Opinion ID: 613271
Heading Depth: 3
Heading Rank: 2

Heading: Congressional Consent to State Action

Text: In 1945, the Supreme Court recognized the undoubted power of Congress to redefine the distribution of power over interstate commerce by permit[ting] the states to regulate the commerce in a manner which would not otherwise be permissible under the dormant Commerce Clause. S. Pac. Co. v. Arizona, 325 U.S. 761, 769, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945). Congressional consent can transform otherwise unconstitutional state action into permissible state action. One leading precedent on congressional consent is Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342 (1946). The McCarran-Ferguson Act provided that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States. Ch. 20, 59 Stat. 33 (1945) (codified as amended at 15 U.S.C. §§ 1011-1015). In Prudential, the Supreme Court held that the Act ratified a South Carolina tax on out-of-state insurance companies. Prudential, 328 U.S. at 429-31, 66 S.Ct. 1142. Because there was no comparable tax on in-state companies, the tax would have violated the dormant Commerce Clause without congressional action. Id. at 417-18, 66 S.Ct. 1142. The Court explained how Congress gave consent: This was done in two ways. One was by removing obstructions which might be thought to flow from its own power, whether dormant or exercised, except as otherwise expressly provided in the Act itself or in future legislation. The other was by declaring expressly and affirmatively that continued state regulation and taxation of this business is in the public interest and that the business and all who engage in it shall be subject to the laws of the several states in these respects. Id. at 429-30, 66 S.Ct. 1142. Two cases expanded on the Prudential analysis. In 1983, the Court held that the Federal Power Act, 41 Stat. 1063 (1920) (codified as amended at 16 U.S.C. §§ 791a-824k), did not insulate state statutes from the dormant Commerce Clause. New England Power Co. v. New Hampshire, 455 U.S. 331, 340-41, 102 S.Ct. 1096, 71 L.Ed.2d 188 (1982). The Court recognized as well settled that Congress may use its powers under the Commerce Clause to confer `upon the States an ability to restrict the flow of interstate commerce that they would not otherwise enjoy.' Id. at 339-40, 102 S.Ct. 1096 (quoting Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 44, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980)). The Act's language  that the federal law shall not ... deprive a State or State commission of its lawful authority now exercised over the exportation of hydroelectric energy which is transmitted across a State line  did not constitute consent. New England Power, 455 U.S. at 341, 102 S.Ct. 1096 (quoting § 201(b), 41 Stat. 1063 (codified as amended at 16 U.S.C. § 824(b))). [T]his provision is in no sense an affirmative grant of power to the states to burden interstate commerce `in a manner which would otherwise not be permissible.' New England Power, 455 U.S. at 341, 102 S.Ct. 1096 (quoting S. Pac., 325 U.S. at 769, 65 S.Ct. 1515). The Court explained that Congress did no more than leave standing whatever valid state laws then existed relating to the exportation of hydroelectric energy ... [the statute] simply saves from pre-emption under Part II of the Federal Power Act such state authority as was otherwise `lawful.' New England Power, 455 U.S. at 341, 102 S.Ct. 1096. In 1985, by contrast, the Supreme Court upheld Massachusetts and Connecticut statutes that gave advantages to New England banks over banks from other regions. Ne. Bancorp, Inc. v. Bd. of Governors of Fed. Reserve Sys., 472 U.S. 159, 175, 105 S.Ct. 2545, 86 L.Ed.2d 112 (1985). The Court found that Congress intended to insulate such laws from a dormant Commerce Clause challenge when it passed the Bank Holding Company Act of 1956, ch. 240, 70 Stat. 133 (codified as amended, 12 U.S.C. § 1841 et seq. ). When Congress so chooses, state actions which it plainly authorizes are invulnerable to constitutional attack under the Commerce Clause. Ne. Bancorp, 472 U.S. at 174, 105 S.Ct. 2545. Although they reached different outcomes, these cases stand for the principle that whether Congress has consented to state regulation of interstate commerce depends on the language of the particular federal statute.