The unconstitutionality of state and local enactments in the United States restricting business ties with Burma (Myanmar).

AuthorSchmahmann, David



    1. Preemption

    2. The Foreign Commerce Clause

    3. The Supremacy Clause

    4. Possible Impermissible Delegation IV. PRACTICAL PROBLEMS PRESENTED BY PARALLEL


    5. The Federal Government has Acted on the

      Matter and yet Its Considered Decision is

      not the Law of the Land

    6. State and Local Governments Are

      Inappropriate Bodies for Foreign

      Policymaking V. CONCLUSION


    By the end of 1996, one state(1) and eight cities(2) in the United States had adopted measures seeking to penalize business entities conducting activities in Burma (Myanmar).(3) These local anti-Burma initiatives employ immediate economic disengagement as a punitive measure against the regime in Rangoon.(4) Federal legislation, on the other hand, threatens to prohibit new investment as leverage to secure the safety of Aung San Suu Kyi and other Burmese democracy leaders, and to encourage dialogue and reconciliation.(5)

    Local excursions into the realm of foreign affairs are not new,(6) but they continue to raise difficult issues. While several excellent articles on the constitutionality of these local measures exist,(7) the case law is almost completely undeveloped.(8) The fact that serious questions remain about the constitutionality of these local forays into foreign affairs may largely be due to the significant political disincentives to challenging their constitutionality.(9) Few corporations would have been bold enough to challenge a community's censure of apartheid, and not many more will want to be perceived as supporting the State Law and Order Restoration Council (SLORC) regime in remote Burma.

    This Article analyzes the constitutionality of these state and local enactments under the U.S. Constitution. Part II of this Article reviews the character of these statutes and ordinances, examining their structure, language, and adoption. In Part III, the constitutional infirmities of these state and local enactments are presented and discussed. With a detailed analysis of Supreme Court case law, this Article asserts that these state and local enactments are constitutionally infirm under preemption, the Foreign Commerce Clause, and the Supremacy Clause of the U.S. Constitution. Further, this Article suggests that these statutes and ordinances may also amount to an impermissible delegation by state and local governments under Due Process. Part IV of this Article then presents the practical problems of multiple foreign policies by federal. state, and local governments, including the failure to "speak with one voice" on international issues. Finally, this Article concludes that these state and local laws arc unconstitutional and susceptible to great mischief, and that their constitutional infirmities are congruent with their practical flaws. Finally, in the case of Burma, local enactments, however well-intentioned, may even work at cross purposes with national policy.


    It is not difficult to understand why Burma has captured the attention of American activists, nor why local initiatives such as those under discussion have, proliferated. Aung San Suu Kyi's serene and principled stand against a military regime calling itself the SLORC(10) presents a "good" versus "evil" scenario ripe for indignation.(11) An issue such as this presents a high visibility, low risk opportunity for local political leaders and activist groups. It "draws the attention of the local press, is more substantive than adoption of a precatory resolution of censure or disapproval, and presents little economic risk to the jurisdiction."(12)

    The first city to act was Berkeley, California, which passed a Resolution in February, 1995 prohibiting contracts for personal services or for the purchase of commodities from entities doing business in Burma "until the City Council determines that the people of Burma have become self-governing."(13) The first state to act was Massachusetts, which amended its general laws in June 1996, to prohibit the state, except in certain limited circumstances, from doing business with entities on a "restricted purchase list" supposedly containing the names "of all persons currently doing business with Burma (Myanmar)."(14) Seven other localities adopted like measures within the next eighteen months.(15)

    The local measures are similar in most salient respects. Each contains a preamble referencing and condemning the political practices of the Burmese regime, and several refer to the struggles and valor of Aung San Suit Kyi and other notables who have expressed their opposition to the SLORC regime.(16) Significantly for purposes of constitutional analyses, each locality, except Ann Arbor and Carborro, includes in its measure language purporting to establish a legitimate local purpose in taking a stand against injustice across the world. Berkeley's measure begins:

