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. No. 6133
LEGISLATIVE RESEARCH COUNCIL
Report Reiative to
GARCIA V. SAN ANTONIO
METROPOLITAN TRANSIT AUTHORITY:
The Decline and Fall of State Sovereignty
September 30,1987
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ORDER AUTHORIZING STUDY
(House, No. 5415 of 1986)
Ordered, That the Legislative Research Council be directed to
investigate and study the impact of the 1985 United States Supreme
Court decision, Garcia v. San Antonio Metropolitan Transit
Authority, including therein the immediate and projected effects of
the decision on the rights of states and of local governments; and to
file the results of its research with the Clerk of the House of Representatives not later than the last Wednesday in May 1987
Adopted by:
The House of Representatives,
March 19, 1986
The Senate, in concurrence,
March 26, 1986
On
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(House, No. 5570 of 1987)
Ordered, That the time be extended to the last Wednesday of
September in the current year whereby the Legislative Research
Council is required to report on its investigation and study of (1) the
impact of the Supreme Court decision, Garcia v. San Antonio
Metropolitan Transit Authority (House, No. 5415 of 1986) and (2)
alternative sentencing practices and policies in the Commonwealth
and other jurisdictions (Senate, No. 1541 of 1987).
Adopted by:
The House of Representatives,
May 26,1987
The Senate, in concurrence,
May 28,1987
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CONTENTS
Order Authorizing Study . . . . . . . . . . .
Letter of Transmittal to the Senate and House of
Representatives . . . . . . . . . . . . . .
Letter of Transmittal to the Legislative
Research Council . . . . . .
Page
2
.
CHAPTER I. INTRODUCTION
5
6
7
Statement of the Problem, . . .
Statement of the Issues . . .
..... .
Subverting the Founders' Intent . . .
.. .
8
9
II
CHAPTER II. GARCIA AT A GLANCE: FEDERALISM
REDEFINED . . . . . . . . . . .
14
CHAPTERIU. CONSTITUTIONAL
DEVELOPMENTS .
18
In Pursuit of "a more perfect union" . . . .
The Congress, the States and the Supreme Court
Early Landmark Cases . . . . . . . .
The Tenth Amendment Rewritten . . . .
The Supreme Court and the New Deal . . .
. .
. .
. .
. . ..
. .
CHAPTER IV. NATIONAL LEAGUE OF CITIES V.
USERY: THE TENTH AMENDMENT
RESUSCITATED . . . . . . .
Setting the Stage
. . . . . . . . . . . . .
Maryland v. Wirtz . . . . . . .
Congressional Amendments . . .
, National League of Cities v. Usery . . . . . .
CHAPTER V. THE PRELUDE TO GARCIA: THE
NATIONAL LEAGUE OF CITIES
DOCTRINE REFINED . . . . .
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Hodel v. Virginia Surface Mining and Reclamation
Association . . . . . . . . . . . . . . . .
Federal Energy Regulatory Commission v.
Mississippi . . . . . . . . . . . . . . . .
United Transportation Union v.
Long Island Railroad . . . • . . . . . . . . .
32
33
34
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Equal Employment Opportunity
Commission v. Wyoming . .
Refinement or Retreat? . . . .
.
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[October
.. . . . .. .
35
37
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CHAPTER VI. GARCIA V. SAN ANTONIO METROTo
POLITAN TRANSIT AUTHORITY:
THE TENTH AMENDMENT LAID
TO REST . . .
...... .
Factual Background . . . . . . .
. .
District Court Disposition . . . .
.....
National League of Cities Overturned . . . . . . .
Mass Transit and Federal Funding . . . . . . .
Difficulties Defining "traditional governmental
" ......... .
.
f unctIOns
Constitutional Checks on Federal Power
A Court Divided . . . . . . . . . . . . . .
Dire Consequences Forecasted
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44
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CHAPTER VII. IN THE WAKE OF GARCIA
The Immediate Impact: State and Local Budgets
on the Brink . . . . . . . . . . . . ...
Congress to the Rescue: The FLSA Amended . . .
The Broad Implications of Garcia: State Autonomy
Threatened . . . . . . . . . . . . . . . .
Responding to Garcia and the Decline of State
Sovereignty . . . . . . . . . .
Litigation . . . . . . . . . . .
Reform Congressional Procedures
Influence National Legislation . .' . . . . . . .
Seek a Constitutional Amendment . . . . . . .
Civil Resistance by State Officers . . . .
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APPENDIX
Draft of Proposed Executive Order on Federalism
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LETTER OF TRANSMITTAL TO THE
SENATE AND HOUSE OF REPRESENTATIVES
To the Honorable Senate and House of Representatives:
LADIES AND GENTLEMEN: The Legislative Research Council
submits herewith a report relative to an investigation and study of
the impact of the decision of the United States Supreme Court, Garcia
v. San Antonio Metropolitan Transit Authority.
Views expressed herein do not necessarily reflect the opinions of
the undersigned members of the Council.
Respectfully submitted,
MEMBERS OF THE LEGISLATIVE RESEARCH COUNCIL
SEN. ANNA P. BUCKLEY OF Plymouth, Chairman
REP. FRANCIS G. MARA of Brockton, House Chairman
REP. JAMES T. BRETT of Boston, Vice- Chairman
SEN. JOSEPH B. WALSH of Suffolk/Norfolk
SEN. JOHN F. PARKER of Bristol
SEN. PETER C. WEBBER of Berkshire
REP. WILLIAM J. FLYNN, Jr., of Hanover
REP. WILLIAM P. NAGLE, Jr., of Northampton
REP. CHARLES N. DECAS of Wareham
REP. SHERMAN W. SALTMARSH, Jr., of Winchester
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LETTER OF TRANSMITTAL TO THE
LEGISLATIVE RESEARCH COUNCIL
To the Members of the Legislative Research Council:
MADAME AND GENTLEMEN: Senate, No. 5415 of 1986
directed the L~gislative Research Council to make an investigation
and study of the impact of the decision of the United States Supreme
Court, Garcia v. San Antonio Metropolitan Transit Authority.
The Legislative Research Bureau submits herewith a report in
accordance with the above order. Its scope and content have been
restricted to statistical and fact-finding data, without recommendations.
The report was prepared by Robert E. England of the Bureau staff.
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Respectfully submitted,
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DANIEL J. FOLEY, Director
Legislative Research Bureau
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CHAPTER I. INTRODUCTION
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In response to a joint order of the Massachusetts General Court
directing the Legislative Research Council to investigate and study
the impact of the 1985 United States Supreme Court decision, Garcia
v. San Antonio Metropolitan Transit Authority, the Legislative
Research Bureau has prepared this report which examines the
immediate and projected effects of the decision on the rights of state
and local governments.
The emphasis of the study, which seems particularly appropriate
during this Bicentennial of the U.S. Constitution, is on the doctrinal
developments in constitutional law that threaten to reduce state
governments to mere administrative adjuncts of the federal
government.
The report begins with a glance back to the days in which the
nation's fundamental document emerged. Debates during this period
were laced with objections from citizens who feared that the new
national government would extend its authority beyond the sphere
of its enumerated powers. To ensure ratification, advocates of the
Constitution pledged to amend it to protect the rights of states and
individuals. The ten amendments which ensued comprise the Bill of
Rights. The last of these amendments guaranteed that the powers not
delegated to the national government would be reserved to the states
or to the people.
From this beginning, the report chronicles a series of landmark
Supreme Court decisions, which through their broad interpretations
of various constitutional clauses, sanctioned the federal government's
aggressive exercise of its powers. These developments, which many
constitutional scholars claim have reduced the Tenth Amendment to
tl1etoric, have certainly drastically diminished the sphere of reserved
powers left to the states.
The report continues with a discussion of Congress' extension of
the Fair Labor Standards Act (FLSA) in 1966 to certain state and
local government employees. Although it gave its approval to the
original extension of the FLSA, the Court delivered a landmark
decision in 1976 when it ruled that further extension of the Act to
state and local government would displace their freedom to "structure
integral operations in areas of traditional governmental functions."
The National League of Cities v. Usery holding established that there
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indeed was a sphere of state sovereignty immune from the reach of
federal regulatory action.
The study then describes a series of subsequent Supreme Court
decisions in which it became apparent that the Court had difficulties
in determining exactly what activities fell within the purview of
"traditional governmental functions." Having lost its vitality through
these decisions, the doctrine expounded in National League of Cities
was completely repudiated in 1985 when that holding was reversed
by the Garcia decision.
The Garcia ruling, which is. reviewed extensively in this report,
stemmed from a Department of Labor advisory that the employees
of the San Antonio Metropolitan Transit Authority were subject to
the minimum wage and overtime provisions of the FLSA. The case
eventually wound its way to the Supreme Court which held that the
municipal operation of a transit system did not constitute a
"traditional governmental function." The Court further ruled that
attempts to draw boundaries of state regulatory immunity in those
terms were not only unworkable but inconsistent "with established
principles of federalism. "The Court stated that if there are to be limits
on the power of the national government to interfere with state
functions those restraints are to be found in the federal political
process. According to the Court, that process ensures that laws that
unduly burden the states will not be passed. Arguably overestimating
"the solicitude of the national political process for the continued
vitality of the states," the Court effectively removed itself as arbiter
of disputes between the national and state governments and left the
federal government as the sole judge of its own power.
In conclusion, the report discusses the immediate effects of the
decision and the amendments to the FLSA which Congress enacted
in response to intense lobbying by state and local government officials.
The broader implications to the role of the states in the federal system
are also examined and a number of possible responses to strengthen
their position are reviewed.
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Statement of the Problem
The allocation of political power between a limited national
government and autonomous individual states is the basis for the
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federal system devised by the framers of our Constitution. In addition,
it has been a topic of public debate since that constitutional framework
emerged. Specifically, this debate concerns the boundaries between
the two spheres of authority and the means to adjudicate the clashes
that arise when the division between the two spheres is in dispute.
On the one hand, there is the Constitution's Commerce Clause which
authorizes Congress to regulate "interstate commerce" and which has
been liberally construed so that the meaning of the phrase has grown
dramatically - along with the range of activities subject to
congressional regulation. On the other hand, there is the Tenth
Amendment which reserves ,to the states those powers not delegated
to the federal government and which - although at one time
considered by the Court as a check on the federal government's power
- has been reinterpreted through judicial doctrine in such a way as
to remove all restraint.
The controversy surrounding the Garcia v. San Antonio
Metropolitan Authority Supreme Court decision focuses on those
issues which have been at the center of the debate. No longer in the
middle of this debate is the Supreme Court which, in its Garcia ruling,
held that its earlier attempts at drawing boundaries around state
activities not subject to congressional regulatory authority were
unworkable and that it would remove itself as arbiter in such disputes
because such a role was "inconsistent with established principles of
federalism." The Court, in effect, said that the relation between the
national government and the states is to be determined at the
discretion of the national legislature.
Statemen,t of the Issues
From the controversy generated by the Garcia decision, a number
of central issues have emerged:
1. The Tenth Amendment states that "The powers not
delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States
respectively, or to the people."
a.
Does the amendment afford the states any
protection from federal regulations that directly
displace core governmental functions and impinge
upon fundamental attributes of state sovereignty?
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b.
Conversely, is the amendment meaningless rhetoric
which leaves to the states only those powers they
would retain without it - an amendment that
added nothing to the original document but which
was proposed only to allay fears that the new
national government might seek to exercise powers
it was not granted?
c.
Should the Tenth Amendment be regarded as
though it said, "Such power as Congress elects not
to exert may to that extent be left to state and local
governments" ?
The Garcia Court held that previous judicial attempts to
define standards for determining whether a particular
state governmental function should be immune from the
reach of Congress' commerce power were "unworkable."
The Court went further, however, and also declared such
attempts to be contrary to the basic principles of our
constitutional system.
a.
In rejecting the judiciary's role in guarding the states
from federal overreaching, did the Garcia Court
reject "almost 200 years of the understanding of the
constitutional status of federalism"?
b.
c.
3.
[October
Did the Constitution's framers assume that limiting
national power in order to protect the states would
be a natural and legitimate function of the jUdiciary?
Is the balancing of competing state and federal
interests a function that is more properly left to the
legislative branch?
A central premise of the Garcia decision is that the
political process will sufficiently protect the states from
laws that would unduly burden them.
a.
Did the Court adopt a naive position that
overestimates "the solicitude of the national
political process for the continued vitality of the
States"?
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Moreover, in asserting confidence in "procedural
safeguards" inherent in the federal political process,
did the Court ignore fundamental shifts in
institutional and political arrangements that have
weakened the ties between national political leaders
and state and local interests?
Subverting the Founders' Intent
The key issue is whether the Constitution successfully protects the
states from wholesale subordination to Congress.
What the federal government was not meant to have is a generalized
veto over any and all state undertakings. The preemptive capabilities
of the Congress were to be limited to the exercise of delegated powers. I
But today, under the commerce power, there is much greater federal
intrusion into the affairs of state governments as well as those of
private firms and individuals than ever occurred in the 19th Century.
The Supreme Court has allowed this development by permitting the
power of the Congress to regulate commerce to evolve from a limited
end to a permissive means that justifies any end, and by being unable
to restrict the incremental expansion of the definition of "commerce
among the states".2 The states are not singled out for regulation but
they are swept into the all-encompassing area of activity that is
touched by interstate commerce.
Yet the general principle at issue remains: states were meant to exist
as sovereign governments within the general framework of the
Constitution including the reserved powers of the Tenth Amendment.
There is sufficient evidence from the records of the Constitutional
Convention and the Federalist Papers to demonstrate that the
Founders intended that the state governments were to exist in order
to prevent the new and stronger national government from becoming
a centralized tyranny.3 As one observer notes:
The states that ratified the new Constitution certainly
cannot be thought to have ratified a Constitution that
preserved nothing significant for the states, since it was that
fear which was raised during the ratification debates and it
was that fear which the Federalists sought to put to rest. by
their reassurances in The Federalist and by the first ten
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amendments. Thus, even if the Tenth Amendment added no
content to the Constitution, it embodied an articulated fear
and. a concomitant promise regarding the limited powers of
the national government. 4
In a recent essay written to commemorate the Bicentennial of the
Constitution, William Bradford Reynolds, Assistant Attorney
General for Civil Rights, commented on the drafting of the Bill of
Rights in these words: " ... the NinthS and Tenth Amendments were
understood to be linked. The Ninth reserved certain unspecified rights
to the people, and the Tenth reserved certain unspecified powers to
the states. Together, these amendments were meant to provide an
obstacle to expansion of national authority. But what the founders
put together, our generation has rent asunder. The amendments have
been severed, the Ninth has been misread as a grant of increased
power to the Federal judiciary, and the Tenth has been rendered
essentially meaningless. As a consequence, we have experienced a
radical enlargement of the national Government's power and control
over not only our day-to-day lives, but also over the legitimate
authority of the states".6 In Garcia, Reynolds added, "The Court
effectively repealed the 10th Amendment all on its own".7
Is any of this a surprise to those who have studied the history of
our Constitution and its development? One of the more revealing
commentaries is that of Brutus, an Anti-Federalist writer who, in
March 1788, argued that the proposed federal structure would bode
ill for the preservation of the state governments:
Perhaps nothing could have been better conceived to
facilitate the abolition of the state governments than the
constitution of the judicial. They will 'be able to extend the
limits of the general government gradually, and by insensible
degrees, and to accommodate themselves to the temper of
the people .... [O]ne adjudication will form a precedent to
the next, and this to a following one .... In this situation,
the general legislature, might pass one law after another,
extending the general and abridging the state jurisdictions,
and to sanction their proceedings would have a course of
decisions of the judicial to whom the constitution has
committed the power of explaining the constitution. If the
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states remonstrated, the constitutional mode of deciding
upon the validity of the law, is with the supreme court, and
neither people, nor state legislatures, nor the general
legislature can remove them or reverse their decrees. 8
Whether Brutus had a remarkable prescience or had sufficient
experience with judicial review to predict a logical turn of events is
secondary to the fact that the Founders, faced with this kind of
prophecy, added the language in the Ninth and Tenth Amendments
to safeguard the rights of the people and the powers of the State
governments from this kind, of development.
