CROSBY, SECRETARY OF ADMINISTRATION AND FINANCE OF MASSACHUSETTS, ET AL. v. NATIONAL FOREIGN TRADE COUNCIL
No. 99-474
Supreme Court of the United States
Argued March 22, 2000-Decided June 19, 2000
530 U.S. 363
Thomas A. Barnico, Assistant Attorney General of Massachusetts, argued the cause for petitioners. With him on the briefs were Thomas F. Reilly, Attorney General, and James A. Sweeney, Assistant Attorney General.
Timothy B. Dyk argued the cause for respondent. With him on the brief were Gregory A. Castanias, John B. Kennedy, and Michael A. Collora.
Solicitor General Waxman argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Acting Assistant Attorney General Ogden, Deputy Solicitor General Kneedler, Barbara McDowell, Mark B. Stern, Alisa B. Klein, Douglas Hallward-Driemeier, David R. Andrews, Neal S. Wolin, and Andrew J. Pincus.*
*Briefs of amici curiae urging reversal were filed for the State of Arkansas et al. by Heidi Heitkamp, Attorney General of North Dakota, Douglas A. Bahr, Solicitor General, and Beth Angus Baumstark, Assistant Attorney General, and by the Attorneys General for their respective States as follows: Mark Pryor of Arkansas, Bill Lockyer of California, Ken Salazar of Colorado, Richard Blumenthal of Connecticut, Earl I. Anzai of Hawaii, Richard P. Ieyoub of Louisiana, Andrew Ketterer of Maine, J. Joseph Curran, Jr., of Maryland, Mike Hatch of Minnesota, Jeremiah W. (Jay) Nixon of Missouri, Philip T. McLaughlin of New Hampshire, John J. Farmer, Jr., of New Jersey, Patricia A. Madrid of New Mexico, W. A.
Briefs of amici curiae urging affirmance were filed for Representative Douglas Bereuter et al. by John Vanderstar, Charles Clark, Eric D. Brown, and W. Thomas McCraney III; for Associated Industries of Massachusetts et al. by Michael F. Malamut; for the Chamber of Commerce of the United States et al. by Daniel M. Price, Robin S. Conrad, Jan Amundson, and Quentin Riegel; for the European Communities et al. by Richard L. A. Weiner and David G. Leitch; for the Industry Coalition on Technology Transfer by Eric L. Hirschhorn and Terence Murphy; for the Washington Legal Foundation by Daniel J. Popeo and R. Shawn Gunnarson; and for Gerald R. Ford et al. by Andrew N. Vollmer, Carol J. Banta, Martin S. Kaufman, and Edwin L. Lewis III.
Kenneth B. Clark filed a brief for the Coalition for Local Sovereignty as amicus curiae.
JUSTICE SOUTER delivered the opinion of the Court.
The issue is whether the Burma law of the Commonwealth of Massachusetts, restricting the authority of its agencies to purchase goods or services from companies doing business with Burma,1 is invalid under the Supremacy Clause of the National Constitution owing to its threat of frustrating federal statutory objectives. We hold that it is.
I
In June 1996, Massachusetts adopted “An Act Regulating State Contracts with Companies Doing Business with or in
“Doing business with Burma” is defined broadly to cover any person
“(a) having a principal place of business, place of incorporation or its corporate headquarters in Burma (Myanmar) or having any operations, leases, franchises, majority-owned subsidiaries, distribution agreements, or any other similar agreements in Burma (Myanmar), or being the majority-owned subsidiary, licensee or franchise of such a person;
“(b) providing financial services to the government of Burma (Myanmar), including providing direct loans, underwriting government securities, providing any consulting advice or assistance, providing brokerage services, acting as a trustee or escrow agent, or otherwise acting as an agent pursuant to a contractual agreement;
“(c) promoting the importation or sale of gems, timber, oil, gas or other related products, commerce in which is largely controlled by the government of Burma (Myanmar), from Burma (Myanmar);
“(d) providing any goods or services to the government of Burma (Myanmar).”
§ 7:22G .
There are three exceptions to the ban: (1) if the procurement is essential, and without the restricted bid, there would be no bids or insufficient competition,
In September 1996, three months after the Massachusetts law was enacted, Congress passed a statute imposing a set of mandatory and conditional sanctions on Burma. See Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1997, § 570, 110 Stat. 3009–166 to 3009-167 (enacted by the Omnibus Consolidated Appropriations Act, 1997, § 101(c), 110 Stat. 3009-121 to 3009-172). The federal Act has five basic parts, three substantive and two procedural.
