The Trump Administration’s Latest Lawsuit Against California and the New Frontier of States’ Rights

Last week, the Trump Administration filed a lawsuit challenging the constitutionality of California’s creation of a regional cap-and-trade program for reducing carbon emissions that includes Quebec. In this Q and A, Stanford Law Professors David Freeman Engstrom and Bernadette Meyler address that controversy, including what it might mean for the future of foreign affairs federalism.

The lawsuit that the DOJ filed against California last week seems like a new front in the ongoing battle between the Trump Administration and California.  How should we think about it?

Last week’s lawsuit might seem like yet another new battle line in the Age of Trump.  In fact, it reflects a long-running trend in U.S. foreign relations:  the rise of assertive states and cities that are stepping onto the global stage and, in effect, conducting their own foreign policy.  The suit, in other words, is neither the first volley nor the last—and it won’t end when Trump exits the White House.

Stanford Law Professor Bernadette Meyler

You’ve each written previously about the wider context of these sorts of battles—David in What if California Had a Foreign Policy? The New Frontier of States’ Rights (with Stanford’s Jeremy Weinstein) and Bernie in Like a Nation State (with Yale’s Douglas Kysar). Can you elaborate?

Some context and history are definitely helpful.  It used to be that foreign policy was thought to be the province of diplomats and soldiers—agents of nation-states duking it out on a global stage.  But this view has never been quite right.  It treats the federal government as a single actor, thus ignoring the federal government’s competing power centers.  Cabinet agencies, Congress, the military, and the courts all shape how national interests are defined and pursued, and they don’t necessarily speak with one voice.  Beyond that, a growing web of government regulators likewise cooperates with foreign governments on transnational crime, corruption, banking, taxation, and immigration, often without explicit direction from the President.  And numerous actors outside of government—multi-national corporations, NGOs, unions, religious institutions, philanthropic organizations, assorted billionaires—also influence U.S. foreign policy.  In other words, the landscape of foreign relations and federalism has gradually shifted out from under the diplomats-and-soldiers view.

The foreign policy activism of subfederal actors like California is just one part of this increasingly crowded field, but it seems to be a growing one.  There are lots of examples, especially in the climate space.  At the moment President Trump announced the U.S. withdrawal from the Paris agreement on climate change in 2017, California Governor Jerry Brown was heading to China to meet with President Xi Jinping in the Great Hall of the People—an honor usually extended only to visiting Heads of State—to discuss a climate partnership.  But Brown’s trip was only the most recent chapter in California’s international climate policy.  In 2015, before Trump was elected President, and even before the Paris framework came into being, some 170 jurisdictions, including California, Canada, and Mexico, had formed the Under 2 Coalition, a nonbinding, global agreement that commits signatories to lower their emissions to net-zero by mid-century.  Several years before that, former Governor Schwarzenegger had announced his intention to lead the world by example and proposed a California cap-and-trade program that could be linked with other jurisdictions internationally—the same type of action that the DOJ’s lawsuit is now challenging.

Other examples go beyond climate and also extend back decades.  Witness current battles between the federal government and “sanctuary cities” over American immigration policy, which have their roots in the 1980s when the state of Wisconsin and many cities, among them Berkeley, offered safe-haven to refugees fleeing Central American conflicts.  Or think back to the late 1970s when states and municipalities declared themselves nuclear-free zones to protest Cold War-era nuclear proliferation.  Or recall states’ and municipalities’ efforts to prohibit engagement with companies investing in apartheid-era South Africa to counter the Reagan Administration’s policy of “constructive engagement.”

While the courts will decide this round, our view is that we, as a nation, need to think hard about this shifting landscape—and how best to manage the opportunities and risks across a range of policy areas, from climate change and immigration to trade and human rights.

Stanford Law Professor David Engstrom
Stanford Law Professor David Engstrom

What’s your guess as to how the lawsuit will come out?

