Category Archives: Federalism

Powers ch 6, Short Course ch 6

The Power to Tax….

With all the attention being paid to the federal budget and the sequester, tax policy has come under scrutiny.  One issue that briefly received attention was the possibility that Congress would end the federal income tax deduction for the state income tax.  The New York Times and NPR commented on the impact of such a change in policy.[1]  In brief, the repeal of the deduction would not only reverse a tax policy that has existed as long as the federal income tax, but would impose greater burdens on residents in states with high income tax rates.  It could be argued that this policy change would threaten state policies that support the needy; it could also weaken state autonomy to determine state policy.

As was noted by both NPR and the Times, the basis of the state income tax deduction is to exempt the portion of individual income that was paid in taxes from being taxed as income—in effect, to avoid double taxation.  States that impose an income tax on its residents find it easier to get acceptance of the taxes since they are exempt.  But the exemption also amounts to a subsidy from the federal government to the states.  What’s more, this subsidy is larger for those states that impose higher taxes to fund programs that provide more support to the needy.  In other words, the subsidy is greatest for those states that believe in the effectiveness of a strong government. [2]

The problem is that the state income tax deduction is estimated to cost the federal government about $70 billion a year.  In the search for more sources of revenue, both Congress and the President have suggested that the state income tax exemption could use another look, either by capping federal tax deductions, which would impact more people in high tax states, or by repealing the exemption.

However, repealing or limiting the exemption could increase pressure to reduce state tax rates, limiting the ability of states to fund many state programs.  As the Times argues,

The deduction is Washington’s way of supporting states that support their most vulnerable citizens and neediest cities. The seven states that account for 90 percent of state and local tax deductions (including sales and property taxes) — New York, New Jersey, California, Pennsylvania, Maryland, Illinois and Massachusetts — generally do a better job of providing for the health and welfare of their citizens, and are more willing to pay for institutions that are good for society as a whole.[3]

 

As such, it could be argued that repealing the exemption would have a deleterious effect on the states’ abilities to adopt and shape their policies.  The policy also reflects a “balance between the federal government and the states.”[4]  After all, as the Chief Justice Marshall so famously noted, “the power to tax is the power to destroy.”   So could repeal of the state income tax deduction be challenged as an unconstitutional infringement on the state’s powers and the federal system?


[1] For the stories, see NPR, “Day 8 of 12 Days of Tax Deductions,” http://www.npr.org/2012/12/19/167600157/day-8-of-12-days-of-tax-deductions and New York Times,  “Keep the State Tax Deduction, “ http://www.nytimes.com/2012/12/07/opinion/keep-the-state-tax-deduction.html

[2] To see a nice map of the relative value of the state income tax deduction, see http://taxfoundation.org/blog/monday-map-state-income-and-sales-tax-deductions  accessed 2/28/13

[3] NPR, “Day 8”

[4] New York Times, “Keep the State Tax Deduction”

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Filed under Federalism, The Power to Tax and Spend, Uncategorized

Purple Haze

Over the course of the past year, two issues have emerged that highlight policy dilemmas generated by the federal structure of the US.  One dilemma will be addressed by the Supreme Court when it hears oral argument in the case of Windsor v. US.  This case deals with the tension between a federal law that refuses to recognize gay marriages, and state laws that recognize those marriages as legal.

The second dilemma involves the contradiction between federal and state drug policies.  Several states—California and Colorado among them—have legalized the use of marijuana.  California allows marijuana to be used for medical purposes since the drug seems to relieve some of the symptoms of certain diseases or various painful side effects of therapy.  The dilemma is that although states may allow the use of marijuana, federal drug policy still makes production, sale, possession and use of the drug a criminal offense.

In 2005, the Supreme Court handed down a decision in the case of Gonzalez v. Raich.[1]  Despite the fact that California law allows the medical use of marijuana, the federal Controlled Substances Act (CSA) makes the production and use of marijuana illegal.  Angel Raich and Diana Monson were two Californians who were using marijuana under physician’s supervision to counteract the effects of a brain tumor and severe back pain, respectively.  Federal agents seized and destroyed six marijuana plants that Monson was growing for her own use.  Both Raich and Monson sued, claiming that the enforcement of the CSA prevented them from having access to a legal medical treatment.  The federal government argued that the CSA was a valid exercise of the federal power to regulate interstate commerce.

