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I am interested in whether a US state constitution could be legally amended to ban exports of specific natural resources (such as coal, lithium or copper) outside it's own state borders.

If such a ban were successful, there would presumably be a fusillade of federal lawsuits from entities that had already invested in the mining of export-restricted resources in the state. What damages if succesful, could the state be liable for? Would the state have a defense against such lawsuits such as force majure? I am particularly interested in contract termination damages if a miner had force majure clauses in their contracts with customers.

A. K.
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Brian Topping
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  • Question does not show much work since the answer is an easy "no" based on the black and white wording in the Constitution. – George White Mar 25 '19 at 03:21
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    Your question has a few too many questions but since it is "if succesful" to which the answer is "NO" I think it will be fine. – A. K. Mar 25 '19 at 04:36
  • @GeorgeWhite Please show me the black and white wording in the constitution you refer to – Kevin Mar 25 '19 at 15:04
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    "I am particularly interested in contract termination damages" Most contracts have a clause in them that allows them to nullify the contract if it becomes illegal. – cybernard Mar 25 '19 at 19:37
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    @Kevin - I was referring to Article I section 8 "3: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;" – George White Mar 25 '19 at 20:28
  • Thanks to all for the responses and to @A.K. for the edit. For context, the question came out of a nextdoor.com thread where we wondered if ending petroleum exports from Colorado could stop the fracking that is literally putting wells in the middle of kids playgrounds. The question stemmed from the idea that cannabis cannot be exported from Colorado, but it's obviously a very different scenario given it's DEA treatment. https://www.nytimes.com/2018/10/23/us/colorado-fracking-proposition-112.html – Brian Topping Mar 26 '19 at 03:15

3 Answers3

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No

A state may not do that.

The US Constitution Art. I section 8 says:

  1. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

...

  1. To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Art I section 10:

  1. No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

The power to regulate interstate commerce and foreign commerce is exclusive to Congress, no state may exercise it. The power to tax imports and exports is only given in vary limited degree to states, and only by specific permission of Congress.

The Interstate Commerce Clause has been interpreted to mean that a state may not favor its own citizens over citizens of other states in taxation or in commercial privileges, although it may restrict state services to state residents, or charge non-residents higher fees, as for tuition at public colleges.

Even with the consent of Congress, or if passed by Congress, such a law might well be precluded by the Equal Protection clause. Congress may prohibit specific items from being moved in interstate commerce, or it may limit, license, or tax them. But all such regulations must be uniform across the United states, and may not apply only to a specific state.

Regulation of interstate commerce can include regulation of purely intra-state transactions, if they are held to "affect" interstate commerce. This power is very wide-ranging.

David Siegel
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    Not being able to tax exports to other states is not the same thing as being able ban exports all together – Kevin Mar 25 '19 at 15:01
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    @Kevin The Commerce Clause, which grants exclusive power over both interstate and foreign commerce to Congress, is probably more relevant. But when the constitution was adopted, embargoes and similar bans were usually done via the taxing power, which you see was connected to the power of inspections. In any case the absence of the taxing power here implies a general absence of regulatory power, and is consistent with the commerce clause. – David Siegel Mar 25 '19 at 15:15
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    Then how is California able to stop anyone from bringing fruit into the state? – Shufflepants Mar 25 '19 at 17:22
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    @Shufflepants The restriction appears to be against taxes rather than outright bans, "Imposts and Duties" would both be charging money to import or export. – IllusiveBrian Mar 25 '19 at 20:25
  • It's worth noting that the Federal government's interpretation of the Commerce Clause is extremely controversial with regard to many issues, particularly the authority to regulate drugs and firearms. – StackOverthrow Mar 25 '19 at 23:08
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    @TKK I was referring to the Supreme Court's interpretation, which has been rather consistent for quite a few years now, and which, like it or not, is the law of the land, pending a new case that overrules past ones, or a constitutional amendment. I don't agree as a matter of legal theory with some of the Supreme Court decisions on this issue but they are the law within the US. Executive branch interpretations are quite another matter. – David Siegel Mar 25 '19 at 23:25
  • @IllusiveBrian I know, and then if that's the case, then that restriction is irrelevant to OP's question and invalidates this answer, because it asks about banning exports/imports rather than tariffs or quotas. – Shufflepants Mar 26 '19 at 14:45
  • @DavidSiegel I understand all that. But the controversy is deep, and there's a potential of a future reversal as radical as those relating to slavery. We're already seeing state legislatures in open rebellion against Federal law with regard to recreational drugs (Washington, Colorado, etc.) and firearms (Missouri, Montana, etc.) My point is that many state legislators would already say that the answer to the OP's question is unequivocally yes, and we may be headed for the Federal government agreeing. – StackOverthrow Mar 26 '19 at 17:59
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I agree with David Siegel's answer but I think its always important in the law to consider what it would take to get what you want. I will say it is possible but not as an export prohibition per se and practically may fail.

