Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-95-06000/USCOURTS-ca10-95-06000-0/pdf.json

Nature of Suit Code: 650
Nature of Suit: Airline Regulations
Cause of Action: 

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PUBLISH u ·A~)FI LED 

m.\: STtates Co~rt or App~Is enth C1rcuit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT Nov o 2 1995 

FRANK J. KELLEY, Attorney General of ) 

the State of Michigan, THE OKLAHOMA ) 

CORPORATION COMMISSION; THE MONTANA ) 

PUBLIC SERVICE COMMISSION; COALITION ) 

AGAINST FEDERAL PREEMPTION OF STATE ) 

MOTOR CARRIER REGULATION; THE ) 

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ) 

Plaintiffs-Appellants, ) 

CARLA STOVALL, Attorney General of the 

State of Kansas, KANSAS CORPORATION 

COMMISSION 

v. 

Plaintiffs-IntervenorsAppellants, 

THE UNITED STATES OF AMERICA, ex rel. 

the Department of Justice; and JANET 

RENO, Attorney General of the United .. 

States, 

Defendants-Appellees. 

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) 

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Nos. 95-6000 

95-6033 

Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. CIV-94-1999) 

W. Robert Alderson and John E. Jandera of Alderson, Alderson & 

Montgomery, Topeka, Kansas, (Robert E. McFarland of Foster, Swift, 

Collins & Smith, Farmington Hills, Michigan; Frank J. Kelley, 

attorney general, Thomas L. Casey, solicitor general, and Kelly G. 

Keenan, assistant deputy attorney general, Lansing, Michigan; 

Leslie Wilson Pepper, Charles 11 Andy 11 Adams, Oklahoma City, 

Oklahoma; Martin Jacobson, Helena, Montana; Richard C. Labarthe, 

Kevin M. Coffey, and Jack C. Moore of Mock, Schwabe, Waldo, Elder, 

Reeves & Bryant, Oklahoma City, Oklahoma; Dale E. Isley of 

Williams & Isley, Denver, Colorado; Marc J. Fink and Torbjorn 

Sjogren of Sher & Blackwell, Washington, D.C., with them on the 

briefs), for the appellants. 

Peter R. Maier, U.S. Department of Justice, Washington, D.C., 

(Leonard Schaitman, U.S. Department of Justice, Washington, D.C., 

with him on the brief), for the appellees. 

Appellate Case: 95-6000 Document: 01019279190 Date Filed: 11/02/1995 Page: 1 
Kenneth R. Nance, Oklahoma City, Oklahoma; Nicholas J. DiMichael, 

Frederic L. Wood, and Jeffrey 0. Moreno of Donelan, Cleary, Wood & 

Maser, Washington, D.C., were on the brief for amici curiae, The 

National Industrial Transportation League, American Frozen Food 

Institute, and Americans for Safe and Competitive Trucking. 

Before HENRY, SETH, and BRISCOE, Circuit Judges. 

BRISCOE, Circuit Judge. 

Plaintiffs, the Oklahoma Corporation Commission, the Montana 

Public Service Commission, the Kansas Corporation Commission, the 

Attorney General of the State of Michigan, the Attorney General of 

the State of Kansas, the Coalition Against Federal Preemption of 

State Motor Carrier Regulation, and the International Brotherhood 

of Teamsters, filed this action for declaratory and injunctive 

relief claiming that § 601 of the Federal Aviation Administration 

Authorization Act of 1994, Pub. L. No. 103-305, 108 Stat. 1604 

(1994), was unconstitutional. After a trial on the merits, the 

district court issued a written opinion denying plaintiffs' claims 

for relief. We affirm the district court's dismissal of 

plaintiff's claims after concluding § 601 does not violate the 

Commerce Clause, the Tenth Amendment, or the Guarantee Clause. 

I . 

Section 601 of the Federal Aviation Administration 

Authorization Act of 1994 was enacted by the 103rd Congress, 2nd 

Session, on August 23, 1994, was signed into law by President Bill 

Clinton, and took effect on January 1, 1995. Section 601 

effectively preempts, with a few minor exceptions, state 

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regulation of intrastate motor carrier activities. In particular, 

§ 601 amends 49 U.S.C. § 41713(b) (4) to read as follows: 

(4) Transportation by air carrier or carrier 

affiliated with a direct air carrier. 

