Supreme Court Watch By Beate Bloch State and local governments have been faring well this Term. The Court rejected three preemption challenges to state laws and regulations, and upheld a state tax against the contention that it violated the "negative" Commerce Clause. One state statute was invalidated under the First Amendment. The Court struck down two federal statutes the Gun-Free School Zones Act for lack of a sufficient nexus to interstate commerce, and the law prohibiting beer labels from showing alcohol content under the First Amendment. Preemption In Anderson v. Edwards, 63 U.S.L.W. 4221 (decided March 22), the Court upheld a California rule providing that all children living in the same household with one caretaker relative must be combined into one Assistance Unit for purposes of AFDC. Justice Thomas, writing for a unanimous Court, held that the rule did not conflict with federal regulations that require the combination only of members of a "nuclear family" living in the same household. Freightliner Corp. v. Myrick, 63 U.S.L.W. 4263 (decided April 18), was an action under state law against a manufacturer of tractor-trailers, alleging negligence because of the failure to include an antilock braking system in the equipment. The Court examined the preemptive effect of regulation or, more accurately, nonregulation under the National Traffic and Motor Vehicle Safety Act of 1966. That Act requires the Secretary of Transportation to establish "appropriate Federal motor vehicle safety standards." An express preemption clause restricts states to establishing standards that are identical with any federal standard "in effect." The Secretary's Standard 121, concerning air brakes, had been challenged, and had been suspended by the Court of Appeals for the Ninth Circuit. The Court held, without dissent, that the Secretary's standards posed no obstacle to the plaintiffs' actions. Justice Thomas wrote the Court's opinion, noting that there was no applicable standard currently in effect, and that the Act contained no exemption from liability under common law. Justice Scalia concurred in the judgment without opinion. New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 63 U.S.L.W. 4372 (decided April 26), involved a New York law requiring hospitals to collect surcharges from patients covered by a commercial insurer, but not from patients insured by a Blue Cross/Blue Shield plan, as well as from certain health maintenance organizations. The Court held, unanimously, that the law was not preempted by ERISA's comprehensive regulation of employer welfare plans. Justice Souter, writing for the Court, held that cost uniformity was not an objective of ERISA preemption. The New York law imposed no substantive coverage requirement. The opinion noted that any other conclusion would bar any state regulation of hospital costs. Commerce Clause Oklahoma Tax Commission v. Jefferson Lines, Inc., 63 U.S.L.W. 4233 (decided April 3), presented a Commerce Clause challenge to the imposition of an Oklahoma sales tax on the full price of a bus ticket for travel from Oklahoma to another state. Jefferson Lines (which had since become bankrupt) did not pay that tax, although it did pay the sales tax on all transportation beginning and ending in Oklahoma. The district court and the Eighth Circuit affirmed the Bankruptcy Court's rejection of the Tax Commission's claim. The Supreme Court reversed, 7 to 2. Justice Souter's opinion reviewed the Court's "negative" Commerce Clause cases, and concluded that the Oklahoma tax was valid under the standards established in Complete Auto Transit v. Brady, 430 U.S. 274 (1977). The sale of tangible goods has sufficient nexus with the state of sale to be taxable by that state; and, in Goldberg v. Sweet, 488 U.S. 252 (1989), the Court held that a state could tax telephone calls originating or terminating within the state and billed within the state. In this case, as in Goldberg, the tax was "internally consistent," because the imposition of an identical tax by other states would not increase the burden on interstate commerce. The tax also met the test of external consistency, because the state was not taxing more than the "portion of value that is fairly attributable to economic activity within the taxing State." "Apportionment" is generally concerned with taxes on income, not on sales. Accordingly, the Court distinguished Central Greyhound Lines, Inc. v. Mealey, 334 U.S. 653 (1948), which held that New York could tax a bus company's gross receipts only to the extent of miles traveled within New York State. A sales tax differs from a tax on gross receipts, in that a sale is "a discrete event facilitated by the laws and amenities of the place of sale." The Court has consistently approved taxation of sales without apportionment, even when interstate movement is contemplated. The opinion cited Wardair Canada Inc. v. Florida Department of Revenue, 477 U.S. 1 (1986), upholding a tax on the