Will Uncooperative Federalism Survive NFIB?

Abstract

In October Term 2012, the Supreme Court decided two cases that are fundamentally at odds: NFIB v. Sebelius and Douglas v. Independent Living Center of Southern California. In NFIB, the Court held that the federal government, at least under some circumstances, may not use the threat of reduced funding in cooperative federalism programs to require states to comply with federal statutory requirements. In Douglas, however, the Court indicated that private litigants should sue federal agencies under the Administrative Procedure Act if those agencies refuse to enforce federal statutory requirements against the states. The problem is that the withdrawal of funding is literally the only enforcement tool that the federal government has in many of these programs. The Supreme Court has thus created liability for federal agencies that they might, in some cases, be unable to avoid. The result could be that Congress gives federal agencies new enforcement tools, but the only alternative tool in current federalism is conditional preemption, which would give rise to a federal takeover in many policy spaces. In the end, the Court's federalism doctrines seem to encourage greater federalization, seemingly at odds with the Court's pro-state intentions.