No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.Article I, Section 10, Clause 3
The Framers of the Constitution had little difficulty seeing that combinations among the states, or any foreign-affairs activities undertaken by the states, were so fraught with danger to the union, that none should be allowed unless Congress consented. Comparable prohibitions had already been contained in the Articles of Confederation, but the Framers chose somewhat stronger language in the Constitution to assure national supremacy in foreign affairs and in relations among the states. The provisions caused no significant debate at the Constitutional Convention, and James Madison described them in The Federalist No. 44 as "fall[ing] within reasonings which are so obvious, or have been so fully developed, that they may be passed over without remark."
The constitutional logic of the provisions reflects a profound insight. Fearing that "factions," or interest groups, operating at the state level would endanger the Union and the legitimate interests of sister-states, Madison urged the Convention to include a congressional "negative" of "state laws in all cases whatsoever." Under his plan, no state law could go into effect without prior congressional approval. The Convention rejected Madison's proposal as unduly nationalistic and, moreover, unnecessarily broad, on the theory that most state laws would have little if any effect on the union or sister-states. The Convention instead subjected state laws to the operation of the Supremacy Clause: state laws become and remain in effect unless they are inconsistent with federal law or the Constitution.
Courts, however, cannot always be relied upon, and constitutional obstacles—in particular, the difficulty of mobilizing concurrent majorities in both houses of Congress and the Executive's assent—may prevent Congress from counteracting dangerous state enactments. Thus, for classes of state activities that could be presumed to threaten the union or sister-states, the Convention supplemented federal supremacy with either an absolute prohibition on state action (See Article I, Section 10, Clause 1) or the Madisonian "negative" (See Article I, Section 10, Clauses 2 and 3). The congressional approval requirement ensures that each state will be informed of, and heard on, potentially threatening sister-state activities, thus reducing the states' costs in monitoring and countermanding such activities. Moreover, the requirement compels the proponents of presumptively problematic state activities to mobilize the requisite majorities at the federal level, thus affording an added measure of security.
Among the provisions of the clause, only the Compact Clause has played a significant role in constitutional litigation. (The last Supreme Court case concerning the tonnage clause, a subject of frequent litigation in the nineteenth century, was in 1935.) The Supreme Court has interpreted the clause from an explicitly nontextual, "functionalist" perspective. While the foreign Compact Clause applies (as a constitutional matter, if not always in practice) to a broad range of formal and informal agreements between a state and foreign countries, the Supreme Court has determined that the domestic Compact Clause applies only to a narrow class of state agreements (those that establish binding obligations and, typically, multistate administrative agencies). Moreover, in United States Steel Corp. v. Multistate Tax Commission (1978), the Supreme Court declared that state compacts require congressional approval only if they "encroach upon the supremacy of the United States." Because states may not encroach upon federal supremacy in any event, a broad reading of United States Steel effectively deprives the Compact Clause of any independent constitutional force.
While the Supreme Court has never found a state compact void for want of congressional approval, some contemporary unapproved interstate agreements (such as the 1998 tobacco settlement between attorneys general and manufacturers) establish tax and regulatory regimes of unprecedented complexity and consequence. It remains to be seen whether this emerging trend could prompt a reexamination and rediscovery of the forgotten Compact Clause.
- Michael S. Greve
- John G. Searle Scholar
- American Enterprise Institute