State of Oklahoma v. United States ( 1998 )

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
DEC 3 1998
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
STATE OF OKLAHOMA, ex rel
Oklahoma Department of Public Safety,
Plaintiff-Appellee,
v. No. 97-6389
UNITED STATES OF AMERICA,
Defendant-Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
(D.C. No. CIV-97-1423-R)
James Robert Johnson, Assistant Attorney General (Douglas F. Price, Assistant Attorney
General, and John K. Lindsey, General Counsel, Oklahoma Department of Public Safety,
with him on the brief), Oklahoma City, Oklahoma, for Plaintiff-Appellee.
Mark B. Stern (Alisa B. Klein and Daniel Kaplan with him on the brief), Appellate Staff,
Civil Division, Department of Justice, Washington, D.C. for Defendant-Appellant.
Robin L. Rivett, Anne M. Hawkins, and Deborah J. La Fetra, Of Counsel, Pacific Legal
Foundation, Sacramento, California, filed an Amicus Curiae Brief in Support of Plaintiff-
Appellee.
Thomas H. Odom, Gregory S. Feder, and Marc R. Baluda of Arter & Hadden LLP,
Washington, D.C., Bill Pryor, Attorney General, Billington M. Garrett, Assistant Attorney
General, and Jack Curtis, Assistant Attorney General, Montgomery, Alabama, and
William U. Hill, Attorney General, Cheyenne, Wyoming, filed an Amicus Curiae Brief in
Support of Plaintiff-Appellee.
Before ANDERSON, HOLLOWAY, and BALDOCK, Circuit Judges.
BALDOCK, Circuit Judge.
In this case, Oklahoma’s open record laws and federal legislation preventing
disclosure of information contained in motor vehicle records are in conflict. The
Oklahoma Highway Safety Code, Okla. Stat. tit. 47, § 6-117(h), and the Oklahoma Open
Records Act, Okla. Stat. tit. 51, § 24A.5, require that information about any individual
identified in the records of Oklahoma’s motor vehicle department be available for public
inspection for a small fee. Any public official who willfully violates the state’s open
records policy is subject to both criminal and civil liability. Id. § 24A.17. In contrast,
subject to certain enumerated exceptions, the Driver’s Privacy Protection Act of 1994
(DPPA), Pub. L. No. 103-322, 108 Stat. 2099-2102 (effective Sept. 13, 1997) (codified at
18 U.S.C. §§ 2721-2725), prohibits a state motor vehicle department from knowingly
disclosing “personal information” about any individual obtained “in connection with a
motor vehicle record.” 18 U.S.C. § 2721(a). The DPPA authorizes the Attorney General
to assess a civil fine of up to $5,000 a day against any state motor vehicle department that
“has a policy or practice of substantial noncompliance” with the DPPA. Id. § 2723(b).
The DPPA also provides for criminal fines and civil damages against any person who
knowingly violates its provisions. Id. §§ 2723(a) & 2724.
The state of Oklahoma filed suit challenging the DPPA on its face as an
2
unconstitutional infringement upon state sovereignty. The question presented is whether
the DPPA is a valid exercise of congressional power to which contrary state law must
yield consistent with constitutional principals of federalism and the Tenth Amendment’s
reservation to the States of all “powers not delegated to the United States by the
Constitution, nor prohibited by it to the States.” U.S. Const. amend. X.
I.
To protect the personal privacy and safety of licensed drivers, see 138 Cong. Rec.
H1785-01, Congress enacted the DPPA which restricts the ability of third parties to
obtain personal information about individuals identified in the records of state motor
vehicle departments. The first section of the DPPA provides:
(a) In general.–Except as provided in subsection (b), a State department
of motor vehicles, and any officer, employee, or contractor, thereof, shall
not knowingly disclose or otherwise make available to any person or entity
personal information about any individual obtained by the department in
connection with a motor vehicle record.
18 U.S.C. § 2721(a).1 Subsection (b) of § 2721 requires a state to disclose personal
information in limited situations to carry out the purposes of federal and state laws
1
The DPPA defines “motor vehicle record” as “any record that pertains to a motor
vehicle operator’s permit, motor vehicle title, motor vehicle registration, or identification
card issued by a department of motor vehicles.” The DPPA defines “personal
information” as that which “identifies an individual, including an individual’s
photograph, social security number, driver identification number, name, address (but not
the 5-digit zip code), telephone number, and medical or disability information, but does
not include information on vehicular accidents, driving violations, and driver’s status.” 18
U.S.C. § 2725(1) & (3).
