One of the most well known American legal traditions is state's rights. State's rights is essentially the idea that each individual state should retain its sovereignty or independance from the federal government. The idea is that each state may have its own varying laws and precedents that the federal government may not supercede. It's as if each state is thought of as being its own nation in and of itself, and before the formation of the federal government this quite literally was the case. Afterall, each American state is roughly the size of an entire European nation, sometimes or even often larger. The idea of state's rights would not have been formed if it weren't for the establishment of a larger apparatus, a federal government that each state is supposed to be a part of.
The idea of state's rights can be used in two basic ways: to stop the federal government from forcing a law on a state, or to stop the federal government from removing or defying a state's law. In other words, state's rights can be used to oppose federal laws and to support state laws. The former function of state's rights can be used to delegitimize and defy the federal government. But the latter function of state's rights presents a problem if one is trying to abide by an objective standard of justice, for theoretically state's rights can be used to uphold and preserve a state's unjust law. To be clear, this does not mean that the federal government is any more justified, but it does show that state's rights is an inconsistant standard for justice since it can be used to legitimize state governments.
From a libertarian anarchist perspective, none of the governmental entities in question are legitimate. The federal government doesn't have "rights" and neither do the states. Only people have rights. The doctrine of state's rights is problematic in that it may leave free reign for state governments to do just about anything. It may function to limit the powers of the federal government, but it does nothing to limit the powers of the state governments. In other words, it sets up a double standard of justice between the levels of government, and for this reason it may lead to some ugly results. It seems inconsistant for one to proclaim that the federal government may not do X but the state of Ohio may. Either X is right or wrong, hence the precise entity or people engaging in X is entirely irrelevant. It matters not if it is 100000 people, one person, France, America, Ohio or Kentucky that is enforcing X.
For example, it seems absurd for one to proclaim that "it is illegitimate for the federal government to impose drug prohibition laws, but the states may impose drug prohibition laws". This would shift debate on the issue from a matter of the justice of drug prohibition itself to a matter of which entity or level of government may prohibit drugs. But for the libertarian anarchist and the proponent of ethical consistancy, that is entirely irrelevant. Drug prohibition is illegitimate altogether as a matter of principle, and therefore it would be no more legitimate for the state of Ohio to enact and enforce such laws then it would be for the federal government to do so. State's rights is problematic to the extent that it is used as a mechanism to legitimize the laws and policies of state governments in defiance of rational principles of justice. It could theoretically be used to legitimize anything a state does that is not explicitly prohibited by the constitution, and the question of what the constitution prohibits the states from doing is rather open ended to begin with.
The issue of integration and segregation is often debated about in the context of state's rights. The fact of the matter is that while the federal government most certainly engaged in an injustice by establishing forced intregration, state's rights was used to legitimize and sustain forced segregation. It's a lose-lose situation no matter which perspective one approaches it from. If the federal government is allowed to impose a ban on discrimination that encompassed all of the states, then property rights are violated. On the other hand, if the states are allowed to make discrimination legally binding or obligatory within their territories, then property rights are violated. Both forced segregation and forced integration are illegitimate, and both the federal and state governments are illegitimate. To the extent that state's rights was used to preserve the power of the states to have a policy of forced segregation, it was an incredible injustice.
State's rights is only useful to the extent that it may stop the federal government from enforcing an unjust law on all of the states, so that there is at least some possibility that certain states will not have that law. This helps avoid a "one-size-fits-all" approach being shoved down the throats of the entire country. It certainly is potentially more beneficial to have more variance between the states so that there is at least some possibility for one to persue alternatives. However, internal to each state, the exact same problem presents itself. An individual state may still enact and enforce an unjust law. And with respect to smaller entities within the state, it is likewise a "one-size-fits-all" approach. The counties and cities have no choice but to be herded into a uniform model by the state. So why not continue the principle and have "county's rights" and "city's rights"? If it is followed through consistantly, one eventually stops at individual rights, the only real kind.
The advantage of state's rights that is commonly pointed out is that one has the ability to "vote with your feet" between each state in order to persue alternatives. This makes a certain level of sense. However, is this not merely the exact same thing as the "love it or leave it" sentiment that is usually applied to entire nations? When people object to their own nation's way of doing things, sometimes they are told that they can just move. But this retort avoids addressing the problem and only begs the question. In short, it assumes the legitimacy of the nation-state to begin with. But from the viewpoint of the libertarian anarchist who rejects the legitimacy of states, the burden of proof is on the state or those defending it to justify it. If the individual is truly sovereign and legitimately owns their property, then they should not have to move. Rather, the state should stop coercing them and trying to claim partial control over their property. This is true of smaller state entities as much as it is of large nation-states. If states do not legitimately control their territories, then state's rights is a very inconsistant creed.
None of this is meant to imply that the federal government should be given more powers. On the contrary, it is meant to imply that the powers of all levels of government are illegitimate as a matter of principle and that libertarians should be more skeptical towards the creed of state's rights than many of them tend to be. State's rights is a very inconsistant and moderate form of decentralization, a vain attempt to simulate free association and competition through large and arbitrary political units or territories. In comparison to the level of decentralization that anarchism entails, a regime of state's rights is still fairly authoritarian and centralized. Perhaps the traditional model for America is not nearly as decentralized as some libertarians would like to think.