Abstract
Against the background of the PSPP judgement, the article conducts an under-researched comparison of the German Court's recent judgement with incidents of defiance from American states’ legislatures. Particularly, it highlights the example of marijuana laws in the US where a handful of states managed to legislate de facto governing norms contrary to the federal ones. The article then examines the German Court's last decision on sovereign bonds to compare the underlying factors that facilitates European judicial defiance with those contributing to occasional state legislator resistance in the US. Comparison to the highly centralized US shows that defiance of supremacy cannot be eliminated, but its conducive factors can be controlled to ensure a functioning constitutional system. To do so, attention must be paid to popular, fiscal and political factors, rather than to exclusively legalistic ones.
Keywords
Introduction
The Public Sector Purchase Programme (PSPP) judgement has evoked a storm of critiques as well as calls for action. The question of supremacy – namely whether the union or Member States is the ultimate arbiter in cases of constitutional conflict – has taken a new turn. In assessing this recent development or charting a way for reform, it is imperative to have a nuanced conception that acknowledges the inherent limits of supremacy in any ‘integrative’ federal or, a fortiori, supranational system. 1 To this end, a comparative analysis of supremacy limits in a well-established federation such as the US is quite insightful.
Conventional comparative accounts among EU scholars perceive the supremacy struggle as exclusively European in contradistinction to ‘mature’ federations like the US, where resistance to supremacy has largely disappeared since the end of the Civil War. 2 However, this is only true if the analysis is confined to a court-centred approach. In the US, resistance to federal supremacy persists in several fields ranging from immigration, experimental medicine, firearms possession, marijuana and others. 3 However, this occasional resistance is initiated by state legislators rather than the judiciary.
There are stark divergences between the US and the EU in terms of kind, degree and frequency of defying supremacy. However, if one zooms out, a common denominator can be identified: authorities of the component states – be it the legislature or the judiciary – attempt to leverage their administrative, political or economic power to defy supremacy whenever the circumstances are conducive. 4 As the US’s experience of a ‘mature federation’ with its immense centralized power suggests, defiance cannot be ‘eliminated’ but its conducive factors can be ‘reduced’. In seeking such a reduction, a distinction must be made between factors giving rise to ‘productive and even needed’ supremacy conflicts and those which threaten ‘the system as a whole’. 5
It is from within this context that this article analyses an example from the US that captures the limits of supremacy and shows how states often manage to create de facto governing norms contrary to the federal supreme ones or force a fundamental rethinking of the federal laws. I contrast this with the European limits of supremacy as epitomized by the May 2020 PSPP judgement. While comparative analysis could be an end itself, this article has two further purposes. First, by providing a brief yet nuanced account of the limits of supremacy in the US, it illustrates that a certain degree of supremacy defiance and ‘normative conflict’ is an inescapable ‘fixture’ of integrative federalism. 6 Second, it aims to build the claim that although defiance is couched in legal jargon, it is facilitated by factual, political, administrative and economic factors. Without duly accounting for these, harmful forms of defiance are bound to reoccur.
The article is structured as follows: in the first part, I provide a summarized account of supremacy and its de jure and de facto limits in the US. Then I offer a brief analysis of the cases of state resistance to federal marijuana regulation. The second part shifts to the EU, which contrasts the different responses to supremacy between national legislative and judiciary. Then it briefly touches on the judicial struggle on supremacy in the EU as epitomized in the PSSP judgement. It concludes by drawing insights from the comparison with an emphasis on the German Court's recent predicament.
American supremacy and its limits
Article VI of the US Constitution contains the supremacy clause whereby the constitution and federal laws ‘shall be the supreme Law of the Land; and…any Thing in the Constitution or Laws of any State to the Contrary notwithstanding’. 7
Insofar as Congress acts pursuant to one of the enumerated powers, such as commerce or foreign policy, the supremacy clause empowers the Congress to pre-empt and set aside state law as well as constitutions. 8 As the Supreme Court (SCOTUS) declared, ‘[U]nder the Supremacy Clause, from which our pre-emption is derived, any state law, however clearly within a state's acknowledged power, which interferes with or is contrary to federal law, must yield’. 9 As per judicial supremacy, the vertical supremacy of SCOTUS on the interpretation of constitutional and federal law is largely settled and Kompetenz Kompetenz is not questioned. 10 A few inter-judicial skirmishes have occurred in the past, but have been successfully quelled. 11 Thus, discussing them is not relevant to our inquiry regarding modern forms of defiance originating mainly from the legislator. Supremacy of federal laws, however, are subject to de jure and de facto limits which are explained below.
De jure limitation: Anti-commandeering
Reading the Tenth Amendment and the Supremacy Clause together, the Court, in the cases of New York, Printz and recently Murphy, held that acceptance of supremacy implies a rejection of ‘commandeering’. 12 The federal government's ability to act directly on individuals meant that it could not enlist state legislatures or executives to ‘do so on its behalf’. 13 Thus, the Court found unconstitutional federal acts requiring state officials to conduct background checks on prospective handgun purchasers (Printz v. United States) or prohibiting state and local legislators from allowing sports gambling (Murphy v. NCAA).
