Due to national shortages in the United States milk supply, Congress passed a law governing the production and sale of milk. The law required "anyone who produced, distributed, or sold milk" to obtain a license from the United States Department of Agriculture (USDA) so that their production and sales could be monitored to ensure an adequate national milk supply.

Part of the law provided states with federal funds through the USDA if states agreed to develop a state plan to help enforce the law's requirements. The USDA must approve the state plans for the state to receive funds. The law required states that received funds to work with the USDA to enforce the law's requirements, including imposing fines for non-compliance and seizing milk supplies if necessary to address shortages. The law stated that federal funds would be rescinded if the state did not comply with its plan.

State Z submitted a plan that was reviewed and approved by the USDA. The plan stated that a State Z agency would assist the USDA with enforcement and carry out the requirements in the law. State Z was awarded and accepted $24 million in federal funds to implement its plan.

Joanie is a small-town farmer in California who grows strawberries and has a small herd of dairy cows on her farm. She sells strawberries and milk at local farmer's markets and to a local Community Supported Agriculture (CSA) group. The USDA sent Joanie a notice that she was required to obtain a license and would be fined if she did not. Joanie ignored the letter.

The USDA subsequently notified the relevant State Z agency about Joanie's non-compliance. State Z agency officials visited Joanie and, after reviewing the size of her small herd and the small number of local sales, determined that Joanie was not required to obtain a permit. USDA officials reviewed the state agency's report on the matter and disagreed. The USDA informed the state agency that Joanie required a license under the law, and the state agency needed to enforce the requirement, or it would be found non-compliant with its plan, and federal funding would be rescinded. The state agency declined. The USDA rescinded its remaining or unspent funding, which amounted to $22 million.

Discuss the Spending Clause issues.

Issue statement:

Does the law and rescinding federal funds meet Spending Clause requirements?

Legal Standards/rule statement

Under the Spending Clause, Congress can offer states funding with certain conditions. The conditions must (1) serve the general welfare by being related to some national concern; (2) have a rational connection to the funds being offered; (3) be clear and unambiguous so that states understand what they agreed to do, and what they will get in return for doing so; (4) be voluntary and not coercive so states an actual choice about whether or not they want to accept the funds; and (5) not induce states to take actions that violate other provisions of the Constitution.

Analysis

Provide your analysis here.

Conclusion

State your conclusion here.