Would a Tennessee bill joining an interstate health-care compact be constitutional?

Subject

Opinion No. 12-99, Health Care Compact, October 29, 2012

Plain-English summary

Representative Pody asked whether HB 0369/SB 0326, a 2012 bill (as amended by House Amendment 2) that would have made Tennessee a party to an interstate health-care compact, was constitutional. The AG concluded it was facially constitutional.

The bill would have added new Tennessee Code sections (proposed §§ 68-1-2501 to -2504) joining a compact under which member states would have primary responsibility for regulating health care in their territory. Funding would come from Congress as mandatory spending. By the compact's own terms, it would not take effect for state or federal law purposes until Congress consented under the Compact Clause (U.S. Const. art. I, § 10, cl. 3).

The Compact Clause analysis was the heart of the question. The AG explained that an interstate compact joined by states is not effective until Congress consents (Cuyler v. Adams). Once Congress consents, the compact "transforms the States' agreement into federal law." Congress has broad authority to grant, withhold, or condition consent (Petty v. Tennessee-Missouri Bridge Comm'n). The Compact Clause exists to keep Congress's supervisory power over cooperative state action that could otherwise interfere with federal authority. Whether Congress consents to any particular compact is a political question and is non-justiciable.

The AG then walked through the standard constitutional doctrines that might apply to the bill and found no facial defect:

• Equal protection, due process, vagueness, appropriations: The bill triggers no state action until Congress consents, so it doesn't impose any duties or sanctions on citizens or require state expenditures. None of these doctrines is implicated facially.

• Dormant Commerce Clause: Once approved by Congress, the compact becomes federal law, so it cannot violate the dormant Commerce Clause restriction (which only constrains state laws). Tarrant Reg'l Water Dist. and Intake Water Co. support this.

• Section 8 of the compact (amending without congressional approval): This is constitutionally defensible. Cuyler v. Adams recognized that Congress can give advance consent to future joint state action, and Broun on Compacts confirms compacts may permit member-state amendments subject to congressional veto.

• Section 5 of the compact (mandatory federal funding): Also defensible. If Congress approves the compact as written, it's exercising its own spending power. Crucially, no Congress can bind future Congresses (Lockhart v. United States; Louisville Bridge Co. v. United States), so even an approved funding provision would not prevent later legislation altering or undercutting it.

The opinion notes that an as-applied challenge to the bill would not be ripe at this time because no factual scenario had been suggested for analysis (Women's Med. Prof'l Corp. v. Voinovich).

The AG also reminded the legislature of the presumption of constitutionality (Waters v. Farr) and the heavier burden a facial challenger bears under Salerno (must show "no set of circumstances exists under which the statute, as written, would be valid").

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The proposed compact

Sections 3 and 4 of the compact would have given each member state's legislature "primary responsibility" for health-care regulation in its territory. Section 5(a) provided funding "by Congress as mandatory spending and not subject to annual appropriation." Section 1(2) and Section 7 expressly conditioned the compact's effectiveness on congressional consent. Section 8 permitted compact amendment without prior congressional approval. Proposed § 68-1-2504 specified that "Federal administration and regulation of health care in this state" would continue until Congress consented AND Tennessee's General Assembly enacted "a sufficient administrative framework to provide effective and efficient state administration and regulation over health care."

The Compact Clause

"[N]o State shall, without the Consent of Congress, . . . enter into any Agreement or Compact with another State." U.S. Const. art. I, § 10, cl. 3. The Supreme Court has read this as a tool for Congress to maintain "ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority" (Cuyler v. Adams).

Why congressional consent matters

Once Congress consents, a compact "transforms the States' agreement into federal law" (Cuyler v. Adams). Interstate compacts then bind future state legislatures and take precedence over conflicting state statutes. They also give states authority "in an area that would otherwise be unavailable to them" (Broun on Compacts § 1.3).

Why dormant Commerce Clause isn't a problem

The dormant Commerce Clause restricts states from burdening interstate commerce (American Trucking Ass'ns v. Michigan Public Serv. Comm'n). But it doesn't restrict federal law. Once approved by Congress, a compact is federal law. So the dormant Commerce Clause doctrine cannot reach it (Tarrant Reg'l Water Dist.; Intake Water Co.).

