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Wednesday, May 16, 2018

Murphy v. NCAA’s Escape from Baseline Hell

Justice Alito’s opinion in Murphy v. NCAA is not elegant. But it does the trick: With the good ol’ “Direct”/“Indirect” distinction and sheer judicial fiat, SCOTUS managed to extricate itself from baseline hell, an infernal location in which the Court tends to find itself w.r.t. Printz’s distinction between “negative” preempting prohibitions and “affirmative” commandeering mandates.

Being a frequent tourist in baseline hell, I will say a word after the jump about why SCOTUS might have finally found that hellish environment intolerable and therefore ditched the “affirmative”/“negative” distinction w.r.t. state autonomy. I will also argue that the SCOTUS’s new “direct”/“indirect” distinction is best understood as leaving old-fashioned preemption unscathed, contrary to a suggestion by Daniel Hemel. (And, I might add, a good thing too — again, contrary to an excellent follow-up post by Hemel, who likes the taxation consequences of state autonomy just a tad too much, even for a decentralziation-loving guy like myself. But that’s a topic for another post). (BTW, for a typically interesting response to Hemel, see Brian Galle’s post).

Finally, I will suggest that the “direct”/“indirect” distinction might confer on states a new immunity from federal laws that try to prohibit states from conferring benefits like university seats and drivers’ licenses on state residents. 8 U.S.C. §1621 is one such law, forbidding states from conferring any “grant, contract, loan, professional license, or commercial license” on unlawfully present aliens. If my analysis of Murphy is correct, then this federal effort to prevent unlawfully present aliens from getting drivers’ licenses and the like is probably unconstitutional.

1. How is Murphy an escape from Baseline Hell?

Murphy is an elegant illustration of how disagreements about baselines can make a hash of distinctions between “negative” prohibitions and “affirmative” mandates. The Professional and Amateur Sports Protection Act (PASPA) makes it unlawful for a State “to ... authorize by law or compact . . . a ... betting, gambling, or wagering scheme based . . . on” competitive sporting events. New Jersey has repealed its old ban on sports betting. The NCAA and the United States said that it has thereby “authorized” such betting: NJ’s repeal is, therefore, preempted. New Jersey said that it has merely refrained from prohibiting betting, so “preempting” the repealed was tantamount to requiring the continuation of (aka “commandeering”) the state prohibition.

Of course, as a formal matter, both sides are correct: The answer depends on whether the “normal” baseline is defined by a world without any state ban on gambling or instead a world in which states routinely prohibit such gambling. Unless SCOTUS wants to define what constitutes the “normal” (or normatively desirable) state of affairs, SCOTUS is stuck in baseline hell — i.e., that hellishly futile debate about whether a decision constitutes a “negative” failure to provide a special benefit or an “affirmative” imposition of a special cost.

2. Does Murphy’s new “Direct”/Indirect” distinction threaten any sort of traditional preemption?

I think not, but Daniel Hemel disagrees. He notes that Murphy condemns any “direct” regulation of states and notes that lots of federal prohibitions on state taxation seem to be such “direct” regulations. (These prohibitions certainly do not mention any private persons to whom they might apply).

I think that he might be overreading Murphy. Here’s why.

Alito’s opinion sidesteps preemption by arguing that federal laws may set aside state law whenever the former “imposes restrictions or confers rights on private actors” and “state law confers rights or imposes restrictions that con­flict with the federal law.” The federal law then operates by the Supremacy Clause’s conflicts of law rule to set aside the state law because “the federal law
takes precedence.”

All of Daniel’s examples of federal laws that preempt state taxation confer a right on private individuals to be free from such taxation. The same goes, of course, for doctrines like the dormant commerce clause and analogous federal statutes. Indeed, such federal laws typically appear in litigation because a private party raises them as federal preemption defenses to state causes of action.

In short, a federal law setting aside state law (“deregulatory nationalism,” if you will) is safely insulated from “state autonomy” doctrine just so long as a private party can assert that federal law as a defense in litigation against the preempted state law.

Daniel argues that, if “words have any meaning,” then Murphy’s effort to save preemption must fail, because the result in Murphy falls within this exception for preemption literally construes. In Daniel’s words

any law that says “states cannot authorize X” can be redescribed as a law that says “private actors are prohibited from doing X notwithstanding any state law that authorizes them.” If this sort of redescription maneuver works, then Murphy itself should have come out the other way, because the challenged provision of PASPA could be redescribed as a permissible regulation of private actors (which the Supreme Court said it was not).

I think that Daniel’s argument overlooks Murphy’s emphasis that PASPA does not confer on either the AG or any private party any right to bring a cause of action against private gamblers. “If a private citizen or company started a sports gambling operation, either with or without state authorization,” Murphy states, “§3702(1) would not be violated and would not provide anyground for a civil action by the Attorney General or any other party.”

To avoid Murphy, federal laws merely need to create a cause of action against a private party for engaging in some federally forbidden activity accompanied by a preemption clause barring any state law from authorizing that which federal law forbids. The problem with PASPA is that it did not contain this “direct” federal prohibition on private gambling.

Murphy, therefore, does not so radically broaden the anti-commandeering rule as to threaten federal preemption. Contrary to Daniel’s post, I think that federal limits on state taxing authority are, I think, safe.