First, it imposes three sanctions directly on Burma. It bans all aid to the Burmese Government except for humanitarian assistance, counternarcotics efforts, and promotion of human rights and democracy. § 570(a)(1). The statute instructs United States representatives to international financial institutions to vote against loans or other assistance to or for Burma, § 570(a)(2), and it provides that no entry visa shall be issued to any Burmese Government official unless required by treaty or to staff the Burmese mission to the United Nations, § 570(a)(3). These restrictions are to remain in effect “[u]ntil such time as the President determines and certifies to Congress that Burma has made measurable and substantial progress in improving human rights practices and implementing democratic government.” § 570(a).
Third, the statute directs the President to work to develop “a comprehensive, multilateral strategy to bring democracy to and improve human rights practices and the quality of life in Burma.” § 570(c). He is instructed to cooperate with members of the Association of Southeast Asian Nations (ASEAN) and with other countries having major trade and investment interests in Burma to devise such an approach, and to pursue the additional objective of fostering dialogue between the ruling State Law and Order Restoration Council (SLORC) and democratic opposition groups. Ibid.
As for the procedural provisions of the federal statute, the fourth section requires the President to report periodically to certain congressional committee chairmen on the progress toward democratization and better living conditions in Burma as well as on the development of the required strategy. § 570(d). And the fifth part of the federal Act authorizes the President “to waive, temporarily or permanently, any sanction [under the federal Act]... if he determines and certifies to Congress that the application of such sanction
On May 20, 1997, the President issued the Burma Executive Order, Exec. Order No. 13047, 3 CFR 202 (1997 Comp.). He certified for purposes of § 570(b) that the Government of Burma had “committed large-scale repression of the democratic opposition in Burma” and found that the Burmese Government‘s actions and policies constituted “an unusual and extraordinary threat to the national security and foreign policy of the United States,” a threat characterized as a national emergency. The President then prohibited new investment in Burma “by United States persons,” Exec. Order No. 13047, § 1, any approval or facilitation by a United States person of such new investment by foreign persons, § 2(a), and any transaction meant to evade or avoid the ban, § 2(b). The order generally incorporated the exceptions and exemptions addressed in the statute. §§ 3, 4. Finally, the President delegated to the Secretary of State the tasks of working with ASEAN and other countries to develop a strategy for democracy, human rights, and the quality of life in Burma, and of making the required congressional reports.3 § 5.
II
Respondent National Foreign Trade Council (Council) is a nonprofit corporation representing companies engaged in foreign commerce; 34 of its members were on the Massachusetts restricted purchase list in 1998. National Foreign Trade Council v. Natsios, 181 F. 3d 38, 48 (CA1 1999). Three withdrew from Burma after the passage of the state Act, and one member had its bid for a procurement contract increased by 10 percent under the provision of the state law
In April 1998, the Council filed suit in the United States District Court for the District of Massachusetts, seeking declaratory and injunctive relief against the petitioner state officials charged with administering and enforcing the state Act (whom we will refer to simply as the State).4 The Council argued that the state law unconstitutionally infringed on the federal foreign affairs power, violated the Foreign Commerce Clause, and was preempted by the federal Act. After detailed stipulations, briefing, and argument, the District Court permanently enjoined enforcement of the state Act, holding that it “unconstitutionally impinge[d] on the federal government‘s exclusive authority to regulate foreign affairs.” National Foreign Trade Council v. Baker, 26 F. Supp. 2d 287, 291 (Mass. 1998).
The United States Court of Appeals for the First Circuit affirmed on three independent grounds. 181 F. 3d, at 45. It found the state Act unconstitutionally interfered with the foreign affairs power of the National Government under Zschernig v. Miller, 389 U. S. 429 (1968), see 181 F. 3d, at 52-55; violated the dormant Foreign Commerce Clause,
The State‘s petition for certiorari challenged the decision on all three grounds and asserted interests said to be shared by other state and local governments with similar measures.5 Though opposing certiorari, the Council acknowledged the
III
A fundamental principle of the Constitution is that Congress has the power to preempt state law.
