Article VI. Prior Debts, National Supremacy, Oaths of Office |
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ARTICLE VI
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PRIOR DEBTS, NATIONAL SUPREMACY, AND OATHS OF OFFICE
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CONTENTS
Page
Clause 1. Validity of Prior Debts and Engagements......... 917
Clause 2. Supremacy of the Constitution, Laws and Treaties 917
National Supremacy........................................ 917
Marshall's Interpretation of the National
Supremacy Clause.............................. 917
Task of the Supreme Court Under the Clause:
Preemption.................................... 918
The Operation of the Supremacy Clause............. 919
Federal Immunity Laws and State Courts.... 919
Priority of National Claims Over State
Claims................................ 920
Obligation of State Courts Under the Supremacy
Clause........................................ 920
Supremacy Clause Versus the Tenth Amendment....... 921
Federal Instrumentalities and Personnel and State
Police Power.................................. 930
The Doctrine of Federal Exemption From State
Taxation...................................... 932
McCulloch v. Maryland..................... 932
Applicability of Doctrine to Federal
Securities............................ 933
Taxation of Government Contractors........ 934
Taxation of Salaries of Employees of
Federal Agencies...................... 936
Ad Valorem Taxes Under the Doctrine....... 937
Federal Property and Functions............ 940
Federally Chartered Finance Agencies:
Statutory Exemptions.................. 940
Royalties................................. 941
Immunity of Lessees of Indian Lands....... 942
Summation and Evaluation.......................... 942
Clause 3. Oath of Office.................................. 943
Power of Congress in Respect to Oaths..................... 943
National Duties of State Officers......................... 944
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ARTICLE VI
PRIOR DEBTS, NATIONAL SUPREMACY, AND OATHS OF OFFICE
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Clause 1. All Debts contracted and Engagements entered into, before
the Adoption of this Constitution, shall be as valid against the United
States under this Constitution, as under the Confederation.
PRIOR DEBTS
There are no annotations to this clause.
Clause 2. This Constitution, and the Laws of the United States which
shall be made in Pursuance thereof; and all Treaties made, or which
shall be made, under the Authority of the United States, shall be the
supreme Law of the Land; and the Judges in every State shall be bound
thereby; any Thing in the Constitution or Laws of any State to the
Contrary notwithstanding.
NATIONAL SUPREMACY
Marshall's Interpretation of the National Supremacy Clause
Although the Supreme Court had held, prior to Marshall's
appointment to the Bench, that the supremacy clause rendered null and
void a state constitutional or statutory provision which was
inconsistent with a treaty executed by the Federal Government,\1\ it was
left for him to develop the full significance of the clause as applied
to acts of Congress. By his vigorous opinions in McCulloch v.
Maryland\2\ and Gibbons v. Ogden,\3\ he gave the principle a vitality
which survived a century of vacillation under the doctrine of dual
federalism. In the former case, he asserted broadly that ``the States
have no power, by taxation or otherwise, to retard, impede, burden, or
in any manner control, the operations of the constitutional laws enacted
by Congress to carry into execution the powers vested in
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the general government. This is, we think, the unavoidable consequence
of that supremacy which the Constitution has declared.''\4\ From this he
concluded that a state tax upon notes issued by a branch of the Bank of
the United States was void.
\1\Ware v. Hylton, 3 Dall. (3 U.S.) 199 (1796).
\2\4 Wheat. (17 U.S.) 316 (1819).
\3\9 Wheat. (22 U.S.) 1 (1824).
\4\4 Wheat. (17 U.S.) 436 (1819).
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In Gibbons v. Ogden, the Court held that certain statutes of New
York granting an exclusive right to use steam navigation on the waters
of the State were null and void insofar as they applied to vessels
licensed by the United States to engage in coastal trade. Said the Chief
Justice: ``In argument, however, it has been contended, that if a law
passed by a State, in the exercise of its acknowledged sovereignty,
comes into conflict with a law passed by Congress in pursuance of the
Constitution, they affect the subject, and each other, like equal
opposing powers. But the framers of our Constitution foresaw this state
of things, and provided for it, by declaring the supremacy not only of
itself, but of the laws made in pursuance of it. The nullity of an act,
inconsistent with the Constitution, is produced by the declaration, that
the Constitution is the supreme law. The appropriate application of that
part of the clause which confers the same supremacy on laws and
treaties, is to such acts of the State legislatures as do not transcend
their powers, but though enacted in the execution of acknowledged State
powers, interfere with, or are contrary to the laws of Congress, made in
pursuance of the Constitution, or some treaty made under the authority
of the United States. In every such case, the act of Congress, or the
treaty, is supreme; and the law of the State, though enacted in the
exercise of powers not controverted, must yield to it.''\5\
\5\9 Wheat. (22 U.S.), 210-211 (1824). See the Court's
discussion of Gibbons in Douglas v. Seacoast Products, 431 U.S. 265,
274-279 (1977).
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Task of the Supreme Court Under the Clause: Preemption
In applying the supremacy clause to subjects which have been
regulated by Congress, the primary task of the Court is to ascertain
whether a challenged state law is compatible with the policy expressed
in the federal statute. When Congress legislates with regard to a
subject, the extent and nature of the legal consequences of the
regulation are federal questions, the answers to which are to be derived
from a consideration of the language and policy of the state. If
Congress expressly provides for exclusive federal dominion or if it
expressly provides for concurrent federal-state jurisdiction, the task
of the Court is simplified, though, of course, there may still be
doubtful areas in which interpretation will be necessary. Where Congress
is silent, however, the Court must itself decide
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whether the effect of the federal legislation is to oust state
jurisdiction.\6\
\6\Treatment of preemption principles and standards is set out
under the commerce clause, which is the greatest source of preemptive
authority.
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The Operation of the Supremacy Clause
When Congress legislates pursuant to its delegated powers,
conflicting state law and policy must yield.\7\ Although the preemptive
effect of federal legislation is best known in areas governed by the
commerce clause, the same effect is present, of course, whenever
Congress legislates constitutionally. And the operation of the supremacy
clause may be seen as well when the authority of Congress is not express
but implied, not plenary but dependent upon state acceptance. The latter
may be seen in a series of cases concerning the validity of state
legislation enacted to bring the States within the various programs
authorized by Congress pursuant to the Social Security Act.\8\ State
participation in the programs is voluntary, technically speaking, and no
State is compelled to enact legislation comporting with the requirements
of federal law. Once, however, a State is participating, its
legislation, which is contrary to federal requirements, is void under
the supremacy clause.\9\
\7\Gibbons v. Ogden, 9 Wheat. (22 U.S.) 1, 210-211 (1824). See,
e.g., Cipollone v. Liggett Group, Inc., 112 S.Ct. 2608 (1992); Morales
v. TWA, 112 S.Ct. 2031 (1992); Maryland v. Lousiana, 451 U.S. 725, 746
(1981); Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977).
\8\By the Social Security Act of 1935, 49 Stat. 620, 42 U.S.C.
Sec. 301 et seq., Congress established a series of programs operative in
those States which joined the system and enacted the requisite complying
legislation. Although participation is voluntary, the federal tax
program underlying in effect induces state participation. See Steward
Machine Co. v. Davis, 301 U.S. 548, 585-598 (1937).
\9\On the operation of federal spending programs upon state
laws, see South Dakota v. Dole, 483 U.S. 203 (1987) (under highway
funding programs). On the preemptive effect of federal spending laws,
see Lawrence County v. Lead-Deadwood School Dist., 469 U.S. 256 (1985).
An early example of States being required to conform their laws to the
federal standards is King v. Smith, 392 U.S. 309 (1968). Private parties
may compel state acquiescence in federal standards to which they have
agreed by participation in the programs through suits under a federal
civil rights law (42 U.S.C. Sec. 1983). Maine v. Thiboutot, 448 U.S. 1
(1980). The Court has imposed some federalism constraints in this area
by imposing a ``clear statement'' rule on Congress when it seeks to
impose new conditions on States. Pennhurst State School & Hospital v.
Halderman, 451 U.S. 1, 11, 17-18 (1981).
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Federal Immunity Laws and State Courts.--An example of the
former circumstance is the operation of federal immunity acts\10\ to
preclude the use in state courts of incriminating statements and
testimony given by a witness before a committee of Congress or a federal
grand jury.\11\ Because Congress in pursuance of its paramount authority
to provide for the national defense, as
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complemented by the necessary and proper clause, is competent to compel
testimony of persons which is needful for legislation, it is competent
to obtain such testimony over a witness's self-incrimination claim by
immunizing him from prosecution on evidence thus revealed not only in
federal courts but in state courts as well.\12\
\10\Which operate to compel witnesses to testify even over self-
incrimination claims by giving them an equivalent immunity.
\11\Adams v. Maryland, 347 U.S. 179 (1954).
\12\Ullmann v. United States, 350 U.S. 422, 434-436 (1956). See
also Reina v. United States, 364 U.S. 507, 510 (1960).
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Priority of National Claims Over State Claims.--Anticipating his
argument in McCulloch v. Maryland,\13\ Chief Justice Marshall in 1805
upheld an act of 1792 asserting for the United States a priority of its
claims over those of the States against a debtor in bankruptcy.\14\
Consistent therewith, federal enactments providing that taxes due to the
United States by an insolvent shall have priority in payment over taxes
due by him to a State also have been sustained.\15\ Similarly, the
Federal Government was held entitled to prevail over a citizen enjoying
a preference under state law as creditor of an enemy alien bank in the
process of liquidation by state authorities.\16\ A federal law providing
that when a veteran dies in a federal hospital without a will or heirs
his personal property shall vest in the United States as trustee for the
General Post Fund was held to operate automatically without prior
agreement of the veteran with the United States for such disposition and
to take precedence over a state claim founded on its escheat law.\17\
\13\4 Wheat. (17 U.S.) 316 (1819).
\14\United States v. Fisher, 2 Cr. (6 U.S.) 358 (1805).
\15\Spokane County v. United States, 279 U.S. 80, 87 (1929). A
state requirement that notice of a federal tax lien be filed in
conformity with state law in a state office in order to be accorded
priority was held to be controlling only insofar as Congress by law had
made it so. Remedies for collection of federal taxes are independent of
legislative action of the States. United States v. Union Central Life
Ins. Co., 368 U.S. 291 (1961). See also United States v. Buffalo Savings
Bank, 371 U.S. 228 (1963) (State may not avoid priority rules of a
federal tax lien by providing that the discharge of state tax liens are
to be part of the expenses of a mortgage foreclosure sale); United
States v. Pioneer American Ins. Co., 374 U.S. 84 (1963) (Matter of
federal law whether a lien created by state law has acquired sufficient
substance and has become so perfected as to defeat a later-arising or
later-filed federal tax lien).