What might be counterintuitively ‘puzzling’ is that whilst in the US commandeering is prohibited, in the EU, directives requiring states legislatures to attain certain ends is commonplace. The two systems, however, do so in the name of protecting the autonomy of their component states. 14 The institutional differences justify the apparent contradiction. First, the EU does not have full executive bureaucracy, thus commandeering is the only option. More importantly, while in the EU component states are fully represented in the central law-making process, this is not the case in the US, particularly after the Seventeenth Amendment, which mandated the popular election of the Senate. Federal and state officials continue to face separate electoral and administrative accountability. Given that the massive fiscal federal leverage might unduly influence states, the doctrine, as the court remarked, ensures that the lines of accountability are clear so that the choice remains with ‘state governments and, ultimately, the state electorate’. 15
The problem is that putting pre-emption and commandeering together causes a tension to often ensue. The Congress could pre-empt state law but not commandeer state officials including state legislature. 16 Additionally, under some factual conditions, states possess some legislative and administrative cards to push back against supremacy and fight the federal policy ‘from within’. 17
The other limits of supremacy? 18
We must turn to history to properly understand the issue. In 1832, South Carolina issued an ordinance declaring that the federal tariffs of 1828 and 1832 null and void within the state borders. 19 The ordinance relied on a discredited theory of state ‘nullification’ of federal law. The theory did not thrive. President Andrew Jackson, the hero of the Battle of New Orleans, threatened to ‘hang the first man of them [nullifiers] I can get my hands on to the first tree I can find’. 20 Even some Southern legislatures issued ordinances condemning South Carolina. The death of this short-lived theory was further reaffirmed in the Civil War. 21
However, the end of the 20th century witnessed several attempts to revive what is often called ‘modern-day nullification’, 22 ‘zombie constitutionalism’ 23 or what could also fit under the rubric of ‘uncooperative federalism’. 24 Given that the ratio of federal to state law enforcement personnel is nearly one to ten, 25 often the federal level lacks the resources to execute its rules without states cooperation. This gives states an additional leverage of the ‘power of the agent’. 26 In such cases, states often manage to enact a legal system contrary to federal law or force a rethinking of the latter.
The pattern is traceable across a host of contemporary issues. This includes, for instance, gun control where several conservative states enacted laws purporting to forbid and restrain the enforcement of federal laws within their jurisdictions. 27 Similarly and despite the federal ban on sports gambling, New Jersey has enacted a law legalizing it. 28 In a similar vein, the expansion of the Affordable Care Act (ACA), commonly known as Obamacare, is subject to a long tug-of-war. 29 Opponents of the expansion of ACA continued to use state legislative as a ‘battleground’ to initiate and perpetuate ‘obstructionist tactics’ to the implementation of the federal program. 30 Other examples abound in areas of experimental medicine 31 and immigration policy. 32
Through induction of incidents where states have successfully limited a validly exercised and presumably supreme federal law, many scholars seem to concur on three cumulative conditions for successful defiance of supremacy. 33 Differently put, in case of the absence of any of the three conditions, defiance is unlikely to succeed or endure. I briefly list these conditions before explaining the marijuana law as an example which puts the conditions into perspective.
The first condition is that the enforcement of the federal regulation must be highly reliant on state personnel and resources. 34 For instance, the federal government cannot implement demanding regulatory schemes such as the expansion of healthcare or the enforcement of banning marijuana across the whole country by itself and thus must rely on state machinery. This reliance is what encourages states to make a functional ‘bet’ that, absent their cooperation, federal law is unlikely to be enforced. This gives states an avenue to leverage their disagreement. 35
The second condition is the lack of non-partisan political will at the federal level and/or fiscal resources to allure states into cooperation through a promise of regulatory power or budgetary grants. By contrast the availability of sufficient fiscal and political capital may allow the federal government to overcome state defiance. Famously that is what happened during the civil rights era in the 1960s. The 1964 Civil Rights Act mandated school de-segregation as a condition for receiving federal funds or else risk costly litigation. 36 Despite previous ‘massive resistance’ from many southern states to desegregate, the financial incentive and threat, among other factors, helped allure states into compliance. 37
The third condition stems from standing and justiciability implications. Compared to the federal law, the opposing state law must be more permissive, 38 liberal and conforming to the state of nature. 39 Choosing the right term is quite tricky yet a common understanding remains that federal law must be harsher/more restrictive compared to the permissive state law. 40 For instance, it is easier to meet the standing doctrine for a challenge against a state's harsher abortion law compared to a challenge of a state's more permissive marijuana laws where meeting the standing threshold is far more difficult. 41
To put the matter in perspective, the example of state marijuana laws detailed below highlights the three conditions and demonstrates the dynamics of how states leverage their powers to oppose and reshape federal laws.
Is medical and recreational use of marijuana legal in the US?
