Defendants' Memorandum In Support Of Their Motion For Summary Judgment ("Opp.") concedes many of the points made in the NFTC's opening brief ("Mem."). Most significantly, defendants agree at the very outset of their brief that the specific purpose and intent of the Massachusetts Burma Law is to "expres[s] the Commonwealth's own disapproval of the violations of human rights committed by the Burmese government" and "apply indirect economic pressure against the Burma regime for reform." (Opp. 1-2)¹ Defendants have also stipulated that the legislative history of the Massachusetts Burma Law (Joint Stipulation ("J.S.") ¶ 18 & Exh. 5) is substantively accurate. That history shows conclusively the foreign-policy objectives of the Law.

No one doubts the importance of human rights in Myanmar. But our Constitution does not allow the Commonwealth of Massachusetts, or any other state or municipality, to implement such admitted foreign-policy initiatives. Foreign policy is the exclusive province of the federal government, as is regulation of international trade under the Foreign Commerce Clause. The Burma Law also conflicts with federal law. The material facts are undisputed, so these questions of law may be decided on summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Fed. R. Civ. P. 56(c).² The conclusion is inescapable: The Massachusetts Burma Law is unconstitutional.

I. THE NFTC HAS STANDING TO CHALLENGE THE BURMA LAW

The NFTC showed (Mem. 14-15) that it has standing to challenge the Burma Law because (1) its claims are germane to the NFTC's mission of furthering free and full foreign trade; (2) the relief sought (an injunction and declaratory relief) does not necessitate that individual NFTC members sue; and (3) individual NFTC members have been affected by the Law and would have standing to challenge it in their own right. Defendants' position (Opp. 14) is that the NFTC must also establish that one or more of its members "has (1) attempted to bid on a contract in Massachusetts after the effective date of the act, (2) has had its offer increased by 10%, or (3) has been denied a contract because of the Burma Law." Defendants' arguments are unavailing.

1. Defendants overstate the legal showing necessary to establish standing. As the NFTC has shown (Mem. 14-15), and as the Supreme Court has recently reaffirmed, the NFTC need only show that the Burma Law would cause a "'probable economic injury resulting from [governmental actions] that alter competitive conditions . . . . It follows logically that any . . . petitioner who is likely to suffer economic injury as a result of [governmental action] that changes market conditions satisfies this part of the standing test.'" Clinton v. City of New York, 118 S. Ct. 2091, 2100 (1998) (quoting 3 K. Davis & R. Pierce, Administrative Law Treatise 13-14 (3d ed. 1994)). The Burma Law undeniably "alter[s] competitive conditions" in a way that presently does, and would in the future (if not enjoined or declared unconstitutional), deny NFTC members an opportunity to compete for state contracts on an equal footing. E.g., Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 212 (1995) (showing that plaintiff "is very likely to bid" on future contracts sufficient to confer standing to challenge law that altered competitive bidding conditions); Northeastern Florida Chapter of the Associated General Contractors of America v. City of Jacksonville, 508 U.S. 656, 664 (1993) (lower court's holding that plaintiff had not established standing "because it failed to allege that one or more of its members would have been awarded a contract but for the challenged ordinance" reversed because it "cannot be reconciled with [the Supreme Court's] precedents").³

2. Once the proper legal test for standing is applied, it is clear that the NFTC's showings, and the undisputed facts contained in the parties' Joint Stipulation, are more than sufficient to establish the NFTC's standing. The NFTC has shown, and the parties have stipulated, that the altered market conditions brought about by the Massachusetts Burma Law have in fact caused at least one NFTC member that was otherwise ready, willing, and able to bid on contracts with Massachusetts to forego those opportunities and their accompanying economic benefits. J.S. ¶ 32; Kittredge Supp. Decl. ¶ 1.⁴ Additionally, at least one other current NFTC member has in the past had 10% added to its bid for a statewide copier contract, which it believes resulted in its failure to obtain that contract. See J.S. ¶ 38; Kittredge Supp. Decl. ¶ 1.⁵ Finally, at least three NFTC members have actually ceased doing business in Myanmar because of the Law Ñ precisely the result the Law seeks to achieve (see Opp. 22 - "[t]he Burma Law discourages companies from doing business with Burma") - thus losing the economic benefits of doing business in Myanmar. J.S. ¶ 36. Defendants can hardly suggest that individuals who are adversely affected when the Law achieves its intended purpose do not have standing to challenge that Law.

In sum: The NFTC has standing to prosecute this action.

