The federal government won South Dakota v. Dole. On June 23, 1987, the Supreme Court ruled 7–2 that Congress could withhold a portion of federal highway funds from states that allowed people under 21 to buy alcohol, upholding the National Minimum Drinking Age Act of 1984.1Justia. South Dakota v. Dole, 483 U.S. 203 (1987) Chief Justice William Rehnquist wrote the majority opinion. Justices Sandra Day O’Connor and William Brennan dissented.
What South Dakota Was Fighting
Congress passed the National Minimum Drinking Age Act in 1984, codified at 23 U.S.C. § 158. It directed the Secretary of Transportation to withhold a percentage of federal highway funds from any state that let people under 21 buy or publicly possess alcohol.2Office of the Law Revision Counsel. 23 USC 158 – National Minimum Drinking Age
South Dakota allowed anyone 19 or older to buy beer containing up to 3.2% alcohol. Rather than raise its drinking age, the state sued Secretary of Transportation Elizabeth Dole. Its argument: the Constitution doesn’t give Congress the power to set a national drinking age, so Congress shouldn’t be able to use highway money as leverage to accomplish the same thing indirectly. The state also invoked the Tenth Amendment and the Twenty-first Amendment, which returned authority over alcohol regulation to the states after Prohibition.
The Four-Part Spending Power Test
The lasting piece of the ruling is a framework for when Congress can attach conditions to federal money. Rehnquist identified four restrictions on the spending power:
- The spending must serve the general welfare.
- Congress must state any conditions unambiguously, so states know what they are agreeing to.
- The conditions must relate to a federal interest in the program receiving the funds.
- The condition cannot require a state to do something that would itself be unconstitutional.
The Court found the drinking age condition satisfied all four. Congress had a legitimate interest in safe interstate travel, and varying drinking ages produced a specific problem: young people driving across state lines to buy alcohol in states with lower age limits, then driving home impaired. That link between drinking age and highway safety satisfied the relatedness requirement.1Justia. South Dakota v. Dole, 483 U.S. 203 (1987)
Why the Money Threat Wasn’t Coercion
South Dakota argued the financial pressure was so heavy it amounted to compulsion rather than persuasion. The Court disagreed. The amount at risk was 5% of the state’s federal highway funds, which the majority called “relatively mild encouragement.” In practical terms, the threatened amount came to less than half of one percent of South Dakota’s overall budget.3Constitution Annotated. Anti-Coercion Requirement and Spending Clause
The Court also rejected the Tenth and Twenty-first Amendment arguments. A state raising its own drinking age to 21 wouldn’t violate the Constitution, so Congress wasn’t asking states to do anything unconstitutional. And while the Twenty-first Amendment gave states control over alcohol regulation, it didn’t stop Congress from using financial incentives to influence how states exercised that control.
The Dissents
Justice O’Connor did not reject the majority’s general framework. Her objection was narrower: she thought the connection between highway funds and the drinking age was too weak to satisfy the relatedness requirement. In her view, the condition had to relate to how states spent the highway money, not to a separate social policy that might indirectly affect highway safety.1Justia. South Dakota v. Dole, 483 U.S. 203 (1987) She warned that the majority’s approach let Congress attach almost any condition to federal spending as long as some loose connection to a federal interest could be drawn.
Justice Brennan filed a brief separate dissent. He said regulating the drinking age fell squarely within the powers the Twenty-first Amendment reserved to the states, and Congress therefore could not use conditional spending to take that authority away.1Justia. South Dakota v. Dole, 483 U.S. 203 (1987)
How NFIB v. Sebelius Later Limited the Win
For 25 years, the coercion limit in Dole looked like a theory that never blocked anything. That changed in 2012 with National Federation of Independent Business v. Sebelius, the Affordable Care Act case. The Court struck down the Medicaid expansion provision, which threatened to cut off all existing Medicaid funding to states that refused to expand coverage. For the first time, the Court found Congress had crossed from persuasion into compulsion.4Congress.gov. Medicaid and Federal Grant Conditions After NFIB v. Sebelius
The numbers made the difference. In Dole, the threatened loss was less than half of one percent of South Dakota’s total budget. In NFIB, Medicaid funding represented over 10% of a state’s overall budget. Chief Justice Roberts called the Medicaid threat “a gun to the head” and contrasted it with the “relatively mild encouragement” in Dole.3Constitution Annotated. Anti-Coercion Requirement and Spending Clause The exact tipping point between the two remains undefined.
What States Did Next
The practical effect of the ruling was swift. Faced with losing federal highway money, every state fell in line. By mid-1988, all 50 states and the District of Columbia had raised their minimum drinking age to 21, with South Dakota and Wyoming among the last holdouts. A modest financial penalty, applied to funds states relied on, produced uniform national policy without Congress ever passing a direct mandate.