The state could use its 5th amendment powers of eminent domain to take possession of all of the desired raw materials and relevant mineral rights for just compensation thus making them all property of The State. Expensive and not sure what the incentive is, but as laws are now, permissible if there is some public benefit. At this point the relevant natural resources would be property of the state and could therefore control where it goes such as keeping the resources in state.

Now assuming that neither budgetary restrictions nor a lawsuit were successful at stopping this measure (two big ifs), The federal government could still take the resources from The State in the same way under eminent domain.

In summary it is possible if:

  1. Your state has large excesses of cash and a desire to be an irrational economic actor AND
  2. the federal government is shutdown for a very very long time preventing operations of the courts and/or solicitor generals office.
A. K.
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    I don't like the second part of point 1; there's nothing irrational about deciding to keep coal in the ground. – gerrit Mar 25 '19 at 09:43
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    Upvoted, and not only for the pubic benefits (I'm all for those). In effect one could imagine a state go socialist and make many resources common goods. Interesting constitutional question how this interacts with the prerogative of Congress to regulate interstate commerce. – Peter - Reinstate Monica Mar 25 '19 at 10:27
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    @gerrit: the question really doesn't bear on keeping coal in the ground; it relates to keeping it in-state once it's mined. Presumably a state could use various regulations (commerce, land use, environmental, transportation) to effectively prohibit coal mining. – CCTO Mar 25 '19 at 16:59
  • This is not necessarily true. Depending on state law, it may be necessary for the government actor(s) to have a specific plan in mind before they can condemn a piece of property. Doing nothing and allowing the property to stand idle may or may not pass muster depending on the specific wording of the law. – Kevin Mar 25 '19 at 23:47
  • @Kevin Good point, but if they have the political will to do this in the first place, I'm sure they could easily change the law. – A. K. Mar 26 '19 at 01:11
  • @CCTO: See the comment I added to the OP. The possible intent of such a export restriction was exactly that – not to stop the mining, but the material would be constrained to in-state usage. – Brian Topping Mar 26 '19 at 03:21
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They can, and do; there's just one wrinkle: They get the assent of the Federal government.

Take the Great Lakes Compact (please, says Nestle and Coke). It's a deal amongst the Great Lakes border states, and provinces, that decide how (or to be more precise, how not) water will leave the Great Lakes watershed. It's an agreement, not a treaty.

But as far as the several states go, you're exactly right, the states couldn't make the deal alone. They got the Federal government to sign off on it, and why wouldn't it, after all? They just went through the formality to get the Federal rubberstamp.

And the water bottling companies are up in arms, because they want to sell the water outside the compact area. They pull the same thing in California with the Sierra watershed, again, protected under a similar compact.