II. THE LAW UNCONSTITUTIONALLY REGULATES FOREIGN AFFAIRS

The NFTC demonstrated (Mem. 15-27) (i) that the Constitution vests full and exclusive authority for regulating affairs with other nations in the national government, and (ii) that the Commonwealth's enactment and enforcement of the Massachusetts Burma Law is entirely inconsistent with this principle. Defendants admit (Opp. 1-2) that the Law's purpose is, inter alia, to affect conditions in Myanmar by applying "indirect economic pressure against the Burma regime for reform," and they attempt (Opp. 44-59) to justify the Commonwealth's foray into foreign relations on four separate grounds. None of defendants' four arguments has merit.

1. Defendants' principal defense to the Law (Opp. 46-49) lies in their claim that the Supreme Court's decision in Zschernig v. Miller, 389 U.S. 429 (1968), is inapplicable. None of defendants' arguments to this effect is persuasive

First, though defendants claim to distinguish Zschernig, their brief demonstrates that they really ask this Court to disregard Zschernig and hold that the Constitution contains no self-executing foreign affairs power. This Court is, of course, bound to apply Zschernig to the facts of this case, and to hold that the Massachusetts Burma Law violates the federal government's foreign affairs power. As the Supreme Court recently noted in Rivers v. Roadway Express, Inc., 511 U.S. 298 (1994), "once the [Supreme] Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law." Id. at 312. Moreover, the Supreme Court's holding in Zschernig, that there is a foreign-affairs-power limitation to state action, was reaffirmed in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 423-27 (1963), which held that the Constitution could not tolerate "divergent and perhaps parochial state interpretations" of the "act of state" doctrine. Id. at 425. See also id. at 427 n.25 (noting various constitutional provisions "reflecting a concern for uniformity in this country's dealings with foreign nations").

Second, defendants suggest (Opp. 48) that Clark v. Allen, 331 U.S. 503 (1947) - which "Zschernig did not overrule" - stands for the proposition that a law "that is intended to affect the behavior of foreign governments" is permissible. Clark does not support any such principle of law. In Clark, the court upheld a California probate statute with reciprocity requirements similar to the Oregon statute at issue in Zschernig. Even though Zschernig did not explicitly overrule Clark, the Court in Zschernig recognized that the analysis employed in Clark failed to grasp, as a factual matter, what state courts were really doing:

At the time Clark v. Allen was decided, the case seemed to involve no more than a routine reading of foreign laws. It now appears that in this reciprocity area under inheritance statutes, the probate courts of various States have launched inquiries into the type of governments that obtain in particular foreign nations.

Zschernig, 389 U.S. at 433-34. Thus, Clark rested on a finding that the California statute required only "a routine reading of foreign laws," and not state "inquiries" or evaluations of "the type of governments that obtain" in particular foreign nations. Given the text, operation, and legislative history of the Massachusetts Burma Law, and defendants' admissions, it is clear that the Massachusetts Legislature has "launched inquiries," and made value judgments, about "the type of governmen[t] that obtain[s]" in Myanmar. "That kind of state involvement in foreign affairs and international relations - matters which the Constitution entrusts solely to the Federal Government - is not sanctioned by Clark v. Allen." Zschernig, 389 U.S. at 436

Third, citing three cases, an opinion of the Office of Legal Counsel (OLC), and a United States amicus brief from almost a decade ago, defendants suggest (Opp. 48-49) that these authorities "have correctly distinguished Zschernig . . . and upheld state and local procurement laws against similar constitutional claims." These authorities are themselves distinguishable. Two of the cases, Trojan Technologies, Inc. v. Pennsylvania, 916 F.2d 903 (3d Cir. 1990), and K.S.B. Technical Sales Corp. v. North Jersey District Water Supply Comm'n, 381 A.2d 774 (N.J. 1977), appeal dismissed, 435 U.S. 982 (1978), both involved "Buy American" directives; since each of the challenged provisions applied to all foreign countries, the courts found no risk, as in Zschernig, that the states would be making "inquiries into the type of governments that obtain in particular foreign nations." 389 U.S. at 434 (emphasis added). See Trojan Technologies, 916 F.2d at 913 ("the statute applies to steel from any foreign source, without respect to whether the source country might be considered friend or foe"); K.S.B. Technical Sales, 381 A.2d at 783, 784 ("The Buy American provisions apply without any discrimination based on the ideology of the seller's country. . . . If refined inquiries into foreign ideologies entered into the decision to apply or not to apply the [contract] condition, there would, of course, be little difficulty in finding a constitutional infirmity."); see generally Mem. 25-26. The third case, Board of Trustees v. Mayor and City Council of Baltimore City, 562 A.2d 720 (Md. 1989) (discussed at Mem. 25 n.13), involved a divestiture provision with less of an impact on foreign relations than the procurement limitations imposed by the Burma Law, and the reasoning of the decision is dubious in any event⁶. The OLC opinion is entitled to little if any weight as a matter of law.⁷ And finally, the United States' brief in Trojan Technologies distinguished Pennsylvania's "Buy American" statute as "[u]nlike the Oregon statute" in Zschernig because "the Pennsylvania statute does not require the state officials who administer it to make judgments regarding the policies and practices of foreign countries." Br. Amicus Curiae of the United States at 21, Trojan Technologies, Inc. v. Pennsylvania, 916 F.2d 903 (3d Cir. 1990) (No. 90-5057).

