CRS Annotated Constitution
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The Standards Applied.— As might be expected from the caveat just quoted, any overview of the Court’s preemption decisions[p.247]can only make the field seem muddled and to some extent it is. But some guidelines may be extracted.
Express Preemption. Of course, it is possible for Congress to write preemptive language that clearly and cleanly prescribes or does not prescribe displacement of state laws in an area.1026 Provisions governing preemption can be relatively interpretation free.1027 For example, a prohibition of state taxes on carriage of air passengers “or on the gross receipts derived therefrom” was held to preempt a state tax on airlines, described by the State as a personal property tax, but based on a percentage of the airline’s gross income; “the manner in which the state legislature has described and categorized [the tax] cannot mask the fact that the purpose and effect of the provision are to impose a levy upon the gross receipts of airlines.”1028 But, more often than not, express preemptive language may be ambiguous or at least not free from conflicting interpretation. Thus, the Court was divided with respect to whether a provision of the Airline Deregulation Act proscribing the States from having and enforcing laws “relating to rates, routes, or services of any air carrier” applied to displace state consumer–protection laws regulating airline fare advertising.1029[p.248]
Perhaps the broadest preemption section ever enacted, Sec. 514 of the Employment Retirement Income Security Act of 1974 (ERISA), is so constructed that the Court has been moved to comment that the provisions “are not a model of legislative drafting.”1030 The section declares that the statute shall “supersede any and all State laws insofar as they now or hereafter relate to any employee benefit plan,” but saves to the States the power to enforce “law[s] . . . which regulates insurance, banking, or securities,” except that an employee benefit plan governed by ERISA shall not be “deemed” an insurance company, an insurer, or engaged in the business of insurance for purposes of state laws “purporting to regulate” insurance companies or insurance contracts.1031 Interpretation of the provisions has resulted in contentious and divided Court opinions.1032
Illustrative of the judicial difficulty with ambiguous preemption language is the fractured opinions in the Cipollone case, in which the Court had to decide whether sections of the Federal Cigarette Labeling and Advertising Act, enacted in 1965 and 1969, preempted state common–law actions against a cigarette company for the alleged harm visited on a smoker.1033 The 1965 provision[p.249]barred the requirement of any “statement” relating to smoking health, other than what the federal law imposed, and the 1969 provision barred the imposition of any “requirement or prohibition based on smoking and health” by any “State law.” It was, thus, a fair question whether common–law claims, based on design defect, failure to warn, breach of express warranty, fraudulent misrepresentation, and conspiracy to defraud, were preempted or whether only positive state enactments came within the scope of the clauses. Two groups of Justices concluded that the 1965 section reached only positive state law and did not preempt common–law actions;1034 different alignments of Justices concluded that the 1969 provisions did reach common–law claims, as well as positive enactments, and did preempt some of the claims insofar as they in fact constituted a requirement or prohibition based on smoking health.1035
Supplement: [P. 249, add to text following n.1035:]
Little clarification of the confusing Cipollone decision and opinions resulted in the cases following, although it does seem evident that the attempted distinction limiting courts to the particular language of preemption when Congress has spoken has not prevailed. At issue in Medtronic, Inc. v. Lohr,50 was the Medical Device Amendments (MDA) of 1976, which prohibited States from adopting or continuing in effect “with respect to a [medical] device” any “requirement” that is “different from, or in addition to” the applicable federal requirement and that relates to the safety or effectiveness of the device.51 The issue, then, was whether a common–law tort obligation imposed a “requirement” that was different from or in addition to any federal requirement. The device, a pacemaker lead, had come on the market not pursuant to the rigorous FDA test but rather as determined by the FDA to be “substantially equivalent” to a device previously on the market, a situation of some import to at least some of the Justices.
