Economic Extraterritorial Regulation Amongst the American States

Abstract

By analyzing historical and contemporary examples, this study demonstrates the reality of extraterritorial regulation and how concepts of federalism and political representation shape legal precedents that allow this practice to occur. Second, using a case study focused on the State of California, the State of Texas, and the State of New York, this study looked for pending or promulgated legislation with extraterritorial effect outside of environmental regulation and where the Congress preempts state law. Conclusively, the practice of economically-powerful American states regulating extraterritorially exists in other policy areas and occurs as a means of national influence outside of federal channels. Additionally, this practice diminishes the political decision-making power of individuals and businesses in non-originating states by influencing or preventing commerce without access to political representation. The findings of this study suggest that the Supreme Court, Congress, or both bodies may use their powers to close loopholes that enable states to regulate with far-reaching effects