As I noted in a separate post, the legal advocacy group Neutral Principles engaged Erik Jaffe and me to draft an amicus brief for them in Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County, which the Court will hear this Fall. You can read the PDF, but here is the Foreign Commerce Clause analysis (the First Amendment analysis is excerpted here):

Besides the serious First Amendment concerns favoring a broad preemption ruling that would avoid such constitutional problems, the state-law suits in this case and others around the country seek to regulate national and international commerce in violation of the Commerce Clause and related structural constraints on extraterritorial regulation.

Boulder attempts to penalize multinational companies not merely for the local and immediate consequences of any local operations, but for the multi-causal long-term consequences of their sales and speech around the country and around the globe. And it is seeking to impose liability on Suncor for the joint consequences of millions of decisions by actors beyond its borders, operating in interstate and international trade. Whatever reticence this Court might have in preempting largely ordinary State regulation that incidentally affects interstate commerce, that reticence would be misplaced when it comes to such a major encroachment on international commerce and an attempt to impose Boulder's views of nuisance and appropriate speech on actors not just in other States but also in foreign countries.

For good reasons, this Court has understood Congress's delegated power over foreign commerce as exclusive of State powers. That understanding is consistent with the original public meaning of both the delegation of power to Congress in Article I, and the catch-all reservation of powers to the states and the people in the Tenth Amendment.

Regardless whether the Constitution supports the somewhat variable dormant interstate Commerce Clause as it had evolved over the years, a more textually grounded reading of the clause supports exclusive federal authority here. Boulder's attempt to impose Colorado law on interstate and foreign commerce conflicts with the Commerce Clause, Article I's delegation of powers, and the Tenth Amendment. And it more broadly conflicts with the Constitution's structure, which organizes horizontal relations among States on principles of (partial) state autonomy, equality, territoriality, non-aggression, and mutual recognition.

The power to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes" U.S. Const. art. I, § 8, cl. 3, is one of the "legislative Powers" that the Constitution "grant[s]," and promises will be "vested in[,] a Congress of the United States," U.S. Const. art. I, § 1.

As a textual matter Article I's grant of authority is exclusive. Taking the "words * * * in their natural and obvious sense, and not in a sense unreasonably restricted or enlarged," Martin v. Hunter's Lessee, 14 U.S. (1 Wheat.) 304, 326 (1816), any "legislative power" granted "is * * * absolutely vested," id. at 329. And by vesting powers in Congress, the Constitution divested those same powers from the States. As Justice Story explained in Hunter's Lessee, "the sovereign powers vested in the state governments, by their respective constitutions, remained unaltered and unimpaired, except so far as they were granted to the government of the United States." Id. at 325 (emphasis added).

The text of the Tenth Amendment confirms this reading, providing that "[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." U.S. Const. amend. X (emphasis added). By such wording the Tenth Amendment necessarily recognizes that powers that are delegated to the United States are not "reserved" to the States or the people, but reside solely in the federal government. Congress might exercise its power to seek assistance from, or grant permission for, some state activities properly understood to "regulate" interstate or foreign commerce. But the default rule is the absence of state power to regulate interstate and foreign commerce—not endless state encroachment on delegated national authority unless and until Congress affirmatively says otherwise.

And that is true even though Congress has the undoubted option to affirmatively disable state regulation of extraterritorial commerce. The exercise of national legislative authority was designed to be difficult. Hurdles such as bicameralism, the potential veto, and the volume of matters that compete for Congress's attention slow and often stop such exercise. Default rules are thus important, and the constitutional default for Article I powers is that individual States may not take it upon themselves to exercise powers delegated to Congress. The Constitution sought to free foreign commerce from state mischief, not to preserve all opportunity for such mischief while the national legislative process struggles to keep up.

Consistent with a proper reading of the Constitutional text, this Court's early cases rejected any suggestion that the power to regulate extraterritorial commerce was held concurrently by Congress and the States.

In Gibbons v. Ogden, Daniel Webster argued that it would be "insidious and dangerous" for the States to have a "general concurrent power" with Congress that would allow the States to "do whatever Congress has left undone." 22 U.S. (9 Wheat.) 1, 17-18 (1824). This Court did not need to reach that question in Gibbons, id. at 208-212, but several justices did discuss it in the Passenger Cases, addressing fees imposed by New York on ships carrying people traveling into the State. Smith v. Turner, 48 U.S. (7 How.) 283 (1849) (Passenger Cases). Justice McLean extensively reviewed the various powers delegated to Congress, the necessity of their exclusiveness within the narrow confines of such delegations, and concluded:

Whether I consider the nature and object of the commercial power, the class of powers with which it is placed, the decision of this court in the case of Gibbons v. Ogden, reiterated in Brown v. The State of Maryland, and often re-asserted by Mr. Justice Story, who participated in those decisions, I am brought to the conclusion, that the power "to regulate commerce with foreign nations, and among the several States," by the Constitution, is exclusively vested in Congress.

Id. at 400.

Justice Story, for his part, spoke of one State's "cheerful acquiescence" in the exclusivity of the commerce power, a point he said had not been "seriously controverted." 2 Joseph Story, Commentaries on the Constitution of the United States 515, § 1067 (Bos., Hilliard, Gray & Co. 1833), https://tinyurl.com/ywemmyzh. He explained that the "power to regulate commerce is general and unlimited in its terms" and left "no residuum" to the States. Id. at 513, § 1063. He continued that "when a State proceeds to regulate commerce with foreign nations, or among the several states, it is exercising the very power, which is granted to congress; and is doing the very thing which congress is authorized to do." Id. at 514, § 1064.