Unanimously, the Court determined that a defective design claim was not preempted and that the MDA did not prevent States from providing a damages remedy for violation of common–law duties that paralleled federal requirements. But the Justices split 4–1-4 with respect to preemption of various claims relating to manufacturing and labeling. FDA regulations, which a majority deferred to, limited preemption to situations in which a particular state requirement threatens to interfere with a specific federal interest. Moreover, the common–law standards were not specifically developed to govern medical devices and their generality removed them from the category of requirements “with respect to” specific devices. However, five Justices did agree that common–law requirements could be, just as statutory provisions, “requirements” that were preempted, though they did not agree on the application of that view.52
Following Cipollone, the Court observed that while it “need not go beyond” the statutory preemption language, it did need to “identify the domain expressly pre–empted” by the language, so that “our interpretation of that language does not occur in a contextual vacuum.” That is, it must be informed by two presumptions about the nature of preemption: the presumption that Congress does not cavalierly preempt common–law causes of action and the principle that it is Congress’ purpose that is the ultimate touchstone.53
The Court continued to struggle with application of express preemption language to state common–law tort actions in Geier v. American Honda Motor Co.54 The National Traffic and Motor Vehicle Safety Act contained both a preemption clause, prohibiting states from applying “any safety standard” different from an applicable federal standard, and a “saving clause,” providing that “compliance with” a federal safety standard “does not exempt any person from any liability under common law.” The Court determined that the express preemption clause was inapplicable. However, despite the saving clause, the Court ruled that a common law tort action seeking damages for failure to equip a car with an airbag was preempted because its application would frustrate the purpose of a Federal Motor Vehicle Safety Standard that had allowed manufacturers to choose from among a variety of “passive restraint” systems for the applicable model year.55 The Court’s holding makes clear, contrary to the suggestion in Cipollone, that existence of express preemption language does not foreclose operation of conflict (in this case “frustration of purpose”) preemption.
Field Preemption. Where the scheme of federal regulation is “so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,”1036 States are ousted from the field. Still a paradigmatic example of field preemption is Hines v. Davidowitz,1037 in which the Court held that a new federal law requiring the registration of all aliens in the country precluded enforcement of a pre–existing state law mandating registration of aliens within the State. Adverting to the supremacy of national power in foreign relations and the sensitivity of the relationship between the regulation of aliens and the conduct of foreign affairs, the Court had little difficulty declaring the entire field to have been occupied by federal law.1038 Similarly, in Pennsylvania[p.250]v. Nelson,1039 the Court invalidated as preempted a state law punishing sedition against the National Government. The Court enunciated a three–part test: 1) the pervasiveness of federal regulation; 2) federal occupation of the field as necessitated by the need for national uniformity; and 3) the danger of conflict between state and federal administration.1040
The Rice case itself held that a federal system of regulating the operations of warehouses and the rates they charged completely occupied the field and ousted state regulation.1041 However, it is often a close decision whether a federal law has regulated part of a field, however defined, or the whole area, so that state law cannot even supplement the federal.1042 Illustrative of this point is the Court’s holding that the Atomic Energy Act’s preemption of the safety aspects of nuclear power did not invalidate a state law conditioning construction of nuclear power plants on a finding by a state agency that adequate storage and disposal facilities were available to treat nuclear wastes, since “economic” regulation of power generation has traditionally been left to the States – an arrangement maintained by the Act – and since the state law could be justified as an economic rather than a safety regulation.1043