ENDNOTES
I. Lawrence A. Hunter and Ronald 1. Oakerson "An Intellectual Crisis in American
Federalism: The Meaning of Garcia," Federalism and the Constitution: A Symposium on
Garcia, ACIR, Washington, D.C., 1987, p. 8.
2. Id.
3. Robert F. Nagel, "Federalism as a SUbject of Interpretation." Federalism, etc., supra, p.
30.
4. Nagel, supra, p. 27.
5. "The enumeration in the Constitution, of certain rights, shall not be construed to deny or
disparage others retained by the people."
6. "Power to the People," The New York Times Magazine, September 13, 1987, p. 120.
7. Id.. p. 121.
xv, 20 March 1788, The Anti-Federalist, ed. by Herbert 1. Storing (Chicago:
The University of Chicago Press, Chicago, 1981), pp. 186-87. Cited by Hunter and Oakerson,
supra, p. 14, note 28.
8. See, Essay
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[October
CHAPTER II.
GARCIA AT A GLANCE: FEDERALISM REDEFINED
Federalism can be defined as the constitutional allocation of power
between the federal and state governments. It is a term also applied
to the political values underlying that allocation. In 1971, the V nited
States Supreme Court characterized federalism as a sensitivity to the
legitimate needs of state governments. l Five years later the Court, in
what appeared to be the ultimate proof of its sensitivity to the role
of state government in the federal system, ruled in favor of state
sovereignty in National League of Cities v. Usery.2 But the euphoria
of the states was to be short-lived. Garcia v. San Antonio
Metropolitan Transit Authority overturned the National League of
Cities decision and, in the minds of many, reduced the states to mere
administrative bodies. Certainly, in the wake of the Court's 1985
decision in Garcia, states and localities, now more than ever, are
dependent upon the national government's sensitivity to their needs
for protection against intrusive and burdensome federal statutory
regulation. 3
The original issue in the Garcia case was whether the minimum wage
and overtime provisions of the Fair Labor Standards Act (FLSA)4
applied to a publicly owned and operated mass transit system. The
case originated as the result of an advisory by the V.S. Department
of Labor that the San Antonio Metropolitan Transit Authority
(SAMT A) was subject to the provisions of the FLSA. SAMT A sought
and obtained declaratory relief from the federal district court
whereupon the Department of Labor on its behalf and that of Garcia,
a SAMTA driver, appealed directly to the Supreme Court. The
appellants, Garcia, et aI., contended th~t regulation of the transit
system's employment conditions fell within the purview of Congress'
power under the Commerce Clause. 5 The appellees argued for
governmental immunity under the Tenth Amendment which reserves
to the states and to the people those powers not delegated to the
national government by the Constitution. 6
The Court, however, did not confine itself to the narrow issue of
whether the operation of such a system was exempt from federal
regulatory law under the "traditional government function" test
established in National League of Cities and refined in subsequent
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decisions. Instead, the Court, by a bare majority, "delivered a
broadside decision" by flatly reversing itself and overruling National
League of Cities. 7 As alluded to above, the latter caSe appeared to
be a landmark decision in that the Court had recognized constitutional
limitations on the federal government's power to regulate commerce
when it impinges upon sovereign state functions. In National League
of Cities, the Court had ruled that congressional enactments
regulating commerce are unconstitutional whenever they "operate to
directly displace the States' freedom to structure integral operations
in areas of traditional governmental functions." 8 The Court also
acknowledged its role as a check on Congress' exercise of power that
might otherwise "devour the essentials of state sovereignty." 9
In overturning eight years of precedent, the Court declared in
Garcia that the "traditional government function" test of National
League of Cities had proven to be "unworkable in practice. "10 The
development of a practicable and definitive standard for determining
whether a particular government function should be immune from
the reach of federal regulation under the commerce clause proved to
be more than just an elusive task for the Court. Any attempt to make
such distinctions, Justice Blackmun wrote for the majority, would be
"inconsistent with established principles of federalism. "II States
should pursue redress from overreaching federal regulatory action
through the political and not the judicial process, according to the
Court. The assessment of the Court was that state sovereignty interests
were sufficiently protected from burdensome or intrusive federal laws
by their representatives in Congress and by the role the states play
in the federal electoral process.
In a sharply worded dissent, Justice Powell described the majority's
opinion as a radical departure "from long settled constitutional
values ... [which]. . .ignores the role of judicial review in our system
of government. "12 Justice Powell pointed out that, "The States' role
in our government is a matter of constitutional law , not of legislative
grace. "13 Rejecting the notion that the political process will shield
states from federal encroachment, Justice O'Connor noted that, "With
the abandonment of National League of Cities, all that stands between
the remaining essentials of state sovereignty and Congress is the
latter's underdeveloped capacity for self-restraint. "14
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[October
The immediate impact of the Garcia ruling was to subject state and
local governments to the wage and hour provisions of the FLSA. The
option of providing compensatory time-off for overtime work was
thus virtually eliminated. The Department of Labor (DOL) calculated
that if the FLSA had applied to state and local governments during
calendar year 1984 the nationwide costs for compliance with the
minimum wage and overtime provisions would have amounted to
$396 million and $733 million, respectively. IS These calculations were
based on the assumption that state and local governments would not
make adjustments in the level or mix of services provided to the public.
Turning to their representatives in Congress, state and local officials
argued that the crushing financial burden on their already-strained
budgets would result in reduced services, tax increases and public
employee layoffs. In what has been viewed in some quarters as a
vindication of the majority opinion in Garcia, Congress responded
to intense lobbying by passing legislation amending, in some respects,
the applicability of the FLSA to the states and their political
subdivisions. Subject to certain prescribed conditions, public agencies
were allowed to continue the widespread practice of providing "comptime." though now at the premium rate of one and one-half hours
for each hour that overtime compensation is required.
The DOL estimations were subsequently recalculated to reflect a
cost of $216 million for state and local compliance with the FLSA's
overtime provisions during the first calendar year they would apply. 16
The amendments did not alter the minimum wage requirements of
the FLSA.
The FLSA amendments notwithstanding, there is no question that
the Garcia Court redefined the balance of power between the federal
and state governments. The question that remains, however, is
whether the states have been relegated, with respect to national policy
making, "to little more than another special interest group. "17
Congress' quick response to the matter, according to one legal scholar,
does not necessarily vindicate the Court's "political safeguards"
theory:
It does not mean, however, that Congress was responding
to a perceived infringement on the states' prerogatives to
choose which services they believe they need to provide, or
how to structure the provisions of those services. The
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amendments only vindicate the power of the states to win a
single battle in a crisis atmosphere where the constituency on
whose behalf Congress was acting - the employees themselves preferred certain exemptions from the coverage of the
Act. What is not vindicated is the ability of the congressional,
political process to preserve the institutional independence of
the states as a check on the power of federal government. I8
ENDNOTES
,
1. Younger v. Harris, 401 U.S. 37,44.
2. 426 U.S. 833.
3. 105 S.Ct. 1005.
4. 29 U.S.c. 201-219 (1982).
5. U.S. Const., Art. I, s. 8, cl. 3.
6. U.S. Const., Tenth Amendment.
7. William W. Van Alstyne, "The Second Death of Federalism," 83 Michigan Law Review
1709 (June, 1985)
8. 426 U.S. at 852.
9. [d. at 855, quoting Maryland v. Wirtz, 392 U.S. at 205 (1968) (Douglas, J., dissenting).
10. 105 S. Ct. at 1016.
II. [d. at 1007; Justice Blackmun was joined by Justices Brennan, White, Marshall and Stevens.
12. [d. at 1023 (Powell, J., dissenting); Justice Powell was joined in his dissenting opinion by
Chief Justice Burger and Justices Rehnquist and O'Connor. Justice Rehnquist also filed
his own dissent. A third dissent by Justice O'Connor was joined by Justices Powell and
Rehnquist.
13. [d. at 1026 (Powell, J., dissenting).
14. [d. at 1037 (O'Connor, J., dissenting).
15. 51 F.R. 25710 (July 16, 1986).
16. 52 F.R. 2011 (Jan. 16, 1987).
17. The Status of Federalism in America: A Report of the Working Group on Federalism of
the Domestic Policy Council (Nov. 1986) at 3.
18. Zoe Baird, "State Empowerment After Garcia,"18 Urban Lawyer 49 I, 513 (Summer, 1986).
18
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[October
CHAPTER III. CONSTITUTIONAL DEVELOPMENTS
In Pursuit of Ha more perfect union"
Two centuries ago, delegates from the original states assembled in
Philadelphia to consider revising the Articles of Confederation which
had been the ruling document of the Union since 1781. In their quest
for "a more perfect union," the delegates abandoned the deficient
Articles as reforms of a more fundamental nature emerged. The new
governmental charter which was adopted instead was a product of
compromise between delegates favoring a strong centralized
government and others who were concerned that the states' viability
as political entities was threatened.
Acutely sensitive to the dangers of concentrating power in a central
authority, the Framers devised a federal system of government under
which the national government would be limited to certain
enumerated powers relating to matters such as war and interstate and
foreign commerce. Despite assurances from James Madison that "the
powers delegated by the proposed constitution to the Federal
Government are few and defined," vociferous opposition was
mounted against the document.! The objections of the" Antifederalists" were based on fears that the new national government would
extend its authority beyond the sphere of its enumerated powers.
During the heated ratification process Massachusetts narrowly
endorsed the new Constitution but recommended that the states and
their citizens be protected from federal encroachment by the addition
of a bill of rights. Seven other states followed Massachusetts' lead in
voting for the Constitution only after proposing amendments to be
adopted after ratification. The Federali~ts eventually conceded that
such provisions were necessary. Ten amendments approved by the
first Congress were subsequently ratified by the states to comprise the
Bill of Rights.
The Tenth Amendment states that "The powers not delegated to
the United States by the constitution, nor prohibited by it to the states,
are reserved to the states respectively, or to the people." In spite of
such a clear assertion of the independent status of the states, their
reserved powers have gradually been usurped by the federal
government's aggressive exercise of its enumerated powers. This
continuously increasing exercise of national authority, however,
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would not be possible without the acquiescence of the Supreme Court.
The Court's expansive in~erpretations of the federal government's
enumerated powers combined with its broad reading of the
Constitution's Necessary and Proper Clause 2 in which the ends justify
the means have produced a constitutional paradox.3
The Tenth Amendment notwithstanding, the effect of these
developments has been to remove any constraints against the intended
limited national government when it acts in relation to the states. The
national government, it would appear, is equipped to do whatever
Congress deems proper, provided it does not run afoul of some express
constitutional prohibition. S\gnificantly, with the National League of
Cities doctrine now discarded, the Supreme Court has refused to
define any such constitutional limitations with respect to
congressional action affecting the states. 4
The Congress, the States and the Supreme Court
Through broad interpretations of various constitutional provisions
the Supreme Court has, in effect, ratified the expanded power of the
national government. The doctrinal developments of the Commerce
Clause, the Necessary and Proper Clause, the Supremacy ClauseS and
the Tenth Amendment are particularly relevant to any discussion of
the Garcia decision.
f
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I
Early Landmark Cases
The Commerce Clause gives the Congress the power to "regulate
commerce with foreign nations, and among the several states, and with
the Indian tribes." One of the foremost reasons for calling the
Constitutional Convention in 1787 was to address the problems
resulting from the proliferation of state-created trade barriers. 6
qppressive restrictions imposed by states on trade involving other
states had fostered a hostile climate for commerce. It was necessary
to vest the federal government with the power to regulate interstate
commerce, according to Madison, in order to insure the "relief of the
States which import and export through other States from the
improper contributions levied on them by the latter. ''7 The debates
leading up to the adoption of the Constitution suggest that Congress'
power over interstate commerce was to be limited. In fact, the preratification debates indicate that the national legislature's power in
------~--------------------
20
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[October
this regard was intended to be confined solely to the elimination or
control of state-imposed trade restrictions. 8
Regardless of the Framers' intentions, the meaning of "interstate
commerce" has grown considerably, along with the scope of state
activities subject to federal regulation. It is not surprising then that
the Supreme Court would describe the Commerce Clause as "one of
the most prolific sources of national power. ''9
The first Supreme Court case involving the Commerce Clause arose
in Gibbons v. Ogden.1O In this 1824 case involving rival steamboat
operators, the Court struck down a New York law which granted
Aaron Ogden the exclusive right to operate between New York and
New Jersey because it conflicted with a federal statute. Chief Justice
Marshall declared, "the act of Congress ... is supreme; and the law
of the state, though enacted in the exercise of powers not controverted,
must yield to it. "11 Marshall, in effect, was restating the doctrine he
had pronounced five years earlier in McCulloch v. Maryland,12 the
case usually cited as "establishing the supremacy of the national
government within its delegated sphere of authority. "13
In Gibbons v. Ogden, the Court also took the opportunity to
expand the meaning of commerce beyond the restrictive definition of
"to traffic, to buying and selling, or to the interchange of
commodities. "14 The definition given "commerce" by the Chief Justice
was broad enough to include all business dealings within its meaning. IS
The Chief Justice also noted that congressional regulation of
commerce was constitutionally valid even if the commerce in question
was conducted internally within a state but which nonetheless had an
effect on another state. 16
In addition to broadly defining "commerce," Chief Justice Marshall
applied equally liberal construction to the meaning of "regulate."
Consistent with his expansive McCulloch interpretation of the
Necessary and Proper Clause, he acknowledged in Gibbons virtually
no limitations to Congress' power to regulate. Describing the scope
of the federal government's powers in McCulloch, the Chief Justice
had written:
... Let the end be legitimate, let it be within the scope of the
constitution, and all means which are appropriate, which are
plainly adapted to that end, which are not prohibited, but
consistent with the letter and spirit of the constitution, are
constitutional. 17
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F or virtually the remainder of the nineteenth century, congressional
regulatory legislation governing commerce: was rarely enacted.
Supreme Court decisions involving the Commerce Clause during that
period were largely confined to cases concerning state legislation
purporting to curtail interstate commerce. The dormant federal
sovereign awoke from its regulatory slumber, however, upon passage
of the Interstate Commerce Act of 1887. 18 With the enactment of that
law based on the Commerce Clause, Congress began its everexpanding foray in the field of commerce regulation. Congress'
exercise of its legislative authority armed it with an affirmative and
powerful "influence over American law and life. "19
The Tenth Amendment Rewritten
Following Chief Justice Marshall's death, in 1835, the Court
adopted a narrower definition of interstate commerce which was
limited to commerce involving the physical crossing of state lines. It
did not matter that commerce remaining within a state had impact
beyond its borders.
Moreover, in the post:..Marshall era, the Supreme Court
reconsidered the meaning of the term "regulate." In the view of the
Marshall Court, the power to regulate commerce was recognized as
the "power to limit and restrain it at pleasure. "20 If the Court
determined that what was at issue was, in fact, a regulation of
commerce, then it was valid under Congress' plenary power. The
motives for the exercise of that power were irrelevant. Such a broad
reading of Congress' power to regulate, however, was cast aside by
the Court in 1918 with its decision in a child labor case.
Hammer v. Dagenhart 21 involved the constitutionality of a federal
statute forbidding the transportation in interstate commerce of the
products of mines or factories which employed children in violation
of the standards established in the Child Labor Act of 1916. 22 The
Court ruled that while the law in question was within the confines
of Congress' commerce power, the real purpose of the act was to
suppress child labor through the regulation of manufacturing. Under
the Court's restrictive interpretation, manufacturing was not deemed
as commerce which could be reached by Congressional authority.
Such regulation was within the scope of state authority.