As the most commonly used drug in US, Congress relied on the commerce clause to adopt the Controlled Substances Act (CSA) which bans marijuana for all purposes, including for medical use. Upon challenge, the Court in Gonzales v. Raich upheld the act and its ban of medicinal consumption of homegrown marijuana as falling under the Congressional powers under the Commerce Clause. 42
Though the federal act and SCOTUS ruling uncompromisingly and constitutionally bans marijuana, California initially, followed by a limited number of other states, started to defy the federal law by enacting laws exempting medical use from state criminal punishment. While states are under no obligation to mirror federal criminal laws, a glaring legal clash ensued. Licensing medicinal users to distribute or consume marijuana is licensing a violation of the judicially upheld federal law. Given the limited ability of the federal government to enforce the ban across the country, state laws, as detailed below, have become to some extent the de facto governing law.
Obviously, Congress cannot force states to re-criminalize the exempted uses because exemptions cannot be pre-empted but rather commandeered. 43 As previously mentioned, since the anti-commandeering principle bans Congress from ordering state legislature to criminalize certain behaviour in the first place, it cannot compel them to restore prohibition. Then, ordering states to ban an exemption would, in fact, fall under impermissible commandeering, not the lawful pre-emption.
Fiscal factors shape the exercise of congressional pre-emption. One may wonder why the Congress would not take the route of enacting a law with a ‘field pre-emption’ which occupies the whole field and thereby explicitly bans any state legislation. Numbers reveal that only 1% of offenders are arrested by federal law enforcement. 44 Given that enforcement warrants massive resources, such field pre-emption that do away with state cooperation could turn out to be, in action, largely ineffectual and even a mockery. To avoid this, Congress may dedicate a disproportionally substantial budget for enforcement, which would be highly irrational. This lack of political and fiscal capital also restrains Congress from using its ‘Trojan horse’, namely conditional spending to allure states into cooperation. 45
Neither public opinion nor time is on the side of the federal government either. 46 As popular opinion is increasingly favouring legalization, the number of states adopting deviant laws is on the rise, despite multiple threats from the Department of Justice. Generally, states have adopted three types of measures: (1) medical use exception, (2) decriminalization of other uses which removes the criminal punishment but keeps other civil or administrative sanctions and (3) full legalization which removes all sorts of penalties. 47
In nearly two decades, states legislatures, as laboratories and ‘norm entrepreneurs’ 48 have fundamentally altered the legal landscape at the state level. For instance, medical exemption started only in California in 1996, which was followed by a handful of states by the beginning of the century. By 2017, however, nearly 90% of the states, as well as Puerto Rico and the District of Columbia, have allowed for the medical use of marijuana in some capacity. 49 Recreational use was still criminalized until 2012 when Colorado and Washington voted to legalize and tax small amounts for recreational use. By 2014, legalization migrated to Alaska, Oregon and DC, followed by California, Nevada and Massachusetts, reaching up to 11 states by 2018. 50 Overall, only one state has not legalized marijuana in some form. 51
Unlike European national courts, US state courts do not initiate a challenge to supremacy. They could nonetheless have a subtly and incidentally supporting role without directly clashing with SCOTUS’s supremacy. This is made possible through the established doctrine whereby SCOTUS will refrain from reviewing state judgments which are based on ‘adequate and independent state grounds’. 52 In interpreting this cannon of judicial and federal dialogue, 53 SCOTUS has further articulated the ‘plain statement rule’ for cases where federal and state legal grounds overlap in the reasoning of the state court. According to this rule, when the state court interweaves matters of federal and state law, it could still avoid SCOTUS review by making a ‘plain statement’ that it used the federal law for guidance only and that its conclusion is compelled exclusively by state law. 54 Thus, for instance, despite the criminal ban and SCOTUS ruling on medical marijuana, Massachusetts’ Supreme Court read its state law to offer a statutory ‘right or privilege’ to a reasonable accommodation for an employee's use of prescribed medical marijuana. 55 Another state court rejected a writ of mandamus to require a city to revoke license of corporation selling medical marijuana. 56 None of these opinions were reviewed by SCOTUS as their conclusions are based on grounds of state law. 57
Faced with growing state challenges, fiscal limits and favourable public opinion, the strategy of the federal government started to shift from ‘war’ on legalization to ‘partial truce’ during the Obama era, to the present near ‘capitulation’. 58 In 2019, the House of Representatives approved a measure to prevent the Department of Justice from interfering with individual state marijuana laws. 59 A bill passed the House pending the Senates entitled the Secure and Fair Enforcement (SAFE) Banking Act. The act would bar federal financial authorities from punishing financial institutions that offer banking services to state-licensed marijuana businesses. 60 However, the federal capitulation was not always linear. Trump's administration renewed efforts to enforce the federal ban. 61 Nonetheless, this did not deter more states from decriminalizing marijuana. 62 Additionally, a proposed bill titled STATES, as its acronym suggests, seeks to empower states to opt out of the federal ban on marijuana. In other words, it would make the federal law reflect the states’ fait accompli.
