Crosby v. National Foreign Trade Council

2000-06-19

Headline: State law banning contracts with companies doing business in Burma is preempted by federal Burma sanctions law; the Court affirmed and blocked the state restriction for undermining presidential sanctions and diplomacy.

Holding: The Court held that Massachusetts’ law barring state contracts with companies doing business in Burma is preempted by federal law because it conflicts with Congress’s delegation to the President and frustrates national foreign-policy objectives.

Real World Impact:

Blocks state bans on contracting with companies doing business in Burma.
Preserves the President’s power to control sanctions and diplomacy.
Reduces risk of state actions causing international disputes or WTO complaints.

Topics: state sanctions, foreign policy, federal vs state power, government contracting, international trade

Summary

Background

Massachusetts passed a 1996 law that barred state agencies from buying goods or services from companies on a “restricted purchase list” for doing business in Burma, with narrow exceptions for news reporting, telecom, and medical supplies. Congress soon enacted a federal Burma sanctions statute that imposed immediate measures, authorized the President to target “new investment” by U.S. persons, allowed the President to waive sanctions for national security, and directed a multilateral diplomatic strategy. A nonprofit trade group sued, a federal court enjoined the state law, and the First Circuit affirmed.

Reasoning

The central question was whether the state law conflicted with Congress’s Burma statute. The Court found it did. The Massachusetts law applied broader, permanent procurement bans — reaching foreign firms, existing affiliates, and contracts Congress had exempted — and it limited what the President could offer as leverage. That inconsistency undermined the President’s flexible authority to impose, lift, or tailor sanctions and to speak for the nation in diplomatic negotiations. Because the state law frustrated the federal statute’s purposes and interfered with national foreign-policy tools, it was preempted under the Constitution’s Supremacy Clause.

Real world impact

The ruling prevents Massachusetts (and similar local laws) from using state procurement bans to impose unilateral pressure on Burma when Congress and the President have adopted a calibrated, national approach. It preserves federal control over sanctions, reduces the risk that state measures will complicate diplomacy or international disputes, and protects the President’s bargaining position in multilateral talks.

Dissents or concurrances

Justice Scalia, joined by Justice Thomas, agreed with the result but limited his support to the judgment and criticized the Court’s reliance on legislative history and extra-statutory materials.