Doe I, Doe II, Federal Dough and Federalism

By Alan Sternstein

Though supreme in their own domains, even sovereigns may, by agreement, accept obligations that lawfully bind them. Depending on the case, they may also pursue, even by coercion, rights granted by other sovereigns. This reflects nothing more than the operation at ever-higher levels of organization (partnerships, corporations, municipalities, states, and nations) the fundamental principles governing legal relationships between individuals. See generally W. Hohfeld, Fundamental Legal Conceptions (1919). These principles recognize the ability of juridical entities through the power of contract to create rights, duties, and other legal relationships among themselves, regardless of the comparative strength of their sovereignties by other measures.[i]

Federal grants to the states are one such exercise of the power of contract between sovereigns. See National Fed’n of Indep. Bus. v. Sebelius (“NFIB”), 132 S. Ct. 2566, 2602 (2012) (“We have repeatedly characterized … Spending Clause legislation as ‘much in the nature of contract.”), citing Barnes v. Gorman, 536 U.S. 181, 186 (2002) (quoting Pennhurst State Sch. & Hosp. v. Halderman451 U. S. 1, 17 (1981)). Grants are obtained through grant applications and effected through state acceptance of notices of award. As conditions of receiving grants, states agree to obligations and afford the federal government certain rights.

Like many federal grants programs, grants encouraging state implementation of sex offender registries pursuant to the Sex Offender Registration and Notification Act (“SORNA”), codified at 42 U.S.C. § 16901 et seq. and 18 U.S.C. § 2250, are rich in their potential for conflicts between federal and state sovereignty. One such conflict nearly ensnared the Court of Appeals in Department of Public Safety & Correctional Services v. Doe (“Doe  II”), 439 Md. 201 (2014). Previously, in Doe v. Department of Public Safety & Correctional Services (“Doe I”), 430 Md. 535 (2013), the court had ruled that retroactive application of Maryland’s sex offender registration provisions[ii] — specifically, registration, for pre-enactment convictions, that complies with current requirements — would be an ex post facto punishment and, therefore, in violation of Article 17 of the Maryland Declaration of Rights. SORNA, separate from state law, requires sex offenders to register in state databases created and administered to comply with requirements of federal law. In Doe II, the court took on the question of whether these requirements trumped Article 17.[iii]

The state administered its database in compliance with federal law in order to receive federal grant funding for combating crimes of sexual abuse. See 42 U.S.C. §§ 16981, 16983, 16988. Compliance with other requirements of SORNA was a condition of receiving and continuing to receive grant funding. Id. at § 16925(d) (“provisions of this sub-chapter that are cast as directions to jurisdictions or their officials constitute, in relation to States, only conditions required to avoid the reduction of Federal funding under this section”). Plaintiffs, several sex offenders, challenged, pursuant to Doe I, being required to register in Maryland’s database, even though federal, not state, law required them to register. They argued that if federal law were applied to require Maryland to maintain their federal registrations in its database, the 10th Amendment, the Commerce Clause, and the Spending Clause of the Constitution would be violated.

Doe II did not require the Court of Appeals to confront any of these constitutional issues. SORNA directly addresses the potential for a conflict between it and state constitutional law “as determined by a ruling of the jurisdiction’s highest court,” stating that the Attorney General should evaluate whether such a judicial decision would render the jurisdiction “unable to substantially implement” the laws required. 42 U.S.C. § 16925(b)(1). Applying this provision and the Attorney General’s accompanying guidelines, as well as noting that “there is no indication in the record that the State has lost any federal funding as a result of Doe I,” Doe II, 439 Md. at 220, the Court of Appeals ruled that there was no bar to the expungement of the plaintiffs’ names from Maryland’s sex offender database.

Suppose, however, that there is a federal grants program aimed at achieving some action by the state that is a legitimate objective of the federal government and, therefore, it will be assumed, within the federal government’s spending power and not subject to constitutional challenge. The program imposes requirements on states as a condition of their receiving federal grant funds. The state’s executive enters into a legal arrangement with the federal government whereby the state complies with the grant program’s requirements and receives federal funds conditioned on such compliance, or the state legislature enacts legislation necessary to comply with the requirements and for the purpose of receiving federal funds. The state’s actions are then challenged in court as ultra vires with respect to state law and, as against the federal government, voidable as contrary to a state statute or the state’s constitution.