Now let's talk about takings aspect. Even if the state could make a law robbing a mine of its interstate customers, that is a taking - specifically a regulatory taking - under the 5th Amendment. They would have to compensate the property owner for the asset value. So here's a crazy idea. Why not just compensate the owner for the asset value? At that point, it's a consensual sale. The Feds can't possibly object. The company, owned by the state, can sell or not sell to whomever they please. Your objective is achieved, just, in the free market instead of the use of force.

Similarly, there's no question that if the State opened a gravel quarry specifically to feed freeway rebuilding projects, and ABC Paving Co. decided they wanted to buy some of that gravel for paving private driveways, State Quarry Inc. is under no obligation to sell to them.

Harper - Reinstate Monica
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    Note that natural water supplies are somewhat different to other resources, as they are subject to a level of regulation that few, if any, other resources are. Indeed the various states are said to "own" waterways, in trust for the people. Note also that eminent domain with compensation is not a consensual sale, and can be challenged on various grounds, mostly the existence of a proper public purpose. – David Siegel Mar 25 '19 at 13:37
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    @DavidSiegel I'm only using water as an example of how to make interstate treaties work. As far as eminent domain, this is me repudiating it. It's slow, unreliable and a lose for everyone. In my experience 98% of emient domain takings are in fact consensual sales done in lieu of, and typically at positively motivational prices. That works on all but the crazies, and company boards don't have a majority of crazies. – Harper - Reinstate Monica Mar 25 '19 at 18:42
  • I would disagree on the takings analysis. This would reduce the value of the resource, but so long as it has some valuable use intrastate, it is not a total taking and does not implicate the takings clause. There is also the question of who owns the resource. A state has wider powers as an owner of the property in question than as a regulator. If the state owns the only coal mine in the state, it can decide who to sell it to, but not so, if it merely regulates that coal mine. (Also there is a special exception for Uranium which is the property of the fed gov by statue absent a US license.) – ohwilleke Mar 25 '19 at 21:07
  • @ohwilleke I've seen plenty of case law where the takings clause was applied to situations where the government action reduced the value of the property. That's kinda the definition of a regulatory taking: textbook example being a rezoning. , you buy a site zoned commercial and worth $900K and blam, they rezone it residential making it worth $400k. Best way out of that for the city is consensual-buy the parcel for 900k. – Harper - Reinstate Monica Mar 25 '19 at 21:19
  • @Harper You are incorrect, both in general and in the specific example that you have provided. Regulatory takings are possible, but they must be total under the U.S. Constitution (state constitutional rights could be more generous in some states). See Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). https://supreme.justia.com/cases/federal/us/505/1003/ A mere reduction in fair market value due to a regulation is not a 5th Amendment or 14th Amendment taking. Down zoning is not, in general, compensable under the 5th Amendment if it leaves some economic use for the property. – ohwilleke Mar 25 '19 at 21:29
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    You're right, the zoning discussion in my comment is problematic. But totality is not the issue; try Pennsylvania Coal v Mahon. But rather whether the government is able to dodge eminent domain by calling it a police action pursuant to a public nuisance** as in your example or Mugler v Kansas. Exporting mined resources out of the state can hardly be called a public nuisance, so that would definitely be a regulatory taking. Regardless, better to dodge the entire issue with a consensual sale. – Harper - Reinstate Monica Mar 25 '19 at 22:27
  • @Harper You may be seeing statutory cases out of CA where there is a statute in CA (or state constitutional provision) that prevents localities from downzoning infill property. But, this is not a constitutional taking. Public nuisance is a separate exception to regulatory takings in addition to the totality rule. There is nice flow chart in this power point presentation that is generally quite accurate. https://www.mcgregorlegere.com/reading-room/slideshows-powerpoints/category/3-real-estate-law-downloads?download=11:real-estate-supreme-court-regulatory-takings-eminent-domain – ohwilleke Mar 28 '19 at 18:54
  • @Harper Lucas expressly refines and modifies Mahon, leaving a physical invasion category, a total taking category, and a narrow fact specific residual "near miss" claim. See Lucas at 1019-1020. – ohwilleke Mar 28 '19 at 19:11