\16\Brownell v. Singer, 347 U.S. 403 (1954).
\17\United States v. Oregon, 366 U.S. 643 (1961).
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Obligation of State Courts Under the Supremacy Clause
The Constitution, laws, and treaties of the United States are as
much a part of the law of every State as its own local laws and
constitution. Their obligation ``is imperative upon the state judges, in
their official and not merely in their private capacities. From the very
nature of their judicial duties, they would be called upon to pronounce
the law applicable to the case in judgment. They were not to decide
merely according to the laws or Constitution of the
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State, but according to the laws and treaties of the United States--`the
supreme law of the land'.''\18\ State courts are bound then to give
effect to federal law when it is applicable and to disregard state law
when there is a conflict; federal law includes, of course, not only the
Constitution and congressional enactments and treaties but as well the
interpretations of their meanings by the United States Supreme
Court.\19\ While States need not specially create courts competent to
hear federal claims or necessarily to give courts authority specially,
it violates the supremacy clause for a state court to refuse to hear a
category of federal claims when the court entertains state law actions
of a similar nature.\20\ The existence of inferior federal courts
sitting in the States and exercising often concurrent jurisdiction of
subjects has created problems with regard to the degree to which state
courts are bound by their rulings. Though the Supreme Court has directed
and encouraged the lower federal courts to create a corpus of federal
common law,\21\ it has not spoken to the effect of such lower court
rulings on state courts.
\18\Martin v. Hunter's Lessee, 1 Wheat. (14 U.S.) 304, 335
(1816). State courts have both the power and the duty to enforce
obligations arising under federal law, unless Congress gives the federal
courts exclusive jurisdiction. Claflin v. Houseman, 93 U.S. 130 (1876);
Second Employers' Liability Cases, 223 U.S. 1 (1912); Testa v. Katt, 330
U.S. 386 (1947).
\19\Cooper v. Aaron, 358 U.S. 1 (1958).
\20\Howlett v. Rose, 496 U.S. 356 (1990); Felder v. Casey, 487
U.S. 131 (1988).
\21\Clearfield Trust Co. v. United States, 318 U.S. 363 (1943);
Textile Workers of America v. Lincoln Mills, 353 U.S. 448 (1957);
Illinois v. City of Milwaukee, 406 U.S. 91 (1972).
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Supremacy Clause Versus the Tenth Amendment
The logic of the supremacy clause would seem to require that the
powers of Congress be determined by the fair reading of the express and
implied grants contained in the Constitution itself, without reference
to the powers of the States. For a century after Marshall's death,
however, the Court proceeded on the theory that the Tenth Amendment had
the effect of withdrawing various matters of internal police from the
reach of power expressly committed to Congress. This point of view was
originally put forward in New York City v. Miln,\22\ which was first
argued but not decided before Marshall's death. The Miln case involved a
New York statute which required the captains of vessels entering New
York Harbor with aliens aboard to make a report in writing to the Mayor
of the City, giving certain prescribed information. It might have been
distinguished from Gibbons v. Ogden on the ground that the statute
involved in the earlier case conflicted with an act of Congress,
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whereas the Court found that no such conflict existed in this case. But
the Court was unwilling to rest its decision on that distinction.
\22\11 Pet. (36 U.S.) 102 (1837).
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Speaking for the majority, Justice Barbour seized the
opportunity to proclaim a new doctrine. ``But we do not place our
opinion on this ground. We choose rather to plant ourselves on what we
consider impregnable positions. They are these: That a State has the
same undeniable and unlimited jurisdiction over all persons and things,
within its territorial limits, as any foreign nation, where that
jurisdiction is not surrendered or restrained by the Constitution of the
United States. That, by virtue of this, it is not only the right, but
the bounden and solemn duty of a State, to advance the safety, happiness
and prosperity of its people, and to provide for its general welfare, by
any and every act of legislation, which it may deem to be conducive to
these ends; where the power over the particular subject, or the manner
of its exercise is not surrendered or restrained, in the manner just
stated. That all those powers which relate to merely municipal
legislation, or what may, perhaps, more properly be called internal
police, are not thus surrendered or restrained; and that, consequently,
in relation to these, the authority of a State is complete, unqualified,
and exclusive.''\23\ Justice Story, in dissent, stated that Marshall had
heard the previous argument and reached the conclusion that the New York
statute was unconstitutional.\24\
\23\Id., 139.
\24\Id., 161.
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The conception of a ``complete, unqualified and exclusive''
police power residing in the States and limiting the powers of the
National Government was endorsed by Chief Justice Taney ten years later
in the License Cases.\25\ In upholding state laws requiring licenses for
the sale of alcoholic beverages, including those imported from other
States or from foreign countries, he set up the Supreme Court as the
final arbiter in drawing the line between the mutually exclusive,
reciprocally limiting fields of power occupied by the national and state
governments.\26\
\25\5 How. (46 U.S.) 504 (1847).
\26\Id., 573-574.
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Until recently, it appeared that in fact and in theory the Court
had repudiated this doctrine,\27\ but in National League of Cities v.
Usery,\28\ it revived part of this state police power limitation upon
the exercise of delegated federal power. However, the decision was
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by a closely divided Court and subsequent interpretations closely
cabined the development and then overruled the case.
\27\Representative early cases include NLRB v. Jones & Laughlin
Steel Corp., 301 U.S. 1 (1937); Steward Machine Co. v. Davis, 301 U.S.
548 (1937); Helvering v. Davis, 301 U.S. 619 (1937); United States v.
Darby, 312 U.S. 100 (1941). Among the cases incompatible with the theory
was Maryland v. Wirtz, 392 U.S. 183 (1968).
\28\426 U.S. 833 (1976).
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Following the demise of the ``doctrine of dual federalism'' in
the 1930s, the Court confronted the question whether Congress had the
power to regulate state conduct and activities to the same extent,
primarily under the commerce clause, as it did to regulate private
conduct and activities to the exclusion of state law.\29\ In United
States v. California,\30\ upholding the validity of the application of a
federal safety law to a state-owned railroad being operated as a non-
profit entity, the Court, speaking through Justice Stone, denied the
existence of an implied limitation upon Congress' ``plenary power to
regulate commerce'' when a state instrumentality was involved. ``The
state can no more deny the power if its exercise has been authorized by
Congress than can an individual.'' While the State in operating the
railroad was acting as a sovereign and within the powers reserved to the
States, the Court said, its exercise was ``in subordination to the power
to regulate interstate commerce, which has been granted specifically to
the national government. The sovereign power of the states is
necessarily diminished to the extent of the grants of power to the
federal government in the Constitution.''\31\ A series of cases followed
in which the Court refused to construct any state immunity from
regulation when Congress acted pursuant to a delegated power.\32\ The
culmination of this series had been thought to be Maryland v. Wirtz,\33\
in which the Court upheld the constitutionality of applying the federal
wage and hour law to nonprofessional employees of state-operated schools
and hospitals. In an opinion by Justice Harlan, the Court saw a clear
connection between working conditions in these institutions and
interstate commerce. Labor conditions in schools and hospitals affect
commerce; strikes and work stoppages involving such
[[Page 924]]
employees interrupt and burden the flow across state lines of goods
purchased by state agencies and the wages paid have a substantial
effect. The commerce clause being thus applicable, the Justice wrote,
Congress was not constitutionally required to ``yield to state
sovereignty in the performance of governmental functions. This argument
simply is not tenable. There is no general `doctrine implied in the
Federal Constitution that ``the two governments, national and state, are
each to exercise its powers so as not to interfere with the free and
full exercise of the powers of the other.''' . . . [I]t is clear that
the Federal Government when acting within a delegated power, may
override countervailing state interests whether these be described as
`governmental' or `proprietary' in character. . . . [V]alid general
regulations of commerce do not cease to be regulations of commerce
because a State is involved. If a State is engaging in economic
activities that are validly regulated by the Federal Government when
engaged in by private persons, the State too may be forced to conform
its activities to federal regulation.''\34\
\29\On the doctrine of ``dual federalism,'' see the commentary
by the originator of the phrase, Professor Corwin. E. Corwin, The
Twilight of the Supreme Court--A History of Our Constitutional Theory
(Yale: 1934), 10-51; The Commerce Power Versus States Rights (Princeton:
1936), 115-172; A Constitution of Powers in a Secular State
(Charlottesville: 1951), 1-28.
\30\297 U.S. 175 (1936).
\31\Id., 183-185.
\32\California v. United States, 320 U.S. 577 (1944) (federal
regulation of shipping terminal facilities owned by State); California
v. Taylor, 353 U.S. 553 (1957) (Railway Labor Act applies on state-owned
railroad); Case v. Bowles, 327 U.S. 92 (1946); Hubler v. Twin Falls
County, 327 U.S. 103 (1946) (federal wartime price regulations applied
to state transactions; Congress' power effectively to wage war); Board
of Trustees v. United States, 289 U.S. 48 (1933) (State university
required to pay federal customs duties on imported educational
equipment); Oklahoma ex rel. Phillips v. Atkinson Co., 313 U.S. 508
(1941) (federal condemnation of state lands for flood control project);
Sanitary District v. United States, 206 U.S. 405 (1925) (prohibition of
State from diverting water from Great Lakes).
\33\392 U.S. 183 (1968). Justices Douglas and Stewart dissented.
Id., 201.
\34\Id., 195, 196-197.
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Wirtz was specifically reaffirmed in Fry v. United States,\35\
in which the Court upheld the constitutionality of presidentially
imposed wage and salary controls, pursuant to congressional statute, on
all state governmental employees. In dissent, however, Justice Rehnquist
propounded a doctrine which was to obtain majority approval in League of
Cities.\36\ In that opinion, he said for the Court: ``[T]here are
attributes of sovereignty attaching to every state government which may
not be impaired by Congress, not because Con
[[Page 925]]
gress may lack an affirmative grant of legislative authority to reach
the matter, but because the Constitution prohibits it from exercising
the authority in that manner.''\37\ The standard apparently, in judging
between permissible and impermissible federal regulation, is whether
there is federal interference with ``functions essential to separate and
independent existence.''\38\ In the context of this case, state
decisions with respect to the pay of their employees and the hours to be
worked were essential aspects of their ``freedom to structure integral
operations in areas of traditional governmental functions.''\39\ The
line of cases, exemplified by United States v. California, was
distinguished and preserved on the basis that the state activities there
regulated were so unlike the traditional activities of a State that
Congress could reach them;\40\ Case v. Bowles was held distinguishable
on the basis that Congress had acted pursuant to its war powers and to
have rejected the power would have impaired national defense;\41\ Fry
was distinguished on the bases that it was emergency legislation
tailored to combat a serious national emergency, the means were limited
in time and effect, the freeze did not displace state discretion in
structuring operations or force a restructuring, and, the federal action
``operated to reduce the pressure upon state budgets rather than
increase them.''\42\ Wirtz was overruled; it permitted Congress to
intrude into the conduct of integral and traditional state governmental
functions and could not therefore stand.\43\
\35\421 U.S. 542 (1975).
