530 U.S. 363, 380 n. 14, 120 S.Ct. 2288, 2298 n.14 (2000)
In June 1996, Massachusetts adopted An Act Regulating State Contracts with Companies Doing Business with or in Burma (Myanmar), 1996 Mass. Acts 239, ch. 130, codified at Mass. Gen. Laws §§ 7:22G–7:22M (1997), and the statute generally bars state entities from buying goods or services from any person identified on a restricted purchase list of those doing business with Burma.1 The definition of doing business with Burma is broad and encompasses operations or subsidiaries in Burma, providing financial services to the government, promoting importation of gems or timber, or providing goods or services to the government, though exemptions exist for news reporting, international telecommunications, and medical supplies.2
Three months later, in September 1996, Congress passed a statute imposing mandatory and conditional sanctions on Burma that banned aid to the Burmese Government except for humanitarian purposes, instructed United States representatives to oppose loans from international financial institutions, and imposed visa restrictions on Burmese officials.3 Congress also authorized the President to prohibit new investment by United States persons upon findings of repression and directed development of a multilateral strategy while granting authority to waive sanctions when contrary to national security interests.4
On May 20, 1997, the President issued Executive Order No. 13047, certifying that the Burmese Government had committed large-scale repression of the democratic opposition and prohibiting new investment in Burma by United States persons along with related transactions.5 The National Foreign Trade Council, a nonprofit representing companies engaged in foreign commerce, had thirty-four members on the Massachusetts restricted purchase list in 1998, and three of those members withdrew from Burma after the state law while one had a bid increased by ten percent under the state provision.6
In April 1998 the Council filed suit in the United States District Court for the District of Massachusetts against the state officials charged with administering the Act, and after detailed stipulations, briefing, and argument the district court permanently enjoined enforcement of the state Act.7 The First Circuit affirmed the injunction on three independent grounds, and the Supreme Court granted certiorari to resolve the questions of preemption and related constitutional issues.8
Whether the Massachusetts law restricting the authority of its agencies to purchase goods or services from companies doing business with Burma is invalid under the Supremacy Clause owing to its threat of frustrating federal statutory objectives?9
Yes. Applying the obstacle preemption standard to the established facts, the Massachusetts law undermines the President's flexibility to control sanctions because the state statute imposes immediate and perpetual bans without waiver provisions, unlike the federal Act which allows the President to waive sanctions for national security interests.12 The state law penalizes companies with pre-existing operations in Burma and foreign companies, whereas the federal Act limits sanctions to United States persons and new investment.13 Furthermore, the state law has led to formal protests from the EU and complaints in the WTO, complicating the President's ability to develop a multilateral strategy as directed by Congress.14
The Massachusetts law is preempted by the federal Act and invalid under the Supremacy Clause.15
Related opinions on this issue
Joined by Justice Thomas
Justice Scalia concurred in the judgment.16 He stated that it is perfectly obvious on the face of the statute that Congress intended to provide the President with flexibility in implementing its Burma sanctions policy.17 Scalia saw no point in devoting footnotes to legislative history when the statute itself makes the intent clear.18
He likewise found it obvious that Congress expected the President to use his discretionary authority over sanctions to move the Burmese regime in the democratic direction.19 He also found it obvious that Congress's policy was deliberately calibrated to limit economic pressure to a specific range.20 Scalia objected to the majority's extensive reliance on legislative history because statements of individual members and executive letters are not reliable indications of what a majority of Congress intended.21 For this reason he joined only the judgment of the Court.22