Regulatory Federalism: A Reprise and Introduction

2 Colum. J. Eur. L. 395 (1996)

George A. Bermann. Charles Keller Beekmnan Professor of Law, Columbia University School of Law.

This colloquium, like its predecessor, proceeds on the basis of a series of assumptions. First, it assumes that the federalism dimension of the regulatory state is an important one (just as is the regulatory dimension of the federal state). In introducing our first colloquium, I suggested that, although determining the content of public policy is critical in a democratic society, also critical is determining the level of government at which the choice of policy is made. Ingolf Pernice remarked then that a federal system is “any legal entity [which is] comprised of states for the purpose of pursuing certain common ends and which has been given, to this effect, the power to exercise limited but direct jurisdiction over their citizens, but where for all other fields of public action the individual states maintain their full autonomy.” If that is so, the inevitable question is where and, perhaps more important, how the demarcation between federal and state power should be drawn.

Assuming that policy on a given issue should, for one reason or another, be made at the federal rather than state level, the further question arises whether the general modalities of the federal intervention make a difference. One distinction drawn in our first colloquium was between federalizing the law (i.e., displacing state law with federal law) and harmonizing state law (i.e., imposing federal standards on state law). On that occasion we noted that while the European Community tends to favor using Community directives requiring the States to modify their laws to meet European Community standards, the United States favors outright federalization. Indeed, the Tenth Amendment, as explained in the case of New York v. United States, forbids federal commandeering of state legislative apparatus. But if, under this view, the federal government must pay for implementing its policies when the states refuse to do so, the consequence may well in the end prove to be less federal regulation, with subsidiarity as the practical result. This awareness and others lead to my second assumption that, stylistically interesting though the difference between federalization and harmonization may be, both approaches equally raise the “level of government” issue.

Finally, I turn to the suggestion that we distinguish between, on the one hand, fixing the proper level for making policy on a given issue and, on the other hand, fixing the policy itself. Drawing such a distinction presents certain abstract merits – like enabling the level of government that has the greatest interest in a matter to assert that interest irrespective of its interest in any specific policy outcome. At first glance, the Community law principle of subsidiarity seems to presuppose that just such a separation can be made. It suggests that a polity can raise and answer the question of power allocation in an abstract fashion. But, even as the Europeans define it, subsidiarity cannot be treated in quite this way. The principle, we are told, dictates that policy be made at the Member State rather than the Community level, whenever the Community’s policy objectives can satisfactorily be met through action taken at the Member State level. Under this view, the proper level of government action is not determined by reference to a defined policy area, but by reference to a defined policy objective. Ultimately, therefore, it is intellectually difficult, and perhaps impossible, to identify the most appropriate level of government in isolation from the most appropriate policy itself.

These, then, have been our basic assumptions: first, that level of government matters; second, that federalization and harmonization alike raise that issue; and third, that the who question invariably implicates the what question. It was on the basis of these structural assumptions that we launched the inquiry around which both this colloquium and its predecessor were organized. But we also thought we needed to organize the inquiry around a sampling of policy areas in which both regulation and federalism are issues. As Michael Bothe put it, the real question, even after a general constitutional distribution of powers has been laid down, “is the question [of] how the powers are actually used,” which in turn is very largely a “political question. “The attribution of specific powers to specific levels of government does not tell the whole story ….

Ingolf Pernice and I believed that the most useful way to launch this second colloquium would be by sharing our reflections on what the initial survey of policy areas may have shown or failed to show, not only about our assumptions, but about the demarcation of regulatory power in federal systems in general. One possibility would be precisely a refutation of one or more of the basic assumptions that we had made – assumptions about level of government mattering, about federalizing and harmonizing being basically alike, and about policy and power to make policy being inseparable. A second issue is whether upon reflection, and borrowing Richard Briffault’s terms, we have “a federal system after all, despite the lack of a significant constitutional limitation on federal power or constitutional reservation of particular subjects to the states.”‘6 This means examining the adequacy of the guarantees in the European and American Constitutions that their respective states shall enjoy a separate and independent existence and an important role in the organization of the federal government. Third and finally, one wonders, based on our survey, whether European and American federalisms, viewed separately or together, show any consistent pattern across different regulatory sectors.