\36\Id. 549. Essentially, the Justice was required to establish
an affirmative constitutional barrier to congressional action. Id, 552-
553. That is, if one asserts only the absence of congressional
authority, one's chances of success are dim because of the breadth of
the commerce power. But when he asserts that, say, the First or Fifth
Amendment bars congressional action concededly within its commerce
power, one interposes an affirmative constitutional defense that has a
chance of success. It was the Justice's view that the State was
``asserting an affirmative constitutional right, inherent in its
capacity as a State, to be free from such congressionally asserted
authority.'' Id., 553. But whence the affirmative barrier? ``[I]t is not
the Tenth Amendment by its terms. . . .'' Id., 557 (emphasis supplied).
Rather, the Amendment was an example of the Framers' understanding that
the sovereignty of the States imposed an implied affirmative barrier to
the assertion of otherwise valid congressional powers. Id., 557-559. But
the difficulty with this construction is that the equivalence sought to
be established by Justice Rehnquist lies not between an individual
asserting a constitutional limit on delegated powers and a State
asserting the same thing but is rather between an individual asserting a
lack of authority and a State asserting a lack of authority; this
equivalence is evident on the face of the Tenth Amendment which states
that the powers not delegated to the United States ``are reserved to the
States respectively, or to the people.'' (emphasis supplied). The States
are thereby accorded no greater interest in restraining the exercise of
nondelegated power than are the people. See Massachusetts v. Mellon, 262
U.S. 447 (1823).
\37\National League of Cities v. Usery, 426 U.S. 833, 845
(1976).
\38\Ibid.
\39\Id., 852.
\40\Id., 854.
\41\Id., 854 n. 18.
\42\Id., 852-853.
\43\Id., 853-855.
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League of Cities did not prove to be much of a restriction upon
congressional power in subsequent decisions. First, its principle was
held not to reach to state regulation of private conduct that affects
interstate commerce, even as to such matters as state jurisdiction over
land within its borders.\44\ Second, it was held not to immunize state
conduct of a business operation, that is, proprietary activity not like
``traditional governmental activities.''\45\ Third, it was held not to
preclude Congress from regulating the way States regulate private
activities within the State, even though such state activity is
certainly traditional governmental action, on the theory that because
Congress could displace or preempt state regulation it may require the
States to regulate in a certain way if they wish
[[Page 926]]
to continue to act in this field.\46\ Fourth, it was held not to limit
Congress when it acts in an emergency or pursuant to its war powers, so
that Congress may indeed reach even traditional governmental
activity.\47\ Fifth, it was held not to apply at all to Congress'
enforcement powers under the Thirteenth, Fourteenth, and Fifteenth
Amendments.\48\ Sixth, it apparently was to have no application to the
exercise of Congress' spending power with conditions attached.\49\
Seventh, not because of the way the Court framed the statement of its
doctrinal position, which is absolutist, but because of the way it
accommodated precedent and because of Justice Blackmun's concurrence, it
was always open to interpretation that Congress was enabled to reach
traditional governmental activities not involving employer-employee
relations or is enabled to reach even these relations if the effect is
``to reduce the pressures upon state budgets rather than increase
them.''\50\ In his concurrence, Justice Blackmun suggested his lack of
agreement with ``certain possible implications'' of the opinion and
recast it as a ``balancing approach'' which ``does not outlaw federal
power in areas such as environmental protection, where the federal
interest is demonstrably greater and where state facility compliance
with imposed federal standards would be essential.''\51\ Indeed, Justice
Blackmun's deviation from League of Cities in the subsequent cases
usually made the difference in the majority. dispute.
\44\Hodel v. Virginia Surface Mining & Reclamation Assn., 452
U.S. 264 (1981).
\45\United Transp. Union v. Long Island Rail Road Co., 455 U.S.
678 (1982).
\46\FERC v. Mississippi, 456 U.S. 742 (1982).
\47\National League of Cities v. Usery, 426 U.S. 833, 854 n. 18
(1976).
\48\Fitzpatrick v. Bitzer, 427 U.S. 445 (1976); City of Rome v.
United States, 446 U.S. 156, 178-180 (1980).
\49\In Pennhurst State School & Hospital v. Halderman, 451 U.S.
1, 17 n. 13 (1981), the Court suggested rather ambiguously that League
of Cities may restrict the federal spending power, citing its
reservation of the cases in League of Cities, 426 U.S. 852 n. 17, but
citing also spending clause cases indicating a rational basis standard
of review of conditioned spending. Earlier, the Court had summarily
affirmed a decision holding that the spending power was not affected by
the case. North Carolina ex rel. Morrow v. Califano, 445 F.Supp. 532
(E.D.N.C. 1977) (three-judge court), affd. 435 U.S. 962 (1978). No hint
of such a limitation is contained in more recent decisions (to be sure,
in the aftermath of League of Cities' demise). New York v. United
States, 112 S.Ct. 2408, 2423, 2426, 2433 (1992); South Dakota v. Dole,
483 U.S. 203, 210-212 (1987).
\50\National League of Cities v. Usery, 426 U.S. 833, 846-851
(1976). The quotation in the text is at id., 853 (one of the elements
distinguishing the case from Fry ).
\51\Id., 856.
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The Court overruled National League of Cities in Garcia v. San
Antonio Metropolitan Transit Auth.,\52\ and seemingly returned to
[[Page 927]]
the conception of federal supremacy embodied in Wirtz and Fry. For the
most part, the Court indicated, States must seek protection from the
impact of federal regulation in the political processes, and not in any
limitations imposed on the commerce power or found in the Tenth
Amendment. Justice Blackmun's opinion for the Court in Garcia concluded
that the National League of Cities test for ``integral operations in
areas of traditional governmental functions'' had proven ``both
impractical and doctrinally barren.''\53\ State autonomy is both limited
and protected by the terms of the Constitution itself, hence--
ordinarily, at least--exercise of Congress' enumerated powers is not to
be limited by ``a priori definitions of state sovereignty.''\54\ States
retain a significant amount of sovereign authority ``only to the extent
that the Constitution has not divested them of their original powers and
transferred those powers to the Federal Government.''\55\ There are
direct limitations in Art. I, Sec. 10, and ``Section 8 . . . works an
equally sharp contraction of state sovereignty by authorizing Congress
to exercise a wide range of legislative powers and (in conjunction with
the supremacy clause of Article VI) to displace contrary state
legislation.''\56\ On the other hand, the principal restraints on
congressional exercise of the commerce power are to be found not in the
Tenth Amendment, in the commerce clause itself, or in ``judicially
created limitations on federal power,'' but in the structure of the
Federal Government and in the political processes.\57\ ``[T]he
fundamental limitation that the constitutional scheme imposes on the
Commerce Clause to protect the 'States as States' is one of process
rather than one of result.''\58\ While continuing to recognize that
``Congress' authority under the Commerce Clause must reflect [the]
position . . . that the States occupy a special and specific position in
our constitutional system,'' the Court held that application of Fair
Labor Standards Act minimum wage and overtime provisions to state
employment does not require identification of these ``affirmative
limits.''\59\ Thus, arguably, the Court has not totally abandoned the
National League of Cities premise that there are limits on the extent to
which federal regulation may burden States as States. Rather, it has
stipulated
[[Page 928]]
that any such limits on exercise of federal power must be premised on a
failure of the political processes to protect state interests, and
``must be tailored to compensate for [such] failings . . . rather than
to dictate a `sacred province of state autonomy.'''\60\
\52\469 U.S. 528 (1985). The issue was again decided by a 5 to 4
vote, Justice Blackmun's qualified acceptance of the National League of
Cities approach having changed to complete rejection. Justice Blackmun's
opinion of the Court was joined by Justices Brennan, White, Marshall,
and Stevens. Writing in dissent were Justices Powell (joined by Chief
Justice Burger and by Justices Rehnquist and O'Connor), O'Connor (joined
by Justices Powell and Rehnquist), and Rehnquist.
\53\Id., 557.
\54\Id., 548.
\55\Id., 549.
\56\Id., 548.
\57\``Apart from the limitation on federal authority inherent in
the delegated nature of Congress' Article I powers, the principal means
chosen by the Framers to ensure the role of the States in the federal
system lies in the structure of the Federal Government itself.'' Id.,
550. The Court cited as prime examples the role of states in selecting
the President, and the equal representation of states in the Senate.
Id., 551.
\58\Id., 554.
\59\Id., 556.
\60\Id., 554.
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Further indication of what must be alleged in order to establish
affirmative limits to commerce power regulation was provided in South
Carolina v. Baker.\61\ The Court expansively interpreted Garcia as
meaning that there must be an allegation of ``some extraordinary defects
in the national political process'' before the Court will intervene. A
claim that Congress acted on incomplete information will not suffice,
the Court noting that South Carolina had ``not even alleged that it was
deprived of any right to participate in the national political process
or that it was singled out in a way that left it politically isolated
and powerless.''\62\ Thus, the general rule is that ``limits on
Congress' authority to regulate state activities . . . are structural,
not substantive--i.e., that States must find their protection from
congressional regulation through the national political process, not
through judicially defined spheres of unregulable state activity.''\63\
\61\485 U.S. 505 (1988).
\62\Id., 512-513.
\63\Id., 512.
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Dissenting in Garcia, Justice Rehnquist predicted that the
doctrine propounded by the dissenters and by those Justices in National
League of Cities ``will . . . in time again command the support of a
majority of the Court.''\64\ As the membership of the Court changed, it
appeared that the prediction was proving true.\65\ Confronted with the
opportunity in New York v. United States,\66\ to re-examine Garcia, the
Court instead distinguished it,\67\ striking down a federal law on the
basis that Congress could not ``commandeer'' the legislative and
administrative processes of state government to compel the
administration of federal programs.\68\ The
[[Page 929]]
line of analysis pursued by the Court makes clear, however, the result
when a Garcia kind of federal law is reviewed.