Note also that, under my analysis, Murphy might spare 8 U.S.C. § 1373, the provision that bars state and local governments from interfering with their employees’ aiding the federal government. To the extent that such employees can assert section 1373 as a federal defense against state or local disciplinary action, section 1373 would seem to qualify as a federally conferred right falling squarely within Murphy’s exception for preemption that incidentally sets aside state law.

3. How Murphy might eliminate 8 U.S.C. Section 1621’s ban on states’ conferring benefits on aliens

But Murphy does broaden state autonomy doctrine in some important ways. Consider, for instance, 8 U.S.C. §1621(a), which provides that “an alien who is not [otherwise qualified by the statute] is not eligible for any State or local public benefit [as defined in the statute].” This statute purports to tell states on whom they can confer various benefits like drivers’ licenses and seats in public universities. This federal law not only looks like a “direct” regulation of state and local governments but also does not contain any defense that any private party could easily raise in litigation. Section 1621 does not allow any private person to set aside some state regulation or tax: Indeed, states’ giving (for instance) a driver’s license to one private person hardly looks like a burden on another private person sufficient to confer standing to sue on the latter.

So I think that 8 U.S.C. §1621 must bite the dust post-Murphy.

And a good thing, too: There is something deeply absurd about the federal government’s telling state and local governments not to spend their own money as they please when no specific individual is harmed by such spending. That absurdity could find a place to hide in “baseline hell,” because a federal law barring unlawfully present aliens from receiving drivers’ licenses could be characterized as a “negative” prohibition rather than an “affirmative” mandate. Murphy‘s getting rid of that particular baseline inquiry leaves §1621 out in the cold.

Posted by Rick Hills on May 16, 2018 at 07:11 PM | Permalink


Does anyone else find it non-obvious why the NCAA had standing?

Posted by: Jr | May 20, 2018 2:52:30 PM

Thanks Rick. After giving the opinion another read and some more thought, I think your reading of the case makes sense. However, I think Hemel's reading of the case is possible too. If you are interested, I just posted again: http://www.thefacultylounge.org/2018/05/murphy-v-ncaa-is-poorly-written-and-should-be-narrowly-applied.html#more

Posted by: Jeff Schmitt | May 17, 2018 11:58:43 AM

I don't understand the question from the DCCD. According to the DCCD, the *Constitution* prohibits states from interfering in interstate commerce without Congress's permission. The anticommandeering principle prohibits Congress from adding to the Constitution's demands of states. Certainly, if a states tries to regulate interstate commerce, courts will block it, based on the DCCD. Congress doesn't have to pass a law banning that action, the Constitution already did. Here, we are talking about states regulating intrastate behavior. What's the contradiction?

Posted by: Biff | May 17, 2018 11:14:29 AM

I think your (2) is precisely right. It seems to me that Alito goes out of his way to reject Hemel's position in Part V. He expressly states that the issue isn't the language Congress uses, but the federal rights and obligations conferred.

Posted by: Salem Al-Damluji | May 17, 2018 4:56:38 AM

Nice post, Jeff. I assume that DCCD creates a federal right for a private party to engage in whatever activity is regulated by state in a commerce-interfering way. So DCCD is like a fed license: It creates a private right with which states cannot interfere. By contrast, the NCAA was not asserting any federal right to engage in some federally protected activity, was it? The NCAA trying to shut down a stare repeal that did nothing to prevent the NCAA from doing anything. Why does this distinction between federal laws that confer private rights and those that simply preclude state laws distinguish Murphy from the DCCD? (Note btw that this distinction might back the doctrine back into baseline hell).

Posted by: Rick Hills | May 16, 2018 9:56:24 PM

Rick, I don't think I understand your position on why Murphy is consistent with the Dormant Commerce Clause Doctrine. In those cases, Congress hasn't acted at all, so it certainly has not directly regulated individuals. Is there a specific cause of action that you think makes those cases consistent with Murphy? I might be wrong, but I thought plaintiffs in DCCD cases typically sought declaratory and injunctive relief under 28 U.S.C. 2201. Isn't this what the plaintiffs in Murphy did? I believe a plaintiff can sometimes also seek relief under section 1983. Is this what you are referring to? Even if you are right about this, Alito's language is Murphy is broad enough to cause a lot of headaches for the lower courts in the coming years.

I raised this point in a post a few days ago at the Faculty Lounge: http://www.thefacultylounge.org/2018/05/murphy-v-ncaa-anti-commandeering-prigg-v-pennsylvania-and-the-dormant-commerce-clause.html#more

Posted by: Jeff Schmitt | May 16, 2018 9:11:46 PM

It seems , that such legal debate , could and should be avoided , if only , the legislator , could be clear , or rather clearly mention, what is the purpose and justification of the law . All I could learn from the law is that it is , I quote :

" An act To prohibit sports gambling under State law, and for other purposes…"

What other purposes ?? I could only learn from the dissenting opinion of justice Ginsburg , that :

" Congress permissibly exercised its authority to regulate commerce by instructing states and private parties to refrain from operating sport – gambling schemes …. "

Other laws of Congress , are sometimes very clear . Unfolding in details the purposes and the history of legislation, for It is solving later, many complicated debates and precious resources.

One may read here for example , a very detailed description of purposes and history , in that :

" Jerusalem embassy act of 1995 "

And providing so , clear guidance for states , lawyers , courts , etc….so simple , here:



Posted by: El roam | May 16, 2018 8:38:49 PM

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