What Right does the Tenth Amendment Bestow? Protection Against Coercion

The Founders designed our federal government to be a government of “enumerated powers.” That means that the federal government may only regulate in the areas where it is expressly granted the authority to do so under the Constitution. Congress may not, as some assume, simply pass laws on whatever is popular. Indeed, the areas over which the federal government is granted control are actually quite narrow– e.g. creating a post office, raising an army, regulating commerce between the states, coining money, etc.

So how is it that the federal government currently sets uniform national standards for things like the age at which one can buy alcohol, minimum standards for public education, and the ratio of male vs. female sports programs at public universities? The answer is somewhat complicated. Basically, Article One, Section 8 of the United States Constitution places explicit guidelines on the areas of human life that Congress may regulate directly.  However, the Supreme Court held in United States v. Butler that these restrictions do not preclude Congress from taxing the public and spending the proceeds in furtherance of the “general welfare.” Moreover, because the courts have interpreted the term “general welfare” broadly, Congress has essentially been deemed to have carte blanche to spend money on almost anything it wants.

So, one might ask, “how does that give Congress the power to regulate?” It doesn’t. However, it does give Congress the power to bribe states with their own tax-dollars to adopt regulations that Congress approves of.  For example, in South Dakota v. Dole, the Supreme Court upheld a federal law that conditioned a portion of South Dakota’ s federal highway funds on South Dakota setting its drinking age at twenty-one years old. As that Court explained, “It is well accepted that under the Spending Clause of the U.S. Constitution that Congress may grant federal funds to the States, and may condition such a grant upon the States “taking certain actions that Congress could not [otherwise] require them to take.”

However, Congress’ authority to withhold funds in order to encourage states to comply with its wishes is not absolute.  Under the Constitution, the Federal Government’s conditioning of funds is permissible only if (1) the spending  is in furtherance of the general welfare; (2) Congress does so unambiguously to the end that states may knowingly exercise their choice to either accept or reject the funds; (3) the conditions imposed are reasonably related to the federal interest in the particular program and; (4) no other constitutional provision “provide[s] an independent bar to the conditional grant of federal funds.”   State of Cal. v. U.S., 104 F.3d 1086, 1092 (9^th Cir. 1997)  Moreover, even if these conditions are met, the condition may still be unconstitutional if “the financial inducement offered by Congress” is “so coercive as to pass the point at which pressure turns into compulsion.”  

This additional restriction stems from the theory that conditional federal funding is only permissible because it is a contract between a state and the federal government.  Barnes v. Gorman, 536 U.S. 181, 186 (2002) ( “We have repeatedly characterized … Spending Clause legislation as much in the nature of a contract.” ).  If the contract is not entered into freely (i.e. there is coercion or duress) then there is no valid contract and the Federal government is essentially conscripting state workers.  Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937) (courts should scrutinize legislation to ensure that Congress is not using financial inducements to exert a “power akin to undue influence.”).

While the Court has repeatedly refused to the “fix the outermost line where persuasion gives way to coercion,” its recent decision in National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (2012), gives us some valuable insight as to where that line may be.  There the Court struck down a portion of the Affordable Care Act that required states to expand Medicaid coverage to include additional classes of individuals or face a complete withdrawal of federal funding from their Medicaid programs. Id. at 2601.  Likening this requirement to a “gun to the head” proposition, the Court found that the requirement violated the Tenth Amendment.  Id. at 2604.

The Court distinguished the Medicaid expansion from other federal requirements that were approved in previous cases by pointing to the amount of funding at stake.  In Dole, for example, the amount of funding withheld for refusing to adopt Congress’s proposed drinking age amounted to a “loss of less than half of one percent of South Dakota’s budget.”  By contrast, a State that opted out of the Affordable Care Act’s expansion in health care coverage would stand to lose “not merely ‘a relatively small percentage’ of its existing Medicaid funding, but all of it.”  In most states, that would result in a loss of more than 10 percent of their total state budget.  Such draconian measures crossed the line from incentive to coercion.

The states’ victory in Sebelius has opened the door to other coercion challenges to federal programs. For example lawsuits are currently pending against the federal government for requiring states to adopt “Common Core” education standards as a condition for receiving federal “Race to the Top” funds. Other federal mandates, like the requirement that public schools ban vending machines and bake sales of sugary foods on campus, or forfeit federal reduced-lunch funding, may also give rise to litigation in the future.

The Constitutional Attorneys at Kassouni Law have experience representing clients in Tenth Amendment claims with successful results. If you have a similar matter and would like the legal merits of your case, please feel free to give us a call, Tim Kassouni will speak with you personally.