\64\Garcia v. San Antonio Metropolitan Transit Auth., 469 U.S.
528, 579-580 (1985).
\65\The shift was pronounced in Gregory v. Ashcroft, 501 U.S.
452 (1991), in which the Court, cognizant of the constraints of Garcia,
chose to apply a ``plain statement'' rule to construction of a statute
seen to be intruding into the heart of state autonomy. Id., 463. To do
otherwise, said Justice O'Connor, was to confront ``a potential
constitutional problem'' under the Tenth Amendment and the guarantee
clause of Article IV, Sec. 4. Id., 463-464.
\66\112 S.Ct. 2408 (1992).
\67\The line of cases exemplified by Garcia was said to concern
the authority of Congress to subject state governments to generally
applicable laws, those covering private concerns as well as the States,
necessitating no revisiting of those cases. Id., 2420.
\68\Struck down was a provision of law providing for the
disposal of radioactive wastes generated in the United States by
government and industry. Placing various responsibilities on the States,
the provision sought to compel performance by requiring that any State
that failed to provide for the permanent disposal of wastes generated
within its borders must take title to, take possession of, and assume
liability for the wastes, id., 2414-2417, 2427-2429, obviously a
considerable burden.
---------------------------------------------------------------------------
That is, because the dispute involved the division of authority
between federal and state governments, Justice O'Connor wrote for the
Court, one could inquire whether Congress acted under a delegated power
or one could ask whether Congress had invaded a state province protected
by the Tenth Amendment. But, said the Justice, ``the two inquiries are
mirror images of each other. If a power is delegated to Congress in the
Constitution, the Tenth Amendment expressly disclaims any reservation of
that power to the States; if a power is an attribute of state
sovereignty reserved by the Tenth Amendment, it is necessarily a power
the Constitution has not conferred on Congress.''\69\
\69\Id., 2417.
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Powers delegated to the Nation, therefore, are subject to
limitations that reserve power to the States. This limitation is not
found in the text of the Tenth Amendment, which is, the Court stated,
``but a truism,''\70\ but is a direct constraint on Article I powers
when an incident of state sovereignty is invaded.\71\ The ``take title''
provision was such an invasion. Both the Federal Government and the
States owe political accountability to the people. When Congress
encourages States to adopt and administer a federally-prescribed
program, both governments maintain their accountability for their
decisions. When Congress compels the States to act, state officials will
bear the brunt of accountability that properly belongs at the national
level.\72\The ``take title'' provision, because it presented the States
with ``an unavoidable command'', transformed state governments into
``regional offices'' or ``administrative agencies'' of the Federal
Government, impermissibly undermined the accountability owing the people
and was void.\73\ Whether viewed as lying outside Congress' enumerated
powers or as infringing the core of state sovereignty reserved by the
Tenth Amendment, ``the provision is inconsistent with the federal
structure of our Government established by the Constitution.''\74\
\70\Id., 2418 (quoting United States v. Darby, 312 U.S. 100, 124
(1941)).
\71\Ibid.
\72\Id., 2424.
\73\Id., 2427-2429, 2434-2435.
\74\Id., 2429.
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Federal laws of general applicability, therefore, are surely
subject to examination under the New York test rather than under the
Garcia structural standard. The exercise of Congress' commerce
[[Page 930]]
powers will likely be reviewed under a level of close scrutiny in the
foreseeable future.
Federal Instrumentalities and Personnel and State Police Power
Federal instrumentalities and agencies have never enjoyed the
same degree of immunity from state police regulation as from state
taxation. The Court has looked to the nature of each regulation to
determine whether it is compatible with the functions committed by
Congress to the federal agency. This problem has arisen most often with
reference to the applicability of state laws to the operation of
national banks. Two correlative propositions have governed the decisions
in these cases. The first was stated by Justice Miller in First National
Bank v. Commonwealth.\75\ ``[National banks are] subject to the laws of
the State, and are governed in their daily course of business far more
by the laws of the State than of the Nation. All their contracts are
governed and construed by State laws. Their acquisition and transfer of
property, their right to collect their debts, and their liability to be
sued for debts are all based on State law. It is only when the State law
incapacitates the banks discharging their duties to the government that
it becomes unconstitutional.''\76\ In Davis v. Elmira Savings Bank,\77\
the Court stated the second proposition thus: ``National banks are
instrumentalities of the Federal Government, created for a public
purpose, and as such necessarily subject to the paramount authority of
the United States. It follows that an attempt by a State to define their
duties or control the conduct of their affairs is absolutely void,
wherever such attempted exercise of authority expressly conflicts with
the laws of the United States, and either frustrates the purpose of the
national legislation, or impairs the efficiency of these agencies of the
Federal Government to discharge the duties for the performance of which
they were created.''\78\
\75\9 Wall. (76 U.S.) 353 (1870).
\76\Id., 362.
\77\161 U.S. 275 (1896).
\78\Id., 283.
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Similarly, a state law, insofar as it forbids national banks to
use the word ``saving'' or ``savings'' in their business and advertising
is void by reason of conflict with the Federal Reserve Act authorizing
such banks to receive savings deposits.\79\ However, federal
incorporation of a railroad company of itself does not operate to exempt
it from control by a State as to business consummated wholly
therein.\80\ Also, Treasury Department regulations, designed
[[Page 931]]
to implement the federal borrowing power (Art. I, Sec. 8, cl. 2) by
making United States Savings Bonds attractive to investors and
conferring exclusive title thereto upon a surviving joint owner,
override contrary state community property laws whereunder a one-half
interest in such property remains part of the estate of a decedent co-
owner.\81\ Similarly, the Patent Office having been granted by Congress
an unqualified authorization to license and regulate the conduct
throughout the United States of nonlawyers as patent agents, a State,
under the guise of prohibiting unauthorized practice of law, is
preempted from enjoining such activities of a licensed agent as entail
the rendering of legal opinions as to patentability or infringement of
patent rights and the preparation and prosecution of application for
patents.\82\
\79\Franklin Nat. Bank v. New York, 347 U.S. 273 (1954).
\80\Reagan v. Mercantile Trust Co., 154 U.S. 413 (1894).
\81\Free v. Bland, 369 U.S. 663 (1962).
\82\Sperry v. Florida, 373 U.S. 379 (1963).
---------------------------------------------------------------------------
The extent to which States may go in regulating contractors who
furnish goods or services to the Federal Government is not as clearly
established as is their right to tax such dealers. In 1943, a closely
divided Court sustained the refusal of the Pennsylvania Milk Control
Commission to renew the license of a milk dealer who, in violation of
state law, had sold milk to the United States for consumption by troops
at an army camp located on land belonging to the State, at prices below
the minimum established by the Commission.\83\ The majority was unable
to find in congressional legislation, or in the Constitution, unaided by
congressional enactment, any immunity from such price fixing
regulations. On the same day, a different majority held that California
could not penalize a milk dealer for selling milk to the War Department
at less than the minimum price fixed by state law where the sales and
deliveries were made in a territory which had been ceded to the Federal
Government by the State and were subject to the exclusive jurisdiction
of the former.\84\ On the other hand, by virtue of its conflict with
standards set forth in the Armed Services Procurement Act, 41 U.S.C.
Sec. 152, for determining the letting of contracts to responsible
bidders, a state law licensing contractors cannot be enforced against
one selected by federal authorities for work on an Air Force base.\85\
\83\Penn Dairies v. Milk Control Comm., 318 U.S. 261 (1943).
\84\Pacific Coast Dairy v. Dept. of Agriculture, 318 U.S. 285
(1943). See also Paul v. United States, 371 U.S. 245 (1963).
\85\Leslie Miller, Inc. v. Arkansas, 353 U.S. 187 (1956).
---------------------------------------------------------------------------
Most recently, the Court has done little to clarify the
doctrinal difficulties.\86\ The Court looked to a ``functional''
analysis of state
[[Page 932]]
regulations, much like the rule covering state taxation. ``A state
regulation is invalid only if it regulates the United States directly or
discriminates against the Federal Government or those with whom it
deals.''\87\In determining whether a regulation discriminates against
the Federal Government, ``the entire regulatory system should be
analyzed.''\88\
\86\North Dakota v. United States, 495 U.S. 423 (1990). The
difficulty is that the case was five-to-four with a single Justice
concurring with a plurality of four to reach the result. Id., 444.
Presumably, the concurrence agreed with the rationale set forth here,
disagreeing only in other respects.
\87\Id., 435. Four dissenting Justices agreed with this
principle, but they also would invalidate a state law that ``actually
and substantially interferes with specific federal programs.'' Id., 448,
451-452.
\88\Ibid. That is, only when the overall effect, when balanced
against other regulations applicable to similarly situated persons who
do not deal with the government, imposes a discriminatory burden will
they be invalidated. The concurring Justice was doubtful of this
standard.Id., 444 (Justice Scalia concurring).
---------------------------------------------------------------------------
The Doctrine of Federal Exemption From State Taxation
McCulloch v. Maryland.--Five years after the decision in
McCulloch v. Maryland that a State may not tax an instrumentality of the
Federal Government, the Court was asked to and did reexamine the entire
question in Osborn v. United States Bank.\89\ In that case counsel for
the State of Ohio, whose attempt to tax the Bank was challenged, put
forward two arguments of great importance. In the first place it was
``contended, that, admitting Congress to possess the power, this
exemption ought to have been expressly asserted in the act of
incorporation; and not being expressed, ought not to be implied by the
Court.''\90\ To which Marshall replied: ``It is no unusual thing for an
act of Congress to imply, without expressing, this very exemption from
state control, which is said to be so objectionable in this
instance.''\91\ Secondly, the appellants relied ``greatly on the
distinction between the bank and the public institutions, such as the
mint or the post office. The agents in those offices are, it is said,
officers of government. . . . Not so the directors of the bank. The
connection of the government with the bank, is likened to that with
contractors.''\92\ Marshall accepted this analogy but not to the
advantage of the appellants. He simply indicated that all contractors
who dealt with the Government were entitled to immunity from taxation
upon such transactions.\93\ Thus, not only was the decision of McCulloch
v. Maryland reaffirmed but the foundation was laid for the vast
expansion
[[Page 933]]
of the principle of immunity that was to follow in the succeeding
decades.
\89\9 Wheat. (22 U.S.) 738 (1824).
\90\Id., 865.
\91\Ibid.
\92\Id., 866.
\93\Id., 867.
