FCC v. The States: Who Shall Regulate Intrastate Telecommunications?

The 1934 Communications Act established a dual system of federaland State telecommunications regulation. The act gave the FederalCommunications Commission (FCC) authority to regulate interstateand foreign telecommunications but not intrastate communications,a market reserved for the states. As part of its move to deregulatethe telecommunications market in the 1970s, the FCC sought toextend its jurisdiction by preempting state regulatory authorityover telecommunications activities traditionally consideredintrastate. In 1986, however, the U.S. Supreme Court, in itsdecision in Louisiana Public Service, restricted federal preemptionof state laws and reinforced the dual regulatory system. Withthe break-up of AT&T, the FCC has renewed its preemptionactivities, claiming that the preemption is necessary in orderto foster an efficient nationwide telecommunications system.Several cases now pending in federal courts will test the breadthand depth of the Supreme Court's holding in Louisiana PublicService, and thereby, the future of the dual regulatory system.     

Federal Preemption of State Regulation of Insurance: End of a 200-Year Era?

This article examines state regulation of insurance, focusingon congressional and judicial attempts to displace state regulatoryprimacy over insurance. After describing the early period ofstate insurance regulation from the U.S. Supreme Court's decisionin Paul v. Virginia to the Court's overruling of that decision,the article examines the McCarran-Ferguson Act and the post-McCarranenvironment, including examples of judicial preemption of stateinsurance laws. Finally, the article considers the system ofinsurance regulation envisioned in H.R. 1290, the most recentcongressional attempt to displace state insurance regulation,and state initiatives to counter federal regulation. AlthoughH.R.1290 purports to setup a dual regulatory scheme, the broadpreemption language in the bill would allow federal regulatorsto preempt virtually all state insurance laws. Moreover, thedecisions of the Supreme Court in Garcia v. San Antonio MetropolitanTransit Authority and Chevron v. Natural Resources Defense Councilwould leave no political or judicial forum for states to debatethe extent and impact of federal preemption     

Federal Preemption Under Reagan's New Federalism

Ronald Reagan defined his federalism program in terms of returningpolitical power to state and local governments. In practice,he was Janus-faced with respect to his views on domestic policyissues. His "public" face emphasized initiatives promoting areturn of political power to the states and local governments.His "silent" face encouraged additional centralization of politicalpower in several functional areas, and he signed bills prohibitingstate economic regulation of certain industries. Most of Reagan'sinitiatives were administrative, and increased to a limitedextent the discretionary authority of states. In general, thepresident favored a smaller federal regulatory role but notnecessarily a larger state and local government role. He signedtotal preemption bills granting greater freedom of action tothe banking, communications, and transportation industries,and tax sanction and crossover sanction bills. At the closeof his administration, intergovernmental relations were morecoercive than they had been in 1980.     

The Rehnquist Court and Federal Preemption: In Search of a Theory

In the 1980s, the U. S. Supreme Court was expected to becomemore solicitous of "states' rights" and to reconsider doctrinesof federal preemption of state and local laws. Those expectationswere built on the Court's ruling in National League of Citiesv. Usery and reinforced by the Reagan administration's rhetoricand Court appointments. The record ofthe Rehnquist Court, however,demonstrates that it has backed away from vigorously enforcingthe Tenth Amendment and has erected only minor constitutionalbarriers, as in New York v. United States, to the Congress'power over the states. Moreover, the Court has not retreatedfrom finding implied statutory preemptions or from imposingits own dormant-commerce clause power on the states. The articleconcludes by considering a number of explanations for the Court'srecord and rulings on federal preemption.     

Foreign-Trade Agreements: A New Federal Partner?