The power to tax, by contrast, is different. Congress originally was empowered to adopt "uniform" taxes "throughout the United States" to pay for distinctly national obligations and activities "of the United States." U.S. Const. art. I, § 8, cl. 1. States may tax only within their jurisdiction and they do so for different ends. "In imposing taxes for state purposes, a state is not doing what congress is empowered to do." 2 Story, supra at 513, § 1064.

Especially in cases involving foreign commerce, this Court has described the commerce power as an exclusive delegation. In Crutcher v. Kentucky, 141 U.S. 47 (1891), this Court explained that the "prerogative, the responsibility, and the duty of providing for the security of the citizens and the people of the United States in relation to foreign corporate bodies or foreign individuals with whom they may have relations of foreign commerce, belong to the government of the United States, and not to the governments of the several states." Id. at 58.

This Court eventually moved away from its earlier understanding as to exclusive federal power over interstate commerce, discovering the very "residuum of power" in the States to act in "the absence of conflicting legislation by Congress," Southern Pac. Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 767 (1945), that Joseph Story rejected in his Commentaries. But this Court nonetheless continued to recognize greater exclusive Congressional authority as to foreign commerce, concluding that the federal "power when exercised in respect of foreign commerce may be broader than when exercised as to interstate commerce." atlan­tic Cleaners & Dyers v. United States, 286 U.S. 427, 434 (1932).

In atlantic Cleaners, this Court explained its conclusion that the Commerce Clause could be plenary as to foreign commerce but not as to interstate commerce by noting that "there is no rule of statutory construction" that precluded it from treating the "same word" as though it has "different meanings." Id. at 433.^[1] And indeed there is some "evidence that the Founders intended the scope of the foreign commerce power to be the greater." Japan Line, Ltd. v. Los Angeles County, 441 U.S. 434, 448 (1979).

Even taking those cases rejecting the exclusivity of the interstate commerce power on their own terms, any residuum of power left with the States was limited and would apply only to "matters of local concern" that would "in some measure affect interstate commerce" or "to some extent, regulate it." Southern Pac., 325 U.S. at 767 (collecting cases). For that reason, just over a decade after this Court decided Southern Pacific, it could still say, correctly, that its cases recognized that the "Commerce Clause gives exclusive power to the Congress to regulate interstate commerce, and its failure to act on the subject in the area of taxation nevertheless requires that interstate commerce shall be free from any direct restrictions or impositions by the States." Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 458 (1959) (emphasis added) (citation omitted). In the foreign commerce context, this Court should be even more cautious in permitting direct or indirect burdens on international commerce.

The subsequent tendency to find even more exceptions to interstate commerce exclusivity—adding more judicial policymaking into the mix—was perhaps driven by concerns that an exclusive reading of an ever-expanding commerce power would foreclose too many state laws regulating ordinary local matters that in some way had an effect on interstate commerce. But while such concerns are understandable, they arise from a different error, not from a proper understanding of exclusivity.

Under an original and narrower view of the commerce power (apart from the erroneously expansive gloss of the Necessary and Proper Clause), any problem of excessively disabling state powers would have been limited. Cf. Albert S. Abel, The Commerce Clause in the Constitutional Convention and in Contemporary Comment, 25 Minn. L. Rev. 432, 493 (1941) ("On the whole, the evidence supports the view that, as to the restricted field which was deemed at the time to constitute regulation of commerce, the grant of power to the federal government presupposed the withdrawal of authority pari passu from the states."). As Justice Thomas has explained, the "Clause's text, structure, and history all indicate that, at the time of the founding, the term '"commerce" consisted of selling, buying, and bartering, as well as transporting for these purposes.'" Gonzales v. Raich, 545 U.S. 1, 58 (2005) (Thomas, J., dissenting) (quoting United States v. Lopez, 514 U.S. 549, 585 (1995) (Thomas, J., concurring))).

When the commerce power is properly constrained to those activities, any alleged harm from divesting the States of such power is necessarily cabined. "While in its content the commerce clause was designed to include only a limited number of matters, the states could no more legislate with propriety as to subjects falling within its limits than Congress could as to any subjects falling outside them." Abel, supra, 25 Minn. L. Rev. at 494.

Just as this Court has recognized that the vesting of powers in one branch forecloses exercise of or encroachment on such powers by another branch in the context of horizontal separation of powers, so too it should continue to recognize a vertical separation of powers between the federal government and the states, especially concerning the exclusive federal power to regulate foreign commerce. Plaintiffs' attempt to extend their tort laws to encompass extraterritorial conduct and global consequences reaches well into the regulation of foreign commerce that is the exclusive province of the federal government.

 

[1] A genuinely originalist and textualist reading would recognize that the Commerce Clause, at least at its core and not expanded beyond its terms over the years, is exclusive as to interstate commerce as well. But this Court's reluctance to return to the original meaning of the Commerce Clause in the interstate commerce context should not prevent it from maintaining the original meaning of the Clause in the foreign commerce context, consistent with its past precedent in this area.

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