In the United States District Court
for the District of MassachusettsNational Foreign Trade Council,
Plaintiff,v. Civil Action No. 98 10757 (JLT)
Charles D. Baker, et al.,
Defendants.
BRIEF OF THE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA
AND THE ORGANIZATION FOR INTERNATIONAL INVESTMENT
AS AMICI CURIAE IN SUPPORT OF THE NATIONAL FOREIGN TRADE COUNCIL
The Chamber of Commerce of the United States of America ("U.S. Chamber") and the Organization for International Investment ("OFII") respectfully submit this brief amici curiae in support of the relief sought by the plaintiff National Foreign Trade Council ("NFTC"). The U.S. Chamber and OFII join the NFTC in requesting the Court to conclude that the Massachusetts Burma Law violates the U.S. Constitution.
INTEREST OF AMICI
The U.S. Chamber is the world's largest business federation, representing an underlying membership of more than three million businesses and organizations of every size, sector, and region. Ninety six percent of the U.S. Chamber's members are businesses with less than 100 employees. Many of its members transact business in all or nearly all the United States as well as a large number of the countries around the world.
The U.S. Chamber regularly advocates its members' views in court on issues of national concern to the business community.
OFII is a business association representing the U.S. subsidiaries of international companies. OFII's member companies range from medium-sized enterprises to some of the largest firms in the United States and employ hundreds of thousands of workers in thousands of plants and locations throughout the United States. Members of OFII transact business in all or nearly all the United States, as well as in foreign countries, and are affiliates of companies transacting business in many countries around the world.
One of the principal goals of both the U.S. Chamber and OFII is reducing unjustified barriers to trade and investment in the United States and throughout the world, and their opposition to the Massachusetts Burma Law derives from that objective. Both the U.S. Chamber and OFII are vitally interested in ensuring that state laws affecting interstate and foreign commerce are reasonable and fair and do not impair the ability of U.S. businesses to compete in the world market.
STATEMENT
The U.S. Chamber and OFII base this brief on the Statement of Facts in the April 30, 1998 Memorandum of Points and Authorities in Support of Plaintiff's Motion for Preliminary Injunction or, Alternatively, for Consolidation and Expedited Consideration of the Merits. In short, the Massachusetts Burma Law restricts the ability of state agencies to enter into contracts with persons doing business with Myanmar (formerly known as Burma). The original sponsor of the law said that its purpose was to put pressure on the government of Myanmar to hold free elections and to combat repression and intolerance there. As a practical matter, the law requires a company seeking to do business with Massachusetts agencies to cease doing business with Myanmar and a company doing business with Myanmar to forfeit business with Massachusetts.
ARGUMENT
I. INTRODUCTION
This case raises important issues for the many large and small U.S. businesses involved in international trade and investment. If the Massachusetts Burma Law is upheld, those businesses will face an increasing number of different and potentially conflicting state and local sanctions laws having the purpose and consequence of disrupting and fragmenting the domestic and foreign commerce of the United States.
A principal purpose of the powers granted to the national government in the U.S.†Constitution was to prevent state and local governments from adopting such laws. The Court therefore should conclude that the Massachusetts Burma Law is unconstitutional for any one of the three reasons advanced by the NFTC, all of which the U.S. Chamber and OFII support. Those reasons are that the Massachusetts law discriminates against foreign commerce, directly intrudes into the exclusive power of the federal government to conduct the foreign affairs of the United States, and is preempted by an existing federal law that imposes sanctions on Myanmar.
In this brief, we develop and expand the first of these arguments, which is of critical importance to the businesses that are members of the U.S. Chamber and OFII. In Part II, we explain that the Massachusetts Burma Law violates the Commerce Clause of the Constitution because it discriminates against and burdens both the interstate and foreign commerce of the United States. We demonstrate that the Massachusetts law and other state and local sanctions laws are virtually per se invalid and are not subject to any balancing test because their purpose and effect is to fracture and isolate parts of the U.S. and world markets. In Part III, we analyze the narrow "market participant" exception that the Supreme Court devised for the dormant Commerce Clause doctrine and set forth the reasons why it is not available to preserve the constitutionality of the Massachusetts law.
