Court Opinion

ID: 8910350
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:43:25.104245+00
Date Added: 2024-06-11T17:08:28.270507
License: Public Domain

McKAY, Circuit Judge,
dissenting:
Had it required the City of Grand Junction and the County of Mesa to incur financial risks for an airport project, Congress would clearly have operated to “directly displace the States’ freedom to structure integral operations in areas of traditional governmental functions.” National League of Cities v. Usery, 426 U.S. 833, 852,96 S.Ct. 2465, 2474, 49 L.Ed.2d 245 (1976). City and county funds would necessarily have been diverted from other essential governmental activities, an effect expressly condemned in National League of Gities. Id. at 846, 96 S.Ct. 2465. Even more starkly, the congressional mandate would have operated on the very structure of the state’s subdivisions— requiring union in a continuing Co-Partnership Agreement — and would have imposed financial obligations directly contrary to an. express Colorado policy. It would, that is, have “displace[d] state policies regarding the manner in which [the States] will structure delivery of those governmental services which their citizens require,” id. at 847, 96 S.Ct. at 2472, and have impaired Colorado’s “ability to function effectively in a federal system.” Id. at 852, 96 S.Ct. at 2474, quoting Fry v. United States, 421 U.S. 542, 547 n.7, 95 S.Ct. 1792, 44 L.Ed.2d 363 (1975).
National League of Cities was of course dealing with federally mandated programs, and by footnote reserved to another day an express reexamination of the limits, if any, on federal stipulations appended to the exercise of spending power. 426 U.S. at 852 n.17, 96 S.Ct. 2465. This court’s citations to the spending power cases in distinguishing the instant case from National League of Cities is flawless as those cases appear to read. But the cases themselves suggest that these broad principles and sweeping language do not imply unlimited license to effect federal will through use of the spending power. Those cases stand today in essentially the same posture as the Commerce Clause cases before National League of Cities was decided. While certainly not a license to disregard prior authority, the Supreme Court’s footnote does suggest that a logical reexamination of the spending power cases is not precluded. At the very least, National League of Cities suggests that we should be watchful for “whatever may be the limits of [the power to fix the terms on which money allotments may be disbursed to the states].” Lau v. Nichols, 414 U.S. 563, 569, 94 S.Ct. 786, 789, 39 L.Ed.2d 1 (1974). Taking that cue, I do not believe that the sweeping import of the cited cases can be sustained anymore than was Maryland v. Wirtz, 392 U.S. 183, 88 S.Ct. 2017, 20 L.Ed.2d 1020 (1968), the eight year old case overturned in National League of Cities. 426 U.S. at 853-55, 96 S.Ct. 2465. Since it is clear that the federally mandated alteration of state government function in this case is precisely the kind condemned in National League of Cities, the principal logical distinction between the cases, if any, must be bottomed on the fiction that the spending power eases involve a freedom of choice which is not available under the mandated programs condemned in National League of Cities. The time has long since passed when the mere formality of choice should satisfy constitutional requirements.
This court should not ignore the practical financial needs of present day state governments. Those needs may well have ended the freedom of choice once inherent in such conditional grants.1 Few, if any, states or *299state subdivisions can now supply adequate services without the benefit of federal largesse. The possibility of refusing federal grants is often only apparent, not real. Particularly after a state has poured significant funding into a program or facility (e. g., the erection of an airport) and attendant local expectations have grown, the state can hardly decline the federal aid necessary to maintain and improve that facility. When grants have risen to this level of necessity, attached conditions must withstand close constitutional scrutiny similar to that applied in National League of Cities to direct regulation of state governmental structure. The federally imposed requirements here fail to survive that scrutiny.
The Supreme Court has repeatedly expressed its concern with preserving the “essentials of state sovereignty,” National League of Cities, 426 U.S. at 855, 96 S.Ct. 2465, quoting Maryland v. Wirtz, 392 U.S. 183, 205, 88 S.Ct. 2017, 20 L.Ed.2d 1020 (1968) (Douglas, J., dissenting), a concern this court should not minimize. That concern has been manifested in a broad range of cases, which go far beyond direct regulation, the Commerce Clause, and the other particular issues of National League of Cities. See, e. g., Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976); Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976); Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971).
The Civil War Amendments were designed to insure that states are subject to federal power insofar as they fail to provide the protections of individual liberty mandated by the Bill of Rights. To that degree the prior understanding of federalism was modified by subsequent amendments. However, the concept of diversified power, as a check on the loss of individual liberty that would be inherent in one central government of unlimited power, remains vigorous. The essence of that constitutional concept is that there must be institutional encumbrances on government intrusion into individual liberty as well as restraints on direct and discrete intrusions. These constitutional concerns about restraints on governmental power through institutional structure are grounded not only in the Tenth Amendment but also in the “structural assumptions of the Constitution as a whole.” L. Tribe, American Constitutional Law 301 (1978).2
Indeed, the cases cited in the majority opinion do not themselves mandate unlimited exercise of federal spending power. At no time has the Supreme Court suggested that any federal government exercise of any constitutional power is immune from the constraints of other constitutional provisions. See, e. g., Lau v. Nichols, 414 U.S. 563, 569, 94 S.Ct. 786, 39 L.Ed.2d 1 (1974); Ivanhoe Irrigation Dist. v. McCracken, 357 *300U.S. 275, 295, 78 S.Ct. 1174, 2 L.Ed.2d 1313 (1958) (conditions must be “reasonable”); King v. Smith, 392 U.S. 309, 333 n.34, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968) (“unless based on some controlling constitutional prohibition”).3 The requirements of federalism provide such constraints, even when Congress is exercising powers that are otherwise plenary. National League of Cities v. Usery, 426 U.S. at 842, 96 S.Ct. 2465.
This is not to suggest that the concept of federalism proscribes all conditions which might be attached to spending power legislation, even some conditions which might run afoul of National League of Cities broadly construed. As the concept immunizes the states from some federal intrusion, so the spending power itself obligates responsible disbursal of funds collected through federal power. It is inevitable that the states’ desires to be immunized from federal stipulations will conflict with the responsible exercise of the spending power. Where those two constitutional concepts come into conflict some balancing must be employed. Such a conflict exists in the instant case. The duty of Congress to insure solvent management of the federal funds might require the states to make financial or governmental structural alterations which strictly speaking would run afoul of the standards set in National League of Cities. It is not suggested that Congress may not require some assurance of financially responsible participation by local units seeking federal tax collecting benefits. However, the concepts of institutional integrity embodied in the federal structure and so strongly reaffirmed in National League of Cities are sufficiently important to require, at a minimum, that the federal program employ the least intrusive method which will satisfy its responsible spending duties and that the stipulation be relevant to the primary purpose of the spending proposal. If the spending power is not confined in such a manner, then National League of Cities would become a silly and useless exercise.4 In this case no alternatives were offered. The state was given no opportunity to propose viable alternatives, but rather the Secretary’s designee indulged in precisely the kind of rigid mandate employed in National League of Cities sans the fictitious opportunity to reject the financial enticement.
Our recent satisfactory encounters with federal leadership in the area of explicit constitutional guarantees of individual liberties may well have beguiled us into subordinating in our minds the significance of the individual protection embodied in a division of authority. This case presents a prime opportunity to examine the scope, restraints and divisions of the exercise of power among constitutionally acknowledged institutions of government. The exercise of federal power in this case goes beyond the scope of its properly delegated authority and offends the restraints embodied in the concept of federalism. The result of effectively implementing the restraints embodied in that concept well may be a determination by Congress to forgo major spending projects if prohibited from imposing some favored but unconstitutional conditions. That, of course, would be the intended fruit of federalism, a restraint on the arrogation of federal power to the unreasonable detriment of state viability. This case should be reversed.

