In Downes v. Bidwell, 182 U.S. 244 (1901), the Supreme Court ruled 5–4 that Puerto Rico was not part of the United States for purposes of the Constitution’s Uniformity Clause, so Congress could tax goods moving between the island and the mainland at rates it could not impose between states. More importantly, a concurrence in that fractured decision introduced the distinction between “incorporated” and “unincorporated” territories, and that distinction still governs the constitutional rights of people born in Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands.
The Tariff That Started the Case
The United States acquired Puerto Rico from Spain under the 1898 Treaty of Paris that ended the Spanish-American War. Two years later Congress passed the Foraker Act to set up a civil government on the island. Section 3 of that act required goods moving between Puerto Rico and the mainland to be taxed at 15 percent of the rates charged on imports from foreign countries.1United States Statutes at Large. 31 Stat. 77 – An Act Temporarily to Provide Revenues and a Civil Government for Porto Rico
Samuel Downes, a New York merchant, paid the duty under protest on a shipment of oranges from San Juan and sued the collector of the port to get his money back. His argument was simple. The Uniformity Clause of Article I, Section 8 requires that all federal duties “shall be uniform throughout the United States.”2Constitution Annotated. ArtI.S8.C1.1.3 Uniformity Clause and Indirect Taxes Puerto Rico was under U.S. sovereignty, so any special tariff on its goods was unconstitutional. Everything in the case turned on whether “throughout the United States” reached the newly acquired island.3Justia U.S. Supreme Court Center. Downes v. Bidwell
A Court That Could Not Agree on Its Own Reasoning
The Court affirmed the judgment against Downes, but the five justices in the majority split on why. As the reporter noted, “there is no opinion in which a majority of the Court concurred.” Justice Henry Billings Brown announced the judgment and wrote the lead opinion. Justice Edward Douglass White wrote a separate concurrence, joined by Justices Shiras and McKenna, that reached the same result on entirely different reasoning. Justice Gray concurred in the judgment. Chief Justice Fuller dissented, joined by Justices Harlan, Brewer, and Peckham.3Justia U.S. Supreme Court Center. Downes v. Bidwell
The rule that eventually became American constitutional law did not come from the lead opinion. It came from White’s concurrence.
Justice Brown’s Lead Opinion
Brown concluded that Puerto Rico was “not a part of the United States” within the meaning of the Uniformity Clause and that Congress could therefore treat the island differently for revenue purposes. His reasoning was that the Constitution’s tax provisions were drafted with the existing states in mind and did not automatically reach every piece of territory the nation might acquire.
Brown’s opinion is also the source of the decision’s most criticized passage. He wrote that if newly acquired territories “are inhabited by alien races, differing from us in religion, customs, laws, methods of taxation, and modes of thought, the administration of government and justice according to Anglo-Saxon principles may for a time be impossible.” That framing tied the reach of constitutional rights to the racial and cultural character of the people in a territory, and it has drawn condemnation from judges and scholars ever since.
Justice White’s Incorporation Doctrine
White agreed the tariff was constitutional but rejected the idea that the Constitution simply stopped at the water’s edge. He wrote that the Constitution “is everywhere and at all times potential insofar as its provisions are applicable.” The line he drew instead turned on whether Congress had taken formal steps to incorporate a territory into the United States as a future part of the Union.
Under White’s approach, the full Constitution applies automatically only in territories Congress has incorporated. In unincorporated territories, only “fundamental” personal rights apply. Because neither the Treaty of Paris nor the Foraker Act showed any intent to make Puerto Rico an integral part of the country on a path to statehood, White concluded the island was unincorporated. The Uniformity Clause did not reach it, and the tariff stood.
That two-step framework, incorporation first and then a case-by-case search for fundamental rights, is still the law. The Court has never produced a definitive list of which rights are fundamental enough to apply in an unincorporated territory.
The Dissent
Chief Justice Fuller, writing for four justices, rejected both Brown’s and White’s approaches. He argued that the Constitution applied in full to every piece of territory under American sovereignty from the moment of acquisition. Article VI declares the Constitution “the supreme law of the land,” and Fuller saw nothing in that language limiting its reach to the states. Where earlier statutes had declared the Constitution in force in a territory, he read those acts as recognizing what was already true rather than granting new rights.
