Contemporary Business and Online Commerce Law 7th Edition by Henry R Cheeseman

Exercise 1

U.S. SUPREME COURT Foreign Commerce

Crosby, Secretary of Administration and Finance of Massachusetts v. National Foreign Trade Council

530 U.S. 363,120 S.Ct. 2288,147 L.Ed.2d 352, Web 2000 U.S. Lexis 4153 (2000)

Supreme Court of the United States

“Within the sphere defined by Congress, then, the federal statute has placed the president in a position with as much discretion to exercise economic leverage against Burma, with an eye toward national security, as our law will admit.”

—Justice Souter

Facts

The military regime of the country of Myanmar (previously called Burma) has been accused of major civil rights violations, including using forced and child labor, imprisoning and torturing political opponents, and harshly repressing ethnic minorities. These inhumane actions have been condemned by human rights organizations around the world. The state legislators of the state of Massachusetts were so appalled at these actions that they enacted a state statute banning the state government from purchasing goods and services from any company that did business with Myanmar.

In the meantime, the U.S. Congress enacted a federal statute that delegated power to the president of the United States to regulate U.S. dealings with Myanmar. The federal statute (1) banned all aid to the government of Myanmar except for humanitarian assistance, (2) authorized the president to impose economic sanctions against Myanmar, and (3) authorized the president to develop a comprehensive multilateral strategy to bring democracy to Myanmar.

The National Foreign Trade Council—a powerful Washington, DC-based trade association with more than 500 member companies—filed a lawsuit against Massachusetts to have the state law declared unconstitutional. The council argued that the Massachusetts “anti-Myanmar” statute conflicted with the federal statute and that under the Supremacy Clause that makes federal law the supreme law of the land, the state statute was preempted by the federal statute. The U.S. District Court and U.S. Court of Appeals ruled in favor of the council. Massachusetts appealed to the U.S. Supreme Court.

Issue

Did the Massachusetts anti-Myanmar state statute violate the Supremacy Clause of the U.S. Constitution?

Language of the U.S. Supreme Court

Within the sphere defined by Congress, then, the federal statute has placed the president in a position with as much discretion to exercise economic leverage against Burma, with an eye toward national security, as our law will admit. And it is just this plenitude of executive authority that we think controls the issue of preemption here. The president has been given this authority not merely to make a political statement but to achieve a political result, and the fullness of his authority shows the importance in the congressional mind of reaching that result. It is simply implausible that Congress would have gone to such lengths to empower the president if it had been willing to compromise his effectiveness by deference to every provision of state statute or local ordinance that might, if enforced, blunt the consequences of discretionary presidential action.

We find it unlikely that Congress intended both to enable the president to protect national security by giving him the flexibility to suspend or terminate federal sanctions and simultaneously to allow Massachusetts to act at odds with the president’s judgment of what national security requires. 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.

Decision

The U.S. Supreme Court held that the Massachusetts anti-Myanmar law conflicted with federal law and was therefore preempted by the Supremacy Clause of the Constitution. The Supreme Court affirmed the decisions of the U.S. District Court and U.S. Court of Appeals in favor of the National Foreign Trade Council.

Case Questions

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Critical Legal Thinking What does the Supremacy Clause provide? Explain.

Ethics Do you think companies that have goods manufactured in Myanmar violate any ethical principles? Explain.

Contemporary Business Could the federal government enact an anti-Myanmar law such as the one Massachusetts enacted?