Should there be any question, the U.S. Chamber and OFII want to state plainly that, for them, this case is about the way the Constitution allocates authority between the national and state governments for the regulation of foreign commerce and for the conduct of the foreign policy of the United States. It is not about the behavior of the current government of Myanmar. We can all agree that the conduct of that government is reprehensible and should be condemned, and the opposition of the U.S. Chamber, OFII, and their members to the Massachusetts Burma Law should in no way be construed as approval of, or support for, the regime now in power in Myanmar.
The U.S. Chamber and OFII want to make equally clear that, just as in the interstate commerce area, states retain a role in regulating international commerce. The U.S. Chamber and OFII do not take the position that the states lack all power to legislate in matters affecting trade or commerce with foreign nations but rather that state and local governments lack the authority under the Constitution to enact rules that have the purpose or effect of fractionating the national or international market, of discriminating against national or international trade, or of usurping the authority and discretion of federal officials to decide the foreign policy of the United States.
I. THE MASSACHUSETTS BURMA LAW VIOLATES THE COMMERCE CLAUSE OF THE U.S. CONSTITUTION BECAUSE IT DISCRIMINATES AGAINST AND BURDENS BOTH THE INTERSTATE AND FOREIGN COMMERCE OF THE UNITED STATES.
A fundamental objective of the Commerce Clause was to establish federal control over interstate and foreign commerce and to ensure that such commerce remains free from burdensome state and local regulation. As we discuss below, the Massachusetts Burma Law violates the Commerce Clause because it discriminates against interstate and foreign commerce on its face and in its plain effect by penalizing those businesses that do business in Myanmar. In addition, it is unconstitutional because its sole purpose is to influence the domestic policies of a foreign nation rather than to protect the health or safety of Massachusetts citizens and because it prevents the federal government from "speaking with one voice" on foreign commerce. This Court therefore may and should declare the Massachusetts statute unconstitutional without the need for judicial balancing.
A. A fundamental objective of the Commerce Clause was to establish federal control over interstate and foreign commerce and to foster uniform national and foreign markets. The Commerce Clause expressly gives Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States." Its fundamental purpose and "one main object of the Constitution [was] to create a national control" over interstate and foreign commerce. Through federal control over such commerce, the Framers sought to create a truly unified national market and a uniform, harmonious foreign trade policy. The Commerce Clause "was designed in part to prevent trade barriers that had undermined efforts of the fledgling States to form a cohesive whole following their victory in the Revolution." This was true both domestically and internationally, as the Court recognized early in its dormant Commerce Clause cases:
Conflicts between the laws of neighboring states, and discriminations favorable or adverse to commerce with particular foreign nations, might be created by state laws regulating pilotage, deeply affecting that equality of commercial rights, and that freedom from state interference, which those who formed the Constitution were so anxious to secure, and which the experience of more than half a century has taught us to value so highly.
Thus, the Supreme Court has long held that such state discrimination is contrary to the primary goal of the Commerce Clause and recently affirmed this principle, observing that "[t]he history of our Commerce Clause jurisprudence has shown that even the smallest scale discrimination can interfere with the project of our federal Union." Both Congress and the federal courts have exercised federal control to achieve the goals of the Commerce Clause and to promote free trade both within and outside the United States. Congress supervises with legislation and policy, but the federal courts have played an essential role by invalidating discriminatory or burdensome state legislation under the dormant Commerce Clause. The Commerce Clause has long been interpreted to have a dormant aspect prohibiting†state legislation inimical to national and international commerce even when Congress has not acted.
The Supreme Court has recognized a particular need for federal control over regulation of foreign commerce: "In the unique context of foreign commerce, we have alluded to the special need for federal uniformity." Federal supervision has created and maintained a vibrant unified national market and has enabled the national government to pursue an unambiguous federal policy of encouraging and facilitating international free trade and investment. Recent examples of this federal policy include the North American Free Trade Agreement, successive rounds of market liberalization under the GATT, support for the establishment of the World Trade Organization, and the ongoing U.S. Bilateral Investment Treaty program.
This policy has dramatically expanded international business for U.S. companies and has increased the net wealth of the United States. U.S. companies, large and small, are among the most competitive and successful companies in markets all over the world and depend on access to foreign markets -- for exportation of finished goods and services, importation of necessary materials and components, and investment -- for their economic health. The success of U.S. companies around the world has contributed significantly to the robust U.S. economy as a whole, benefiting American workers and consumers along the way. In brief, the purpose of the Commerce Clause was to give the national government control over interstate and foreign commerce. The federal courts rely on the dormant Commerce Clause to achieve that end and, in doing so, have substantially contributed to the creation of a unified national market and a uniform national foreign trade policy that has enriched the nation.
