preempt.
And I also would say with respect to Federalism and the comity that our system requires, that it is a wholly unnecessary irritant that would constantly come up in the context of our political system if, in the area of foreign affairs and foreign commerce, the national Government in order to pursue its... the objectives that the Constitution gives it, were required to single out, now, Massachusetts, we... you know, we preempt what you have done, and the Village of Takoma Park, we preempt what you have done.
The question was raised earlier about the South Africa sanctions which is, so far as we know, since the beginning of the Republic, the only instance, and not only the amicus brief citing the petitioner, but all of the scholarly articles that are cited in those briefs, we reviewed, and there are not instances of Governments acting in their procurement capacity to do this.
But in the South Africa example, I think it's important to recognize first that in 1986... the South Africa case was decided by the Maryland Court of Appeals in 1989, and I believe it's the only decided case... that the... there was a congressional resolution, the national Congress, explicitly allowing States to do this, and there was a provision in the South Africa law that was passed that granted an exemption to States engaging, and localities engaging in procurement with Federal dollars from the general Federal rule that required that the lowest bidder, the lowest responsible bidder get it.
So I think the South Africa example, to the extent that it consists of the only precedent that we have, is highly distinguishable, because here, in addition to the point I made about the frustration of the national Government's objective to pursue a multilateral strategy, the Massachusetts law is also inconsistent, and therefore frustrates the objectives of the Federal law in two other respects.
First of all, and the legislative debates about this couldn't be clearer, Congress considered much more stringent sanctions.
It considered precisely what Massachusetts has done, and it deliberately chose what it called a middle path, what Massachusetts... that is, not to prohibit precisely what Massachusetts has.
Chief Justice Rehnquist: Thank you, General Waxman.
Mr. Waxman: Thank you.
Rebuttal of Thomas A. Barnico
Chief Justice Rehnquist: Mr. Barnico, you have 4 minutes remaining.
Mr. Barnico: Thank you, Mr. Chief Justice, and may it please the Court:
First, I would like to go to the question, or the reason why foreign officials have visited Boston in the last few years, and I must point out a Federal statute not previously mentioned in the argument today, which is the Federal law adopting the Uruguay Round agreements under the GATT.
We, through the United States, has now been... we have been purported to have been held to a new round of international trade agreements.
The foreign complaints that you've heard described are complaints under that agreement.
Our point is simply that in this new world of global trade and new international agreements, this type of contact will be common.
This type of complaint against Massachusetts and the other States that the procurement laws violate GATT will be all the common.
There will be contact.
It's not a realistic approach that...
Justice Ginsburg: Mr. Barnico, are you suggesting that times have changed so that the national unit is no longer responsible under international law for its subunits, that the rest of the world will target their retaliation to Massachusetts, and the rest of the United States will remain unaffected?
Is that what you're suggesting?
Mr. Barnico: I'm suggesting, Your Honor, that as the... if the focus is on the effects of our law, the Court should not give great weight to the fact that foreign countries have objected to the Massachusetts law under a trade agreement that's been ratified by Congress.
We take that agreement to mean, and the congressional action to mean, that Congress knows full well that States will have complaints made against them of this type.
Justice Breyer: That's what I thought perhaps... I thought maybe you agree on this, I'm not sure, that whatever it requires, we should treat the Foreign Commerce Clause the same as the dormant Commerce Clause vis-a-vis States and if, in fact, they could do this vis... give us a... you'd have a regular body of law, we'd know how to apply it, and what the... what Massachusetts could do vis-a-vis Texas, it can do vis-a-vis Austria, et cetera, at least for purposes of this case.
Is that your view?
Mr. Barnico: Yes, Your Honor, and that means... that's why we urge the Court, under both of those constitutional provisions, to recognize what we've described as a market participation exception.
That's why we've argued that the boycott, so close in nature to that type of State activity, was not within the thought of the Framers as to either of those dormant clauses.
That's the way to handle this, to preserve to the States a limited sphere of activity which has speech components and consumer components.
Justice Breyer: Of course, what I'm thinking of is a kind of nightmare, where all the right-to-work States pass laws stopping procurement in the unionized States, and all the unionized States pass laws trying to stop procurement in the right-to-work States, and that's... that kind of, sort of chaos is what's worrying me under the dormant Commerce Clause.
Mr. Barnico: Well, those questions will remain for Congress.
Under our rule they would be proprietary.
We can only hope, though, as I mentioned earlier, that there is a comity owing between sister States that's not owing to the Government of Burma, certainly, and Massachusetts has the right in this instance to exercise that proprietary power, that limited sphere of power cabined as historical basis for assuming that the Framers did not intend to take the boycotts out of the hands of the States, just as we know the power of boycott remains in the hands of every American citizen.
Justice Ginsburg: Mr. Barnico, you said there's comity among the States and there's not comity with Burma, but it isn't Burma.
As you yourself recognized, Massachusetts has been visited by an ASEAN delegation, by an EU delegation, so it's the rest of the world of which we are a part that may disagree strongly on the efficacy of sanctions.
Mr. Barnico: I acknowledge that, Your Honor, and I point to the '94 law and the GATT simply to say that this will be common in our view.
State and local laws, not of human rights dimension, but all kinds of laws will be subject to attack by foreign Governments under these...
Chief Justice Rehnquist: Thank you, Mr. Barnico.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 99-474, Crosby versus National Foreign Trade Council will be announced by Justice Souter.
Argument of Justice Souter
Mr. Souter: This case comes to us on a writ of certiorari to the United States Court of Appeals for the First Circuit.
In June of 1996, the Commonwealth of Massachusetts passed a statute restricting state agencies from purchasing goods and services from companies doing business with Burma.
In September of 1996, Congress passed a law that imposed immediate federal sanctions on Burma, authorized the President to impose further sanctions or to suspend or terminate any federal sanctions, and directed him to work with our allies in developing a comprehensive strategy to bring human rights and democracy to Burma.
The National Foreign Trade Council which represents companies engaged in foreign commerce, challenge the state law on behalf of its members.
The District Court held that the law was unconstitutional, is a violation of the Federal Foreign Affairs Power.
The court of appeals for the First Circuit affirmed on three independent grounds; it found the state law unconstitutionally interfered with the Foreign Affairs Power of the National Government that it violated the Dormant Foreign Commerce Clause and that it was preempted by the Congressional Burma Act.
In an opinion filed with the Clerk at Court today, we affirm the judgment of the First Circuit.
The state law is invalid under the Supremacy Clause of the constitution, that is, it is preempted because it stands as an obstacle to the accomplishment of Congress’s full objectives under the Federal Act.
First, Congress clearly intended the President to exercise effective discretion over economic sanctions against Burma.
It provided him with the ability to impose additional conditional sanctions and to suspend or terminate all federal sanctions in the interest of national security.
The state sanctions undermine the President’s authority by making it impossible for him to bargain with the full economic power of the United States.
Second, Congress carefully calibrated the scope of sanctions against Burma.
The state law penalizes behavior well beyond that range; it targets contracts for goods, services or technology, and the behavior of foreign as well as United States companies, all of which the Federal Act exempts.
Finally, Congress intended the President to speak for the United States among the world’s nations in developing a comprehensive multi-lateral strategy toward Burma.
The State act interferes with that authority; it undermines the President’s capacity for diplomacy by reducing his bargaining power and generating formal protests in the international trade disputes with our allies.
The state act conflicts with Federal Law and must therefore yield.
Justice Scalia has filed an opinion concurring in the judgment in which Justice Thomas joins.