Succinctly put, Congress enacted an across-the-board ban on marijuana which was judicially upheld. However, the Court's decision in Raich did not stop states from adopting laws which legalized medical and other uses of marijuana. These laws not only remain in effect but has also reshaped state marijuana laws in almost all states and secured de facto regimes against the mandate of the supremacy clause. It may even alter the federal law itself, at least incrementally. 63
Beyond marijuana, states are using this mechanism to act contrary to federal policy in issues such as experimental medicine, 64 healthcare and firearms possession. 65 A more complex ongoing example is the federal immigration law. As reliance upon states is becoming inescapably greater in enforcing federal immigration law, states have used this leverage to defy the federal immigration policy for years. 66 Particularly, certain states, known as ‘sanctuary jurisdictions’, have taken an immigration-friendly stance and enacted ‘non-cooperation laws’ with the goal of hindering the enforcement of federal immigration law. 67
The takeaway from these examples is that although ‘nullification is surely dead’, as Young notes, ‘state resistance to federal authority persists’. 68 As Resnik puts it ‘normative conflict is a fixture of federalism’. 69 However, these instances of conflict are of different types and could serve as a double-edged sword. Examples such as states allowing the medical use of marijuana or restraining Trump's populist anti-immigrant agenda 70 are considered democracy ‘reinforcing.’ Namely, they limit the overreach of the federal government without undermining the system as a whole. 71 These cases are unlike the well-known ‘constitutionally undermining’ moments of defiance before the Civil War or during the Civil Rights movement. It is the complementarity of judicial, fiscal and popular safeguards in the federal structure that give flexibility to assess and filter out harmful defiance and tolerate those that reinforce democracy. The comparison with the EU, as discussed in Section 3, helps illustrate the importance of complementarity of different safeguards.
Limits of supremacy in Europe
Contrary to the US, the supremacy of EU law has triggered the opposite reaction from the national judiciary compared to the legislature. I explain this before briefly illustrating the apex of judicial defiance in the May 2020 judgement.
Supremacy: Different thing to different national authorities
In a well-known historic line of cases, the ECJ established the primacy of EU law over state laws and constitutions. 72 From the ECJ's perspective, EU primacy is absolute and unreserved. However, most national courts ‘locate the authority of EU law’ within their national constitutions, whose basic core remain superior, as do their national judicial guardians, over EU law. 73 Interestingly, whereas in the US it is state legislators and governments that often, under certain conditions, challenge supremacy, it is the European courts that serve as the main theatre of these clashes. Conversely, there was almost no considerable attempts from Member States’ political actors – be it the government or legislator – to curb the Union's primacy. 74
The contrast between the political attitudes in the two systems can be explained by the institutional difference in their law-making process. Component states are heavily represented in the EU legislative process through the appointment of their ministers in the Council, de jure requirement of unanimous voting on some occasions, de facto tendency to consensus voting 75 and the subsidiarity mechanism which have no equivalence in the US. The European process, as Moravcsik remarked, ‘makes everyday legislation in the EU as difficult to pass as a constitutional revision [in the US]’. 76 This facilitates and explains political – as opposed to judicial – acceptance of primacy.
The stronghold of the concept of monistic sovereignty over the European courts plays a role regarding this issue. However, the position of national courts may also find justification for structural reasons. From the lens of the division of power, the ECJ, as a Kelsenian court, is more ‘privileged’ in its relationship with the Union legislator and other institutions. 77 It enjoys unchallenged horizontal monopoly over interpretation, which SCOTUS does not have, not to mention the difficulty of treaty amendment to reverse the Court's constitutional interpretation, and the absence of both vibrant party politics and legislative control over the Court's jurisdiction compared to the US. 78 This leaves national courts as a main check on the ECJ's potential over-centralization through its wide discretion in ‘jurisdictional grey areas’. 79 Whilst incidents of national courts overriding the ECJ remain empirically small, 80 given the lack of blunt coercive powers, the ECJ usually seeks to avoid conflict and elicit compliance through persuasion and leaving substantial room to national judges. 81 In sensitive areas with broad discretions, ECJ judges most probably factor the threat of ‘mutually asserted’ judicial destruction and the chain of events that could result from a radical interpretation. 82 This form of ‘look[ing] ahead and reason[ing] back’ or ‘backward induction’ 83 could serve as a sort of subtle constitutional check.
The downside is that while mutual destruction could bind national courts, recent practice is increasingly showing alarming signs. It is questionable whether national courts have sufficient internal checks, self-restraint and consideration of injustice externalities beyond their borders that guarantee adherence to a balanced inter-judicial dialogue, especially in the face of the ongoing financial crisis. The concern is particularly vivid in the courts of post-Soviet countries, where supreme courts are stronger than the ‘disorganized, weaker’ branches of government. 84 Equally troubling is the German Constitutional Court (FCC), whose approach seems ‘out of sync with German interest in the EU’, but the political cost of checking the court is ‘prohibitive’. 85 Indeed, as the current EU constitutional arrangement remains in place, national courts are a valued interlocuter and a needed brake on the ECJ's broad discretionary powers. However, excessively strong brakes might unduly stifle the progress of the EU's constitutional vehicle, or its improper timing veer the vehicle off. This is clear in the May 2020 judgement on sovereign bonds, which witnessed an unprecedented escalation from the German Court.
