North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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Telephone: (919) 716-6900 Fax: (919) 716-6763

January 2, 2001

Honorable President Pro Tempore of the Senate Marc Basnight Honorable Speaker of the House of Representatives James Black 16 West Jones Street Raleigh, North Carolina 27601-1096

Re: Advisory Opinion; Congress’ Power to Require States to Enact “Open Container” Restrictions; 23 U.S.C. § 154; S.L. 2000-155

Dear Senator Basnight and Speaker Black:

In the 1999 Session of the General Assembly, House Bill 1499 was enacted as Session Law 2000-155 to implement the recommendations of the Governor’s DWI Task Force, to provide for a challenge to the transfer of federal funds, and to clarify the effective date for commercial motor vehicle insurance provisions of Session Law 330 of the 1999 General Assembly. Section 19 of this act requested the Attorney General “to initiate litigation to challenge the constitutionality of the federal government’s intrusion into the State’s authority to enact and enforce its own laws regarding motor vehicles and traffic safety, particularly Section 154 of Title 23 of the United States Code.” This request is being interpreted initially as a request for our opinion on the constitutionality of the “open container” requirements in 23 U.S.C § 154, and hence the likelihood of a successful challenge to that provision in court.

In 1998, Congress enacted Section 1405 of the Transportation Equity Act for the 21st Century and amended Title 23 of the United States Code by adding a new Section 154. The new section provides for the transfer of a percentage of a State’s allocation of federal highway construction funds to State and local law enforcement agencies for the enforcement of drunk driving laws or to fund alcohol-impaired driving countermeasures if a State has not enacted or is not enforcing a conforming open container law. To avoid the transfer of funds, a State must enact and enforce a law that “prohibits the possession of any open alcoholic beverage container, or the consumption of any alcoholic beverage, in the passenger area of any motor vehicle (including possession or consumption by the driver of the vehicle) located on a public highway, or the right-of-way of a public highway, in the State.” 23 U.S.C. § 154(b)(1). Failure to enact or enforce a conforming law would result in a 1.5% transfer of funds in fiscal years 2001 and 2002; for fiscal year 2003 and thereafter the transfer would be 3% of the funds. Effective September 1, 2000, the General Assembly conformed the State’s existing open container law, N.C. GEN STAT. § 20-138.7, to the federal requirements.

The open container requirements are an exercise of Congress’ power under the Federal Constitution’s spending clause. (Art. I, 8, cl 1). Whether this is a valid exercise of the spending Marc Basnight, President Pro Tempore James Black, Speaker of the House January 2, 2001 Page 2

power has previously been addressed by the United States Supreme Court under analogous circumstances in South Dakota v. Dole, 483 U.S. 203, 107 S. Ct. 2793, 97 L. Ed. 2d 171 (1987). In Dole, Congress directed the Secretary of Transportation to withhold 5% of otherwise allocated federal highway funds from States in which the purchase or public possession of any alcoholic beverage by a person who is less than 21 years of age is lawful. 23 U.S.C. § 158. The Court’s opinion was delivered by Rehnquist, C. J., in which White, Marshall, Blackmun, Powell, Stevens and Scalia,

J. J., joined. Justices Brennan and O’Connor filed dissenting opinions.

In its opinion, the Court reaffirmed that incident to its spending power Congress may attach conditions on the receipt of federal funds, and may employ the power to “further broad policy objectives by conditioning receipt of federal money upon compliance by the recipient with federal statutory and administrative directives.” Dole, 483 U.S. at 206, 107 S. Ct. at 2796, 97 L. Ed. 2d at 178 (citations omitted). In affirming Congress’ spending power to encourage uniformity in States’ drinking ages, the Dole Court found that the age provision was designed to serve the general welfare and that the condition imposed was directly related to one of the main purposes for which highway funds are expended – safe interstate travel. 483 U.S. at 208, 107 S. Ct. at 2796-97, 97 L. Ed. 2d at

179. While acknowledging that in some circumstances the financial inducement offered by Congress might be “so coercive as to pass the point at which ‘pressure turns into compulsion,’” 483 U.S. at 211, 107 S. Ct. at 2798, 97 L. Ed. 2d at 181 (quoting Steward Machine Co. v. Davis, 301 U.S. 548, 590, 57 S. Ct. 883, 892, 81 L. Ed. 1279, 1293 (1937)), the Court concluded that the 5% South Dakota would lose if she adhered to her chosen minimum drinking age was a “relatively small percentage” of funds otherwise obtainable under federal highway grant programs and that the coercion argument was “more rhetoric than fact.” Id.