2. Next, defendants make the related claim (Opp. 48) that the Burma Law is constitutional because it has only an "indirect impact on foreign affairs." The Law most assuredly cannot be so characterized. Indeed, the purpose and effects of the Burma Law are at least as "direct" as the Oregon probate statute struck down in Zschernig. As the NFTC has earlier demonstrated (Mem. 19-20), the probate statute in Zschernig was unconstitutional because state courts were required to make determinations of the "democracy quotient" of a foreign nation, which invariably required these state courts to impermissibly intrude into foreign relations matters "entrust[ed] solely to the Federal Government" by the Constitution. 389 U.S. at 435-36. Here, the Massachusetts Legislature made exactly the same kinds of determinations in passing the Burma Law. The legislative history of the Law (J.S. ¶, 18 & Exh. 5) establishes this, and defendants themselves admit it.⁸ The Burma Law's sponsor, Rep. Byron Rushing, stated that the Law was intended as a "very specific" "foreign policy" initiative intended to support "the democratic movement in Burma" against the present "right wing totalitarian regime." (J.S. Exh. 5, at 4-5) Such an evaluation of a nation's "democracy quotient" is indistinguishable from the unconstitutional determinations made by the state courts in Zschernig.⁹

3. Defendants also urge (Opp. 52-54) that the Burma Law is justified by "important state interests . . . embodied in the First and Tenth Amendments." This argument, too, lacks merit.

First, the First Amendment does not give states any free-speech interests. To support its contrary argument, defendants rely principally upon law review articles (see Opp. 53), and "the purpose and spirit of the First Amendment," relegating to a footnote the First Circuit's statement in Student Government Association v. Board of Trustees, 868 F.2d 473 (1st Cir. 1989), that "a state entity . . . itself has no First Amendment rights." Id. at 481.

Second, defendants' Tenth Amendment argument Ñ which is little more than the unexceptional assertion that procurement "lies at the core of state sovereignty" (Opp. 52) - is equally unavailing. The present suit does not challenge the Commonwealth's ability to engage in procurement; it merely objects to the Commonwealth engaging in procurement in an unconstitutional manner. The Tenth Amendment no more insulates the Massachusetts Burma Law from constitutional challenge under Zschernig than it would insulate a racially discriminatory procurement policy from constitutional challenge under the Fourteenth Amendment.

4. Finally, defendants urge (Opp. 54-59) that this Court either leave this issue to the political branches of government or, alternatively, be the first to engraft a "market-participant exception" to the exclusive federal foreign relations power. Neither argument is well taken.

First, defendants' invocation of the "classical deference to the political branches in matters of foreign policy" (Opp. 57, quoting Regan v. Wald, 468 U.S. 222, 242 (1984)) is misplaced. That principle accords judicial deference to the substantive foreign policy judgments of the federal political branches; it does not suggest that the courts should abstain from resolving such issues. Under the rule of "deference" proposed by defendants, the Supreme Court in Zschernig should have left resolution of the issue to some unwieldy combination of executive and legislative departments at both the state and federal levels. It did not do so; indeed, the Court in Zschernig refused to defer to the Department of Justice's view that the Oregon statute "does not . . . unduly interfer[e]" with foreign relations. 389 U.S. at 434 (quotation omitted). In any event, a proper application of that principle of "deference" here would not help defendants; rather, it would strongly suggest that this Court give judicial deference, as a substantive matter, to the federal government's disapproval of provisions such as the Massachusetts Burma Law, as reflected in a number of statements by ranking State Department officials. (See Mem. 10-11, 22-23, 36-39)