. The inherent coerciveness of funding was recognized by the Supreme Court in United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477 (1936): “The power to confer or withhold un*299limited benefits is the power to coerce or destroy.” Id. at 71, 56 S.Ct. at 321. Even in dissent, Mr. Justice Stone saw the possibility of economic force: “Threat of loss, not hope of gain, is the essence of economic coercion.” Id. at 81, 56 S.Ct. at 326. Given that the Airport and Airway Trust Fund monies were already appropriated for airport improvements and that the state subdivisions had become dependent on the airport’s existence, Colorado faced something approaching a threat of loss. Although much of Butler was effectively repudiated in Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279 (1937), even there Mr. Justice Cardozo did not deny the possibility that economic inducement may, at some point, turn into coercion. Id. at 590, 57 S.Ct. 883.

. The framers of the Constitution, of course, remain the primary exponents of federalism’s virtues:
In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.
The Federalist No. 51 (J. Madison).
I am unable to conceive that the State legislatures, which must feel so many means of counteracting the federal legislatures, would fail to detect or to defeat a conspiracy of the latter against their common constituents. . I must pronounce the liberties of America cannot be unsafe in the number of hands proposed by the federal Constitution.
The Federalist No. 55 (J. Madison).

. “In a long line of decisions involving a variety of protected rights, the Supreme Court has held that government may not condition the receipt of its benefits upon the nonassertion of constitutional rights.” Note, Academic Freedom and Federal Regulation of University Hiring, 92 Harv.L.Rev. 879, 891-92 (1979). With respect to individual rights, for example, the Court abolished the once preeminent “right-privilege” distinction, under which government could “set aside the personal liberties of those with whom it contracted.” No longer, that is, can government “trammel[] an otherwise sheltered constitutional right” by the use of an indirect means. Van Alstyne, Cracks in ‘‘The New Property”: Adjudicative Due Process in the Administrative State, 62 Cornell L.Rev. 445, 445-46 (1977).

. One need be only a casual reader of the newspaper to recognize that Congress could Attach the very requirements struck down in National League of Cities to a revenue-sharing bill in order to render all that that case stands for a practical nullity.