Significantly, the Court invoked language from a ruling it handed
down fifty years earlier in Lane County v. Oregon. 23 As it had done
- - - - - - - - - -
22
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[October
in that 1868 decision, the Hammer Court framed the sphere of state
authority in language far less ambiguous than that of the Tenth
Amendment. In each instance, the inclusion of a single adverb not
found in the text of the amendment revealed the philosophy embraced
by the Court. Virtually echoing the Lane ruling, the Hammer opinion
declared that:
In interpreting the Constitution it must never be forgotten
that the Nation is made up of states to which are entrusted
the powers of local government. And to them and to the people
the powers not expressly delegated to the National
Government are reserved. The power of the States to regulate
their purely internal affairs by such laws as seem wise to the
local authority is inherent and has never been surrendered to
the general government. 24 (emphasis added)
With the addition of the word "expressly," the complexion of the
Tenth Amendment had been dramatically altered. The broad
interpretation invigorated the amendment as an instrument that could
be used by the states in fending off an aggressive national government
that had abandoned its doctrine of laissez faire.
The Supreme Court and the New Deal
In response to the devastation wrought by the Great Depression
of the 1930s, President Roosevelt pushed a profusion of far-reaching
and novel measures through Congress. The conservative court,
however, soon invalidated most of the new laws. Its appraisal that
the measures unlawfully interfered with the states' exclusive power
over intrastate commerce was prominent among the various
constitutional objections voiced by the Court.
Stymied in his recovery and relief attempts, and emboldened by his
overwhelming electoral victory in the 1936 election, Roosevelt
proposed in 1937 to alter the composition of the Court by providing
retirement at full pay for all justices over the age of seventy. An
"assistant justice" with full voting rights was to be appointed for each
member refusing to accept retirement. Congress balked at the plan
which critics characterized as "packing the court" and it was
abandoned in July. Nonetheless, there followed a sudden inclination
by the Court to look at New Deal proposals in a favorable light which
prompted wags to revise an old proverb by asserting that "a switch
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in time saves nine." However, given the 5-4 decisions by which some
of Roosevelt's initiatives were thwarted and the appointment of two
new members in April, it would be a dubious claim to attribute the
Court's turnabout, which soon followed the President's proposal,to
the members' self-interests.
With the changed composition of the Court, the immediate impact
was a swing to a more liberal interpretation of the Commerce Clause.
The Court's 1937 decision in National Labor Relations Board v. Jones
and Laughlin Steel CO.,25 upheld a comprehensive labor statute 26 and
restored to Congress the sweeping commerce power that it had been
denied since the Hammer. rUling. Once more, manufacturing was
within the reach of the federal government's power to regulate
commerce. Such authority was soon extended to other productive
industries such as agriculture and mining. Only the year before in
Carter v. Carter Coal CO.,27 the Court had ruled that the mining of
coal did not constitute "commerce" and was thus immune from federal
commerce regulation.
The Jones and Laughlin decision marked the Supreme Court's
return to Chief Justice Marshall's broad conception of federal power.
The ruling, however, did not remove all limits on the national
government's commerce power. While Tenth Amendment restrictions
on that power were accorded little relevance, the Court did require
that the activity being regulated must have a "close and substantial"
relationship to interstate commerce. 28 The Court would not extend
to Congress such far-ranging power "so as to embrace effects upon
interstate commerce so indirect and remote that to embrace
them ... would effectually obliterate the distinction between what is
national and what is local and create a completely centralized
government."29 Nonetheless, the Jones and Laughlin ruling was
~ignificant for it "permitted Congress to legislate in many areas where
the States previously had exercised exclusive control." 30
While Jones and Laughlin and a series of subsequent decisions
repudiated the Hammer Court's federalism theory, it was not until
a 1941 decision that the Hammer ruling was overturned. At issue in
the landmark case of United States v. Darby 31 was the constitutionality of the Fair Labor Standards Act of 1938. The FLSA authorized
a federal agency to set minimum wages and maximum hours. The act
also prohibited the shipment in interstate commerce of commodities
24
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[October
produced by employees whose wages and hours were in violation of
the prescribed standards.
The Court was urged to invalidate the statute on the grounds that
while the prohibition was ostensibly a regulation of commerce, in fact,
its actual purpose was to regulate labor conditions. It was argued that
under the guise of interstate commerce, the federal government was
usurping one of the powers reserved to the states under the Tenth
Amendment. In this case it was the authority of the state of Georgia
to leave wages and hours unregulated.
Unlike the Hammer Court, which examined the motives of the
Child Labor Act, the Darby Court found such consideration
irrelevant. The Court declared that the motive and purpose of
interstate commerce regulations are matters deferred to legislative
judgement. The Court returned to the doctrine Chief Justice Marshall
annunciated in Gibbons v. Ogden: 32 aside from any constitutional
limitations, Congress' power over interstate commerce was absolute
and could be exercised regardless of the reason.
In writing for the Court, Justice Harlan Stone noted that its
conclusions were unaffected by the Tenth Amendment:
The amendment states but a truism that all is retained which
has not been surrendered. There is nothing in the history of
its adoption to suggest that it was more than declaratory of
the relationship between the national and state governments
as it had been established by the Constitution before the
amendment or that its purpose was other than to allay fears
that the new national government might seek to exercise
powers not granted, and that the states might not be able to
exercise fully their reserved powers.33 ,
Attempts to limit the scope of Congress' commerce power were
abandoned by the Supreme Court the next year. In the 1942 Wickard
v. Fi/burn 34 decision, the Court ruled that the Agricultural
Adjustment Act of 1938 extended to produce not grown for commerce
but for a farmer's personal consumption and for feed for his poultry
and livestock. The Court contended that the fact that the farmer's
"contribution to the demand for wheat may be trivial by itself is not
enough to remove him from the scope of federal regulation. "35 It was
thus asserted that Congress is vested with the authority to regulate
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activities that are undeniably trivial and purely local in matter so long
as there is an effect on interstate commerce ~. however indirect that
effect may be. The Court's reasoning essentially freed Congress to
regulate any activity. With the Wickard ruling, the Court had
culminated the expansion of the definition of commerce that had
commenced with the Jones and Laughlin decision. The latter case,
significantly, marked the beginning of a period of Supreme Court
deference to Congress' commerce power that continued uninterrupted
until the landmark 1976 National League of Cities opinion.
, ENDNOTES
I.
2.
3.
4.
5.
6.
7.
8.
9.
10.
II.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
The Federalist Papers, No. 45 at 292 (c. Rossiter ed. 1961).
U.S. Const., Art. I, sec. 8, cl. 18.
The Status of Federalism in America, supra, at 13.
Advisory Commission on Intergovernmental Relations (ACIR), (Feb., 1986),
Reflections on Garcia and its Implications for Federalism, at 28.
U.S. Const., Art. VI, sec. 2.
The Status of Federalism in America, supra, at 21; Bernard Schwartz, A Commentary
on the Constitution of the United States, (1977), Part I, Volume I at 179.
The Federalist Papers, supra, No. 22 at 144.
The Status of Federalism in America, supra, at 21; Garcia, 105 S. Ct. at 1029 (Powell,
J., dissenting).
Hoods and Sons v. Dec Mond, 336 U.S. 525,533-34 (1949).
22 U.S. (9 Wheat.) I.
Id. at 21 I.
17 U.S. (4 Wheat.) 316 (1819).
Advisory Commission on Intergovernmental Relations (ACIR), (Apr., 1986), A
Framework for Studying the Controversy Concerning The Federal Courts and
Federalism at 15.
22 U.S. (9 Wheat.) at 189.
Schwartz, supra, at 18t.
22 U.S. (9 Wheat.) at 194.
17 U.S. (4 Wheat.) at 421.
Paraphrasing Schwartz, supra, at 179.
Wickard v. Fi/burn, 317 U.S. Ill, 121 (1942).
22 U.S. (9 Wheat.) at 227.
247 U.S. 251.
39 Stat. 675.
7 Wall. 71 (1868).
22 U.S. (9 Wheat.) at 275, emphasis added.
301 U.S. I.
National Labor Relations Act of 1935.
298 U.S. 238 (1936).
301 U.S. at 37.
/d.
Status of Federalism, supra, at 26.
312 U.S. 100 (1941).
22 U.S. (9 Wheat.) 1 (1824).
312 U.S. at 124.
317 U.S. II I.
35. Id. at 127.
26
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CHAPTER IV. NATIONAL LEAGUE OF CITIES V. USERY:
THE TENTH AMENDMENT RESUSCITATED
Setting the Stage
Maryland v. Wirtz
When the FLSA was enacted in 1938, states and their political
subdivisions were specifically excluded from the Act's definition of
"employer." Congress amended the Act in 1966, however, and
extended its coverage to employees of schools, hospitals and
institutions operated by states and their subdivisions. l The
amendments also extended coverage of the FLSA to state-owned or
regulated mass transit company employees, although the overtime
provisions of the Act remained inapplicable to drivers, operators and
conductors.
The constitutionality of the 1966 amendments was challenged in
the 1968 Maryland v. Wirtz case. 2 The plaintiff contended that the
expansion of the coverage was beyond the scope of Congress' power
since the amendments would interfere with sovereign state functions.
The Court, however, found no interference with state functions per
se. According to the Court, the employees in question were engaged
in economic activities within the meaning of the "enterprise concept"
described in the FLSA amendments. The Court reasoned that when
a state acts as an employer in functions such as those specified in the
amendments, the state is "subject to the same restrictions as a wide
range of other employers whose activities affect commerce, including
privately operated schools and hospitals." 3
In reaching its decision, the Court dismissed the contention that
Congress' regulatory power over commerce "must yield to state
sovereignty in the performance of government functions." 4 The Court
ruled that an "otherwise valid regulation of commerce" is unaffected
by the fact that it conflicts with "countervailing" state interests. 5
The minority in Wirtz argued that the federal government cannot
"interfere unduly with the state's performance of its sovereign
functions of government." 6 Justice Douglas, in writing the dissent,
noted that the amendments would impose burdens on the states that
would require them to alter their fiscal policies. States, in his view,
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would need to raise taxes, to adjust the levels of services they offer,
or to refrain from implementing initiatives in new fields of
governmental activity. In addition, he cited the danger that "the
National Government could devour the essentials of state sovereignty,
though that sovereignty is attested by the Tenth Amendment." 7
al
of
Congressional Amendments
ld
ld
Emboldened by the Wirtz decision and "evidently encouraged by
three decades of judicial winking," 8 Congress enacted a number of
amendments to the FLSA in 1974 that extended coverage of the Act
to virtually all employees of state and local government. 9 The national
legislature had decided that the states and their political subdivisions
should be required to operate under the same wage and hour standards
that applied to private employers.
le
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National League of Cities v. Usery
In response, a number of cities and states, along with the National
League of Cities and the National Governors Conference, filed suit
against the U. S. Secretary of Labor in the federal district court for
the District of Columbia. The plaintiffs challenged the validity of the
1974 amendments and sought declaratory and injunctive relief. A
district court panel granted the Secretary of Labor's motion to dismiss
the complaint "for failure to state a claim upon which relief might
be granted. "10 The panel, however, was "troubled" by the plaintiffs'
assertions that the amendments represented an intrusion upon the
states' ability to perform "essential governmental functions. "II The
court considered their contentions substantial and noted that the
Supreme Court might deem it appropriate to retreat from the "farreaching implications" of the Wirtz decision. 12 Nonetheless, the court
felt obliged to apply the latter holding to the case before it.
The district court's assessment proved to be prophetic as the
Supreme Court agreed that the states' contentions were substantial
and accepted the case upon appeal. In fact, the high court went on
to decide that the "far-reaching implications" of Wirtz warranted
overruling of that opinion and the district court's decision was
reversed.13 In overturning the Wirtz decision by a 5-4 vote the court
had derailed major congressional economic legislation for the first
28
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[October
time "since the judicial attack on the New Deal." 14
The appellants in National League of Cities contended that the
Tenth Amendment prohibited Congress from exercising its commerce
power to the extent that it was dictating the terms of internal state
operations. The appellee argued that the FLSA amendments would
no more curtail the sovereignty of the st,ates than previous Supreme
Court decisions upholding sweeping exercises of congressional
authority.
The Court was not persuaded by the latter argument, noting that
those exercises to which the appellee referred involved federal action
preempting state regulation of the private sector. The Court declared
that:
It is one thing to recognize the authority of Congress to
enact laws regulating individual businesses necessarily subject
to the dual sovereignty of the government of the Nation and
of the State in which they reside. It is quite another to uphold
a similar exercise of congressional authority directed, not to
private citizens, but to the States as States. 15
In writing the Court's opinion, Justice Rehnquist 16 did not explicitly
cite the Tenth Amendment when he pointed out that the Court had
repeatedly acknowledged that there are attributes of state sovereignty
which Congress may not impair, "not because Congress 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." 17 While it has been suggested that Justice Rehnquist
"carefully avoided tying his doctrine to the Tenth Amendment," 18 he
pointed out that the Court had recognized only a year earlier that
the amendment represented an express declaration limiting Congress'
commerce power to regulate "the activities of the States as States." 19
Rehnquist quoted a passage from the Court's 1975 opinion in Fry v.
United States:20
While the Tenth Amendment has been characterized as a
'truism,' stating merely that 'all is retained which has not been
surrendered,' 21 it is not without significance. The Amendment expressly declares the constitutional policy that
Congress may not exercise power in a fashion that impairs
the States' integrity or their ability to function effectively in
a federal system. 22
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The states' power to determine the wages and hours of their
employees was described by the Court as an "undoubted attribute of
state sovereignty." 23 Citing examples advanced by the appellants, the
Court noted the adverse effects on state and local governments which
would result from compliance with the amended FLSA. The Court
considered not only the increased costs in terms of dollars but also
with regard to the reduction or elimination of services to the "citizens
who depend upon those governments. ''24 In the view of the Court,
however, precise assessments of actual impact were not crucial to the
resolution of the issue before it. The majority was satisfied that the
FLSA amendments would, "impermissibly interfere with the integral
governmental functions" of states and political subdivisions: 25
For even if we accept appellee's assessment concerning the
impact of the amendments, their application will nonetheless
significantly alter or displace the States' abilities to structure
employer-employee relationships in such areas as fire
prevention, police protection, sanitation, public health, and
parks and recreation. 26
These particular governmental activities were cited by the Court
as being typical of the services that states and localities have
"traditionally afforded their citizens. "27 The Court agreed with Justice
Douglas who, in his Wirtz dissent, cautioned against congressional
assertions of power that directly displace the ability of the states to
choose how to structure their services. Douglas feared that such
exercises of power threatened to cripple the ability of the states to
make decisions regarding "functions essential to [their] separate and
independent existence." 28
According to the Court, the FLSA amendments represented a direct
displacement of the freedom of the states "to structure integral
operations in areas of traditional government functions." 29
Dismissing the reasoning of the Wirtz majority, the National League
of Cities Court overruled that 1968 decision and held that the
challenged amendments were outside Congress' commerce power.
Dissenting opinions were written by Justice Brennan who was
joined by Justices White and Marshall, and by Justice Stevens who
dissented separately.
Justice Brennan's dissent was a stinging rebuke of the majority's
30
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[October
repudiation of "principles governing judicial interpretation of our
Constitution settled since the time of Mr. Chief Justice John
Marshall." 30 Brennan scolded his brethren for discarding Marshall's
"postulate that the Constitution contemplates that restraints upon
exercise by Congress of its plenary commerce power lie in the political
process and not in the judicial process." 31 In Brennan's view, the
majority opinion was unfaithful to a principle that was annunciated
by Marshall in 1824. 32 He denounced his colleagues for their
"purported discovery in the Constitution of a restraint derived from
sovereignty of the States." 33 Characterizing the majority's reasoning
as a weak disguise to cover their disdain for a congressional decision,
Brennan reminded the Court that our system of government reserved
policy judgements to Congress and condemned the Court's rejection
of a long and "unbroken line of precedents. "34
Justice Stevens' dissent was written in a different vein. Stevens was
in agreement with many of the positions advanced by the majority
and had "a great deal of sympathy" for the views it expressed. 35
Nonetheless, he could identify no limitations on the federal
government's reach in this instance "that would not also invalidate
federal regulations of state activities that I consider unquestionably
permissible." 36 Like Justice Brennan, Stevens felt that the states must
seek redress through political and not judicial channels.
ENDNOTES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
29 U.S.C. s. 203(s) (5).
392 U.S. 183.
[d. at 193.