3
affecting motor vehicles. Subsection (b) also sets forth fourteen exceptions to subsection
(a)’s general prohibition, each of which allow a state motor vehicle department, in its
discretion, to disclose personal information in certain instances. Id. § 2721(b). Perhaps
the most notable of these is exception eleven, which is an opt-out provision allowing a
state to disclose an individual’s motor vehicle record–
if the motor vehicle department has provided in a clear and conspicuous
manner on forms for issuance or renewal of operator’s permits, titles,
registrations, or identification cards, notice that personal information
collected by the department may be disclosed to any business or person, and
has provided in a clear and conspicuous manner on such forms an
opportunity to prohibit such disclosures.
Id. § 2721(b)(11).2
In its complaint, the state of Oklahoma sought declaratory and injunctive relief,
asking the district court to declare the DPPA unconstitutional and enjoin its enforcement.
According to the state, the DPPA impairs the state’s ability to manage its motor vehicle
records by directing the state to regulate the disclosure of motor vehicle information in a
specific manner. The state contends the DPPA unconstitutionally “commandeers” the
functioning of its motor vehicle department by requiring the state to regulate a federal
program. The United States defends the DPPA on the basis that it does not direct the
state to regulate a federal program; rather the DPPA directly regulates the disclosure of
2
The DPPA also places restrictions on the manner in which third parties may use,
sell, or otherwise re-disclose personal information obtained pursuant to the DPPA’s
exceptions. 18 U.S.C. § 2721(c).
4
state motor vehicle information consistent with constitutional principles of federalism and
the Tenth Amendment.
The district court granted the state’s requested relief and permanently enjoined the
United States from enforcing the DPPA in Oklahoma. The district court held that the
DPPA constituted an unconstitutional “command to state governments to implement
legislation enacted by Congress.” Oklahoma v. United States, 994 F. Supp. 1358, 1363
(W.D. Okla. 1997). The court reasoned:
The State of Oklahoma processes approximately 1 million requests for
motor vehicle information annually . . . . The system set forth in the DPPA
would require Oklahoma to train . . . [Oklahoma Department of Public
Safety] employees and the employees in approximately 270 tag agencies
across the State on when and how records may be released. Additionally,
the State would be required to monitor the tag agents to ensure their
compliance with the federal standards.
Id. at 1362. According to the district court, the DPPA unlawfully required the state of
Oklahoma to create and maintain a system to enforce an unfunded federal mandate. Id. at
1363. Our jurisdiction to review the district court’s judgment arises under 28 U.S.C.
§ 1291. We review de novo the district court’s determination of the DPPA’s
constitutionality, United States v. Bolton, 68 F.3d 396, 398 (10th Cir. 1995), and reverse.
II.
In determining whether an Act of Congress is constitutional on its face, we afford
the legislation great deference. Rostker v. Goldberg, 453 U.S. 57, 64 (1981). We begin
with the presumption that the challenged statute is constitutional. INS v. Chadha, 462
5
U.S. 919, 944 (1983). We do not question the wisdom of the statute. Id. “Once the
meaning of an enactment is discerned and its constitutionality determined, the judicial
process comes to an end.” TVA v. Hill, 437 U.S. 153, 194 (1978).
Ascertaining the constitutional line between federal and state power is among the
most difficult judicial tasks. The Constitution confers certain enumerated powers upon
Congress. U.S. Const. Art. I. To the extent the Constitution does not divest the states of
certain powers, they retain them. Thus, the Tenth Amendment “states but a truism that all
is retained which has not been surrendered.” United States v. Darby, 312 U.S. 100 124
(1941). To be sure, states retain a significant amount of sovereign authority. See Garcia
v. San Antonio Metropolitan Transit Auth., 469 U.S. 528, 549 (1985). How much
remains uncertain. We therefore look to existing Supreme Court precedent for guidance
as to the proper division between federal and state authority.
A.
To support its argument that the DPPA is unconstitutional, the state of Oklahoma
relies principally on New York v. United States, 505 U.S. 144 (1992), and Printz v.
