Federal Preemption

by Brian Todd Hoyle and Mark Bennett

I.            Introduction

Recent cases and developments in the law have increased significantly the importance of the concept of federal preemption. Under today’s legal landscape, every product liability case should be examined, by both plaintiff’s counsel and defense counsel, for the applicability of federal preemption. In many cases, federal preemption is not raised as a defense when it would serve as an absolute bar to plaintiff’s recovery from a defendant. Similarly, too often, plaintiff’s counsel is surprised by defendant’s motion for summary judgment, and has not established a factual record necessary to defeat such a motion. This paper identifies the legal issues raised by federal preemption in an attempt to provide greater awareness of this concept for future representations.

 II.        Types of Federal Preemption

 A.            Background of Preemption Principles

The American civil justice system is built upon the twin pillars of state and federal law. When the two come into conflict, federal law is supreme. To insure this most basic of principles, the Framers drafted the Supremacy Clause into the United States Constitution. The Supremacy Clause establishes the preemption of state law that conflicts with federal law:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any thing in the constitution or Laws of any State to the Contrary notwithstanding.

U.S. Const. art. VI, cl. 2.

The Supremacy Clause of the Federal Constitution gives Congress authority to preempt any state law that conflicts with the exercise of federal power. See id.; see also Fidelity Fed. Sav. & Loan Ass’n v. De La Cuesta, 458 U.S. 141, 152-153 (1982). Federal law may preempt state law in one of three different ways: 1) express preemption, 2) field preemption, or 3) conflict or implied preemption. First, Congress may expressly preempt state law by using language to that effect in a statute. See Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 701, 713 (1985). Second, the text of a statute or its legislative history may evidence a Congressional intent to occupy a regulatory field to the exclusion of state law. See International Paper Co. v. Ouellette, 479 U.S. 481, 492 (1987). Third, even if Congress has not occupied a given regulatory field completely, state law is preempted to the extent that it conflicts with federal law. See Geier v. American Honda Co., Inc., 120 S.Ct. 1913, 1919 (2000).

Thus, under conflict or implied preemption principles, a state law is preempted if the regulated party cannot comply with both the sate and federal regulation. See Hillsborough County, 471 U.S. at 713. Additionally, if a state law is an obstacle to the accomplishment and execution of the full purpose and objective of Congress by interfering with the methods employed in the federal scheme, the state law is likewise preempted. See Geier, 120 S.Ct. at 1921; see also Michigan Canners & Freezers Assoc., Inc. v. Agricultural Mktg. & Bargaining Bd., 467 U.S. 461 (1984).

A mere decision by a federal agency not to regulate is not automatically enough to preempt state law; however, where an agency actively investigates and has analyzed a “proposed area of regulation and has deliberately concluded that regulation is not appropriate in a given area, federal inaction will preempt state law not identical to it.” 63B Am. Jur. 2d Products Liability § 2023 (1997); see also Arkansas Elec. Co-op. Corp. v. Arkansas Pub. Serv. Comm’n, 461 U.S. 375, 384 (1983) (“A federal decision to forego regulation in a given area may imply an authoritative federal determination that the area is best left unregulated, and in that event would have as much preemptive force as a decision to regulate.”). Furthermore, implied preemption analysis is not foreclosed by an inference against preemption based on statutory language indicating a limited scope for preemption. See Freightliner Corp. v. Myrick, 514 U.S. 280, 288 (1995).

Regulations promulgated by federal agencies under a statutory authorization have the force of federal law and preempt conflicting state law. See De La Cuesta, 450 U.S. at 153-54; Hillsborough County, 471 U.S. at 713. The imposition of damages under a state tort law claim is a form of state regulation subject to the Supremacy Clause. See Geier, 120 S.Ct. at 1928; see also San Diego Bldg. Trades Counsel v. Garmon, 359 U.S. 236, 247 (1959). It makes no difference whether the state law in question is a statute, ordinance, common law, or an award of state law tort damages if the imposition of the state standard would frustrate the objectives of the federal law. See id.; see also Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 256 (1984). 

B.        The Geier Decision: Preemption Principles in Product Liability Context

In Geier, the court addressed three issues: (1) whether or not the National Traffic and Motor Safety Act of 1966 (“The Safety Act”) express preemption provision preempted the underlying lawsuit; (2) whether conflict preemption principles nonetheless applied; and (3) whether the underlying lawsuit conflicted with Federal Motor Vehicle Safety Standard 208 (“FMVSS 208”). See Geier, 120 S. Ct. 1913, 1917-18 (2000). While the court did not find express preemption applicable under The Safety Act, the court did find that conflict preemption principles were still applicable, and that the underlying lawsuit was preempted because it was in conflict with FMVSS 208. See id.

The preemption provision of The Safety Act allows for the exclusion of common law actions under a narrow reading. See Geier, 120 S. Ct. at 1919 (“The language of the preemption provision permits a narrow reading that excludes common law actions. Given the presence of the saving clause, we conclude that the preemption clause must be so read.”). Even though the preemption clause of The Safety Act does not override the savings provision to create expressed preemption of all state law claims, this does not foreclose implied preemption analysis as a means of the federal government achieving The Safety Act’s objectives. See Myrick, 514 U.S. at 287 (stating that while some courts have read Cipollone to mean that “implied preemption cannot exist when Congress has chosen to include an express preemption clause in a statute... this interpretation is without merit.”).