Why future Congresses aren't locked in

A bedrock principle of constitutional law: "one legislature cannot enact a statute that prevents a future legislature from exercising its lawmaking power" (82 C.J.S. § Statutes 11; Lockhart v. United States, Scalia, J., concurring; Louisville Bridge Co.). So even if Congress approves a compact with a mandatory-funding provision, a later Congress can change the funding terms by ordinary legislation. Broun on Compacts § 2.1.4 makes the same point: "congressional assent to a compact in no way estops the Congress from effectively undercutting an agreement through ordinary legislation."

Presumption of constitutionality

Tennessee courts will "uphold the constitutionality of a statute whenever possible" (Waters v. Farr). The presumption applies "with even greater force" to facial challenges, where the challenger must establish that "no set of circumstances exists under which the statute, as written, would be valid" (Salerno; Northland Family Planning Clinic v. Cox). HB 0369 cleared this low bar because the bill is essentially conditional: it does nothing until Congress consents.

Common questions

Did this bill become law in Tennessee?
The opinion addresses a bill, not an enacted statute. To track current status, check Tennessee Code Annotated for §§ 68-1-2501 et seq. or the Tennessee General Assembly bill history.

Has Congress consented to the Health Care Compact?
The compact required congressional consent to take effect. The opinion does not report any congressional action, and consent decisions are nonjusticiable. Anyone trying to rely on the compact's terms today should verify whether Congress has consented.

What would the compact have actually done if Congress consented?
It would have shifted primary health-care regulatory authority from the federal government to the member states. Section 5 also called for federal mandatory-spending support. But Congress can attach conditions to consent (or change the funding scheme later), so the practical effect would depend on congressional terms.

Could a future legislature pull Tennessee out of the compact?
The compact, once federal law, would bind future Tennessee legislatures during its term (Broun on Compacts § 1.2.2). Withdrawing would generally require following whatever withdrawal procedure the compact itself provides. Congress, however, retains authority to alter the compact's federal-law effect through later legislation.

Citations

Constitutional provisions and proposed statutes:

• U.S. Const. art. I, § 8, cl. 3 (Commerce Clause)
• U.S. Const. art. I, § 10, cl. 3 (Compact Clause)
• HB 0369 / SB 0326 (107th Tenn. Gen. Assembly, 2d Sess. 2012)
• Proposed Tenn. Code Ann. §§ 68-1-2501 to -2504

Cases:

• Cuyler v. Adams, 449 U.S. 433 (1981)
• Petty v. Tennessee-Missouri Bridge Comm'n, 359 U.S. 275 (1959)
• Waters v. Farr, 291 S.W.3d 873 (Tenn. 2009)
• Northland Family Planning Clinic, Inc. v. Cox, 487 F.3d 323 (6th Cir. 2007)
• United States v. Miller, 604 F.Supp.2d 1162 (W.D. Tenn. 2009)
• United States v. Salerno, 481 U.S. 739 (1987)
• Tarrant Reg'l Water Dist. v. Herrmann, 656 F.3d 1222 (10th Cir. 2011)
• Intake Water Co. v. Yellowstone River Compact Comm'n, 769 F.2d 568 (9th Cir. 1985)
• Lockhart v. United States, 546 U.S. 142 (2005)
• Louisville Bridge Co. v. United States, 242 U.S. 409 (1917)
• Women's Med. Prof'l Corp. v. Voinovich, 130 F.3d 187 (6th Cir. 1997)
• Am. Trucking Ass'ns v. Michigan Pub. Serv. Comm'n, 545 U.S. 429 (2005)

Secondary sources:

• Caroline N. Broun et al., The Evolving Use and the Changing Role of Interstate Compacts: A Practitioner's Guide (ABA 2006) ("Broun on Compacts")
• Congressional Supervision of Interstate Compacts, 75 Yale L.J. 1416 (1966)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-099.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

October 29, 2012

Opinion No. 12-99

Health Care Compact

QUESTION

Is House Bill 0369/Senate Bill 0326, 107th General Assembly, 2nd Sess. (2012), as amended ("HB0369"), which proposed to make Tennessee a party to an interstate health care compact, constitutional?

OPINION

HB0369 appears to be facially constitutional.

