Final Examination: Constitutional Law - Federal and State Power Relationships
Spring 2000 Professor Kmiec Total No. of Questions: 3 Time:
Sample Fed-State Exam & Sample Answer Spring 2000 Professor Douglas W. Kmiec
The State of Phillips accords recording act protection as against prior unrecorded conveyances to those purchasers first recording without notice of a prior competing interest. In order to record a conveyance, the purchaser of a residential dwelling must fill out a data cover sheet indicating the name and address of the purchaser, purchase price, size of home, and various other details of any existing dwelling, such as number of bedrooms, baths, fireplaces, etc. The State uses this information to update its building and safety codes and to monitor the affordability and diversity of housing within the State. The information supplied on cover sheets, however, also yields a commercially valuable data base of interest to all manner of sellers of household goods and appliances. The State of Phillips law allows the State to sell this information for a fee, and it has done so for the past ten years raising annually over three million dollars for the State treasury.
A. Assume that the Secretary of State of Phillips has recently adopted a regulation that precludes the sale or resale of this information to any business corporation neither headquartered, incorporated nor having a physical presence within the State. The Secretary’s motivation is to curtail the burgeoning sale of appliances and other goods over the Internet that at the moment elude State sales tax. Assume for this part that Mr. Icebox.com, an Indiana corporation, with no physical presence with the State of Phillips challenges the regulation. What argument would Mr. Icebox make? Would it matter if Mr. Icebox.com was told by the Secretary’s office informally that the prohibition could be lifted as to it if the Internet firm would pay Phillips sales tax on its Internet appliance sales to Phillips residents? Discuss fully.
Icebox would challenge as facially discriminatory under the dormant commerce
clause; such facial discrimination would normally be invalid absent a compelling governmental interest. The loss of State revenue is seldom, if ever, of that magnitude. Thus, the resale limitation -- as a regulation of private parties -- would be invalid. The sale limitation is arguably okay because the State is market participant making a proprietary decision based on the status of the purchaser of the information and the State’s proprietary discretion not to sell to those of that status (see, e.g., Alexandria Scrap or Reeves). However, the informal advice makes the denial of sale seem less proprietary, and perhaps, subject to the Alaska Timber objection that a downstream regulation is being bootstrapped onto a proprietary choice, which the majority in that case held improper under the dormant commerce clause.
B. Assume for this part that Congress enacts The Recordation Personal Privacy Act of 2000 [RPPA] limiting, subject to some exceptions pertaining to State police power needs, the ability of any State, or subdivision thereof, to disclose or sell for commercial value and purpose any personal information “related to the acquisition of a residential dwelling” without the express written consent of the residential dwelling purchaser. Under RPPA, a State or subdivision thereof in violation of the terms of the Act is subject to fine of $1000 per violation to be paid to the United States. The court may not award injunctive relief. Suits may be initiated by the U.S. Attorney General or by any “person or persons having an interest which is or may be adversely affected.” If the National Privacy Foundation (NPF) files suit against the State of Phillips alleging that State’s continued sale of cover sheet data, notwithstanding the RPPA, is: (1) the case justiciable? (2) Would it matter if the U.S. Attorney General intervened? (3) What if NPF filed suit against the City of Ronald, rather than the State of Phillips, would that case be justiciable?
(1) Nonjusticiability may be alleged for two reasons: either no standing on the part of NPF or the immunity of the State.
Standing – irreducible minimum for standing is an injury in fact; that is an injury which is concrete and particular; actual and imminent; the injury must not be conjectural and it must be traceable to the defendant, and capable of redress by the Court. An association has standing whenever its members otherwise would and the interest asserted by the association is germane to the association’s purpose and the relief requested does not require the actual party to be before the court. Here assuming some individual members of NPF either have purchased or wish to acquire property in Phillips, standing should be found. Laidlaw establishes that the remedy (a fine) need not go directly to the plaintiffs. Civil penalties indirectly remedy or deter noncompliant behavior even when not paid to the plaintiff. The
dissenters in Laidlaw argued that to allow private parties to seek public fines or penalties is to wrongly marry private wrong with public remedy, in violation of either Article II which requires that federal law be enforced by the Executive branch or Article III, since it invites the litigation of “generalized grievances” before the Court.
(2) As to State immunity, this is the Eleventh Amendment issue, and unless the RPPA was passed to vindicate 14th amendment rights or the State has waived its immunity, the case would be nonjusticiable when brought by NPF. It would not be, however, if brought by the Attorney General. Even the Court’s broadly stated considerations of immunity in its recent cases do not preclude direct enforcement against States by the United States. This is part of the constitutional design, argues the Chief Justice and other sovereign immunity advocates on the Court.
The NPF suit might be permitted if Congress based the enactment of the RPPA on the 14th amendment. If States were consistently invading the privacy of its house purchasing citizens that might well be argued as a deprivation of a privacy-related liberty for which section 5 legislation would be appropriate. The difficulty would be finding federal cases upholding this conception of privacy as a protected liberty interest. Privacy has been protected by the Court in matters of abortion and the like, and associations have been accorded privacy over their membership records, but the dimensions of constitutional privacy have not been extended to include protection from disclosure of information filed with the government. Hence, as in Kimel, the Court may well find that the remedy employed by Congress is not congruent and proportionate to any constitutional violation. If the regulation can only be sustained as an exercise of Congress’ Article I commerce power, that is insufficient to abrogate State immunity under Seminole Tribe.
(3) if the suit was brought against Ronald, there is no sovereign immunity; the concept of State sovereign immunity has not been extended to municipal corporations.
C. Assume for this part that the case brought against Phillips by either the U.S. Attorney General or NPF is justiciable, what arguments would you expect the State of Phillips to make on the merits and how would the Supreme Court dispose of them?
That it doesn’t apply on its own terms -- in other words, no ion: it refers to information obtained in association with “acquisition”; recording -as all property students know -- is unrelated to acquisition; recording relates to the preservation of title not obtaining it. In other words, the State would argue that there is a presumption against preemption and that this presumption applies especially when the Congress regulates in an area traditionally occupied by the States (property matters). The U.S. would likely point to the language that it is information “related to” the acquisition of property, and such language as a word of art has meant or signaled comprehensive field preemption. In any event, there is a direct conflict here between federal and state law – one authorizes and one prohibits, and in such conflicts, the Supremacy Clause favors the federal government.
10th amendment – that the RPPA commandeers Phillips. It would be argued that compliance takes up the time of the state and the state must administer the law. The State would in essence make a “no commandeering” argument of the variety made in Printz regarding the gun background checks. There is one crucial difference, however, and that is the law does not commandeer the State to legislate or administer federal law as against private individuals, it merely regulates the states, themselves. After Garcia, it is settled that the States may be directly regulated by Congress under its Article I powers. The States interests will be accommodated, if at all, only in the political process.
Not interstate commerce: What is commerce has bedeviled the Court since Gibbons v. Ogden. The Court in Lopez indicated that it would fit within this category if it affected the channels or instrumentalities of commerce or if the intrastate activity was economic in nature and substantially affected interstate commerce. The data at issue is neither channel nor instrumentality, so we are likely in the third category. Since the information is directly related to the facilitation of commercial transactions, and given that the Court has not overruled its decision in Champion v. Ames (the Lottery ticket) case, it is unlikely that the RPPA will be perceived to be outside the scope of the commerce power. This is not equivalent to the noneconomic matter sought to be regulated in Brzonkala.