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Clearinghouse review H September–October 2013 H Special Issue

pursuing racial justice in the 21st century

Volume 47, Numbers 1–2

May–June 2013

Servicing Standards of the National Mortgage Settlement

Legal Structures for Farmers’ Markets

Collaboration by Civil Legal Aid Lawyers and Public Defenders

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Parent Representation

Toward a “Civil Gideon”

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Clearinghouse REVIEW Journal of Poverty Law and Policy n May–June 20134

An outraged columnist for the Los Angeles Times in 2010 wrote, “More than $69 million in California welfare money, meant to help the needy pay their rent and clothe their children, has been spent or withdrawn outside the state in

recent years, including millions in Las Vegas, hundreds of thousands in Hawaii and thousands on cruise ships sailing from Miami.”1 An online New Mexico newspaper in 2012 reported that

[f]rom bustling Miami to sleepy Goffstown, New Hampshire, from San Diego to Minneapolis, recipients of New Mexico’s welfare funds use their state- issued EBT [electronic benefit transfer] cards every day to spend money far from the Land of Enchantment. In a two[-]month period examined by New Mexico Watchdog expenditures of the state’s welfare funds occurred in 45 states.2

Similar media reports suggesting misuse of welfare benefits out of state surfaced in 2011 and 2012 in Minnesota and Missouri.3

For the press, “welfare money” generally means cash assistance to low-income fami-lies with children and paid for, at least in part, with federal funds provided to the state through the Temporary Assistance to Needy Families (TANF) block grant.4 The block grant was created in 1996 as part of the Personal Responsibility and Work Opportu-nity Reconciliation Act, which gave the states almost total freedom to impose stricter

Deborah HarrisStaff Attorney

Massachusetts Law Reform Institute99 Chauncy St. Suite 500 Boston, MA [email protected]

Julia Schlozman J.D. 2013, Harvard Law School

[email protected]

1Jack Dolan, $69 Million in California Welfare Money Drawn out of State, los angeles Times, Oct. 4, 2010, http://lat.ms/10ftU1k.

2Jim Scarantino, NM Welfare Funds Spent Far Beyond State’s Borders, new mexiCo waTChdog.org, nov. 16, 2012, http://bit.ly/16VzVFL.

35 Eyewitness News Investigation Prompts Changes to MN Welfare Laws (KSTP TV Minneapolis and St. Paul broadcast July 4, 2012), http://bit.ly/14lDlBU (“We found welfare cash can be used for all sorts of things never intended, from the Twin Cities to the [U.S.] Virgin Islands.”); Missouri Welfare Benefits Being Spent in Hawaii (KMOV.com March 4, 2011), http://bit.ly/WTuuDe.

4“Welfare money” may also mean general assistance, refugee assistance, and old age and disability assistance (see E-Government Payments Council, Restricting Access to TANF [Temporary Assistance for Needy Families] Funds at Specific Merchant Locations 5 (n.d.), http://bit.ly/16VBHGU (Deborah Harris accessed this website in 2012).

By Deborah Harris and Julia Schlozman

VARIATIONS ON AN UNCONSTITUTIONAL THEME

Restrictions on Interstate Use of Cash Benefits

mailto:[email protected]


http://lat.ms/10ftU1k

http://bit.ly/16VzVFL

http://bit.ly/14lDlBU

http://bit.ly/WTuuDe

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Clearinghouse REVIEW Journal of Poverty Law and Policy n May–June 2013 5

5Personal Responsibility and Work Opportunity Reconciliation Act, Pub. L. 104-193, 110 Stat. 2105 (Aug. 22, 1996).

6Some states have also adopted restrictions on what may be purchased with cash assistance benefits or what types of establishments may house automatic teller machines (ATMs) or point-of-sale devices that accept electronic benefit transactions (see u.s. governmenT aCCounTabiliTy offiCe, GAO-12-535, Tanf eleCTroniC benefiT Cards: some sTaTes are resTriCTing CerTain Tanf TransaCTions, buT Challenges remain (July 2012), http://1.usa.gov/XGVseq; E-Government Payments Council, supra note 4, at 6). Section 4004 of the Middle Class Tax Relief and Job Creation Act of 2012 requires states to have policies and practices to restrict the use of TANF assistance in electronic benefits transfer (EBT) transactions at specified locations by February 2014 (Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, 126 Stat. 156). Here we focus solely on restricting access to or spending of cash assistance outside the beneficiary’s home state; such restrictions are not required by federal law.

7Electronic Fund Transfer Act § 903, 15 U.S.C. §§ 1693a(7), 1693b(d)(2)(A) (2012).

8See E-Government Payments Council, supra note 4, at 4–5. See also TANF Assistance and Electronic Benefit Transfer Transactions: Request for Public Comment, 77 Fed. Reg. 24667–69 (April 25, 2012) (request for public comment on how TANF benefits are delivered and whether states have experience blocking particular establishments).

9Letter from Kurt Helwig, President and Chief Executive Officer, Electronic Funds Transfer Association, to Robert Shelbourne, Office of Family Assistance, Administration for Children and Families (June 4, 2012), http://bit.ly/16YwxKl.