(A) General rule. Except as provided in 

subparagraph (B), a State, political subdivision of a 

State, or political authority of 2 or more States may 

not enact or enforce a law, regulation, or other 

provision having the force and effect of law related to 

a price, route, or service of an air carrier or carrier 

affiliated with a direct air carrier through common 

controlling ownership when such carrier is transporting 

property by aircraft or by motor vehicle (whether or not 

such property has had or will have a prior or subsequent 

air movement) . 

(B) Matters not covered. Subparagraph (A) 

(i) shall not restrict the safety regulatory 

authority of a State with respect to motor 

vehicles, the authority of a State to impose 

highway route controls or limitations based on the 

size or weight of the motor vehicle or the 

hazardous nature of the cargo, or the authority of 

a State to regulate motor carriers with regard to 

minimum amounts of financial responsibility 

relating to insurance requirements and selfinsurance authorization; and 

(ii) does not apply to the transportation of 

household goods, as defined in section 10102 of 

this title. 

(C) Applicability of paragraph (1) . This paragraph 

shall not limit the applicability of paragraph (1). 

Pub. L. No. 103-305, 108 Stat. 1605, 1606 (1994). 

Section 601 also amends 49 U.S.C. § 11501 by adding 

subsection (h), which reads as follows: 

(h) Preemption of State economic regulation of 

motor carriers. 

(1) General rule. Except as provided in paragraphs 

(2) and (3), a State, political subdivision of a State, 

or political authority of 2 or more States may not enact 

or enforce a law, regulation, or other provision having 

the force and effect of law related to a price, route, 

or service of any motor carrier (other than a carrier 

affiliated with a direct air carrier covered by section 

41713(b) (4) of this title) or any motor private carrier 

with respect to the transportation of property. 

(2) Matters not covered. Paragraph (1) 

(A) shall not restrict the safety regulatory 

authority of a State with respect to motor 

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vehicles, the authority of a State to impose 

highway route controls or limitations based on the 

size or weight of the motor vehicle or the 

hazardous nature of the cargo, or the authority of 

a State to regulate motor carriers with regard to 

minimum amounts of financial responsibility 

relating to insurance requirements and selfinsurance authorization; and 

(B) does not apply to the transportation of 

household goods. 

(3) State standard transportation practices. 

(A) Continuation. Paragraph (1) shall not 

affect any authority of a State, political 

subdivision of a State, or political authority of 2 

or more States to enact or enforce a law, 

regulation, or other provision, with respect to the 

intrastate transportation of property by motor 

carriers, related to 

(i) uniform cargo liability rules, 

(ii) uniform bills of lading or receipts for 

property being transported, 

(iii) uniform cargo credit rules, or 

(iv) antitrust immunity for joint line rates 

or routes, classifications and mileage guides, if 

such law, regulation, or provision meets the 

requirements of subparagraph (B) . 

(B) Requirements. A law, regulation, or 

provision of a State, political subdivision, or 

political authority meets the requirements of this 

subparagraph if 

(i) the law, regulation, or provision covers 

the same subject matter as, and compliance with 

such law, regulation, or provision is no more 

burdensome than compliance with, a provision of 

this subtitle or a regulation issued by the 

Interstate Commerce Commission or the Secretary of 

Transportation under this subtitle; and 

(ii) the law, regulation, or provision only 

applies to a carrier upon request of such carrier. 

(C) Election. Notwithstanding any other 

provision of law, a carrier affiliated with a 

direct air carrier through common controlling 

ownership may elect to be subject to a law, 

regulation, or provision of a State, political 

subdivision, or political authority under this 

paragraph. 

Pub. L. No. 103-305, 108 Stat. 1606 (1994). 

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II. 

We review the district court's interpretations of law de 

novo, and any relevant findings of fact for clear error. Roberts 

v. Colorado State Bd. of Agriculture, 998 F.2d 824, 826 (lOth 

Cir.), cert. denied, 114 S. Ct. 580 (1993). 

III. 

As a preliminary matter, we must address whether this court 

has subject matter jurisdiction to consider plaintiffs' claims. 