The federal government intervenes, opposing any ruling that would permit the state’s actions to be voided. What should be the result? Well, it depends.[iv]

Because federal grants create contractual relationships, with the specific terms of grant agreements governing the rights and obligations between the federal government and the grantee.[v] The law governing grant agreement formation (including the authority to contract), however, would seem to have its source in a limited enclave of federal judicial law that has developed in connection with litigation about grant disputes, one of many such limited enclaves that might be loosely characterized as federal “common law.”[vi] Generally accepted principles of contract formation that would inform such common law suggest the following contractual analysis.[vii]

There is nothing, on its face, that would arguably permit the state action to be voided — that is, no basis for constructive notice to the federal government that the state action is unlawful and, therefore, arguably voidable — if the requirements are contrary only to the existing state statute and the only state action has been legislation (as opposed to executive action) to implement compliance with the spending-program requirements. Presumably, the later-enacted statute related to federal-program compliance trumps the existing statute (even if only implicitly), precluding any argument by the state that the action is voidable. However, there would be constructive notice to the federal government that an action is arguably voidable if the federal law’s requirements are, clearly and on their face, contrary to an existing state statute, and it is the executive who takes action to comply with them. It is likely that such state executive action is unlawful. (The final answer revolves around the scopes of the state’s legislative and state executive powers.)

If compliance with the federal program requirements is contrary to the state constitution, the outcome depends on whether the conflict (i) is clear and obvious on the face of the state constitution (that is, there is constructive notice to the federal government of arguably voidable state action) or, (ii) if not obvious — and as echoed in SORNA itself, see 42 U.S.C. § 16925(b) — on whether the state action occurs before (in which case there is no basis for constructive notice to the federal government of arguably voidable state action) or after (in which case there is a basis for such notice) any first and final determination by the state’s highest court that the federal requirements conflict with the state constitution. If the conflict with the state constitution is not clear and obvious and state action occurs before a first and final judicial determination that it conflicts with the state constitution, the action is not arguably voidable. The federal government is, at least, in the position to contend that the subsequent judicial determination does not trump obligations to the federal government that have come into being.

If the state action occurs after the judicial determination, whether it is arguably voidable by the state depends on the primacy of judicial review in the state on state constitutional questions. If judicial review has no primacy but stands on a par with executive and legislative determinations of constitutionality, the action is not arguably voidable by the state, because the executive and legislature remain free to determine their own powers notwithstanding the judicial precedent. If judicial review has primacy, the action is arguably voidable by the state, but whether it may be voided depends on whether federal law, including obligations to the federal government, trumps state constitutional law.

According to this analysis, the federal government either does or does not have clear and timely notice that state officials are acting outside their authority. A grant agreement when there is such notice is, arguably, voidable by the state but not the federal government. A grant agreement when there is not such notice is, arguably, voidable by the federal government but not the state, and the state is bound to the terms of the agreement despite any eventual judicial determinations of conflict with state law.

The analysis should go further, however, for the potential bearings of the U.S. Constitution’s Supremacy Clause, U.S. Const., Art. VI, cl. 2; Spending Clause, Id., Art. I, § 8, cl. 1; and 10th Amendment on these matters also needs to be taken into consideration. As to when the federal government has clear and timely notice of an ultra vires grant agreement, the questions are whether the Supremacy Clause does or should preclude it from being voided by the state and whether the 10th Amendment does or should protect or preserve a state’s power (whether that of the judiciary, the legislature, or the executive) to void the agreement. As to when the federal government does not have such notice, the question is whether the 10th Amendment does or should protect a state’s power (whether that of the judiciary, the legislature or the executive) to void an agreement that is not otherwise voidable by the state.[viii]

The Supremacy Clause provides: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing [sic] in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const., Art. VI, cl. 2. Even assuming that an agreement made pursuant to a federal statute constitutes “Laws” within the meaning of the Supremacy Clause, presumably that status does not validate an agreement that is unlawful and voidable by the state under federal law itself (albeit federal common law), such as a grant agreement entered into with the federal government’s constructive knowledge of its infirmity. Unlike its treatment, at times, of the 10th Amendment (discussed below), the Supreme Court has viewed the Supremacy Clause as only ranking above state interests substantive powers delegated to the federal government elsewhere under the Constitution, not itself granting power to the federal government.