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Applicability of Doctrine to Federal Securities.--The first
significant extension of the doctrine of the immunity of federal
instrumentalities from state taxation came in Weston v. Charleston,\94\
where Chief Justice Marshall also found in the supremacy clause a bar to
state taxation of obligations of the United States. During the Civil
War, when Congress authorized the issuance of legal tender notes, it
explicitly declared that such notes, as well as United States bonds and
other securities, should be exempt from state taxation.\95\ A modified
version of this section remains on the statute books today.\96\ The
right of Congress to exempt legal tender notes to the same extent as
bonds was sustained in Bank v. Supervisors,\97\ over the objection that
such notes circulate as money and should be taxable in the same way as
coin. But a state tax on checks issued by the Treasurer of the United
States for interest accrued upon government bonds was sustained since it
did not in any way affect the credit of the National Government.\98\
Similarly, the assessment for an ad valorem property tax of an open
account for money due under a federal contract,\99\ and the inclusion of
the value of United States bonds owed by a decedent, in measuring an
inheritance tax,\100\ were held valid, since neither tax would
substantially embarrass the power of the United States to secure
credit.\101\ A state property tax levied on mutual savings banks and
federal savings and loan associations and measured by the amount of
their capital, surplus, or reserve and undivided profits, but without
deduction of the value of their United States securities, was voided as
a tax on obligations of the Federal Government. Apart from the fact that
the ownership interest of depositors in such institutions was different
from that of corporate stockholders, the tax was im
[[Page 934]]
posed on the banks which were solely liable for payment thereof.\102\
\94\2 Pet. (27 U.S.) 449 (1829), followed in New York ex rel.
Bank of Commerce v. New York City, 2 Bl. (67 U.S.) 620 (1863).
\95\12 Stat. 709, 710, 1 (1863).
\96\31 U.S.C. Sec. 3124. The exemption under the statute is no
broader than that which the Constitution requires. First National Bank
v. Bartow County Bd. of Tax Assessors, 470 U.S. 583 (1985). The
relationship of this statute to another, 12 U.S.C. Sec. 548, governing
taxation of shares of national banking associations, has occasioned no
little difficulty. American Bank & Trust Co. v. Dallas County, 463 U.S.
855 (1983); Memphis Bank & Trust Co. v. Garner, 459 U.S. 392 (1983).
\97\7 Wall. (74 U.S.) 26 (1868).
\98\Hibernia Savings Society v. San Francisco, 200 U.S. 310, 315
(1906).
\99\Smith v. Davis, 323 U.S. 111 (1944).
\100\Plummer v. Coler, 178 U.S. 115 (1900); Blodgett v.
Silberman, 277 U.S. 1, 12 (1928).
\101\Accord: Rockford Life Ins. Co. v. Illinois Dept. of
Revenue, 482 U.S. 182 (1987) (Tax including in an investor's net assets
the value of federally-backed securities (``Ginnie Maes'') upheld, since
it would have no adverse effect on Federal Government's borrowing
ability).
\102\Society for Savings v. Bowers, 349 U.S. 143 (1955).
---------------------------------------------------------------------------
Income from federal securities is also beyond the reach of the
state taxing power as the cases now stand.\103\ Nor can such a tax be
imposed indirectly upon the stockholders on such part of the corporate
dividends as corresponds to the part of the corporation's income which
is not assessed, i.e., income from tax exempt bonds.\104\ A State may
constitutionally levy an excise tax on corporations for the privilege of
doing business, and measure the tax by the property of net income of the
corporation, including tax exempt United States securities or the income
derived therefrom.\105\ The designation of a tax is not
controlling.\106\ Where a so-called ``license tax'' upon insurance
companies, measured by gross income, including interest on government
bonds, was, in effect, a commutation tax levied in lieu of other
taxation upon the personal property of the taxpayer, it was still held
to amount to an unconstitutional tax on the bonds themselves.\107\
\103\Northwestern Mutual L. Ins. Co. v. Wisconsin, 275 U.S. 136,
140 (1927).
\104\Miller v. Milwaukee, 272 U.S. 713 (1927).
\105\Provident Institution v. Massachusetts, 6 Wall. (73 U.S.)
611 (1868); Society for Savings v. Coite, 6 Wall. (73 U.S.) 594 (1868);
Hamilton Company v. Massachusetts, 6 Wall. (73 U.S.) 632 (1868); Home
Ins. Co. v. New York, 134 U.S. 594 (1890); Werner Machine Co. v.
Director of Taxation, 350 U.S. 492 (1956).
\106\Macallen v. Massachusetts, 279 U.S. 620, 625 (1929).
\107\Northwestern Mutual L. Ins. Co. v. Wisconsin, 275 U.S. 136
(1927).
---------------------------------------------------------------------------
Taxation of Government Contractors.--In the course of his
opinion in Osborn v. United States Bank,\108\ Chief Justice Marshall
posed the question: ``Can a contractor for supplying a military post
with provisions, be restrained from making purchases within any state,
or from transporting the provisions to the place at which the troops
were stationed? Or could he be fined or taxed for doing so? We have not
yet heard these questions answered in the affirmative.''\109\ Today, the
question insofar as taxation is concerned is answered in the
affirmative. While the early cases looked toward immunity,\110\ in James
v. Dravo Contracting Co.,\111\ by a 5-to-4 vote, the Court established
the modern doctrine. Upholding a state tax on the gross receipts of a
contractor providing services to the Fed
[[Page 935]]
eral Government, the Court said that ```[I]t is not necessary to cripple
[the State's power to tax] by extending the constitutional exemption
from taxation to those subjects which fall within the general
application of non-discriminatory laws, and where no direct burden is
laid upon the governmental instrumentality, and there is only a remote,
if any, influence upon the exercise of the functions of
government.'''\112\ A state-imposed sales tax upon the purchase of goods
by a private firm having a cost-plus contract with the Federal
Government was sustained, it not being critical to the tax's validity
that it would be passed on to the Government.\113\ Previously, it had
sustained a gross receipts tax levied in lieu of a property tax upon the
operator of an automobile stage line, who was engaged in carrying the
mails as an independent contractor\114\ and an excise tax on gasoline
sold to a contractor with the Government and used to operate machinery
in the construction of levees on the Mississippi River.\115\ While the
decisions have not set an unwavering line,\116\ the Court has in recent
years hewed to a very restrictive doctrine of immunity. ``[T]ax immunity
is appropriate in only one circumstance: when the levy falls on the
United States itself, or on an agency or instrumentality so closely
connected to the Government that the two cannot realistically be viewed
as separate entities, at least insofar as the activity being taxed is
concerned.''\117\ Thus, New Mexico sustained a state gross receipts tax
and a use tax imposed upon contractors with the Federal Government which
operated on ``advanced funding,'' drawing on federal deposits so that
only federal funds were expended by the contractors to meet their
obligations.\118\
\108\9 Wheat. (22 U.S.) 738 (1824).
\109\Id., 867.
\110\The dissent in James v. Dravo Contracting Co., 302 U.S.
134, 161 (1937), observed that the Court was overruling ``a century of
precedents.'' See, e.g., Panhandle Oil Co. v. Mississippi ex rel. Knox,
277 U.S. 218 (1928) (voiding a state privilege tax on dealers in
gasoline as applied to sales by a dealer to the Federal Government for
use by Coast Guard). It was in Panhandle that Justice Holmes uttered his
riposte to Chief Justice Marshall: ``The power to tax is not the power
to destroy while this Court sits.'' Id., 223 (dissenting).
\111\302 U.S. 134 (1937).
\112\Id., 150(quoting Willcuts v. Bunn, 282 U.S. 216, 225
(1931)).
\113\Alabama v. King & Boozer, 314 U.S. 1 (1941), overruling
Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218 (1928), and
Graves v. Texas Co., 298 U.S. 393 (1936). See also Curry v. United
States, 314 U.S. 14 (1941). ``The Constitution . . . does not forbid a
tax whose legal incidence is upon a contractor doing business with the
United States, even though the economic burden of the tax, by contract
or otherwise, is ultimately borne by the United States.'' United States
v. Boyd, 378 U.S. 39, 44 (1964) (sustaining sales and use taxes on
contractors using tangible personal property to carry out government
cost-plus contract).
\114\Alward v. Johnson, 282 U.S. 509 (1931).
\115\Trinityfarm Const. Co. v. Grosjean, 291 U.S. 466 (1934).
\116\United States v. Allegheny County, 322 U.S. 174 (1944)
(voiding property tax that included in assessment the value of federal
machinery held by private party); Kern-Limerick v. Scurlock, 347 U.S.
110 (1954) (voiding gross receipts sales tax applied to contractor
purchasing article under agreement whereby he was to act as agent for
Government and title to articles purchased passed directly from vendor
to United States).
\117\United States v. New Mexico, 455 U.S. 720, 735 (1982). See
South Carolina v. Baker, 485 U.S. 505, 523 (1988).
\118\``[I]mmunity may not be conferred simply because the tax
has an effect on the United States, or even because the Federal
Government shoulders the entire economic burden of the levy.'' United
States v. New Mexico, 455 U.S. 720, 734 (1982).
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[[Page 936]]
Of course, Congress may statutorily provide for immunity from
taxation of federal contractors generally or in particular
programs.\119\
\119\James v. Dravo Contracting Co., 302 U.S. 134, 161 (1937);
Carson v. Roane-Anderson Co., 342 U.S. 232, 234 (1952); United States v.
New Mexico, 455 U.S. 720, 737 (1982). Roane-Anderson held that a section
of the Atomic Energy Act barred the collection of state sales and use
taxes in connection with sales to private companies of personal property
used by them in fulfilling their contracts with the AEC. Thereafter,
Congress repealed the section for the express purpose of placing AEC
contractors on the same footing as other federal contractors and the
Court upheld imposition of the taxes. United States v. Boyd, 378 U.S. 39
(1964).
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Taxation of Salaries of Employees of Federal Agencies.--Of a
piece with James v. Dravo Contracting Co. was the decision in Graves v.
New York ex rel. O'Keefe,\120\ handed down two years later. Repudiating
the theory ``that a tax on income is legally or economically a tax on
its source,'' the Court held that a State could levy a nondiscriminatory
income tax upon the salary of an employee of a government corporation.
