Would it be legal for a US State to ban exports of a natural resource?

Question

I am interested in whether a US state constitution could be legally amended to ban exports of specific natural resources (such as coal, lithium or copper) outside it's own state borders.

If such a ban were successful, there would presumably be a fusillade of federal lawsuits from entities that had already invested in the mining of export-restricted resources in the state. What damages if succesful, could the state be liable for? Would the state have a defense against such lawsuits such as force majure? I am particularly interested in contract termination damages if a miner had force majure clauses in their contracts with customers.

Answer 1

No

A state may not do that.

The US Constitution Art. I section 8 says:

1. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

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3. To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Art I section 10:

2. No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

The power to regulate interstate commerce and foreign commerce is exclusive to Congress, no state may exercise it. The power to tax imports and exports is only given in vary limited degree to states, and only by specific permission of Congress.

The Interstate Commerce Clause has been interpreted to mean that a state may not favor its own citizens over citizens of other states in taxation or in commercial privileges, although it may restrict state services to state residents, or charge non-residents higher fees, as for tuition at public colleges.

Even with the consent of Congress, or if passed by Congress, such a law might well be precluded by the Equal Protection clause. Congress may prohibit specific items from being moved in interstate commerce, or it may limit, license, or tax them. But all such regulations must be uniform across the United states, and may not apply only to a specific state.

Regulation of interstate commerce can include regulation of purely intra-state transactions, if they are held to "affect" interstate commerce. This power is very wide-ranging.

Answer 2

I agree with David Siegel's answer but I think its always important in the law to consider what it would take to get what you want. I will say it is possible but not as an export prohibition per se and practically may fail.

The state could use its 5th amendment powers of eminent domain to take possession of all of the desired raw materials and relevant mineral rights for just compensation thus making them all property of The State. Expensive and not sure what the incentive is, but as laws are now, permissible if there is some public benefit. At this point the relevant natural resources would be property of the state and could therefore control where it goes such as keeping the resources in state.

Now assuming that neither budgetary restrictions nor a lawsuit were successful at stopping this measure (two big ifs), The federal government could still take the resources from The State in the same way under eminent domain.

In summary it is possible if:

1. Your state has large excesses of cash and a desire to be an irrational economic actor AND
2. the federal government is shutdown for a very very long time preventing operations of the courts and/or solicitor generals office.

Answer 3

They can, and do; there's just one wrinkle: They get the assent of the Federal government.

Take the Great Lakes Compact (please, says Nestle and Coke). It's a deal amongst the Great Lakes border states, and provinces, that decide how (or to be more precise, how not) water will leave the Great Lakes watershed. It's an agreement, not a treaty.

But as far as the several states go, you're exactly right, the states couldn't make the deal alone. They got the Federal government to sign off on it, and why wouldn't it, after all? They just went through the formality to get the Federal rubberstamp.

And the water bottling companies are up in arms, because they want to sell the water outside the compact area. They pull the same thing in California with the Sierra watershed, again, protected under a similar compact.

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Now let's talk about takings aspect. Even if the state could make a law robbing a mine of its interstate customers, that is a taking - specifically a regulatory taking - under the 5th Amendment. They would have to compensate the property owner for the asset value. So here's a crazy idea. Why not just compensate the owner for the asset value? At that point, it's a consensual sale. The Feds can't possibly object. The company, owned by the state, can sell or not sell to whomever they please. Your objective is achieved, just, in the free market instead of the use of force.

Similarly, there's no question that if the State opened a gravel quarry specifically to feed freeway rebuilding projects, and ABC Paving Co. decided they wanted to buy some of that gravel for paving private driveways, State Quarry Inc. is under no obligation to sell to them.