Suppose, nevertheless, that the Supremacy Clause were to be advanced as a source of power insulating a grant agreement from being voided by a state, even though the federal government, with at least constructive knowledge of contrary state law, entered into the agreement. The question then presented is whether, on account of the Supremacy Clause, contractual powers and privileges are granted the federal government that override the contractual powers retained by the states. This, in turn, raises issues about 10th Amendment limitations on federal power and about the inherent scope of powers delegated to the federal government, in particular, whether federal efforts to enforce an otherwise voidable grant agreement would unconstitutionally infringe on the state’s powers or exceed the intrinsic scope of the federal government’s spending power.

As between the 10th Amendment and the Supremacy Clause, the question is whether the former’s provisions trump the latter’s supposed grant of power to the federal government with respect to contract formation. The 10th Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” The Supreme Court has, at times, viewed the 10th Amendment as a limitation, or at least reflecting a limitation inherent in state sovereignty, on the supremacy or constitutionally valid scope of laws enacted facially pursuant to powers delegated to the federal government under the Constitution, rather than merely the allocation of powers for which the existence and scope have elsewhere been determined.[ix] Though currently in disfavor,[x] this view of the 10th Amendment could be advanced as a limitation of any grant of power pursuant to the Supremacy Clause. Otherwise, however, this supposed grant of power would prevail, and preclude the state’s voiding a grant agreement.[xi]

Supposed Supremacy Clause grants of power aside, there are also the matters of whether the provisions of the 10th Amendment or principles of federalism immanent in the Constitution extrinsically limit the scope of federal power and whether, independent of the 10th Amendment and federalism, limitations on a given power intrinsic to the power itself could preclude its use in these circumstances. As to the latter form of limitation, and in the particular case of the spending power, so long as federal government spending “provide[s] for the common Defence and general Welfare of the United States,” U.S. Const., Art. I, § 8, cl. 1, the Spending Clause does not limit the federal government’s power to spend money through grant programs.[xii] There is, however, a recognized limitation on the federal government’s exercise of its spending power that, if not grounded in the 10th Amendment, is loosely anchored in the constitutional concept of federalism. In particular, the federal government may not use its spending power in circumstances that amount to coercion of state action, even to achieve an otherwise lawful end.

Most recently, the Supreme Court held by a 5-to-4 vote in NFIB that Congress’s conditioning a state’s receipt of the entirety of its federal Medicaid funds — including existing and longstanding Medicaid funding — on whether the state elected to expand its Medicaid program in accordance with the Patient Protection and Affordable Care Act (“Obamacare”) was an unconstitutionally coercive use of Congress’s spending power. The Court noted that it had “long recognized that Congress may use [the spending] power to grant federal funds to the States, and may condition such a grant upon the States’ ‘taking certain actions that Congress could not require them to take.’” 132 S. Ct. 2601. However, the Court observed that “[f]ederal funds received through the Medicaid program have become a substantial part of state budgets, now constituting over 10 percent of most States’ total revenue.” Id. at 2581. “If a State does not comply with the Act’s new coverage requirements, it may lose not only the federal funding for those requirements, but all of its federal Medicaid funds.” Id. at 2582. This atmosphere of economic coercion, according to the Court, “runs contrary to our system of federalism.” Id. at 2602.

As the Court explained, “[p]ermitting the Federal Government to force the States to implement a federal program would threaten the political accountability key to our federal system.” Id. “Indeed, this danger is heightened when Congress acts under the Spending Clause, because Congress can use that power to implement federal policy it could not impose directly under its enumerated powers.” Id. at 2603. However, “Spending Clause programs do not pose this danger when a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds. In such a situation, state officials can fairly be held politically accountable for choosing to accept or refuse the federal offer.” Id. at 2602-03.

The Court found “a legitimate choice wanting” when, as in NFIB, a “State that opts out of the Affordable Care Act’s expansion in health care coverage . . . stands to lose not merely ‘a relatively small percentage’ of its existing Medicaid funding, but all of it.” Id. at 2604 (emphasis in original). Though stopping short of ruling that the 10th Amendment had been violated, the Court did hold that the coercive effects of the government’s spending program with respect to Medicaid were an unconstitutional exercise of power under the spending Clause.