ANALYSIS

HB0369 proposes to adopt and to make Tennessee a party to an interstate health care compact ("Compact") by which the member states seek to "return the authority to regulate Health Care to the Member States consistent with the goals and principles articulated" in the Compact. [Footnote 1: Although several amendments were proposed for SB0326 and HB0369, the House and Senate Conference Committee recommended that House Amendment 2 be adopted and that the other amendments previously passed in the Senate and House be deleted. Therefore, this opinion addresses HB0369 as amended by House Amendment 2 (copy attached).] HB0369, § 1, proposed Tenn. Code Ann. § 68-1-2502, Section 2. The compact would be added to Tennessee Code Annotated, Title 68, Chapter 1 (proposed §§ 68-1-2501 to -2504). [Footnote 2: The Compact is contained in proposed § 68-1-2502; references throughout this opinion to the sections of the Compact refer to that part.]

Under the Compact, the legislature of each member state would have the primary responsibility for regulating health care in its state. Id., Sections 3 and 4. Funding would be provided as detailed in the Compact "by Congress as mandatory spending and not subject to annual appropriation, to support the exercise of Member State authority under this Compact." Id., Section 5(a).

By its terms, the Compact requires Congressional consent pursuant to the Compact Clause of the United States Constitution. Id., Section 1(2) & 7. The Compact Clause provides that "[n]o State shall, without the Consent of Congress, . . . enter into any Agreement or Compact with another State." U.S. Const. art. I, § 10, cl. 3. The Compact would require that member states "take joint and separate action" to secure Congress's consent to the Compact. HB0369, § 1, proposed Tenn. Code Ann. § 68-1-2502, Section 2. The Compact would "become effective for purposes of the operation of State and Federal law in a Member State" only after the Compact has received such Congressional consent. Id., Section 1(2).

Once given, congressional consent "transforms the States' agreement into federal law under the Compact Clause." Cuyler v. Adams, 449 U.S. 433, 440 (1981). Interstate compacts are binding on future state legislatures and have precedence over any conflicting state statutes. See, e.g., Caroline N. Broun, et al., The Evolving Use and the Changing Role of Interstate Compacts: A Practitioner's Guide, § 1.2.2 (ABA 2006) ("Broun on Compacts"). Congressional approval "provides states with the authority to regulate in an area that would otherwise be unavailable to them." Id. at § 1.3, p. 28.

The Compact Clause provides Congress with broad power to grant, condition, or withhold consent to proposed interstate compacts. See, e.g., Cuyler, 449 U.S. at 438-41; Broun on Compacts, Chapter 2. The Compact Clause was designed to ensure that Congress maintains "ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority." Cuyler, 449 U.S. at 440. See also Petty v. Tennessee-Missouri Bridge Comm'n, 359 U.S. 275, 281-82 (1959). As one commentator has observed:

Congressional consent presents a political question and the refusal of Congress to grant consent or to impose terms and conditions on the member states is a nonjusticiable question. Consequently, as a rule, there are no limitations on Congress's substantive right to grant or withhold consent, or condition the granting of its consent, save a finding that the compact itself somehow violates the Constitution.

Broun on Compacts, § 2.1.2, pp. 41-42.

On its face, HB0369 does not appear to violate the United States Constitution. [Footnote 3: A statute also may be found to be unconstitutional as applied to a particular set of circumstances. See, e.g., Women's Med. Prof'l Corp. v. Voinovich, 130 F.3d 187, 193-94 (6th Cir. 1997); 16 C.J.S. Constitutional Law § 187 (2012). "[T]he constitutional inquiry in an as-applied challenge is limited to the plaintiff's particular situation." Voinovich, 130 F.3d at 193. HB0369 was not adopted and has not been applied, and no circumstances have been suggested for an "as applied" assessment at this time.] Courts will "uphold the constitutionality of a statute whenever possible." Waters v. Farr, 291 S.W.3d 873, 882 (Tenn. 2009). See also Northland Family Planning Clinic, Inc. v. Cox, 487 F.3d 323, 339 (6th Cir. 2007) (observing that "federal courts are required to seek to uphold the constitutionality of state statutes where possible"); United States v. Miller, 604 F.Supp.2d 1162, 1169 (W.D.Tenn. 2009) (recognizing that "every duly enacted federal law is entitled to a presumption of constitutionality"); 2A Singer, Sutherland Statutory Construction § 45.11 (7th ed.) ("every presumption favors the validity of an act of the legislature"). Indeed, "[t]he presumption of constitutionality applies with even greater force when a party brings a facial challenge to the validity of a statute" given "the challenger must establish that no set of circumstances exists under which the statute, as written, would be valid." Waters, 291 S.W.3d at 882. See also United States v. Salerno, 481 U.S. 739, 745 (1987).