“For when the question is whether a Federal act overrides a state law, the entire scheme of the statute must of course be considered and that which needs must be implied is of no less force than that which is expressed. If the purpose of the act cannot otherwise be accomplished-if its operation within its chosen field else must be frustrated and its provisions be refused their natural effect-the state law must yield to the regulation of Congress within the sphere of its delegated power.” Savage, supra, at 533, quoted in Hines, supra, at 67, n. 20.
Applying this standard, we see the state Burma law as an obstacle to the accomplishment of Congress‘s full objectives under the federal Act.7 We find that the state law undermines the intended purpose and “natural effect” of at least three provisions of the federal Act, that is, its delegation of effective discretion to the President to control economic
A
First, Congress clearly intended the federal Act to provide the President with flexible and effective authority over economic sanctions against Burma. Although Congress immediately put in place a set of initial sanctions (prohibiting bilateral aid, § 570(a)(1), support for international financial assistance, § 570(a)(2), and entry by Burmese officials into the United States, § 570(a)(3)), it authorized the President to terminate any and all of those measures upon determining and certifying that there had been progress in human rights and democracy in Burma. § 570(a). It invested the President with the further power to ban new investment by United States persons, dependent only on specific Presidential findings of repression in Burma. § 570(b). And, most significantly, Congress empowered the President “to waive, temporarily or permanently, any sanction [under the federal Act]... if he determines and certifies to Congress that the application of such sanction would be contrary to the national security interests of the United States.” § 570(e).
And that is just what the Massachusetts Burma law would do in imposing a different, state system of economic pressure against the Burmese political regime. As will be seen, the state statute penalizes some private action that the federal Act (as administered by the President) may allow, and pulls levers of influence that the federal Act does not reach. But the point here is that the state sanctions are immediate,11 see 1996 Mass. Acts 239, ch. 130, § 3 (restricting all contracts after law‘s effective date);
B
Congress manifestly intended to limit economic pressure against the Burmese Government to a specific range. The federal Act confines its reach to United States persons, § 570(b), imposes limited immediate sanctions, § 570(a), places only a conditional ban on a carefully defined area of “new investment,” § 570(f)(2), and pointedly exempts contracts to sell or purchase goods, services, or technology, § 570(f)(2). These detailed provisions show that Congress‘s calibrated
The State has set a different course, and its statute conflicts with federal law at a number of points by penalizing individuals and conduct that Congress has explicitly exempted or excluded from sanctions. While the state Act differs from the federal in relying entirely on indirect economic leverage through third parties with Burmese connections, it otherwise stands in clear contrast to the congressional scheme in the scope of subject matter addressed. It restricts all contracts between the State and companies doing business in Burma,
As with the subject of business meant to be affected, so with the class of companies doing it: the state Act‘s generality stands at odds with the federal discreteness. The Massachusetts law directly and indirectly imposes costs on all companies that do any business in Burma,
The conflicts are not rendered irrelevant by the State‘s argument that there is no real conflict between the statutes because they share the same goals and because some companies may comply with both sets of restrictions. See Brief for Petitioners 21-22. The fact of a common end hardly neutralizes conflicting means,14 see Gade v. National Solid.
