State Activism and Federal Power: Economic Sanctions, Foreign Direct Investment and Environmental, Social and Governance Laws

Abstract

This article analyzes the proliferation of state laws regulating business activities that cross state and national borders, including economic sanctions, foreign investment and the use of environmental, social, and governance factors in investment decisions. Such activities have long been the domain of the federal government and the implementation of these regulations at a state level causes confusion for businesses and conflicts with existing federal laws. This article concludes that many of these laws likely are preempted by the Supremacy Clause as well as the federal government’s exclusive authority to act on behalf of the nation with regard to foreign affairs.