Clashing courts and sovereign bonds
With some degree of variation among each EU state, the longstanding European sovereigntist conception leads to two common ‘constitutional denials’: first, that the EU is not a state and as a corollary does not have sovereignty; 86 second, it has no unitary European people as a demos and for this, among other things, it does not have democracy. 87 The denials are translated into three ‘locks’ or limits used by national court to restrain EU supremacy: (i) the competence-based limit of ultra vires and its concomitant Kompetenz-Kompetenz, (ii) respect of fundamental rights and (iii) national constitutional identity. 88 Whereas most national courts had put one of the limits into use, the German Federal Constitutional Court regularly uses all or most of the checks and has come to ‘epitomize’ national resistance to EU supremacy. 89 To put the issue into perspective, I briefly highlight the FCC's two latest judgements on sovereign bonds, the last of which ushered in a direct attack on the ECJ.
The two checks of ultra vires and constitutional identity were joined together in the FCC's first primary reference to the ECJ in January 2014. 90 The OMT case, taking its name from a Euro-crisis-related programme titled Outright Monetary Transactions, sought to circumvent the prohibition of Article 123 TEFU on financing member states. The OMT authorizes the European Central Bank (ECB) to make unlimited purchases in secondary markets of sovereign bonds of fiscally troubled member states. The purchase is conditioned on macro-economic reforms that the state in question must follow. One problem with this field is the ‘problematic separation of competences of the Economic and Monetary Union’. 91 While the Monetary Union lies exclusively with the EU, economic policy remains ‘national in nature’ where the EU may only facilitate coordination. 92 The legal issue largely boils down to assessing whether the debt crisis measure is still within the ‘permitted’ monetary policy, or ventures into the ‘prohibited’ economic policy. 93 The almost inseparable linkage of the two domains often makes the distinction externally inconsistent with the real world. 94 Thus, any drawing of boundaries would prove arbitrary as well as a fertile ground for inter-judicial conflicts.
Unsurprisingly, then, FCC's reference had a clear threat: unless the OMT was interpreted restrictively by ECJ, it would be in violation of the two limits of ultra vires and German constitutional identity. 95 The FCC even suggested what constraints should be placed to rescue the validity of the programme. 96 The ECJ reconciled the German threat with the need to preserve the measure for Euro-crisis dictates by using a ‘light touch’ proportionality review. 97 The FCC was not ‘reassured’ with ECJ's response nor with its proportionality analysis. 98 Still, it accepted the legality of OMT and found there was no manifest violation of the conferral principle. 99
Until very recently and almost for half a century, the FCC had a pattern of ‘all bark no bite’. 100 However, this changed in May 2020 when the FCC went for its first ‘bite’. 101 In PSPP, a challenge was brought against the legality of the participation of German federal government and Federal Central Bank in the Public Sector Purchase Program (PSPP). 102 The latter is yet another instrument of the Euro-crisis, which facilitates the acquisition of sovereign bonds in secondary markets with the goal of increasing liquidity and stimulating the concerned states’ economy. By the end of 2017, around two trillion’s worth of sovereign bonds had changed ownership through the private sector into the hands of the ECB and the national central banks, therefore, increasing ‘the fiscal exposure to interest rate risk’ in Euro members. 103 Again, the FCC referred ‘more or less’ the same question of OMT. 104 The ECJ stuck to its proportionality standard and found the programme compatible with EU law. 105
However, the FCC did not welcome ECJ's insistence on its light proportionality test and held that the ECJ's judgement itself is ultra vires for ‘methodological flaws’ in its proportionality review. 106 To the FCC, the flaw was on CJECU's ‘uncond[itional]’ focus on the objective of monetary policy ‘while ignoring the economic policy effects resulting from the programme’. 107 Then, the FCC moved to find the acts of the ECB also disproportionate and ultra-vires. The court gave ECB three months to issue a decision that sufficiently explains the balancing of the PSPP's monetary policy goal with its economic consequences. 108 ECB, however, is not subject to the FCC's jurisdiction and even declined to appear in the case. There are some proposals to ‘save everyone's face’, but future rounds of conflict are expected. 109
Whilst other courts have rejected ECJ ruling on ultra vires or one of the other limits, this was in respect of cases with a more limited scope, not as consequential as the PSPP. 110 The latter might incite harmful forms of supremacy defiance by encouraging other Eurosceptic courts to follow suit. 111 The judgement has already been celebrated by the Polish Prime Minister as the most important in the EU history. 112 Alternatively, excessive judicial defiance could trigger the opposite of its intended consequences. It might, as Maduro suggested, accelerate a ‘wake-up call’ for long overdue reform that allows dealing with risk sharing through EU's own financial resources. 113 Time will tell how this saga of conflict will unfold.
Comparative insights and concluding remarks
As the case studies show, both systems have some form of state defiance, but the details of defiance dynamics in the two experiences are considerably different. In the EU, defiance to supremacy is almost exclusively judicial, whilst in the US, defiance is initiated by state legislators, with state courts often playing an incidental catch-up role. In addition, conflict in the US involves some of the applications of the supremacy doctrine, not the foundation thereof, as is the case in the EU. Another major difference is that while defiance in the US succeeds only under the three conditions detailed earlier, defiance in the EU seem to materialize under several conditions which are difficult to exhaustively categorize.