C
Finally, the state Act is at odds with the President‘s intended authority to speak for the United States among the world‘s nations in developing a “comprehensive, multilateral strategy to bring democracy to and improve human rights practices and the quality of life in Burma.” § 570(c). Congress called for Presidential cooperation with members of ASEAN and other countries in developing such a strategy, ibid., directed the President to encourage a dialogue between the Government of Burma and the democratic opposition, ibid.,15 and required him to report to the Congress on the progress of his diplomatic efforts, § 570(d). As with Con-
Again, the state Act undermines the President‘s capacity, in this instance for effective diplomacy. It is not merely that the differences between the state and federal Acts in scope and type of sanctions threaten to complicate discussions; they compromise the very capacity of the President to speak for the Nation with one voice in dealing with other governments. We need not get into any general consideration of limits of state action affecting foreign affairs to realize that the President‘s maximum power to persuade rests on his capacity to bargain for the benefits of access to the entire national economy without exception for enclaves fenced off willy-nilly by inconsistent political tactics.16 When such
While the threat to the President‘s power to speak and bargain effectively with other nations seems clear enough, the record is replete with evidence to answer any skeptics. First, in response to the passage of the state Act, a number of this country‘s allies and trading partners filed formal protests with the National Government, see 181 F. 3d, at 47 (noting protests from Japan, the European Union (EU), and ASEAN), including an official Note Verbale from the EU to the Department of State protesting the state Act.18 EU officials have warned that the state Act “could have a damaging effect on bilateral EU-US relations.” Letter of Hugo
Second, the EU and Japan have gone a step further in lodging formal complaints against the United States in the World Trade Organization (WTO), claiming that the state Act violates certain provisions of the Agreement on Government Procurement,19 H. R. Doc. No. 103-316, p. 1719 (1994), and the consequence has been to embroil the National Government for some time now in international dispute proceedings under the auspices of the WTO. In their brief before this Court, EU officials point to the WTO dispute as threatening relations with the United States, Brief for European Communities et al. as Amici Curiae 7, and n. 7, and note that the state Act has become the topic of “intensive discussions” with officials of the United States at the highest levels, those discussions including exchanges at the twice yearly EU-U. S. Summit.20
Third, the Executive has consistently represented that the state Act has complicated its dealings with foreign sovereigns and proven an impediment to accomplishing objectives assigned it by Congress. Assistant Secretary of State Larson, for example, has directly addressed the mandate of the
“While the [Massachusetts sanctions on Burma] were adopted in pursuit of a noble goal, the restoration of democracy in Burma, these measures also risk shifting the focus of the debate with our European Allies away from the best way to bring pressure against the State Law and Order Restoration Council (SLORC) to a potential WTO dispute over its consistency with our international obligations. Let me be clear. We are working with Massachusetts in the WTO dispute settlement process. But we must be honest in saying that the threatened WTO case risks diverting United States’ and Europe‘s attention from focusing where it should be-on Burma.” Eizenstat testimony, App. 115.22
Our discussion in Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U. S. 298 (1994), of the limited weight of evidence of formal diplomatic protests, risk of foreign retaliation, and statements by the Executive does not undercut the point. In Barclays, we had the question of the preemptive effect of federal tax law on state tax law with discriminatory extraterritorial effects. We found the reactions of foreign powers and the opinions of the Executive irrelevant in fathoming congressional intent because Congress had taken specific actions rejecting the positions both of foreign governments, id., at 324-328, and the Executive, id., at 328-329. Here, however, Congress has done nothing to render such evidence beside the point. In consequence, statements of foreign powers necessarily involved in the President‘s efforts to comply with the federal Act, indications of concrete disputes with those powers, and opinions of senior National Government officials are competent and direct evidence of the frustration of congressional objectives by the state Act.23 Although we do not unquestioningly defer to the legal judgments expressed in Executive Branch statements when determining a federal Act‘s preemptive charac-
IV
The State‘s remaining argument is unavailing. It contends that the failure of Congress to preempt the state Act
The argument is unconvincing on more than one level. A failure to provide for preemption expressly may reflect noth-
V
Because the state Act‘s provisions conflict with Congress‘s specific delegation to the President of flexible discretion, with limitation of sanctions to a limited scope of actions and actors, and with direction to develop a comprehensive, multilateral strategy under the federal Act, it is preempted, and its application is unconstitutional, under the Supremacy Clause.
The judgment of the Court of Appeals for the First Circuit is affirmed.
It is so ordered.
JUSTICE SCALIA, with whom JUSTICE THOMAS joins, concurring in the judgment.
It is perfectly obvious on the face of this statute that Congress, with the concurrence of the President, intended to “provid[e] the President with flexibility in implementing its Burma sanctions policy.” Ante, at 375, n. 9. I therefore see no point in devoting a footnote to the interesting (albeit unsurprising) proposition that “[s]tatements by the sponsors of the federal Act” show that they shared this intent, ibid., and that a statement in a letter from a State Department officer shows that flexibility had “the explicit support of the
It is perfectly obvious on the face of the statute that Congress expected the President to use his discretionary authority over sanctions to “move the Burmese regime in the democratic direction,” ante, at 377. I therefore see no point in devoting a footnote to the interesting (albeit unsurprising) proposition that “[t]he sponsors of the federal Act” shared this expectation, ante, at 377, n. 12.