A. State legislation that burdens interstate or foreign commerce is unconstitutional unless it both is nondiscriminatory and effectuates a legitimate local public interest.
Under the dormant Commerce Clause, a federal court must strike down state legislation regulating interstate or foreign commerce in a discriminatory manner. Even if nondiscriminatory, a state statute affecting commerce is also unconstitutional if it does not effectuate a legitimate local public interest. The Massachusetts Burma Law satisfies neither standard and therefore is unconstitutional for two independent reasons.
The first step in analyzing any state or local statute under the Commerce Clause is to determine whether it "discriminates" against interstate or foreign commerce or rather whether it "regulates evenhandedly." Discrimination simply means according disfavored treatment to interstate or international commercial interests that are otherwise in the same situation as the favored class. State or local legislation, like the Massachusetts Burma Law, that discriminates on its face or in its effect against interstate or foreign commerce is "virtually per se invalid." The Court has repeatedly held that such discriminatory legislation is subject to "our highest scrutiny" -- a burden "so heavy that facial discrimination by itself may be a fatal defect." In fact, with just one exception, the Supreme Court has never upheld state legislation that discriminates against interstate or foreign commerce subject to the Commerce Clause.
This heavy burden of proof rests on the state. Courts must be particularly careful to give this thorough examination to state legislation affecting international commerce. "It is a well-accepted rule that state restrictions burdening foreign commerce are subjected to a more rigorous and searching scrutiny." State legislation affecting foreign commerce demands a more searching inquiry because of the need for uniformity and the overlap of foreign relations and foreign trade: "In 'the unique context of foreign commerce,' a State's power is further constrained because of 'the special need for federal uniformity.'" When state legislation affects foreign commerce, "matters of concern to the entire Nation are implicated. Like the Import-Export Clause, the Foreign Commerce Clause recognizes that discriminatory treatment of foreign commerce may create problems, such as the potential for international retaliation, that concern the Nation as a whole."
Such retaliation would be directed at American commerce in general, not just that of the regulating state, so that "the Nation as a whole would suffer." As a result, it "is crucial to the efficient execution of the Nation's foreign policy that the Federal Government . . . speak with one voice when regulating commercial relations with foreign governments." "'In international relations and with respect to foreign intercourse and trade the people of the United States act through a single government with unified and adequate national power.'"
A. The Massachusetts Burma Law is facially discriminatory and invalid.
The Massachusetts Burma Law cannot survive this scrutiny. It discriminates against interstate and foreign commerce on its face by barring state agencies from procuring goods or services from companies doing business with Myanmar. It forces U.S. and foreign companies to choose between doing business with Massachusetts or doing business with Myanmar. The law therefore discourages interstate or foreign trade, isolating either parts of the Massachusetts market or the world market and thereby creating precisely the sort of national and international fragmentation of commerce that the Framers so solidly rejected in adopting the Commerce Clause.
The Massachusetts debarment statute is similar to other state laws that the Supreme Court has found unconstitutional as being facially discriminatory and tending "to discourage domestic corporations from plying their trades" in interstate and foreign commerce. For example, in Camps Newfound, the Court held that a Maine tax exemption for property owned by charitable institutions, but not those institutions operated principally for the benefit of nonresidents, discouraged interstate commerce. The statute was facially discriminatory and unconstitutional because its effect was to provide a strong incentive for affected entities not to do business with nonresidents to qualify for the exemption. The Massachusetts Burma Law has the same flaw because its goal is to discourage companies from doing business with Myanmar.
Moreover, the danger from upholding the Massachusetts law cannot be limited to this case and must be assessed in light of the numerous state and local boycott statutes similar to the Massachusetts Burma Law. Other state and local laws, in effect or under consideration, discriminate against foreign commerce with a long list of foreign nations, including some statutes that similarly bar government contracts with companies engaged in foreign commerce with these countries. This patchwork of state and local regulation discriminating against foreign commerce leads to the balkanization of the U.S. market and denies U.S. companies access to parts of the world market.
