MBE Constitutional Law - Federalism

States. Grants broad authority to enact legislation for the general welfare.

Holds that if a federal law directly or indirectly conflicts with a state law, federal law will prevail (and state law declared void). Federal laws can either expressly or impliedly preempt state law.

Article VI, paragraph 2

When either:

Law is an exclusive power of the federal government (e.g. power to conduct foreign affairs); or

Regulation in that area has been expressly prohibited by federal government

⚠️ Note: express preemption laws are narrowly construed

Courts will infer federal intention to preempt if:

State law hinders purpose of the federal law;

State law makes compliance with federal law impossible (i.e. impossible to comply with both at the same time); or

Congress intended for federal government to occupy the entire field (“field preemption”)

Yes, in the absence of preemption, states can create more stringent laws than the federal government

Since Congress has exclusive power to regulate interstate commerce, states are prohibited from discriminating against or unduly burdening interstate commerce even if Congress has not regulated the activity.

More Info: Dormant Commerce Clause

If regulation:

Discriminates against out-of-state commerce;

Unduly burdens interstate commerce; or

Regulates wholly out-of-state activity

When it promotes the economic interests of its own residents at the expense of out-of-staters (e.g. imposing requirements on out-of-state companies but not in-state companies)

If:

Regulation is necessary to achieve important government interest and no reasonable, non-discriminatory alternatives are available (strict scrutiny);

State is a market participant (i.e. acts like a business or consumer); or

Regulation involves traditional government function (e.g. trash collection), or

Congress has expressly authorized regulation (e.g. Congress explicitly states that regulation violates Dormant Commerce, but will allow it anyways)

it unduly burdens interstate commerce

Yes, as long as tax does not discriminate or unduly burden interstate commerce.

Commerce Clause;

Privileges and Immunities Clause of Article IV (Comity Clause);

Equal Protection; and

Due Process of the Fourteenth Amendment

Tax must satisfy the Complete Auto test:

Tax must have substantial nexus to taxing state (i.e. activity being taxed must have significant relationship with the state);

Tax must be fairly apportioned;

Tax cannot discriminate against interstate commerce; and

Tax must be fairly related to the services provided by the state

Tax must:

Satisfy the Complete Auto Test;

AND refrain from either:

Creating a substantial risk of international multiple taxation; or

Preventing the federal government from “speaking with one voice” regarding international trade or foreign affairs issues

No, unless taxes are incidental (e.g. taxes on federal employees) and do not burden the federal government

Yes

Taxes based on assessed value of the item. Cannot be imposed on goods in interstate transit; only when goods reach their final destination.

Yes, as long as:

Instrumentality has sufficient contacts with taxing state; and

Tax is reasonably proportional to the time instrumentality has spent in the state

Mandates that states cannot discriminate against the fundamental rights or esssential activities of out-of-state residents

⚠️ Note: Privileges and Immunities does not apply to corporations. If you see discrimination against an out-of-state corporation, think Dormant Commerce Clause

Includes:

Commercial rights (pursuit of employment, right to engage in business);

Right to live;

Right to travel;

Right to participate in judicial and political process

⚠️ Note: This is not an exhaustive list

If:

There is a substantial justification for the discrimination (e.g. protectionism or residents are the “peculiar source of evil” law was intended to fix:); and

No less-discriminatory alternatives are available

Article IV (Privileges and Immunities): Prevents states from discriminating against non-residents

14th Amendment (Privileges OR Immunities): prevents states from denying citizens the right to interstate travel (narrowly construed)

No, only fundamental rights

Ex. a restriction on hunting licenses for non-residents is valid

No, only out-of-state citizens

Dormant Commerce Clause.

Privileges and Immunities applies to persons, not corporations

Requires that states respect the judgments of other states as long as they were valid final judgments on the merits