107 U.S.C. § 2016(h); 7 C.F.R. § 274.1(b) (2013).

mandates than those required to draw down the block grant and removed fed-eral oversight over state administration of the federal funds except to the extent considered necessary to assure compli-ance with new federal rules.5

Taking advantage of the flexibility af-forded by the TANF block grant, legisla-tors in some states responded to allega-tions that benefits were being used out of state for frivolous purposes by proposing to restrict access to and spending of cash benefits to a recipient’s home state (or, in some cases, the home state and border states).6 At least one state has enacted a geographic limit on cash assistance ac-cess. We explore the serious constitu-tional problems raised by prohibitions or restrictions on out-of-state access to or spending of cash benefits. In part I we explain how cash assistance is disbursed. In part II we review the reasons that ben-eficiaries use their benefits outside their home state. In part III we summarize re-cent state legislative proposals to restrict out-of-state access or spending. And in part IV we discuss the constitutional constraints on such restrictions. We ar-gue that states’ efforts to limit or prevent out-of-state access to or spending of cash assistance benefits impermissibly interfere with interstate commerce and unreasonably burden the right to travel.

I . How Is Cash Assistance Disbursed?

Financial exchanges or transactions in the United States are increasingly accom-

plished through electronic funds transfer, the transfer of funds between accounts us-ing computer-based systems. Electronic funds transfer includes transactions ini-tiated with a payment card, direct payroll deposits, debit payments, electronic bill payments, wire transfers, and electronic benefits transfer. EBT is an electronic system that automates the delivery, re-demption, and reconciliation of public assistance benefits issued by government agencies.7

Cash assistance may be paid by means of EBT or another electronic payment card, or directly deposited into a re-cipient’s demand deposit account. Some states still issue checks.8 Forty-six state agencies use EBT for some or all cash delivery.9 When benefits are delivered through EBT, the beneficiary typically uses the card to obtain cash from an automatic teller machine (ATM) in the network or to purchase items or get cash back at a participating vendor’s point-of-sale device.

Unlike TANF, the Supplemental Nutri-tion Assistance Program (SNAP), for-merly the Food Stamp Program, is a fed-eral program that states administer in accordance with detailed federal rules. All states participate in SNAP. Effective October 1, 2002, federal law required states to deliver SNAP benefits via an EBT system that complies with federally established standards.10 SNAP benefi-ciaries use their EBT cards to purchase SNAP-authorized food products at gro-cery stores and other authorized SNAP

Variations on an Unconstitutional Theme: Restrictions on Interstate Use of Cash Benefits

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vendors. The federal SNAP statute and regulations require state agencies to fa-cilitate interoperability and portability nationwide so that SNAP beneficiaries can access SNAP benefits issued by their home state in any other state.11

There is no federal requirement that states similarly ensure interoperability and portability so that cash assistance re-cipients can access their benefits outside their home state, and no requirement that states use an EBT system to provide cash assistance benefits. Because states are required to use EBT for SNAP, however, many states piggyback their systems for disbursing cash benefits onto the SNAP electronic benefits transfer system, so that SNAP recipients who also receive cash assistance via EBT have both types of benefits loaded onto a single card.12 A majority of states use the Quest operating system for both types of benefits. Quest sets standards for electronic distribution of government benefits under the Quest Mark.13 The basic principle of the Quest Mark is that the benefit is interoperable without regard to state borders: program benefits that can be accessed only in the state where they were issued cannot be made available under the Quest Mark.14

II . Why Do Beneficiaries Use Their Benefits Outside Their Home States?

Despite sensational news stories, there is no evidence that more than a tiny percent-age of cash assistance benefits are accessed outside beneficiaries’ home states.15 Like-wise, there is no evidence that beneficia-ries’ out-of-state expenditures are frivo-lous.16 Beneficiaries may travel outside their home state for a number of reasons: to attend a funeral; care for a relative; visit family; look for a job; accompany a child on a school trip; or attend a religious, po-litical, or other meeting or event. Benefi-ciaries who live near their state’s borders may also cross state lines to work, shop, or go to school.17 Beneficiaries may also travel outside their home state for recreation—or to escape domestic violence.18 A New Mex-ico reporter determined that most of the out-of-state transactions by New Mexico residents were either in border towns or in small towns; this pattern suggests that work, shopping, school, or family visits rather than exotic vacations were the pri-mary reasons that beneficiaries accessed benefits while out of state.19


117 U.S.C. § 2016(j)(2); 7 C.F.R. § 274.8(b)(10) (2013) (“The term ‘interoperability’ means the EBT system must enable benefits issued in the form of an EBT card to be redeemed in any State. The term ‘portability’ means the EBT system must enable benefits issued in the form of an EBT card to be used in any State by a household to purchase food [at any approved Supplemental Nutrition Assistance Program (SNAP) vendor].”).

12See u.s. governmenT aCCounTabiliTy offiCe, supra note 6, at 5; U.S. Department of Agriculture, Building a Healthy America: A Profile of the Supplemental Nutrition Assistance Program 2 (April 2012), http://1.usa.gov/14oJn4F.

13Quest, The Quest Operating Rules (Dec. 2008), http://bit.ly/YEPC0D.

14Id.

15Massachusetts Department of Transitional Assistance, EBT Transactions by State, January 2011 (Feb. 2012) (97.5 percent of benefits accessed in Massachusetts; 99.1 percent accessed in Massachusetts or a border state) (on file with Harris); see also Ripples Group, Cashless System Commission Draft Report and Ripples Recommendations 14 (Dec. 11, 2012) (96.7 percent of Massachusetts EBT transactions on ATMs are in Massachusetts; less than 2 percent are outside New England), http://1.usa.gov/X90BPg; Fiscal Note on H. 2294-1A, 2011–12 Sess. (Minn. 2012) 7 (March 21, 2012), http://bit.ly/109V3mQ (98 percent of EBT transactions take place in Minnesota) (fiscal note by Rep. Jim Abeler).