United States, 521 U.S. 98 (1997). Both New York and Printz set aside Acts of Congress
on Tenth Amendment grounds. The state argues that New York and Printz establish a
broad prohibition against federal restrictions aimed exclusively at state activity–a
prohibition which, according to the state of Oklahoma, sounds the death knell of the
DPPA.
6
In New York, the Court addressed the constitutionality of the “take title” provision
of the Low-Level Radioactive Waste Policy Amendments Act of 1985. That provision
directed state legislatures either to enact laws regulating the disposal of low level nuclear
waste produced within their borders, or to take title to and possession of such waste with
all its accompanying liability and problems. A state’s failure to “choose” either
alternative would result in the state becoming liable for all damages waste generators
suffered as a result of the state’s inaction. The Court held that the provision was
inconsistent with the division of authority between state and federal governments because
it commandeered the states’ legislative process by compelling them to enact or administer
a federal regulatory program. Id. at 174-177. In other words, the law effectively required
states either to legislate pursuant to Congress’ direction, or to implement an
administrative solution. The Court emphasized that a state could not decline to
administer the program. No matter which alternative the state chose, it was compelled to
follow Congress’ mandate. Id. at 176-77. The Court concluded:
No matter how powerful the federal interest involved, the Constitution
simply does not give Congress the authority to require the States to regulate.
The Constitution instead gives Congress the authority to regulate matters
directly and to pre-empt contrary state regulation. Where a federal interest
is sufficiently strong to cause Congress to legislate, it must do so directly; it
may not conscript state governments as its agents.
Id. at 178 (emphasis added).
Subsequent to New York, the Court again addressed the proper division between
state and federal authority in Printz. Printz involved the constitutionality of certain
7
interim provisions of the Brady Handgun Violence Prevention Act. Those provisions
directed state and local law enforcement officials to conduct background checks and
perform other tasks related to prospective handgun purchasers. Relying on historical
practice, the structure of the Constitution, and its prior decisions, a sharply divided Court
held that the forced participation of a state’s executive officers in the actual
administration of a federal program, albeit only temporarily, was unconstitutional. Printz,
521 U.S. at . The Court concluded:
We held in New York that Congress cannot compel the States to enact or
enforce a federal regulatory program. Today we hold that Congress cannot
circumvent that prohibition by conscripting the State’s officers directly. The
Federal Government may neither issue directives requiring the States to
address particular problems, nor command the States’ officers, or those of
their political subdivisions, to administer or enforce a federal regulatory
program. . . . [S]uch commands are fundamentally incompatible with our
constitutional system of dual sovereignty.
Id. at .
B.
The United States asserts that New York and Printz do not prohibit Congress from
imposing restrictions directly on state activity; rather they only prohibit Congress from
requiring states to enact or administer a federal regulatory program designed to address
problems created by third parties. The United States argues that the DPPA is
constitutional because it regulates state motor vehicle departments by directing them to
comply with federal law. The DPPA does not require states or their agents to regulate
third parties by directing states to enforce federal law. Citing South Carolina v. Baker,
8
485 U.S. 505 (1988), the United States suggests the Tenth Amendment poses no bar to
federal legislation which regulates state activity directly.
Baker addressed the constitutionality of § 310(b)(1) of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA), which removed from federal income tax exemption
interest earned on bearer bonds issued by state and local governments. The question was
whether § 310(b)(1) violated the Tenth Amendment by compelling states to issue bonds
in registered form. Baker, 485 U.S. at 507-08. Treating § 310(b)(1) as if it directly
regulated the states by prohibiting the issuance of bearer bonds, the Court rejected South
Carolina’s argument that the law was invalid because it commandeered the state
legislative and administrative process by requiring states to enact legislation authorizing
and administering bond registration. Id. at 513. The Court reasoned:
Such ‘commandeering’ is . . . an inevitable consequence of regulating a
state activity. Any federal regulation demands compliance. That a State
wishing to engage in certain activity must take administrative and
sometimes legislative action to comply with federal standards regulating
that activity is a commonplace that presents no constitutional defect.
Id. at 514-15. With this background in mind, we turn to a discussion of the DPPA.
III.
