The Associated Press
June 19, 2000

WASHINGTON (AP) -- The Supreme Court, ruling that states cannot infringe on the foreign policymaking prerogatives of the U.S. government, made it harder for states to refuse to buy from companies that do business in nations known for human-rights abuses.

The court on Monday threw out a Massachusetts law that limits state purchases from companies doing business with Myanmar, also known as Burma.

The law is pre-empted by the federal government's own sanctions against Myanmar, the justices said.

"The state act is at odds with the president's intended authority to speak for the United States among the world's nations in developing a comprehensive, multilateral strategy to bring democracy to and improve human rights practices and the quality of life in Burma," Justice David H. Souter wrote for the court.

The Massachusetts law is similar to the boycotts of South Africa by many states and cities during the apartheid era.

However, Souter wrote, "Since we never ruled on whether state and local sanctions against South Africa in the 1980s were pre-empted or otherwise invalid, arguable parallels between the two sets of federal and state acts do not tell us much about the validity of the latter."

The decision upholds a federal appeals court decision that invalidated the Massachusetts law.

A number of state and local governments, including New York City and Los Angeles, restrict their purchases from companies doing business in countries such as Myanmar, Northern Ireland and China.

During the 1980s, many states and cities protested racial apartheid in South Africa by boycotting companies that sold goods to that nation.

Massachusetts -- home of the 1773 Boston Tea Party in which colonists dumped tea in Boston Harbor rather than pay taxes to England -- argued that it had a right to apply a "moral standard" to its spending decisions.

But the law was challenged by a group that represents companies involved in foreign trade. Foreign policy must be exclusively controlled by the federal government, the National Foreign Trade Council said, because allowing states and cities to have a variety of foreign-trade policies would harm trade overall.

The Clinton administration supported the group, citing the federal government's "preeminent role in acting for the United States in the international arena."

The military has ruled Myanmar, one of the world's poorest countries, since 1962. In 1988, the military gunned down thousands of protesters during a crackdown on a pro-democracy uprising.

Massachusetts' 1996 law says most companies doing business with Myanmar can sell goods and services to the state only if their bid is 10 percent lower than all other bids.

The law makes exceptions for purchases of some medical devices, for newsgathering companies, and for international telecommunications companies.

Several months after the Massachusetts law was enacted, Congress imposed its own sanctions on Myanmar. Under the law, President Clinton in 1997 barred new U.S. investments in that country.

The National Foreign Trade Council challenged the Massachusetts law in 1998. A federal judge ruled for the council, saying the law unconstitutionally interfered with the federal government's authority to conduct foreign policy.

The 1st U.S. Circuit Court of Appeals upheld that ruling and also said the law was pre-empted by the federal sanctions against Myanmar.

The Supreme Court upheld that ruling.

"Congress clearly intended the federal act to provide the president with flexible and effective authority over economic sanctions against Burma," Souter wrote.

"It is simply implausible that Congress would have gone to such lengths to empower the president if it had been willing to compromise his effectiveness by deference to every provision of state statute or local ordinance" that might conflict with federal action, Souter added.

The case is Crosby vs. National Foreign Trade Council, 99-474.