In their argument challenging the law, it seemed that Raich and Monson had the upper hand.  Not only was their marijuana produced locally, it was also provided free to those who needed it.  Thus it was argued that the production, distribution and use of the plant were not part of the stream of interstate commerce.  The medical use of marijuana also seemed to be a subject that fell squarely within the bounds of state police powers.  In response, the federal government argued that the commerce power extends to economic activity that substantially impacts interstate commerce, using Wickard v. Filburn as precedent.

Although the lower courts agreed with Raich and Monson, the Supreme Court reversed.  Despite the fact that two cases—Lopez (1995) and Morrison (2005)—had indicated that the Court was sympathetic to restrictions on the breadth of the commerce clause, the Court voted 6-3 that the situation here was much like that in Wickard.  In that case, the Court determined that the Commerce Power could be used to regulate agricultural production that was purely for personal use, on the ground that this production in the aggregate could affect the interstate demand for a product.  As was the case in Wickard, the Court in Raich determined that the national market for marijuana, even if an illegal market, could be regulated under the Commerce Power.  Chief Justice Rehnquist and Justices O’Connor and Thomas were the only justices to agree with Monson and Raich that their use and production of marijuana was not an economic transaction, much less one that impacted interstate commerce.

Raich is prelude to an interesting prosecution taking place now.  The New York Times reports that a California businessman, Matthew Davies, has been indicted for growing and producing marijuana for medical use.[2]  Davies has established a medical marijuana supply business that is perfectly legal in California, complying with all employment and commercial requirements.  Records documenting the medical need for the drug are meticulously kept and the business only supplies marijuana for health reasons, with detailed records to back that claim.  Despite President Obama’s comments that the Justice Department has more important things to do than prosecute individuals for the use of medical marijuana, the US attorney for the area argues that Davies is a major “commercial marijuana trafficker.”  He has offered a plea deal that could put Davies behind bars for a mandatory minimum sentence of five years.  Davies, who appears to be a respectable citizen with no criminal record and is the father of a young family, is fighting the indictment.

Given the outcome of Raich, it would seem that Davies’ business would definitely be subject to federal regulations under the Commerce Power.  Although Justice Thomas’s dissent in Raich argued that simple use of locally produced and donated marijuana was not economic activity; in this case, Davies’ business is clearly production for profit.   But the case squarely presents a tension between state and federal policy, highlighting the problem of federalism, and this question is addressed in Justice O’Connor’s dissenting opinion.  As she noted, an important function of federalism is to provide “spheres of state sovereignty” that “promot[e] innovation by allowing for the possibility that ‘a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments.’”[3]   If this is so, then what is to be done when the federal government tries to enforce a national social and health policy that contradicts a popular state policy?  It will be interesting to see whether more cases like this one emerge, whether the Court will eventually address the question, and how it will resolve this dilemma.


[1] Excerpted in Epstein and Walker, Constitutional Law for a Changing America: Institutional Powers and Constraints, 7th ed., pp. 456-464.

[2] Adam Nagourney, “In California, It’s US vs. State Over Marijuana,” January 13, 2013; http://www.nytimes.com/2013/01/14/us/14pot.html?hpw accessed 1/14/2013.

[3] Epstein and Walker, p. 462.

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Filed under Federalism, The Commerce Power

Cat Lovers Beware! You have been “Wickarded”.

The Eleventh Circuit of US Courts of Appeal issued a decision that the Animal Welfare Act, passed under the egis of the Commerce Clause, gives authority to the USDA to regulate Hemingway’s cats (or at least the progeny of Hemingway’s cats).   For those that have not visited Key West and Hemingway’s house there, it is important to the story that the six-toed cats are a fixture—a living and roaming exhibit of the museum.  After all, there are well over fifty kitties roaming the grounds.  Apparently, several years ago a visitor to the museum thought that the cats were not being cared for appropriately and filed a complaint.  This complaint resulted in a district court and then appeals court ruling, both times in favor of the government and the regulation.

