preemption

Northwest, Inc. v. Ginsberg

Issues: 

Does the Airline Deregulation Act preempt a state claim for breach of an implied covenant of good faith and fair dealing concerning a frequent flyer program?

S. Binyomin Ginsberg sued Northwest Airlines, now Delta Airlines, after Northwest terminated his “WorldPerks” frequent flyer membership. Ginsberg asserted four state contract causes of action. Northwest argues that Ginsberg’s claims are preempted under the Airline Deregulation Act (“ADA”) of 1978, which preempts states from enacting or enforcing laws related to the price, route, or service of airline transportation. The District Court for the Southern District of California granted Northwest’s motion to dismiss the complaint. The Court of Appeals for the Ninth Circuit reversed, holding—in conflict with other circuit courts—that Ginsberg’s claim for breach of an implied covenant of good faith and fair dealing was not preempted. The Ninth Circuit reasoned that nothing in the ADA suggested that Congress intended to displace state common law contract claims that were only peripherally related to deregulation. The Supreme Court granted certiorari to resolve the circuit split over whether state contract claims are preempted by the Airline Deregulation Act. The Court will also determine whether the Act preempts claims arising out of frequent flyer programs. The Court’s decision will impact the balance of state and federal regulatory interests under the ADA, and the scope of other federal preemption regimes.

Questions as Framed for the Court by the Parties: 

Did the court of appeals err by holding, in conflict with the decisions of other Circuits, that respondent’s implied covenant of good faith and fair dealing claim was not preempted under the ADA because such claims are categorically unrelated to a price, route, or service, notwithstanding that respondent’s claim arises out of a frequent flyer program (the precise context of Wolens) and manifestly enlarged the terms of the parties’ voluntary undertakings, which allowed termination in Northwest’s sole discretion. 

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American Trucking Ass

Starting in 2008, one of the busiest ports in the United States, the Port of Los Angeles (POLA), entered into “concession agreements” with motor carriers doing business at the port. POLA enforced the agreements through a system of tariffs levied against noncompliant carriers and remedial provisions that empowered it to revoke noncompliant carriers’ access to the port. The American Trucking Association (ATA) sued POLA, arguing that the agreements were barred under the Federal Aviation Administration Authorization Act of 1994 (FAAAA) and the Supreme Court’s decision in Castle v. Hayes Freight Lines, Inc. The Central District of California and Ninth Circuit found that multiple provisions of the concession agreements were exempted from the FAAAA’s preemption clause under the market-participant doctrine and held that Castle did not bar suspension of carriers’ port access because of the FAAAA’s express safety exemption. In resolving the questions presented, the Supreme Court will determine the scope of the market-participant exemption to FAAAA preemption and whether Castle bars POLA from enforcing its concession agreements through revocation or suspension of port access. The case directly affects local and state governments’ power to regulate and contract under the FAAAA and similar Congressional legislation and has broad regulatory implications for motor carriers and other regulated actors in interstate commerce.

Questions as Framed for the Court by the Parties: 

Title 49 U.S.C. § 14501(c)(1), originally enacted as a provision of the Federal Aviation Administration Authorization Act of 1994, provides that “a State [or] political subdivision . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... with respect to the transportation of property.” It contains an exception providing that the express preemption clause “shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” Id. § 14501(c)(2)(A). The questions presented are:

  1. Whether an unexpressed “market participant” exception exists in Section 14501(c)(1) and permits a municipal governmental entity to take action that conflicts with the express preemption clause, occurs in a market in which the municipal entity does not participate, and is unconnected with any interest in the efficient procurement of services.
  2. Whether permitting a municipal governmental entity to bar federally licensed motor carriers from access to a port operates as a partial suspension of the motor carriers’ federal registration, in violation of Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954).

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Issue

Does federal law prevent enforcement of certain aspects of motor carrier-related contracts used by the Port of Los Angeles?

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Dan

Robert Pelkey's car was towed from his apartment complex for failure to move it during a snowstorm. At the time, Mr. Pelkey was quite ill and eventually was sent to the hospital to have his left foot amputated. When he returned home and was made aware that his car was towed, he had his attorney track down the car at Dan’s City towing and ask for it back. When they disposed of the car, Mr. Pelkey sued for violations of New Hampshire’s consumer protection laws and common law negligence. Dan’s City claimed that the Federal Aviation Administration Authorization Act ("FAAAA") controlled motor carriers and preempted any state law claims. The New Hampshire Supreme Court reversed the lower court and agreed with Mr. Pelkey that his state law remedies were not preempted because they dealt with the disposal of property and debt collection on a lien, rather than the "services" of the towing company. Dan's City contends these actions are incidental to their towing and storage of the vehicle and therefore are properly construed as services of their company. The Supreme Court granted certiorari to resolve a circuit split on the scope of preemption under the FAAAA. How the Court rules in this case will have great significance for both vehicle owners and the towing industry.

Questions as Framed for the Court by the Parties: 

Whether state statutory, common law negligence, and consumer protection act enforcement actions against a tow-motor carrier based on state law regulating the sale and disposal of a towed vehicle are related to a transportation service provided by the carrier and are thus preempted by 49 U.S.C. § 14501(c)(1).

Issue(s)

Are state law claims of negligence and consumer fraud against a towing company for having a car towed and eventually disposed of to pay towing and storage fees preempted by the Federal Aviation Administration Authorization Act (“FAAAA”)?

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Mutual Pharmaceutical Co. v. Bartlett

After receiving a prescription for sulindac, the generic version of Clinoril, Karen Bartlett developed Stevens-Johnson Syndrome and toxic epidermal necrolysis, rare skin disorders that causes the sufferer’s skin to deteriorate by either being burned off or by turning into an open wound. Bartlett subsequently suffered painful, permanent injuries, including near-blindness, esophageal burns, and lung damage. A New Hampshire federal jury awarded Bartlett $21.06 million for her injuries based on a New Hampshire products liability claim for defective design. Mutual Pharmaceutical Company, a sulindac manufacturer, now challenges that decision by arguing that federal law regulating generic drugs preempts New Hampshire's design-defect law. The United States Court of Appeals for the First Circuit upheld the lower court design, finding no preemption, despite Supreme Court precedent finding preemption in similar contexts. Mutual Pharmaceutical argues that the Food, Drug, and Cosmetic Act preempts the state design-defect law because the Act requires generic drug manufacturers to produce generic medications that are bioequivalent to the corresponding name brand version of the drug. Bartlett responds that the state law does not conflict with federal law because the state law imposes no duty for sellers to change their product from the name brand version. 

Questions as Framed for the Court by the Parties: 

Whether the First Circuit erred when it created a circuit split and held-in clear conflict with this Court's decisions in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011); Riegel v. Medtronic, Inc., 552 U.S. 312 (2008); and Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)-that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products. 

Issue

Does federal law governing claims against generic pharmaceutical products preempt state law design-defect claims against the makers of those products?

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Douglas v. Independent Living Center of Southern California (09-958); Douglas v. California Pharmacist Association (09-1158); Douglas v. Santa Rosa Memorial Hospital (10-283)

Oral argument: October 3, 2011

Appealed from: United States Court of Appeals for the Ninth Circuit (July 9, 2009)

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