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The California Supreme Court Upholds a State Ban on Importing Kangaroo: A Case About State/Federal Legal Conflict that Might Interest the U.S. Supreme Court


Friday, Aug. 03, 2007

The California Supreme court recently handed down an interesting and important ruling -- Viva! International Voice for Animals v. Adidas Promotional Retail Operations, Inc. -- that illustrates the complicated interplay between state and federal policies in the area of law known as "preemption." As I'll explain, it's very possible that the U.S. Supreme Court may opt to both review and reverse the decision.

The Narrow Question Presented by the Adidas Case

The Adidas case asks whether California can enforce its criminal prohibition on the importation into or sale within the State of products made from kangaroo. Adidas conceded it was violating this ban, but argued that federal governmental policies concerning international management of kangaroo populations displaced California's power to regulate kangaroo import or sales. Under the federal Constitution's Supremacy Clause, if state laws conflict with federal objectives, then the federal programs trump and oust - "preempt" -- the conflicting state provisions.

The California Justices rejected Adidas's argument and upheld the California statute on the ground that no conflict exists between state and federal policies in this area. While the California court's opinion seems defensible, Adidas may seek and obtain U.S. Supreme Court review and perhaps get a reversal. (It might bear noting here that in the 2006-2007 Term, the U.S. Supreme Court lopsidedly reversed the California Supreme Court in two high-profile cases where the California court had rejected the federal claimant's challenge to state law -- Cunningham v. California and Brendlin v. California.)

The California Court's Reasoning

The California Justices' result turned largely on their interpretation of the federal Endangered Species Act of 1973 (ESA). This law was intended to protect endangered and threatened species from depletion and possible extinction. Because kangaroos have at times been (but are not currently) listed as threatened species, Adidas argued that kangaroo regulation is the unique province of federal authorities, who have been working with other countries - most importantly Australia - to develop effective kangaroo management practices. In particular, Adidas contended that the federal government has decided explicitly not to ban kangaroo importation into the U.S., as part of a deal with Australian national and regional governments, who in exchange have promised to regulate (and have, in fact, been regulating) excessive kangaroo destruction.

The California Justices rejected these arguments for a number of reasons. Perhaps most importantly, the California court relied on the "joint cooperative state-federal approach to wildlife preservation" it found to be reflected in a preemption provision contained in the ESA itself. A section of the ESA does purport to preempt state laws that permit what the ESA and its implementing regulations expressly prohibit, or prohibit what the ESA and its implementing regulations expressly permit. However, the same provision also says the ESA "shall not otherwise be construed to void any State law or regulation. . . ." and that "[a]ny state law or regulation [concerning] endangered species or threatened species may be more restrictive than the exemptions or permits provided for in [the ESA] but not less restrictive than the prohibitions so defined."

The California court reasoned that this provision recognizes a broad residual state power to regulate endangered and threatened animals. It also reasoned that as to "unlisted" species like kangaroos -- i.e., species that are not currently considered endangered or threatened -- the "inference" of unpreempted state authority is as great or even greater.

Why the California Supreme Court's Reasoning May Not Persuade the U.S. Supreme Court

The California Supreme Court's logic has force, but it still may not persuade skeptical U.S. Supreme Court Justices. For starters, the ESA clause that speaks to preemption is no model of clarity - it purports to allow states to be "more restrictive" than federal exemptions or permits, but at the same time, it also bars states from prohibiting what is "authorized" by federal permit.

Moreover, as the California court pointed out, the preemption clause doesn't even really mention species that are not endangered or threatened. The California court read that silence as authorizing state power, but others would simply say the clause is not relevant - in either direction -- to issues of federal preemption when states are regulating unlisted species.

In this regard, I should note that the U.S. Supreme Court's track record in the preemption area has been erratic, and that the Court has sometimes ignored (or read in a strained way) so-called preemption clauses in federal statutes, in order to preempt state regulation. In Geier v. American Honda Motor Co., for instance, the Court found that a common law state tort products liability action for unsafe products was preempted by federal safety laws even though the federal statutes had a provision that said "[c]ompliance" with the federal standard "did not exempt any person from liability under the common law."

The Larger Problem: The U.S. Supreme Court's Aggressive Rulings Concerning Preemption Where Foreign Affairs Are Concerned

Even if the California Justices are right that the ESA proper and its implementing regulations do not support preemption, the court might still be reversed because of the deal the United States seems to have struck with Australia - a deal in which the United States agreed not to close the American market to kangaroo products if the Australians would themselves prevent international consumer demand from taking too many kangaroos.