The Animal Welfare Act regulates circuses, zoos, and traveling animal shows of all kinds.  The museum may be housed intrastate, but Key West is a travel destination and the museum, much like the motel in Heart of Atlanta v. U.S. 379 US 241 (1964), serves interstate travelers and uses the cats to market to those visitors.  Indeed, without tourists traveling to Key West and get a sense of Margaritaville, the museum would not be a viable enterprise.  Given this substantial connection to interstate commerce, Wickard v. Filburn 317 US 111 (1942)applies.  Harm to the cats is equivalent to the harm to interstate commerce.  Based upon the ruling, the museum must either house all the cats in cages overnight or erect a much higher fence keeping the cats within the borders of the museum for their own safety.   And, if the USDA does not already, they clearly have the ability to regulate the housing and care of all the show animals in the various local, state, regional, and national competitions as well as those 4H animals that head off to the county and state fairs.

The lower courts were clearly following precedent, but would the justices of the Supreme Court be equally deferential?  Yes the majority cited Wickard in Gonzalez v. Raich 545 US 1 (2005) to justify striking California’s medical marijuana law.  That the substantial effect was on the black market rather than the legal market was not a concern for the justices.  Here though, could we see them taking an alternative route?  Distinguishing the Six-toed Cat Case from Heart of Atlanta or Wickard? 

In Heart of Atlanta, the justices made the reasonable argument that if you cannot find a place to stay while traveling you are less likely to travel.  However, are the cats similar?  If the federal government does not come in and regulate the cats, will people stop flocking to the sunny Florida Key?  Or is this situation another example of overreach by the federal bureaucracy as it tries to get its hands (paws) on a local police powers issue?

It is not known whether the museum will appeal to the justices for relief.  I hope so.  And, I hope the justices take it and reverse the lower courts.  Why?  Because I want to be able to talk about the Six-toed cat case right along side the Sick Chicken case.

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Filed under Federalism, The Commerce Power

Gay marriage and federalism

Followers of this blog have no doubt read the timely and interesting piece by my co-author on the blockbuster decision on gay marriage by the 2d Circuit Court in Windsor v. US.  The elevation of gay rights as an area subject to the same level of legal scrutiny as gender discrimination makes it less likely that laws restricting gay rights will be upheld, and that, as my colleague notes, is a real game changer.
There will no doubt be a lot of discussion about the case and legal pundits are now all but certain that this issue will have to be addressed by the Supreme Court.   I will just add an observation about what I see as another important issue in the case: Federalism.

 

As Judge Jacobs notes in his opinion in Windsor, one of the questions in this case involves the ability of Congress to enact a federal standard for the definition of marriage.  This is an especially important issue since the “Regulation of marriage is ‘an area that has long been regarded as a virtually exclusive province of the States.'” [1] Judge Jacobs goes on to note: “It has for very long been settled that ‘[t]he State… has the absolute right to prescribe the conditions upon which the marriage relation between its own citizens shall be created, and the causes for which it may be dissolved.'”

 

One of the purposes used at argument to justify DOMA was that the federal government has “’unique federal interests’ in…a consistent federal definition of marriage.”  As Judge Jacobs notes, this justification raises questions because federal law has always recognized marriage as the “virtually exclusive” province of state government. [2]  After discussions of the “unprecedented intrusion” into state regulation, the failure of DOMA to address other diverse restrictions and regulations of marriage among states, and the “inefficiencies” created, the court concluded that, “Because DOMA is an unprecedented breach of longstanding deference to federalism that singles out same-sex marriage as the only inconsistency (among many) in state law that requires a federal rule to achieve uniformity, the rationale premised on uniformity is not an exceedingly persuasive justification for DOMA.”

 

If Windsor is accepted by the Supreme Court and the decision to strike down DOMA is upheld, one can imagine that there will be relief amongst many who have been adversely affected by this federal policy.  It’s important not to forget that the impact of that decision would still leave the definition of marriage to the states, and leaving the definition of marriage to the states may not be an unalloyed blessing.  As noted in the dissent to Windsor, many states have adopted restrictive definitions of marriage.   Those restrictive definitions would determine federal benefits for each state’s residents if DOMA were to be struck down.  Thus, the significance of our federal system would then be seen in the challenges to state level restrictions on gay marriage and the standard that would be used by the Court in deciding those cases (cue Hollingsworth v. Perry and cases like it here).