The Department of Justice asserts that neither of the 

jurisdictional bases cited in plaintiffs' complaint, 28 U.S.C. § 

1331 (the federal question statute) and 28 U.S.C. §§ 2201-2202 

(the Declaratory Judgment Act), waives the sovereign immunity of 

the United States. Further, the Department argues the 

Administrative Procedure Act (APA), 5 U.S.C. § 701 et seg., which 

was relied upon by the district court but was not cited in 

plaintiffs' complaint, has no application in this case because, 

according to the Department, no agency has acted pursuant to the 

challenged provisions of § 601. 

Sovereign immunity generally bars suits against the United 

States or its agencies, whether brought by a private party or by a 

state. Block v. North Dakota, 461 U.S. 273, 280 (1983). Thus, 

under sovereign immunity principles, the United States may be sued 

only if and to the extent that it consents. United States v. Dalm, 

494 U.S. 596, 608 (1990). "' [T]he terms of its consent to be sued 

in any court define that court's jurisdiction to entertain the 

suit.'" Id. (quoting United States v. Testan, 424 U.S. 392, 399 

(1976)) . "Such a waiver of sovereign immunity must be strictly 

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construed in favor of the sovereign and may not be extended beyond 

the explicit language of the statute." Fostvedt v. United States, 

978 F.2d 1201, 1202 (lOth Cir. 1992), cert. denied, 113 S.Ct. 1589 

(1993). 

Significantly, the doctrine of sovereign immunity is not 

always applicable to suits filed against federal entities or 

officials. In particular, one of the well-established exceptions 

to the doctrine limits its application in declaratory and/or 

injunctive suits against federal entities or officials seeking to 

enjoin the enforcement of an unconstitutional statute. Dugan v. 

Rank, 372 U.S. 609, 621-22 (1963); Malone v. Bowdoin, 369 U.S. 

643, 647-48 (1962); Larson v. Domestic & Foreign Commerce Corp., 

337 U.S. 682, 689-90 (1949); Tenneco Oil Co. v. Sac and Fox Tribe, 

725 F.2d 572, 574 (lOth Cir. 1984); Kozera v. Spirito, 723 F.2d 

1003, 1008 (1st Cir. 1983). As the Court noted in Larson, the 

doctrine does not apply in such cases because "the conduct against 

which specific relief is sought is beyond the officer's power and 

is, therefore, not the conduct of the sovereign." 337 U.S. at 690. 

"Any other rule would mean that a claim of sovereign immunity 

would protect a sovereign in the exercise of power it does not 

possess." Tenneco Oil Co .. 725 F.2d at 574. We find this exception 

applicable to the claims filed by plaintiffs in this case. 

IV. 

The Commerce Clause of the United States Constitution, 

provides that Congress shall have the Power "[t]o regulate 

Commerce ... among the several States," Art. 1, § 8, cl. 3, and 

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"[t]o make all Laws which shall be necessary and proper for 

carrying into Execution the foregoing Powers " Art. 1, § 8, 

cl. 18. 

Recently, in United States v. Lopez, 115 S. Ct. 1624 (1995), 

the Supreme Court identified three broad categories of activity 

that Congress may regulat'= under the Commerce Clause: (1) "the use 

of channels of interstate commerce"; (2) "the instrumentalities of 

interstate commerce, or persons or things in interstate commerce"; 

and (3) "activities that substantially affect interstate 

commerce." 115 S. Ct. at 1629-30. With respect to the third 

category of activity, the Court emphasized that it had repeatedly 

"upheld a wide variety of congressional Acts regulating intrastate 

economic activity where [it had] concluded that the activity 

substantially affected interstate commerce." 115 S. Ct. at 1630. 

Here, we find that the activity at issue, state regulation of 

intrastate motor carrier activities, falls squarely within the 

third category of activity cited in Lopez. In enacting § 601, 

Congress made express findings, set forth in subsection (a) of § 

601, that state regulation of intrastate motor carrier activities 

substantially affects interstate commerce: 

(1) [T]he regulation of intrastate transportation 

of property by the States has 

(A) imposed an unreasonable burden on 

interstate commerce; 

(B) impeded the free flow of trade, traffic 

and transportation of interstate commerce; and 

(C) placed an unreasonable cost on the 

American consumers; and 

(2) certain aspects of the State regulatory process 

should be preempted. 