16Only 0.3 percent of Massachusetts out-of-state transactions (less than 0.01 percent of total transactions) in one period were at locations that might be considered frivolous, such as liquor stores or resorts, and since most of the transactions were for cash, the recipients might simply have been accessing funds at a convenient location and spending the benefits elsewhere (Ripples Group, supra note 15, at 15).

17Kent v. Dulles, 357 U.S. 116, 125 (1958) (overruled on other grounds) (“Travel … may be necessary for a livelihood. It may be as close to the heart of the individual as what he eats, wears, or reads.”).

18Saenz v. Roe, 526 U.S. 489, 494 (1999) (“Each plaintiff alleged that she had recently moved to California to live with relatives in order to escape abusive family circumstances.”).

19Scarantino, supra note 2.

http://1.usa.gov/14oJn4F

http://bit.ly/YEPC0D

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Sometimes beneficiaries withdraw cash before they go out of state and then spend the cash, but carrying cash is not always advisable. Moreover, beneficiaries typi-cally do not have enough money in their accounts to be able to withdraw sufficient cash for more than a very short trip.20 The beneficiary may need to access funds when she is out of her home state to pay for expenses of the trip, or to pay bills, such as rent or utilities, that come due at home while she is away.21

III . What Geographic Restrictions Have Legislatures Proposed?

In response to alleged abuse of cash as-sistance supposedly demonstrated by the small percentage of benefits used out of state, legislators in some states have proposed—and, in at least one state, en-acted—restrictions on out-of-state use of cash assistance.

In April 2012 Minnesota became the first—and, to our knowledge, only—state to enact a geographic restriction on ben-efits: “EBT debit cardholders … are pro-hibited from using the cash portion of the EBT card at vendors and automatic teller machines located outside of Minnesota, Iowa, North Dakota, South Dakota, or Wisconsin. This subdivision does not apply to the food portion.”22 Geographic restrictions were also proposed but not enacted in 2011 and 2012 in Missouri, California, Florida, and Massachusetts.23

The Missouri, California, and Florida proposals would have barred transac-tions in all states other than the re-cipient’s state of residence, whereas the Minnesota statute and the Massachusetts proposals would have allowed transac-tions in adjacent states. Proposals to al-

low transactions in border states as well as the home state appear intended to accommodate the reality that state resi-dents regularly cross into nearby states to transact ordinary business. The provi-sions do not, however, acknowledge that a nonadjacent state may be quite close to a state’s border or that there may be equally legitimate reasons to transact benefits in nonadjacent states. A Mas-sachusetts proposal would also have al-lowed an exception to the prohibition on access or use in case of emergency but did not specify how the emergency determination would be made or how it could be made fast enough to provide a recipient the funds needed to cope with the emergency.24

How would these restrictions be im-plemented? Consider a hypothetical transaction: a recipient of cash benefits approaches an ATM in a forbidden ju-risdiction and inserts her card. Depend-ing on her home state’s implementation system, cash might or might not emerge. Her state might have blocked the trans-action (explained more fully below), in which case she could withdraw no funds. The California and Florida proposals ex-plicitly chose this first option and would have required changes in the states’ EBT systems to prevent out-of-state access. Alternatively a state might simply forbid cash assistance recipients from using their cards outside the home state or out-side the home state and its neighbors. A state could partially (though imperfectly) enforce such prohibitions by using EBT transaction records to identify recipi-ents who have accessed their benefits at an ATM or point-of-sale device outside the permitted geographic area and im-posing penalties on those recipients.

20Helwig, supra note 9 (“TANF funds are quickly withdrawn at the beginning of the month for such vital reasons as shelter payments, utilities, transportation, and child care.”).

21Many states review cases with repeated out-of-state activity and close the case if they find that the household has moved out of state (see, e.g., Scarantino, supra note 2). These practices are not at issue here.

22House File No. 2294, 2011–12 Sess. (Minn. April 28, 2012), http://bit.ly/XcFQo8 (amending Minn. Laws 2011 supp. § 256.987, with § 8 subdiv.3).

23H.B. 1187, 96th Gen. Assemb., 2d Reg. Sess. (Mo. 2012), http://on.mo.gov/10sz4an (died on calendar); A.B. No. 493 § 1, 2011–12 Reg. Sess. (Cal. filed Feb. 15, 2011), http://bit.ly/10oWHRs (not enacted); S.B. 1658 (Fla. posted Jan. 6, 2012), http://bit.ly/YZ3TIw (died on calendar). In Massachusetts one proposal passed the Massachusetts House but was not enacted (see H. 4101 § 35(f) (Mass. 2012), http://1.usa.gov/10slsLe). A second proposal was docketed but not assigned a bill number and died at the end of 2012 (H.D. 4343, 2011–12 Leg. (Mass. 2012) (on file with Harris)).

24H. 4101 § 35(f) (“family or medical emergency or other such emergency as approved by the department”).


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States could also impose penalties on re-cipients who admit to out-of-state access or spending or who have been reported by state investigators or others to have violated the prohibition. In this alternate approach, a recipient would be able to access the cash or make a purchase and would be subject to sanctions after the fact.

