State and local pension funds have billions of dollars invested in global markets, and often use these assets to pressure foreign nations to change their human rights policies. Social investing practices and other non-social investment decisions impacting foreign nations may be impermissible incursions into the federal government's exclusive power over foreign policy under the Dormant Foreign Affairs Power, an implied constitutional restriction on state activity. This Note argues that in this era of global markets, a blanket prohibition against criticism of foreign nations does not allow states to fulfill their investment obligations. This Note calls for a flexible test to determine the constitutionality of state action—a test that considers the federal government's need for uniformity in foreign policy with the need of state governments to be global economic actors.
Carol E. Head, The Dormant Foreign Affairs Power: Constitutional Implications for State and Local Investment Restrictions Impacting Foreign Countries, 42 B.C.L. Rev. 123 (2001), https://lawdigitalcommons.bc.edu/bclr/vol42/iss1/3