[d. at 195.
[d. at 195-197.
392 U.S. 182, 205 (Douglas, J., dissenting), quoting New York v. United States, 326
U.S. 572, 587 (1946), (Stone, C. J., concurring); Justice Douglas was joined in his dissent
by Justice Stewart.
[d. at 205.
Van Alstyne supra, at 1712.
Fair Labor Standard Amendments of 1974, Pub, L. No. 93-259, 88 Stat. 55.
426 U.S. at 833.
[d. at 839.
[d.
[d. at 840.
Joseph F. Kobylka, "The Court, Justice Blackmun, and Federalism: A Subtle Movement
With Potentially Great Ramifications," 19 Creighton Law Review 9, 24 (1985), quoting
C. H. Pritchett, Constitutional Law of the Federal System, at 234 (1984).
426 U.S. at 845.
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16. Justice Rehnquist was joined by Chief Justice Burger and Justices Stewart and Powell.
Justice Blackmun concurred separately.
17. 426 U.S. at 845.
18. Martha A. Field, "Garcia v. San Antonio Metropolitan Transit Authority: The Demise
of a Misguided Doctrine," 99 Harvard Law Review 84 (1985).
19. 426 U.S. at 842.
20. 421 U.S. at 547 n. 7 .
21. United States v. Darby, 312 U.S. 100, 124 (1941).
22. 426 U.S. at 842.
23. [d. at 845.
24. [d. at 846.
25. [d. at 851.
26. [d.
27. [d.
28. Lane County v. Oregon, 7 Wall. 71, 76 (1868).
29. 426 U.S. at 852.
30. 426 U.S. 833, 856 (Brennan, Jr., dissenting).
31. [d.
32. [d.; Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1.
33. 426 U.S. at 858.
34. [d. at 867. 876.
35. 426 U.S. 833, 880 (Stevens, J., dissenting).
36. [d.
32
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CHAPTER V. THE PRELUDE TO GARCIA: THE NATIONAL
LEA GUE OF CITIES DOCTRINE REFINED
Following the Court's constitutional holding in National League
of Cities, several cases were brought before the high tribunal in which
the central issue was whether certain challenged federal regulatory
actions should be invalidated under the principles set forth in that
landmark federalism decision. The holdings in the cases spawned by
National League of Cities ostensibly clarified the doctrine stated in
that case. Attempting to more clearly delineate which governmental
functions were immune from federal regulations under National
League of Cities, the actual effect of these subsequent rulings was to
limit the scope of the decision's applicability.
Hodel v. Virginia Surface Mining and Reclamation Association!
The validity of the Surface Mining Control and Reclamation Act
of 1977 was challenged in this 1981 Supreme Court case. This act
established minimum standards for surface mining operations.
Stricter federal standards were imposed upon states that failed to
comply with the minimum criteria. A federal district court had earlier
ruled the legislation unconstitutional based on the Nq.tional League
of Cities holding.
The Hodel Court unanimously upheld the statute and in the process
restated National League of Cities by formulating a four-part test that
had to be met in order for a state activity to be considered immune
from the reach of federal regulation:
First, there must be a showing that the challenged statute
regulates the "States as States"... Second, the federal
regulation must address matters that are indisputably
"attribute [s] of state sovereignty." .. '. And third, it must be
apparent that the States' compliance with the federal law
would directly impair their ability "to structure integral
operations in areas of traditional governmental functions."2
In addition, the Court supplemented this three-pronged test with
a footnote:
Demonstrating that these three requirements are met does
not, however, guarantee that a Tenth Amendment challenge
to congressional commerce power action will succeed. There
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are situations in which the nature of the federal interest
advanced may be such that it justifies stat~ submission. 3
The three-pronged test was thus, in effect, expanded with the
qualifier to include a balancing test. Although widely considered as
dicta at the time, Justice Blackmun, in his concurring opinion in
National League of Cities, had interpreted the Court as adopting such
an approach in its majority opinion. 4
The key to the Hodel decision was the Court's determination that
the statute did not regulate states but "only the activities of coal mine
operators who are private individuals and businesses." 5 Consequently, the Court ruled that the first prong of the test was not met.
The Court's reasoning thereby "repudiated the idea that National
League of Cities granted any immunity against congressional
regulation of the private sphere, even in areas traditionally left to the
states. "6
Federal Energy Regulatory Commission v. Mississippi 7
This 1982 Supreme Court decision upheld the constitutionality of
the Public Utility Regulatory Policies Act of 1978, a statute enacted
in response to the energy crisis that was afflicting the nation. State
utility regulatory commissions were directed to "consider" the
adoption of specific federal regulatory standards. 8 The statute also
required the Federal Energy Regulatory Commission (FERC), in
consultation with state commissions, to promulgate rules designed to
promote the development of cogeneration and small power facilities.
Implementation and enforcement of these rules were left to the states.
The legislation, however, was struck down by a federal district court
applying the National League of Cities guidelines. 9
The high court reversed the district ruling and held that the act did
not represent an unconstitutional encroachment on the sovereignty
of the states. The Court ruled that the statute was not a threat to the
"separate and independent existence" IO of the states, nor did it impair
their ability "to function effectively in a federal system." 11 The Court
characterized the conscription of state regulatory agencies as a
permissible act of cooperative federalism since, under its commerce
power, the federal government could have preempted the entire field
of energy policy. Instead, the national government merely preempted
conflicting state energy regulations. 12
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The majority opinion drew sharp dissent from three of the five
Justices who comprised the National League of Cities majority.
Although Justice Blackmun had abandoned the National League of
Cities coalition, the remaining justices were joined by Justice
O'Connor who, only the year before, had been appointed to replace
the retiring Justice Stewart. O'Connor contended, in writing the
minority opinion, that there was nothing "cooperative" about drafting
state agencies into "the national bureaucratic army." 13 Applying the
standards developed in Hodel, O~Connor found the statute to be a
clear violation of the states' prerogatives that was manifestly
unconstitutional under the principles enunciated in National League
of Cities. Justice Powell viewed the act as a violation of the Tenth
Amendment that interfered with "an important state function." 14
United Transportation Union v. Long Island RailroadI5
The National League of Cities test was next applied in this 1982
case concerning a state-owned and operated passenger railroad in New
York and a conflict between federal and state labor laws. I6 After
previously being under private ownership for 132 years, the commuter
line was acquired by the state in 1966. The railroad continued to
conduct its labor negotiations pursuant to the federal Railway Labor
Act until a bargaining impasse developed in 1978. With the failure
of mediation efforts, the union sought a declaratory judgment from
a federal district court that the Railway Labor Act was applicable to
its dispute with the railroad. If the court agreed with its position the
union would be free to call a strike since this tactic was permissible
under the federal statute. The railroad, meanwhile, attempted to block
such an action by filing suit in a state court to enjoin the union under
New York law. The federal court ruled in favor of the union while
the state suit was pending. That decision, however, was reversed by
a federal appeals court which held that operating a railroad was an
essential state governmental function. The appeals court stated further
that the federal statute displaced the ability of the states to make
"essential government decisions" and noted that the federal interest
in uniform railway laws failed to outweigh that of the state. I ? The
appellate court ruling, however, was reversed by a unanimous
Supreme Court decision.
Relying on the third prong ofthe Hodelformulation of the National
League of Cities test, the Court, in an opinion written by Chief Justice
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Burger, held that the act in question failed to "directly impair [the
States'] ability to structure integral operations in areas of traditional
governmental functions. "18 The Court, noting that only two of
seventeen commuter railroads in the country at the time were state
owned and operated, concluded that the operation of railroads "has
traditionally been a function of private industry, not state or local
governments. 19 The Court stated that the fact that some railroads had
come under state control "does not alter the historical reality that the
operation of railroads is not among the functions traditionally
performed by state and local governments. Federal regulation of stateowned railroads simply dOe:s not impair a state's ability to function
as a state. ''20
The Court's conclusions were derived from an analysis that
represented a further elaboration of the National League of Cities test.
In effect, the Court adopted three additional factors to be considered
in identifying a "traditional governmental function":
(1) historical reality, i.e., whether there exists a record of
state activity in the area; (2) other factors indicating that a
particular function is a current and basic state prerogative; and
(3) the history and scope of federal regulation in the area. 21
The Court pointed to the federal government's historic role in
regulating railroads and cautioned that attempts to circumvent federal
railroad labor statutes threatened to disrupt the efficiency of
operations achieved through the uniformity of Congress' mandates. 22
Equal Employment Opportunity Commission v. Wyoming23
This 1983 Supreme Court decision concerned the applicability of
the federal Age Discrimination Act of 1967 to employees of state and
local governments. Described by one legal scholar as being "virtually
indistinguishable from National League of Cities, "24 the case
originated in a federal district court when the Equal Employment
Opportunity Commission (EEOC) challenged a Wyoming statute
permitting the state to retire game wardens at age fifty-five. The
federal law prohibiting discrimination against certain employees
between the ages of forty and seventy was extended by Congress to
the states in 1974. The district court agreed with Wyoming's
contention that the extension of the law violated the principles set
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[October
forth in National League of Cities and dismissed the suit. The Supreme
Court, however, reversed the lower court's decision upon appeal.
Again relying on the third prong of the Hodel test, the Court ruled
that the federal law was constitutional since it failed to directly impair
the ability of the states to "structure integral operations in areas of
traditional governmental functions. "25 The Court, in an opinion
written by Justice Brennan, further pointed out that "the degree of
federal intrusion in this case is sufficiently less serious than it was in
National League of Cities so as to make it unnecessary for us to
overide Congress' express choice to extend its regulatory authority
to the States. ''26 The federal statute, the Court noted, provided the
states sufficient leeway since it made exceptions for those instances
"where age is a bona fide occupational qualification. ''27
While also joining Brennan's majority opinion, Justice Stevens
wrote a separate concurring opinion in which he advocated the
reversal of National League of Cities.2 8 Stevens described the latter
decision as being "inconsistent with the central purpose of the
Constitution itself' and one which warranted prompt rejection. 29
The same coalition which had so vehemently dissented in FERC
v. Mississippi was equally ardent in condemning the m~jority opinion
in this decision. Joined by Justices Powell, Rehnquist and O'Connor,
Chief Justice Burger argued that Wyoming's statute represented an
employment decision that constituted a fundamental state function
and that the application of the federal act to the states violated all
the prongs of the test the Court had developed in Hodel. The Chief
Justice further noted that the enforcement clause of the Fourteenth
Amendmenpo also empowers Congress to enact legislation affecting
the states but he pointedly wrote that "this does not mean that
Congress has been given a 'blank check" to intrude into details of
states' governments at will. The Tenth Amendment was not, after all
repealed when the Fourteenth Amendment was ratified: it was merely
limited. "31 Burger's references to the Fourteenth Amendment were
significant since they suggested an inclination to extend the scope of
National League of Cities limitations on federal action to this
constitutional source of congressional power over the states. 32
Justice Powell and O'Connor also wrote separate dissenting
opinions in which they attacked Justice Stevens' interpretations of
federalism as articulated in his concurrence. Powell chastised Stevens
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for failing to recognize any limits on Congress' ability "to override
state sovereignty in exercising its powers under the Commerce
Clause .... Under this view it is not easy to think of any state function
- however sovereign - that could not be preempted. "33
Refinement or Retreat?
Theoretically, the Court's rulings in the cases spawned by National
League of Cities represented an ongoing refinement of the doctrine
on which that decision was based. In fact, however, closer
examination of those series of holdings reveals that the Court seemed
to be retreating from that decision. The 5-4 vote in the original
decision demonstrated thai the ruling had lacked the solid support
of the Court. Although Justice Blackmun joined with the majority,
he also wrote a separate concurring opinion in which he indicated that
he was troubled by "certain possible implications of the Court's
opinion. "34 When Blackmun, in the subsequent cases, withdrew from
the coalition which comprised the National League of Cities majority,
the Court drifted off the course set by that opinion. Before long its
direction would be reversed - along with National League of Cities
itself.
ENDNOTES
I. 452 U.S. 264 (1981).
2. /d. at 287, 88 (citations omitted).
3. [d. at 288 n. 29.
4. 426 U.S. 833, 856 (Blackmun, J., concurring).
5. 452 U.S. at 288.
6. Field, supra, at 93.
7. 456 U.S. 742 (1982).
8. Kobylka, supra, at 28.
9. [d.
10. 456 U.S. at 765, 66.
II. [d. at 764 n. 28.
12. Kobylka, supra, at 28.
•
13. 456 U.S. 742, 775 (O'Connor, J., dissenting). O'Connor was joined by Chief Justice Burger
and Justice Rehnquist.
!
14. 456 U.S. 742 (Powell, J., concurring in part and dissenting in part).
9
!
15. 455 U.S. 678 (1982).
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16. Bernard Schwartz, "National League of Cities Again - R.I.P. On A Ghost That Still
Walks?" 54 Fordham Law Review 141, 146 (1985); Rosemarie E. Del Monte, Garcia v.
San Antonio Metropolitan Transit Authority: And The States Stand Alone," 19 Creighton
Law Review 105, 116 (1985).
17. 455 U.S. at 682.
18. [d. at 684.
19. /d. at 686.
20. [d.
21. DelMonte, supra, at 117.
22. Joseph M. Lynch, "Garcia v. San Antonio Metropolitan Transit Authority: An Alternate
Opinion," 16 Seton Hall Review 73, 83 (1986).
23. 103 S. Ct. 1054 (1983).
24. Field supra, at 87.
25. 103 S. Ct. at 1060.
26. [d. at 1062.
27. [d. at 1057.
28. 103 S. Ct. 1054, 1067 (Stevens, J., concurring).
29. [d.
30. U.S. Const., Art. XIV, sec. 5.
31. 103 S. Ct. 1054, 1072 (Burger, c.J., dissenting).
32. See Kobylka, supra at 30.
33. 105 S. Ct. 1054, 1080 (Powell, J., dissenting).
34. 426 U.S. 833, 856 (Blackmun, J., concurring).
\
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CHAPTER VI.
GARCIA V. SAN ANTONIO METROPOLITAN TRANSIT
AUTHORITY: THE TENTH AMENDMENT LAID TO REST
II
'.
National League of Cities had appeared to be a landmark case that
had recognized constitutional limitations on the federal government's
power to regulate commerce. Although the decision had originally
seemed to be a watershed judicial acknowledgement of a sphere of
sovereign state authority, the Court's subsequent decisions in related
cases discouraged such perceptions.
In each of the fbur post-National League of Cities cases described
in the preceding chapter, the Supreme Court was faced with deciding
the applicability of the doctrine it had enumerated in its 1976 decision.
The basis of that doctrine was the principle that states were immune
from federal commerce regulations that directly displaced their
"freedom to structure integral operations in areas of traditional
governmental functions. "I
In the cases which ensued, however, the Court determined that such
immunity did not apply to the factual situations with which it was
presented. In each instance, the Court found, for one reason or
another, that the state sovereignty principles it articulated in National
League of Cities were not applicable. Whatever promise National
League of Cities had held for those who applauded it was soon
extinguished by the ruling in Garcia v. San Antonio Metropolitan
Transit Authority.2
e
Factual Background
\
The San Antonio Metropolitan Transit Authority (SAMT A) is a
publicly-owned regional transit authority that began operations in
1978. The system had been privately owned and operated until 1959
when it was acquired by the City of San Antonio. Ownership of the
transit system was transferred in 1978 from the city to a public mass
transit authority.
The case originated in 1976 when the San Antonio Transit System
(SA TS) informed its employees shortly after the National League of
Cities decision that they were no longer covered by the overtime
provisions of the FLSA amendments of 1974. The federal government
challenged that assertion in a 1979 advisory opinion issued by the
Wage and Hour Administration of the Department of Labor (DOL).
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-
The opinion stated that SAMT A's operations "are not constitutionally immune from the application of the Fair Labor Standards Act"
under National League of Cities. SAMTA filed suit in federal district
court seeking a determination to the contrary. The Secretary of Labor,
in turn, countersued for enforcement of the overtime and recordkeeping requirements of the FLSA. A concurrent civil action was also
brought against the transit authority by Joe Garcia, a SAMT A driver,
and several fellow employees. The district court stayed the civil suit
but allowed Garcia to intervene as a defendant in support of the
Secretary.