Most states appear to have chosen the first method, and would implement geo-graphic restrictions at least in part by changing their EBT systems to prevent recipients from accessing their benefit at vendors and ATMs outside the speci-fied geographic regions.25 This method by itself does not affect recipients whose benefits are directly deposited in a bank account and who would still be able to withdraw cash outside the state.26 Nor does this method by itself prevent recip-ients from withdrawing cash in the home state and spending it outside the permit-ted geographic region, although doing so may not meet the recipient’s need for funds while the recipient is away from the home state.

A state wanting to change its EBT system to block out-of-state transactions must first withdraw from Quest because Quest participation requires that the benefits be accessible at any location that displays the Quest Mark, without regard to state borders.27 In 2012 Missouri and Min-nesota officials assumed that they would

need to replicate agreements previously covered under Quest rules and would do so by negotiating separate agreements with every card-processing entity, mer-chant, and ATM network in the permit-ted geographic area that wanted to be able to accept EBT cash.28 Minnesota has now determined that the company that manages its EBT system is able—for an additional charge—to deny authoriza-tion of transactions that originate from a merchant or ATM that has a location code outside the permitted geographic area.29 A state that withdraws from Quest must issue new EBT cards without the Quest logo because the cash program is no lon-ger interoperable in all states.30 Other costs of blocking include training of state agency workers and clients on the new system, preparation and printing of new brochures and other informational ma-terials, increased volume of calls to the state for help, and mailing costs.31 Aside from the legal issues discussed below, the issue for states is whether making these changes in order to block the tiny percentage of transactions occurring out of state is worth the expense and trouble, particularly when there is no evidence that the expenditures are frivolous.32

IV . Geographic Restrictions on Benefits Are Constitutionally Suspect

Whatever restrictions a state adopts, lim-iting access to or spending of cash ben-

25Fiscal Note on H. 2294-1A.

26States could cease directly depositing recipients’ benefits in bank accounts as a way of restricting out-of-state access. States might be reluctant to do so because of opposition from the banks, the higher cost of EBT compared to direct deposit, and the desire to encourage mainstream banking for low-income households (Sherrie L.W. Rhine & Eric Robbins, Federal Deposit Insurance Corporation, 2011 FDIC Survey of Banks’ Efforts to Serve the Unbanked and Underbanked 10 (Dec. 2012), http://1.usa.gov/13xVeOL (importance of bringing low-income consumers into the financial mainstream).

27Fiscal Note on H.B. 1187, 96th Gen. Assemb. (Mo. 2012) 4 (Jan. 24, 2012), http://on.mo.gov/127NLkG (fiscal note by Missouri Commission on Legislative Research Oversight Division); Fiscal Note on H. 2294-1A at 7.

28Fiscal Note on H.B. 1187; Fiscal Note on H. 2294-1A.

29Telephone Communication from Tim Bonin, Supervisor of Benefit Issuance, Minnesota Department of Human Services (March 27, 2013). Whatever method is used, electronic blocking is not fail-safe. ATM owners frequently move their machines from one location to another, and nothing prevents them from moving their machines across state lines (see Helwig, supra note 9; Ripples Group, supra note 15, at 41).

30The state could issue new cash-benefits-only cards with access limited to the specified region and new SNAP-only cards accessible anywhere in the country. Alternatively the state could continue to load both cash and SNAP onto a single card but allow access to cash benefits loaded onto the card only in the specified region while allowing SNAP benefits to be accessed from anywhere in the country.

31Fiscal Note on H.B. 1187; Fiscal Note on H. 2294-1A.

32Ripples Group, supra note 15, at 44.


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efits outside a specified geographic area invites constitutional challenge. Both the ends and the means of such restrictions are unconstitutional. They are designed to deter constitutionally protected in-terstate travel and do so by preventing or forbidding transactions occurring out-side the legislating state—an improper state regulation of interstate commerce.

A . Geographic Restrictions on Benefits Violate the Dormant Commerce Clause

Article I, Section 8, Clause 3, of the U. S. Constitution grants Congress the power “[t]o regulate Commerce … among the several States.”33 Courts have inferred that this express grant implies its own converse; if the power to regulate in-terstate commerce belongs to Congress alone, under the so-called dormant commerce clause, states cannot do the same.34 Accessing or spending cash as-sistance benefits while outside the home state is unquestionably a form of com-merce protected from state usurpation by the dormant commerce clause.

1 . Geographic Restrictions on Benefits Directly and Impermissibly Regulate Interstate Commerce

Laws that block or prohibit out-of-state access to cash assistance thwart the elec-tronic transfer of funds from one state to another with the express purpose of pre-venting the recipient from spending the funds in another state. Laws that prohibit the spending of cash assistance outside the home state punish recipients who ac-cess the funds in the home state, physi-cally carry the money to another state,

and engage in commercial activity in the other state. Restrictions on out-of-state access to and spending of cash assis-tance thus impermissibly and “overtly block[] the flow of interstate commerce at a State’s borders.”35 Therefore they are subject to the “virtually per se rule of in-validity” that applies to direct regulation of interstate commerce.36

Proponents of the restrictions might argue that the per se rule of invalidity is inapplicable because the cases in which statutes have been struck down under the dormant commerce clause generally involved some form of economic pro-tectionism. But even if the state is not seeking to protect in-state economic in-terests, a direct regulation of interstate commerce is invalid unless the state law “‘advances a legitimate local purpose that cannot be adequately served by reason-able nondiscriminatory alternatives.’”37 This is a very high hurdle that geographic restrictions on benefits do not clear.

