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02-1238 Nixon v. Missouri Municipal League (60650)

By: dmc-admin//March 29, 2004//

02-1238 Nixon v. Missouri Municipal League (60650)

By: dmc-admin//March 29, 2004//

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“In familiar instances of regulatory preemption under the Supremacy Clause, a federal measure preempting state regulation of economic conduct by a private party simply leaves that party free to do anything it chooses consistent with the prevailing federal law. See, e.g., Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 540-553. But no such simple result would follow from federal preemption meant to unshackle local governments from entrepreneurial limitations. Such a government’s capacity to enter an economic market turns not only on the effect of straightforward economic regulation below the national level (including outright bans), but on the authority and potential will of state or local governments to support entry into the market. Preempting a ban on government utilities would not accomplish much if the government could not point to some law authorizing it to run a utility in the first place. And preemption would make no difference to anyone if the state regulator were left with control over funding needed for any utility operation and declined to pay for it. In other words, when a government regulates itself (or the subdivision through which it acts) there is no clear distinction between the regulator and the entity regulated. Legal limits on what the government itself (including its subdivisions) may do will often be indistinguishable from choices that express what the government wishes to do with the authority and resources it can command. Thus, preempting state or local governmental self-regulation (or regulation of political inferiors) would work so differently from preempting regulation of private players that it is highly unlikely that Congress intended to set off on such uncertain adventures.

299 F.3d 949, reversed.

Local effect:

The Seventh Circuit has not previously addressed the issue.

Souter, J.; Scalia, J., concurring; Stevens, J., dissenting

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