Steward Machine Co. V. Davis

• Cardozo, 1937. Reversed course; abandoned distinction between “conditional appropriations” and appropriations requiring binding promises by the recipient.

• Upheld provision of the Social Security Act which allowed employers to receive a credit against federal tax for any contribution to a state-enacted unemployment plan. Even though the credit was given only where the state passed a plan meeting congressionally-defined (certainly an arrangement having aspects of an “agreement” between the state and the federal government), the plan was held valid, in view of the need to combat employment, a federal problem.

• Cardozo observed congressional action here was necessary because unemployment was a collective action problem. [zqn – is this functional argument a legitimate mode of constitutional argument?]

• SCt here left open question of limits on congressional power.

• Cardozo purported to distinguish rather than overrule Butler, but distinguished it into oblivion.

South Dakota V. Dole - National drinking age

• Rehnquist 1987. Held that there is little limit on conditional use of spending power. But how can this holding be reconciled with Lopez?

• Facts. Congress, in order to prevent drivers under the age of 21 from drinking, withheld federal highway funds from states that permit individuals younger than 21 to purchase or possess in public any alcoholic beverage. South Dakota attacked the statute on the grounds that this condition interfered with its own exclusive powers under both the 10th and 21^st Amendments.

• Holding. SCt upheld the statute. Even if, arguendo, direct congressional setting of the drinking age for the entire country would be unconstitutional, Congress’ indirect use of its conditional spending power to achieve the same results is permissible. Only if, by the use of that conditional spending power, Congress induced the states to pass laws that would themselves violate the constitutional rights of individuals would that congressional action be unconstitutional. “Thus, for example, a grant of federal funds conditioned on invidiously discriminatory state action or the imposition of cruel and unusual punishment would be an illegitimate exercise of the Congress’ broad spending power.” Here, by contrast, if South Dakota responded to Congress’ inducement by raising its drinking age to 21, the state’s action would not violate anyone’s constitutional rights, so Congress’ attempt to persuade the state by use of its spending power is not unconstitutional.

Pennhurst State School & Hospital V. Halderman

• 1981. Added limit to Congressional spending power in form of rule of statutory construction:

• If Congress intends to impose a condition on grant of federal moneys, it must do so unambiguously.

• Rationale. It would be unfair (and perhaps unconstitutional) to impose obligation on state, following its acceptance of federal funds, unless “Congress spoke so clearly that we can fairly say that state could make an informed choice.”

Dormant commerce clause (dcc) – Protection against facial discrimination

• These cases present question of powers on border between exclusive federal powers and concurrent powers.

• DCC doctrine is an inference from Congressional silence. Any limitation imposed on state law by doctrine (i.e., SCt. strikes state statute) is waivable by Congress. It is merely a presumption, a tool for interpreting Congressional silence, given that there is no mechanism for Congressional review of state legislation. (Unlike federal judiciary, Congress does not have to hear cases that come to it.)