Suchergebnisse

This Article unpacks three doctrinal puzzles at the intersection of federalism and federal contracting, using student loan law as its anchoring case study. Currently, more than $1 trillion of federal student loan debt is serviced by private financial institutions under contract with the Department of Education. These loan servicers have allegedly engaged in systemic consumer abuses but are seldom held accountable by the federal government. To bridge the accountability gap, several states have recently passed "Student Borrower Bills of Rights." These state laws include provisions to regulate the student loan servicing industry, including the Department's federal contractors. States undoubtedly have legitimate interests to protect their residents, communities, and local economies against industry malfeasance. The overarching question, however, is whether federal law prohibits states from performing this remedial function. This Article offers a fresh look at three doctrinal puzzles at the heart of that debate. The first puzzle is whether the federal government's constitutional immunity extends to shield federal contractors from generally applicable state laws. The second puzzle is whether federal procurement laws preempt state licensing of federal contractors. The third puzzle is whether federal contracts that expressly incorporate state law can save state law from preemption. Individually and collectively, how these puzzles are resolved may have far-reaching implications—not only for the future of student loan law, but also for federalism and federal contracting more generally.

The Supreme Court has long held that federal agencies may preempt state law in much the same way as Congress: either by issuing binding administrative rules that conflict with state law or by asserting exclusive federal control over a regulatory domain. Under this sweeping conception of the Supremacy Clause, agencies wield an extraordinary power in our federalist system. Specifically, agencies may displace the laws of all fifty states without the political and procedural safeguards inhering in the legislative process. The administrative-preemption power rests on the undertheorized doctrinal assumption that Congress may, in effect, "delegate supremacy" to agencies. This Article challenges the constitutionality of that premise and normatively defends an imagined federalist system in which agencies are stripped of the power to create supreme federal law.