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The members of the Supreme Court — for years split 5-4 over how much power Congress can wield over the states — finally found common ground in a states’ rights case. The Court on Monday voted unanimously to strike down a Massachusetts law to boycott companies doing business with Burma — the Southeast Asia country criticized for human rights abuses — because it was pre-empted by a federal statute. The decision effectively kills similar provisions passed by other state and local governments, according to lawyers representing both sides of the debate. The 1996 Massachusetts law penalized in contract bids companies doing business with Burma. Justice David Souter wrote in the Court’s main opinion in Crosby v. National Foreign Trade Council that the state law undermined Congress’ objectives in passing its own law sanctioning Burma a few months later. The federal law is more flexible than its Massachusetts counterpart, Souter wrote, granting the president wide discretion to control the economic sanctions and directing him to develop a Burma policy with other nations. The Massachusetts law makes it impossible for the president to use the entire national economy as a bargaining chip in negotiations, Souter added. “Quite simply,” Souter explained, “if the Massachusetts law is enforceable the President has less to offer and less economic and diplomatic leverage as a consequence.” He added, “[T]he 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.’” In the last two years, the Court has split 5-4 in favor of states’ rights in areas ranging from age discrimination and patent and trademark law to the federal Violence Against Women Act. But the Court clearly sided with the federal government when it comes to foreign policy, said Gregory Castanias, a partner in the Washington, D.C., office of Jones, Day, Reavis & Pogue who represented the National Foreign Trade Council, an association of major corporations that challenged the Massachusetts law. “It sends a particularly strong signal that this is none of their business,” said Castanias. In a press release, Massachusetts Attorney General Tom Reilly said, “We’re disappointed. We feel this law addressed basic human rights and allowed the state to decide who it did business with.” Robert Stumberg, a professor at the Georgetown University Law Center who wrote an amicus brief for members of Congress supporting Massachusetts, conceded that the decision barred states from using purchasing decisions to punish companies. But Stumberg said the decision would still allow cities and states to punish Burma by divesting their assets in companies doing business with Burma or, at the least, by requiring those companies to disclose their interests in Burma. While the Court resoundingly killed the Massachusetts Burma law, Stumberg said, “We were relieved the Court didn’t follow the track of the 1st Circuit.” Last year the 1st U.S. Circuit Court of Appeals struck down the Massachusetts law not only on pre-emption but also on Constitutional grounds. It ruled that the law was an unconstitutional burden on foreign commerce. Souter wrote in a footnote that the Court need not address the foreign commerce clause or whether federal laws are generally presumed to pre-empt state laws. In the 1980s, Congress and numerous states passed laws creating economic sanctions against South Africa because of its policy of apartheid, but Congress specifically passed a law saying federal laws did not pre-empt the state laws against South Africa, according to Stumberg. Souter noted that the Court never ruled on the South Africa sanctions, so “arguable parallels between the two sets of federal and state acts do not tell us much.” Justices Antonin Scalia, joined by Justice Clarence Thomas, concurred in the judgment, but added a rebuke to the majority for relying on the legislative history of the federal Burma law to reach its conclusion when the language of the statute was clear. “I consider that to be not just wasteful,” Scalia wrote, “but harmful, since it tells all 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.”

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