BETHLEHEM STEEL CORPORATION, Plaintiff and Appellant, v. BOARD OF COMMISSIONERS OF THE DEPARTMENT OF WATER AND POWER OF THE CITY OF LOS ANGELES et al., Defendants and Respondents.
Civ. Nos. 32969, 32976
Second Dist., Div. Five.
Sept. 18, 1969
276 Cal. App. 2d 221
(Consolidated Cases.)
The judgment is affirmed.
Aiso, J., and Reppy, J., concurred.
Elliot Bredhoff, Michael H. Gottesman, George H. Cohen, Jerome Smith, Arnold, Smith & Schwartz, Bernard Kleiman, and Kleiman, Cornfield & Feldman as Amici Curiae on behalf of Plaintiff and Appellant.
Roger Arnebergh, City Attorney, Gilmore Tillman, Chief Assistant City Attorney, Alfred H. Driscoll, Assistant City Attorney, Gerald Luhman and Kenneth W. Downey, Deputy City Attorneys, Roger Justice Fleischmann, Graham & James, Alexander D. Calhoun, Jr., Reed M. Williams, McLaughlin & Irvin and Joseph M. McLaughlin for Defendants and Respondents.
STEPHENS, Acting P. J.—These consolidated appeals are from summary judgments rendered in two superior court actions denying Bethlehem Steel Corporation (Bethlehem) injunctive relief and damages against the Department of Water and Power of the City of Los Angeles (the Department).
The first of these two consolidated cases was filed November 14, 1966, by Triangle Steel & Supply Company (Triangle) and Bethlehem to enjoin the Department from performing a contract with Ducommun, Incorporated (Ducommun) for the purchase of structural steel beams to be used by the Department in enlarging the Owens River-Los Angeles Aqueduct. The contract had been awarded after competitive bidding in which seven firms, including both Triangle and Ducommun, had offered to supply the steel. The bid submitted by plaintiff Triangle was the lowest responsive bid based on supplying steel to be manufactured in the United States. The bid sub-
The second consolidated case was filed December 7, 1966, by Bethlehem to enjoin the Department from awarding a contract to any of several bidders proposing to use foreign steel in the construction of suspension towers required by the Department for a portion of an electrical transmission line from Celilo, near The Dalles, Oregon, to Sylmar, California. Bethlehem was the only responsive bidder proposing to construct the towers from steel manufactured in the United States. The low bid, submitted by respondent Marubeni-Iida (America) Inc. (Marubeni), proposed to use steel manufactured in Japan.
Bethlehem sought preliminary injunctions in both cases to prevent performance of the contracts unless they were modified to comply with the California Buy American Act. After a consolidated hearing on the two applications, preliminary injunctions were denied. Following this, Bethlehem filed amended complaints to add claims for damages, and for a declaration that the Department must comply with the California Buy American Act in awarding future public works contracts. Triangle withdrew as a plaintiff in the first suit, leaving Bethlehem as the sole plaintiff, and Bethlehem dismissed without prejudice all the bidders which were originally named as defendants in the second suit, except Marubeni, to whom the contract had been awarded.
Without answering the amended complaints, defendants in both suits moved the trial court for summary judgments, asserting that the California Buy American Act violated certain international agreements of the United States, and was unconstitutional as a burden on foreign commerce and a denial of due process and equal protection of the law. The Department also contended that the act did not apply to it because Los Angeles is a chartered city and because application of the act would result in a gift of public funds. Summary judgments were entered in both cases against Bethlehem and in favor of defendants.
The California Buy American Act (
The crucial and determinative issue presented by these appeals is whether this act, as applied to certain purchases of steel products manufactured abroad, violates the United States Constitution. We have concluded that the California Buy American Act is an unconstitutional encroachment upon the federal government‘s exclusive power over foreign affairs, and constitutes an undue interference with the United States’ conduct of foreign relations.
The United States Constitution itself does not, in so many words, vest in the national government the power to conduct external relations. Instead, it parcels out certain aspects of the foreign affairs power among the political departments. As one writer has pointed out, “the organic provisions delegating such specific powers fall far short of covering comprehensively the whole field of foreign affairs.”2
Whether we must conclude from this that the nation does not possess foreign affairs powers other than those specifically enumerated is answered in an unqualified negative: “As a sovereign power possessed by the nation, the power over foreign affairs is inherent, exclusive, and plenary. It is inherent, since . . . it does not depend for its existence upon the affirmative grants of the Constitution. It is exclusive in the Federal Government, both because of express prohibitions on the states in this field and because only the Union is vested with the attributes of external sovereignty. For national purposes, embracing our relations with foreign nations, we are but one people, one nation, one power. [Footnotes omitted.]”3
The exclusivity of the federal government‘s power in this sphere is predicated upon the “irrefutable postulate that though the states were several, their people in respect of foreign affairs were one.” (United States v. Curtiss-Wright Export Corp., supra, at p. 317 [81 L.Ed. at p. 261].)5 The several states are bereft of power in this field since “in respect of our foreign relations generally, state lines disappear.” (United States v. Belmont, supra, at p. 331 [81 L.Ed. at p. 1139]; see also Chae Chan Ping v. United States, 130 U.S. 581, 606 [32 L.Ed. 1068, 1075, 9 S.Ct. 623].) Hence, the external power of the United States is exercisable “without regard to state laws or policies” and “is not and cannot be subject to any curtailment or interference on the part of the several states.” (Ibid.)6
