Crosby v. National Foreign Trade Council

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The Crosby case (2000) represents perhaps the Rehnquist Court’s most important encounter with the intersection between federalism, separation of powers, and foreign affairs. The case arose out of an attempt by the Commonwealth of Massachusetts to protest human rights abuses by the military regime in Burma (renamed Myanmar after the junta’s 1988 coup). In June 1996, the Commonwealth enacted a law that generally barred state entities from purchasing goods or services from persons or corporations doing business in Burma. (Exceptions written into the statute meant that companies doing business in Burma could compete for state contracts but suffered a 10 percent penalty to their bids.) The National Foreign Trade Council, a group representing companies engaged in foreign commerce, brought a federal lawsuit to enjoin enforcement of the Commonwealth’s Burma Law on three grounds: (1) that the law infringed the federal government’s exclusive foreign affairs power, (2) that it violated the dormant Foreign Commerce Clause, and (3) that the state law was preempted by sanctions on Burma enacted at the federal level three months after the state measure.

The federal district court enjoined enforcement of the law based on the first of these claims, and the U.S. Court of Appeals for the First Circuit affirmed by accepting all three theories. The Supreme Court likewise upheld the injunction, but on much narrower grounds. Refusing to reach the exclusive foreign affairs power and dormant foreign commerce arguments, Justice David Souter’s opinion for a unanimous court held that the state law was preempted by the federal statute providing for national sanctions. Although nothing in the federal statute expressly preempted state or local measures, the Court found a conflict between the Massachusetts law and three distinct aspects of the federal statute. First, the federal law conferred discretion upon the president either to expand the range of federal sanctions against Burma or to terminate those sanctions, either because they were detrimental to national security or upon finding that Burma had made significant progress in human rights. Presuming that state-level sanctions would not be subject to presidential control, the Court held that the state law unduly narrowed the flexibility that Congress meant to give the president. Second, the Court noted that the Massachusetts sanctions went further than the federal law, penalizing private activities in Burma that Congress had elected not to reach under the federal law. Noting that “[s]anctions are drawn not only to bar what they prohibit but to allow what they permit,” Justice Souter concluded that “the inconsistency of sanctions here undermines the congressional calibration of force.” Third, the Court found Massachusetts’ effort to chart its own course with respect to Burma inconsistent with Congress’s statutory mandate that the president work with other countries to develop a “comprehensive, multilateral strategy to bring democracy to and improve human rights practices and the quality of life in Burma.” Relying on statements by midlevel State Department officials that the Massachusetts law interfered with U.S. diplomacy, as well as on protests by foreign governments (including a formal proceeding initiated by Japan and the European Union before the World Trade Organization), the Court found that the state law thwarted Congress’s intent for the nation to speak with “one voice” on Burma policy.

The second of these arguments is a fairly conventional point in the Court’s preemption jurisprudence; state law often regulates private activity more strictly than federal law, and courts must make difficult judgment calls as to whether such state regulation is a welcome supplement to federal measures or an invalid attempt to reach conduct that Congress meant to exempt. The first and third points, however, are more unusual in that they give preemptive force to Congress’s delegation of authority to the president, even though the president had taken no formal action pursuant to that authority that could be pointed to as preempting the state measure. That aspect of the Court’s opinion has led some commentators to suggest that the Court is applying a more stringent preemption analysis in foreign affairs cases than it does in domestic preemption litigation. Other scholars have questioned whether the “one voice” paradigm is a realistic picture of American government, given the sharing of foreign affairs authority between the president and a multimember Congress, as well as frequent and public divisions of opinion within the executive branch. Still other observers, however, have suggested that Crosby should be viewed as less a case about federalism than one about separation of powers: by foreclosing state efforts to conduct their own foreign policies even where Congress may lack the political will to preempt those policies expressly, the decision protects the president’s primacy in foreign affairs. Yet by tying the analysis closely to the specific provisions of the federal Burma statute, Justice Souter’s opinion left the precise limits of state activities affecting foreign affairs to be worked out in future decisions.

BIBLIOGRAPHY:

American Insurance Association v. Garamendi, 539 U.S. 396 (2003); Sarah H. Cleveland, “Crosby and the ‘One-Voice’ Myth in U.S. Foreign Relations,” Villanova Law Review 46 (2001): 975; Jack Goldsmith, “Statutory Foreign Affairs Preemption,” Supreme Court Review (2000): 175; and Ernest A. Young, “Dual Federalism, Concurrent Jurisdiction, and the Foreign Affairs Exception,” George Washington Law Review 69 (2001): 139.

Ernest A. Young

Last updated: 2006

SEE ALSO: Commerce with Foreign Nations; Preemption