Consider the difficulties just two of these state and local sanctions laws create. A company doing business in Myanmar and Nigeria, for example, may not do business with the state of Massachusetts (pursuant to the Massachusetts Burma Law) and the city of Oakland, California (pursuant to local legislation aimed at Nigeria). A company doing business with Myanmar but not Nigeria may do business with the city of Oakland but not Massachusetts, and vice versa for a company doing business with Nigeria but not Myanmar. Conversely, a company doing business with Massachusetts and Oakland may not do business with Myanmar or Nigeria, and so on. These complexities mount with each additional state or local sanction heaping on more dizzying permutations, further segregating the U.S. and foreign markets, and adding greater compliance burdens.
As the Supreme Court recently observed: "Avoiding this sort of 'economic Balkanization,' and the retaliatory acts of other States [and foreign nations] that may follow, is one of the central purposes of our negative Commerce Clause jurisprudence." These proliferating state and local sanctions laws also implicate the "one voice" requirement that, as described above, the Supreme Court employs in foreign commerce cases. This Court does not need to reach this part of the dormant Commerce Clause test, however, because courts apply the "one voice" requirement only after determining that the challenged state action is otherwise constitutional, and the Massachusetts Burma Law is discriminatory and, as shown below, does not effectuate a legitimate local purpose. Nevertheless, consideration of the "one voice" requirement is useful to emphasize the danger of sustaining these state and local sanctions laws.
State and local sanctions laws prevent the federal government from speaking with one voice on foreign commerce and in our foreign economic relations in several ways. Such state and local laws carve up the U.S. and international markets, as noted above, and present a substantial risk of imposing inconsistent obligations. It is not inconceivable that, if state sanctions laws were found to be constitutional, some states would enact government procurement laws favoring one side in the Middle East or Kashmir controversies, for example, and other states would pass laws favoring the other side. The Supreme Court has explicitly recognized the danger of multiple, inconsistent state regulations in striking down discriminatory state statutes. Furthermore, each additional state and local sanctions law increases the risk of foreign retaliation against the United States as a whole, another danger the Supreme Court identified as relevant in foreign commerce cases. Finally, state and local sanctions detract from the federal government's ability to coordinate sanctions policy with our trading partners. Foreign trade sanctions must be set at the national level both because of the need for uniformity and because, to be effective in stopping all major sources of trade with a particular foreign country, a significant number of countries must adopt the same trade rules.
This practical necessity of imposing sanctions multilaterally reinforces the general conclusion that the federal government must have exclusive control over foreign trade sanctions. Only the federal government has the foreign relations capability of seeking and obtaining the agreement of other countries to impose multilateral sanctions. For all these reasons, the Massachusetts Burma Law and its ilk prevent the federal government from "speaking with one voice" on foreign commerce and do not pass the heightened scrutiny applied to state and local regulations affecting foreign commerce.
A. The Massachusetts Burma Law effectuates no legitimate local public interest to safeguard the health and safety of its people.
In addition to the requirement that a state statute regulate evenhandedly, that is, in a nondiscriminatory manner, it must also serve "a legitimate local purpose" to survive Commerce Clause analysis. As with the evaluation of discriminatory purpose or effect, the Supreme Court subjects the alleged state interest to the highest scrutiny: "facial discrimination invokes the strictest scrutiny of any purported legitimate local purpose." Several Supreme Court decisions indicate the types of local public interests that are legitimate and those that are not. For example, legitimate local public interests involve serious health and safety concerns to local residents.
On the other hand, administrative convenience and a "preference for domestic commerce over foreign commerce" are not legitimate local interests. The Massachusetts Burma Law serves no legitimate local public interest within the meaning of the Commerce Clause. Thus, in addition to being discriminatory, the statute is unconstitutional for this second, independent reason. As described in detail in the NFTC memorandum, the purpose of the discriminatory statute, according to its primary sponsor, state representative Byron Rushing, is to "put pressure on the government of Burma until they allow the democratically elected government to take power or hold a free election."
A state's moral judgment -- however noble it might be -- concerning the domestic policies of a foreign country is not a legitimate local interest recognized by the Supreme Court for these purposes. It is an action seeking to achieve a foreign policy objective and therefore is a measure traditionally and constitutionally within the province of the national government rather than state governments, and it does not resemble in any way the type of health and safety protection that the Supreme Court has approved as a legitimate local regulatory interest. A state's concern for the citizens of a foreign country is not a constitutionally recognized purpose: "the State has no legitimate interest in protecting nonresident[s]."
For these reasons, the Massachusetts Burma Law fails to effectuate any legitimate local purpose and is, for this additional reason, unconstitutional.
