How the Trump administration could attack state laws it says stifle US economy

The Trump administration is hunting for state laws that drag down the US economy. But axing statutes it sees as problematic will depend on how it wields the Constitution’s powerful Commerce Clause.

Last Friday, the Justice Department and the National Economic Council announced a joint initiative to “address” state statutes that “significantly and adversely affect the national economy.” State regulations, policies, causes of action, and practices were also included as targets.

The plan is meant to support the White House’s deregulation agenda, which President Trump described in a series of separate executive orders issued in January, February, and April. Those orders emphasize the administration’s goal of alleviating policies that it views as “unnecessary burdens” on Americans, small businesses, private enterprise, and entrepreneurship.

In an unusual twist, the agencies also solicited help from US citizens, asking members of the public to point out economy-slowing state laws and to propose legal theories that could reverse the laws’ adverse effects.

“They’re crowdsourcing their legal theories,” said Emily Berman, a constitutional scholar with the University of Houston Law Center.

Crowdsourcing the law: President Trump in the White House on Monday. (AP Photo/Alex Brandon) · ASSOCIATED PRESS

However, the plan stopped short of explaining what theories the administration would rely on to undo suspected harmful state laws.

Jeremy Rovinsky, a federal prosecutor who teaches constitutional law at Crestpoint University, said the language used in the DOJ’s plan to attack state laws shows that the Trump administration has the Commerce Clause in mind.

“It’s clear that Trump’s lawyers are thinking through it this way,” Rovinsky said. “The Supreme Court has allowed the federal government to regulate state power in an almost unlimited way.”

But the Commerce Clause doesn’t guarantee the administration power to alter state law. The provision vests power to regulate commerce in Congress, not in the executive branch.

A more straightforward type of challenge, the lawyer said, is one where state law directly conflicts with federal statutes. In those cases, the Justice Department could raise preemption challenges under the Constitution’s Supremacy Clause. Preemption challenges argue that a state rule essentially steps on the federal government’s toes, Berman said.

Absent such a clear-cut conflict, the administration would need more legal leverage to countermand state law. That leverage could come from the Commerce Clause, the constitutional scholar said, which empowers Congress to regulate interstate and foreign commerce.

“Anything that regulates commerce falls within the scope of Congress’s authority, which has been interpreted relatively broadly,” Berman said.

To tap into the federal government’s authority over commerce, the administration would need to persuade lawmakers to pass new federal legislation invalidating state law.

Ravinsky said he sees the DOJ’s announcement as an opening salvo to persuade members of Congress.

“I think the people that are in [Trump’s] inner legal circle wrote that document the way they did, because they want to give Congress a heads up to have them codify what he’s doing with executive actions into actual congressional legislation,” Ravinsky said.

Jonathan Entin, professor emeritus at Case Western Reserve School of Law, said it’s possible, but not certain, that pressure on Congress from either President Trump or others in the executive branch would lead to new, preemptive federal laws.

“If the president says this is a big priority, then maybe a fair number of people in both the House and the Senate would go along with it,” Entin said. “Now, whether there will be enough votes, that’s a separate question,” he added. “Congress does not legislate very much.”

Would they uphold the power of Congress? US Supreme Court Justice Elena Kagan, Supreme Court Chief Justice John Roberts, and Amy Coney Barrett attend President Trump’s address to a joint session of Congress at the US Capitol on March 4. (Win McNamee/Pool via Reuters) · via REUTERS / Reuters

“If Congress wants to move legislation against state laws that they say hurt the economy, they need 60 votes in the Senate,” Entin said. “And the chances of getting 60 votes in the Senate for much of anything these days are pretty slim.”

The Supreme Court has largely upheld Congress’ power over interstate commerce in a series of cases evaluating the Commerce Clause stretching back more than 80 years.

In 1942, the Supreme Court issued a landmark decision in Wickard v. Filburn that expanded the federal government’s regulatory power under the Commerce Clause.

The case involved an Ohio farmer who grew more wheat than permitted under the Agricultural Adjustment Act of 1938. The court rejected the farmer’s argument that the federal government could not regulate his excess wheat supply under the act because it was grown for personal, rather than commercial, use.

In a unanimous 8-0 decision, the court reasoned that while a single farmer’s excess crop may not substantially impact interstate commerce, the same actions, if taken in the aggregate by multiple farmers, could indeed influence the national market.

Despite the Supreme Court’s longstanding support for expansive application of the Commerce Clause, Entin suspects that even new federal legislation could fail to preempt certain state laws.

States still retain their police powers, he said, and can exercise those powers as long as doing so doesn’t interfere with interstate commerce.

“It’s not clear to me that Congress can use its commerce power to preempt the state’s exercise of their police powers, even if state laws may, in fact, be unwise or even foolish,” Entin said.

Still another, and equally uncertain, path to challenge state laws could involve a judge-created theory known as the “Dormant Commerce Clause,” the lawyers said.

The concept further expands Congress’ power over interstate and foreign commerce by limiting states’ authority to regulate commerce even when Congress has not directly legislated on an issue.

The theory is intended to prevent states from adopting discriminatory, protectionist laws that benefit local economies to the detriment of the national market.

The theory was put to the test and shown to have limits in a recent case decided by the Supreme Court.

In 2023, the court loosely upheld a California state law known as Proposition 12, which criminalized California sales of pork meat that came from pigs housed in pens measuring less than 24 square feet — 10 square feet larger than the industry standard.

The Iowa Pork Producers Association and 23 states argued that the law discriminated against out-of-state pork producers, imposing excessive burdens on interstate commerce.

However, Berman said, Dormant Commerce Clause challenges to state rules have historically been brought by private litigants, not the federal government.

“It’s going to be a private business sector actor saying, ‘Our business is being harmed … we shouldn’t have barriers to markets along state lines.”

Entin agreed that it would be unusual for the federal government to sue states over their regulations. Alternatively, he said, Congress could try to persuade states to change laws through conditional federal spending.

The administration may not find support from the high court for pushing Congress’ authority over commerce even further, Entin added. Conservatives on the court in recent years have expressed “real skepticism” about whether courts should be in the business of enforcing the Commerce Clause, he said.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.