In Maine v. Taylor the U.S. Supreme Court upheld a statute prohibiting the import of baitfish into Maine because the re-cord supported the state’s position that the prohibition was the only way to pre-vent invasive, nonnative baitfish from entering Maine waters.38 No state here can put forth a comparable claim that the geographic restrictions are neces-sary “to protect the health and safety of its citizens [or] the integrity of its natural resources.”39 The purpose of the restric-tions, charitably construed, is to promote the wise expenditure of cash assistance benefits. But beneficiaries can spend their funds prudently outside their home state and can spend the money unwisely

33U.S. ConsT. art. I, § 8, cl. 3.

34See, e.g., United Haulers Association Incorporated v. Oneida-Herkimer Solid Waste Management Authority, 550 U.S. 330, 338 (2007); Wyoming v. Oklahoma, 502 U.S. 437, 454–55 (1992).

35Hughes v. Oklahoma, 441 U.S. 322, 337 (1979) (quoting Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978)).

36Camps Newfound/Owatonna v. Town of Harrison, 520 U.S. 564, 575 (1997); see Healy v. Beer Institute Incorporated, 491 U.S. 324, 336 (1989); United Haulers Association, 550 U.S. at 338.

37Camps Newfound/Owatonna, 520 U.S. at 597 (quoting New Energy Company of Indiana v. Limbach, 486 U.S. 269, 274, 278 (1988)). See also United Haulers Association, 550 U.S. at 346; Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 956 (1982) (“For Commerce Clause purposes, we have long recognized a difference between economic protectionism, on the one hand, and health and safety regulations, on the other.”).

38Maine v. Taylor, 477 U.S. 131 (1986).

39Id. at 151.



inside their home state. Thus, even if the economic paternalism that may underlie the restrictions is not the equivalent of economic protectionism under the com-merce clause, there is no credible “health and safety” or comparable justification for the burden on interstate commerce.40

2 . Geographic Restrictions on Benefits Impermissibly Regulate Extraterritorial Transactions

The Supreme Court has consistently held that state efforts to regulate commerce in other states violate the commerce clause. The leading case is Baldwin v. GAF Seelig, in which New York barred the sale of milk acquired out of state at prices below the New York minimum price.41 The Court, in a decision by Justice Cardozo, unani-mously struck down the New York stat-ute and regulations under the commerce clause: “New York has no power to proj-ect its legislation into Vermont by regu-lating the price to be paid in that state for milk acquired there.”42

More recent cases have confirmed that states’ extraterritorial restrictions on commerce violate the dormant commerce clause. For example, in Healy v. Beer Insti-tute Incorporated, the Court struck down a Connecticut statute barring out-of-state dealers from selling beer to Connecticut wholesalers at prices below the prices they charged in states bordering Connecticut because it had “the undeniable effect of controlling commercial activity occurring wholly outside the boundary of the State” and thus exceeded the state’s powers un-der the commerce clause.43

Laws need not explicitly target extrater-ritorial transactions to be invalid; rather, state laws may improperly regulate in-

terstate commerce where their “practi-cal effect” is to regulate conduct in other states.44 Not just the practical but the ex-clusive effect of the laws geographically limiting access to or spending of cash assistance is to regulate transactions in other states; the laws are triggered only when a recipient of cash assistance tries to access her benefits or make a purchase in another state.

3 . Deterring Interstate Movement Impairs Interstate Commerce

In two companion cases rejecting chal-lenges to the Civil Rights Act of 1964, Heart of Atlanta Motel and Katzenbach v. McClung, the Supreme Court ruled that the systematic inability of African Americans to obtain basic necessities such as food or lodging while traveling in the segregated South deterred them from traveling and thereby reduced the amount of goods and services in interstate commerce.45 Deny-ing government assistance beneficiaries the ability to access or spend their funds while out of state would have a similar im-permissible chilling effect on interstate movement that would affect interstate commerce.

Other cases have expressly treated the interstate movement of persons as an as-pect of interstate commerce. In Edwards v. California the Supreme Court held in 1941 that a California statute making it a crime to bring an indigent person into the state was an unconstitutional barrier to inter-state commerce.46 The Court wrote:

[N]o boundar[y] to the permis-sible area of State legislative ac-tivity … is more certain than the prohibition against attempts on the part of any single State to iso-

40Cf. Kraft General Foods Incorporated v. Iowa Department of Revenue and Finance, 505 U.S. 71, 82 (1992) (state interest in using federal forms and definitions of taxable income does not constitute “the kind of serious health and safety concern” that justifies facially discriminatory treatment of dividends received from foreign subsidiaries).

41Baldwin v. GAF Seelig, 294 U.S. 511 (1935).

42Id. at 521.

43Healy, 491 U.S. at 336.

44Id.; Brown-Forman Distillers Corporation, 476 U.S. at 583 (quoting Southern Pacific Company v. Arizona ex rel. Sullivan, 325 U.S. 761, 775 (1945)).

45Heart of Atlanta Motel v. United States, 379 U.S. 241, 258 (1964); Katzenbach v. McClung, 379 U.S. 294, 300 (1964).