It is perfectly obvious on the face of the statute that Congress‘s Burma policy was a “calibrated” one, which “limit[ed] economic pressure against the Burmese Government to a specific range,” ante, at 377. I therefore see no point in devoting a footnote to the interesting (albeit unsurprising) proposition that bills imposing greater sanctions were introduced but not adopted, ante, at 378, n. 13, and to the (even less surprising) proposition that the sponsors of the legislation made clear that its “limits were deliberate,” ibid. And I would feel this way even if I shared the Court‘s naive assumption that the failure of a bill to make it out of committee, or to be adopted when reported to the floor, is the same as a congressional “reject[ion]” of what the bill contained, ibid. Curiously, the Court later recognizes, in rejecting the argument that Congress‘s failure to enact express pre-emption implies approval of the state Act, that “the silence of Congress [may be] ambiguous.” Ante, at 388. Would that the Court had come to this conclusion before it relied (several times) upon the implications of Congress‘s failure to enact legislation, see ante, at 376, n. 11, 378, n. 13, 385, n. 23.
It is perfectly obvious from the record, as the Court discusses, ante, at 382-385, that the inflexibility produced by the Massachusetts statute has in fact caused difficulties with our allies and has in fact impeded a “multilateral strategy.” And as the Court later says in another context, “the existence of conflict cognizable under the Supremacy Clause does not depend on express congressional recognition that federal and state law may conflict,” ante, at 388. I therefore see no point in devoting a footnote to the interesting (albeit unsurprising) fact that the “congressional sponsors” of the Act and “the Executive” actually predicted that inflexibility would have the effect of causing difficulties with our allies and impeding a “multilateral strategy,” ante, at 385, n. 23.
Of course even if all of the Court‘s invocations of legislative history were not utterly irrelevant, I would still object to them, since neither the statements of individual Members of Congress (ordinarily addressed to a virtually empty floor),* nor Executive statements and letters addressed to congressional committees, nor the nonenactment of other proposed legislation, is a reliable indication of what a majority of both Houses of Congress intended when they voted for the statute before us. The only reliable indication of that intent-the only thing we know for sure can be attributed
*Debate on the bill that became the present Act seems, in this respect, not to have departed from the ordinary. Cf. 142 Cong. Rec. 19263 (1996) (statement of Sen. McConnell) (noting, in debate regarding which amendment to take up next: “I do not see anyone on the Democratic side in the Chamber“).
In any case, the portion of the Court‘s opinion that I consider irrelevant is quite extensive, comprising, in total, about one-tenth of the opinion‘s size and (since it is in footnote type) even more of the opinion‘s content. I consider that to be not just wasteful (it was not preordained, after all, that this was to be a 25-page essay) but harmful, since it tells future litigants that, even when a statute is clear on its face, and its effects clear upon the record, statements from the legislative history may help (and presumably harm) the case. If so, they must be researched and discussed by counsel-which makes appellate litigation considerably more time consuming, and hence considerably more expensive, than it need be. This to my mind outweighs the arguable good that may come of such persistent irrelevancy, at least when it is indulged in the margins: that it may encourage readers to ignore our footnotes.
For this reason, I join only the judgment of the Court.
Notes
We add that we have already rejected the argument that a State‘s “statutory scheme . . . escapes pre-emption because it is an exercise of the State‘s spending power rather than its regulatory power.” Wisconsin Dept. of Industry v. Gould Inc., 475 U. S. 282, 287 (1986). In Gould, we found that a Wisconsin statute debarring repeat violators of the National Labor Relations Act,
Because our conclusion that the state Act conflicts with federal law is sufficient to affirm the judgment below, we decline to speak to field preemption as a separate issue, see n. 6, supra, or to pass on the First Circuit‘s rulings addressing the foreign affairs power or the dormant Foreign Commerce Clause. See Ashwander v. TVA, 297 U. S. 288, 346-347 (1936) (concurring opinion).
Statements of the sponsors of the federal Act also lend weight to the conclusions that the limits were deliberate. See, e. g., 142 Cong. Rec., at 19279 (statement of Sen. Breaux) (characterizing the federal Act as “strik[ing] a balance between unilateral sanctions against Burma and unfettered United States investment in that country“). The scope of the exemptions was discussed, see ibid. (statements of Sens. Nickles and Cohen), and broader sanctions were rejected, see id., at 19212 (statement of Sen. Cohen); id., at 19280 (statement of Sen. Murkowski) (“Instead of the current draconian sanctions proposed in the legislation before us, we should adopt an approach that effectively secures our national interests“).