Federalism depends on courts stopping states from regulating beyond their borders
Today, PLF filed an amicus brief in the Second Circuit supporting a television manufacturer’s challenge to a Connecticut law that shifts the cost of a local recycling program onto consumers in other states. The law is plainly unconstitutional under the Dormant Commerce Clause, which forbids states from regulating or taxing activity beyond their borders.
This has been a growing problem in recent years, as more states have attempted to impose their environmental regulations beyond their borders. In our brief, we explain that this trend of states encroaching on their neighbors undermines the Constitution’s system of competitive federalism.
The genius of American federalism is that it requires many policy questions to be decided by states that must compete for voters, taxpayers, and industry. This competitive pressure forces them to be more responsive to the wishes of those they govern and, ultimately, leads to smarter, more cost-efficient regulation. This competitive pressure forces them to be more responsive to the wishes of those they govern and, ultimately, leads to smarter, more cost -efficient regulation. States are generally free to experiment with novel solutions to vexing public policy problems. But they cannot avoid competition from other states by extending their experiments beyond their borders or by shifting the costs of those experiments to residents of other states.
Only courts can enforce federalism’s balance. States have too great an incentive to upset it to avoid the restraining influence of competition.