In the opinion of the Court, Justice Stone intimated that Congress could
not validly confer such an immunity upon federal employees. ``The
burden, so far as it can be said to exist or to affect the government in
any indirect or incidental way, is one which the Constitution
presupposes; and hence it cannot rightly be deemed to be within an
implied restriction upon the taxing power of the national and state
governments which the Constitution has expressly granted to one and has
confirmed to the other. The immunity is not one to be implied from the
Constitution, because if allowed it would impose to an inadmissible
extent a restriction on the taxing power which the Constitution has
reserved to the state governments.''\121\ Chief Justice Hughes concurred
in the result without opinion. Justices Butler and McReynolds dissented
and Justice Frankfurter wrote a concurring opinion in which he reserved
judgment as to ``whether Congress may, by express legislation, relieve
its functionaries from their civic obligations to pay for the benefits
of the State governments under which they live.''\122\
\120\306 U.S. 466 (1939), followed in State Comm. v. Van Cott,
306 U.S. 511 (1939). This case overruled by implication Dobbins v. Erie
County, 16 Pet. (41 U.S.) 435 (1842), and New York ex rel. Rogers v.
Graves, 299 U.S. 401 (1937), which held the income of federal employees
to be immune from State taxation.
\121\Id., 487.
\122\Id. 492.
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That question is academic, Congress having consented to state
taxation of its employees' compensation as long as the taxation ``does
not discriminate against the . . . employee, because of the
[[Page 937]]
source of the . . . compensation.''\123\ This statute, the Court has
held, ``is coextensive with the prohibition against discriminatory taxes
embodied in the modern constitutional doctrine of intergovernmental tax
immunity.''\124\
\123\4 U.S.C. Sec. 111. The statute, part of the Public Salary
Tax Act of 1939, was considered and enacted contemporaneously with the
alteration occurring in constitutional law, exemplified by Graves. That
is, in Helvering v. Gerhardt, 304 U.S. 405 (1938), the Court had
overruled precedents and held that Congress could impose
nondiscriminatory taxes on the incomes of most state employees, and the
1939 Act had as its primary purpose the imposition of federal income
taxes on the salaries of all state and local government employees.
Feeling equity required it, Congress included a provision authorizing
nondiscriminatory state taxation of federal employees. Graves came down
while the provision was pending in Congress. See Davis v. Michigan Dept.
of the Treasury, 489 U.S. 803, 810-814 (1989).
\124\Id., 813. This case struck down, as violative of the
provision, a state tax imposed on federal retirement benefits but
exempting state retirement benefits. See also Barker v. Kansas, 112
S.Ct. 1619 (1992) (similarly voiding a state tax on federal military
retirement benefits but not reaching state and local government
retirees).
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Ad Valorem Taxes Under the Doctrine.--Property owned by a
federally chartered corporation engaged in private business is subject
to state and local ad valorem taxes. This was conceded in McCulloch v.
Maryland,\125\ and confirmed a half century later with respect to
railroads incorporated by Congress.\126\ Similarly, a property tax may
be levied against the lands under water which are owned by a person
holding a license under the Federal Water Power Act.\127\ However, when
privately owned property erected by lessees on tax exempt state lands is
taxed by a county at less than full value, and houses erected by
contractors on land leased from a federal Air Force base are taxed at
full value, the latter tax, solely by reason of the discrimination
against the United States and its lessees, is rendered void.\128\
Likewise, when under state laws, a school district does not tax private
lessees of state and municipal realty, whose leases are subject to
termination at the lessor's option in the event of sale, but does levy a
tax, measured by the entire value of the realty, on lessees of United
States property utilized for private purposes and whose leases are
terminable at the option of the United States in an emergency or upon
sale, the discrimination voided the tax collected from the latter. ``A
state tax may not discriminate against the Government or those with whom
it deals'' in the absence of significant differences justifying levy of
higher taxes on lessees of federal property.\129\ Land conveyed by
[[Page 938]]
the United States to a corporation for dry dock purposes was subject to
a general property tax, despite a reservation in the conveyance of a
right to free use of the dry dock and a provision for forfeiture in case
of the continued unfitness of the dry dock for use or the use of land
for other purposes.\130\ Also, where equitable title has passed to the
purchaser of land from the Government, a State may tax the equitable
owner on the full value thereof, despite retention of legal title;\131\
but, in the case of reclamation entries, the tax may not be collected
until the equitable title passes.\132\ In the pioneer case of Van
Brocklin v. Tennessee,\133\ the State was denied the right to sell for
taxes lands which the United States owned at the time the taxes were
levied, but in which it had ceased to have any interest at the time of
sale. Similarly, a State cannot assess land in the hands of private
owners for benefits from a road improvement completed while it was owned
by the United States.\134\
\125\4 Wheat. (17 U.S.) 316, 426 (1819).
\126\Thomson v. Pacific Railroad, 9 Wall. (76 U.S.) 579, 588,
(1870); Union Pacific R. Co. v. Penistion, 18 Wall. (85 U.S.) 5, 31
(1873).
\127\Susquehanna Power Co. v. Tax Comm. (No. 1), 283 U.S. 291
(1931).
\128\Moses Lake Homes v. Grant County, 365 U.S. 744 (1961).
\129\Phillips Chemical Co. v. Dumas School Dist., 361 U.S. 376,
383, 387 (1960). In Offutt Housing Co. v. Sarpy County, 351 U.S. 253
(1956), a housing company was held liable for county personal property
taxes on the ground that the Government had consented to state taxation
of the company's interest as lessee. Upon its completion of housing
accommodations at an Air Force Base, the company had leased the houses
and the furniture therein from the Federal Government.
\130\Baltimore Shipbuilding Co. v. Baltimore, 195 U.S. 375
(1904).
\131\Northern Pacific R. Co. v. Myers, 172 U.S. 589 (1899); New
Brunswick v. United States, 276 U.S. 547 (1928).
\132\Irwin v. Wright, 258 U.S. 219 (1922).
\133\117 U.S. 151 (1886).
\134\Lee v. Osceola Imp. Dist., 268 U.S. 643 (1925).
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In 1944, with two dissents, the Court held that where the
Government purchased movable machinery and leased it to a private
contractor the lessee could not be taxed on the full value of the
equipment.\135\ Twelve years later, and with a like number of Justices
dissenting, the Court upheld the following taxes imposed on federal
contractors: (1) a municipal tax levied pursuant to a state law which
stipulated that when tax exempt real property is used by a private firm
for profit, the latter is subject to taxation to the same extent as if
it owned the property, and based upon the value of real property, a
factory, owned by the United States and made available under a lease
permitting the contracting corporation to deduct such taxes from rentals
paid by it; the tax was collectible only by direct action against the
contractor for a debt owed, and was not applicable to federal properties
on which payments in lieu of taxes are made; (2) a municipal tax, levied
under the authority of the same state law, based on the value of the
realty owned by the United States, and collected from a cost-plus-fixed-
fee contractor, who paid no rent but agreed not to include any part of
the cost of the facilities furnished by the Government in the price of
goods supplied under the contract; (3) another municipal tax levied in
the
[[Page 939]]
same State against a federal subcontractor, and computed on the value of
materials and work in process in his possession, notwithstanding that
title thereto had passed to the United States following his receipt of
installment payments.\136\
\135\United States v. Allegheny County, 322 U.S. 174 (1944).
\136\United States v. City of Detroit, 355 U.S. 466 (1958). The
Court more recently has stated that Allegheny County ``in large part was
overruled'' by Detroit. United States v. New Mexico, 455 U.S. 720, 732
(1982).
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In sustaining the first tax, the Court held that it was imposed,
not on the Government or on its property, but upon a private lessee,
that it was computed by the value of the use to the contractor of the
federally leased property, and that it was nondiscriminatory; that is,
it was designed to equalize the tax burden carried by private business
using exempt property with that of similar businesses using taxed
property. Distinguishing the Allegheny case, the Court maintained that
in this older decision, the tax invalidated was imposed directly on
federal property and that the question of the legality of a privilege on
use and possession of such property had been expressly reserved therein.
Also insofar as the economic incidents of such tax on private use
curtails the net rental accruing to the Government, such burden was
viewed as insufficient to vitiate the tax.\137\
\137\United States v. City of Detroit, 355 U.S. 478, 482, 483
(1958). See also California Bd. of Equalization v. Sierra Summit, 490
U.S. 844 (1989).
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Deeming the second and third taxes similar to the first, the
Court sustained them as taxes on the privilege of using federal property
in the conduct of private business for profit. With reference to the
second, the Court emphasized that the Government had reserved no right
of control over the contractor and, hence, the latter could not be
viewed as an agent of the Government entitled to the immunity derivable
from that status.\138\ As to the third tax, the Court asserted that
there was no difference between taxing a private party for the privilege
of using property he possesses, and taxing him for possessing property
which he uses; for, in both instances, the use was private profit.
Moreover, the economic burden thrust upon the Government was viewed as
even more remote than in the administration of the first two taxes.\139\
\138\United States v. Township of Muskegon, 355 U.S. 484 (1958).
\139\City of Detroit v. Murray Corp., 355 U.S. 489 (1958). In
United States v. County of Fresno, 429 U.S. 452 (1977), these cases were
reaffirmed and applied to sustain a tax imposed on the possessory
interests of United States Forest Service employees in housing located
in national forests within the county and supplied to the employees by
the Forest Service as part of their compensation. A State or local
government may raise revenues on the basis of property owned by the
United States as long as it is in possession or use by the private
citizen that is being taxed.
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[[Page 940]]
Federal Property and Functions.--Property owned by the United
States is, of course, wholly immune from state taxation.\140\ No State
can regulate, by the imposition of an inspection fee, any activity
carried on by the United States directly through its own agents and
employees.\141\ An early case, the authority of which is now uncertain,
held invalid a flat rate tax on telegraphic messages, as applied to
messages sent by public officers on official business.\142\
\140\Clallam County v. United States, 263 U.S. 341 (1923). See
also Cleveland v. United States, 323 U.S. 329, 333 (1945); United States
v. Mississippi Tax Comm., 412 U.S. 363 (1973); United States v.
Mississippi Tax Comm ., 421 U.S. 599 (1975).
\141\Mayo v. United States, 319 U.S. 441 (1943). A municipal tax
on the privilege of working within the city, levied at the rate of one
percent of earnings, although not deemed to be an income tax under state
law, was sustained as such when collected from employees of a naval
ordinance plant by reason of federal assent to that type of tax
expressed in the Buck Act. 4 U.S.C. Sec. Sec. 105-110. Howard v.
Commissioners, 344 U.S. 624 (1953).
\142\Telegraph Co. v. Texas, 105 U.S. 460, 464 (1882).