A. The Court may therefore declare the Massachusetts Burma Law invalid without the need for judicial balancing because the law does not regulate evenhandedly to effectuate a legitimate local interest.
A court must undertake a balancing test, weighing the local benefit against the incidental burdens on commerce, only if the state or local law is a nondiscriminatory and has a legitimate local purpose that cannot be adequately served by reasonable alternatives. The lesser scrutiny of the balancing test is available only "where other legislative objectives are credibly advanced and there is no patent discrimination" against interstate or foreign commerce. Because the Massachusetts statute discriminates against companies that do business with Myanmar and because it effectuates no legitimate local purpose, this Court need not reach the balancing test.
I. THE "MARKET PARTICIPANT" EXCEPTION DOES NOT PROTECT THE MASSACHUSETTS BURMA LAW FROM INVALIDATION UNDER THE COMMERCE CLAUSE.
As a discriminatory statute that does not effectuate any legitimate local public interest, the Massachusetts Burma Law fails the Supreme Court's dormant Commerce Clause test and is therefore unconstitutional. The market participant exception to that test does not protect the Massachusetts law from invalidation. That narrowly construed exception does not apply to the Massachusetts statute because the purpose and effect of the state action is to discriminate against and burden foreign commerce and because neither the purpose nor effect of the law is to favor Massachusetts citizens over others. Furthermore, the exception does not apply to the Massachusetts statute because a state may not impose conditions on interstate or foreign commerce that have a substantial regulatory effect outside the particular market in which the state is a market participant.
A. The Massachusetts Burma Law sweeps too broadly to qualify for the narrowly construed market participant exception.
The Supreme Court narrowly construes the exception:
The market-participant doctrine permits a State to influence "a discrete, identifiable class of economic activity in which it is a major participant." Contrary to the State's contention, the doctrine is not carte blanche to impose any conditions that the State has the economic power to dictate, and does not validate any requirement merely because the State imposes it upon someone with whom it is in contractual privity. Even when ostensibly acting in a proprietary capacity, states and localities undertake government actions with consequences fundamentally different from private actors. Thus, when discriminatory state legislation affected "broad swathes" involving many markets rather than one discrete market, the Court held that the legislation "must be viewed as action taken in the State's sovereign capacity rather than a proprietary decision to make an entry into all of the markets" to which the discriminatory legislation applied.
The Massachusetts Burma Law similarly implicates a broad swath of markets, encompassing all markets in which the state procures goods and services. For that reason, the market participant exception cannot shield the Massachusetts law from Commerce Clause scrutiny.
A. The exception does not apply to state action burdening international commerce.
The Supreme Court has never applied the market participant exception to state regulation burdening foreign, as opposed to interstate, commerce. That may be because, as explained above, the exception is narrowly construed and the Constitution requires even stricter scrutiny of state actions affecting foreign as opposed to interstate commerce or because the rationales for the exception lose force when foreign commerce is at stake.
The Court has explained that state sovereignty is a basis for the market participant exception: "Restraint in this area is also counseled by considerations of state sovereignty, each State's role as guardian and trustee for its people." When the policy of uniform foreign commerce is at stake, however, the Constitution requires that these concerns for state sovereignty give way: "Congress' power to regulate interstate commerce may be restricted by considerations of federalism and state sovereignty. It has never been suggested that Congress' power to regulate foreign commerce could be so limited."
A second justification for the exception also indicates that it is not available when state action affects foreign commerce. The Reeves Court held that the market participant exception to the Commerce Clause was intended to permit state experimentation "without risk to the rest of the country." This principle of state experimentation "without risk to the rest of the country" does not apply in the foreign commerce context because foreign retaliation to state discrimination against foreign commerce will likely be directed against the nation as a whole. For these reasons, the market participant exception does not apply to legislation affecting foreign commerce and therefore does not apply to the Massachusetts Burma Law.
A. The exception does not apply to the Massachusetts Burma Law because, under the exception, a state may act in a proprietary capacity only to favor its own citizens over others.
The market participant exception is expressly limited to cases in which a state acts in its proprietary capacity to favor its own citizens over others. In summarizing the common element connecting the three cases in which the Court recognized a market participant exception, the Court stated: "These three cases stand for the proposition that, for purposes of analysis under the dormant Commerce Clause, a State acting in its proprietary capacity as a purchaser or seller may 'favor its own citizens over others.'" Neither the purpose nor the effect of the Massachusetts Burma Law is to favor Massachusetts citizens over others, and, as a result, the market participant exception is not available.