The coercive circumstances confronting the Supreme Court in NFIB would not appear to be anywhere duplicated in connection with SORNA grants. Substantial state expenditures on law enforcement and public protection long preceded SORNA and would likely continue without it. Still, it should be apparent that Doe I, Doe II, and NFIB are just the tip of an iceberg that extends deeply and broadly into our constitutional system and legal relationships in general.


[i] See generally Deutsch, “The Probability of International Law,” in The Relevance of International, at 83 (K. Deutsch & S. Hoffmann eds. 1971) (“[M]en must see one another as obstacles to the fulfillment of their individual wills . . . and yet as indispensable partners to its attainment. Something similar now holds for nation-states. They will guard and defend their sovereignty against one another, and yet they must coordinate their behavior to avoid increasingly ruinous collision and destruction.”); Kelsen, “The Essence of International Law,” in id., at 115 (“[I]nternational law regulates the behavior of human beings, even where it regulates the behavior of states.”); id., at 120 (“[T]he wronged state is . . . authorized, according to general international law, to react with a sanction against an infringement. The right of the one state which is the reflex of the obligation of the other state is equipped with the authorization to execute the sanctions . . . against the state which violates its obligation.”).

[ii] Md. Code Ann., Crim. Proc. § 11-701 et seq.

[iii] See 42 U.S.C. §§ 16911, 16913; Kennedy v. Allera, 612 F.3d 261 (4th Cir. 2010); United States v. Gould, 568 F.3d 459 (4th Cir. 2009).

[iv] Not taken into consideration in this analysis is whether the challenge to the state’s actions occurs before or after the state starts receiving funds. Depending on, among other things, equitable-remedy principles, this circumstance, too, may bear on the outcome.

[v] Grant agreements, with a “principal purpose … to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States,” should be distinguished from federal government procurement contracts, which have a “principal purpose . . . to acquire . . . property or services” and are extensively governed by the Federal Acquisition Regulations. 31 U.S.C. §§ 6103, 6104.

[vi] See, e.g., Agathos v. Starlite Motel, 977 F.2d 1500, 1508–09 (3d Cir. 1992) (noting that “[f]ederal common law governs the construction of a collective bargaining agreement,” and proceeding to apply “general principles of contract law” as distilled in the Restatement (Second) of Contracts); see generally Nelson, “The Legitimacy of (Some) Federal Common Law,” 10 Va. L. Rev. 1, 34-35 (2015).

[vii] See authorities cited, supra, n.6.

[viii] Because the grant agreement in this circumstance is not voidable by the state, there is no need to consider any effect of the Supremacy Clause on state power.

[ix] Compare Maryland v. Wirtz, 392 U.S. 183 (1968), and Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 (1985), with National League of Cities v. Usery, 426 U.S. 833 (1976); see generally “Supremacy Clause Versus the Tenth Amendment,”

[x] See authorities cited, supra, n.9.

[xi] As noted above, SONRA was also challenged in Doe II as violating the Commerce Clause. U.S. Const., Art. 1, § 8. As understood at times, the 10th Amendment would also operate to limit the scope of federal power granted by the Commerce Clause. In accordance with current federalism jurisprudence, however, any limitations on the scope of that federal power would depend on limitations inherent in the power itself. See United States v. Lopez, 514 U.S. 549 (1995).

[xii] See, e.g., South Dakota v. Dole483 U. S. 203, 203–06 (1987) (conditioning federal highway funds on states raising the age for legal consumption of alcohol to 21). To be sure, the U.S. Supreme Court has previously rejected efforts of the federal government to accomplish unconstitutional ends by using its spending powers. For example, in the 1922 case of Bailey v. Drexel Furniture Co., 259 U.S. 20, the Court struck down a 1919 tax on child labor because Congress did not have the power to directly regulate labor and the tax was an attempt to indirectly achieve the same end.

This ruling appeared to have been reinforced in United States v. Butler, 297 U.S. 1 (1936), in which the Court ruled that the processing taxes instituted in the 1933 Agricultural Adjustment Act violated the 10th Amendment by attempting to regulate state activity. However, despite its outcome, and as subsequent Supreme Court decisions made clear, Butler expressly affirmed that Congress does have a broad power to expend revenues within its discretion. As the Court stated:

The clause confers a power separate and distinct from those later enumerated[,] is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. . . .  It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.

Id. at 65-66.



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