    The citizens of the City of Berkeley, believing that their quality of life

    is diminished when peace and justice are not fully present in the world

    adopted Ordinance No. 5985-N.S. to promote universal respect for human

    rights and fundamental freedoms, recognize the responsibility of local

    communities to take positive steps to support the rule of law and to help

    end injustices and egregious violations of human rights wherever they may

    occur . . . .(17)

    San Francisco's and Takoma Parks measures contains almost identical language. Madison's ordinance notes that the SLORC regime is "illegal and contrary to international law and covenants," and declares its existence "morally repugnant to the citizens of the City of Madison . . . ."(18) Santa Monica's measure recites how "the city and the government of the City of Santa Monica reflect a community united in its commitment to policies which guarantee broad human rights to people throughout the world."(19) Oakland "recognize[s] the moral responsibility of communities to take positive steps to end human rights abuses and support legitimately elected governments."(20)

    Further, with respect to substantive debarment provisions, two distinct but related features are notable. First, the Massachusetts statute and four city measures incorporate the analysis of independent organizations in determining which businesses are present in Burma (as variously defined and modified) so as to merit debarment.(21) Second, none of the measures clearly defines or anticipates what constitutes doing business "with" or "in" Burma.(22)

    More significantly, however, several of the measures include language contemplating their possible constitutional infirmity.(23) The measures adopted by Berkeley, Madison, Oakland, San Francisco, and Takoma Park provide as follows:

    The United States Supreme Court has upheld the power of a municipality

    to make legitimate economic decisions without being subject to the

    restraints of the Interstate Commerce Clause when it participates in the

    market place as a corporation or a citizen as opposed to exerting its

    regulatory powers.(24)


    All of the cited measures are vulnerable to constitutional attack on three grounds, and by delegating legislative authority to third parties for the compilation of "restricted" or "prohibited" lists, possibly four. First, the local measures are preempted by federal legislation.(25) Second, under the Foreign Commerce Clause of the Constitution, they constitute an impermissible intrusion into an area reserved for the federal government.(26) Third, the local measures are an usurpation of federal authority under the Supremacy Clause of the Constitution.(27) These latter two doctrines are closely related.(28) Finally, those local measures that incorporate by reference the judgment of third parties such as the Investor Responsibility Research Center may present Due Process problems if found as a matter of fact to be an impermissible delegation of authority.(29)

    1. Preemption

      Article VI of the Constitution provides that the laws and treaties of the United States are "the Supreme Law of the Land" and prevail over, or preempt, state and local enactments. Thus any local law that purports to regulate or govern a matter explicitly(30) or implicitly covered by federal legislation is preempted, even if it is in an area otherwise amenable to state regulation.(31) Since the Omnibus Consolidated Appropriations Act of 1997(32) is silent as to its preemptive effect, preemption, if it exists, must be implied.

      The parameters of implied preemption were spelled out in Hines v. Davidowitz,(33) which dealt with Pennsylvania's attempts to impose registration requirements on aliens that were in several respects different from and more onerous than the federal requirements. The Pennsylvania law contained a number of provisions evincing a suspicion of or hostility to aliens, i.e., the requirement to carry identification cards with proof of registration, many of which the Supreme Court found had actually been considered by Congress, severely criticized, and not included in the federal act.(34)

      The Supreme Court struck down Pennsylvania's law, noting that the "basic subject of the state and federal laws is identical. . . . The only question is whether . . . the state and Federal Government have concurrent jurisdiction. . . ."(35) Even in the absence of preemption, however, the fate of the Pennsylvania statute may have been sealed because it interfered in foreign affairs. Taking careful note of the possible foreign ramifications of Pennsylvania's hostility to aliens,(36) the Court reiterated that the "the supremacy of the national power in the general field of foreign affairs . . . is made clear by the Constitution, was pointed out by the authors of The Federalist in 1787, and has since been given continuous recognition by this Court."(37)

      The Court could not provide a timeless prescription for circumstances in which preemption would be found. "In the...

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