A. The exception does not apply to the Massachusetts law because a state may not seek to regulate outside the particular market in which it is a market participant.
A state may not impose conditions under the guise of the market participant exception that have a substantial regulatory effect outside of the narrowly defined market in which the state is a participant:
The limit of the market-participant doctrine must be that it allows a State to impose burdens on commerce within the market in which it is a participant, but allows it to go no further. The State may not impose conditions, whether by statute, regulation, or contract, that have a substantial regulatory effect outside of that particular market. Unless the "market" is relatively narrowly defined, the doctrine has the potential of swallowing up the rule that States may not impose substantial burdens on interstate commerce even if they act with the permissible state purpose of fostering local industry. The Supreme Court in that case concluded that, rather than merely choosing its own trading partners, the state was attempting to govern the private, separate economic relationships of its trading partners and accordingly struck down the statute: "although the State may be a participant in the timber market, it is using its leverage in that market to exert a regulatory effect in the processing market, in which it is not a participant."
Similarly, in a case involving a statute analogous to the Massachusetts Burma Law, the Supreme Court invalidated a state's attempt to regulate employers through a law that prohibited state contracts for goods or services with companies that had violated certain federal labor practices. The Court rejected the state's attempt to invoke the market participant exception and held that the Wisconsin debarment statute amounted to regulation of company conduct unrelated to the ostensibly proprietary contractual relationship with the state. These cases show that, by boycotting firms that do business with Myanmar, Massachusetts impermissibly seeks to use its leverage in the government procurement market to exert an effect in a distant market, namely foreign commerce with Myanmar, in an effort to influence the human rights behavior of that government. The Massachusetts statute is similar to the one invalidated in Gould, when the Court said: "We are not faced here with a statute that can even plausibly be defended as a legitimate response to state procurement constraints or to local economic needs, or with a law that pursues a task Congress intended to leave to the States."
Like the statute in Gould, the Massachusetts Burma Law is an unconstitutional effort to regulate a market outside the one in which the state is purportedly acting as a market participant and is thus unprotected by the market participant exception.
CONCLUSION
For the foregoing reasons, the Court should grant the relief requested by the NFTC and find the Massachusetts Burma Law unconstitutional.
Of Counsel:Stephen A. Bokat
Robin S. Conrad
National Chamber Litigation
Center, Inc.
1615 H Street, N.W.
Washington, D.C. 20062
202-463-5337
July 7, 1998
Respectfully submitted,Andrew N. Vollmer
John A. Trenor
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
202-663-6000James D. Smeallie (BBO #467380)
Sherburne, Powers & Needham, P.C.
1 Beacon Street
Boston, Massachusetts 02108
617-573-5812Counsel for Amici Curiae
Chamber of Commerce of the United States of America and the Organization for International Investment
CERTIFICATE OF SERVICE
I hereby certify that a true copy of the above document was served upon the attorney of record for each other party by hand on July 7, 1998.
James D. Smeallie
Act of June 25, 1996, chapter 130, ß 1, 1996 Mass. Acts 210, codified at Mass. Gen. Laws, ch. 7, ßß 22G-22M.
Some members of the U.S. Chamber and OFII are also members of the plaintiff NFTC.
For example, the U.S. Chamber recently filed amicus briefs in General Motors Corp. v. Tracy, 519 U.S. 278 (1997), and Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298 (1994). Both cases concerned the constitutionality of state taxes affecting interstate and foreign commerce.
See, for example, U.S. Department of State, Country Reports on Human Rights Practices for 1997, 690 (detailing the Burmese Government's "longstanding severe repression of human rights" and "the arbitrary and sometimes brutal dictates of the military dictatorship"); Human Rights Watch, Burma World Report Chapter 1998 (reporting human rights violations including forced portering, summary executions, rape, and torture).
U.S. Const., art. I, ß 8, cl. 3.
Cooley v. Board of Wardens, 53 U.S. 299, 317 (1851); see also Hicklin v. Orbeck, 437 U.S. 518, 534 (1978) ("the Constitution was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are in union and not division" (internal quotation marks omitted)).
Jack N. Rakove, Original Meanings 26-27 (1996).
Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 807 (1976).
Cooley, 53 U.S. at 317 (emphasis added).
Camps Newfound/Owatonna, Inc. v. Town of Harrison, 117†S. Ct. 1590, 1608 (1997).
Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 310 (1994); see also South Carolina Highway Dept. v. Barnwell Bros., Inc., 303 U.S. 177, 185 (1938).
Wardair Canada, Inc. v. Florida Dep't of Revenue, 477 U.S. 1, 8 (1986) ("As in the context of cases alleging violations of the dormant Interstate Commerce Clause, the concern in these Foreign Commerce Clause cases is not with an actual conflict between state and federal law, but rather with the policy of uniformity, embodied in the Commerce Clause, which presumptively prevails when the Federal Government has remained silent").
See, for example,†Economic Report of the President, Transmitted to the Congress February 1998, at 215 (the "United States has long recognized that open domestic markets and an open global trading system are superior to trade protection and isolationism at promoting broad-based growth and prosperity").
See id. ("For decades our open economy and successful U.S. leadership in liberalizing global trade and investment have generated important benefits for the American people, in the form of stronger growth and improved employment opportunities. The opportunity to acquire goods and services from abroad both encourages us as producers to stay competitive and allows us as consumers to raise our standard of living"); see also id. at 5 ("Trade has been key to the strength of this economic expansion -- about a third of our economic growth in recent years has come from selling American goods and services overseas").
Oregon Waste Sys., Inc. v. Department of Envtl. Quality of Or., 511 U.S.†93, 99 (1994).
See Maine v. Taylor, 477 U.S. 131, 138 (1986); Camps Newfound/Owatonna, Inc. v. Town of Harrison, 117 S.†Ct. 1590, 1601 n. 16 (1997).
Camps Newfound, 117 S.†Ct. at 1598; see also Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573, 579 (1986) (when a state statute discriminates, "we have generally struck down the statute without further inquiry").
Camps Newfound, 117 S. Ct. at 1601; see also New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 278 (1988) ("the standards for such justification are high").
Camps Newfound, 117 S. Ct. at 1598, quoting Oregon Waste, 511 U.S. at 101.
The one exception is Maine v. Taylor, 477 U.S. 131 (1986), in which out-of-state fish posed a risk of parasites to in-state fish. See also Camps Newfound, 117 S. Ct. at 1601, n. 16 (noting that Maine v. Taylor was "the single case . . . in which we found the per se standard to have been met").
Maine v. Taylor, 477 U.S. at 138.
South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 100 (1984); see also Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 446 (1979) ("When construing Congress' power to 'regulate Commerce with foreign Nations,' a more extensive constitutional inquiry is required").
Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 311 (1994), quoting Wardair Canada, Inc. v. Florida Dep't of Revenue, 477 U.S. 1, 8 (1986).
Kraft Gen. Foods, Inc. v. Iowa Dep't of Revenue and Fin., 505 U.S. 71, 79 (1992) (citation and footnote omitted).
Japan Line, Ltd., 441 U.S. at 450.
South-Central Timber, 467 U.S. at 100 (1984) (internal quotation marks omitted).
Japan Line, Ltd., 441 U.S. at 448 (1979), quoting†Board of Trustees v. United States, 289 U.S. 48, 59 (1933).
Camps Newfound/Owatonna, Inc. v. Town of Harrison, 117 S.†Ct. 1590, 1599 (1997).
Id.; see also Fulton Corp. v. Faulkner, 516 U.S. 325, 333 (1996) (North Carolina statute that taxed stock only to the degree that the issuing corporation participated in interstate commerce thereby "discourage[d] . . . interstate commerce" and was found facially discriminatory and unconstitutional).
State and local sanctions legislation has been proposed and in several cases enacted targeting such foreign countries as China, Cuba, Egypt, Indonesia, Iran, Iraq, Laos, Morocco, Myanmar, Nigeria, North Korea, Pakistan, Saudi Arabia, Sudan, Switzerland, Turkey, and Vietnam. See Organization for International Investment, State and Municipal Sanctions Report, June 22, 1998, at 1-3.
Oakland, Cal., Ordinance 11886 C.M.S. (May 7, 1996).
"Compliance burdens, if disproportionately imposed on out-of-jurisdiction enterprises, may indeed be inconsonant with the Commerce Clause." Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 313 (1994).
Camps Newfound, 117 S. Ct. at 1599 (citation omitted).