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Federally Chartered Finance Agencies: Statutory Exemptions.--
Fiscal institutions chartered by Congress, their shares and their
property, are taxable only with the consent of Congress and only in
conformity with the restrictions it has attached to its consent.\143\
Immediately after the Supreme Court construed the statute authorizing
the States to tax national bank shares as allowing a tax on the
preferred shares of such a bank held by the Reconstruction Finance
Corporation,\144\ Congress passed a law exempting such shares from
taxation. The Court upheld this measure, saying: ``When Congress
authorized the states to impose such taxation, it did no more than
gratuitously grant them political power which they theretofore lacked.
Its sovereign power to revoke the grant remained unimpaired, the grant
of the privilege being only a declaration of legislative policy
changeable at will.''\145\ In Pittman v. Home Owners' Corp.,\146\ the
Court sustained the power of Congress under the necessary and proper
clause to immunize the activities of the Corporation from state
taxation; and in Federal Land Bank v. Bismarck Co.,\147\ the like result
was reached with respect to an attempt by the State to impose a retail
sales tax on a sale of lumber and other building materials to the bank
for use in repairing and improving property that had been acquired by
foreclosure or mortgages.
\143\Des Moines Bank v. Fairweather, 263 U.S. 103, 106 (1923);
Owensboro National Bank v. Owensboro, 173 U.S. 664, 669 (1899); First
Nat. Bank v. Adams, 258 U.S. 362 (1922); Michigan Nat. Bank v. Michigan,
365 U.S. 467 (1961).
\144\Baltimore Nat. Bank v. Tax Comm., 297 U.S. 209 (1936).
\145\Maricopa County v. Valley Bank, 318 U.S. 357, 362, (1943).
\146\308 U.S. 21 (1939).
\147\314 U.S. 95 (1941).
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[[Page 941]]
The State's principal argument proceeded thus: ``Congress has
authority to extend immunity only to the governmental functions of the
federal land banks; the only governmental functions of the land banks
are those performed by acting as depositories and fiscal agents for the
federal government and providing a market for government bonds; all
other functions of the land banks are private; petitioner here was
engaged in an activity incidental to its business of lending money, an
essentially private function; therefore 26 cannot operate to strike down
a sales tax upon purchases made in furtherance of petitioner's lending
functions.''\148\ The Court rejected this argument and invalidated the
tax saying: ``The argument that the lending functions of the federal
land banks are proprietary rather than governmental misconceives the
nature of the federal government with respect to every function which it
performs. The federal government is one of delegated powers, and from
that it necessarily follows that any constitutional exercise of its
delegated powers is governmental. . . . It also follows that, when
Congress constitutionally creates a corporation through which the
federal government lawfully acts, the activities of such corporation are
governmental.''\149\
\148\Id., 101.
\149\Id., 102.
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Similarly, the lease by a federal land bank of oil and gas in a
mineral estate, which it had reserved in land originally acquired
through foreclosure and thereafter had conveyed to a third party, was
held immune from a state personal property tax levied on the lease and
on the royalties accruing thereunder. The fact that at the time of the
conveyance and lease, the bank had recouped its entire loss resulting
from the foreclosure did not operate to convert the mineral estate and
lease into a non-governmental activity no longer entitled to
exemption.\150\ However, in the absence of federal legislation, a state
law laying a percentage tax on the users of safety deposit services,
measured by the bank's charges therefore, was held valid as applied to
national banks. The tax, being on the user, did not, the Court held,
impose an intrinsically unconstitutional burden on a federal
instrumentality.\151\
\150\Fed. Land Bank v. Kiowa County, 368 U.S. 146 (1961).
\151\Colorado Bank v. Bedford, 310 U.S. 41 (1940).
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Royalties.--In 1928, the Court went so far as to hold that a
State could not tax as income royalties for the use of a patent issued
by the United States.\152\ This proposition was soon overruled in Fox
Film Corp. v. Doyal,\153\ where a privilege tax based on gross income
and applicable to royalties from copyrights was upheld.
[[Page 942]]
Likewise a State may lay a franchise tax on corporations, measured by
the net income from all sources and applicable to income from copyright
royalties.\154\
\152\Long v. Rockwood, 277 U.S. 142 (1928).
\153\286 U.S. 123 (1932).
\154\Educational Films Corp. v. Ward, 282 U.S. 379 (1931).
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Immunity of Lessees of Indian Lands.--Another line of anomalous
decisions conferring tax immunity upon lessees of restricted Indian
lands was overruled in 1949. The first of these cases, Choctaw, O. & G.
R. Co. v. Harrison,\155\ held that a gross production tax on oil, gas,
and other minerals was an occupational tax, and, as applied to a lessee
of restricted Indian lands, was an unconstitutional burden on such
lessee, who was deemed to be an instrumentality of the United States.
Next, the Court held the lease itself a federal instrumentality immune
from taxation.\156\ A modified gross production tax imposed in lieu of
all ad valorem taxes was invalidated in two per curiam decisions.\157\
In Gillespie v. Oklahoma,\158\ a tax upon net income of the lessee
derived from sales of his share of oil produced from restricted lands
also was condemned. Finally a petroleum excise tax upon every barrel of
oil produced in the State was held inapplicable to oil produced on
restricted Indian lands.\159\ In harmony with the trend to restricting
immunity implied from the Constitution to activities of the Government
itself, the Court overruled all these decisions in Oklahoma Tax Comm. v.
Texas Co. and held that a lessee of mineral rights in restricted Indian
lands was subject to nondiscriminatory gross production and excise
taxes, so long as Congress did not affirmatively grant him
immunity.\160\
\155\235 U.S. 292 (1914).
\156\Indian Oil Co. v. Oklahoma, 240 U.S. 522 (1916).
\157\Howard v. Gipsy Oil Co., 247 U.S. 503 (1918); Large Oil Co.
v. Howard, 248 U.S. 549 (1919).
\158\257 U.S. 501 (1922).
\159\Oklahoma v. Barnsdall Corp., 296 U.S. 521 (1936).
\160\336 U.S. 342 (1949). Justice Rutledge, speaking for the
Court, sketched the history of the immunity lessees of Indian lands from
state taxation, which he found to stem from early rulings that tribal
lands are themselves immune. The Kansas Indians, 5 Wall. (72 U.S.) 737
(1867); The New York Indians, 5 Wall. (72 U.S.) 761 (1867). One of the
first steps taken to curtail the scope of the immunity was Shaw v. Oil
Corp., 276 U.S. 575 (1928), which held that lands outside a reservation,
though purchased with restricted Indian funds, were subject to state
taxation. Congress soon upset the decision, however, and its act was
sustained in Board of Comm. v. Seber, 318 U.S. 705 (1943).
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Summation and Evaluation
Although McCulloch v. Maryland and Gibbons v. Ogden were
expressions of a single thesis, the supremacy of the National
Government, their development after Marshall's death has been sharply
divergent. During the period when Gibbons v. Ogden was eclipsed by the
theory of dual federalism, the doctrine of McCulloch
[[Page 943]]
v. Maryland was not merely followed but greatly extended as a restraint
on state interference with federal instrumentalities. Conversely, the
Court's recent return to Marshall's conception of the powers of Congress
has coincided with a retreat from the more extreme positions taken in
reliance upon McCulloch v. Maryland. Today, the application of the
supremacy clause is becoming, to an ever increasing degree, a matter of
statutory interpretation; a determination whether state regulations can
be reconciled with the language and policy of federal enactments. In the
field of taxation, the Court has all but wiped out the private
immunities previously implied from the Constitution without explicit
legislative command. Broadly speaking, the immunity which remains is
limited to activities of the Government itself, and to that which is
explicitly created by statute, e.g., that granted to federal securities
and to fiscal institutions chartered by Congress. But the term,
activities, will be broadly construed.
Clause 3. The Senators and Representatives before mentioned, and the
Members of the several State Legislatures, and all executive and
judicial Officers, both of the United States and of the several States,
shall be bound by Oath or Affirmation, to support this Constitution; but
no religious Test shall ever be required as a Qualification to any
Office or public Trust under the United States.
OATH OF OFFICE
Power of Congress in Respect to Oaths
Congress may require no other oath of fidelity to the
Constitution, but it may superadd to this oath such other oath of office
as its wisdom may require.\161\ It may not, however, prescribe a test
oath as a qualification for holding office, such an act being in effect
an ex post facto law,\162\ and the same rule holds in the case of the
States.\163\
\161\McCulloch v. Maryland, 4 Wheat. (17 U.S.) 316, 416 (1819).
\162\Ex parte Garland, 4 Wall. (71 U.S.) 333, 337 (1867).
\163\Cummings v. Missouri, 4 Wall. (71 U.S.) 277, 323 (1867).
See also Bond v. Floyd, 385 U.S. 116 (1966), where the Supreme Court
held that antiwar statements made by a newly elected member of the
Georgia House of Representatives were not inconsistent with the oath of
office, pledging support to the federal Constitution.
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[[Page 944]]
National Duties of State Officers
Commenting in The Federalist on the requirement that state
officers, as well as members of the state legislatures, shall be bound
by oath or affirmation to support the Constitution, Hamilton wrote:
``Thus the legislatures, courts, and magistrates, of the respective
members, will be incorporated into the operations of the national
government as far as its just and constitutional authority extends; and
it will be rendered auxiliary to the enforcement of its laws.''\164\ The
younger Pinckney had expressed the same idea on the floor of the
Philadelphia Convention: ``They [the States] are the instruments upon
which the Union must frequently depend for the support and execution of
their powers . . .''\165\ Indeed, the Constitution itself lays many
duties, both positive and negative, upon the different organs of state
government,\166\ and Congress may frequently add others, provided it
does not require the state authorities to act outside their normal
jurisdiction. Early congressional legislation contains many
illustrations of such action by Congress.
\164\No. 27, (J. Cooke ed. 1961), 175(emphasis in original). See
also, id., No. 45, 312-313 (Madison).
\165\1 M. Farrand, The Records of the Federal Convention of 1787
(New Haven: rev. ed. 1937), 404.
\166\See Article I, Sec. 3, cl. 1; Sec. 4, cl. 1; 10; Article
II, Sec. 1, cl. 2; Article III, 2, cl. 2; Article IV, Sec. Sec. 1, 2;
Article V; Amendments 13, 14, 15, 17, 19, 25, and 26.