District Court Disposition
The district court ruled in favor of SAMT A in 1982 and granted
it declaratory relief. The court found that local mass transit systems
such as SAMT A "constitute integral operations in areas of traditional
governmental functions" and hence are immune from federal
regulation under National League of Cities. 3 The ruling was appealed
to the Supreme Court, which in light of its recent Long Island
Railroad decision, vacated the district court's judgement and
remanded it for further consideration. On remand, tpe lower court
reaffirmed its original decision:
Upon further consideration, this Court finds nothing in
LIRR that compels a change in its previous conclusion that
a public transit system is a governmental function entitled to
Tenth Amendment immunity.4
After judgement was re-entered for SAMT A the Secretary of Labor
and Garcia again appealed to the Supreme Court. The Court accepted
the case and following a round of briefing and oral argument it was
ordered held over for reargument during the next term.5 In addition
to the question of whether the FLSA should apply to SAMT A, the
parties were requested to address "whether or not the principles of
the Tenth Amendment as set forth in National League of Cities v.
Usery should be reconsidered?"6
The State and Local Legal Center, representing state, county and
municipal government officials filed amicus curiae briefs in support
of SAMTA.7 Similar briefs were also filed by the American Public
Transit Association.
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National League of Cities Overturned
"
J
On February 19, 1985, the Supreme Court·stunned all parties in
the case when it "delivered a broadside decision"8 that not only went
against SAMT A but which reversed National League of Cities. Even
the Solicitor General, who had argued the case for the federal
government, had urged the Court to uphold its 1976 precedent.
Seeking only a clarification of the test established by National League
of Cities, the federal government's attorney was instead "surprised and
grieving" over the outcome. 9
Although it could have simply applied its unanimous Long Island
Railroad decision and held that the operation of SAMT A did not
represent a "traditional governmental function," the Court ruled in
a 5-4 decision that attempting to apply this standard was "unworkable
[and] inconsistent with established principles of federalism." 10
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Mass Transit and Federal Funding
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Looking first to the issue of whether the FLSA should apply to
SAMTA's operations, the Court began its analysis, in an opinion
authored, significantly, by Justice Blackmun, by noting that public
transportation in San Antonio, as with the United States generally,
originally was provided by private enterprises. The Court further
pointed out that with the advent of publicly-operated transit systems,
municipalities such as San Antonio began to rely on the federal
government for substantial subsidies - principally through funds
made available under the Urban Mass Transportation Act of 1964
(UMTA).II To illustrate the extent of such funding, the Court cited
the fact that, under UMTA, states and localities had received over
$22 billion in mass transit aid since its enactment - $3.7 billion in
1983 alone. 12 Although Justice Blackmun was careful in noting that
his references to UMT A were not meant to imply that federal
regulation under the Commerce Clause must be accompanied by
countervailing financial support, these references had clear
implications nonetheless. In its Hodel decision, the Court identified
four prerequisites that must be rriet for governmental immunity under
National League of Cities. The second prong of the Hodel test
required a challenged statute to "address matters that are indisputably
'attribute[ s] of state sovereignty'." 13 In citing the degree to which
public transit systems were dependent upon federal financial
42
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[October
assistance, Blackmun seemed to be assailing the credibility of any
claims of state sovereignty in the field. Blackmun's remarks suggest
that he ignored the argument presented in a State and Local Legal
Center brief which contended that the acceptance of UMTA grants
was irrelevant to the issue of Tenth Amendment immunity. 14 The brief
noted that the Court had ruled in a prior case that in order for
Congress to impose conditions upon federal grants the conditions
must be clearly expressed to grant applicants. 15 State and local
governments might otherwise be unaware of the obligations they
would assume upon acceptance of grants, according to the Court's
own logic. In the case of UMT A, amici asserted, grant funds were
not conditioned upon compliance with the wage and hour provisions
of the FLSA. Conversely, the Court itself in an earlier case involving
UMT A, had declared that "Congress made it absolutely clear that it
did not intend to create a body of federal law applicable to labor
relations between local government entities and transit workers." 16
Difficulties Defining "traditional governmental functions"
The Court focused next on the third prong of the Hodel test that a challenged federal statute must interfere with "traditional
governmental functions." The district court had earlier expressed
concern with identifying such a function:
Despite the abundance of adjectives, identifying which
particular state functions are immune remains difficult ... If
transit is to be distinguished from the exempt [National
League of Cities] functions it will have to be by identifying
a traditional state function in the same way pornography is
sometimes identified: someone knows it when they see it, but
they can't describe it. 17
Justice Blackmun underscored the difficulty in distinguishing
between exempt and non-exempt functions under National League
of Cities by comparing a number of lower court cases. In five of the
cases cited in which the courts ruled in favor of exemptions, the
functions involved included: regulating ambulance services; licensing
automobile drivers; operating a municipal airport; performing solidwaste disposal; and, operating a highway authority. The functions
involved in the other ten cases cited in which the courts ruled against
exemption included: issuing industrial development bonds; regulating
air transportation; operating a telephone system; leasing and selling
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natural gas; operating a mental health facility; and providing in-house
domestic services for the aged and handicapped. Blackmun stated that
he found "it difficult, if not impossible, to identify an organizing
principle that places each of the cases in the first group on one side
of a line and each of the cases in the second group on the other side. "18
Although the Court in National League of Cities had given
examples of protected and unprotected functions, Justice Blackmun
pointed out that it had failed to explain how those examples had been
identified. 19 In Long Island Railroad, the Court largely relied on the
historical reality that the operation of railroads is not among the
functions traditionally performed by state and local governments." 20
At the same time, however, it disavowed "a static historical view of
state functions generally immune from federal regulation. ''21 In spite
of this, the Long Island Court emphasized the long-standing historical
record of federal involvement in the rail transportation field. 22
Justice Blackmun further noted that, in Long Island Railroad, the
Court had held that examining a particular function's "traditional"
nature was merely a means of determining whether a challenged
federal statute interfered with "basic state prerogatives. "23 The Court,
however, had neglected to explain what makes one state function a
"basic prerogative" and another function not basic.
In the Garcia ruling, Blackmun compared the difficulties the Court
faced in arriving at a practicable definition with its earlier experience
in the related field of state immunity from federal taxation. At various
times in the forty years following the Court's ruling, in South Carolina
v. United States,24 that state tax immunity extended only to
"ordinary" and "strictly governmental" agencies, the Court had
identified protected functions as "essential," "usual," or "traditional. "25 These adjectives were all employed in attempts to
~istinguish between "governmental" and "business or proprietary"
functions. That these attempts proved to be less than successful is
illustrated by the Court's rulings in several cases which Blackmun
cited. In 1911, the Court held that providing a municipal water supply
"is no part of the essential governmental functions of a state." 26
Twenty-six years later, the Court inexplicably ruled that such a
function was essentia1. 27 In 1934, however, the Court held that the
Boston Elevated Railway did not constitute an immune function. 28
Four years after the decision, the Court, in a case involving the New
York Port Authority, recognized that an implied constitutional
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distinction between a publicly-operated transportation system and a
municipal water work system based on an essential/ non-essential test
could only manifest uncertainty and instability.29 By 1946, in fact, the
Court had found that such distinctions were so "untenable" they
warranted abandonment. 30
The Garcia Court determined that such distinctions were equally
"unworkable" in the field of regulatory immunity under the
Commerce Clause. Apart from such difficulties, however, the Court
was troubled by a more fundamental problem. Although objective
criteria for identifying "traditional governmental functions" proved
to be elusive, the Court was more concerned that, "regardless of how
the distinctions are phrased," 31 judicial attempts to demarcate
boundaries around sovereign state functions were contrary to the
principles of federalism:
Any rule of state immunity that looks to the "traditional,"
"integral," or "necessary" nature of governmental functions
inevitably invites an- unelected federal judiciary to make
decisions about which state policies it favors and which ones
it dislikes. 32
Hence, the Court rejected, "as unsound in principle a~d unworkable
in practice," any rule of state immunity from federal regulation that
is derived from "a judicial appraisal of whether a particular
governmental function is 'integral' or 'traditional'." 33 The Court held
that any limits on the power of the federal government to interfere
with state functions must be found elsewhere.
Constitutional Checks on Federal Power
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Justice Blackmun observed in Garcia that states enjoy "a significant
measure of sovereign authority." 34 Qualifying that observation, he
wrote that "they do so, however, only to the extent that the
Constitution has not divested them of their original powers and
transferred those powers to the Federal Government." 35
Elaborating on this theme, Blackmun quoted from an address
James Madison gave to the First Congress:
Interference with the power of the States was no constitutional criterion of the power of Congress. If the power was
. not given, Congress could not exercise it; if given, they might
exercise it, although it should interfere with the laws, or even
the Constitution of the States. 36
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Excluding the rare guarantees such as the inviolability of state
territorial boundaries,37 the Constitution, Blackmun noted, does not
fashion explicit areas of state sovereignty that may not be displaced
by Congress in exercising its delegated powers. Thus, Blackmun
reasoned that, "In short we have no license to employ freestanding
conceptions of state sovereignty when measuring congressional
authority under the Commerce Clause." 38 Instead, according to the
Garcia Court, the framers devised a constitutional scheme in which
the states' role is primarily ensured by "the structure of the Federal
Government itself." 39
The Coart cited the fact
that states were vested with indirect
,
influence over the House of Representatives through their control of
electoral qualifications. States also have indirect influence over the
executive branch, the Court said, by virtue of their role in the electoral
college. In addition, it was pointed out that states were given direct
influence in the Senate through equal representation in that branch
of Congress. The Court further noted that, originally, each senator
was to be selected by the legislature of his or her state.
Justice Blackmun acknowledged that the adoption of popular
elections for senators, along with other structural changes in the
federal government, may have altered the influence of the states in
the national political process. Nonetheless, Blackmun was adamant
that the sovereign interests of the states "are more properly protected
by procedural safeguards inherent in the structure of the federal
system than by judicially created limitations on federal power." 40
Disregarding changes that have occurred since 1789, the Court based
its ruling on its interpretation that the intent of the Framers was to
bridle federal power over the states through "the built-in restraints
that our system provides through state participation in federal
governmental action. "41
To illustrate the apparent effectiveness of the federal political
process in protecting the interests of the states, the Court noted that
state and local governments have been so successful in obtaining
federal support that one-fifth of their expenditures are now funded
by federal grants. 42 The Court further observed that the states have
also succeeded in gaining congressional exemptions from a wide
variety of laws enacted under the Commerce Clause - including the
FLSA.
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In summation, the Garcia Court declared its unabashed faith that
the political position of the states in the federal system would serve
to protect their interests:
The political process ensures that laws that unduly burden
the States will not be promulgated ... [The National League
of Cities doctrine] underestimated, in our view, the solicitude
of the national political process for the continued vitality of
the States. 43
The Garcia majority was assuredly confident that the political
process would protect the states from federal encroachment. The
confidence the Court evinced., along with its disregard of the Tenth
Amendment, incited howls of incredulity among the ruling's
detractors. One legal scholar was led to remark that it was difficult
to accept the Court's argument as anything "other than a good-hearted
joke. "44 Although the dissenting justices in Garcia may not have
shared that commentator's "skepticism that those who assert this
argument can possibly believe it",45 it would be an understatement
to say that they found the Court's reasoning to be naive and deficient.
A Court Divided
As with National League of Cities itself, the Garcia decision which
reversed it was based on a narrow 5-4 majority. Justice Powell wrote
a minority opinion which was joined by Chief Justice Burger and
Justices Rehnquist and O'Connor. O'Connor also wrote a dissent in
which Justices Powell and Rehnquist joined. A separate, one
paragraph dissent was written, as well, by Rehnquist, who limited his
opinion to some technical points regarding the minority opinions. 46 Although recognizing that the doctrine of stare decisis
(upholding precedents) is not rigidly applied by constitutional
questions, Justice Powell was troubled that the Court would so
abruptly ignore the rationale of National League of Cities and its
progeny without the special justification such a departure from the
doctrine usually demands. 47 Powell noted that, in its unanimous
Hodel decision, the Court had considered the National League of
Cities test to be "settled constitutional doctrine 48 despite the fact that
it "may at times be a difficult one. "49
That difficulty was acknowledged by Justice O'Connor, who wrote
that, indeed, "It has been difficult for this Court to craft bright lines
----------
1987]
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HOUSE - No. 6133
47
defining the scope of the state autonomy protected by National
League of Cities. "50 In O'Connor's view, however, complications are
to be expected when attempting to resolve constitutional concerns
such as a conflict between "federalism and the effectiveness of the
commerce power." 51 Rather than reconcile these dual concerns,
according to O'Connor, the Court instead chose to retreat from its
constitutional duty.
While also acknowledging the difficulty of defining the realm of
"traditional governmental functions" with precision, Powell further
observed that "the luxury of precise definitions is one rarely enjoyed
in interpreting and applying the general provisions of our
Constitution." 52 In addition, Powell expressed confoundment that
Justice Blackmun could conclude in National League of Cities that
"the result with respect to the statute under challenge here [the FLSA]
is necessarily correct"53 yet reach the opposite conclusion in Garcia
without even discussing the statute or identifying any changed
circumstances that would "warrant the conclusion today that National
League of Cities is necessarily wrong. " 54
The Garcia dissenters were even more astounded by the majority's
view that the states' role in the electoral process would protect them
from federal infringement on their "residual state sovereignty." 55
Powell stated that the Garcia ruling leaves the role of the states in
the federal system dependent "upon the grace of elected federal
officials, rather than on the Constitution as interpreted by the
Court." 56 The majority's opinion was characterized by Powell as one
which "radically departs from long settled constitutional values and
ignores the role of judicial review in our system of government." 57
Noting that the Tenth Amendment is a primary feature of the Bill
of Rights, Powell assailed the Court's logic that the political process
would protect the states from federal encroachment:
- One can hardly imagine this Court saying that because
Congress is composed of individuals, individual rights
guaranteed by the Bill of Rights are amply protected by the
political process. Yet, the position adopted today is
indistinguishable in principle. 58
Powell further pointed out that although members of Congress are
elected from their states, once they are in office they become members
of the federal government. Pursuing his assault on the Court's logic,
Powell also took notice of "a variety of structural and political changes
48
HOUSE - No. 6133
[October
in this century [that] have combined to make Congress particularly
insensitive to state and local values. "59 Powell cited the direct election
of senators, the weakening of political parties on the local level, the
burgeoning of sophisticated special interest groups, and the emergence
of national media as examples of the changes that "have made
Congress increasingly less representative of State and local interests,
and more likely to be responsive to the demands of various national
constituencies. "60 Agreeing with Powell's estimation, Justice
O'Connor also caustically concurred with his view on the federal
government's tendency "to exceed the outer limits of its power" :61
With the abandonment of National League a/Cities, all that
stands between the remaining essentials of state sovereignty
and Congress is the latter's underdeveloped capacity for selfrestraint. 62
Powell also criticized the Garcia majority's assessment that the
"effectiveness of the federal political process in preserving the States'
interests" 63 is demonstrated by their success in obtaining federal funds
and in securing exemptions from various federal statutes. Such
political success was considered irrelevant to Powell in determining
whether the political process is the "proper means of enforcing
constitutional limitations" :64
The fact that Congress generally does not transgress
constitutional limits on its power to reach State activity does
not make judicial review any less necessary to rectify the cases
in which it does do so. The States' role in our system of
government is a matter of constitutional law, not of legislative
grace. 65
According to Powell, the Garcia ruling left federal political officials
as the "sole judges of the limits of their own power." 66 Powell and
O'Connor both scolded their colleagues in the majority for virtually
ignoring the Tenth Amendment. Blackmun's opinion, as Powell
remarked, barely acknowledged the amendment's existence. The
Court, in fact, mentioned the Tenth Amendment only once and that
was merely when it restated the question that the parties in the case
were requested to brief and argue.