In fact, the petitioners in Geier conceded that implied or conflict preemption is not foreclosed by the express preemption provision in light of Freightliner Corp. v. Myrick, 514 U.S. 280 (1995); however, the petitioners argued that the savings clause should eliminate implied preemption. See Geier, 120 S. Ct. at 1919. The court addressed this point and stated “[w]e now conclude that the savings clause (like the express preemption provision) does not bar the ordinary working of conflict preemption principles.” Id. The court further stated that it has “repeatedly ‘decline[d] to give broad effect to saving clauses where doing so would upset the careful regulatory scheme established by federal law.’” Id. (citing United States v. Locke, 120 S. Ct. 1135, 1146-47 (2000)).

Geier specifically addressed whether or not a common law tort claim, such as the underlying case in Geier based on a lack of an airbag, would conflict with federal regulations such as FMVSS 208. The court held that the common law claim conflicted with the federal rule. See id. at 1922. The court further explained:

In petitioners’ and the dissent’s view, FMVSS 208 sets a minimum airbag standard. As far as FMVSS 208 is concerned, the more airbags, and the sooner, the better. But that was not the Secretary’s view. DOT’s comments, which accompanied the promulgation of FMVSS 208, make clear that the standard deliberately provided the manufacturer with a range of choices among different passive restraint devices. Those choices would bring about a mix of different devices introduced gradually over time; and FMVSS 208 would thereby lower costs, overcome technical safety problems, encourage technological development, and win widespread consumer acceptance—all of which would promote FMVSS 208’s safety objectives. 

Id. (citations omitted). Thus, the court in Geier, characterized Petitioner’s state tort law claim as an attempt to place a duty on manufacturers to install airbags on all cars that were in production in 1987. See id.

Such a state law—i.e., a rule of state tort law imposing such a duty—by its terms would have required manufacturers of all similar cars to install airbags rather than other passive restraint systems, such as automatic belts or passive interiors. It thereby would have presented an obstacle to the variety and mix of devices that the federal regulation sought. It would have required all manufacturers to have installed airbags in the entire District of Columbia related portion of their 1987 new car fleet, even though FMVSS 208 at that time required only that 10% of a manufacturer’s nationwide fleet be equipped with any passive restraint device at all. It thereby also would have stood as an obstacle to the gradual passive restraint phase-in that the federal regulation deliberately imposed. In addition, it could have made less likely the adoption of a state mandatory buckle-up law. The Court held that “[b]ecause the rule of law for which petitioners contend would have stood ‘as an obstacle to the accomplishment and execution of’ the important means-related federal objectives that we have just discussed, it is pre-empted.” Id. at 1925.

1.            Application and Effect on Product Liability Cases

The Safety Act was enacted “to reduce traffic accidents and deaths and injuries resulting from traffic accidents.” 49 U.S.C. § 30101 (1996). To attain this goal, The Safety Act directed the Secretary of Transportation to study problems, develop solutions, and to prescribe, as necessary, appropriate rules, regulations, orders, and standards that “shall be practicable, meet the need for motor vehicle safety, and be stated in objective terms.” 49 U.S.C. § 30111(a) (1996). Congress’ clear intent was that the safety standards promulgated under The Safety Act to be “uniform national standards.” See S. Rep. No. 89-1301, at 12 (1966), reprinted in 1966 U.S.C.C.A.N. 2709; H.R. Rep. No. 89-1776, at 17 (1966), reprinted in 1966 U.S.C.C.A.N. 2731.

But, do objective, uniform national safety standards protect consumers? Obviously, the answer to this question depends upon whom you ask. If a manufacturer is responding, the answer is yes, because more resources are committed to testing and improvement of safety since there is less concern for defending against huge damage verdicts based upon a state common law cause of action. On the other hand, a consumer advocate would state no because less resources are committed to testing and improvement of safety since there is less concern for defending against huge damage verdicts based upon a state common law cause of action. Regardless of the outcome of that debate, one fact remains certain; the Supreme Court’s decision in Geier has cemented federal preemption as an issue in almost all vehicular product liability causes of action.

VI. Conclusion

The scope federal preemption laws will have on our practice is still being determined by the courts. The Safety Act, the act made the basis of Geier, appears to be the tip of the iceberg. As the federal government continues to expand, federal preemption principles likewise will continue to expand and become increasingly important in determining whether or not a state common law cause of action exists. The issue is certainly one that should be considered from initial opening of a file as it literally determines, in many cases, whether evidence should ever be presented to a jury.

 This article was written by Brian Todd Hoyle, who is an associate specializing in products liability defense with the firm of Brown McCarroll, L.L.P. in Longview, Texas and by W. Mark Bennett, in-house counsel in the Litigation Section of Texaco, Inc. in Houston.