The North American Free Trade Agreement (NAFTA) and the GeneralAgreement on Tariffs and Trade (GATT) shift power away fromstate and local government in the federal system. They imposenew rules on the exercise of state and local powers over procurementand the regulation of food, environmental, health, product andservice standards, investments, services, financial services,economic development, and land transportation. States will haveto comply with various reporting and registration requirements,and may be subject to stricter nondiscrimination obligationstoward imported goods and services than under the commerce clauseof the U.S. Constitution. State and local governments will bejudged by international panels, whose judgments the United Statesmust enforce or suffer trade sanctions from aggrieved tradingpartners. Yet, states have not strongly opposed NAFTA and GATT.The greatest state opposition has been to automatic preemption,which the Clinton administration promised to avoid as much aspossible. Nevertheless, increased power over federalism hasmoved to the executive branch, business, and trade-dispute panels,with less power for state and local governments.     

State Environmental Regulation and Economic Development: Are They Compatible?

An underlyingussumption of the partial preemption apprmh is the belief that minimum federal standmds contribute to the prospective decentralization of environmental protection programs by removing or reducing industry incentives to shop aroundfor states with a more lenient regulatory stance. This assumption was examined through a survey of chief executive oficers of pollution-generating firms. Tlze data suggest that corporate officials see regulatory climate m an important component of overhead ctxits. The author concludes that the desire to retain industries within state boundaries does inhibit the promulgation of strict environmental regulat ions by public officials.     

The Impact of Federal Preemption of State Antipredatory Lending Laws on the Foreclosure Crisis

State antipredatory lending laws (APLs) are designed to protect borrowers against predatory lending that can increase the risk of default and deplete the home equity held by borrowers. Federal regulators instituted preemption that limited the scope and reach of state antipredatory lending regulations for certain lenders. Based on the variation in state laws and the variation in the regulatory environment among lenders, this paper identifies the effects of federal preemption of state APLs on the quality of mortgages originated by preempted lenders. The results provide evidence of a relatively higher increase in default risk among loans exempted from strong state antipredatory laws. These results are most robust among refinance mortgages with adjustable interest rates—a large and highly dynamic market in the period of analysis. The findings provide initial evidence that preemption of state mortgage lending regulations may result in an increase in mortgage default risk, thus limiting consumer protection in the residential mortgage market.     

ADA, Disability Rights, and Evolving Regulatory Federalism: Articles

This article explores the evolution of regulatory federalismby examining the shifting basis of disability rights mandatesfrom conditions-of-aid to federal preemption. It also examinesthe disability rights mandates placed on state and local governmentsby the Americans with Disabilities Act (ADA) and compares themwith those provided in earlier federal laws. The central thesisis that by adopting a preemptive approach, the U.S. Congressclaimed for itself the dominant role in creating and enforcingnondiscrimination mandates to protect the rights of people withdisabilities. While several organizing principles and implementationdirectives stipulated in ADAwerefirst devised in earlier federallaws and administrative regulations, their application throughfederal preemption strengthened the force and reach of disabilityrights protections. In the process, preemption substantiallyreduced the authority of state and local governments to createand implement their own disability rights measures.     

From Coercion to Partnership in Federal Partial Preemption: SMCRA, RCRA, and OSH Act

This article examines the experiences of three important partial-preemptionprograms—the Surface Mining Control and Reclamation Actof 1977 (SMCRA), the Occupational Safety and Health Act of 1970(OSH Act), and the Resource Conservation and Recovery Act of1976 (RCRA)—over the last two decades to improve our understandingof how federal-state interactions have shaped the regulatorypartnership. The evidence we gather suggests that the controlof regulatory programs has shifted over time back and forthbetween the federal government and the states. In the initialyears of these programs, what the Congress intended to be aregulatory partnership was, in effect, almost total federalpreemption of state authority. Under the Ronald Reagan administration,the opposite occurred; federal regulation in many cases becamede facto state regulation as federal officials essentially abdicatedtheir oversight responsibility. By the end of the 1980s, thefederal government began again to assert greater control overintergovernmental regulatory programs. The regulatory relationshipthat emerged is one in which the federal government and thestates share responsibility and authority for the implementationof these programs.     

