Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va.) today delivered the following remarks during the Regulatory Reform, Commercial and Antitrust Law Subcommittee’s hearing on “No Regulation Without Representation:  H.R. 2887 and the Growing Problem of States Regulating Beyond Their Borders.”

Chairman Goodlatte: For most of American history, it was axiomatic that states cannot regulate beyond their borders.

This fundamental premise was woven into our founding documents.

The principle was reiterated by our courts.  In 1834, Justice Story wrote in his Commentaries on the Conflict of Laws that “no state or nation can, by its laws, directly affect, or bind . . . persons not resident therein.”   Writing for a unanimous Supreme Court in 1881, Chief Justice Waite observed that “[n]o State can legislate except with reference to its own jurisdiction.”  In 1895, the New York Court of Appeals stated, it is “a principle of universal application, recognized in all civilized states, that the statutes of one state have . . . no force or effect in another.”

The chief constraint on state regulatory power is the democratic process.  Exporting regulations dodges accountability.  As the Supreme Court has explained, when “the burden of state regulation falls on the interests outside of the state, it is unlikely to be alleviated by the operation of those political restraints normally exerted when interests within the state are affected.”

Indeed, states have become increasingly aggressive in exporting regulatory burdens.

A 2016 Massachusetts law bans the sale of products from livestock raised in certain types of cages.  Since there is only one in-state farm using the targeted cages, Massachusetts Farm Bureau members say they “feel like pawns in a national campaign to drive policy in other states.”

Alameda County, California forces pharmaceutical companies that sell into the jurisdiction to pay for drug disposal.  The chief sponsor of the legislation admitted that the only thing “wrong” with a preexisting, “publicly-funded [disposal] program,” was “that the taxpayers pay for it.”

North Dakota has one of the country’s largest deposits of lignite coal.  The industry employs 4,000 people and provides substantial revenue to the State.  In 2016, North Dakota won a five year legal battle against a Minnesota law that limited the ability of out-of-state utilities selling power into the State to use coal.

A response from Congress has become increasingly important, because neither the Due Process nor the Commerce Clause of the Constitution has proven a durable, adequate check on extraterritorial state regulation.  In both cases, beginning with the New Deal, the original understanding of the Constitution’s protections was watered down or abandoned by courts to make way for big government.

H.R. 2887 would provide a clear congressional response that would, at the same time, protect states’ rights: “If equal states are to retain autonomy over their own affairs, they must refrain from regulating each other’s affairs.”  H.R. 2887 would establish just this kind of restraint, by barring states from imposing tax or regulatory burdens on entities that are not physically present.

At the same time, H.R. 2887 specifically permits states to ban the in-state sale of items that do not meet federal health and safety standards or the standards of the producing state.

Opponents of this legislation may warn of a “race to the bottom.” That theory is a handy scare tactic, but scholar Michael Greve writes that “modern scholarship has severely undermined [its] theoretical and empirical foundations.”  Furthermore, since H.R. 2887 does not disturb state tort law, producers still have to fear lawsuits from lax standards.  There are also a myriad of federal laws protecting consumer safety.

The No Regulation Without Representation Act respects the states’ role as “laboratories of democracy.”  The legislation merely demands that states experiment on their own citizens, not everyone else’s.

H.R. 2887 is a bipartisan bill that helps curb state overregulation by restoring democratic accountability between the regulators and the regulated.  I am proud to co-sponsor it.

I thank Mr. Sensenbrenner for sponsoring the bill, and I look forward to hearing from our witnesses.

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