Huebert, I agree completely with your post.
On Napolitano's Freedom Watch, Professor Randy Barnett says he favors the constitutional amendment allowing two-thirds of the States to veto federal law (he also commented on Volokh). This would be good, but it is is not enough. Two-thirds of the States should not have to agree (as I noted in "Taking the Ninth Amendment Seriously: Review of Calvin R. Massey, Silent Rights: The Ninth Amendment and the Constitution’s Unenumerated Rights,"a better amendment would be that proposed by Marshall DeRosa in The Ninth Amendment and the Politics of Creative Jurisprudence: "When a national majority of each State’s chief judicial official declares a decision by the U.S. Supreme Court to be inconsistent with the U.S. Constitution, the said decision shall thereby be negated and precedent restored. The States’ designated chief judicial officers shall convey their declarations to the U.S. Solicitor General, who in turn will notify the Chief Justice of the U.S. Supreme Court to take appropriate measures consistent with this amendment."; I survey other possible structural limitations on federal law in this review and in “Legislation and the Discovery of Law in a Free Society”).
But any State should be free to refuse to enforce unconstitutional laws—or, in my view, any federal law it doesn't like—for any reason—even a constitutional law. If the Feds or the other States don't like it that, say, California refuses to enforce federal drug law (or to permit federal agents to enforce it), or even to enforce "constitutional" federal laws, they are free to boot California out of the union. (Please, please, kick Texas out. Call us names, spit at us, hate us. Kick us out.)
The Constitution and the federal judicial appeal process is not the end-all be-all, or the only way to challenge the leviathan's evil laws. A political argument need not be merely a legal one. The Fourteenth Amendment was illegally ratified but now is de facto part of the Constitution. The Constitution itself arose out of an illegal Constitutional Convention; it was a coup d’etat (see Rockwell on Hoppe on the Constitution as Expansion of Government Power). The nation's size owes to the illegal Louisiana Purchase. Sometimes political reality becomes legal reality. And so here. Why can't nullification be used to appeal to people's moral and political sensibilities? If you persuade people the states should have the right to nullify—they will.
In fact the States and State officers are duty bound to uphold the Constitution, are they not? They are bound to nullify—refuse to enforce—federal laws they view are unconstitutional. The argument against this is the notion that the Supreme Court is the final word and final interpreter of the Constitution. Where is that specified in the Constitution? Professor Barnett asked where nullification is specified as a power in the Constitution (even though the Constitution was an enumeration of federal powers, not State powers; why should any state power have to be "found" in the Constitution? The States pre-existed the federal government as sovereign states with plenary legislative power; by contrast the federal government does not have complete or plenary power—it is not authorized to outlaw murder or rape, say; for more on this see The Unique American Federal Government). Well where is federal judicial supremacy specified? In fact the very idea that the Supreme Court can strike down—i.e., NULLIFY—unconstitutional federal laws rests on the notion that it is an equal and independent branch of the federal government, and it has an obligation, just like the executive and legislative branches, not to violate the Constitution. The very idea of judicial review rests recognizing an independent judicial obligation not to violate the Constitution. But this does not imply judicial supremacy. It implies that the three branches of the federal government have independent obligation to refuse to enact or enforce or condone a federal law or policy or action that they believe to be unconstitutional. In effect, any of the three branches can "veto"—nullify—actions of the other two. The Courts can refuse to grant an unconstitutional law the status of legality. A Congressman can—and should—refuse to vote for an unconstitutional law, or to fund an unconstitutional war. And the Executive can refuse to execute and enforce unconstitutional laws; as President Andrew Jackson said when he ignored a Supreme Court ruling that Georgia had stolen certain Cherokee lands in the early 1830s, "They have made their decision, now let them enforce it." This is just the Jeffersonian idea of concurrent review.
But why does concurrent review work only horizontally? Vertically, the feds can already "veto" "bad" State laws—as libertarian centralists (2) and proponents of the Fourteenth Amendment and federal judicial review of state laws are too eager to remind us. Why should this be one-way? Horizontally, there are checks and balances: each branch can basically veto the other two branches actions. Why should the federal government—an agency of limited powers created by the state for limited purposes—be able to veto laws of the States, and the States not be able to veto laws of their own creation, this pipsqueak little limited-powers agency that has metastasized and gotten too big for its britches? Imagine if NAFTA started vetoing state or federal laws and arrogated to itself the right to be the final interpreter of its own charter of limited powers.