Despite divergence in details, the two systems share a ‘normative’ denominator 114 and a family resemblance that allows for a functional comparison. 115 This stems from the fact that the US federal structure, like the EU, ‘came into being through a constitutional process of ‘coming together’ 116 or what Lenaerts terms ‘integrative federalism’. 117 As many have remarked, in both experiences, pre-existing sovereign states voluntarily agreed – without waiving their sovereignty – to integrate into a continent-sized polity. 118 The multiplicity of sovereign actors concomitantly brings an inescapable ‘tension between uniformity and diversity’ and an inherent requirement of reconciling ‘dispersion and fragmentation’ within a ‘unified’ constitutional order. 119 In such settings, a tug-of-war contest and defiance become an inevitable part of the constitutional dynamics. This commonality is what makes a comparison of ‘the centrality of conflict’ and the limits of supremacy in the two systems ‘obvious and fruitful’. 120 Thus, despite divergence in details, the two systems remain thematically ‘the least different’ if not ‘the most similar’ among other possible comparator constitutional polities. 121 Yes there are differences, but as in any comparison, differences are useful to sharpen understanding and enrich self-reflection. 122
With both divergence and convergence in mind, the comparison provides useful insights on the EU's struggle with supremacy. Two interrelated remarks in particular are worth stressing. First is that a degree of defiance and conflict is inescapable in ‘an integrative federal structure’, thus, defiance cannot be completely eliminated but rather be negotiated and controlled. Second, negotiating the conflict cannot be done alone through compartmentalized judicial or legalistic solutions, but rather must be aided by mutually complementary political, fiscal and popular safeguards. Both points are worth further unpacking.
First, in integrative federalism, supremacy defiance cannot be eliminated. Thinking in statist terms,
123
conventional accounts among EU scholars seem to conceive supremacy conflicts as an ‘aberration’ or European ‘novelty’
124
that ‘mature’ federal states do not encounter.
125
However, state marijuana laws, among many other examples, showed that even beyond the well-known conflicts in the early American history, defiance or ‘modern nullification’ persists in several legislative spheres, albeit under certain conditions. The US federal government, unlike the EU, enjoys a full bureaucracy, executive capacity to act on its citizens, strong fiscal capacities and unrivalled spending powers.
126
Despite these immense centralized powers, supremacy remains inherently limited by the previously mentioned factual consideration. Perhaps a more vivid image of the American system is best captured by Cover: I, ultimately, do not want to deny that there is value in repose and order. But the inner logic of ‘our federalism’ seems to me to point more insistently to the social value of institutions in conflict with one another. It is a daring system that permits the tensions and conflicts of the social order to be displayed in [its] very jurisdictional structure…. It is that view of federalism that we ought to embrace.
127
If this is the case with a two-and-a-half century-old system which is perceived as the ‘Magna Carta’ of integrative federalism, 128 then it is safe to say that the EU's supremacy, no matter how ambitious a reform it might undergo, will have to acknowledge certain limits. In fact, some degree of conflict in multilevel constitutional systems is understandable given that, as Shapiro remarked, ‘the [two levels] of governments are regulating the same people at the same place’. 129 Acknowledging limits, says Davies, is part of ‘legal maturity’. 130
To be clear, if a degree of defiance is inescapable and even fruitful, other excessive forms are quite the opposite. Conflicts have been celebrated by the camp of ‘constitutional pluralism’ within the EU scholarship. Heterarchy rather than hierarchy facilitates different perspectives in a heterogenous constitutional space, fosters ‘“virtues” of adaptation, contestation and checks and balances’. 131 For example, the Solange saga is referred to as a ‘potential crisis’ which eventually ‘served as a turning point, opening a new era’ of fundamental rights in the case law of the ECJ. 132 Likewise in the US, yet from a different angle, Gerken and Bulman-Pozen instigated a rich strand of literature on the benefits of ‘uncooperative federalism’ as a constitutional guarantee of ‘loyal opposition’. 133 According to this view, rejection of federalizing marijuana or resistance to federal immigration policy is not merely an expression of local values but rather helps states ‘voice’ their concern for ‘American constitutional values’ and serves as a vehicle to ‘mediate’ divergent perspectives. 134 Yet it remains widely acknowledged that excessive forms of defiance are against the logic of dialogue, undermine the system as a whole and can degenerate into chaos. 135 This is often exemplified by state opposition to gun control laws in the US, 136 or by earlier resistance to race desegregation, 137 in the EU, by Hungarian court's defiance of EU asylum relocation to solidify the policies of the incumbent Hungarian government. 138
The question then turns to ‘how much [supremacy] contestation is optimal’. 139 Federal constitutional theories fail to provide a crisp line on which forms of defiance is constitutionally reinforcing and serves the ends of mutual accommodation of difference; and which type ‘degenerates’ into chaos and threatens the ‘whole system’. 140 This article cannot venture into providing an answer to this federal existential question. Instead, it refers to a point which is more widely established and relevant to the comparison. Namely, that negotiating or reducing conflict is better made not through compartmentalized legal solutions but rather through a host of safeguards, political, popular, structural and judicial, which ‘complement each other in the nature of punishment they offer’ against ‘aberrant actors.’ 141
Second, when contemplating the last saga of judicial defiance in the EU, one must recall that integrative federalism, as defined earlier, is an inherently complex structure born out of the ‘chronic’ challenge of reconciling unity and diversity in heterogeneous legal and socio-political order. 142 The judicial safeguards or inter-judicial dialogue, albeit crucial, are but one of many safeguards which must be arranged to complement one another in sustaining a multi-level constitutional space as the EU or federal as the US. Popular, fiscal and political safeguards collectively or often ‘competitively’ patrol the encroachment of the component states or the centre. 143 State defiance is often made possible by a shortcoming of one of these safeguards. If a shortcoming of a certain safeguard in the highly centralized US can trigger defiance, it is unsurprising that the profound weakness of the same safeguard facilitates resistance in the less-powerful EU when uncompensated by an alternative mechanism.