sale of airplane fuel for use in foreign commerce. The sale of services, like the sale of goods, is a local event. In Central Greyhound, the seller-taxpayer could have been taxed by New Jersey and Pennsylvania on portions of the same receipts that New York was taxing in their entirety. Here, the tax falls on the buyer, who couldn't be subjected to double taxation on the sale. Related taxes imposed by other states would have to allow credit for the Oklahoma tax, which reaches only activity, i.e., the sale, taking place within the taxing state. There was no discrimination against interstate commerce, and the tax bore a fair relationship to benefits police and fire protection and the like conferred by the taxing state. Justice Scalia, joined by Justice Thomas, concurred, on the ground that it was sufficient to show that there was no discrimination against interstate commerce. Justice Breyer, joined by Justice O'Connor, dissented, finding the tax identical, as a practical matter, with the tax held unconstitutional in Central Greyhound. They saw only a "linguistic difference" between a tax "upon all sales of transportation" and a tax on "gross income," including receipts of any such sale. Although the tax fell technically on the buyer, it was the bus company that was responsible for collecting and paying a tax imposed on interstate travel. In United States v. Lopez, 63 U.S.L.W. 4343 (decided April 26), the Court, 5 to 4, struck down the federal Gun-Free School Zones Act of 1990, which prohibits the possession of firearms in a school zone. Chief Justice Rehnquist, for the Court, held that Congress has no power to regulate public schools. The Act is a criminal statute, with no relationship to interstate commerce. It contains no jurisdictional element to ensure a nexus to interstate commerce, and there were no express congressional findings of an effect on interstate commerce. Justice Kennedy, joined by Justice O'Connor, wrote a concurring opinion, as did Justice Thomas. Justices Stevens and Souter wrote dissenting opinions and, together with Justice Ginsburg, joined Justice Breyer's dissenting opinion. First Amendment McIntyre v. Ohio Elections Commission, 63 U.S.L.W. 4279 (decided April 19), involved an Ohio law prohibiting the distribution of anonymous literature designed to influence the outcome of an election. Margaret McIntyre had been fined $100 for distributing, at a public meeting, unsigned leaflets opposing a proposed school tax levy. The Supreme Court reversed, 7 to 2. Justice Stevens, writing for the Court, relied on Talley v. California, 362 U.S. 60 (1960), where the Court invalidated a city ordinance prohibiting all anonymous leafleting (Talley involved unsigned handbills urging a boycott of certain merchants who allegedly engaged in discriminatory employment practices). In this case, the challenged law was not limited to fraudulent, false, or libelous statements. It applies only to documents designed to influence voters in an election. The Court distinguished Burson v. Freeman, 504 U.S. 191 (1992), which upheld a law prohibiting campaigning within 100 feet of a polling place. In this case, the Ohio statute "does not control the mechanics of the election process," but "is a regulation of pure speech." Strict scrutiny is applied to restrictions on political speech. The Court rejected the justifications advanced by the state. (1) The writer of political matter cannot be required to make statements or disclosures for the information of the electorate. (2) The law is not needed to prevent fraud and libel; other statutory provisions serve that purpose, and the statute applies to documents that are not even arguably false or misleading. Justice Ginsburg wrote a concurring opinion. Justice Thomas also concurred, citing the original intent of the Framers. Justice Scalia, joined by the Chief Justice, dissented, on the ground that this kind of law was common among the states, and was a valid regulation of the electoral process. He rejected the idea that there was a "right to anonymity" in the Constitution, and noted that the question of the effectiveness of the law was one for the state legislature, not the courts. In Rubin v. Coors Brewing Co., 63 U.S.L.W. 4319, the Court unanimously struck down section 5(e)(2) of the Federal Alcohol Administration Act of 1935, which prohibits beer labels from showing the alcohol content of the product. Justice Thomas, for the Court, held that this was protected commercial speech, consisting only of truthful verifiable factual information. The Court rejected the argument that the law was needed to assist states in preventing "strength wars" competition based on alcohol content. The opinion noted that the provision was inconsistent with federal policy concerning wine and liquor. The Court will decide next Term whether a state may forbid advertising of liquor prices (44 Liquormart v. Rhode Island). Beate Bloch is a legal writing consultant in Washington, DC.