Opinion ID: 789574
Heading Depth: 3
Heading Rank: 2

Heading: Constitutional Challenge to Statute

Text: 55 The Prescription Drug Marketing Act of 1987 (PDMA) requires that any wholesaler of prescription drugs who would engage in interstate distribution be licensed by the state from which the drugs are to be shipped, under a state licensing scheme that complies with federal guidelines. See 21 U.S.C. § 353(e)(2)(A). Milstein was convicted of violating that provision, and now claims that the statute exceeds Congress's power under the Commerce Clause and violates the Tenth Amendment and the principles of federalism. He asserts that the statutory scheme has the same defects as the statutes struck down in New York v. United States, 505 U.S. 144, 112 S.Ct. 2408, 120 L.Ed.2d 120 (1992), Printz v. United States, 521 U.S. 898, 117 S.Ct. 2365, 138 L.Ed.2d 914 (1997), and Board of Natural Resources v. Brown, 992 F.2d 937 (9th Cir.1993) ( Brown ). We disagree. 56 It is clear Congress may not commandee[r] the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program. New York, 505 U.S. at 161, 112 S.Ct. 2408 (quoting Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 288, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981)). This is not to say that Congress lacks the ability to encourage a State to regulate in a particular way, or that Congress may not hold out incentives to the States as a method of influencing a State's policy choices. New York, 505 U.S. at 166, 112 S.Ct. 2408. Congress may urge a State to adopt a legislative program consistent with federal interests, id., and it cannot be constitutionally determinative that the federal regulation is likely to move the States to act in a given way, or even to `coerc[e] the States' into assuming a regulatory role by affecting their `freedom to make decisions in areas of integral governmental functions,' Federal Energy Regulatory Commission v. Mississippi, 456 U.S. 742, 766, 102 S.Ct. 2126, 72 L.Ed.2d 532 (1982) (quoting Hodel, 452 U.S. at 289, 101 S.Ct. 2352). 57 In New York, the Supreme Court struck down part of the Low-Level Radioactive Waste Policy Amendments Act of 1985, Pub.L. 99-240, 99 Stat. 1842, 42 U.S.C. § 2021b et seq., which provided three types of incentives to encourage the states to regulate, in accordance with Congress's direction, the disposal of low-level radioactive waste generated within their borders. New York, 505 U.S. at 152, 112 S.Ct. 2408. One such incentive offered the states the option, in lieu of timely compliance with the federal statute, of taking title to and possession of ... low level radioactive waste generated within their borders[, thereby] becoming liable for all damages waste generators suffer as a result of the States' failure to do so promptly. New York, 505 U.S. at 174-75, 112 S.Ct. 2408. That part of the statute crossed the line distinguishing encouragement from coercion and thus violated the Tenth Amendment. Id. at 175, 112 S.Ct. 2408. 58 In Brown, the Ninth Circuit held unconstitutional a portion of the Forest Resources Conservation and Shortage Relief Act, 16 U.S.C. §§ 620-620j. See 992 F.2d at 940. The statute at that time provided that [e]ach State shall determine the species, grade, and geographic origin of unprocessed timber to be prohibited from export... and shall administer such prohibitions consistent with the intent of sections 620 to 620j of this title. 16 U.S.C. § 620c(d)(2) (emphases added). If the state decided not to administer the federal regulatory program, the state would have had to halt all timber sales, an alternative the Ninth Circuit held Congress had no authority to command. Brown, 992 F.2d at 947. 59 The choice offered to the States by the PDMA is not equivalent to those in New York and Brown. Under the PDMA, a state is allowed to choose not to create a licensing framework pursuant to federal guidelines. The consequence is simply that a wholesale distributor may not distribute its prescription drugs from that state to another state. That consequence, though it may move a state to adopt the necessary licensing framework in order to encourage companies to do business in the state, does not transform the provisions of the PDMA into a legislative scheme that is mandatory or coercive. Accordingly, we see no Tenth Amendment violation. 60