State Corporate and Federal Securities Law: Dual Regulation in a Federal System

Corporate law in the United States involves dual regulation.Although state and federal corporate law typically functionwithout mutual interference, the last thirty years have revealedpotential conflicts, chiefly in two situations. One involvescivil remedies for investors under federal securities statutes;the other is state anti-takeover regulation and its relationshipto the federal Williams Act. The postwar years until 1975 sawperhaps too much reliance on the federal component of corporateregulation. Since 1975, there has been a renaissance of statelaw. Recently, however, appreciation for state regulatory authoritymay have degenerated into hostility to the will of Congress.The authors argue that the core interpretive task in federalsecurities law is preservation of both regimes to maximum effect,because the Congress has expressly declared that state authorityshould continue adjacent to federal regulation.     

City-State Ideological Incongruence and Municipal Preemption

A growing concern among municipal officials across the United States is that their policymaking capacity is under attack by state legislatures who are increasingly likely to preempt those municipalities. However, determining the extent to which municipalities are preempted is challenging. We overcome this by surveying a large sample of municipal officials from across the United States. We find that officials from municipalities that are more ideologically distant from their state overall are more likely to report being preempted by their state government. Moreover, this pattern is driven by more liberal municipalities in both Republican and Democratic states reporting higher rates of preemption. Additionally, municipalities under unified state governments are more likely to report preemption, especially those under unified Republican control. These findings have important implications for the quality of representation in our federalist system and indicate that preemption is not just an issue between Republican states and liberal urban cities.     

STATE IMPLEMENTATION OF THE SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977

The implementation of the Surface Mining Control and Reclamation Act (SMCRA) of 1977 in coal producing states is guided by a partial preemption policy approach t h a t establishes a balance between federal and state decision-making authority. The usefulness of this approach is assessed by analyzing state enforcement actions in relation the institutional capacity of states to shoulder regulatory responsibilities and the propensity of the federal Office of Surface Mining (OSM) t o oversee state enforcement actions and, if necessary, to undertake corrective action. Our results indicated that state administration of SMCRA was canstrained by the lack of effective federal oversight but was largely unaffected by interstate differences in political, economic, or administrative characteristics.     

THE STATES' ROLE IN POLICY IMPLEMENTATION: TRANSPORTATION POLICY

Over the past 25 years, the federal government has exerted a profound impact over transportation policy, with over one thousand policies and programs administered in 1979. States have been heavily involved in administering most of these programs. In the past, state and local governments have responded by raising the revenues necessary to match federal grants. Despite budget problems, the states' role is expected to continue.     

Municipal Communications Tax Revenue Reliance and Fiscal Impact of Possible Federal Preemption

This paper presents empirical evidence of the extent to which municipal governments might be affected by federal preemption in the communications sector in light of the substantial variation in municipal governments' reliance on communications tax revenues. The results suggest that the federal preemption would have a negative fiscal impact on the majority of municipal governments, and the extent of the impact would vary substantially. The analysis also indicates that it would be challenging or legally impossible for some city governments to make up for the magnitude of revenue loss due to the states' constraints on municipal revenue‐raising capacity.     

Who Preempted the Massachusetts Burma Law? Federalism and Political Accountability Under Global Trade Rules

With its "Burma law, " Massachusetts joined a procurement boycottof companies doing business in Burma. In Crosby v. NFTC, theU.S. Supreme Court held that Congress preempted the Massachusettslaw, even though Congress was silent on preemption. The Courtrelied on actions by executive-branch, foreign, and corporateactors to find that the state law was an obstacle to impliedobjectives of federal Burma sanctions. In doing so, the Courtdiffused congressional accountability for preemption and constrainedthe "constituent diplomacy" by which states and local governmentsuse their purchasing power to influence national policy andmultinational corporations. Crosby shifted the burden to Congressto express its intent not to preempt such measures. Congresshas several opportunities to meet this burden if it wants topreserve the diversity and balance that constituent diplomacybrings to the federal system.     

