Court Fails to Address Key Issue in Burma Law Defense
A Massachusetts bill intended to promote human rights in Burma turned into a court battle over states rights and the authority of the federal government to conduct foreign affairs. On June 19, 2000, the U.S. Supreme Court unanimously struck down Massachusetts's so-called "Burma Laws" in Crosby v. NFTC.
In 1996, the Massachusetts legislature passed the "Burma Laws," selective purchasing laws designed to restrict companies doing business with Burma from bidding on contracts offered by Massachusetts state entities. Three months later, Congress passed a bill restricting trade with and new investment in Burma and gave the President authority to suspend economic sanctions or impose new ones as he sees fit.
In 1998, the National Foreign Trade Council (NFTC), an industry lobbying group representing 580 companies, filed suit against Massachusetts in federal court, arguing that the laws infringed on the federal government's constitutionally-mandated authority to conduct foreign policy. Massachusetts responded that federal Burma laws did not expressly prohibit state action and were actually intended to complement state Burma laws. Lower courts sided with the NFTC.
Justice Souter, writing for the Supreme Court, argued that the Massachusetts Burma Law was unconstitutional because it (1) was preempted by federal laws, whether or not the preemption was explicit, (2) interfered with the mandate giving the President discretion to control sanctions against Burma, (3) stymied Congress's attempt to limit sanctions to a specific range (Massachusetts sanctions were more comprehensive), and (4) limited the President's authority to speak for the U.S. with other nations and to develop a multilateral strategy to deal with Burma.
NFTC lawyers argued that all purchasing laws or sanctions enforced by state and local governments were unconstitutional because they interfered with federal supremacy in the area of foreign affairs. Many news sources subsequently reported that the Court ruled against all state sanctions on foreign trade. Instead, the Court carefully restricted its decision to the Massachusetts Burma Law. The decision does not invalidate all state or local restrictions on foreign trade in the absence of federal preemption, but rather state and local laws in conflict with the federal Burma law. The ruling thus does not restrict similar actions by state governments against other repressive regimes. Though the ruling disappointed many Burma activists, it does not preclude the use of state law as a tool to promote human rights.
Unfortunately, the Supreme Court ruling seems to ignore one interesting argument made by Massachusetts. The state argued that its Burma Laws did not regulate trade but instead represented "market participation" -- Massachusetts was merely acting as any private company might in boycotting vendors with seedy connections. The nature of the Massachusetts Burma Law is often misrepresented. The legislation is active only under limited circumstances -- it prevents companies doing business with Burma from bidding on Massachusetts state contracts. Unlike federal statutes, the law does not otherwise prevent companies from doing business with or investing in Burma.
But is Massachusetts akin to any other private company? Are restrictions on state contracts different than regulations banning trade? The NFTC argued that they are the same -- states are big businesses, spending $730 billion annually on procurements from private companies (Massachusetts spends about $2 billion).
The Court's ruling implies that the Massachusetts Burma Law, whether it regulated or represented market participation, significantly hindered federal Burma Laws, but it never directly addresses the issue of market participation versus regulation, to the detriment of Massachusetts's case and possibly the Burmese people.
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