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The Judiciary Act of 1789 \167\ not only left the state courts
in sole possession of a large part of the jurisdiction over
controversies between citizens of different States and in concurrent
possession of the rest, and by other sections state courts were
authorized to entertain proceedings by the United States itself to
enforce penalties and forfeitures under the revenue laws, examples of
the principle that federal law is law to be applied by the state courts,
but also any justice of the peace or other magistrates of any of the
States were authorized to cause any offender against the United States
to be arrested and imprisoned or bailed under the usual mode of process.
From the beginning, Congress enacted hundreds of statutes that contained
provisions authorizing state officers to enforce and execute federal
laws.\168\ Pursuant to same idea of treating state governmental organs
as available to the National Government for administrative purposes, the
act of 1793 entrusted the rendition of fugitive slaves in part to
national officials and in part to state offi
[[Page 945]]
cials and the rendition of fugitives from justice from one State to
another exclusively to the state executives.\169\
\167\1 Stat. 73 (1789).
\168\See Warren, Federal Criminal Laws and the State Courts, 38
Harv. L. Rev. 545 (1925); Holcomb, The States as Agents of the Nation, 3
Selected Essays on Constitutional Law (Cambridge: 1938), 1187; Barnett,
Cooperation Between the Federal and State Governments, 7 Ore. L. Rev.
267 (1928). See also J. Clark, The Rise of a New Federalism (Princeton:
1938); E. Corwin, Court Over Constitution (Princeton: 1938), 148-168.
\169\1 Stat. 302 (1793).
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With the rise of the doctrine of States Rights and of the equal
sovereignty of the States with the National Government, the availability
of the former as instruments of the latter in the execution of its power
came to be questioned.\170\ In Prigg v. Pennsylvania,\171\ decided in
1842, the constitutionality of the provision of the act of 1793 making
it the duty of state magistrates to act in the return of fugitive slaves
was challenged; and in Kentucky v. Dennison,\172\ decided on the eve of
the Civil War, similar objection was leveled against the provision of
the same act which made it ``the duty'' of the Chief Executive of a
State to render up a fugitive from justice upon the demand of the Chief
Executive of State from which the fugitive had fled. The Court sustained
both provisions, but upon the theory that the cooperation of the state
authorities was purely voluntary. In the Prigg case the Court, speaking
by Justice Story, said that ``while a difference of opinion has existed,
and may exist still on the point, in different states, whether state
magistrates are bound to act under it, none is entertained by this
Court, that state magistrates may, if they choose, exercise that
authority, unless prohibited by state legislation.''\173\ Subsequent
cases confirmed the point that Congress could authorize willing state
officers to perform such federal duties.\174\ Indeed, when Congress in
the Selective Service Act of 1917 authorized enforcement to a great
extent through state employees, the Court rejected ``as too wanting in
merit to require further notice'' the contention that the Act was
invalid because of this delegation.\175\ State officials were frequently
employed in the enforcement of the National Prohibition Act, and suits
to abate nuisances as defined by the statute were authorized to be
brought, in the name of the United States, not only by federal
[[Page 946]]
officials, but also by ``any prosecuting attorney of any State or any
subdivision thereof.''\176\
\170\For the development of opinion, especially on the part of
state courts, adverse to the validity of such legislation, see 1 J.
Kent, Commentaries on American Law (New York: 1826), 396-404.
\171\16 Pet. (41 U.S.) 539 (1842).
\172\24 How. (65 U.S.) 66 (1861).
\173\16 Pet. (41 U.S.) 539, 622 (1842). See also Kentucky v.
Dennison, 24 How. (65 U.S.) 66, 108 (1861). The word ``magistrates'' in
this passage does not refer solely to judicial officers but reflects the
usage in that era in which officers generally were denominated
magistrates; the power thus upheld is not the related but separate issue
of the utilization of state courts to enforce federal law.
\174\United States v. Jones, 109 U.S. 513, 519 (1883); Robertson
v. Baldwin, 165 U.S. 275, 280 (1897); Dallemagne v. Moisan, 197 U.S.
169, 174 (1905); Holmgren v. United States, 217 U.S. 509, 517 (1910);
Parker v. Richard, 250 U.S. 235, 239 (1919).
\175\Selective Draft Law Cases, 245 U.S. 366, 389 (1918). The
Act was 40 Stat. 76 (1917).
\176\41 Stat. 314, Sec. 22. In at least two States, the practice
was approved by state appellate courts. Carse v. Marsh, 189 Cal. 743,
210 Pac. 257 (1922); United States v. Richards, 201 Wis. 130, 229 N.W.
675 (1930). On this and other issues under the Act, see Hart, Some Legal
Questions Growing Out of the President's Executive Order for Prohibition
Enforcement, 13 Va. L. Rev. 86 (1922).
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In the Dennison case, however, it was held that while Congress
could delegate it could not require performance of an obligation. The
``duty'' of state executives in the rendition of fugitives from justice
was construed to be declaratory of a ``moral duty.'' Said Chief Justice
Taney for the Court: ``The act does not provide any means to compel the
execution of this duty, nor inflict any punishment for neglect or
refusal on the part of the Executive of the State; nor is there any
clause or provision in the Constitution which arms the Government of the
United States with this power. Indeed, such a power would place every
State under the control and dominion of the General Government, even in
the administration of its internal concerns and reserved rights. And we
think it clear that the Federal Government, under the Constitution, has
no power to impose on a State officer, as such, any duty whatever, and
compel him to perform it[.] . . . It is true,'' the Chief Justice
conceded, ``that in the early days of the Government, Congress relied
with confidence upon the co-operation and support of the States, when
exercising the legitimate powers of the General Government, and were
accustomed to receive it, [but this, he explained, was] upon principles
of comity, and from a sense of mutual and common interest, where no such
duty was imposed by the Constitution.''\177\
\177\24 How. (65 U.S.) 66, 107-108 (1861).
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Eighteen years later, in Ex parte Siebold,\178\ the Court
sustained the right of Congress, under Article I, Sec. 4, parag. 1 of
the Constitution, to impose duties upon state election officials in
connection with a congressional election and to prescribe additional
penalties for the violation by such officials of their duties under
state law. While the doctrine of the holding was expressly confined to
cases in which the National Government and the States enjoy ``a
concurrent power over the same subject matter,'' no attempt was made to
catalogue such cases. Moreover, the outlook of Justice Bradley's opinion
for the Court was decidedly nationalistic rather than dualistic, as is
shown by the answer made to the contention of counsel ``that the nature
of sovereignty is such as to preclude the joint cooperation of two
sovereigns, even in a matter in which they are mutually concerned.'' To
this Justice Bradley replied: ``As a general rule, it is no doubt
expedient and wise that the operations
[[Page 947]]
of the State and national governments should, as far as practicable, be
conducted separately, in order to avoid undue jealousies and fears and
conflicts of jurisdiction and power. But there is no reason for laying
this down as a rule of universal application. It should never be made to
override the plain and manifest dictates of the Constitution itself. We
cannot yield to such a transcendental view of state sovereignty. The
Constitution and laws of the United States are the supreme law of the
land, and to these every citizen of every State owes obedience, whether
in his individual or official capacity.''\179\
\178\100 U.S. 371 (1880).
\179\Id., 392.
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Conflict, thus, developed early between these two doctrinal
lines. But was the Siebold line that was to prevail. Enforcement of
obligations upon state officials through mandamus or through injunctions
was readily available, even when the State itself was immune, through
the fiction of Ex parte Young,\180\ under which a state official could
be sued in his official capacity but without the immunities attaching to
his official capacity. Although the obligations were, for a long period,
in their origin based on the Federal Constitution, the capacity of
Congress to enforce statutory obligations through judicial action was
little doubted.\181\ Nonetheless, it was only recently that the Court
squarely overruled Dennison. ``If it seemed clear to the Court in 1861,
facing the looming shadow of a Civil War, that `the Federal Government,
under the Constitution, has no power to impose on a State officer, as
such, any duty whatever, and compel him to perform it,' . . . basic
constitutional principles now point as clearly the other way.''\182\
That case is doubly important, inasmuch as the Court spoke not only to
the extradition clause and the federal statute directly enforcing it,
but it also enforced a purely statutory right on behalf of a Territory
that could not claim for itself rights under the clause itself.\183\
\180\209 U.S. 123 (1908). See also Board of Liquidation v.
McComb, 92 U.S. 531, 541 (1876).
\181\Maine v. Thiboutot, 448 U.S. 1 (1980).
\182\Puerto Rico v. Branstad, 483 U.S. 219, 227 (1987) (Dennison
``rests upon a foundation with which time and the currents of
constitutional change have dealt much less favorably'').
\183\In including territories in the statute, Congress acted
under the territorial clause rather than under the extradition clause.
New York ex rel. Kopel v. Bingham, 211 U.S. 468 (1909).
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Even as the Court imposes new federalism limits upon Congress'
powers to regulated the States as States, it has reaffirmed the
principle that Congress may authorize the federal courts to compel state
officials to comply with federal law, statutory as well as
constitutional. ``[T]he Supremacy Clause makes federal law paramount
over the contrary positions of state officials; the power
[[Page 948]]
of federal courts to enforce federal law thus presupposes some authority
to order state officials to comply.''\184\
\184\New York v. United States, 112 S.Ct. 2408, 2430 (1992). See
also FERC v. Mississippi, 456 U.S. 742, 761-765 (1982); Washington v.
Washington State Commercial Passenger Fishing Vessel Assn., 443 U.S.
658, 695 (1979); Illinois v. City of Milwaukee, 406 U.S. 91, 106-108
(1972).
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No doubt, there is tension between the exercise of Congress'
power to impose duties on state officials\185\ and the developing
doctrine under which the Court holds that Congress may not
``commandeer'' state legislative or administrative processes in the
enforcement of federal programs.\186\ However, the existence of the
supremacy clause and the federal oath of office, as well as a body of
precedent indicates that coexistence of the two lines of principles will
be maintained.
\185\The practice continues. See P.L. 94-435, title III, 90
Stat. 1394, 15 U.S.C. Sec. 15c(authorizing state attorneys general to
bring parens patriae antitrust actions in the name of the State to
secure monetary relief for damages to the citizens of the State);
Medical Waste Tracking Act of 1988, P. L. 100-582, 102 Stat. 2955, 42
U.S.C. Sec. 6992f(authorizing States to impose civil and possibly
criminal penalties for violations of the Act); Brady Handgun Violence
Prevention Act, P.L. 103-159, tit. I, 107 Stat. 1536, 18 U.S.C.
Sec. 922s(imposing on chief law enforcement officer of each jurisdiction
to ascertain whether prospective firearms purchaser his disqualifying
record).
\186\New York v. United States, 112 S.Ct. 2408 (1992).
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