The California Buy American Act, in effectively placing an embargo on foreign products, amounts to a usurpation by this state of the power of the federal government to conduct foreign trade policy. That there are countervailing state policies which are served by the retention of such an act is “wholly irrelevant to judicial inquiry” (United States v. Pink, 315 U.S. 203, 233 [86 L.Ed. 796, 819, 62 S.Ct. 552]) since “[i]t is inconceivable that any of them can be inter-
The argument is nevertheless advanced that until such time as the federal government acts, either by conflicting legislation8 or international agreement,9 state legislation is unobjectionable. In Purdy & Fitzpatrick v. State of California, 71 Cal.2d 566, 577 [79 Cal. Rptr. 77, 456 P.2d 645], our Supreme Court stated: “We need not await an instance of actual conflict to strike down a state law which purports to regulate a subject matter which the Congress simultaneously aims to control. The opportunity for potential conflict is too great to permit the operation of the state law.” [Footnote
The California Buy American Act, like the Oregon escheat statute in Zschernig v. Miller, 389 U.S. 429, 434-435 [19 L.Ed.2d 683, 688-689, 88 S.Ct. 664], “has more than ‘some incidental or indirect effect in foreign countries,’ and its great potential for disruption or embarrassment makes us hesitate to place it in the category of a diplomatic bagatelle.”12 Such state legislation may bear a particular onus to foreign nations since it may appear to be the product of selfish provincialism, rather than an instrument of justifiable policy. It is a type of protectionism which invites retaliative restrictions on our own trade. While the present California statute is not as gross an intrusion in the federal domain as
Our system of government is such that the interest of the cities, counties and states, no less than the interest of the people of the whole nation, “imperatively requires that federal power in the field affecting foreign relations be left entirely free from local interference.” (Hines v. Davidowitz, supra, 312 U.S. at page 63 [85 L.Ed. at p. 584].)15 Effectiveness in handling these delicate problems requires no less. (United States v. Pink, supra, 315 U.S. 203, 229-230 [86 L.Ed. 796, 817-818].) To permit state legislation to concurrently operate in this sphere would very certainly “imperil the amicable relations between governments and vex the peace of nations.” (Oetjen v. Central Leather Co., 246 U.S. 297, 304 [62 L.Ed. 726, 732, 38 S.Ct. 309]; see Ricaud v. American Metal Co., 246 U.S. 304, 308-310 [62 L.Ed. 733, 736-737, 38 S.Ct. 312].)
The present legislation is an impermissible attempt by the state to structure national foreign policy to conform to its own domestic policies. It illustrates the dangers which are involved if federal policy is to be qualified by the variant notions of the several states. We conclude that the California Buy American Act is an unconstitutional intrusion into an exclusive federal domain.
The judgments are affirmed.
AISO, J.—I concur in Acting Presiding Justice Stephens’ opinion holding the California Buy American Act (
Juxtaposition of the text of the California Buy American Act alongside those of GATT and the Trade Agreements Act (
The power to regulate commerce with foreign nations is an express grant by the people to the federal government. (Gibbons v. Ogden (1824) 22 U.S. (9 Wheat.) 1, 187-189 [6 L.Ed. 23, 68].) “It is an essential attribute of the power that it is exclusive and plenary. As an exclusive power, its exercise may not be limited, qualified or impeded to any extent by state action. [Citations.] The power is buttressed by the express provision of the Constitution denying to the States authority to lay imposts or duties on imports or exports without the consent of the Congress. Art. 1, § 10, ¶ 2. . . . The Congress may determine what articles may be imported into this country and the terms upon which importation is permitted.” (University of Illinois v. United States (1932) 289 U.S. 48, 56-57 [77 L.Ed. 1025, 1028; 53 S.Ct. 509, 510].)
“The power which insures uniformity of commercial regulation must cover the property which is transported as an article of commerce from hostile or interfering legislation, until it has mingled with and become a part of the general property of the country, and subjected like it to similar protection, and to no greater burdens. If, at any time before it has thus become incorporated into the mass of property of the State or nation, it can be subjected to any restrictions by state legislation, the object of investing the control in Congress may be entirely defeated.” (Welton v. Missouri, supra, 91 U.S. 275, 281 [23 L.Ed. 347, 349]; see also Guy v. Baltimore (1879) 100 U.S. 434, 443 [25 L.Ed. 743, 746].)
Since “commerce with foreign countries . . . is of national importance, and admits and requires uniformity of regulation,” no state even in the absence of congressional legislation may intrude into this domain. (Welton v. Missouri, supra, 91 U.S. at p. 280 [23 L.Ed. at p. 349]; Scandinavian Airlines System, Inc. v. County of Los Angeles (1961) 56 Cal.2d 11, 23 [14 Cal.Rptr. 25, 363 P.2d 25], cert. denied, 368 U.S. 899 [7 L.Ed.2d 94, 82 S.Ct. 175].) Absence of congressional enactments may be deemed “equivalent to a declaration that [the] commerce shall be free and untrammeled.” (Welton v. Missouri, supra, 91 U.S. at p. 282 [23 L.Ed. at p. 350].)
Thus state encroachments upon this exclusive and plenary federal power whether in the guise of a licensing requirement (Welton v. Missouri (1875) supra, 91 U.S. 275 [23 L.Ed. 347]; Brown v. Maryland (1827) 25 U.S. (12 Wheat.) 419 [6 L.Ed. 678]), a grant of exclusive privileges or a franchise (Gibbons v. Ogden (1824) supra, 22 U.S. (9 Wheat.) 1 [6 L.Ed. 23]), or of inspection and fees therefor (Hale v. Bimco Trading, Inc. (1938) 306 U.S. 375 [83 L.Ed. 771, 59 S.Ct. 526]) have been stricken down. Worthy of particular note is that in Hale, the Trade Agreements Act (
Reppy, J., concurred.
Appellant‘s petition for a hearing by the Supreme Court was denied November 12, 1969. Mosk, J., was of the opinion that the petition should be granted.