A city’s effort to enforce stiff penalties for ship pollution that resulted from boilers approved by the Federal Government was[p.251]held not preempted, the field of boiler safety, but not boiler pollution, having been occupied by federal regulation.1044 A state liability scheme imposing cleanup costs and strict, no–fault liability on shore facilities and ships for any oil–spill damage was held to complement a federal law concerned solely with recovery of actual cleanup costs incurred by the Federal Government and which textually presupposed federal–state cooperation.1045 On the other hand, a comprehensive regulation of the design, size, and movement of oil tankers in Puget Sound was found, save in one respect, to be either expressly or implicitly preempted by federal law and regulations. Critical to the determination was the Court’s conclusion that Congress, without actually saying so, had intended to mandate exclusive standards and a single federal decisionmaker for safety purposes in vessel regulation.1046 Also, a closely divided Court voided a city ordinance placing an 11 p.m. to 7 a.m. curfew on jet flights from the city airport where, despite the absence of preemptive language in federal law, federal regulation of aircraft noise was of such a pervasive nature as to leave no room for state or local regulation.1047
Congress may preempt state regulation without itself prescribing a federal standard; it may deregulate a field and thus occupy it by opting for market regulation and precluding state or local regulation.1048
Conflict Preemption. Several possible situations will lead to a holding that a state law is preempted as in conflict with federal law. First, it may be that the two laws, federal and state, will actually conflict. Thus, in Rose v. Arkansas State Police,1049 federal law provided for death benefits for state law enforcement officers “in addition to” any other compensation, while the state law required a reduction in state benefits by the amount received from other[p.252]sources. The Court, in a brief, per curiam opinion, had no difficulty finding the state provision preempted.1050
Second, conflict preemption may occur when it is practically impossible to comply with the terms of both laws. Thus, where a federal agency had authorized federal savings and loan associations to include “due–on–sale” clauses in their loan instruments and where the State had largely prevented inclusion of such clauses, while it was literally possible for lenders to comply with both rules, the federal rule being permissive, the state regulation prevented the exercise of the flexibility the federal agency had conferred and was preempted.1051 On the other hand, it was possible for an employer to comply both with a state law mandating leave and reinstatement to pregnant employees and with a federal law prohibiting employment discrimination on the basis of pregnancy.1052 Similarly, when faced with both federal and state standards on the ripeness of avocados, the Court discerned that the federal standard was a “minimum” one rather than a “uniform” one and decided that growers could comply with both.1053
Third, a fruitful source of preemption is found when it is determined that the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.1054 Thus, the Court voided a state requirement that the average net weight of a package of flour in a lot could not be less than the net weight stated on the package. While applicable federal law permitted variations from stated weight caused by distribution losses, such as through partial dehydration, the State allowed no such deviation. Although it was possible for a producer to satisfy the federal standard while satisfying the tougher state standard, the Court discerned that to do so defeated one purpose of the federal requirement—the facilitating of value comparisons by shoppers. Because[p.253]different producers in different situations in order to comply with the state standard may have to overpack flour to make up for dehydration loss, consumers would not be comparing packages containing identical amounts of flour solids.1055 In Felder v. Casey,1056 a state notice– of–claim statute was found to frustrate the remedial objectives of civil rights laws as applied to actions brought in state court under 42 U. S. C. Sec. 1983 . A state law recognizing the validity of an unrecorded oral sale of an aircraft was held preempted by the Federal Aviation Act’s provision that unrecorded “instruments” of transfer are invalid, since the congressional purpose evidenced in the legislative history was to make information about an aircraft’s title readily available by requiring that all transfers be documented and recorded.1057
Supplement: [P. 253, add to text following n.1057:]
In Boggs v. Boggs,56 the Court, 5 to 4, applied the “stands as an obstacle” test for conflict even though the statute (ERISA) contains an express preemption section. The dispute arose in a community–property State, in which heirs of a deceased wife claimed property that involved pension–benefit assets that was left to them by testamentary disposition, as against a surviving second wife. Two ERISA provisions operated to prevent the descent of the property to the heirs, but under community–property rules the property could have been left to the heirs by their deceased mother. The Court did not pause to analyze whether the ERISA preemption provision operated to preclude the descent of the property, either because state law “relate[d] to” a covered pension plan or because state law had an impermissible “connection with” a plan, but it instead decided that the operation of the state law insofar as it conflicted with the purposes Congress had intended to achieve by ERISA and insofar as it ran into the two noted provisions of ERISA stood as an obstacle to the effectuation of the ERISA law. “We can begin, and in this case end, the analysis by simply asking if state law conflicts with the provisions of ERISA or operates to frustrate its objects. We hold that there is a conflict, which suffices to resolve the case. We need not inquire whether the statutory phrase ‘relate to’ provides further and additional support for the pre–emption claim. Nor need we consider the applicability of field pre–emption.” 57