Pub. L. No. 103-305. 

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These findings are further supported by the House Report that 

accompanied § 601. Therein, the House of Representatives 

specifically noted as follows: 

State economic regulation of motor carrier operations 

causes significant inefficiencies, increased costs, 

reduction of competition, inhibition of innovation and 

technology and curtails the expansion of markets. 

According to Department of Transportation estimates, 

preemption of State economic regulation could eventually 

yield $3-8 billion per year in savings. Other estimates 

put the savings as high as $5-12 billion. The sheer 

diversity of these regulatory schemes is a huge problem 

for national and regional carriers attempting to conduct 

a standard way of doing business. In hearings held on 

this issue, numerous examples have been cited in which 

rates for shipments within a state exceed rates for 

comparable distances across state lines. In the small 

package express business, companies frequently ship 

goods across state lines and back into the state of 

origin to avoid the higher rates for purely intrastate 

shipments. Lifting of these antiquated controls will 

permit our transportation companies to freely compete 

more efficiently and provide quality service to their 

customers. Service options will be dictated by the 

marketplace; and not by an artificial regulatory 

structure. 

H.R. Conf. Rep. No. 677, 103rd Cong., 2d Sess. (1994). 

We believe these findings are rational. See Hodel v. Virginia 

Surface Min. & Reel. Assn., 452 U.S. 264, 276 (1981). Granted, 

there are undoubtedly various state regulations that affect and 

pertain only to purely intrastate motor carrier activities, and 

have little or no effect on interstate commerce. Nonetheless, 

Congress rationally determined the regulation of intrastate motor 

carrier activities, considered as a whole, does in fact impact and 

impede interstate commerce. 

Having determined that state regulation of intrastate motor 

carrier activities is an "activity" that may be regulated by 

Congress under the Commerce Clause, the only remaining question is 

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whether "the means chosen by [Congress] [are] reasonably adapted 

to the end permitted by the Constitution." Hodel, 452 U.S. at 276. 

Plaintiffs set forth several reasons why § 601 is not reasonably 

adapted to the end sought by Congress. First, plaintiffs claim § 

601 is overly broad and preempts not only state economic 

regulation of intrastate trucking, but also "state tort laws, 

state antitrust laws, state consumer protection laws, state laws 

regarding cargo loss and damage claims, state laws governing the 

transportation of solid and hazardous waste, and state uniform 

conunercial codes." Appellants' br. at 20. Second, plaintiffs argue 

that the overbreadth of § 610 "has created a disjointed two-tiered 

system of regulation," in which interstate carriers are regulated 

by Congress, but in which purely intrastate carriers remain wholly 

unregulated. Appellants' br. at 21-22. Finally, plaintiffs argue 

that § 601 is improper because it preempts state law "in favor of 

nothing." Appellants' br. at 23. 

Notwithstanding plaintiffs' arguments, the means chosen by 

Congress are reasonably adapted to the ends sought by Congress. 

First, § 601's preemption of state regulations pertaining to 

"price[s], route[s], or service[s]" of intrastate motor carriers 

clearly serves to eliminate the "patchwork" of varying state 

regulations that concerned Congress. Second, although § 601 

undoubtedly preempts a wide range of state regulations, it is far 

from clear that its impact is as far-reaching as plaintiffs would 

have the court believe. In fact, as pointed out by the Department 

of Justice, many of the examples cited by plaintiffs are purely 

speculative and are based upon an interpretation of § 601 not 

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shared by the Department of Justice or the Department of 

Transportation. Moreover, although plaintiffs claim that § 601 

will preempt state legislation of garbage and recyclable 

collection, representatives from Congress, as well as the 

Interstate Commerce Commission, have indicated it will not. 140 

Cong. Rec. E2204-03 (daily ed. Oct. 7, 1994) (statement by Rep. 

