MASSACHUETTS BURMA LAW CASE
.\Crosby v. National Foreign Trade Council
....... Supreme Court of the United States
....530 U.S. 363, 120 Sct. 2288, 147 L.Ed. 352 (2000)
A private corporation, the National
Foreign Trade Council, represents its member companies
in the United States engaged in foreign trade. A number of those
member companies were subject to a Massachusetts state law which
affected their ability to engage in trade with Burma. The Trade
Council thus sued Massachusetts state officials (including the
Massachusetts Secretary of Administration
and Finance), seeking a declaration that the "Massachusetts
Burma Law" (MBL) was unconstitutional. The Council alleged
that the MBL--which restricted the ability of Massachusetts and
its various state agencies to purchase goods or services from
companies doing business with Burma (now Myanmar)--violated the
Supremacy Clause of the federal Constitution. That clause provides,
among other things, that federal law governs in the event of
a conflict with state law.
1. 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, [FN1] is invalid under the Supremacy Clause of the National Constitution owing to its threat of frustrating federal statutory objectives. We hold that it is.
" 'Doing business with Burma' " is defined [very] broadly
to cover any person:
4. There are three exceptions to the ban [which unnecessary for analyzing this edited version of the case]....[FN2]
5. 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. . . . The federal Act has five basic parts . . . . 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. The statute instructs United States representatives to international financial institutions to vote against loans or other assistance to or for Burma, 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. 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."
6. Second, the federal Act authorizes the President to impose further sanctions subject to certain conditions. He may prohibit "United States persons" from "new investment" in Burma, and shall do so if he determines and certifies to Congress that the Burmese Government has physically harmed, rearrested, or exiled Daw Aung San Suu Kyi (the opposition leader selected to receive the Nobel Peace Prize), or has committed "large-scale repression of or violence against the Democratic opposition." ...
7. 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." 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.
8. ... [T]he 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. 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 would
be contrary to the national security interests of the United
10. 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). 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."
12. [W]e see the state
Burma law as an obstacle to the accomplishment of Congress's
full objectives under the federal Act. 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 sanctions against Burma, its limitation of sanctions
solely to United States persons and new investment, and its directive
to the President to proceed diplomatically in developing a comprehensive,
multilateral strategy towards Burma.
14. ... Within the sphere defined by Congress, then, the 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.
15. 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 [italics added]. 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 . . . and perpetual, there being
no termination provision. This unyielding application undermines
the President's intended statutory authority by making it impossible
for him to restrain fully the coercive power of the national
economy when he may choose to take the discretionary action open
to him, whether he believes that the national interest requires
sanctions to be lifted, or believes that the promise of lifting
sanctions would move the Burmese regime in the democratic direction.
Quite simply, if the Massachusetts law is enforceable the President
has less to offer and less economic and diplomatic leverage as
17. 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. . . .
18. 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. The fact of a common end hardly neutralizes
conflicting means, and the fact that some companies may be able
to comply with both sets of sanctions does not mean that the
state Act is not at odds with achievement of the federal decision
about the right degree of pressure to employ. Sanctions are drawn
not only to bar what they prohibit but to allow what they permit,
and the inconsistency of sanctions here undermines the congressional
calibration of force.
20. 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. When such exceptions do qualify his capacity to present a coherent position on behalf of the national economy, he is weakened, of course, not only in dealing with the Burmese regime, but in working together with other nations in hopes of reaching common policy and "comprehensive" strategy. [FN17]
21. 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 [Massachusetts] 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. EU officials have warned that the state Act "could have a damaging effect on bilateral EU-US relations."
22. 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, 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, 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.
23. 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 federal Burma law in saying that the imposition of unilateral state sanctions under the state Act "complicates efforts to build coalitions with our allies" to promote democracy and human rights in Burma. A. Larson, State and Local Sanctions: Remarks to the Council of State Governments 5 (Dec. 8, 1998). "[T]he EU's opposition to the Massachusetts law has meant that U.S. government high level discussions with EU officials often have focused not on what to do about Burma, but on what to do about the Massachusetts Burma law." This point has been consistently echoed in the State Department:
24. This evidence in combination
is more than sufficient to show that the [Massachusetts] state
Act stands as an obstacle in addressing the congressional obligation
to devise a comprehensive, multilateral strategy.
The judgment of the Court of Appeals for the First Circuit
Notes & Questions
1. Both the state and the federal government sought the same objectives of democratization and adherence to ...human rights in "Burma." Why, then, was the state law deemed unconstitutional?
2. How did it interfere with the US President's ability to engage in foreign relations?
3. Why would the E.U. appear to be more concerned about dealing with the Massachusetts Burma Law than ...with Burma itself, as indicated in the text of the Supreme Court opinion?
4. In September, 2001, a federal judge dismissed suits brought by World War II slaves under a 1999 California
....law. The judge held that Code of Civil Procedure section 354.6, allowing such suits for compensation,
...."infringes on the federal government's exclusive power over foreign affairs." This particular order dismissed
....suits by Chinese, Korean, and Philippino plaintiffs. In an earlier dismissal, the same judge dismissed like suits
....by US and allied veterens, holding that the 1951 Treaty of Peace with Japan waived all such claims. The
....defendants in these suits included Japan's Nippon Steel, Mistubishi Corporation, and Japan Energy
....Corporation. In re World War II Era Japanese Forced Labor Litigation, 114 F.Supp.2d 939 (N.D.Cal.,
....2000). In Jan. 2003, the US SCt granted certiorari for the purpose of reviewing a 9th Cir case to determine
....whether this state statute violates federal law. American Ins. Ass'n v. Garamendi, 123 S.Ct. 817 (Jan. 10, ...2003).
5. As of December 2002, about twenty cities had passed resolutions urging federal authorities to respect the civil
....rights of local citizens in the national government's "war on terrorism." Efforts to pass similar measures were ....under way in more than sixty other cities. These resolutions are largely symbolic, but provide ostensible legal ....justification for local authorities to resist cooperating with the federal government--when civil liberties and ....constitutional rights are arguably being compromised. See M. Janofsky, Cities Urge Restraint in Fight ....Against Terror, NYT on the Web (Dec. 23, 2002).
6. The potential conflict between states of the United States, and the country as a whole, will be further addressed ....in other chapters. In the treaty chapter (Ch. 8), for example, you will examine and apply various constitutional ....law principles. One of them is that "No State shall enter into any Treaty, Alliance, or Confedration." US ....Const., Art. I, §10, clause 1 (thus empowering only the national government to engage in such foreign ....relations).
7. Can the US engage in treaties with a subsovereign of another nation? See In re Extradition of Coe, ___ ...F.Supp.2d ___, 2003 WestLaw 21051703 (Cent. Dist. Cal., 2003) (Hong Kong-US extradition treaty ...upheld).