To put the issue into perspective, two of these factors have been dialectically involved, to varying degrees, in the compared case studies: popular safeguards and fiscal limits. Whilst the latter is self-explanatory, the former might need a brief definition. Popular safeguards, which can be traced back to Madison, refer to the capacity of public opinion or participation to enforce the distribution of authority against encroachment or abdication of either the centre or component states. 144 The legitimacy of federalism is said to ‘ultimately rest on popular consent’. 145 When the federal/central policy is at odds with popular preference, component states may have a better chance of leveraging their disagreement. Recall that in the US, as medical marijuana became more popularly accepted, this encouraged more state-defiant legislation.
Similarly, the fiscal limitations made the federal government almost capitulate to states regarding marijuana and placed significant limits on its ability to subdue immigration friendly jurisdictions. For instance, Congress spends over $2.4 billion per annum to combat marijuana. 146 But as discussed earlier, this has proven insufficient to enforce the ban across a continent-sized polity. To override state defiance, Congress would have to raise more tax to federally enforce the ban, but the tax would be ‘especially unpopular’. 147 In the midst of this fiscal constraint, states, reinforced by popular opinion, managed to convert the fiscal gap into a defiance conducive gap whereby it pursues defiant legislations. 148
Harking back to the EU, the same two safeguards, or the lack thereof, might have played a role in the current German defiance saga. As per popular factors, while courts are, in the conception of many, counter-majoritarian institutions that balance constitutional values against the whims of popular vicissitudes, 149 empirical studies have demonstrated the courts’ general tendency to ratify popular preference. 150 In Europe, evidence suggests that domestic public opinion indirectly influences European constitutional courts, including the FCC. 151 For instance, a study showed how the German Court's ESM ruling ‘appeared to adhere closely to the contours of public opinion’. 152 The point can also be indirectly gleaned from the President of FCC's introductory remarks to the PSSP judgement where he was keen on allaying the public concern that the judgement does not ‘make any statement’ on ECB's COVID-19 programs. 153
Fiscal issues are of relevance too. The EU, Ziblatt notes, is ‘fiscally speaking, a political pygmy; its actual budget is minuscule, and it is arguably the largest political unit in history without the power to raise debt for itself’. 154 While there has been recent EU fiscal breakthrough with the NextGen EU COVID-19's recovery package, 155 the statement of Ziblatt remains largely true. Without the EU being capable of raising its own resources, Germany has unrivalled fiscal and economic leverage on the Union. Once again, this broader political canvas must come into play in the background of FCC's decision-making process. It might be no coincidence that the most fiscally influential country houses the court which, in Chalmers’ words, ‘epitomize[s] the hegemonic national position’ in challenging supremacy. 156 Fiscal and popular factors together make the FCC's divergent judicial philosophy and institutional interest easy to manifest. Even if Germany's political long-term interest lies with the Euro-crisis measures, the FCC's recent judgement might portray the court to the public as a hero ensuring that German taxpayers’ money is spent both wisely and democratically. This insulates the court from popular backlash, making defiance less politically costly for the court, but the political cost of restraining the court ‘prohibitive’. 157
To be clear, non-legal factors – be it popular, fiscal, political, administrative or others – do not themselves create the disagreement between the centre and component states, but rather often make its expression less costly for the defiant party. In the US, the lack of fiscal or political capital was not the reason that states harboured conflicting views on issues such as marijuana or immigration. Rather, when such disagreement already existed, fiscal limits gave states room to ‘leverage’ their disagreement and tied the hand of the federal government from pushing back. Likewise, fiscal factors in the EU do not bring about the judicial disagreement between the two courts; rather it becomes easier to manifest whenever the absence of these safeguards unevenly advantages one side over the other. It is implausible to think that fiscal issues inspired FCC's proportionality test. However, one may wonder whether the FCC would have been as vocal of its different proportionality approach had Germany been the one receiving the fund. 158
Therefore, when examining legal conflicts of supremacy, one should account for the conducive factors through which defiance becomes less costly. Controlling these non-legal factors will not eliminate conflict, which is inevitable, but reduce its chances and allow for more flexible negotiation thereof. As McCormick noted a long time ago, avoiding conflict ‘is a matter for circumspection and for political as much as legal judgment’. 159 In federalism scholarship the point is quite clear, it is the redundancy across judicial and ‘extra-judicial’ safeguards that allow to flexibly negotiate conflict across different levels of the system and weave together a constitutional safety net against the risk of misjudgement. 160 ‘Limp[ing] along’ on one safeguard (as the judiciary in the EU) may not provide the required flexibility nor the complete coverage of all interactions. 161 These accounts of federalism theory bear some conceptual resemblance to similar discussions on the level of the nation state where scholars argue for the need to combine elements of legal constitutionalism with political constitutionalism. 162