Mineta). Third, assuming the rationality of Congress' findings 

with respect to the negative impact of state regulations on 

interstate commerce, what choice did Congress have except to enact 

a statute that preempts a fairly broad range of state economic 

regulations? In any event, the Supreme Court rejected the notion 

of second-guessing Congress by belatedly reviewing other possible 

legislative options. See South Carolina State Highway Dept. v. 

Barnwell Bros., 303 U.S. 177, 190 (1938). Finally, although§ 601 

may have had some unintended effects, such as freeing the reins on 

intrastate towing and wrecker services, plaintiffs have not cited 

any cases holding that unintended effects of legislation, by 

themselves, serve to make the legislation irrational for purposes 

of Commerce Clause analysis. 

For these reasons, the district court properly concluded that 

§ 601 does not violate the Commerce Clause. 

v. 

The Tenth Amendment to the Constitution provides that 11 [t]he 

powers not delegated to the United States by the Constitution, nor 

prohibited by it to the States, are reserved to the States 

respectively, or to the people. 11 

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In New York v. United States, 112 S. Ct. 2408, 2417 (1992), 

the Supreme Court noted that "[i]n a case . involving the 

division of authority between federal and state governments," the 

inquiries under the Commerce Clause and the Tenth Amendment "are 

mirror images of each other." Specifically, the Court noted as 

follows: 

If a power is delegated to Congress in the Constitution, 

the Tenth Amendment expressly disclaims any reservation 

of that power to the States; if a power is an attribute 

of state sovereignty reserved by the Tenth Amendment, it 

is necessarily a power the Constitution has not 

conferred on Congress. 

Thus, even if plaintiffs are correct in their assertion that 

§ 601 intrudes upon a domain traditionally left to the states, it 

is constitutional as long as it falls within the commerce power. 

Gregory v. Ashcroft, 501 U.S. at 460 (holding that Congress may 

impose its will on the states as long as it is acting within the 

powers granted by the Constitution); United States v. Lopez, 2 

F.3d 1342, 1346-47 (5th Cir. 1993), aff'd. 115 S. Ct. 1624 (1995). 

Having concluded that § 601 was a proper exercise of the commerce 

power by Congress, the only remaining question we must decide is 

whether Congress, in enacting § 601, somehow "commandeer[ed] the 

legislative processes of the States .... "Hodel, 452 U.S. at 

288. 

Plaintiffs argue that § 601 violates the Tenth Amendment 

because it does not give the states a choice between regulating in 

a fashion consistent with federal regulation of motor carriers or 

having their state regulatory scheme preempted by a federal 

regulatory scheme, but instead compels the states not to regulate 

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at all. In addition, plaintiffs assert that enactment of § 601 has 

created a 11 two-tiered system11 which allows Congress to 11 hide 

behind the states and avoid accountability. 11 Appellants' br. at 

35. Specifically, plaintiffs claim this two-tiered system 11 creates 

the false impression that state governments are unresponsive to 

their electorate's needs, while the federal government, which 

continues to regulate, is addressing their needs. 11 Appellants' br. 

at 35. 

Neither of plaintiffs' arguments is meritorious. In New York, 

the Court reaffirmed that Congress may not exercise its Article I 

plenary powers to 11 'commandee[r] the legislative processes of the 

States by directly compelling them to enact and enforce a federal 

regulatory program.' 11 112 S.Ct. at 2420 (quoting Hodel, 452 U.S. 

at 288). Notwithstanding these limitations, however, Congress does 

enjoy 11 Several options short of imposing a coercive regulatory 

directive on the states. 11 Ponca Tribe of Okla. v. Oklahoma, 37 

F.3d 1422, 1433 (lOth Cir. 1994). First, Congress may, under its 

spending power, attach conditions on the states' receipt of 

federal funds. Id. Second, Congress can offer the states the 

choice of regulating a given activity in accordance with federal 

standards or having state law preempted by federal regulation. Id. 

Finally, Congress may, under the Supremacy Clause, 11 preempt an 

entire field of regulation and thereby deprive the states of any 

regulatory role. 11 Id. 