Second, the "market-participant" exception proposed by defendants (Opp. 54-59) would be a wholly unprecedented application of that principle, which heretofore has been applied by the Supreme Court only to claims involving the dormant Interstate Commerce Clause. As the NFTC showed in its opening brief (Mem. 31-36), and shows below (pp. 14-17, infra), such a "market-participant" exception would not even extend to claims under the Foreign Commerce Clause; there is similarly no basis for suggesting that the exception should extend to the exclusive constitutional foreign-relations power, and defendants cite no case that has ever so held. And, indeed, even if the market-participant exception applied in the Foreign Commerce Clause context, where economic parochialism is the primary concern, there would be no reason to apply that exception under Zschernig, where overall relations with foreign nations are at stake. Moreover, as the NFTC has earlier shown (Mem. 34-36) and shows below, the Massachusetts Burma Law is not a "proprietary" state action, but a regulatory one. Since the Commonwealth is not acting as a market participant, but as a market regulator, a "market-participant" exception would not apply in any event. Building & Constr. Trades Council v. Associated Builders & Contractors, 507 U.S. 218, 229 (1993); Wisconsin Dep't of Industry, Labor and Human Relations v. Gould Inc., 475 U.S. 282, 283 (1986); Chamber of Commerce v. Reich, 74 F.3d 1322, 1335-37 (D.C. Cir. 1996).

In sum: The Massachusetts Burma Law impermissibly involves the Commonwealth "in foreign affairs and international relations - matters which the Constitution entrusts solely to the Federal Government." Zschernig, 389 U.S. at 436.

III. THE BURMA LAW VIOLATES THE FOREIGN COMMERCE CLAUSE

The NFTC has previously articulated (Mem. 27-36) why the Massachusetts Burma Law violates the Foreign Commerce Clause of the United States Constitution. Defendants argue in response (Opp. 28-44) that the Law (i) does not discriminate against foreign commerce, (ii) does not impede the federal government's ability to "speak with one voice" regarding foreign affairs, and (iii) should be upheld under a "market-participant" exception to the Foreign Commerce Clause. None of defendants' arguments provides a basis for upholding the Burma Law.

1. The NFTC showed (Mem. 28-29) that the Massachusetts Burma Law discriminates against foreign commerce by singling out, and burdening, trade with and in Myanmar. Defendants respond (Opp. 38-40) by urging (i) that the Burma Law applies equally to United States and foreign companies and thus does not discriminate, and (ii) that Congress has given implied approval to the Burma Law. Neither of defendants' arguments saves this discriminatory statute.

First, the law is plainly discriminatory. The NFTC did not argue that the Burma Law draws impermissible distinctions based on the locus of the affected companies, nor would such a finding be necessary to prove discrimination against foreign commerce. The Commerce Clause forbids discrimination against interstate or foreign commerce as well as discrimination against interstate or foreign companies. See, e.g., Kraft General Foods, Inc. v. Iowa Dep't of Revenue, 505 U.S. 71, 79 (1992). As defendants admit (Opp. 39-40), companies that choose to do business in Myanmar are denied the right to compete for Massachusetts business on equal terms with companies who do not do business in Myanmar. That is plainly discriminatory.

Defendants additionally rely upon a case from the Maryland Court of Appeals holding that a decision to divest pension fund investments from companies doing business in South Africa did not violate the Foreign Commerce Clause because it, like the Burma Law, did not "favor residents of the City of Baltimore or the State of Maryland over residents of any other State" and "did not intend to secure economic advantages for local businesses at the expense of businesses situated elsewhere." Board of Trustees, 562 A.2d at 754. First of all, the Maryland decision dealt with a divestment statute - which has less of an impact on commerce than the selective purchasing statute at issue here. (See Mem. 25 n.13) Moreover, the Maryland decision is not binding on this Court, nor should it be followed. As the NFTC has just shown, the Foreign Commerce Clause forbids discrimination against foreign commerce, not just discrimination that favors local residents or businesses. The Maryland court never gave a moment's thought to that principle. As the NFTC has previously shown (Mem. 29), the Constitution was designed, in part, to prevent "discriminations . . . adverse to commerce with particular foreign nations." Cooley v. Board of Wardens, 53 U.S. (12 How.) 299, 317 (1851) (emphasis added). The fact that Massachusetts is discriminating against commerce with a "particular foreign natio[n]" that does not bear the Commonwealth's human-rights stamp of approval cannot cure the discrimination.

