Vertical and Horizontal Federalism

Vertical and Horizontal Federalism

1. Vertical Federalism: relationship between federal gov’t and states

1. 
   Taxing and Spending Power (Art. I, Sec. 8, Cl. 1): Congress has power to tax and provide general welfare of United States
   
2. 
   S.D. v. Dole [CB 627]: important for establishing test for when Congress can use Spending Power to influence state legislation
   
   1. 
      FACTS: SCOTUS upholds Congressional statute withholding federal highway funds from states w/ drinking age below 21 as not in excess of Spending Power
      
   2. 
      Congress is regulating drinking age, which looks to be state power (21^st Amdt: interpreted to grant state power over alcohol regulation) → BUT SCOTUS says Congress can indirectly regulate this area through Spending Power
      
   3. 
      Four-part test (all conditions must be met):
      
      1. 
         Conditions placed on federal grants must be in pursuit of general welfare
         
      2. 
         Conditions must be unambiguous so states know the consequences of their choice
         
      3. 
         Conditions on federal grants must be related to federal interest in particular nat’l projects or programs
         
      4. 
         Conditions may not violate other constitutional provisions
         
   4. 
      O’Connor’s dissent: broad spending power lets Congress do through the back door what it can’t do through front door → also, link btw nat’l interest and conditions imposed is too attenuated: conditions are both over and under-inclusive for keeping roads safe from drunk drivers
      

1. Horizontal Federalism: relationship btw states

   1. 
      Dormant Commerce Clause: negative inference from Commerce Clause → even where Congress has not acted, Commerce Clause restricts state’s regulation of interstate commerce such that states cannot engage in economic protectionism (see Gibbons concurrence)
      
      1. 
         Other examples where const. lets Congress dominate the field: declaration of war; post offices; roads; printing $; immigration/naturalization
         
      2. 
         Example of concurrent powers: taxation (see McCulloch: states can tax within their sphere of sovereignty, but cannot tax within fed. sphere)
         
      3. 
         Black-Bird Creek [CB 730]: early reluctance to create Dormant Commerce Clause → Marshall doesn’t want to let Congress occupy field of interstate commerce when it hasn’t spoken
         
   2. 
      Application of Dormant Commerce Clause
      
      1. 
         Question 1: Does state regulation impinge on an activity covered by federal legislation?
         
         1. 
            Yes: state regulation is invalid under simple preemption analysis (Gibbons)
            
      2. 
         Question 2: Does state regulation discriminate against interstate commerce?
         
         1. 
            Yes: virtually per se rule of invalidity → in order to survive must satisfy either:
            
            1. 
               Strict scrutiny: further an important, non-economic state interest and there must be no reasonable nondiscriminatory alternatives
               
            2. 
               Market participant exception: state must be acting as a purchaser, seller, subsidizer, or some other kind of participant in the market
               
      3. 
         Question 3: Does the (non-discriminatory) state regulation burden interstate commerce? → i.e. not discriminatory in purpose, but in effect
         
         1. 
            Pike balancing [CB 731]: if statute effects a legitimate local purpose, court must balance this interest against the burden on interstate commerce (in this case, SCOTUS found that state’s interest in protecting reputation of its produce by requiring cantaloupes to be packaged in-state was outweighed by substantial financial burden it placed on cantaloupe sellers engaging in interstate commerce)
            
         2. 
            Hughes [CB 731]: refined Pike into 3-part test
            
            1. 
               Does challenged statute regulate even-handedly with only incidental effects on inter-state commerce, or does it discriminate against interstate commerce either on its face or in practice effect
               
            2. 
               Does statute serve a legitimate local purpose, and, if so
               
            3. 
               Can alternative means promote this local purpose as effectively w/o discriminating against interstate commerce
               
      4. 
         NOTE: Congress likes Dormant Commerce Clause (structural argument: mechanism for monitoring state regulations that threaten integrated national economy) and legislates against that background → if SCOTUS drops Dormant Commerce Clause jurisprudence, Congress would probably enact broadly worded statute to bring courts back into doing what it already is doing
         
   3. 
      Privileges & Immunities Clause (Art. II, Sec. 2): citizens of each state entitled to P&I of citizens in several states
      
      1. 
         What are the P&I of citizens of several states (Corfield):
         
         1. 
            Interstate travel
            
         2. 
            Reside in state for biz or other purposes
            
         3. 
            Do biz in state
            
         4. 
            Take, hold, and disposes of property
            
      2. 
         Equality, rather than fundamental rights, principle: you can’t favor your citizens over citizens of other states
         
         1. 
            NOTE: different from P or I clause of 14^th Amdt., which includes fundamental rights (Slaughterhouse)
            
      3. 
         P&I test for challenged statutes:
         
         1. 
            Does the legislation treat out-of-staters differently w/ respect to a recognized P&I?
            
            1. 
               NOTE: discrimination must be purposeful; otherwise, law is valid (unlike DCC, which covers non-purposeful discrimination under Pike/Hughes balancing)
               
         2. 
            If so, is the legislation tailored (no less restrictive means) to a substantial justification?