See, for example, Barclays Bank PLC, 512 U.S. at 323. For this as well as other reasons, the Supreme Court's decision in Barclays Bank is not contrary to the above analysis. In Barclays Bank, the Court found that the California corporate franchise tax was constitutional according to the initial factors of the dormant Interstate Commerce Clause analysis, largely because, unlike the Massachusetts law here, the California franchise tax was not discriminatory. The Court thus went on to consider the additional requirements of the Foreign Commerce Clause analysis, including the need for federal uniformity, but identified no applicable federal policy necessitating uniformity of corporate franchise taxes. In contrast, as discussed below, the Massachusetts Burma Law impedes a strong national policy necessitating federal uniformity, namely reducing barriers to global trade and minimizing the use of trade sanctions.
Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 584 (1986).
See Japan Line Ltd. v. County of Los Angeles, 441 U.S. 434, 450 (1979).
See, for example, Jahangir Amuzegar, "Adjusting to Sanctions," 76 Foreign Affairs 31, 35 (May/June 1997).
See, for example, Hughes v. Oklahoma, 441 U.S. 322, 336 (1979); City of Philadelphia v. New Jersey, 437 U.S. 617, 623-24 (1978).
Hughes v. Oklahoma, 441 U.S. at 337.
See, for example, City of Philadelphia, 437 U.S. at 623-24; Pike v. Bruce Church, Inc., 397 U.S. 137, 143 (1970).
Kraft General Foods, Inc. v. Iowa Dep't of Revenue and Finance, 505 U.S. 71, 79 (1992) ("a State's preference for domestic commerce over foreign commerce is inconsistent with the Commerce Clause even if the State's own economy is not a direct beneficiary of the discrimination"); id. at 82 (noting that the state's only putative local benefit, administrative convenience, does "not constitute the kind of serious health and safety concern that we have sometimes found sufficient to justify discriminatory state legislation").
Yawu Miller, State Rep. Is on Front Line of Burma Struggle, The Ethnic Newswatch, Oct. 9, 1997.
Edgar v. MITE Corp., 457 U.S. 624, 644 (1982).
Chemical Waste Management, Inc. v. Hunt, 504 U.S. 334, 343, n. 5 (1992); see also City of Philadelphia, 437 U.S. at 624.
South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 97 (1984), quoting White v. Massachusetts Council of Constr. Employers, Inc. 460 U.S. 204, 211 (1983).
Wisconsin Dep't of Indus., Labor and Human Relations v. Gould, Inc., 475 U.S. 282, 290 (1986) (a state "government occupies a unique position of power in our society, and its conduct, regardless of form, is rightly subject to special restraints").
Camps Newfound/Owatonna, Inc. v. Town of Harrison, 117 S. Ct. 1590, 1607 (1997).
Reeves, Inc. v. Stake, 447 U.S. 429, 438 (1980) (footnote omitted).
Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 448, n. 13 (1979) (emphasis added).
Reeves, 447 U.S. at 441.
See Japan Line, Ltd., 441 U.S. at 450.
Camps Newfound, 117 S. Ct. at 1606 (emphasis added), quoting Hughes v. Alexandria Scrap, 426 U.S. 794, 810 (1976); South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 96 (1984) (recognizing "the permissible state purpose of fostering local industry"); Reeves, 447 U.S. at 441 (the market participant exception recognizes "a State's ability to structure relations exclusively with its own citizens" (emphasis added)); Hughes v. Alexandria Scrap Corp., 426 U.S. at 808 (noting that the state restricted trade "to its own citizens or businesses within the State" (emphasis added)).
South-Central Timber, 467 U.S. at 97-98 (emphasis added).
Id. at 98.
Wisconsin Dep't of Indus., Labor and Human Relations v. Gould Inc., 475 U.S. 282 (1986).
Id. at 289 ("by flatly prohibiting state purchases from repeat labor law violators Wisconsin simply is not functioning as a private purchaser of services; for all practical purposes, Wisconsin's debarment scheme is tantamount to regulation" (citation and internal quotation marks omitted)); see also Building and Constr. Trades Council v. Associated Builders and Contractors of Mass./R.I., Inc., 507 U.S. 218, 228-29 (1993) ("the statute at issue in Gould addressed employer conduct unrelated to the employer's performance of contractual obligations to the State" (emphasis added)). In Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 584 (1986), a Commerce Clause case not directly addressing the market participant exception, the Court said a state may not project its legislation into other states in an attempt to regulate commerce there. This principle is even more applicable to state attempts to project legislation into foreign nations.
Gould, 475 U.S. at 291 (1986).
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