The dissent’s warning has aged well among the doctrine’s critics. Fuller saw no principled stopping point: if Congress could exempt Puerto Rico from the Uniformity Clause, it could exempt a territory from any guarantee it found inconvenient.
Incorporated and Unincorporated Territories Today
White’s distinction became the organizing principle for American territorial law. Incorporated territories are places Congress has put on a path to statehood, either expressly or by clear implication, and their residents enjoy the full Constitution. The Alaska and Hawaii territories were treated as incorporated before statehood.4Legal Information Institute. U.S. Constitution Annotated – ArtIV.S3.C2.3 Power of Congress over Territories
Unincorporated territories are possessions Congress has not signaled any intent to bring into the Union. All five major inhabited U.S. territories fall into this category today: Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands. Their residents are guaranteed only rights the Court deems fundamental. Congress governs them under Article IV, Section 3, which grants it authority to “make all needful Rules and Regulations” for U.S. territory.5Constitution Annotated. Article 4 Section 3 Clause 2
The Supreme Court formally locked in White’s framework in Balzac v. Porto Rico (1922). Chief Justice Taft’s opinion confirmed that White’s concurrence, not Brown’s lead opinion, supplied the controlling rule, and held that extending U.S. citizenship to Puerto Ricans through the Jones Act of 1917 did not amount to incorporating the island. Without incorporation, the constitutional right to a jury trial did not apply there.6Legal Information Institute. Balzac v. People of Porto Rico
What the Doctrine Means for Citizenship, Taxes, and Benefits
The consequences reach into ordinary life. People born in the 50 states or the District of Columbia hold constitutional citizenship under the Fourteenth Amendment. People born in most unincorporated territories hold statutory citizenship granted by Congress, which rests on a different legal foundation. American Samoa shows the sharpest edge: people born there are classified as U.S. nationals, not citizens, and cannot vote in federal elections after moving to a state unless they naturalize. In Fitisemanu v. United States (2021), the Tenth Circuit upheld that arrangement, holding that “Congress plays the preeminent role in the determination of citizenship in unincorporated territorial lands” and that the Fourteenth Amendment’s Citizenship Clause does not automatically extend to unincorporated territories.7Justia Law. Fitisemanu v. United States, No. 20-4017 (10th Cir. 2021)
Taxes work differently too. Bona fide residents of Puerto Rico generally owe no federal income tax on income from sources within the island under 26 U.S.C. § 933, though self-employment income still carries Social Security and Medicare obligations.8Office of the Law Revision Counsel. Income From Sources Within Puerto Rico9Internal Revenue Service. Tax Guide for Individuals With Income From U.S. Territories The trade-off is reduced access to federal programs. Puerto Rico residents are excluded from Supplemental Security Income, receive capped Medicaid funding, and get a nutrition block grant rather than SNAP. In United States v. Vaello Madero (2022), the Supreme Court upheld the SSI exclusion 8–1, holding that Congress needs only a rational basis to treat territory residents differently and pointing to the general federal income tax exemption as sufficient justification.10Social Security Administration. Supplemental Security Income and United States Territories
Calls to Overturn
Criticism of the Insular Cases now comes from across the ideological spectrum. Justice Gorsuch, concurring in Vaello Madero, wrote that those decisions “have no foundation in the Constitution and rest instead on racial stereotypes” and said the Court should overrule them. Justice Sotomayor, dissenting, called them “premised on beliefs both odious and wrong.” Academic writing routinely compares the racial reasoning in Brown’s opinion to Plessy v. Ferguson.
The Court has not taken up the invitation. It denied review in Fitisemanu in 2022, and the majority in Vaello Madero resolved the case without relying on the Insular Cases directly. White’s incorporation doctrine remains the governing standard, Congress retains plenary power over the territories under Article IV, Section 3, and roughly 3.5 million Americans living in the territories continue to live under a constitutional framework built on a fractured 1901 decision that no majority of the current Court has defended on its original terms.