 

When this occurs, will the fight over gay marriage look like the struggle for progressive labor regulations during the early 20th century?  That is, will gay marriage become an issue that can be regulated by neither the federal government, because it is a matter for the states, nor state governments, because the laws would be an unconstitutional violation of an important individual liberty?


[2] Windsor  Sec. 4 A at 8.

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Filed under Discrimination, Federalism

What does Reno v. Condon mean for state sovereignty?

Teaching the government powers and constraints portion of my constitutional law course while prepping for the civil liberties section for the winter term tends to foster interesting counterfactuals.  As I created the moot court hypothetical for this term, I had occasion to review Reno v. Condon (528 US 141 2000).  In this case the Court is examining a federalism and sovereign immunity conflict.  Congress passed the Driver’s Privacy Protection Act of 1994 after learning that states were selling private information for revenue.   South Carolina challenged the act claiming that Congress was infringing on state power.  The Supreme Court disagreed and found that if the state is acting as a business not a sovereign, then the federal government can regulate the interstate commerce.

As class moved on this term, we came to the case of Heart of Atlanta Motel v. US (379 US 241 1964), and the typical discussion ensued regarding why the federal government could not ban discrimination under the 14th Amendment instead of the commerce clause.  I provided a quick summary of the state action doctrine and referenced Wilmington Parking Authority v. Burton (365 US 715 1961).

After class, I began wondering about the implications of Reno here.  In Burton, the Court finds state action because the parking garage housing the segregated restaurant was built with public monies AND the restaurant pays rent to the city.  In other words, the parking garage and the restaurant are revenue streams.  Wilmington is a landlord.  Under Reno, Wilmington should not be treated as a sovereign or part of a sovereign—it should be treated as any other private business and immune to equal protection arguments under the 14th Amendment.[1]

This same line of reasoning opens up states to a whole host of federal regulation based upon the reasoning in Reno.  For example, in City of Abilene v. EPA (2003), the Fifth Circuit noted that Reno means that cities themselves fall under the proscriptions of the Clean Water Act.  “Like the DPPA, the proposed numeric end-of-pipe permits would not have required the Cities to regulate their own residents, but instead, by requiring the Cities to meet effluent limitations, would have regulated them in the same manner as other dischargers of pollutants.” (325 F.3d 663)

If the doctrine in Reno shield states and cities from some intrusions, the pay-off may not be as great as the price.  While there may be fewer places for the reach of the 14th amendment, there seems to be more areas where a state or city government is acting as an individual.


[1] Of course, this does not mean that the restaurant could discriminate—the Civil Rights Act covered that base under the commerce clause.

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Filed under Discrimination, Federalism, The Commerce Power

The heat is on? A hypothetical

A recent NPR story on efforts to reduce the incidence of heat stroke deaths of young athletes raises interesting issues about federalism and regulation.

As anyone who lives in the South knows, football practices begin in earnest during the summer.  The hot, humid Southern weather and the conditions of practice and workouts (lots of physical exertion, lack of shade, a “macho” environment where it’s expected that the players will endure demands that push them to the edge of physical limits) have led to the deaths of young players from heatstroke.  According to the NPR story, five high school players died of heat stroke last year; more deaths have occurred in previous years.

The deaths have led to research about conditions that will mitigate the threat of heatstroke (for example, practice in a t-shirt and shorts keeps players significantly cooler than practice in uniforms and padding).  It has also led to the formation and adoption of guidelines by the National Athletic Trainers Association (NATA) to help coaches create practices that enable players to adapt to practicing and playing in the heat.  According to the NPR story, “The guidelines require a certain number of days at the beginning of the practice season without full uniforms. They limit the number of two-a-day practices that teams can have. They also recommend having an athletic trainer on site — something fewer than half of high schools do.”  Craig Lemoult, the reporter for the story, further notes that only “nine states have fully adopted the task force guidelines.”[1]  He ends the piece by noting that because the policies guiding high school athletic training policies are governed by state policies, concerned parents who want football practices conducted according to the NATA recommendations must advocate for their adoption in each state.