46Edwards v. California, 314 U.S. 160 (1941).



late itself from difficulties com-mon to all of them by restraining the transportation of persons and property across its borders.47

As the Supreme Court said in another civil rights case, “the Commerce Clause … ground of decision [in Edwards] was consistent with precedents firmly estab-lishing that the federal commerce power surely encompasses the movement in interstate commerce of persons as well as commodities.”48 More recently, the Supreme Court held in Camps Newfound/Owatonna Incorporated v. Town of Harrison, Maine that campers who traveled to Maine to attend a summer camp were engaged in interstate commerce, for “the transporta-tion of persons across state lines … has long been recognized as ‘commerce.’”49 Under this rationale, state regulation that has the goal and effect of restricting the interstate movement of low-income persons would itself violate the dormant commerce clause, particularly when the effect on commercial activity is obvious and undeniable.

B . Geographic Restrictions on Benefits Unconstitutionally Burden the Right to Travel

Although no single clause of the Consti-tution explicitly protects the right to in-terstate travel, state restrictions on out-of-state access to or spending of benefits are also susceptible to challenge because they unconstitutionally burden interstate travel.

1 . The Constitution Protects the Right to Interstate Travel

The right to interstate travel has been recognized in American law since the early days of the Republic. The Articles

of Confederation guaranteed “the people of each State … free ingress and regress to and from any other State.”50 The right is not expressly mentioned in the Con-stitution because “a right so elementary was conceived from the beginning to be a necessary concomitant of the stronger Union the Constitution created.”51 Also, the framers thought that the right to travel between states was one of the privileges and immunities of citizenship protected by Article IV, Section 2.52 Indeed, as Prof. Seth Kreimer points out, Justice Taney in Dred Scott concluded that the descen-dants of slaves could not be citizens be-cause citizenship “would give … [African Americans] the right to enter every other State whenever they pleased.”53 For Justice Taney, Dred Scott was the logical extension of his views on the right to travel expressed in his dissent in the Passenger Cases:

Living as we do under a com-mon government, charged with the great concerns of the whole Union, every citizen of the Unit-ed States, from the most remote States or Territories, is entitled to free access, not only to the prin-cipal departments established at Washington, but also to its judi-cial tribunals and public offices in every State and Territory of the Union. And the various provi-sions in the Constitution of the United States … all prove that it intended to secure the freest intercourse between the citi-zens of the different States. For all the great purposes for which the Federal government was formed, we are one people, with one common country. We are all citizens of the United States;

47Id. at 173–74 (citations omitted).

48United States v. Guest, 383 U.S. 745, 758–59 (1966).

49Camps Newfound/Owatonna, 520 U.S. at 573 (1997). See also Hoke v. United States, 227 U.S. 308, 320 (1913) (holding that “[c]ommerce among the states … consists of intercourse and traffic between their citizens, and includes the transportation of persons and property”).

50Articles of Confederation of 1789 art. IV, http://bit.ly/YWQ5YW.

51Guest, 383 U.S. at 758.

52See Saenz, 526 U.S. at 501 n.13; see also Corfield v. Coryell, 6 F. Cas. 546, 551–52 (C.C.E.D. Pa. 1823).

53Scott v. Sandford, 60 U.S. 393, 416–17 (1857); see Seth F. Kreimer, Territoriality and Moral Dissensus: Thoughts on Abortion, Slavery, Gay Marriage and Family Values, 16 QuinnipiaC law review 161, 178–79 (Spring–Summer 1996).


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and, as members of the same community, must have the right to pass and repass through every part of it without interruption, as freely as in our own States.54

Justice Taney’s thinking was syllogistic: all citizens have a right to travel; states must be allowed to restrict the travel of slaves and free blacks; therefore slaves and free blacks cannot be citizens.55 The citizenship and privileges or immunities clauses of the Fourteenth Amendment were specifically intended to overrule Dred Scott and provide explicit federal protection for interstate travel as well as other rights of national citizenship.56

In 1867, while ratification of the Four-teenth Amendment was pending, the Supreme Court in Crandall v. Nevada struck down a Nevada tax on every per-son leaving the state or passing through it by common carrier.57 The Crandall Court did not find it necessary to identify any particular provision of the Constitution as the source for the right to travel. In-stead the Court, like Justice Taney in his dissent in the Passenger Cases, focused on the basic right of every citizen to move freely throughout the country.58

If the state had the power to impose an exit tax on everyone leaving Nevada, the Court said, it could “totally prevent or seriously burden all transportation of

passengers from one part of the country to the other.”59 Two justices in Crandall concurred on the ground that the tax was “inconsistent with the power conferred upon Congress to regulate commerce among the several States.”60

The majority in Edwards v. California held the California anti-indigent statute unconstitutional on dormant commerce clause grounds.61 Justice Douglas, joined by Justices Black and Murphy, concurred on the ground that “[t]he right to move freely from State to State is an incident of national citizenship protected by the privileges and immunities clause of the Fourteenth Amendment against state interference.”62 Justice Douglas claimed not to express a view on whether the California statute ran afoul of the com-merce clause, but he could not resist saying that “the right of persons to move freely from State to State occupies a more protected position in our consti-tutional system than does the movement of cattle, fruit, steel and coal across state lines.”63 Justice Jackson concurred sepa-rately, agreeing with the majority that the commerce clause was a permissible ground for striking down the statute, and agreeing with Justice Douglas that the better ground was the right of national citizenship protected by the privileges or immunities clause of the Fourteenth Amendment.64

54Smith v. Turner (Passenger Cases), 48 U.S. 283, 492 (1849) (Taney, C.J., dissenting).