Here, Congress has clearly chosen the third option, to 

preempt the entire field of price, service, and route regulation 

of intrastate motor carrier activities. Although plaintiffs have 

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attempted to otherwise characterize Congress' actions, it is clear 

that Congress has not compelled the states to voluntarily act by 

enacting or administering a federal regulatory program. Rather, 

Congress has simply imposed rules on the states via its Supremacy 

Clause powers. See Laurence H. Tribe, American Constitutional Law 

§ 6-25 (2d ed. 1988) ("So long as Congress acts within an area 

designated to it, the preemption of conflicting state or local 

action . flow[s] directly from the substantive source of power 

of the congressional action coupled with the supremacy clause of 

article VI .... ").Thus, contrary to plaintiffs' assertions, 

there is no risk that the states will be held politically 

accountable for the actions of the federal government. Instead, it 

is abundantly clear that the federal government is responsible for 

the lack of intrastate motor carrier price, route, and service 

regulation. 

We affirm the district court's denial of plaintiffs' Tenth 

Amendment challenge to § 601. 

VI. 

The Guarantee Clause of the Constitution provides that "[t]he 

United States shall guarantee to every State in this Union a 

Republican Form of Government . . . . "Art. IV, § 4 . 

In their final argument, plaintiffs contend § 601 violates 

the Guarantee Clause because it "has so infringed upon state 

sovereignty that the guarantee of a republican form of government 

has been breached." Appellants' reply br. at 24. Plaintiffs offer 

no further explanation of this argument, nor do they cite any case 

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law in support of their position. In response, the Department of 

Justice asserts that plaintiffs' argument is undermined by the 

fact that § 601 was unanimously passed in both the Senate and the 

House of Representatives, without objection by any of the elected 

senators or representatives from any of the forty-one states that, 

prior to January 1, 1995, regulated intrastate motor carrier 

activities. Moreover, the Department suggests that plaintiffs 

cannot assert a justiciable claim under the Guarantee Clause. 

Finally, the Department argues plaintiffs cannot succeed on such a 

claim in this case because "Section 601 is a substantive 

constraint on the power of state governments to regulate 

intrastate trucking, not a fundamental restructuring of the form 

of state governments," and therefore the treatise cited by 

plaintiffs provides no support for plaintiffs' claim. Appellees' 

br. at 30. 

In New York, the Supreme Court discussed, but did not 

resolve, the question of whether claims under the Guarantee Clause 

are justiciable. 112 S.Ct. at 2432-33. In particular, the Court 

noted that, since its decision in Luther v. Borden, 7 How. 1 

(1849), there has been some belief that violations of the 

Guarantee Clause cannot be challenged in the courts because they 

present nonjusticiable political questions. 112 S. Ct. at 2433. 

Continuing, the Court noted it has suggested, in more recent 

opinions, that this belief may be incorrect, and that "not all 

claims under the Guarantee Clause present nonjusticiable political 

questions." Id. However, the Court ultimately found it unnecessary 

to "resolve this difficult question 

14 

. . . . " Id. 

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In American Constitutional Law § 5-23, the Guarantee Clause 

is discussed in the following manner: 

The most fundamental threats to state sovereignty--

those that genuinely portend reduction of the states 

into "field offices of the national bureaucracy" or 

"bureaucratic puppets of the Federal Government"--would 

seem to arise less from federal laws that impose 

substantive constraints on state and private actors 

alike . . . than from federal laws that restructure the 

basic institutional design of the system a state's 

people choose for governing themselves. If there is any 

form of congressional assault that might truly "'nibble 

away at state sovereignty, bit by bit, until someday 

essentially nothing is left but a gutted shell,'" it is 

an assault on those "democratic processes through 

[which] . . . citizens . . . retain the power to govern 

... their local problems." 

Assuming, without deciding, that plaintiffs' claim is 

justiciable, there appears to be no merit to it. As noted by the 

Department of Justice, "Section 601 is a substantive constraint on 

the power of state governments to regulate intrastate trucking, 

not a fundamental restructuring of the form of state governments." 

Appellees' br. at 30. More specifically, having concluded that § 

601 does not violate the Commerce Clause or the Tenth Amendment, 

it is difficult to understand how § 601 could be construed in any 

way as affecting the states' ability to structure their own 

governments as they see fit. The district court was correct in 

denying this claim. 

VII. 

The district court's denial of plaintiffs' claims for 

declaratory and injunctive relief is AFFIRMED. 

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