469 U.S. 528 (1985)
The history of public transportation in San Antonio began with private operators.1 In 1959 the City of San Antonio purchased the privately owned San Antonio Transit Company and replaced it with the publicly owned San Antonio Transit System.2
In 1978 the city transferred its facilities and equipment to appellee San Antonio Metropolitan Transit Authority, a public mass-transit authority organized on a countywide basis.3 SAMTA became the major provider of transportation in the San Antonio metropolitan area.4 Between 1978 and 1980 its vehicles traveled over 26 million route miles and carried over 63 million passengers.5
San Antonio began receiving federal subsidies under the Urban Mass Transportation Act of 1964.6 SATS and SAMTA received over $51 million in UMTA grants from December 1970 through February 1980.7 This total included $12.5 million in operating grants during SAMTA's first two fiscal years.8
The Fair Labor Standards Act was enacted in 1938 without applying to local mass-transit employees.9 Congress amended the statute in 1961 to extend minimum-wage coverage to private mass-transit carriers with annual gross revenue of at least $1 million.10 In 1966 Congress withdrew exemptions from public hospitals, schools, and mass-transit carriers whose rates and services were subject to state regulation.11 The 1974 amendments provided for the progressive repeal of the surviving overtime exemption for mass-transit employees while extending FLSA coverage to virtually all state and local government employees.
Following the 1976 decision in National League of Cities v. Usery, SATS informed its employees that the decision relieved it of overtime obligations under the FLSA.12 On September 17, 1979, the Wage and Hour Administration of the Department of Labor issued an opinion that SAMTA's operations were not constitutionally immune from the FLSA.13 On November 21, 1979, SAMTA filed suit against the Secretary of Labor in the United States District Court for the Western District of Texas seeking declaratory relief.14 On the same day appellant Garcia and other SAMTA employees sued SAMTA in the same court for overtime pay under the FLSA.15
On November 17, 1981, the District Court granted SAMTA's motion for summary judgment.16 The court held that local public mass-transit systems constitute integral operations in areas of traditional governmental functions.17 After the Supreme Court decided Transportation Union v. Long Island R. Co. in 1982, the District Court's judgment was vacated and remanded.18 On remand the District Court adhered to its original view and again entered judgment for SAMTA in 1983.19 The Secretary and Garcia took direct appeals.20 The Supreme Court noted probable jurisdiction, restored the cases for reargument after initial argument, and requested briefing on whether the principles of the Tenth Amendment as set forth in National League of Cities v. Usery should be reconsidered.
Whether the distinction between traditional and nontraditional governmental functions provides a workable standard for determining state immunity from federal regulation under the Commerce Clause?21
The distinction between traditional and nontraditional governmental functions is unworkable and inconsistent with established principles of federalism; the political process rather than judicial appraisal protects state interests under the Commerce Clause.22
No. Lower courts applying the standard reached inconsistent results, holding municipal airports and mental health facilities to be traditional functions while finding in-home care programs and mass-transit operations sometimes not traditional.23 In these cases the District Court concluded that SAMTA's countywide mass-transit operations constituted integral operations in areas of traditional governmental functions.24 Yet the Supreme Court determined that the governmental-proprietary distinction proved elusive and unworkable in practice, as demonstrated by the conflicting outcomes in cases such as Amersbach v. City of Cleveland and Bonnette v. California.25 The distinction therefore supplies no reliable constitutional line for state immunity.26
The distinction does not provide a workable standard.27
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Joined by Burger, C. J., And Rehnquist, J.
Justice Powell dissented on the ground that the majority ignored the structure of the Constitution and the Tenth Amendment.28 He argued that the decision allows Congress to regulate the States in all activities without regard to whether those activities are traditional or essential to the States' sovereign functions.29 Powell maintained that the political process cannot substitute for judicial enforcement of state sovereignty.30
He would have adhered to National League of Cities and affirmed the District Court judgment.31 Powell emphasized that the States need the protection of the courts to preserve their role in the federal system.32
Joined by Powell And Rehnquist, Jj.
Justice O'Connor joined Justice Powell's dissent.33 She argued that the Court's abandonment of the traditional governmental functions standard leaves the States without any meaningful protection against federal overreaching.34 The political process cannot be counted on to protect the States in all cases.35 O'Connor maintained that the judiciary must enforce the constitutional limits on federal power.36
She concluded that the Constitution establishes a system of dual sovereignty that today's decision undermines.37 She would reaffirm National League of Cities and hold that the FLSA cannot constitutionally be applied to the States in the performance of their traditional governmental functions.38
Whether National League of Cities v. Usery should be overruled?39
National League of Cities v. Usery is overruled because its traditional governmental functions standard is unsound in principle and unworkable in practice, and state sovereignty is protected by the structure of the federal political process.40
Yes. The eight years of lower-court experience after National League of Cities produced irreconcilable decisions on which state activities qualify as traditional.41 The governmental-proprietary distinction borrowed from tort immunity doctrine never supplied a reliable constitutional line.42 The facts of SAMTA's evolution from private operation in 1959 to public authority in 1978, supported by over $51 million in federal UMTA grants, illustrate that state functions change over time.43
The political process has already adjusted through funding and exemptions, rendering the National League of Cities rule unnecessary and unworkable.44
National League of Cities v. Usery is overruled.45
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Justice Rehnquist joined Powell's dissent and wrote separately to stress that the decision marks a significant departure from principles of federalism that guided the Court for most of its history.46 He maintained that the Framers intended the Federal Government to be one of limited powers.47 Rehnquist argued that the Tenth Amendment was included in the Bill of Rights to make clear that the powers not delegated to the United States are reserved to the States or to the people.48
He concluded that National League of Cities was a correct application of these principles and that the decision to overrule it is wrong.49
Whether the Fair Labor Standards Act may constitutionally be applied to employees of a public mass-transit authority organized on a countywide basis?50
The Fair Labor Standards Act may constitutionally be applied to employees of state and local governments, including public mass-transit authorities, because the political process protects state interests and the statute does not impair the States' ability to structure integral operations in traditional functions.51
Yes. SAMTA, as a countywide public mass-transit authority that received substantial federal operating and capital grants under the Urban Mass Transportation Act, faces the same minimum-wage and overtime obligations imposed on hundreds of thousands of other public and private employers.52 The 1974 amendments extending FLSA coverage to virtually all state and local employees were accompanied by extensive federal funding.53 The political process has produced numerous exemptions for States in other statutes, confirming that the structure of the federal system adequately safeguards state sovereignty without judicial intervention.54
The Fair Labor Standards Act may constitutionally be applied to SAMTA employees.55