55See Seth F. Kreimer, The Law of Choice and the Choice of Law, 67 new york universiTy law review 451, 502–4 (1992).

56U.S. ConsT. amend. XIV, § 1; Kreimer, supra note 53. See Twining v. New Jersey, 211 U.S. 78, 97 (1908) (“Thus, among the rights and privileges of national citizenship recognized by this court are the right to pass freely from state to state”); Williams v. Fears, 179 U.S. 270, 274 (1900) (“Undoubtedly the right of locomotion, the right to remove from one place to another according to inclination, is an attribute of personal liberty, and the right, ordinarily, of free transit from or through the territory of any state is a right secured by the 14th Amendment and by other provisions of the Constitution.”).

57Crandall v. Nevada, 73 U.S. 35 (1867).

58Id. at 44, 48–49 (quoting Justice Taney’s dissent in the Passenger Cases, 48 U.S. at 492).

59Id. at 46.

60Id. at 49 (Clifford, J., concurring in the judgment).

61Edwards, 314 U.S. 160.

62Id. at 178. In the Slaughter-House Cases the U.S. Supreme Court, citing Crandall’s reasoning, had included the right to travel to “the seat of government” for government-related business and the “right to free access to its seaports” as among the rights protected by the privileges or immunities clause (83 U.S. (16 Wall.) 36, 79 (1873)).

63Edwards, 314 U.S. at 177, 181.

64Id. at 185.



Right-to-travel cases after Edwards have uniformly endorsed its result but for the most part have declined to locate the right in any specific provision of the Constitu-tion. Saenz v. Roe, the Supreme Court’s most recent interstate travel case, de-fined the right to travel as consisting of “at least” three parts:

It protects the right of a citi-zen of one State to enter and to leave another State, the right to be treated as a welcome visitor rather than an unfriendly alien when temporarily present in the second State, and, for those travelers who elect to become permanent residents, the right to be treated like other citizens of that State.65

Geographic restrictions on access to or spending of benefits impinge on the first component—the right to enter and leave another state without being subject to state-imposed burdens. The plaintiffs in Saenz challenged a California statute limiting TANF cash assistance benefits during the recipient’s first year of resi-dency to the benefits they would have received in the state of their prior resi-dence. According to the Saenz Court, that case concerned “the third aspect of the right to travel—the right of the newly ar-rived citizen to the same privileges and immunities enjoyed by other citizens of the same State.”66 The Saenz court ascribed that right to both “the new ar-rival’s status as a state citizen” protected by the privileges and immunities clause of Article IV, Section 2, and “her status as a citizen of the United States” protected

by the privileges or immunities clause of the Fourteenth Amendment.67

Because the statute in Saenz did not “di-rectly impair the exercise of the right to interstate travel,” the Supreme Court in Saenz determined that it “need not identify the source of [the right to en-ter and leave another state] in the text of the Constitution.”68 However, the Court quoted with approval the suggestion in United States v. Guest that the right of “free ingress and regress to and from” neigh-boring states was taken for granted from the beginning to be an essential element of Union.69 It was this right, the Court in Saenz said, “to go from one place to an-other, including the right to cross state borders while en route, that was vindi-cated in Edwards v. California.”70

Chief Justice Rehnquist, joined by Jus-tice Thomas, rejected the majority’s con-clusion in Saenz that the California law violated the right to travel.71 But the chief justice agreed that “[t]he right to travel clearly embraces the right to go from one place to another, and prohibits States from impeding the free interstate pas-sage of citizens.”72 He also agreed that in Edwards the state law, “which prohibited the transport of any indigent person into California, was a classic barrier to travel or migration and the Court rightly struck it down.”73 “Indeed,” he said, “for most of this country’s history, what the Court to-day calls the first ‘component’ of the right to travel … was the entirety of this right.”74

The Constitution, the Supreme Court thus unanimously said in Saenz, protects the right to travel in its most basic sense—

65Saenz, 526 U.S. at 489, 500 (striking down California statute that limited cash assistance for needy families during their first year of residence in state).

66Id. at 502.

67Id. at 502–3.

68Id. at 501.

69Id.

70Id.; Edwards, 314 U.S. at 160.

71Saenz, 526 U.S. at 511–16 (Rehnquist, C. J., dissenting).

72Id. at 511–12.

73Id. at 512.

74Id.



the right to enter and leave another state without being subject to state-imposed burdens. State restrictions or prohibi-tions on out-of-state access to or spend-ing of cash assistance are inconsistent with that right.

2 . Geographic Restrictions on Benefits Unreasonably Burden the Right to Travel

Proponents of geographic restrictions on access to or spending of cash assistance might make several arguments in sup-port of their constitutionality.

First, they might argue that the state is not constitutionally required to provide cash assistance at all and certainly is not required to provide it through a system that can be accessed outside the home state. Electronic funds transfer systems and electronic banking came into use only in the 1970s.75 The use of EBT for the disbursement of cash assistance benefits is also quite new. Previously states dis-bursed cash assistance by mailed check, by direct deposit, or by requiring recipi-ents to appear in person to collect the cash or a warrant.76 Recipients who got their benefits by mail would have been able to access them while out of state only if someone at home forwarded the mail. Recipients who received their benefits via direct deposit in most cases would have had to go to a local bank to withdraw them. Thus, before the development of elec-tronic funds transfer systems and their adoption for the distribution of public benefits, beneficiaries were not signifi-cantly more restricted in their ability to access their benefits than they would be under the recent proposals to permit re-cipients to access their benefits only in their home state. A few states still pay benefits by mailed check, which can only be received in the recipient’s home state.77 Proponents of geographic restrictions on

benefits might argue that disbursement methods used in the past and still used in some states support the conclusion that the state is not constitutionally required to disburse benefits in a way that assures out-of-state access, and therefore there is no constitutional barrier to a state choosing to disburse benefits in a way that geographically restricts access.

