Are FAA Grant Conditions Unconstitutional Coercion?

Anti-commandeering law is related to Congress' Spending Clause powers (Art. I, Sec. 8, cl. 1 a.k.a. the "power of the purse"). The Supreme Court has been clear that the federal government cannot coerce state and local action by withholding federal funds. In 2012, in National Federation of Independent Business v. Sebelius, the Court declared unconstitutional a provision of the Patient Protection and Affordable Care Act that required state governments receiving Medicaid funds to provide coverage to those within 133 percent of the federal poverty level. Those not complying would lose all federal Medicaid funds. 

Chief Justice Roberts, writing for the Court, said that “[i]n this case, the financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’ — it is a gun to the head.” The Court explained that “Medicaid spending accounts for over 20 percent of the average State’s total budget, with federal funds covering 50 to 83 percent of those costs. . . . The threatened loss of over 10 percent of a State’s overall budget, in contrast, is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.” Sound familiar?

Congress can also place requirements on the recipients of federal funds to regulate their conduct in exchange for federal funding. While funding conditions such as these are common, they are subject to constitutional limitations. First, funding conditions must provide clear notice to the recipient of what actions are required in exchange for federal funds and the consequences of noncompliance. Second, funding conditions must be related to the purposes of the federally funded program or activity. Third, although Congress may incentivize states to adopt a particular policy in order to obtain specific federal funds, it may not coerce state participation. Congress may not, for example, tie an existing funding source on which a state has come to rely on compliance with a new kind of requirement. Fourth, the funding condition may not violate an independent constitutional bar or the related unconstitutional conditions doctrine. So, what does a prohibition on cities enacting noise regulations or banning touch-and-go operations have to do with a grant to build a fence or airport improvement? And, now that cities are completely reliant on federal AIP grants to fund their operations, can Congress tie an existing funding source on which a state has come to rely on compliance with a new kind of requirement (continue to sell leaded aviation fuel or be fined $5,000 a day)? Isn't that a "gun to the head?" As for the final requirement, the grant conditions require cities to bargain away their police power -- the sovereign responsibility to protect public health, safety and welfare. That is unconstitutional. United States v. Winstar Corp., 518 U.S. 839, 874, (1996) (stating that the reserved powers doctrine was developed to prevent public contracts from becoming a "threat to the sovereign responsibilities of state governments").