The Trump Administration is claiming California has “intruded into the federal sphere” by linking its cap-and-trade program to Quebec.  California will, no doubt, offer a vigorous defense.  Ultimately, whether the courts will allow California’s cross-border cap-and-trade program to stand will depend on how much leeway they say the Constitution gives to states.  Historically, the answer has been very little.  Supreme Court decisions dating back a hundred years establish the idea that the Constitution makes foreign affairs the exclusive domain of the federal government.  Sound foreign policy, the idea goes, requires that the federal government speak with “one voice.”  It cannot be opened up to a provincial chorus.

While convenient shorthand, the “one voice” idea is hardly ironclad legally.  In fact, the Constitution sprinkles foreign affairs powers across the legislative and executive branches, creating multiple federal voices, not one.  More importantly, on foreign affairs the Constitution is, as one scholar has said, a “strange, laconic document.” It specifies some foreign affairs powers but omits others.  Where, for instance, is the power to recognize other governments, open consulates in other countries and admit foreign consulates, or acquire and cede territory?  Add in the increasingly crowded field of actors who now shape American foreign policy, and the “one voice” idea suddenly seems full of cracks.  It is these cracks that California and other subfederal actors are exploiting as they pursue opportunities for global leadership.

Nor does application of the “one voice” notion definitively resolve the DOJ’s lawsuit.  True, the Constitution prohibits certain state actions—wars, treaties, and compacts or agreements entered into without Congress’s consent.  This latter constraint, inscribed in the Compact Clause, is the one that is front and center in the DOJ’s lawsuit.  But Congress, despite its constitutional authority to disapprove state agreements, has never objected to California’s Canadian linkages.  This is important, for the Supreme Court has previously shown itself willing to interpret congressional silence on compacts as acquiescence and, thus, approval.

All of this suggests that the Trump Administration could face an uphill battle in convincing the court that California has gone rogue and entered into an unauthorized compact or treaty with a foreign power.

Do you trust the courts to get this right?  What is the right answer on these issues?

The big question here, and one that goes beyond any particular lawsuit, is:  Will U.S. foreign policy be advanced or impaired by subfederal activism?  This isn’t easy to answer.

One might begin by noting that two of federalism’s primary virtues—its potential to spur policy innovation and to bring policy closer to the people—stand in tension with the view that U.S. power depends on unified action.  In earlier eras marked by bipartisan agreement on national security priorities, few worried about activist states and cities; many even saw their energy as a virtue, opening up new channels for advancing U.S. interests.  But as bipartisan consensus has eroded, the potential for federal and subfederal governments to act at cross-purposes has steadily grown, as has the incentive for the latter to push the envelope.  Perhaps this will move the Supreme Court to sharply check California’s move onto the global stage.  But amidst a long-running transformation in how foreign policy is conducted, and with a conservative Supreme Court that has long laced its decisions with paeans to federalism, the time to challenge unitary foreign affairs powers may be here.

What is clear is that courts are not well-equipped to navigate this new terrain.  Judges will encounter these issues sporadically, in a subset of policy domains, and without the expertise to gauge how a more expansive subfederal role fits with U.S. foreign policy goals.  Ideally, policymakers on both sides of the aisle would get ahead of the courts.  The challenge of harnessing all the tools of American power requires hard thinking about how to lead a diverse network of actors in a common direction and toward a shared goal.  This is a heavy lift under any circumstance, let alone in a deeply polarized system headed by an inexpert and distractable President.  While the deeper trends behind yesterday’s lawsuit long predate the Age of Trump, a measured and wise resolution of the difficult questions the case poses may prove to be yet another casualty.

David Freeman Engstrom is Professor of Law, Associate Dean for Strategic Initiatives, and the Bernard D. Bergreen Faculty Scholar.  He is a scholar of the design and implementation of litigation and regulatory regimes whose expertise runs to civil procedure, administrative law, federal courts, constitutional law, legal history, and empirical legal studies. Bernie Meyler is the Carl and Sheila Spaeth Professor of Law and Associate Dean for Research and Intellectual Life. She is a scholar of British and American constitutional law and of law and the humanities.