Second, contrary to defendants' suggestion (Opp. 41-43), Congress has not "passively" endorsed the discrimination worked by the Burma law. Indeed, defendants' showing falls woefully short of the legal requirements for establishing such congressional approval. The Supreme Court has clearly indicated that a "passive indication" of what Congress "probably had in mind" (New England Power Co. v. New Hampshire, 455 U.S. 331, 343 (1982)) will not insulate a state law from Commerce Clause scrutiny. Rather, the Court would have to find that 'Congress' 'intent and policy' to sustain state legislation from attack under the Commerce Clause" has been "expressly stated" (Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 960 (1982) (quotation omitted)), in the most "unmistakably clear" terms. South-Central Timber Development, Inc. v. Wunnicke, 467 U.S. 82, 91 (1984). There must be an "unambiguous indication of congressional intent . . . 'to alter the limits of state power otherwise imposed by the Commerce Clause." Maine v. Taylor, 477 U.S. 131, 139 (1986) (quoting United States v. Public Utilities Comm'n of California, 345 U.S. 295, 304 (1953)). No such "unambiguous indication" exists here, or is even suggested by defendants. ¹⁰

2. The NFTC also showed (Mem. 29-31) that the Burma Law violates the Foreign Commerce Clause for a second, independent reason: It impairs the federal government's ability to "'speak with one voice when regulating commercial relations with foreign governments.'" Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 449 (1979) (quoting Michelin Tire Corp. v. Wages, 423 U.S. 276, 285 (1976)). The federal government's ability to speak with a single voice is particularly important here in view of the fact that the European Union ("EU") and Japan have launched formal WTO proceedings against the federal government because of the Burma Law. Indeed, as the EU has expressed, the Burma Law "raises questions about the ability of the U.S. to honor commitments which it has entered into within the framework of the WTO." Br. Amicus Curiae of the European Union at 7 (July 6, 1998). Defendants respond (Opp. 40-43) that "Congress has passively indicated" or "accepted" Massachusetts' role as one of "the chorus of state and local voices raised against the denial of human rights in Burma." (Opp. 41) This argument is flawed for three reasons.

First, defendants' repeated use of the "chorus of voices" metaphor (Opp. 40, 41) makes the NFTC's point exactly. With respect to commercial relations with foreign governments, the constitutional command is that the Nation clearly "speak with one voice" Ñ not as a "chorus" of multiple voices. Japan Line, 441 U.S. at 449. See also Sabbatino, 376 U.S. at 425 ("rules of international law should not be left to divergent and perhaps parochial state interpretations").

Second, the "chorus" in which the Commonwealth sings is not even in harmony with the national government. As the NFTC has shown (Mem. 37-38), Congress considered - but ultimately rejected - a national approach to commerce with Myanmar that would have prohibited all United States investment in that country. Instead, Congress, and the President, opted for more focused and limited sanctions. While the national approach and the Commonwealth's approach may broadly share the same goals of sanctioning the current Myanmar regime, the ways in which these goals are being implemented are undisputably dissonant. To carry defendants' metaphor a step further, the members of the "chorus" may be singing the same song, but they are singing at different tempos, in different keys, and out of tune with the conductor.

Third, just as Congress has not approved of the discrimination worked by the Burma Law, it has not approved of a departure from the "speak with one voice" requirement of the Foreign Commerce Clause. Barclays Bank PLC v. Franchise Tax Board of California, 512 U.S. 298 (1994), relied upon by defendants (Opp. 41), did not silently overrule the well-established requirement of an "unambiguous indication" with respect to the "speak with one voice" limitation. The state tax at issue in Barclays was a generally applicable tax system (it was not claimed to be discriminatory). The state's approach was not found to impede the national government's ability to "speak with one voice when regulating commercial relations with foreign governments." The Supreme Court's reliance upon congressional inaction noted that Congress had repeatedly been presented with, but had refused to enact, numerous bills that, if passed, would have explicitly preempted the state-taxation system under challenge. 512 U.S. at 325-26. Here, there is no such lengthy history; indeed, defendants can point to no similar proposed but rejected legislation here.

3. The NFTC also showed (Mem. 31-36) that a "market-participant" exception to the Foreign Commerce Clause has never been recognized by the Supreme Court, and is not appropriate; additionally, the NFTC showed that even were such an exception available, the Burma Law would not satisfy it because it is a regulatory measure, not a proprietary one, which sweeps far beyond what any rational market participant would do. Defendants nonetheless feature a "market-participant-exception" argument as their principal and predominant defense under the Foreign Commerce Clause. (Opp. 29-38) This defense does not withstand scrutiny.

