The federal government may require the States to comply with federal law, but it cannot commandeer the state governments into implementing legislation pursuant to a federal objective.
The federal government may not regulate states in their sovereign capacity
It can regulate a state in a private capacity (the conduct could be done by a state or an individual)
E.g., the federal law in question prohibited the state from selling drivers license holders' personal information; this regulated the state as a database owner (actor in the market), not as a sovereign government.
No requirement for a state to enact a law or have state executive enforce a federal law
Also, private information was a instrumentality of ISC; thus, valid to regulate under the CC.