Powell warned that the federal system adopted by the Framers of
the Constitution would be imperiled by judicial failure to enforce the
Tenth Amendment. The Garcia majority was reminded by Powell that
the intention of the Framers, as expressed in the Federalist Papers,
1
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HOUSE - No. 6133
49
was to limit the jurisdiction of the federal government "to certain
enumerated objects only, ... leav[ing] to the several States a residuary
and inviolable sovereignty over all other subjects." 67 Madison's
description of the separate spheres of federal and state authority was
quoted by Powell:
The powers delegated by the proposed constitution to the
Federal Government are few and defined. Those which are to
remain in the State Governments are numerous and indefinite.
The former will be exercised principally on external objects,
as war, peace negotiation, and foreign commerce; ... The
powers reserved to th~ several States will extend to all the
objects, which, in the ordinary course of affairs, concern the
lives, liberties and properties of the people; and the internal
order, improvement, and the prosperity of the State. 68
Sidestepping the semantic struggling over "traditional governmental functions," which had so stymied the majority, Powell found the
operation of a municipal mass transit system to be "indistinguishable
in principle from the traditional services of providing and maintaining
streets, public lighting, traffic control,' water, and sewerage
systems." 69 Disregarding its relative novelty, Powell characterized the
municipal operation of a transit system as "a classic example of the
type of service traditionally provided by local government." 70 Powell
and O'Connor expressed fear that by impairing the states' abilities
to perform their traditional functions, federal overreaching under the
Commerce Clause would result in undermining "the constitutionally
mandated balance of power between the States and the federal
government, a balance designed to protect our fundamental
liberties." 71
Comparing the Framers' narrow perception of commerce with the
expansive meaning the Court has given it over the years, O'Connor
observed that, "Because virtually every state activity, like virtually
every activity of a private individual, arguably 'affects' interstate
commerce, Congress can now supplant the States from the significant
sphere of activities envisioned for them by the Framers."72 O'Connor
argued that in determining the validity of congressional commerce
regulation of a state it is inadequate to merely ask whether the same
regulation would be valid if enforced against a private party. "As far
as the Constitution is concerned," O'Connor wrote, "a State should
not be equated with any private litigant. "73 In order to properly make
50
HOUSE - No. 6133
[October
such an assessment, according to the dissenting justices, the Court
should employ a balancing test in which the federal interest is weighed
against the potential harm to the autonomy of the states. Referring
to the spirit if not letter of the Tenth Amendment, O'Connor quoted
a distinguished constitutional scholar:
The question, always, is whether the exercise of power is
consistent with the entire Constitution, a question that can be
answered only by taking into account, so far as they are
relevant, all of the values to which the Constitution - as
interpreted over time - gives expression. 74
The Garcia court had failed in this respect, according to Powell,
who described its ruling as one which "rejects almost 200 years of the
understanding of the constitutional status of federalism." 75 Powell
succinctly summarized the sentiments of the dissenting justices:
Indeed, the Court's view of federalism appears to relegate
the States to precisely the trivial role that opponents of the
Constitution feared they would occupy.76
,
Dire Consequences Forecasted
The immediate impact of the Garcia decision was to subject state
and local governments to the provisions of the Fair Labor Standards
Act. Dire consequences of reduced services and/ or increased taxes
were predicted by representatives of those governments. To avoid the
anticipated burdens associated with FLSA compliance, states and
municipalities were compelled to beseech Congress to amend the law
by exempting them from its coverage. A successful lobbying effort,
however, would only address the urgent issue of impending financial
chaos. The fact that the Court had "washe[d] its hands of all efforts
to protect the States"77 loomed as an issue that transcended the
economic impact of the Garcia ruling. With the' rejection of the
National League of Cities doctrine, Congress was given virtually
unlimited freedom to exercise its commerce power as it saw fit regardless of whether it impaired the ability of the states to perform
their functions. As it stood, the states could only share the optimism
of Justice Rehnquist that the principles embodied by National League
of Cities would "in time again command the support of a majority
of this Court. "78
2
2
2
3
3
3
)ber
1987]
HOUSE - No. 6133
51
ENDNOTES
ourt
~hed
I. 426 U.S. at 852.
flng
::lted
2. 105 S. Ct. 1005 (1985).
3. San Antonio Metropolitan Transit Authority v. Donovan, 557 F. Supp. 445, 446 (W.D.
Tex 1983) rev'd sub nom.
4.Id.
5. 104 S. Ct. 3582 (1984).
6. Id.
veIl,
'the
well
7. The State and Local Legal Center is an arm of The Academy for State and Local
Government. The Academy is governed by the National League of Cities, the National
Governors' Assoc., the National Association of Counties, the National Conference of State
Legislatures, the Council of State Governments and the International City Management
Association.
8. Van Alstyne, supra at 1709.
9. Linda Greenhouse, New York Times, Feb. 20, 1985. Quoting Rex E. Lee.
10. 105 S.Ct. at 1008.
II. Pub.L. 88-365, 78 Stat. 302, as amended, 49 U.S.c. app. ss.I60I et seq.
12. 105 S. Ct. at 1020.
13. 452 U.S. at 287, 88.
14. Brieffor the National League of Cities, et al., at 28.
15. Pennhurst Slate School and Hospital v. Halderman, 451 U.S. I, 17 (1981).
tate
trds
lxes
the
and
law
ort,
cial
)rts
the
the
ally
•rm
Lsm
~ue
rity
16. Jackson Transit Authority v. Local Division 1285, Amalgamated Transit Union, 102 S.
Ct. 2202, 2209 (1982) emphasis added.
17. San Antonio Metropolitan Transit Authority v. Donovan, 557 F. Supp. 447, 453 (W.D.
Texas) rev'd sub nom.
18. 105 S. Ct. at 1012.
19. 426 U.S. at 851, 854.
20. 455 U.S. at 686, first emphasis added; second in original.
21. Id.
22. Id. at 687-689.
23. Id. at 686.
24. 199 U.S. 437 (1905).
25. -105 S. Ct. at 1013.
26. Flint v. Stone Tracy Co., 220 U.S. 107, 172.
27. Brush v. Commissioner, 300 U.S. 352, 370-373.
28. Helvering v. Powers, 293 U.S. 214 (1934) .
29. Helvering v. Gerhardt, 304 U.S. 405, 427 (1938).
30. New York v. United States, 326 U.S. 572 (1946).
31. 105 S. Ct. at 1015.
32. /d.
52
HOUSE - No. 6133
[October
1
33. /d. at 10 16.
6l
34. 105 S. Ct. at 1017; quoting EEOC v. Wyoming, 460 U.S. at 269 (Powell, J., dissenting).
6~
35. 105 S. Ct. at 1017.
7(
36. 2 Annals of Congress 1897 (1791)
7:
37. U.S. Const., Art. IV, sec. 3.
38. 105 S. Ct. at 1017.
39. /d. at 1018.
7<
40. Id. at 1018.
4 I. Id. at 1020.
42. Id. at 1019, citing Advisory Commission on Intergovernmental Relations (ACIR), (1984),
Significant Features of Fiscal Federalism, at 120, 122.
43. 105 S. Ct. at 1020, 2 I.
44. Van Alstyne, supra, at 1724, F.N. 64.
45. Id.
46. In his majority opinion, Justice Blackmun was joined by Justices Brennan, White, Marshall,
and Stevens.
47. In differentiating Garcia from National League of Cities, Powell noted that the rationale
of Wirtz, which the latter decision overturned, was not repeatedly accepted in a series of
subsequent rUlings.
48. 105 S. Ct. 1005, 1022 (Powell, J., dissenting).
49. /d., quoting Hodel, 455 U.S. at 684.
50. 105 S. Ct. 1005, 1038 (O'Connor, J., dissenting).
5 I. Id.
52. Id. at 1023, F.N. 4 (Powell, J., dissenting).
53. 426 U.S. at 856, emphasis added.
54. 105 S. Ct. at 1025 (Powell, J., dissenting).
55. Id.
56. ld. at 1023.
57. Id.
58. Id. at 1025, F.N. 8.
59. Id., quoting Advisory Commission on Intergovernmental Relations (ACIR), Feb. 1984,
Regulating Federalism: Policy, Process, Impact and Reform at 50.
.
60. Id.
61. Id. at 1025, quoting Immigration and Naturalization v. Chadha, 462 U.S. 919 (1983).
62. Id. at 1037 (O'Connor, J., dissenting).
63. /d. at 1018.
64. Id. at 1026 (Powell, J., dissenting).
65. Id.
66. Id.
67. Id. at 1028, quoting Madison, The Federalist Papers, No. 39 at 256 (J. Cooke ed. 1961).
7~
7(
7~
7~
ober
1987]
.ng).
68. Id., The Federalist Papers, No. 45 at 313 (1. Cooke ed. 1961).
69. /d. at 1032 .
HOUSE - No. 6133
53
70. Id., emphasis added.
71. Id. 1029 (Powell, J., dissenting).
72. Id. at 1035 (O'Connor, J., dissenting).
73. Id. at 1037.
74. Id. at 1036, quoting Terrance Sandalow, "Constitutional Interpretation," 79 Michigan Law
Review 1033, 1055 (1981).
75. Id. at 1023 (Powell, J., dissenting).
1984),
76. Id. at 1030.
77. /d. at 1037 (O'Connor, J., dissenti,ng).
78. Id. at 1033 (Rehnquist, J., dissenting).
rshall,
ionale
ries of
1984,
I.
61).
54
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[October
CHAPTER VII. IN THE WAKE OF GARCIA
The Garcia majority redefined the role of the states in the federal
system. In effect, the Garcia Court invited the federal government to
escalate its unwelcome intrusion into state and local affairs. Moreover, with its ruling, the nation's highest court has apparently abdicated its role as arbiter between the states and the federal government.
In addition to its broader implications, however, the Garcia decision
subjected the states to a more immediate risk - financial peril.
The Immediate Impact: State and Local Budgets on the Brink
The most pressing aspect of the Garcia holding was that overtime
and minimum wage standards of the FLSA were made applicable not
only to Joe G. Garcia and his fellow SAMTA drivers but to practically all state and local government employees. l State and local
governments were forced to virtually abandon the widespread practice
of granting compensatory time off to employees who worked
overtime. Comp-time practices had been particularly relied upon by
states and localities in responding to the cyclical or seasonal nature
of certain public jobs such as legislative employees, law enforcement
officers, fire fighters, forest workers and snow plow drivers, to name
but a few. FLSA guidelines, however, require that any overtime hours
would have to be reimbursed at the premium rate of one and onehalf times the regular rate of pay unless an employee used the "comptime" within the same pay period in which it was granted. Such constraints served to severely restrict the use of comp-time as a practical
cost-reducing option.
Estimates projecting the annual cost, of compliance with the overtime provisions of the FLSA ranged from the International City Managers Association's conservative figure of $321 million to the
whopping $3 billion "worst case" calculation of the National Public
Employer Labor Relations Association. 2 The Department of Labor
(DOL) calculated that if the FLSA had applied to state and local
governments during calendar year 1984 the nationwide overtime costs
would have amounted to $733 million. 3 The DOL also estimated that
it would cost states and localities $396 million over the same period
to comply with the minimum wage requirements of the FLSA.4
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HOUSE - No. 6133
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Approximately 240,000 state and local government employees were
identified by the DOL as being paid sub-minimum wages. This latter
category of employees was generally comprised of salaried workers
whose hourly rate was brought below the minimum level by the excessive number of hours they logged during a pay period. In addition
to projected FLSA compliance costs, state and local governments
were faced with potential lawsuits aimed at holding them liable for
retroactive wage adjustments.
FLSA provisions also threatened to terminate or restrict the use
of volunteer workers. Under federal guidelines, volunteers who are
paid a nominal fee or reiqlbursed for expenses may be deemed to be
employees who would thus be entitled to the minimum wage. Such
a requirement would have an impact on volunteer fire departments,
volunteer teaching assistants, foster grandparent programs, and other
similarly staffed activities.
Congress to the Rescue: The FLSA Amended
Unless alleviated by Congress, the financial burden of the Garcia
decision on state and local governments would have to be met through
raising taxes, reducing or eliminating services, foregoing contemplated initiatives, or combinations thereof. Following the staggering
February 19, 1985 decision, state and local government officials, along
with many of their national and state organizations, mobilized a concerted lobbying effort to convince Congress and the President of the
need for remedial legislation. Supported by the Reagan Administration and bolstered by the efforts of U. S. Senator Don Nickles from
Oklahoma, state and local government representatives worked tirelessly to inform Congress ofthe scope of the problem. Senator Nickles,
chairman of the Subcommittee on Labor of the Senate Committee
00 Labor and Human Services, held strong federalism views and convened hearings to consider how Congress should respond to the
Garcia ruling. s Sympathetic to the plight of state and local governments, Rickles introduced S. 1570, a bill which would have provided
them with a complete exemption from the overtime provisions of the
FLSA.6 The bill would also have clarified the term "volunteers" and
would have established the date of the decision as the effective date.
The latter stipulation would have eliminated the liability of state and
local governments for retroactive overtime compensation.
56
HOUSE - No. 6133
[October
Despite the lobbying by state and local government officials and
the Secretary of Labor's endorsement for the bill, Senator Nickles and
other congressional backers were unable to enlist sufficient political
support for the original version of S. 1570. Majorities of both the Senate Labor and Human Resources Committees and the House Education and Labor Committee opposed a complete overtime exemption.
Such a provision was fervidly resisted by the AFL-CIO and other
unions representing public employees. 7 Union representatives,
however, were subject to increasing pressure from members of Congress as well as from their own members, many of whom preferred
receiving compensatory time off instead of time and a half pay for
overtime work. 8 Compromises were eventually worked out between
union and government officials who jointly lobbied the respective
House and Senate committees to support the negotiated agreement.
Similar but not identical bills were soon passed in both Houses of
Congress. Disputes were resolved in conference and legislation
amending the FLSA was signed by President Reagan on November
13, 1985.
The exemptions contained in the amendments, however, apply only
to those state and local government employees who, under the
National League of Cities doctrine, were considered to be engaged
in traditional governmental functions. Thus, employees engaged in
non-traditional functions such as the operation of a municipal electric system and to whom the National League of Cities did not apply,
remain under the full coverage of the FLSA.
Key highlights of the FLSA amendments are:
• Unless prohibited by collective bargaining agreements, compensatory time in lieu of overtime pay may be given at the rate of at
least one and one-half hours for each hour for which overtime compensation is required under the FLSA;
(
i
]
I
(
t
I
t
• Maximum accrued comp-time set at 480 hours for public safety,
emergency response and seasonal personnel. Comp-time for all
other employees is capped at 240 hours;
1
• Overtime wages must be paid at the rate of at least one and onehalf times the regular scale when the comp-time cap is reached. All
remuneration given to an employee such as shift differential, educational incentives, longevity pay and other special stipends must be
included in calculating the regular rate;
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HOUSE - No. 6133
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• Accrued comp-time payment upon termination set at the higher
of the regular rate paid at termination or the average regular rate
for the three prior years;
• FLSA restrictions on the use of volunteers relaxed for state and
local governments;
• FLSA exemption established for all state legislative employees
except those covered by civil service laws and those employed in
legislative libraries;
• Exemptions also provided for elected officials and certain staff
members, appointees and advisors; 10
• FLSA overtime liability existing as of April 14, 1986 waived;
• Implementation of FLSA requirements delayed until April 15,
1986.
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:d
In
cy,
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l-
While the amendments signed into law have eliminated most of the
significant problems that the Garcia decision posed for state and local
governments the burden has not been lifted entirely. Even with the
amendments, the Department of Labor projected that the overtime
costs resulting from the Garcia ruling would amount to $216 million
for the year beginning April 1986 and ending March 1987. 11 The
DOL's pre-amendment, estimated minimum wage impact of$396 million was not affected by Congress' action.12 Minimum wage
compliance was changed by the amendments only with respect to the
use of volunteers.