First, contrary to defendants' arguments (Opp. 31-33), the "market-participant" exception does not apply to the Foreign Commerce Clause. As defendants recognize (Opp. 31), the Supreme Court has expressly not decided the issue. Reeves, Inc. v. Stake, 447 U.S. 429, 437 n.9 (1980). The Court has been properly reticent to extend the "market-participant" exception from the Interstate Commerce Clause to the Foreign Commerce Clause: As the Court has frequently recognized, the Foreign Commerce Clause serves different interests than the Interstate Commerce Clause; because of this difference, "the Founders intended the scope of the foreign commerce power to be greater" than the interstate commerce power. Japan Line, 441 U.S. at 448.

The cases relied upon by defendants (Opp. 30-32) either ignored, or were not informed by, the Solicitor General's position that the "market-participant" exception should not be engrafted upon the Foreign Commerce Clause. See Br. Amicus Curiae for the United States at 21-22, South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82 (1984) (No. 82-1608); Mem. 32. Additionally, none of defendants' cases paid any heed to the Supreme Court's mandate that the constitutional prohibition against state interference with foreign commerce is broader than the protection afforded to interstate commerce. See Kraft General Foods, 505 U.S. at 79.

Second, even were a "market-participant" exception available under the Foreign Commerce Clause, the Massachusetts Burma Law would not satisfy it. The "market-participant" doctrine permits states, when acting in a proprietary and not regulatory role in the marketplace, to favor the interests of their own citizens. Even by its terms, however, the exception would not permit the Commonwealth's clear regulation of trade with Myanmar.

The three Interstate Commerce Clause cases in which the market-participant exception has been applied by the Supreme Court make this clear. In Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976), the case in which the Court first recognized the exception, the Court permitted the State of Maryland to purchase scrap automobiles from solely in-state scrap processors in order to help rid the state of junk cars. Id. at 809-10. In Reeves, Inc. v. Stake, the Court allowed a South Dakota-owned cement plant to prefer residential sales over out-of-state sales. 447 U.S. at 437, 446-47. And in White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. 204 (1983), the Court upheld a Mayoral order requiring all City of Boston-funded construction projects to be performed by a work force comprised of at least 50% bona fide Boston residents. Id. at 209-10, 214-15.

The Massachusetts Burma Law, however, operates far differently than the state actions that were permitted under the "market-participant" exception; these differences illustrate why the Burma Law cannot benefit from that exception. Unlike the scrap-car purchasing program in Alexandria Scrap, the cement-sales program in Reeves, and the hiring preference in White, the Massachusetts Burma Law does not operate to favor Massachusetts residents' commercial interests; indeed, the Massachusetts Legislature "clearly did not intend to secure economic advantages for local businesses." (Opp. 39, citation and quotation omitted) More significantly, unlike the state programs upheld in Alexandria Scrap, Reeves, and White, the Burma Law does not work its discrimination in the "market" in which the state is "participating" - at most, these cases might support the proposition that the Commonwealth could favor Massachusetts-based bidders in the bidding process. But that is not what the Law does. Rather, the Burma Law seeks to use the competitive bidding process to reach beyond Massachusetts and regulate the internal affairs of a foreign nation. This takes the Law outside of the proprietary arena, and into the regulatory arena, where the "market-participant" exception is not available. Building & Construction Trades Council, 507 U.S. at 227, 230.

Defendants also contend (Opp. 37-38) that the Burma Law is not regulatory because the Commonwealth is merely acting as private parties do, asserting that two NFTC member companies have adopted corporate policies similar to the Burma Law. These policies are not remotely analogous to the Burma Law. The cited policies declare only that the companies themselves will not engage in certain activities related to Myanmar. Unlike the Commonwealth's actions under the Burma Law, neither company is refusing to do business equally with other companies simply because they trade in Myanmar, and defendants do not even suggest that an "economically rational" business actor would behave in that manner. Chamber of Commerce, 74 F.3d at 1336.

Finally, defendants' invocation of the "market-participant" exception, if sustained, would have disturbing consequences for the Interstate Commerce Clause, since the exception sought by defendants admits of no principle that would limit it to foreign commerce. Under defendant's version of the "market-participant" exception, the Commonwealth could, for example, "express its disapproval" of a state with a high crime rate by imposing a ten percent bid penalty upon government contractors who also trade in or with that state. The Commonwealth could likewise express its "moral" outrage against states that (unlike Massachusetts) regularly impose capital punishment on convicted murderers by imposing a similar bid penalty against those who trade in or with those states. This would be contrary to the Supreme Court's long-established command that "[n]o State can legislate except with reference to its own jurisdiction." Bonaparte v. Tax Court, 104 U.S. 592, 594 (1881). See generally BMW of N.A. v. Gore, 517 U.S. 559, 571 & n.16 (1996) (citing cases). The regime envisioned by defendants, moreover, would lead to inevitable economic warfare among the states (Hughes v. Oklahoma, 441 U.S. 322, 325-26 (1979)), contrary to the framers' vision that the Constitution in general, and the Commerce Clause in particular, "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." Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 523 (1935).