Given that few states have adopted the guidelines, a committed set of parents could launch a lobbying effort to Congress to get the passage of legislation that would require any state that received federal education funds to adopt the NATA guidelines.  That congressional legislation could require, rather than recommend, an athletic trainer on site.  One could imagine that cash-strapped state schools who don’t have athletic trainers (according to the NPR story, this is less than half of all high schools) might protest the imposition of another cost to their budgets.  If they decided to challenge this legislation, the following questions would be raised:

1)      How could this legislation be justified under the Constitution?  Is it an exercise of the commerce power?  If so, how?

2)      If passed, would the legislation be an imposition of legitimate federal regulation or a coercion on the states?  What factors would affect the answer to this question?


[1] Craig Lemoult, “Heat Guidelines Help Keep Young Athletes Cool,” http://www.npr.org/2012/08/28/160114705/heat-guidelines-help-keep-young-athletes-cool, accessed 8/28/2012.

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Filed under Federalism, The Commerce Power, The Power to Tax and Spend

Is it Federalism or an Undue Burden?

As several states, most notably Arizona pass more restrictive abortion laws there is a lot of ire from the pro-choice side about reduction of access and impediments placed in front of women seeking to end a pregnancy.  And certainly several of the last major challenges to abortion laws were all about which restrictions violated the Roe test and then the undue burden standard.  For example, according to the Guttmacher Institute, 39 states require a physician perform the procedure; 21 require a hospital stay; 17 mandate counseling; and 26 require waiting periods between counseling and the procedure. Interest groups expend significant amounts of money challenging and protecting these restrictions in court, in the state and federal legislatures, and in public opinion.  Judges then apply the undue burden test as outlined in Planned Parenthood of SE PA v. Casey505 US 833 (1992).

What I find interesting is the similarities between the restrictions enacted in these new laws and Oregon’s Death with Dignity Act.  Under this law[1] you cannot make use of it unless you have reached majority (18) and you are a resident of Oregon; you must have a diagnosis from two different physicians and they must agree that you have six months or less left of life.  Doctors must discuss all other options with the patient and request notification of the family of the request. The patient must make two oral requests for the medication and these requests must be at least 15 days apart.  Afterwards, the patient must make a written request with two witnesses.  These witnesses cannot be family, beneficiaries, or medical personnel that treat the patient.  The doctors must agree that the patient is capable of making appropriate medical decisions.  The patient must wait 48 hours (2 days) after the written request to receive the prescription.  The doctor must mail or personally deliver the prescription to the pharmacy.  Finally, the doctor must contact the state health and human services department.  In other words, the Death with Dignity Act creates similar if not more significant hurdles for those wishing to undergo the procedure than the new abortion laws coming out of some states.

In Gonzales v. Oregon, 546 U.S. 243 (2006), the Supreme Court ruled that the use of the Controlled Substances Act to prosecute doctors prescribing the lethal doses under the Death With Dignity Act is beyond the Attorney General’s powers.  In essence, it was a question of federalism and state’s rights won the day.  The states retain their police power over the health (and delivery of health care) within their borders.  Therefore, the Death with Dignity Act withstood the challenge and remains good law.

Again, the constitutional question in Gonzalez focused on federal versus state powers, but the substance of the act dealt with the right to die.  Often when we consider issues under the rubric of the ‘right to die’, the case is connected to the right to privacy (i.e. Cruzan v. Director, MO DOH 497 US 26 (1990) or WA v. Glucksberg 521 US 702 (1997)).  A question that remains is does the Death with Dignity Act pass the undue burden test?  If physician’s assisted suicide is covered under the umbrella of the right to privacy can the states (OR and WA) place these significant obstacles in front of the terminal patient?[2]


[2] Granted, if the Death with Dignity Act was deemed unconstitutional under this hypothetical it would suggest that there can be physician’s assisted suicide on demand.   But the application of the undue burden test to the strictures of the Death with Dignity Act seems like a good test of student understanding of the privacy material.

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Filed under Federalism, The Right to Privacy