Second, proponents of geographic re-strictions on where benefits can be ac-cessed or spent might argue that the rules are not intended to inhibit travel but rather are intended to prevent ben-efits funded by tax revenues from being used frivolously or unwisely. They might point out that beneficiaries are free to use funds from other sources to travel.

These arguments fail because the re-strictions are in fact intended to and would have the effect of limiting out-of-state travel: “If a law has ‘no other purpose … than to chill the assertion of constitutional rights by penalizing those who choose to exercise them, then it (is) patently unconstitutional.’”78 Although a legacy system of mailed checks may be permissible, geographic restrictions on access that are adopted with the obvi-ous—and often express—intent of pre-venting recipients from accessing or spending their benefits while out of state would unconstitutionally burden inter-state movement. Especially given the advantages of nationwide interoperabil-ity and portability and the costs of limit-ing access to the home state or the home state and its neighbors, a state could not credibly claim a neutral purpose for in-stituting restrictions or adopting sweep-ing changes in its cash assistance dis-bursement systems.

Nor could a state hide behind a sup-posed purpose of deterring unwise use of cash assistance benefits. Whether the

75See Joe Tauber, The Emergence of the Electronic Fund Transfer System: Consumer Protection, Federal Antitrust, and Branch Banking Laws, 10 ohio norThern universiTy law review 323, 324 (1983). Congress passed the Electronic Fund Transfer Act in 1978 (Pub. L. No. 95-630, 92 Stat. 3641 (1978)).

76See offiCe of TeChnology assessmenT, u.s. Congress, oTa-bp-CiT-47, eleCTroniC delivery of publiC assisTanCe benefiTs: TeChnology opTions and poliCy issues 3 (April 1988), http://bit.ly/Xo7Wgg.

77Helwig, supra note 9 (“three states left that pay by check or warrant”).

78Shapiro v. Thompson, 394 U.S. 618, 631 (1969) (quoting United States v. Jackson, 390 U.S. 570, 581 (1968)).


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beneficiary is in her home state or an-other state, benefits can be spent wisely or unwisely.79 There is no basis for as-suming that benefits accessed or spent outside the home state are more likely to be spent frivolously. The restrictions are certainly not tailored to further a supposed purpose of preventing ben-efits from being wasted. As the Supreme Court said in Crandall when it rejected an argument that a per-passenger tax levied on railroad and stage companies for the privilege of passing through the state did not inhibit travel because it was a tax on business and not on the passengers,

[i]f the act were much more skillfully drawn to sustain this hypothesis than it is, we should be very reluctant to admit that any form of words, which had the effect to compel every person travelling through the country by the common and usual modes of public conveyance to pay a spe-cific sum to the State, was not a tax upon the right thus exercised. The statute before us is not, how-ever, embarrassed by any nice difficulties of this character.80

The suggestion that beneficiaries’ travel is not restricted because they are free to use other funds must also fail. Because of the way benefits are calculated, cash assistance beneficiaries have little or no nonbenefit income.81 Moreover, the Su-

preme Court struck down the $1 exit tax in Crandall without any showing that the tax prevented out-of-state travel. The fact of the tax was sufficient evidence that travel was burdened, whether or not it was prevented.

Although the proponents of restrictions might attempt post hoc rationalizations, geographic restrictions on access to and spending of cash assistance benefits are no less a burden on travel than the $1 tax in Crandall. Recipients who are traveling out of state may need to access their ben-efits to pay expenses while they are away or to pay bills that come due at home, such as rent.82 Just as African Americans during the Jim Crow era could “hardly travel without eating,” cash assistance recipients can hardly travel if they are unable to access or spend their benefits while away from home.83

■ ■ ■

Statutes restricting access to or spend-ing of cash assistance outside the recipi-ent’s home state or its border states are vulnerable to constitutional attack on at least two main grounds. They attempt to regulate interstate commerce in viola-tion of the dormant commerce clause. And they unconstitutionally impede citi-zens’ exercise of their right to interstate travel. Whether these statutes block or prohibit access or penalize spending, courts should strike them down.

79Compare Ripples Group, supra note 15, at 15 (0.3 percent of out-of-state transactions were at locations matching key words “liquor,” “tobacco,” “bar,” “cigar,” “spa,” “nails,” “jewelry,” “resort,” “tattoo,” or “salon”), with id. at 13 (0.2 percent of total transactions at similar list of locations were later prohibited by state); these data show where the benefits were withdrawn but do not show where or for what they were spent.

80Crandall, 73 U.S. at 39.

81See david kassabian eT al., urban insTiTuTe, welfare rules daTabook: sTaTe Tanf poliCies as of July 2010, at 27–31, 80, 92–93 (Aug. 2011), http://urbn.is/17jOX5u.

82See II. Why Do Beneficiaries Use Their Benefits Outside Their Home States?, supra.

83Katzenbach, 379 U.S. at 300.


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