5.2: Federalism and Preemption

Much of the Constitution deals with the allocation of power among three separate and coequal branches of government. Substantively, much more attention is paid to the limitations on the power given to each of the three branches than to any positive grant of rights. The Constitution is a document of prohibition, outlining what government cannot do as opposed to what government must do. This is the result of the Founders’ distrust of authoritarian regimes.

Separation of Powers

The Constitution provides for the separation of powers, which requires each branch of government to play its own unique role in governing the people.

Figure 5.1 Separation of Powers of the Branches of the Federal Government

Article I of the Constitution establishes the legislative branch through a bicameral legislature. The House of Representatives, with elections every even-numbered year, has 435 members, with representation determined proportionately by state population as determined by a census every decade. The most populous state, California, has fifty-three representatives, while several states have only one representative. The House is led by the Speaker of the House, typically from the party that holds the majority seats in the House. The House is generally thought to represent the most contemporary views of the American public, with its large body of members and frequent elections.

As a check on the majority will, and on the power of larger states, the Senate is a smaller body with one hundred members (two from each state) and with less frequent elections (every six years). The Senate is meant to be a deliberative body to ensure debate of significant issues and prevent hastily rushed law. The makeup of the Senate means that citizens from smaller states, representing many fewer people, may frustrate the will of the majority of Americans. The Constitution places the power to legislate with both chambers, but the House retains the exclusive right to originate bills raising revenue (taxation), while the Senate maintains the exclusive right to ratify treaties.

Article II of the Constitution establishes the executive branch of government. It sets forth some of the mechanisms for becoming president—and is the only place in the Constitution that prescribes a specific oath of office. Article II grants the president power to be the primary architect of foreign affairs, including the power to negotiate treaties and appoint ambassadors. The president is also commander-in-chief of the armed forces. The president is mainly responsible for enforcing the laws of the nation. Through prosecutorial and police functions, the president ensures that the will of the people, as expressed through Congress, is carried out.

Article III of the Constitution establishes the judicial branch of the federal government. The judicial branch plays a critical role in interpreting the Constitution and outlining the powers of the legislature and executive branches. The power to adjudicate disputes is given to the Supreme Court and any other lower courts established by Congress. Federal courts have the power to hear disputes under the Constitution, federal laws and treaties. Also, if disputes arise between citizens of different states, a federal court may have diversity jurisdiction. Federal judges are nominated by the president and confirmed by the Senate. Federal judges serve for life, which helps insulate them from political pressures.

Checks and Balances

The Constitution establishes a system of checks and balances among the legislative, executive, and judicial branches. Under this system, each branch of government restrains the power of the other two branches of government. For example, the president may veto a bill passed by Congress. And Congress can override a presidential veto by a two-thirds vote.

Figure 5.2 Checks and Balances of the Federal Government

The judicial branch has the power of judicial review of executive and legislative actions to determine whether they violate the Constitution. Although not expressly written in the Constitution, judicial review was established in 1803 in a landmark case, Marbury v. Madison. Judicial review also includes review of state action for violations of the US Constitution. As a result, judicial review ensures that the US Constitution is the supreme law of the land and that the judicial branch has the authority to interpret the Constitution.

Federalism

Another aspect of the separation of powers is the separation of power between the federal and state governments, known as federalism. To avoid tyranny, the Constitution grants certain powers to Congress, reserving all other powers to the states. This is a result of the Founders’ distrust of a central government and their effort to address the failures of the Articles of Confederation. These powers are listed in Article I, Section 8 and are called enumerated powers.

Congress has the power to borrow money, lay and collect taxes, regulate interstate commerce, establish a uniform law on bankruptcy and naturalization, make money and establish its value, punish the counterfeiting of US money, and establish a uniform system of weights and measures. Congress also has the power to establish post offices and to protect intellectual property in copyrights and patents. Congress can create lower courts under the Supreme Court created in Article III and to define crimes committed on the “high seas” and against the “law of nations.” Congress is also given fiscal responsibility over the armed forces.

State Police Powers

The Constitution reinforces that states have police power, which is the authority to regulate public safety, health, welfare, and morals. States may grant more civil rights to its citizens than the federal government does. For example, some states have passed anti-discrimination laws that protect more minority groups than are recognized by the federal government. States are permitted to do so as long as the exercise of their power does not violate the US Constitution. Generally, this means the state legislation must be reasonable and applied fairly rather than arbitrarily.

Concurrent Powers

The federal and state governments have some of the same powers, which are called concurrent powers. For example, both federal and state governments may tax businesses and individuals. States are permitted to tax, but only if the activity taxed has a nexus to the state. A transaction (such as a sale) that takes place inside the state creates a nexus for a sales tax. Working in the state typically creates a nexus for state or local income tax to apply, and owning real property creates a nexus for real estate tax to apply.

Figure 5.3 Venn Diagram of the Powers of the Federal and State Governments

What happens, however, if a state’s citizen purchases goods from a seller out of state? Traditionally, buyers do not pay sales tax to the government directly—rather, they pay the sales tax to the seller, who collects the tax on behalf of the government and turns it over to the government at regular intervals. As the popularity of e-commerce has skyrocketed, more and more states are reexamining how to tax transactions from out-of-state sellers by compelling those sellers to collect the applicable state sales tax. In June 2018, the US Supreme Court ruled that states may impose sales tax on e-commerce sales on businesses that do not have a physical presence within the states’ boundaries. If the business has a clear connection to state consumers and generate a certain threshold of sales, a state can collect sales tax.

Preemption

What happens when state and federal laws exist on the same subject matter and they contradict each other? Under the Constitution’s Supremacy Clause (Article VI, Section 2), the Constitution, federal laws and treaties are the “supreme law of the land” and judges in every state “shall be bound” by those laws. This means that federal laws are superior to state laws. Therefore, when a federal law conflicts with a state law, the federal law prevails.

When Congress states its intent to regulate an area completely, this is called express preemption. Implied preemption occurs when Congress intends to completely regulate an area but does not say so explicitly. Instead, Congress passes laws that “occupy the field” so much that no room for state regulation exists. Finally, some areas of the law allow both state and federal governments to regulate together. For example, both federal and state governments have laws to protect consumer rights.

Constitutional Rules Between the States

There are several important Constitutional provisions that ensure our federalist system works properly. The first is the Privileges and Immunities Clause in Article IV. This Clause ensures that people in different states are treated equally by the government. For example, the federal government cannot pass laws that subject citizens in the West to more regulations than citizens in the East. Federal laws must be applied equally across the nation. The Founders included this provision to encourage travel and business between the states.

Another important Constitutional provision is the Full Faith and Credit Clause in Article IV. This Clause requires states to “respect the public acts, records, and judicial proceedings of every other state.” This is important for businesses because it ensures that state courts respect the judgments of courts from other states. Therefore, a judgment won in Colorado may be enforced in another state, without relitigating the underlying issues. This facilitates business because litigation can be finalized without subjecting a company to endless liability across states.