As Jessica and I previously explained, the Tenth Circuit, in Epel, recognized that the Constitution does not divest Colorado of the power to regulate Nebraska’s coal-driven power industry. As an environmentalist, Colorado’s initiative is near and dear to my heart. But as a constitutionalist, I believe that the court’s logic threatens to violate what is, for me, the first tenet of jurisprudence: Don’t hurt the people you are trying to help. If Colorado can impose its progressive environmental policies on Nebraska, Nebraska can impose its own will on Coloradans. The Harvard Law Review, in 2013, endorsed the repudiation the extraterritoriality principle on the ground that it impedes Brandesian experimentation: “What is clear is that the mechanical application of a territorial principle inhibits state experimentation with laws that attempt to solve their social and economic problems.” 126 HARV. L. REV. at 2442. In fact, the dormant Commerce Clause’s extraterritoriality doctrine is one of the most important constitutional buttresses for such experimentation. While Colorado celebrated its new-found power to impose its legislative judgments on Nebraskans, the festivities might be short lived. Colorado inexplicably failed to foresee the impact the extraterritorial doctrine’s apparent demise will have on its own marijuana-legalization experiment. Sauce for the goose is, after all, sauce for the gander. Nebraska posits that Colorado’s commercial pot market allows marijuana to “flow into [Nebraska], undermining its own marijuana ban, draining its treasury, and placing stress on its criminal justice system.” Complaint at 3–4. If that is so — and evidence suggests that it is — what prevents Nebraska from projecting its own laws across the border to regulate Colorado marijuana transactions that “affect a substantial number of [Nebraska] residents”? That’s what Jessica thinks should happen.
If Colorado can regulate emissions from Nebraska’s coal-fired power plants because they harm Coloradans, why can’t Nebraska directly regulate Colorado marijuana sales? Can Nebraska bar Colorado vendors from selling pot to Nebraskans? Can — as Jessica argues — Nebraska apply a “gram-shop law” to Colorado marijuana vendors who sell pot to impaired drivers who cause accidents in Nebraska? Can Nebraska apply its law to Colorado’s border-town vendors whose primary source of revenue are Nebraskans? Can Colorado enforce laws protecting its nascent pot industry from interference by Nebraska or other prohibitionist States?
Admittedly, the Supreme Court has, “revamped the doctrine” on occasion since the DCC’s original formulation, 135 S. Ct. at 1808, by Daniel Webster and Chief Justice John Marshall in 1824. But few constitutional doctrines are truer to the Charter’s original intent. The doctrine in general — and its extraterritoriality principle in particular — literally embodies the animating principle behind both the Commerce Clause and the Constitution itself. The States’ unfettered ability to mettle in their neighbors’ commercial activities “during the Articles of Confederation led to ongoing disputes among the States, and the prospect of a descent toward even more intense commercial animosity was one of the principal arguments in favor of the Constitution.” Dennis, 498 U.S. at 453. As Justice Cardozo observed in the first articulation of the DCC’s extraterritoriality doctrine, if the States were free to sabotage their neighbors’ economic ventures by protecting their domestic industries from out-of-state competitors or “projecting legislation into [neighboring states],” then “the door will be opened to rivalries and reprisals that were meant to be averted by subjecting commerce between the states to the power of the nation.” Baldwin, 294 U.S. at 522. For this reason, the Court has recognized that “when a state statute [either] directly regulates or discriminates against interstate commerce we have generally struck down the statute without further inquiry.” Brown-Forman, 476 U.S. at 579. The Tenth Circuit’s recent ruling contends that one-half of this proposition is no longer binding. The looming standoffs between neighboring pot-friendly and prohibitionist states demonstrates that Justice Cardozo’s axiom applies equally to non-protectionist attempts by States to regulate commercial transactions beyond their borders. As the Fourth Circuit noted, rejecting arguments that the DCC’s application should be limited to protectionist laws, “extraterritorial laws disrupt our national economic union just as surely as [protectionist] ones” because “one extraterritorial burden can easily lead to another. When one state reaches into another state’s affairs or blocks its goods, ‘the door has been opened to rivalries and reprisals that were meant to be averted by subjecting commerce between the states to the power of the nation.’” Carolina Trucks, 492 F.3d at 490. The present feud between Nebraska and Colorado over each’s respective marijuana and energy policies demonstrates the Fourth Circuit’s prescience.
According to the Tenth Circuit, Colorado now enjoys the power to “reach into [Nebraska’s] affairs” and regulate Nebraskan utility transactions — against Nebraska’s wishes and in contravention of Nebraska’s own chosen policies. But Colorado’s intervention in Nebraska’s internal affairs may trigger retaliation: “one extraterritorial burden can easily lead to another.” Jessica’s theory fails to account for this. Admittedly, Nebraska’s coal burning and Colorado’s marijuana market produce negative externalities that spillover into neighboring states. But resolution of such transboundary disputes lies exclusively in federal hands. “When a State enters the Union it surrenders certain sovereign prerogatives” — including the power to reach beyond its borders to quell transboundary nuisances. The Constitution dictates that “these sovereign prerogatives are now lodged in the Federal Government.” Mass. v. EPA, 549 U.S. at 519. The looming extraterritorial marijuana contests will prove the wisdom of this choice.
Posted by Chad DeVeaux on December 15, 2015 at 05:51 PM
Comments
Chad, I have been writing on this issue recently as well, and I completely agree that the extraterritoriality principle is valuable and should be preserved. However, the following comment, which I made in response to one of Jessica’s posts earlier this month, applies equally here:
While I agree that the marijuana issue raises extraterritoriality concerns, I think you are reading the Tenth Circuit case far too strongly. I don’t read the court as saying that a state can directly regulate conduct in another state. Instead, the court rejects the application of the rule prohibiting extraterritorial regulation to a state law that indirectly has effects on out-of-state companies that produce electricity bound for in-state markets. As I explain in a recent article, I think this is fully consistent with the prohibition on direct extraterritorial regulation. See Making Sense of Extraterritoriality: Why California’s Progressive Global Warming and Animal Welfare Legislation does not Violate the Dormant Commerce Clause, 39 HARV. ENVTL. L. REV. 423 (2015).
In my opinion, if Nebraska passed a law regulating marijuana sales in Colorado, it would surely be unconstitutional. The best Nebraska can do is to regulate marijuana sales in Nebraska. Cases like Epel merely hold that such a regulation of sales in Nebraska would be constitutional even though it would have indirect effects on businesses in Colorado.
Posted by: Jeff Schmitt | Dec 17, 2015 8:14:53 PM