Perhaps nothing puts the point in stronger light than a reference to the incumbent president of the ECJ, who himself stressed the need to supplement the judiciary with extra-judicial safeguards to properly uphold the EU's complex architecture and reconcile its different traditions. President Lenaerts remarked that ‘achieving the balance of power between “unity” and “diversity” is not a task for the judiciary alone, it is also a task with which the political process may be entrusted. This is what [is] called “the political safeguards of federalism”.’ 163 He reminded us that both judicial and extra-judicial safeguards should not be seen as ‘mutually exclusive’ but they rather ‘mutually reinforce one another’ in maintaining a historically divergent, continent-sized legal order. 164
It is important to keep this in mind while assessing the calls for action made in the aftermath of the PSPP judgement. For instance, a suggested reform was a constitutional amendment which ‘takes away Federal Constitutional Court jurisdiction to rule over ECB matters’. 165 Such a proposal cannot prevent conflict if conducted in isolation from the fuller institutional, extra-judicial picture of the EU order. Assuming it is politically feasible, judges as well as lawyers are notoriously skilful in finding leeway to use constitutional principles to their own predetermined views. A relevant example is the principle of ‘friendliness towards European integration (Europafreundlichkeit)’ of the German Constitution which did not stop FCC's continuous ‘unfriendly’ clashes with the ECJ. 166 It is also difficult to amend each national constitution of ‘euro-sceptic’ courts to prevent future escalation. Nor did the supremacy clause of the US constitution stop state defiance when circumstances were conducive. As previously mentioned, clashes of vertical supremacy cannot be dealt with by purely legalistic measures that either restrain or strengthen one side of the judiciary. Supremacy conflicts are facilitated by non-legal factors; factoring in and controlling the latter may help make the former more difficult to manifest.
Surely, given the institutional realities of the EU and the relative weakness of non-judicial safeguards, Courts could be advised to restore the cautious golden mean which have long described the EU's ‘judicial universe’. 167 Namely that between the extreme ends of ECJ's over-centralization and rebellion of national courts lies a broader constitutional space of inter-judicial dialogue which aims at sparing unnecessary friction and mutually ‘accommodating the symbiosis of different judicial outlooks on constitutional supremacy’. 168 However, the success of dialogue depends on the willingness of the other interlocutors. If defiance continues to increase in the face of the lingering Euro-crisis, democratic backsliding as well as concerns of competence creep. Then bringing and reforming political and other complimentary safeguards will be inevitable to aid judicial tools in sustaining the robustness of the EU project. 169
After all, the ‘political and institutional epilogue’ of PSPP judgement remains unknown at the time of writing, 170 and might be too early to tell which side of the conflict the PSPP judgement will fall: the productive or destructive one. Yet, in contemplating the trajectory of future conflicts in the EU, rather than exclusive focus on judicialization, equal focus should be paid to nurturing the popular and political safeguards of the EU as well its ‘fiscal capacity’. 171 Simply put, the EU should garner popular support for its policies, and strengthen its miniscule fiscal capacities. 172 That is, of course, easier said than done and prescribing the method of doing so goes beyond the scope of the article whose aim is to revisit some assumptions about supremacy and highlight the common role of non-legal factors in influencing defiance in both systems. As per the method of remedying the institutional shortcoming, space preludes discussing the plethora of valuable proposals offered by many leading voices such as Hanjaeos, Fabbrini and Maduro who suggested significant reforms to the EU's political structure and fiscal capacities. 173
To conclude, what the two compared systems have in common is that supremacy of the centre vis-à-vis component states is not unlimited. However, the details of the limitation placed on supremacy in each system differ considerably. First is with regard to the state organ that is more prone to defy supremacy – state legislature in the US and judiciary in the EU. Second, conflict in the EU calls into question the foundation of supremacy, whilst in the US challenges only some of its applications. Third, the two systems differ on the frequency and the conditions under which defiance can be attained.
Consequently, comparison to the highly centralized US illustrates that supremacy defiance cannot be eliminated. The possible route is to control its ‘conducive factors’ and to wed judicial with extra-judicial safeguards to filter out constitutionally lethal forms of conflict and nurture productive ones. It is true that in envisioning the required reforms to attain this balance, the political dynamics and historical contingencies of the European project allows no easy solutions which can be made on an a priori basis, nor through copying comparative institutions. Yet the value of this comparative analysis lies not in providing ‘off-the-shelf’ answers but rather in revisiting conventional assumptions about supremacy in the EU. 174