Just as the three branches of the federal government have an obligation to abide by the Constitution, the States have a similar obligation—and they are not beholden to the federal government's or the Supreme Court's interpretation of what is or is not constitutional, since judicial (or even federal!) supremacy is not specified in the Constitution. By the way, in Telluride recently I saw some interesting artwork on buildings saying things like "Dissent is the highest form of patriotism," "We get our brains washed daily with CNN and Fox News," and, best of all, "Your Civil Liberties are Safe in Telluride," above a copy of Telluride Resolution No. 9, enacted in 2003 in the wake of the abominable Patriot Act, stating, for example, "when the Town of Telluride engages in public safety intelligence gathering as a part of law enforcement and of national security, the Town of Telluride intends that such intelligence gathering comply with the following policy: No information about political, religious or social views, associations, or activities may be collected." This is quasi-nullification, I believe—and good for them!
Update: On Huebert's blog, a commenter asked me about my comment that "states ... are not beholden to the federal government's, or the Supreme Court's, interpretation, since judicial (or even federal!) supremacy is not specified in the Constitution." An edited version of my reply:
The Supremacy Clause says only that the Constitution is the supreme law of the land--not that the federal government, or its court system, is the final interpreter of it. Nor that the States may not secede from the Union, or nullify unconstitutional laws. In particular, what I said was: "judicial (or even federal!) supremacy is not specified in the Constitution." And I stand by this. Judicial supremacy is the idea that the federal Supreme Court's interpretation is final. Nonsense. Initially even the idea of judicial review itself was controversial; but in the end, I do believe judicial review is implied by the judiciary's independent status and independent obligation to abide by the Constitution. But it is only as an aspect of the Jeffersonian idea of concurrent review, that judicial review makes sense: each of the three federal branches has the right and obligation to refuse to enforce an unconstitutional law.
So: the federal judiciary, Congress, and executive, each have an independent obligation to abide by the Constitution. But: so do the States. The federal government is not supreme over the states. In fact, in my view, the best interpretation is that the federal government is not even party to the compact; only the 50 States are. It is like a treaty between 50 international persons that creates a limited-purpose agency, similar to NATO or ANZUS (or even the UN), or in other ways to the Coast Guard or the Post Office or the Department of Commerce.
The problem here is the assumption that nullificaiton is only "legitimate" if the Supreme Court would agree. But this is question-begging since the idea of nullification is that it comes into play precisely when the entire federal government, including its court, is wrong. Constitutional law experts like the idea of a nice written framework to refer to, a neat potential solution to disputes. This is the legalistic and positivistic way of looking at it. It is the lawyers' way. It is the way the central state likes to frame it. They want to say, oh, you have the right to protest--just file the an appeal. Let the system work! Meanwhile the implicit presumption is their dominance and supremacy. (Just like the marriage penalty they've been promising to eliminate for over ten years; yet I'm still paying it. It's just a carrot to distract the serfs.)
But the idea that the federal government is supreme over the states is pure nonsense. The States should assert nullification as their right, regardless of Supreme Court approval. They should defy the feds. They should state clearly their right of sovereignty over their soil and their reserved, plenary power to protect their citizens from the actions of a rogue, pissant, limited-powers agency gone wild. If thirteen States formed a united dog-catcher's agency, or piracy-stopping agency, they have the right to cut the legs out from under this upstart agency if it starts to go beyond its authorized powers (that is, if it acts ultra vires). It is the same with the pisher federal government. It has arrogated to itself supreme, overlord status over the States that created it by compact, even though unlike every other normal sovereign state in the world it does not even have the power to outlaw murder, rape, trespass, or robbery. It is not a state, really--it is just an emaciated shell of a state; a partial state that rests on the power granted to it by the 50 sovereign States. It is just a limited-powers, special-purpose agency formed by compact of 13 (now 50) sovereign States. It should be roped in as it has acted ultra vires.