Relying on New York and Printz, a divided panel of the Fourth Circuit recently
held that because the DPPA was not a “generally applicable law,” “Congress did not have
authority under our system of dual sovereignty to enact it.” Condon v. Reno, 155 F.3d
9
453, 463 (4th Cir. 1998), petition for rehearing filed October 16, 1998.3 In Condon, the
Fourth Circuit read Garcia v. San Antonio Metropolitan Transit Auth., 469 U.S. 528
(1985), and its progeny (including Baker) to stand for the proposition, purportedly
endorsed in New York and Printz, that Congress may only regulate the conduct of state
governments through laws of general applicability. Condon, 155 F.3d at 461-62 & n.5.4
According to the Fourth Circuit, Congress may not regulate “States as States.” Rather,
“Congress may only subject states to legislation that is also applicable to private parties.”
Id. at 461 (citing New York, 505 U.S. at 160). Because the DPPA regulated only the
disclosure of information contained in state motor vehicle records and did not regulate the
disclosure of personal information contained in private databases, the DPPA, like the
laws in New York and Printz, could not withstand Tenth Amendment scrutiny. Condon
155 F.3d at 460-63.5
3
On October 22, 1998, the Fourth Circuit ordered Plaintiffs Condon and South
Carolina to respond to the United States’ petition for rehearing with suggestion for
rehearing en banc. Plaintiffs filed their response on November 3, 1998. As of today’s
date, the United States’ petition remains pending.
4
In Garcia, the Court overruled the “traditional governmental functions” test
established in National League of Cities v. Usery, 426 U.S. 833 (1976), and held that
application of the Fair Labor Standards Act to state and local governments did not
unconstitutionally infringe upon state sovereignty. The Court declined, however, “to
identify or define what affirmative limits the constitutional structure might impose on
federal action affecting States under the Commerce Clause.” Garcia, 469 U.S. at 556. See
also EEOC v. Wyoming, 460 U.S. 226 (1983) (upholding application of the ADEA to the
States).
5
The question of the DPPA’s constitutionality currently is pending in the Seventh
(continued...)
10
In his dissent, Judge Phillips rejected the majority’s conclusion that Congress lacks
any authority to regulate the “States as States.” Id. at 469 (Phillips, J., dissenting).
According to Judge Phillips, the legislation at issue in Garcia and subsequent cases relied
on by the court “was immune to Tenth Amendment challenge not so much–if at
all–because it applied equally to state and private actors as because it directly regulated
state activities rather than using the ‘States as implements of regulation’ of third parties.”
Id. at 468 (quoting New York, 505 U.S. at 160). In regulating states that choose to
release motor vehicle information to the public, Congress simply exercised its power of
preemption by requiring states to release such information into the stream of commerce in
a manner Congress deemed appropriate.
Like Judge Phillips, we do not read Supreme Court precedent as establishing a
blanket rule that “Congress may only subject state governments to generally applicable
law.” Condon, 155 F.3d at 461 (internal quotations omitted). The Supreme Court has
never suggested that the Tenth Amendment bars Congress from regulating state conduct
merely because states are the only actors engaged in certain activity.
Surely it is no basis for invalidating [the DPPA] . . . that no private
equivalent could be found in the particular area of regulation. Would the
requirements of the DPPA really be any less intrusive on state sovereignty
5
(...continued)
and Eleventh Circuits. Travis v. Reno, 12 F. Supp. 2d 921 (W.D. Wis.) (holding the
DPPA unconstitutional), appeal docketed, No. 98-2881 (7th Cir., filed July 27, 1998);
Pryor v. Reno, 998 F. Supp.1317 (M.D. Ala.) (holding the DPPA constitutional), appeal
docketed, No. 98-6261 (11th Cir., filed April 2, 1998).
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interests if they were part of broad privacy protections involving private as
well as public holders of sensitive information?
Id. at 469 (Phillips, J., dissenting).
To be sure, the Supreme Court has noted a logical distinction between generally
applicable laws, which incidentally apply to states, and laws compelling States to legislate
or regulate in accordance with federal law. Printz, 521 U.S. at ; New York, 505 U.S.
at 160. Oppressive federal regulation that “commandeers” a state’s sovereign functions is
less likely to arise where the law is aimed at both private and public entities. This is so
because generally applicable laws are not aimed at uniquely governmental functions.
