Exemption Federalism: Regulatory Carve-Outs and the Protection of Local Farms

Abstract

When national regulatory programs exempt small-scale operators or producers from certain requirements, the result looks surprisingly like federalism. That is, many local (or intrastate) operators end up subject only to state or local regulations; most national (or interstate) operators end up subject to federal regulation. While small-scale businesses may rely on these exemptions in practice, the exemptions are understudied and undertheorized in the legal scholarship. This Note proposes a new way of looking at exemptions to large national programs: as “exemption federalism.” In an era when federal regulatory power is nearly limitless, exemption federalism may prove to be a significant source and style of contemporary federalism. To illustrate, this Note takes a close look at one particular statute — the 1957 Poultry Products Inspection Act — and its exemptions for small-scale poultry producers. By examining the historical context of the Act, the debates surrounding its passage, its expansion, its exemptions, and its practical effect today, this Note traces the contours of modern American federalism through an agricultural lens. It also zooms out further, asking where else we can find exemption federalism, where it comes from, its costs and benefits, and its implications for industries outside of agriculture, from finance, to healthcare, to housing.

Keywords: constitutional law, regulation, agriculture, federalism