In addition to costs such as these, it is impossible to overlook the
administrative burden that state and local governments must endure
to comply with the FLSA. Extensive record keeping cannot be
avoided in order to maintain compliance. Most state and local governments, in fact, need to sustain dual record-keeping systems. The overtime threshold under the FLSA for a 7-day work period, for example,
is 40 hours. If an employee is paid for a 44-hour week that includes
8 hours of sick time, the FLSA overtime provisions would not apply
since only 36 hours were actually worked. A state or municipality
might base its pay periods on a 35-hour week and pay overtime for
any hours worked above that threshold. If that were the case,
explained a staff member of the Massachusetts Municipal Associa-
58
HOUSE - No. 6133
[October
tion, the state or municipality "will rec~i~e [FLSA] credit for such
payments even if figured on a base pay rate which is lower than the
one stipulated by the FLSA. The FLSA base rate is typically higher
because it includes such things as longevity payments. Thus, the credit
for the overtime paid on hours worked over 35 and under 40 could
exceed what the FLSA would otherwise demand for the time worked
in excess of 40 hours. In that case [the state or municipality] would
not be liable for any additional wages. "13
The paperwork involved in complying with the FLSA, consequently, is quite extensive. In addition, there are numerous technical provisions of the FLSA that state and local governments must
heed in order to avoid being unwittingly liable for overtime wages.
A state or municipality may be exposed to overtime liability when
an employee answers the phone once or twice while eating lunch at
his or her desk or if a worker comes in early and/ or leaves late. Strict
guidelines also exist relative to dual employment, on-call employees,
and employees volunteering work in a capacity similar to the type of
service involved in their regular job.
As of now, states and municipalities should be intimately familiar
with the FLSA requirements and the burdens they impose. State and
local governments have also had sufficient time to develop fiscal
strategies designed to meet the costs associated with the overtime
provisions of the FLSA (and it should be noted that even granting
comp-time at time-and-a-half in lieu of overtime pay is not a costfree alternative). If, in fact, state and local governments have become
comfortable with FLSA compliance, it is a testimony to their ability
to adapt to sudden and unexpected change. This capability to make
needed adjustments, however, should not obscure the issue being discussed here - the federal government directing the manner in which
state and local governments structure their internal operations.
The Broad Implications of Garcia:
State Autonomy Threatened
Due to the adversarial nature of the litigants in a court case, the
decisions of any court can be expected to generate divergent responses.
The nature of a judge's duties, according to one Massachusetts jurist,
is such that it guarantees "a fifty percent consumer dissatisfaction
1
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1987]
HOUSE - No. 6133
59
rate." Thus the decisions of the U.S. Supreme Court will always be
simultaneously applauded by some and condemned by others. The
Garcia decision was no exception to this maxim. While many theorists
condemned the Court's ruling, others praised it. Some Garcia supporters heartily agreed with the Court's interpretations of the constitutional scheme that was envisioned by the Framers. 14 . Others who
accepted the decision did not necessarily embrace the doctrine
espoused by the Court but did agree that when a factual situation
demonstrates that a state (or in this case, SAMT A,) is "actually
dependent, and therefore not sovereign, the question of so-called state
sovereignty is irrelevant. "15 The reaction of Garcia foes was similarly
mixed. The objection of some critics focused primarily on the financial impact that loomed as a result of the Court's holding. To other
detractors, the immediate monetary costs were vastly overshadowed
by the ruling's implication that the states govern "largely at the sufferance of the national government. "16
As already noted, the financial impact of Garcia sparked responses
conceived to blunt it. States must mount another campaign, however,
to thwart the threat of further encroachment by the federal government into their affairs. Fortified by the breadth given to Congress'
commerce power by the Supreme Court, the national legislature, in
extending the FLSA to state and local government employees, seemed
to adopt the posture suggested by an eminent legal scholar:
[ W]hatever Congress might preempt from state regulation
(namely the determination of wages), it might also command of the states themselves (namely, the payment of
wages).17
Even in those instances where Congress is not bold enough to
attempt to command the states to conform to its wishes, it is still
empowered, according to the Court, to achieve its ends through tactics that can reasonably be described as coercive. Under the "condition doctrine," the federal government is able to indirectly regulate
the states through the Constitution's Spending Clause. 18 By attaching conditions to its grants, the federal government has been able to
indirectly achieve objectives that would otherwise be unattainable as
a result of being beyond the scope of its enumerated powers. Through
this application of its spending power, Congress has been able to
impose conditions on the states that are unrelated to the nature of
60
HOUSE - No. 6133
[October
1
the underlying grants. This congressional exercise has resulted in a
virtually limitless number of grants that attach conditions in disregard of local concerns and which may require states to alter their
budget priorities, change their laws or even amend their constitutions. 19 Conditions on the receipt of highway construction grants, for
example, have required the regulation of billboard advertising, the
concealment of roadside junk yards, the surveying of all roads in order
to identify and remedy hazards, the imposition of Hatch Act restrictions on employee political activity, the conformance with the recently
amended 55 mile-per-hour speed limit, and the adoption of a
minimum drinking age of 21 years. 20
The Supreme Court has repeatedly rejected arguments by the states
that the imposed conditions interfere with the sovereign powers
reserved to them by the Tenth Amendment. Despite the fact that the
states are free to decline the grants and hence the conditions, the fact
of the matter is that the states have no practical choice in avoiding
the requirements. The level of national taxes inhibits the ability of
the states to increase their own taxes. With their fiscal independence
undercut, the states are more dependent upon federal financial aid. 21
Acceptance of federal grants, no matter how repugnant the accompanying conditions, is more than just politically expedient. Rejection
of federal grants would ultimately result in states denying their citizens the benefits of programs supported by their federal tax dollars.22.
The State of South Dakota sidestepped the Tenth Amendment issue
and recently challenged the minimum drinking age condition by
basing its arguments before the Supreme Court on the grounds that
the requirement violated both the Twenty-first Amendment22 and the
constitutional limitations on Congr~ss' spending power. In South
Dakota v. Do/e,24 the Court acknowledged that it had previously
recognized limitations on Congress' spending power. As articulated
in earlier cases, that power must be exercised in pursuit of "the general
welfare. ''25 In addition, if Congress wishes to condition the receipt of
grants it "must do so unambiguously. ''26 The Court has also ruled,
without much elaboration, that conditions on grants may be invalid
if they do not relate "to the federal interest in particular national
projects or progams. "27 Lastly, according to the Court, the
conditions must not violate any other constitutional prohibitions. 28
The Court has also recognized that there may be instances in which
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conditional grants might be so coercive that "pressure turns into
compulsion. ''29
Applying these standards, the Court, in South Dakota, ruled
against the state. One problem with the legal strategy employed by
the State of South Dakota was that it did not ask the Court to consider
how related a condition must be to the purpose of a grant. Entering
the case at the Supreme Court level, the State and Local Legal Center
urged the Court to establish that a condition must be directly related
to the purpose of the expenditures. Counsel for South Dakota,
however, told the Court that he was not prepared to argue the
"reasonable relationship" question. The Court stated that it was
satisfied with the relationship in this particular factual situation but
conceded in a footnote that the point may be a valid one:
Our cases have not required that we define the outer bounds
of the "germaneness" or "relatedness" limitation on the
imposition of conditions under the spending power ... [W]e
do not address whether conditions less directly related to the
particular purpose of the expenditure might be outside the
bounds of the spending power. 30
Describing the condition doctrine as a means by which the federal
government may "buy the states' constitutional rights," Barry
Friedman, Counsel for the State and Local Legal Center, deplored
the breadth of the decision - one which he considered to be the "most
important case on federalism since the New Deal, more important
even than Garcia. "31 The ruling, in his opinion, meant that the federal
government was no longer limited to the powers it was delegated under
the Constitution. Friedman, whose argument in the Legal Center's
amicus brief was adopted by Justice O'Connor in her dissent,
characterized the Court's holding as effectively saying that:
We have never had any requirement that the condition
relate to the grant. Congress is perfectly free, when if offers
you - the state and governments - money, to tell you that
the condition for accepting it is to do whatever the federal
government would like, no matter what it is, so long as it
doesn't violate another constitutional prohibition like the First
Amendment or the Equal Protection Clause. 32
Thus, the latter case represents yet another contribution to the
gradual erosion of state sovereignty rights ostensibly guaranteed by
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the Tenth Amendment. With the acquiescence of the U.S. Supreme
Court, the federal government, through both its direct mandates and
its funding policies, has been able to achieve a fundamental reworking
of its relationship with the states. The existence of the states as
autonomous political entities has been increasingly imperiled. States
can passively hope that "unwarranted federal encroachments on state
authority are and will remain 'horrible possibilities that never happen
in the real world',")3 Conversely, states can take affirmative steps to
secure their proper constitutional role of diffusing power, checking
abuses by the federal government and promoting experimentation in
the evolution of enlightened public policy.34 Today, there is a growing
recognition in both political and academic circles that doctrinal
developments in constitutional law threaten to reduce state
governments to mere administrative adjuncts of the national
government. This recognition has led the Reagan Administration's
Domestic Policy Council to establish the Working Group on
Federalism. The purpose of the Working Group is to "identify and
develop initiatives for restoring a proper balance to American
government. "35 It has also emerged as a forum within the
Administration for the discussion of important issues relating to the
proper relationship between the national government and the
governments of the several States. "36 In pursuit of its mission, the
Working Group prepared an extensive report, cited herein several
times, which analyzes the current state of constitutional federalism
in America. Included in the report are a number of suggested reforms
which could be instituted in an effort to revitalize federalism in
American government. The desire to undertake such efforts,
according to the Working Group, is ne~ther a summons to dismantle
the federal government and restore all authority to the states nor a
call to return to the days of the Framers:
Rather it is a call for a return to the Framers' vision of a
nation of States - a system of government in which the
national government exercises sovereign authority in accord
with the letter, and the limits, of its constitutionally enumerated powers, and the States exercise sovereign authority
in all other areas. It is a call for innovation and experimentation in government. And at its very roots it is based on the
recognition that the people of the United States are the
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HOUSE - No. 6133
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ultimate source of sovereignty and that they can best exercise
their authority in the statehouses, city halls, town halls, and
county court houses scattered throughout this land. 37
In response to his own fervent belief that the balance of
governmental authority between the federal government and the states
should be restored to his vision of the Framers' intentions, President
Reagan has drafted an executive order that, when implemented, could
have a profound effect on the status of federalism. The forthcoming
order (a draft copy is included as an Appendix) directs executive
departments and agencies to be guided by a number of fundamental
federalism principles when formulating and implementing policies.
The directive also requires that executive departments and agencies
adhere to certain criteria designed to reduce unwarranted and
intrusive federal activities and to encourage state participation in
policy development. Also contained in the order are provisions meant
to minimize the extent of federal statutory and regulatory preemption
of state laws. The President's order further prohibits executive offices
from submitting legislative proposals to Congress that are inconsistent
with the principles of National League of Cities, which would attach
unrelated conditions to grants, or which would unnecessarily preempt
state laws.
In addition to summarizing the reforms suggested by the Domestic
Policy Council's Working Group on Federalism, the following section
will also incorporate possible state responses to the Garcia decision
which have been raised by the U.S. Advisory Commission on
Intergovernmental Relations. The latter group, comprised of elected
officials from all levels of government, federal executive appointees
and private citizens, is a 26-member bipartisan body created by
Congress in 1959 to monitor the operation of the American federal
system and to recommend improvements.
Responding to Garcia and the Decline of
State Sovereignty
The President's executive order is a welcome turn on a road that
has been leading to an eradication of "the diffusion of power between
state and nation on which the Framers based their faith in the
efficiency and vitality of our RepUblic. "38 The President's action,
however, is but one of the steps that could be taken to offset a trend
64
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[October
toward an ever-diminishing sphere of state autonomy. If left
unchecked, the risk of the Tenth Amendment being reduced to empty
rhetoric will surely be realized. Several strategies to salvage the
remaining sovereignty of the states or to restore that which they have
already lost are highlighted below.
]
1,
Cl
1
Litigation
t
r
In Garcia, the majority stated that it was not the role of the Court
to judicially create limitations on federal power.39 Such a position
places federal officials in the role as the sole judges of their own power.
This, of course, flies in the face of the Supreme Court's historical
Marbury v. Madison 40 decision which established the doctrine of
judicial review. That ruling affirmed that it is the Supreme Court's
role to consider the constitutionality of acts of Congress. It is therefore
hardly conceivable that the Court can continue this apparent prank
it has perpetrated. In South Carolina v. Baker,41 a case that will be
argued this term, the Court will be asked if it really meant in Garcia
that it isn't going to rule on any state challenges to federallegislation. 42
Although the State and Local Legal Center expects the Court to reply
that, no, it didn't really mean that, the prospects of winning this
particular case are not bright. The case concerns the constitutionality
of an Internal Revenue Code provision that denies tax-exempt status
for state and local bonds that are not issued in registered form. Other
cases will arise, however, that may have factual situations more
favorable than in Garcia. A case involving a more significant
intrusion on the states and entailing a less convincing federal interest
could persuade the Court to acknowledge a constitutionally
recognized sphere of state sovereignty.43 The Court, for example,
could draw a line of immunity around an area of core governmental
functions, traditional or not, that is restricted to essentially internal
activities. Such activities might include the organization of state and
local governments, the treatment of their employees and other
"housekeeping functions. "44 In conjunction with the State and Local
Legal Center, state and local governments can pursue legal strategies
that may result in a repudiation of Garcia. The sharp dissents in that
5-4 decision certainly encourage such an effort. Appropriate cases for
challenging the conditional grant policies of the federal government
could also be pursued.
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Reform Congressional Procedures
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HOUSE - No. 6133
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Certain procedural revisions could be adopted by Congress through
legislation or through changes in the rules of its two Houses. State
and local governments, along with their citizens and other parties
interested in the revitalization of federalism, could lobby Congress
to revise its internal process to reflect a greater appreciation of the
role of the states. Dubious exercises of federal power could be deterred
by requiring all bills to explicitly state Congress' constitutional
authority to enact them. Congress could also require that bills contain
a "Federalism Assessment" that would include a review of the need
for a national solution and how such legislation would affect the
sovereignty of the states and their ability to perform their functions.
Such assessments could be patterned after the Regulatory Impact
Evaluation presently required in the Senate or the Regulatory Impact
Analysis directed by presidential executive order.45
Since Garcia placed Congress in the position of being the sole judge
of its power under the Commerce Clause, the states could lobby the
national legislature to impose limits on itself. A standard based on
the National League of Cities doctrine could be adopted so that federal
regulation of the states would be prohibited if it interferes with
"functions essential to [the states] separate and independent
functions. "47 In addition, Congress could require that legislation
intended to regulate the states contain an explicit statement to that
effect. Statues lacking such a statement would thus be construed as
not applying to the states.
Similarly, Congress could be encouraged to explicitly state its intent
to "occupy a field" and preempt state law. Adoption of the latter two
reforms would minimize the instances of sovereign state authority
being displaced by federal intrusion. The asserted authority of federal
agencies to preempt state law is often based on inferences from federal
statutes or their legislative histories. The approval of federal courts
in preemption cases is also often based on such inferences. If Congress were to require itself to explicitly state its intentions such
tendencies would be curbed. Preemption policies could be restricted
even further if Congress denied federal agencies the authority to
preempt by regulation unless explicitly permitted by a statute. Laws
could then be drafted to include standards to control an agency's exercise of its preemption authority. Alternatively, Congress could
66
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[October
specifically deny agencies the authority to preempt by regulation and
require that preemption be accomplished only by statute.
States could also pressure Congress to reconsider its practice of
conditioning grants to requirements that have little or no relationship
to the purpose of the expenditure. The Office of Management and
Budget has catalogued 68 "crosscutting" regulations that are imposed
on all federal grants regardless of their nature. These are in addition
to the "crossover" conditions such as the uniform minimum drinking
age and maximum national speed limit discussed earlier.
Congress' government affairs committees presently have subcommittees on intergovernmental relations. The subcommittees, however,
are generally concerned with the management and efficiency of federal
grant programs and rarely consider federalism issues. Pressure could
be brought on Congress to establish federalism subcommittees to
review all bills that might affect the autonomy of the states. These subcommittees could also be given the responsibility of ensuring compliance with any other reforms Congress may adopt in this regard.