In sum: The Burma Law violates the Foreign Commerce Clause.

IV. THE BURMA LAW IS PREEMPTED BY THE FEDERAL SANCTIONS AGAINST MYANMAR

The NFTC showed (Mem. 36-39) that the Burma Law conflicts with, and is therefore preempted by, the federal sanctions implemented by Congress and the President. Defendants offer two reasons why the Burma Law is not preempted - one, the federal law does not "creat[e] a private right of action" (Opp. 21); and two, the Burma Law and federal law "broadly" "promote the same goal." (Opp. 21, 25) Neither argument saves the Burma Law from preemption.

First, there is no requirement that a federal law create a private right of action to preempt state law. Indeed, the only authority cited by defendants, Furtick v. Medford Housing Authority, 963 F. Supp. 64 (D. Mass. 1997) (cited at Opp. 21), did not even deal with issues of preemption.

Second, even though the aims of the Massachusetts Burma Law and the federal Burma sanctions are similar, the laws are in conflict with one another, because the means chosen by the Commonwealth - a broad-based burden on companies that deal in or with the Nation of Myanmar - are irreconcilable with the national government's decision to adopt a more narrowly tailored approach to sanctions, which, unlike the Massachusetts approach, was part of a coordinated multilateral strategy for pressuring the Myanmar government. (Mem. 37-38)

Contrary to defendants' argument (Opp. 22), it is not enough to save the Burma Law that the "state and federal laws further the same purpose." "In determining whether state law 'stands as an obstacle' to the full implementation of a federal law, 'it is not enough to say that the ultimate goal of both federal and state law' is the same." Gade v. National Solid Wastes Management Ass'n, 505 U.S. 88, 103 (1992) (internal citation omitted). Regardless of their "goals," where a state law "interferes with the methods by which the federal statute was designed to reach [its] goal," preemption will lie. International Paper Co. v. Ouellette, 479 U.S. 481, 494 (1987) (emphasis added); see also Securities Industry Ass'n v. Connolly, 883 F.2d 1114, 1118 (1st Cir. 1989) ("a direct, facial contradiction between state and federal law is not necessary to catalyze an 'actua[l] conflict' within the doctrinal parameters of the Supremacy Clause"), cert. denied, 495 U.S. 956 (1990). Defendants do not show the state and federal "methods" to be harmonious. (See Opp. 25)

Moreover, the ordinary presumption against preemption does not apply here, because the Burma Law does not legislate in an area traditionally reserved to the states, but rather implicates the national government's foreign-affairs powers. Under these circumstances, "the conflict with federal policy need not be as sharp as that which must exist for ordinary preemption when Congress legislates in a field which the States have traditionally occupied." Boyle v. United Technologies Corp., 487 U.S. 500, 507 (1988) (quotation omitted). An interest that "is one of unique federal concern changes what would otherwise be a conflict that cannot produce preemption into one that can." Id. International relations "by its very nature admit[s] only of national supervision." See Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 143 (1963).

Defendants' reliance (e.g., Opp. 23-24) upon Phillip Morris, Inc. v. Harshbarger, 122 F.3d 58 (1st Cir. 1997), does not alter the analysis. There, the First Circuit, addressing the constitutionality of a Massachusetts law requiring tobacco manufacturers to disclose additives and nicotine-yield ratings to their products, stated: "[E]ven assuming the state law somehow alter[s a] purported balance, . . . the question is not whether a congressionally calibrated system is altered by state law, but if altered, whether the change obstructs the purpose of Congress." Id. at 85 (emphasis in original; quotation omitted). This statement of law has little if any application to the present case. For one, the law in Philip Morris "comfortably f[e]ll within the Ôhealth and safety' realm of traditional state police powers" (id. at 67); here, by contrast, the Burma Law treads far afield from the "traditional" areas of state concern. For another, unlike in Philip Morris, here the different means that Massachusetts has chosen to further its asserted interest in human rights in Burma does "obstruc[t] the purpose of Congress." The federal decisions to choose limited, carefully drawn sanctioning devices were made precisely because the national government concluded that a broader mode of sanctions would not help to achieve meaningful reforms in Myanmar. (See Mem. 38)

In sum: The Burma Law is preempted by the federal sanctions against Myanmar.

