Document Type

Article

Disciplines

International Law

Abstract

Part II of this note provides a brief background of the recent U.S. involvement in Iraq and formation of the Coalition Provisional Authority.8 Part III examines in detail the creation of Order 39. Part IV considers its legal basis and authority, specifically as to how the United States, as an occupying power, is trying to create immutable facets of the new government. Part V offers a theoretical framework for evaluating sovereignty, and how economic restrictions can significantly affect state sovereignty. This note analyzes how the future Iraq may fit into that framework, and how Order 39 may violate Iraq's future sovereignty, concluding in the final section that the foreign investment policy created by Order 39 will result in a semisovereign Iraq.

Notwithstanding clear constitutional language indicating that foreign relations is the federal government's responsibility, state and local governments continue to engage in a great deal of activity that has international consequences.' On many occasions, states have enacted legislation or made policy affecting foreign nations or foreign citizens that has conflicted with an expression of federal law. In these situations, because federal laws and treaties are the supreme law of the land under our Constitution, a state law that conflicts with federal law is preempted under the Supremacy Clause.

In some situations, however, a state law affecting foreign commerce might address an issue that the federal government has not addressed, and does not wish to address formally, i.e., by enacting a federal statute or by entering into a treaty or executive agreement. Even in those situations, a state law with international consequences may still be found unconstitutional under the Zschernig6 doctrine if the statute can be seen as an attempt by the state to conduct foreign relations or if the state law in question has more than an incidental effect on foreign relations.

The Supreme Court established the Zschernig doctrine in 1968, when it decided Zschernig v. Miller. In its decision, the Supreme Court created new constitutional doctrine7 that has subsequently been referred to as the "dormant foreign affairs power." Under the dormant foreign affairs power, a state law will be found unconstitutional if it intrudes into the arena of foreign affairs even if it does not conflict with operative federal law.' The rationale for the rule is that the nation must speak with one voice in foreign affairs: the voice of the federal government.' Under the "one voice" rationale, any time a state acts internationally, the nation's ability to speak with one voice is compromised.

Until recently, the Supreme Court had not relied on Zschernig since it was decided in 1968. Many commentators have criticized the decision for its lack of constitutional support and undefined scope." In the years after Zschernig, the Court decided the constitutionality of state laws affecting foreign affairs under other doctrines, such as preemption 2 and the Foreign Commerce Clause. 3 Some questioned whether the dormant foreign affairs power, as set forth in Zschernig, was still relevant constitutional doctrine.

Amidst rumors that it had become obsolete, the Supreme Court resurrected the dormant foreign affairs power in 2003 when it decided American Insurance Assn. v. Garamendi5 In Garamendi, the Court relied on Zschernig to preempt a California statute requiring insurance companies doing business in California to disclose a list of all insurance policies issued in Europe between 1920 and 1945 in an effort to help citizens recover the value of insurance policies confiscated by the Nazis.

Section II of this comment examines the history of the dormant foreign affairs power. Section III discusses the Garamendi decision and the Court's rationale. Section IV discusses whether Garamendi was really a preemption case decided pursuant to the Supremacy Clause instead of a reaffirmation of the dormant foreign affairs power and how this opinion lowered the bar for preempting state laws that affect foreign affairs. Section V discusses how Garamendi will affect the ability of the states to enact laws that affect foreign affairs in the future. Finally, Section VI examines the relationship between the power of the Executive Branch to preempt state laws, as set forth in Garamendi, and the power of Congress to regulate foreign commerce.

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