It is a basic, intuitive, premise of our federal system that each state makes law for that states and not the other states. To steal an example from Professor Don Regan, even if the state of Michigan had a very strong anti-smoking policy, it could not ban the manufacture of cigarettes in North Carolina, only the importation of those cigarettes into Michigan.
And yet, it is not clear what actual part of our positive law enacts that premise. There is no Territoriality Clause in the Constitution, no Territoriality Statute, and arguments based on other more esoteric sources of law (general law?) raise deep questions of their own. Moreover, as every conflict of laws scholar knows, the basic premise of our federal system is frequently denied in practice—states regularly apply their own law to conduct that took place in other states, with relatively little shame or theoretical explanation. And if there is no Territoriality Clause in the Constitution, maybe they are allowed to do that.
On occasion, the courts get so flummoxed with this that they temporarily press other constitutional clauses into temporary active serve as a Territoriality Clause. The Due Process Clause is occasionally asked to do this work, for instance (as it as asked to many constitutional odd jobs). More promisingly, several cases had asked the so-called dormant Commerce Clause to do this work as well. If states cannot discriminate against interstate commerce, the logic went, then they also cannot simply regulate out-of-state commerce either.
No more. In today's decision in National Pork Producers v. Ross, a majority opinion by Justice Gorsuch upholds California's prohibition on pork produced in inhumane conditions, even though that production generally occurs outside of California. In doing so, the Court pretty squarely rejects the idea of territoriality review under the dormant Commerce Clause, despite several cases that had generally been read this way (and excerpted in conflict of laws casebooks this way); and even the partly dissenting judges appear to agree with him on this point. The dormant Commerce Clause will no longer serve as a Territoriality Clause.
But at the same time, even Justice Gorsuch's opinion cannot give up on the idea that something in the Constitution must do the work of a Territoriality Clause. In distinguishing away yet another one of the Court's territoriality dormant Commerce Clause cases, the Court writes:
Beyond Baldwin, Brown-Forman, and Healy, petitioners point to Edgar v. MITE Corp., 457 U. S. 624 (1982), as authority for the "almost per se" rule they propose. Invoking the dormant Commerce Clause, a plurality in that case declined to enforce an Illinois securities law that "directly regulate[d] transactions which [took] place . . . wholly outside the State" and involved individuals "having no connection with Illinois." Id., at 641–643 (emphasis added). Some have questioned whether the state law at issue in Edgar posed a dormant Commerce Clause question as much as one testing the territorial limits of state authority under the Constitution's horizontal separation of powers. See, e.g., D. Regan, Siamese Essays: (I) CTS Corp. v. Dynamics Corp. of America and Dormant Commerce Clause Doctrine; (II) Extraterritorial State Legislation, 85 Mich. L. Rev. 1865, 1875–1880, 1897–1902 (1987); cf. Shelby County v. Holder, 570 U. S. 529, 535 (2013) ("[A]ll States enjoy equal sovereignty"). But either way, the Edgar plurality opinion does not support the rule petitioners propose. That decision spoke to a law that directly regulated out-of-state transactions by those with no connection to the State. Petitioners do not allege those conditions exist here. To the contrary, they acknowledge that Proposition 12 regulates only products that companies choose to sell "within" California. Cal. Health & Safety Code Ann. §25990(b).
There is a LOT to unpack here.
It is true that the real extraterritoriality cases involve "directly regulat[ing] out-of-state transactions," not doing so indirectly as in National Pork Producers. But what is the Court's view of those direct regulations? Are they unconstitutional? And if so, why?
The Court's answer in this footnote is to move those cases away from the dormant Commerce Clause doctrine and instead into the "territorial limits of state authority under the Constitution's horizontal separation of powers." But … what are those? What constitutional provision encodes "the Constitution's horizontal separation of powers"? Or is Justice Gorsuch (Justice Gorsuch!?) endorsing some kind of free-floating unwritten constitutional law that is not contained in a specific constitutional provision?
And what does the answer to this have to do with Shelby County v. Holder's famous but controversial statements about equal sovereignty? Is the idea that the missing Territoriality Clause will now be located inside the Equal Sovereignty Clause (which is, alas, also missing)? Or is the idea that if the Court can find a free-floating Equal Sovereignty Principle Without A Clause, it may equally do so for a Territoriality Principle Without A Clause?
On the one hand, the Court's desire to limit the dormant Commerce Clause doctrine and avoid getting in to intractable questions of territoriality reflects commendable restraint. On the other hand, its apparent belief, reflected in this footnote, that those intractable questions of territoriality will still be dealt with under the Constitution, under the unwritten "territorial limits of state authority under the Constitution's horizontal separation of powers," does not inspire confidence that the Court has thought this one all the way through.
[In my view, the territorial limits on the states were probably originally understood as a subset of the law of nations, as applied to the U.S. states, and perhaps then better understood as a form of pre-Erie general law. But if that is their status it is hard to know what to make of them in a post-Erie world, and hard to figure out whether and when states have the power to disregard them. And it is hard to know what to make of various constitutional rules, from Due Process to the Faith and Credit to the Extradition Clause and maybe even the Commerce Clause that seem to presuppose such limits even if they do not enact them.]
I have called the Court's occasional, but inconstant, temptation to constitutionalize such principles "the Temptation of the Dark Side" So I will ask again a version of the question I asked there. If we are going to have "territorial limits on state authority under the Constitution's horizontal separation of powers," can we at least use them consistently, rigorously, and for good, to constrain a state's choice of law in cases implicating conduct in other states? And if not, can we be clearer and more definitive about the lack of constitutional limits in this area?
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