South Dakota permits persons over 19 to purchase beer containing up to 3.2% alcohol.
In 1984, Congress enacted 23 U.S.C. § 158, which directs the Secretary of Transportation to withhold a percentage of federal highway funds otherwise allocable from States "in which the purchase or public possession . . . Of any alcoholic beverage by a person who is less than twenty-one years of age is lawful."
Procedural History
SCOTUS held for U.S., § 158 constitutional.
Issues
Does Congress have the ability to place conditions on grants to state and local governments?
Does § 158 violate the constitutional limitations on congressional exercise of spending power and violate the 21st Amendment.
Holding/Rule
Congress has the ability to place conditions on grants to state and local governments as long as:
The exercise of the spending power is in pursuit of "the general welfare";
The conditions are unambiguous;
The conditions are related to the federal interest or goal of a particular project or program;
Does not violate any other constitutional doctrines.
Reasoning
Congress may attach conditions on the receipt of federal funds. However, there are some conditions:
First, it must be in pursuit of the general welfare.
Here, courts should defer substantially to the judgment of Congress.
Second, the condition must be unambiguous and allow the states to exercise their choice cognizant of the consequences of participation or nonparticipation.
Third, the conditions must be related to the federal interest or goal of the particular program.
Finally, the conditions and exercise of power must not violate any other constitutional doctrines.
South Dakota does not claim that § 158 is inconsistent with the first three restrictions above.
The 10th Amendment limitation of congressional regulation of state affairs did not concomitantly limit the range of conditions legitimately placed on federal grants.
In some circumstances, it is possible that the financial inducement offered by Congress might be so coercive as to pass the point at which "pressure turns into compulsion." This is not the case here, however, since SD would only lose a relatively small percentage of funds.
SD's argument regarding the coercive nature of the program is much more rhetoric than fact.
Dissent
(Brennan)
Regulation of the minimum age of purchasers of liquor falls squarely within the ambit of those powers reserved to the states by the 21st Amendment.
Since states possess this power, Congress cannot condition a grant in a way that abridges this right.
(O'Connor)
§ 158 is not a condition on spending reasonably related to the expenditure of federal funds and cannot be justified on that ground.
Instead, it is an attempt to regulate the sale of liquor, an attempt that lies outside Congress's power to regulate commerce because it falls within the ambit of § 2 of the 21st Amendment.
I agree with the Court that Congress may attach conditions on the receipt of federal funds to further the federal interest in particular national projects or programs. However, in my view, establishment of a minimum drinking age is not sufficiently related to interstate highway construction to justify conditioning funds appropriated for that purpose.
If Congress could do this, Congress could condition the funds on moving the state capital. They are equally related.