For the foregoing reasons, and those stated in the NFTC's opening memorandum, the Massachusetts Burma Law should be declared unconstitutional, and its enforcement should be enjoined.

Dated: August 13, 1998

¹At various other points in their brief, defendants similarly assert that the Massachusetts Burma law "has the obvious purpose of expressing disapproval of a regime that ... 'deserves international rebuke" (Opp.53 n.16 & 54 n.18), with the "goal of human rights in Burma." (Opp.22; see also Opp.17) Back to section

² In their Joint Statement of June 30, 1998, the parties agreed to treat the NFTC's Motion for a Preliminary Injunction as a Motion for Summary Judgement, and to submit this case to the Court on cross-motions for summary judgment. Back to section

³ Defendants attempt (Opp.15-160) to distinguish City of Jacksonville on the twin grounds that it is limited to cases involving (i) a supposed "complete prohibition" on certain contracts, and (ii) and equal protection claim. This argument fails. First, the minority set -aside in City of Jacksonvilleapplied only to a limited number of state contracts; here, the Burma Law applies to every state contract. Second, the Supreme Court itself relied on City of Jacksonvilleto find standing in Clinton v. City of New York, 118 S. Ct. 2091, 2101 m22 (1998). Clinton involved a Presentment Clause (U.S. Const. art. I, § 7, cl. 2) challenge to the Line Item Veto Act - hardly a case involving "an immutable characteristic such as race." (Opp.16) Back to section

⁴Defendants suggest in a footnote (Opp.13 n.2) that the law of standing obligates the NFTC to "identif[y] by the name the members who 'would otherwise have standing to sue in their own right.'" First of all, Article III imposes no such requirement ( particularly where, as here, the Boston Chamber of Commerce v. City of Boston, 772 F. Supp. 696, 698-99 & n.8 (D. Mass 1991), cited by defendants, does not remotely suggest that this is an Article III requirement. Second, defendants have been provided with the specific names of the NFTC members that have been injured by operation of the Burma Law, pursuant to the Protective Order entered by this Court on July 8, 1998. Back to section

⁵Although this company was not an NFTC member at the time of it's bid, this new member may be considered in the standing analysis because the NFTC seeks only prospective relief. Compare Petro-Chem Processing, Inc. v. ERA, 866 F.2d 433, 437 (D.C. Cir) (later-joining association members not considered for standing purpose only because the new members' claims. if asserted in their own right, would have been time-barred), cert. denied, 490 U.S. 1106 (1989); cf. also Warth v. Seldin, 422 U.S. 490. 501 (1975) (in considering standing, "it is within the trial court's power to allow... the plaintiff to supply.. by affidavits, further particularized allegations of fact deemed supportive of plaintiff's standing"). Back to section

⁶See, e.g., Weisburd, State Courts, Federal Courts and International Cases, 20 Yale J. Int'l L.1, 22n.145 (1995) ("The court's effort to distinguish Zschernig [in Board of Trustees] seems disingenuous.") Back to section

⁷OLC opinions are not entitled to any deference from the court. See, e.g., Crandon v. United States, 494 U.S. 152, 177 (1990) (Scalia, J., joined by O'Connor and Kennedy. JJ., concurring) (OLC opinions are not administrative interpretations entitled to Chevron deference). OLC opinions and memoranada are building only on the Department of Justice and other Executive Branches agencies. Tenaska Washington Partners II, L.P. v. United States, 34 Fed Cl. 434, 439. Back to section

⁸Defendants concede that the Burma Law's purpose is to "contribut[e] to the growing effort.. to apply indirect economic pressure against the Burma regime for reform," and to express the Commwealth's "disapproval of [that] regime." (Opp. 53 n.16) Back to section

⁹Indeed, the evaluation of the Myanmar government made by the Massachusettes Legislature is at least as objectionable as the qualities that defendants say (Opp. 480) rendered the Oregon statute unconstitutional in Zschernig: The Legislature here "assess[ed] the actual operation of foreign laws," "evaluate[d] the crediblity of foreign representatives," and "engage[d] in persistent'... criticism' of foreign states." Back to section

¹⁰Defendants similarly suggest (Opp.42) that the Massachusetts congressional delegation's statements to the WTO, that the Massachusetts Burma law is an '''internal affai[r] of Massachusetts,''' somehow support the notion that Congress has failed to preempt the law. This is not the statement of a few senators and representatives do not establish the intent of the Congress as a whole. See. e.g., Conroy v. Aniskoff, 507 U.S. 511, 58-28 ( 1993) (Scalia. J., concurring). Back to section

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