Influence National Legislation
Should the states fail to persuade Congress to adopt the kind of
institutional and procedural reforms discussed above, it will be
necessary for the states to aggressively pursue their interests on an
ad hoc basis. Adhering to the Garcia majority's edict that "restraints
on federal power over the States inhere ... principally in the
workings of the National Government itself, "48 states will have to
persevere in the federal political arena if they are to repel intrusive
and burdensome legislation. The states will need to remain keenly
aware of legislation being considered by Congress in order to lobby
for specific exemptions from laws that encroach on their authority.
Seek a Constitutional Amendment
Although given the difficulties involved in amending the
Constitution, this course of action cannot be ignored in spite of its
impracticality. It is quite conceivable that the states will be unable
to convince Congress to alter its internal processes to reflect a
heightened awareness and regard for the role of the states in our
constitutional structure. Such changes in the institutional decisionmaking process of the federal government to ensure the protection
ler
1987]
.nd
of the states' ability to govern could, however, be achieved through
the amendment process. Alternatively, the states could seek to amend
the Constitution so that the Tenth Amendment would explicitly
guarantee their powers in much the same way that the other nine
amendments of the Bill of Rights protect the rights of individuals.
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HOUSE - No. 6133
67
Civil Resistance by State Officers
An admittedly extreme approach to responding to the Garcia
decision involves respectful disobedience of federal regulations that
states consider intrusions into their sphere of authority. When
convinced that a federal mandate or grant stipulation represents an
unconstitutional encroachment on the sovereign power ostensibly
guaranteed them by the Constitution, states might instruct their
officers to resist the offending requirement. The purpose of such civil
disobedience would be to direct attention to what is perceived as a
constitutional crisis that must be resolved to the satisfaction of the
states. The message sent by such a response would be clear:
The Garcia Court has ignored the plain meaning of the
Tenth Amendment (as argued by the dissenters) or ... the
design and subsequent alteration of the Constitution has
progressively caused the position of the states to deteriorate,
demanding a renegotiation of the federal bargain. 49
ENDNOTES
1. Certain employees who, under FLSA guidelines, could be categorized as political, executive,
administrative or professional employees remained exempt.
2. Minimum Wage and Maximum Hours Standards Under the Fair lAbor Standards Act,
Department of Labor (April, 1986).
3. 51 Federal Register 25710 (July 16, 1986).
4: Id.
tie
its
,Ie
a
ur
n>n
5. Hearings were also conducted by the Joint Economic Committee and the Subcommittee
on Labor Standards of the House Committee on Education and Labor.
6. Two identical bills were filed in the House of Representatives by Congressmen
Hammerschmidt of Arkansas and Loeffler of Texas. Eighteen bills, in total, were filed in
response to the Garcia ruling.
7. William T. Waren, "The Garcia decision and the Fair Labor Standards Act Amendment,"
NCSL State-Federal Issue Brie/(October, 1986}.
8.Id.
68
HOUSE - No. 6133
[October
9. Public Law 99-150
10. All workers who can be categorized under FLSA guidelines as executive, administrative
or professional employees were already exempt.
1
4:
4:
11. $313 million estimated for the year, April, 1987 - March, 1988.
12. Estimate for calendar year 1984.
4:
13. L. Thomas Linden, "The Fair Labor Standards Act and Local Government: A Summary
of the FederalLaw's Requirements," The Beacon (September, 1985), p. 8.
4
14. Fields, supra, among others.
15. Lynch, supra, at 99.
16. ACIR (Feb., 1986), supra, p. 4.
17. Van Alstyne, supra, at 1716.
18. U.S. Const., Art. I, s. 8, cl. I.
19. Status of Federalism, supra, at 35.
20. Id. at 33.
21. Id. at 36.
22. Id.
23. Repeal of Prohibition.
24. 107 S. Ct. 2793 (1987).
25. Helvering v. Davis, 301 U.S. 619, 640 (1938); United States v. Butler, 297 U.S. 1,66 (1936).
26. Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17 and F.N. 13 (1981).
27. Massachusetts v. United States, 435 U.S. 444, 461 (1978) (plurality' opinion); Ivanhoe
Irrigation District v. McCracken, 357 U.S. 275, 295 (1958).
28. Lawrence County v. Lead-Deadwood School District, 469 U.S. 256, 269 (1985).
29. Steward Machine Co. v. Davis, 301 U.S. 548,595 (1937):
30. 107 S. Ct., F.N. 3.
31. National Conference of State Legislatures Annual Meeting, Legal Services Staff Section
session on "South Dakota v. Dole: The Federal Government's Power of Conditional Grants.
32. /d.
33. Garcia v. San Antonio Metropolitan Transit Authority, 105 S. Ct. 1005, 1037 (O'Connor,
J., dissenting), quoting New York v. United States" 326 U.S. 572, 583 (1946).
34. Paraphrasing Bruce E. Fein, "A Reagan Supreme Court: Restoring Constitutional Dignity
to the States," State Legislatures (June, 1985), p. 21.
35. Status of Federalism, supra, p. I.
36. Id.
37. Id. at 59.
38. Garcia v. San Antonio Metropolitan Transit Authority, 105 S. Ct. 1005, 1035 (O'Connor,
J., dissenting).
39. 105 S. Ct. 1005, 1018.
40. 1 Cranch 137 (1803).
41. Filed May 2, 1986.
4'
41
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1987]
HOUSE - No. 6133
69
42. Friedman, supra.
ve
43. A. E. Dick Howard, "Garcia: Federalism's Principles ~orgotten," Intergovernmental
Perspective (Spring/ Summer 1985), p. 14.
44. Field, supra, at 104, 5.
.ry
45. See Status of Federalism, supra for a complete discussion of this suggested response as
well as most of the others discussed in this section .
46. National League of Cities v. Usery, 426 U.S. 833, 845 quoting Coyle v. Oklahoma, 221
U.S. 559,580 (1911).
47. 426 U.S. 833,852.
48. [d. at 1018.
49. ACIR (Feb., 1986), supra, p. 42.
i).
m
.s.
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[October
APPENDIX
DRAFT OF PROPOSED EXECUTIVE
ORDER ON FEDERALISM
(Source: U.S. Department of Justice)
EXECUTIVE ORDER _ _
FEDERALISM
By the authority vested in me as President by the Constitution and
laws of the United States of America, and in order to restore the
division of governmental responsibilities between the national
government and the States that was intended by the Framers of the
Constitution and to ensure that the principles of federalism
established by the Framers guide the Executive departments and
agencies in the formulation and implementation of policies, it is
hereby ordered as follows:
Section 1. Fundamental Federalism Principles. In formulating and
implementing policies that have federalism implications (regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on State or
local governments, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government), Executive
departments and agencies shall be guided by the following
fundamental federalism principles:
(a) Federalism is rooted in the knowledge that our political liberties
are best assured by limiting the size and scope of the national
government.
(b) The people of the States created the national government when
they delegated to it those enumerated governmental powers relating
to matters beyond the competence of the individual States. All other
sovereign powers, save those expressly prohibited the States by the
Constitution, are reserved to the States or to the people.
(c) The constitutional relationship among sovereign governments,
State and national, is formalized in and protected by the Tenth
Amendment to the Constitution.
(d) The people of the States are free, subject only to restrictions in
the Constitution itself or in constitutionally authorized Acts of
Congress, to define the moral, political, and legal character of their
lives.
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(e) In most areas of governmental concern, State and local
governments uniquely possess the constitutional authority, the
resources, and the competence to discern the sentiments of the people
and to govern accordingly. In Thomas Jefferson's words, the States
are "the most competent administrations for our domestic concerns
and the surest bulwarks against antirepublican tendencies."
(f) The nature of our constitutional system encourages a healthy
diversity in the public in the public policies adopted by the people
of the several States according to their own conditions, needs, and
desires. In the search for enlightened public policy, individual States
and communities are free Jo experiment with a variety of approaches
to public issues.
(g) Acts of the national government - whether legislative,
executive, or judicial in nature - that exceed the enumerated powers
of that government under the Constitution violate the principle of
federalism established by the Framers.
(h) Policies of the national government should recognize the
responsibility of - and should encourage opportunities for individuals, families, neighborhoods, local governments and private
assoCiations to achieve their personal, social, and economic objectives
through cooperative effort.
(i) In the absence of clear constitutional or statutory authority, the
presumption of sovereignty should rest with the individual States.
Uncertainties regarding the legitimate authority of the national
government should be resolved against regulation at the national level.
Section 2. Federalism Policymaking Criteria. In addition to the
fundamental federalism principles set forth in section I, Executive
departments and agencies shall adhere, to the extent permitted by law,
to the following criteria when formulating and implementing policies
~hat have federalism implications (as defined in section I):
. (a) There should be strict adherence to constitutional principles .
Executive departments and agencies should closely examine the
constitutional and statutory authority supporting any Federal action
that would limit the policymaking discretion of the States, and should
carefully assess the necessity for such action. To the extent practicable,
the States should be consulted before any such action is implemented.
Executive Order No. 12372 ("Intergovernmental Review of Federal
Programs'') remains in effect for the programs and activities to which
it is applicable.
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[October
(b) Federal action limiting the policymaking discretion of the States
should be taken only where constitutional authority for the action is
clear and certain and the national activity is necessitated by the
presence of a problem of national scope. For the purposes of this
Order:
(1) It is important to recognize the distinction between problems
of national scope (which may justify Federal action) and problems
that are merely common to the States (which will not justify Federal
action because individual States, acting individually or together, can
effectively deal with them).
(2) Constitutional authority for Federal action is clear and certain
only when authority for the action may be found in a specific provision
of the Constitution, there is no provision in the Constitution
prohibiting Federal action, and the action does not encroach upon
authority reserved to the States.
(c) With respect to national policies administered by the States, the
national government should grant the States the maximum
administrative discretion possible. Intrusive, Federal oversight of
State administration is neither necessary nor desirable.
(d) When undertaking to formulate and implement policies that
have federalism implications, Executive departments and agencies
shall:
(I) Encourage States to develop their own policies to achieve
program objectives and to work with appropriate officials in other
States.
(2) Refrain, to the maximum extent possible, from establishing
uniform, national standards for programs and, when possible, defer
to the States to establish standards.
(3) When national standards are required, consult with appropriate
State elected officials in developing those standards.
Section 3. Special Requirements For Preemption. (a) To the extent
permitted by law, Executive departments and agencies shall construe
a Federal statute to preempt State law only when the statute contains
an express preemption provision or there is some other firm and
palpable evidence compelling the conclusion that Congress intended
preemption of State law, or when the exercise of State authority
directly conflicts with the exercise of Federal authority under the
Federal statute.
)er
1987]
:es
(b) Executive departments and agencies shall construe Federal
statutes authorizing issuance of regulations as authorizing preemption
of State law by rulemaking only when the statutes expressly authorize
issuance of preemptive regulations.
(c) Any regulatory preemption of State law shall be restricted to
the minimum level necessary to achieve the objectives of the statute
pursuant to which the regulations are promulgated.
(d) As soon as an Executive department or agency foresees the
possibility of a conflict between State law and Federally protected
interests within its area of regulatory responsibility, the department
or agency shall consult, to the extent practicable, with appropriate
State elected officials in an effort to avoid such a conflict.
(e) When an Executive department or agency proposes to act
through adjudication or rulemaking to preempt State law, the
department or agency shall provide all affected States notice and an
opportunity for appropriate participation in the proceedings.
Section 4. Special Requirements For Legislative Proposals.
Executive departments and agencies shall not submit to Congress
legislation that would:
(a) Directly regulate the States in ways that would interfere with
functions essential to the States' separate and independent e~istence,
operate to directly displace the States' freedom to structure integral
operations in areas of traditional governmental functions, or
otherwise violate the constitutional principles of state sovereignty
enunciated by the Supreme Court in National League of Cities v.
Usery, 426 U.S. 833 (1976) - principles which are essential to the
vitality of federalism and must therefore be followed by Executive
departments and agencies, regardless of whether they will be enforced
by the Supreme Court (see Garcia v. San Antonio Metropolitan
Transit Authority, 469 U.S. 528 (1985);
(b) Attach to federal grants conditions that are not directly related
to the purpose of the grant; or
(c) Preempt State law, unless preemption is consistent with the
fundamental federalism principles set forth in section 1, and unless
a clearly legitimate national purpose, consistent with the federalism
policymaking criteria set forth in section 2, cannot otherwise be met.
Section 5. Agency Implementation. (a) The head of each Executive
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department and agency shall designate an official to be responsible
for ensuring the implementation of this Order.
(b) In addition to whatever other actions the designated official may
take to ensure implementation of this Order, the designated official
shall determine which policies have sufficient federalism implications
to warrant the preparation of a Federalism Assessment (as described
in subsection (c) of this section). The department or agency shall
consider any such Assessment in formulating and implementing the
policy. If the policy is submitted to the Office of Management and
Budget pursuant to Executive Order No. 12291 or OMB Circular
No. A-19, it shall be accompanied by a copy of any such Federalism
Assessment.
(c) Each Federalism Assessment shall discuss and evaluate the
following matters, to the extent relevant:
(1) The application of the principles, criteria, and requirements
stated in sections 1 through 4 of this Order to the policy being assessed;
(2) The content and results of consultation with officials and
organizations representing States affected by the policy;
(3) The nature of the internal agency federalism review to which
the policy has been subject;
(4) The efforts the States have taken to address the problem that
is the subject of the policy;
(5) The extent to which the policy imposes additional costs or
burdens on the States;
(6) The extent to which the policy would affect the States' ability
to discharge traditional State Governmental functions, or other
aspects of State sovereignty;
(7) The effect of the policy on the S~ates' ability to innovate and
experiment with solutions to the problem that is the subject of the
policy; and
(8) The overall effect of the policy on the distribution of sovereign
power and responsibilities among the various levels of government;
and
(9) The factors necessitating a national solution, if such is called
for by the policy.
Section 6. Government-wide Federalism Coordination and
Review.
(a) In implementing Executive Order Nos. 12291 and 12498 and
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1987]
HOUSE - No. 6133
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OMB Circular No. A-19, the Office of Management and Budget may,
to the extent permitted by law and consistent with the provisions of
those authorities, take action to ensure that the policies of the
Executive departments and agencies are consistent with the principles,
criteria, and requirements stated in sections 1 through 4 of this Order.
(b) In submissions to the Office of Management and Budget
pursuant to Executive Order No. 12291 and OMB Circular No. A-19,
Executive departments and agencies shall identify proposed
regulatory and statutory provisions that have significant federalism
implications and shall address any substantial federalism concerns.
Where the departments or agencies deem it appropriate, substantial
federalism concerns should also be addressed in notices of proposed
rule making and messages transmitting legislative proposals to
Congress.
(c) Not later than December 31 of each year, each Executive
department and agency shall submit a report to the President
describing in detail the significant federalism issues it faced during
the preceding fiscal year. The report should identify both
accomplishments and failures with respect to federalism that occurred
during the fiscal year, as well as any substantial concerns expressed
by the States during the fiscal year and the department or agency's
response to such concerns. The report should also identify and discuss,
to the extent practicable, federalism issues that the department or
agency anticipates facing during the current fiscal year. The Domestic
Policy Council shall prepare an annual summary of these reports for
the President. After presentation to the President, the summary shall
be made available to the States, the Congress, and the pUblic.
Section 7. Judicial Review. This Order is intended only to improve
the internal management of the Executive branch, and is not intended
t~ create any right or benefit, substantive or procedural, enforceable
at law by a party against the United States, its agencies, its officers,
or any person.
THE WHITE HOUSE,
ed
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nd
Author's Note: Subsequent to the filing of this report, the foregoing draft, with slight changes
in substance and form [new s.l containing definitions; minor revisions in ss. 3(b), 4(a), 5(b)
and (c), and 6(a); 6(c) deleted] was signed by President Reagan on October 28, 1987.
This Document Has Been Printed On 100% Recycled Paper.