HB0369, by its terms, will not effect any change in law or policy in Tennessee until and unless the referenced interstate health care compact is approved by Congress. HB0369 specifies that "Federal administration and regulation of health care in this state" shall continue unless and until Congress consents to the Compact and until the Tennessee General Assembly "enacts by law a sufficient administrative framework to provide effective and efficient state administration and regulation over health care." HB0369, § 1, proposed Tenn. Code Ann. § 68-1-2504. HB0369 does not require any citizen action, impose penalties or sanctions of any kind, or require state expenditures at this time. Therefore, HB0369 does not implicate constitutional principles concerning equal protection, due process, unconstitutional vagueness, or state appropriations.

Likewise, the Compact that is the subject of HB0369 appears to be facially constitutional. The Compact does not implicate dormant Commerce Clause [Footnote 4: The dormant Commerce Clause prevents states from placing burdens on the flow of commerce across state borders. See, e.g., Am. Trucking Ass'ns, Inc. v. Michigan Pub. Serv. Comm'n, 545 U.S. 429, 433 (2005). It is the "negative command" in Article I, Section 8, Clause 3, of the United States Constitution, which expressly grants to Congress the power to regulate commerce among the states. Id.] concerns because, if approved, it will be federal law. Cuyler, 449 U.S. at 438. Thus, by definition, it cannot be deemed a state law that impermissibly interferes with commerce. See, e.g., Tarrant Reg'l Water Dist. v. Herrmann, 656 F.3d 1222, 1236 (10th Cir. 2011); Intake Water Co. v. Yellowstone River Compact Comm'n, 769 F.2d. 568, 570 (9th Cir. 1985); Broun on Compacts, § 2.1.2, p. 41.

Section 8 of the Compact, which would authorize amendment of the Compact without prior congressional approval, is constitutionally defensible given that "Congress may consent to an interstate compact by authorizing joint state action in advance or by giving expressed or implied approval to an agreement the States have already joined." Cuyler, 449 U.S. at 441. See also Broun on Compacts, § 2.1.6, pp. 55-56 (recognizing that interstate compacts may permit member states to amend the compacts subject to congressional veto).

Section 5 of the Compact, which would mandate federal funding as detailed in the Compact, also appears to be constitutionally defensible. If Congress approves the Compact as written, Congress will be exercising its own broad spending power by approving the funding provision. [Footnote 5: Alternatively, Congress may impose limitations or conditions on its approval of the Compact that would alter the funding formula or explicitly provide for future changes to the funding or Compact. See, e.g., Broun on Compacts, § 2.1.2, pp. 39-42.] See, e.g., Broun on Compacts, § 2.1.2, pp. 39-42. Such approval will not prevent future legislative action that would alter or limit the funding or the Compact in general. Id. at § 2.1.4, pp. 43-47 (stating "congressional assent to a compact in no way estops the Congress from effectively undercutting an agreement through ordinary legislation"). See also Congressional Supervision of Interstate Compacts, 75 Yale L.J. 1416, 1431 (1966). It is well established "that one legislature cannot enact a statute that prevents a future legislature from exercising its lawmaking power." 82 C.J.S. § Statutes 11 (2012). See also Lockhart v. United States, 546 U.S. 142, 147-48 (2005) (Scalia, J., concurring); cf. Louisville Bridge Co. v. United States, 242 U.S. 409, 421-25 (1917). Generally "a compact is not immune from subsequent or alternative federal legislation that may alter the landscape in which the compact operates or even render the compact a nullity in practice, if not under the law." Broun on Compacts, § 2.1.4, p. 44.

For these reasons, a court would likely determine that HB0369, if enacted as amended, would be facially constitutional.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

CAROLYN E. REED
Assistant Attorney General

Requested by:
The Honorable Mark Pody
State Representative, 46th District
301 6th Avenue North
Suite 203, War Memorial Plaza
Nashville, Tennessee 37243