The dissents authored by Justices O’Connor and Brennan in Dole expressed their views that the regulation of the minimum age of purchasers of liquor falls within those powers reserved to the States by the Twenty-first Amendment. Furthermore, in light of the Twenty-first Amendment’s return of control of the liquor trade to the States, Justice O’Connor deemed the establishment of a minimum drinking age of 21 not to be sufficiently related to interstate highway construction to justify so conditioning funds appropriated for that purpose.

Decisions by the United States Supreme Court since Dole have curtailed Congress’ exercise of its Article I commerce clause power and its Section 5 powers under the Fourteenth Amendment against the States. These decisions, however, have not displaced Dole and based on Dole it appears highly unlikely that the open container requirements would be struck down as an invalid exercise of Congress’ spending power. With respect to coercion, the percentage transferred for failing to enact and enforce a conforming law reaches only a maximum of 3%, compared to the 5% loss in Dole. Furthermore, the States do not lose the funds entirely; they are simply transferred to enhance the States’ drunk driving enforcement efforts or other alcohol-impaired driving countermeasures. The open container provision appears to meet the requirement of serving the general welfare and, like the drinking age restriction in Dole, appears to be directly related to interstate highway safety. The measure falls well short of attempting to regulate the sale of liquor in contravention of the TwentyMarc Basnight, President Pro Tempore James Black, Speaker of the House January 2, 2001 Page 3

first amendment and so may not be objectionable even under Justice O’Connor’s analysis. Indeed, the distinguishing features of the minimum drinking age enactment at issue in Dole (28 U.S.C. § 158) and the more recent open container enactment (28 U.S.C. § 154), buttress rather than diminish the vitality of the Dole opinion as controlling authority supporting the constitutionality of the open container requirements.

The unlikely prospect of a successful challenge to the provision through litigation seeking reconsideration or a significant narrowing of the Dole opinion is illustrated by another recent and unsuccessful spending clause challenge. The State of Kansas sued the United States challenging new federal requirements imposed on states receiving federal funds for Temporary Assistance to Needy Families (“TANF”) and Title IV-D programs by the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (“PRWORA”), Pub. L. No. 104-193, 110 Stat. 2105 (1996). Kansas brought a spending clause challenge because it stood to lose more than $130 million unless it complied with numerous new federal requirements, including adoption of the Uniform Interstate Family Support Act, 42 U.S.C. § 666.

Relying on Dole the district court dismissed Kansas’ suit. Kansas v. United States, 24 F. Supp. 2d 1192 (D. Kan. 1998). The Tenth Circuit affirmed the district court’s analysis, finding that the TANF and Title IV-D programs were sufficiently related to the general welfare so that Congress could constitutionally threaten Kansas with the loss of over $100 million in TANF funds for failure to comply with Title IV-D requirements. Kansas v. United States, et al., 214 F. 3d 1196, 1198 (10th Cir. 2000). In addition, the Circuit Court rejected Kansas’ coercion argument, even though the loss of federal funds in Dole was “trivial” in comparison to the amount Kansas risked losing under PRWORA. Id. at 1202. Relying on the United States Supreme Court’s recent decisions imposing new limits on Congress’ commerce power, see United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995) and United States v. Morrison, 529 U.S. 598, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000), Kansas petitioned the United States Supreme Court for writ of certiorari seeking reconsideration of Dole and adoption of a higher level of scrutiny in spending clause cases. That petition was denied. Kansas v. United States, No. 00-329, 2000 U.S. Lexis 8135 (U.S. Dec. 4, 2000).

You should also know that we have surveyed the other states to determine if any challenge to the open container requirements is pending or contemplated. To our best knowledge, no such challenge is pending or contemplated at this time.

Marc Basnight, President Pro Tempore James Black, Speaker of the House January 2, 2001 Page 4

In sum, it is our conclusion that the open container requirements likely constitute a valid exercise of Congress’ spending power and that a constitutional challenge to the open container requirements would not likely succeed.

Very truly yours,

Grayson G. Kelley Senior Deputy Attorney General

Tiare B. Smiley Special Deputy Attorney General