The Savings and Loan Debacle and Erosion of the Dual System of Bank Regulation

The crisis in the banking and thrift industries is catalyzinga shift in the traditional system of dual state-federal bankregulation toward the federal government and away from the states.Erosion in this system has been evident for the past decadedue to actions of the Congress, federal regulators, and thejudiciary. The dual system has two sets of flaws. One is regulatorycompetition that encourages weak monitoring of financial institutionsby states. The other is created by the "moral hazard" of thecurrent system of federal deposit insurance. There are two pathsto reform. One is continued erosion of the power of the states.The alternative is to provide incentives that reinforce thedual system of regulation and deter the sources of "moral hazard."     

The Decline of the Legislative Veto: Federal/State Comparisons and Interactions

Legislative veto systems originated in the 1930s. Their numberincreased steadily until the early 1980s and then declined significantly.The decline of the legislative veto is attributable primarilyto decisions by a number of state supreme courts between 1980and 1984, and by the U.S. Supreme Court in 1983. Almost allcourt decisions have held the legislative veto to be an unconstitutionalviolation of the separation of powers. In addition, most proposalsto authorize the legislative veto by state constitutional amendmenthave been rejected by voters. There has also been a decreasein legislators' enthusiasm for the legislative veto, even instates where it has not been declared unconstitutional. Legislatorshave found other ways to control administrative agencies. Inexamining the decline of the legislative veto, one finds thatthe federal government exercised little influence over the states,the states exercised still less influence over the federal government,but the states did significantly influence one another.     

The Welsh Liberal Democrats: From Government to Opposition and Then Back Again?

For over 50 years from 1945 onwards, the Liberal Party and then the Liberal Democrats were either in decline in Wales or struggling to survive from election to election. Since 1997, however, there has been a steady evolution in the party's electoral and political strength. Over this past decade, the Welsh Liberal Democrats, as a state party, have experienced a change in electoral fortunes that has on occasions put them into national political power well in advance of their federal counterparts in England. As an autonomous state party within a federal structure, the Welsh Liberal Democrats have been able to take like a duck to water to the arrival of devolution in the form of the Welsh Assembly. This article examines how the evolution of the party has occurred and, in particular, the role that has been played by the Welsh Liberal Democrat Assembly Members in Welsh politics. The article also explores not only the strengths but also the weaknesses that still dog the Welsh party as it seeks once more to become a major force in Welsh politics.     

RegData: A numerical database on industry‐specific regulations for all United States industries and federal regulations, 1997–2012

We introduce RegData, formerly known as the Industry‐specific Regulatory Constraint Database. RegData annually quantifies federal regulations by industry and regulatory agency for all federal regulations from 1997–2012. The quantification of regulations at the industry level for all industries is without precedent. RegData measures regulation for industries at the two, three, and four‐digit levels of the North American Industry Classification System. We created this database using text analysis to count binding constraints in the wording of regulations, as codified in the Code of Federal Regulations, and to measure the applicability of regulatory text to different industries. We validate our measures of regulation by examining known episodes of regulatory growth and deregulation, as well as by comparing our measures to an existing, cross‐sectional measure of regulation. Researchers can use this database to study the determinants of industry regulations and to study regulations’ effects on a massive array of dependent variables, both across industries and time.     

Congressional Preemption During the George W. Bush Administration

President Bush approved 64 preemption acts during 2001–2005.Fifteen acts were responses to the September 11, 2001, terroristattacks, and five acts extended sunset provisions. The otheracts removed specified powers from states in the fields of banking,commerce, energy, environmental protection, finance, foreigncommerce, health, intellectual property, safety, taxation, telecommunications,and transportation. Only the two Internet taxation prohibitionacts have a major impact on state governments by depriving themof billions of dollars in tax revenues that could be used toexercise their reserved powers. The other acts are minor oneson the periphery of state exercised powers compared to lawsenacted in the period 1964–1999.