International Construction Law Review
CORRESPONDENT’S REPORT: SUPREME COURT HOLDS THAT STATE STATUTE BARRING STATE AGENCY AWARD OF CONTRACTS TO COMPANIES DOING BUSINESS WITH BURMA IS PREEMPTED BY FEDERAL LAW
MATTHEW S PERLMAN
Arent Fox Kintner Plotkin & Kahn, PLLC, Washington, DC
In 1996, the State of Massachusetts passed a statute that, with some exceptions, barred Massachusetts government agencies from contracting with firms doing business in Burma.1
The purpose of the statute was to put economic pressure on the repressive regime in that country. As commented on in a Correspondents’ report in the April, 1999 issue of this publication (Volume 16, Part 2 at 317), the US District Court in Boston, Massachusetts found the Massachusetts statute unconstitutional in National Foreign Trade Council
v. Baker,
26 F Supp 2d 287 (Mass 1998) on the dual grounds that it impinged on the Federal Government’s exclusive authority to regulate foreign commerce and it was preempted by Federal legislation also dealing with the repressive regime in Burma. The US Court of Appeals for the First Circuit affirmed the District Court ruling. National Foreign Trade Council
v. Natsios,
181 F 3d 38 (1st Cir 1999). The Supreme Court agreed to hear the case and has recently affirmed the decision. Crosby
v National Foreign Trade Council,
—US—, 120 S Ct 2288 (19 June 2000).
Justice Souter, writing for a unanimous Supreme Court, finds that the Massachusetts statute is preempted by the US Federal Government legislation dealing with Burma. Shortly after the Massachusetts statute was enacted, Congress passed its own statute dealing with the repression in Burma. Foreign Operations, Export Financing and Related Programs Appropriation Act, §570(b), 110 Stat 3009–166 to 3009–167 (enacted by the Omnibus Consolidated Appropriations Act, 1997, §101 (c), 110 Stat 3009–121 to 3009–172). This Federal Burma Act contained various sanctions and other provisions designed to pressure the Government of Burma. The Federal Burma Act limited foreign aid to Burma, required US representatives to international lending organisations to vote against loans to Burma, and barred visas to Burmese government officials except where required by treaty or for their UN mission. The Federal Burma Act also allowed the President to bar new investment in Burma and required him to work with other countries
[2000
The International Construction Law Review
674