Number: RL33948
Title: State and Local Economic Sanctions: Constitutional Issues
Authors: Jeanne J. Grimmett, American Law Division 
Abstract: States and localities have often proposed or enacted measures restricting their agencies' economic transactions with firms that do business with or in foreign countries whose conduct the jurisdictions find objectionable. While some maintain that sub-federal entities may enact such laws under sovereign proprietary powers and other constitutional prerogatives, others argue that such statutes impermissibly invade federal commerce and foreign affairs authorities and in some cases may be preempted by federal law. In 2000, the U.S. Supreme Court unanimously held in Crosby v. National Foreign Trade Council that a Massachusetts law restricting state transactions with firms doing business in Burma was preempted by a federal Burma statute. In American Insurance Association v. Garamendi, a 2003 case, the Court reaffirmed the relevance of the dormant federal foreign affairs power to preempt state law, but the scope of the 5-4 decision is unclear.
Pages: 13
Date: July 2, 2008