Moreover, laws affecting both private and public interests are subject to stricter political
monitoring by the private sector. See Vicki C. Jackson, Federalism and the Uses and
Limits of Law: Printz and Principle?, 111 Harv. L. Rev. 2180, 2207 (1998).
The Supreme Court’s “anticommandeering” approach in New York and Printz
reflects a legitimate concern about federal government interference with state government
functions. But the arguments against the DPPA are much less compelling than the
arguments against the statutes at issue in New York and Printz. Unlike the federal statute
in New York, the DPPA does not commandeer the state legislative process by requiring
states to enact legislation regulating the disclosure of personal information from motor
vehicle records. Rather, the DPPA directly regulates the disclosure of such information
and preempts contrary state law. See New York, 505 U.S. at 178. If states do not wish to
comply with those regulations, they may stop disseminating information in their motor
12
vehicle records to the public. In contrast, the statute in New York offered no such
alternative to the states.
Unlike the federal statute in Printz, the DPPA does not conscript state officials to
enforce federal law. Under the DPPA, enforcement is the job of federal officials. Unlike
New York and Printz, the DPPA does not affect any unique government function, such as
the state legislative process or state law enforcement activities. The dissemination of
personal information into the stream of commerce can in no sense be considered uniquely
governmental. See e.g., Fair Credit Reporting Act, 15 U.S.C. § 1681b; Video Privacy
Protection Act, 18 U.S.C. § 2710. The DPPA neither limits a state’s ability to regulate in
the field of automobile licensing and registration, an exercise traditionally left to the
states, nor restricts a state’s ability to use motor vehicle information in its own regulatory
activities.
Our conclusion that the DPPA differs from the statutes at issue in New York and
Printz is buttressed by the Supreme Court’s decision in Baker. The only provision of
TEFRA at issue in Baker was § 310(b)(1), which removed the federal tax exempt status
for bearer bonds issued by state and local entities. Consequently, the provision imposed a
burden only on state and local governments. In upholding § 310(b)(1), Baker rejected the
notion that the federal government may never force a state wishing to engage in certain
activity to take administrative or legislative actions to comply with federal standards. 485
U.S. at 514-15. In fact, the Court referred to federal regulation of state activity as “a
13
commonplace that presents no constitutional defect.” Id. at 515.
In enacting the DPPA, Congress obviously curtailed states’ prerogative to make
choices respecting the release of motor vehicle information. No one claims that Congress
exceeded the scope of its power under the Commerce Clause in so doing. Nor has the
Supreme Court ever suggested that Congress impermissibly invades areas reserved to the
states under the Tenth Amendment because it exercises its preemptive authority under the
Commerce Clause in a manner that displaces state law and policy to some extent. The
DPPA simply requires states to make a choice, i.e. stop releasing personal information
from state motor vehicle records to the public, or release such information consistent with
the dictates of the DPPA. See FERC v. Mississippi, 456 U.S. 742, 767-68 n.30 (1982)
(upholding federal legislation that gave States “a choice between regulating in conformity
with federal requirements, or abandoning regulation in a given field”).
While we are cognizant of the Supreme Court’s trend established by New York
and Printz of striking down federal legislation which “commandeers” state legislative and
administrative processes, the Court has yet to hold that a federal law, which directly
regulates state activity and necessitates some state legislative or administrative action to
achieve compliance, amounts to unconstitutional “commandeering.” If a precedent of the
Supreme Court (in this case Baker) “has direct application in a case, yet appears to rest on
reasons rejected in some other line of decisions, the Court of Appeals should follow the
case that directly controls, leaving to . . . [the Supreme Court] the prerogative of
14
overruling its own decisions.” Rodriguez de Quijas v. Shearson/American Express, Inc.,
490 U.S. 477, 484 (1989). Finding the logic in Baker controlling, we believe that any
expansion of Tenth Amendment jurisprudence to invalidate the DPPA is best left to the
Supreme Court. At this stage in Tenth Amendment jurisprudence, we find nothing that
requires us to invalidate the DPPA. We hold that the DPPA constitutes a valid exercise
of congressional power.6 The judgment of the district court is
REVERSED.
6
Because we conclude that the DPPA does not violate the Tenth Amendment, we
need not address the United States’ alternative argument that the DPPA may also be
upheld as a legitimate exercise of congressional power under § 5 of the Fourteenth
Amendment.
15