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Good morning, this is part two
of our study of federalism.

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Today, we are going to analyse why
States are called ""laboratories

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of democracy" and "markets of laws"
and then we will briefly study

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Articles IV and VI of the US
Constitution.

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We have seen that, under the US
Constitution, Congress has been

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granted the power to regulate commerce
among the States which is called

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interstate commerce.

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However, regulating commerce is
a power that also belongs to the

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States at state level.

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Each State has the power to regulate
commerce within its own boundaries

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more or less as it wishes.

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This creates differences as States
compete with one another to attract

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companies or people and pass laws
to do so.

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That is why States have been called
"markets of laws".

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You have all heard of Delaware's
legislation which is hugely favorable

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to companies to the point of being
called a tax haven.

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As many as 285,000 businesses share
the same address (1209 North Orange

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Street) even though for some that
is almost the only link that they

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have with that State.

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They have chosen to be incorporated
or registered there because it

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allows them to avoid the sales
taxes and regulations imposing

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higher costs and more transparency
that apply elsewhere.

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Foreign companies have been attracted
too.

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Another less well-known but similar
system is that of Texas which does

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not levy state income taxes
on residents to attract people.

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That strategy works as Texas is
the second largest U.S.

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State in population after California.

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It had the highest population increase
between 2000 and 2010 and is now

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the fourth fastest growing State
according to the last census of 2020.

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Concretely speaking, it added four
million people between 2010 and

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2020 and now has a total of more
than 29 million people.

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That has significant political
consequences.

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Indeed, even though California remains
the most popular State, because

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the growth of its population has
slowed down, it will lose a U.S.

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Representative seat in the next
election of 2024.

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Texas will gain two of them and
is the only State to get more than

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one additional seat in the U.S.

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Congress which gives an idea of
how fast its population is growing

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compared to other States.

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Having two more Representatives
of the State in the House is of

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course a significant advantage
especially in times when there

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is no clear majority.

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Indeed those two seats might make
a huge difference and even decide

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the passing or not of a law at
federal level.

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States are also called "laboratories
of democracy" for the novel

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social experiments they carry out.

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An example would be the laws allowing
use, consumption and sale of marijuana.

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Massachusetts is another interesting
example.

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Two instances of what it has done
are same-sex marriage, which became

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legal in 2004, and affordable health
insurance coverage to all residents,

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which was implemented in 2006.

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As we have seen, from the very beginning,
the aim of the drafters,

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admittedly mainly federalist ones,
was to establish a system that

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would form a more perfect union,
would reinforce the union of the

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States first by making it easier
for StateS to settle their disputes

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and second by granting more power
to the Federal Government.

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This was achieved by the ratification
of respectively Article IV and Article

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VI of the U.S.

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Constitution.

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There are four sections in Article IV.

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The first two are the most famous ones.

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Section 1 is called the Full Faith
and Credit Clause because it imposes

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on the States to give faith and
credit to "public acts,

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records and judicial proceedings
of every other State".

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For example, birth and marriage
certificates are issued at state

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level and when a State issues one
it is valid in all the other States.

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This is seldom a problem but it
can be, as was shown by the controversy

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on same-sex marriage between 2004,
when Massachusetts passed a law

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allowing it, and the decision of the U.S.

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Supreme Court, which imposed it
upon all the States in the case

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Obergefell and Hodges in 2015.

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During that period, the question
was: should a state which has not

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passed the law providing for same-sex
marriage, which does not want to do so,

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be forced to recognize a marriage
certificate (and all the benefits

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that are derived from marital status)
of two same-sex people who were

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married in another State?

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Or could that marriage certificate
be considered to be invalid in

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that State?

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Similarly, if someone has been
sentenced to prison in a State

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that person cannot escape that
sentence by fleeing to another State.

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They will be sent back to the State
which found them guilty by any

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State where they try to find refuge
even if it is to face the death

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penalty and the State where the refugee
fled is against it.

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It is also possible at trial for
a party to ask the Court to deliver

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a decision that is similar to one
that has already been handed down

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in another State.

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However in that case the Court
is free to accept or to refuse to do so.

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So be careful here: giving full
faith and credit does not always

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mean strictly applying decisions
made in other States.

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States retain their own power to decide,
especially as far as courts are concerned,

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when it has not been decided in
the Constitution that they should

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not have any leeway.

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Section two of Article IV is
called the Privileges and Immunities

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Clause because it protects the
privileges and immunities of each

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citizen when they travel to or
through different States where they

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do not reside.

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Privileges refers to rights and
immunities to legal protection.

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It is also possible to say that
privileges refers to positive rights,

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the right to vote for example,
while immunities are negative rights,

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that is, the right not to... for example,
the right not to be deported to

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a foreign country.

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In the case Corfield v Coryfel
in 1823 Justice Bushwood

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Washington, who happened to be George
Washington's nephew, made a list

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of the privileges and immunities
enjoyed by American citizens under

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the US constitution, among which
the right to be protected by the

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Government, the right to life,
liberty and property,

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the right to travel to and settle
in other States and the right to vote.

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Keep in mind that each citizen,
being at the same time a citizen

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of the State where they reside
and a citizen of the USA, can be

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granted more rights by their own
State under the state constitution

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than those that are federally
protected.

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Section three of Article IV describes
how new States may be integrated

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into the Union, that is, only by
Congress.

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It reads "The Congress shall
have power to dispose of and make

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all necessary needful rules and
regulations respecting the territory

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of other property belonging to
the United States".

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Section four imposes a republican
form of government. Nowadays, the

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words "republic" and "democracy" are
often used indifferently but at

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the time the Constitution was ratified
the Framers differentiated them.

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For them, democracy referred to
a system of government in which

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the power of the majority is unlimited,
be it exercised directly or through

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a representative body. In that system,
the rule of the majority is absolute

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and it is perfectly possible for
the majority to act in a tyrannical

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way towards a majority minority.
In a republic, the rule of the majority

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also applies but minorities are
protected thanks to a system of

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guarantee of individual rights
and checks of the majority rule.

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A republican government limits
the power of the majority to protect

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minorities: the majority rule applies
but within defined and prescribed

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limits. Section two of Article VI,
which is the only section that

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we will study, reads "This
Constitution and the laws of the

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United States which shall be made
in pursuance thereof; and all treaties

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made, or which shall be made under the
authority of the United States

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shall be the supreme law of the
land". As a consequence, the U.S.

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Constitution is the supreme law
of the land which means that any

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law, state or federal, which contradicts
it will be struck down as

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unconstitutional and federal law
is superior to state law in case

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there is a conflict between the
two. Keep in mind that there are

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laws that are passed by the States
and of which state courts will

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be the final interpreters, not federal
courts. This means that if a federal

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court has to adjudicate a case
which is based on a violation of

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a state law as happens in diversity
cases (which you will study in Unit

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six), its decision
is not final and can be overturned

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by state courts. There are also
situations in which a conflict

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between federal and state laws
has not been settled yet and the

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two contradictory laws co-exist.
That is the case in States in which

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marijuana is allowed whereas it
is still forbidden at the federal

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level. In that sort of cases, the
federal prosecutors usually do

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not prosecute those who possess
or sell that drug unless that is

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the good excuse they were looking
for to prosecute that offender

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who they suspect has committed
other crimes forbidden at federal

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level. That's the end of today's lesson.