While the Federal Government is bound to only make laws that execute the enumerated powers in Article I, Section 8 of the United States Constitution, the statutes made by the State governments have a much broader realm of application. So long as state laws and statutes do not violate the guidelines of the Federal Constitutions, they generally are free to govern the well-being of the citizens at the state’s discretion. Policies regulated at the state level include divorce, adoption, gambling, marriage, age of consent and many other crucial issues.
The principal of state law allows for the creation of diversity at the local level, which allows particular states to regulate their specific residents more aptly than the federal government. The prevailing logic behind this process is that state governments are more knowledgeable and familiar with their own civilians and can enact legislation in their best interests, as many state and local officials are lifelong residents of their respective states.
While the theory of state legal diversity is to ensure that different states are rule as they wish to be ruled, drawbacks of the system include protracted legal actions which force out-of-state parties to hire local legal counsel. This inconvenience emerges most often in corporate lawsuits, in which a claimant sues a corporation which is located out-of-state, and thereby bound to the laws of that state.
Attorneys in the plaintiff’s state will more likely than not be unfamiliar and not licensed to practice law in the corporation’s state. The plaintiff will then conduct much of his or her business remotely with an out-of-state legal counsel which is often seen as an unsatisfactory form of legal representation.
Conversely, a corporation may choose to seat itself in an state with less strict statutes on business regulations, thus ensuring extra protection against lawsuits or claims regarding business practices. Critics of state’s rights argue for tighter federal laws regulating corporations to prevent “state shopping” of sorts, but the Doctrine of Implied Powers does not pertain to all such matters.
Interstate commerce, however, has lead many states to adopt the Uniform Commercial Code (UCC) and its respective revisions. The UCC is drafted by the federal government in conjunction with state officials, and attempts to regulate interstate business law so that corporations with interstate dealings do not have to concern themselves with the multitude of varying regulations in each state regarding products liability, shipment, warranty and the like.
State laws may regulate the same areas that federal laws regulate, providing that they do not violate federal law or the Constitution of the United States. State laws may be concurrent with federal laws, may be redundant, and may also impose greater restrictions on federally regulated areas.
For example, if a Federal Law regulates a misdemeanor amount for drug possession, state laws may tighten the restriction by decreasing the amount of the narcotic qualifying as a misdemeanor. As the Federal Law is not violated or loosened by the State Law in this example, the State Law will stand up to federal review.