The California Justices found that such a deal might have existed 20 years ago - when kangaroos were listed as endangered - but no longer has relevance today. However, Adidas makes the counterargument that the federal authorities continue to monitor kangaroo destruction, and may be inclined to relist various kangaroo species if the deal struck two decades ago unravels because of state laws. And this counterargument is not frivolous.

In deciding how open the U.S. Supreme Court may be to Adidas's arguments, it is important to consider two recent rulings (one invalidating a California statute). Both seem to reflect a strong tendency on the part of the Court to displace state laws that even arguably touch on federal foreign affairs negotiations.

One striking example of the Supreme Court's interpreting the powers of states perhaps more narrowly than is appropriate can be found in Crosby v. National Foreign Trade Council, decided in 2000. In that case, the Court invalidated a Massachusetts statute that had directed state agencies not to purchase goods and services from any companies doing business in Burma, a nation with a notoriously bad human rights record.

In support of its result, the Supreme Court reasoned that Congress's own sanctions, imposed on Burma through a federal statute, represented Congress's considered choice about how much, and in what ways, Burma should be induced to change its evil ways. The federal government, the Court pointed out, had acted affirmatively in this area by imposing particular sanctions. And, the Court believed, commercial activity by Massachusetts might have interfered with the commercial system of incentives Congress sought to establish.

Many observers - myself included -- think the Court may well have decided Crosby wrongly. It ought to be clear that the people of a state, acting collectively through their state legislature, can speak their consciences, even as to matters of foreign affairs. One can plausibly argue that declining to spend money is simply one form of collective local expression. But even assuming that Congress does have the power to regulate the choices that a state makes when it acts -- as Massachusetts did there -- in its capacity as a conscientious consumer (as opposed to its capacity as a sovereign regulator of private consumers), I also think the evidence is fairly thin that the Massachusetts policy frustrated congressional will.

After all, the federal law implemented by President Clinton in 1997 was itself anti-Burma -- sending a message that America wanted the human rights violations to end. Because the Massachusetts policy reinforced, rather than undermined, this overall American goal, I do not see the clear conflict that the Court saw here. In the preemption realm, states typically have the power to go further than federal law, but in the same direction; for instance, their antidiscrimination laws can be more protective than federal ones. Had Massachusetts, in its purchasing policies, favored companies that did business in Burma, then a finding of conflict would have been more plausible. But since Congress did not provide any clear statement in its law that the judiciary should infer preemption, I think respect for federalism should have counseled the Court to come out the other way.

Additionally, it bears noting that the Massachusetts law existed when Congress acted (and, indeed, might have helped put the issue on Congress's agenda). But Congress did not say anything negative about the Massachusetts law when it enacted the federal measures; no member of Congress voiced opposition to what Massachusetts had done.

Some of the same criticisms apply to the Court's decision in 2003, in American Insurance Association v. Garamendi, to strike down, this time by a 5-4 vote, a California law that regulated insurance companies doing business within the state in an attempt to force them to disclose information about the industry's treatment of Holocaust victims over fifty years ago. The Court held that California's attempt conflicted with the policy the President had been pursuing, which was less coercive. Reading presidential actions broadly, the Court reasoned that because the Constitution gives to the federal government, and in particular the President, the power (which he had exercised) to negotiate with foreign countries and foreign companies, California's law could not stand.

Although these two decisions are arguably wrongly decided, and although they certainly stop short of saying that state regulation that might affect foreign affairs is invalid even in the absence of some affirmative preemptive action by Congress or the President, they do seem to reflect an unstated but meaningful presumption in favor of preemption in this realm. And the California Supreme court opinion, while it mentions these two cases, does not do much to explain why its result in the Adidas dispute can be easily distinguished from these two rulings. We will see in the next few months whether the California jurists have the last word in this matter or not.

Vikram David Amar is a professor of law at the University of California, Hastings College of Law in San Francisco. He is a 1988 graduate of the Yale Law School, and a former clerk to Justice Harry Blackmun. He is a co-author, along with William Cohen and Jonathan Varat, of a major constitutional law casebook, and a co-author of several volumes of the Wright & Miller treatise on federal practice and procedure. Before teaching, Professor Amar spent a few years at the firm of Gibson, Dunn & Crutcher.

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