Crosby v. National Foreign Trade Council

PETITIONER: Crosby
RESPONDENT: National Foreign Trade Council
LOCATION: Massachusetts Office for Administration and Finance

DOCKET NO.: 99-474
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 530 US 363 (2000)
ARGUED: Mar 22, 2000
DECIDED: Jun 19, 2000

ADVOCATES:
Seth P. Waxman - Argued the cause for the United States, as amicus curiae, by special leave of court, supporting affirmance
Thomas A. Barnico - Argued the cause for the petitioners
Timothy B. Dyk - Argued the cause for the respondent

Facts of the case

In 1996, the Massachusetts Burma Law, which restricted state entities from buying goods or services from companies doing business with Burma, was passed. Afterwards, Congress also imposed mandatory and conditional sanctions on Burma. Businesses with ties to Burma landed on Massachusetts' "restricted trade" list. The list came to include 34 members of the National Foreign Trade Council (Council), a non-profit advocate for American companies that do business abroad. The Council filed suit against Stephen Crosby, the Massachusetts Secretary of Administration and Finance, and other state officials in federal court, claiming that the state act unconstitutionally infringes on the federal foreign affairs power, violates the Foreign Commerce Clause, and is preempted by the Federal Burma Law. The District Court permanently enjoined the state act's enforcement, and the Court of Appeals affirmed. The court also found that the Massachusetts Burma Law violated the Supremacy Clause because the state was acting in an area of unique federal concern, foreign policy, through a balanced, tailored approach.

Question

Is the Massachusetts Burma Law, which restricts the authority of its agencies to purchase goods or services from companies doing business with Burma, unconstitutional under the Supremacy Clause?

Media for Crosby v. National Foreign Trade Council

Audio Transcription for Oral Argument - March 22, 2000 in Crosby v. National Foreign Trade Council

Audio Transcription for Opinion Announcement - June 19, 2000 in Crosby v. National Foreign Trade Council

William H. Rehnquist:

The opinion of the Court in No. 99-474, Crosby versus National Foreign Trade Council will be announced by Justice Souter.

David H. Souter:

This case comes to us on a writ of certiorari to the United States Court of Appeals for the First Circuit.

In June of 1996, the Commonwealth of Massachusetts passed a statute restricting state agencies from purchasing goods and services from companies doing business with Burma.

In September of 1996, Congress passed a law that imposed immediate federal sanctions on Burma, authorized the President to impose further sanctions or to suspend or terminate any federal sanctions, and directed him to work with our allies in developing a comprehensive strategy to bring human rights and democracy to Burma.

The National Foreign Trade Council which represents companies engaged in foreign commerce, challenge the state law on behalf of its members.

The District Court held that the law was unconstitutional, is a violation of the Federal Foreign Affairs Power.

The court of appeals for the First Circuit affirmed on three independent grounds; it found the state law unconstitutionally interfered with the Foreign Affairs Power of the National Government that it violated the Dormant Foreign Commerce Clause and that it was preempted by the Congressional Burma Act.

In an opinion filed with the Clerk at Court today, we affirm the judgment of the First Circuit.

The state law is invalid under the Supremacy Clause of the constitution, that is, it is preempted because it stands as an obstacle to the accomplishment of Congress’s full objectives under the Federal Act.

First, Congress clearly intended the President to exercise effective discretion over economic sanctions against Burma.

It provided him with the ability to impose additional conditional sanctions and to suspend or terminate all federal sanctions in the interest of national security.

The state sanctions undermine the President’s authority by making it impossible for him to bargain with the full economic power of the United States.

Second, Congress carefully calibrated the scope of sanctions against Burma.

The state law penalizes behavior well beyond that range; it targets contracts for goods, services or technology, and the behavior of foreign as well as United States companies, all of which the Federal Act exempts.

Finally, Congress intended the President to speak for the United States among the world’s nations in developing a comprehensive multi-lateral strategy toward Burma.

The State act interferes with that authority; it undermines the President’s capacity for diplomacy by reducing his bargaining power and generating formal protests in the international trade disputes with our allies.

The state act conflicts with Federal Law and must therefore yield.

Justice Scalia has filed an opinion concurring in the judgment in which Justice Thomas joins.