Similarly, the Court found it unnecessary to consider field preemption due to its holding that a Massachusetts law barring state agencies from purchasing goods or services from companies doing business with Burma imposed obstacles to the accomplishment of Congress’ full objectives under the federal Burma sanctions law.58 The state law was said to undermine the federal law in several respects that could have implicated field preemption—by limiting the President’s effective discretion to control sanctions, and by frustrating the President’s ability to engage in effective diplomacy in developing a comprehensive multilateral strategy—but the Court “decline[d] to speak to field preemption as a separate issue.” 59
Also, a state law making agricultural producers’ associations the exclusive bargaining agents and requiring payment of service fees by nonmember producers was held to counter a strong federal policy protecting the right of farmers to join or not join such associations.1058 And a state assertion of the right to set minimum stream–flow requirements different from those established by FERC in its licensing capacity was denied as being preempted under the Federal Power Act, despite language requiring deference to state laws “relating to the control, appropriation, use, or distribution of water.”1059
Contrarily, a comprehensive federal regulation of insecticides and other such chemicals was held not to preempt a town ordinance that required a permit for the spraying of pesticides, there being no conflict between requirements.1060 The application of state antitrust laws to authorize indirect purchasers to recover for all overcharges passed on to them by direct purchasers was held[p.254]to implicate no preemption concerns, inasmuch as the federal antitrust laws had been interpreted as not permitting indirect purchasers to recover under federal law; state law may be inconsistent with federal law but in no way did it frustrate federal objectives and policies.1061 The effect of federal policy was not strong enough to warrant a holding of preemption when a State authorized condemnation of abandoned railroad property after conclusion of an ICC proceeding permitting abandonment, although the railroad’s opportunity costs in the property had been considered in the decision on abandonment.1062
Supplement: [P. 247, add to n.1026, immediately preceding City of New York v. FCC:]
Smiley v. Citibank, 517 U.S. 735 (1996) .
Supplement: [P. 247, add to n.1027:]
And see Department of Treasury v. Fabe, 508 U.S. 491 (1993) .
Supplement: [P. 247, add to n.1029:]
See also American Airlines v. Wolens, 513 U.S. 219 (1995) .
Supplement: [P. 248, add to n.1032:]
District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125 (1992) (law requiring employers to provide health insurance coverage, equivalent to existing coverage, for workers receiving workers’ compensation benefits); John Hancock Mutual Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993) (ERISA’s fiduciary standards, not conflicting state insurance laws, apply to insurance company’s handling of general account assets derived from participating group annuity contract); New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) (no preemption of statute that required hospitals to collect surcharges from patients covered by a commercial insurer but not from patients covered by Blue Cross/Blue Shield plan); De Buono v. NYSA–ILA Med. and Clinical Servs. Fund, 520 U.S. 806 (1997) ; California Div. of Labor Stds. Enforcement v. Dillingham Constr., Inc., 519 U.S. 316 (1997) ; Boggs v. Boggs, 520 U.S. 833 (1997) (decided not on the basis of the express preemption language but instead by implied preemption analysis).
Supplement: [P. 251, add to n.1046 after Ray v. Atlantic Richfield citation:]
United States v. Locke, 120 S. Ct. 1135 (2000) (applying Ray).
Supplement: [P. 252, add to n.1050 before Free v. Brand:]
Allied–Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) (federal arbitration law preempts state law invalidating pre–dispute arbitration agreements that were not entered into in contemplation of substantial interstate activity); Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681 (1996) (federal arbitration law preempts state statute that conditioned enforceability of arbitration clause on compliance with special notice requirement).
Supplement: [P. 252, add to n.1054:]
See also Barnett Bank v. Nelson, 517 U.S. 25 (1996) (federal law empowering national banks in small towns to sell insurance preempts state law prohibiting banks from dealing in insurance; despite explicit preemption provision, state law stands as an obstacle to accomplishment of federal purpose).
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