This article appears in the Spring 2017 issue of The American Prospect magazine. Subscribe here.
In the wake of the 2016 elections, many progressives have sought solace in the prospect of resisting Trump administration initiatives and advancing progressive goals in blue states. In his State of the State address last January, California Governor Jerry Brown proclaimed: "California is not turning back. Not now, not ever." Lieutenant Governor Gavin Newsom suggested that California might use its stringent environmental protection laws to impede the Trump administration's efforts to build a wall along its southern border. Washington Governor Jay Inslee proudly announced that "our state will remain undeterred and we will not be slowed one iota by the foolishness that we're hearing out of the White House."
Conversations about how progressive states should resist regressive Trump administration policies and sidestep Republican control of Congress often ignore the elephant in the room-the power of the federal government to preempt state regulations and even the ability of victims of corporate abuse to seek relief in state courts.
Under the Supremacy Clause of the United States Constitution, federal statutes and regulations are the "supreme law of the Land," state laws "to the contrary notwithstanding." This means that when Congress makes law or a federal agency regulates, state laws that conflict with the federal law, or even address the same subject matter, are null and void, unless Congress has provided otherwise. Congress does frequently allow states to enact laws and regulations that go beyond a federal floor, as in minimum-wage rules and clean air standards. But what Congress giveth, Congress can taketh away.
Sometimes Congress addresses preemption in the laws that empower federal agencies to regulate business practices. Lawyers then argue over the meaning of these "express preemption" clauses when companies and their trade associations attack more stringent state laws. Even when federal statutes are silent about preemption, the Supreme Court has held that federal regulations can "impliedly" preempt state laws where Congress would have preempted them, had it thought about the matter. The law of federal preemption is not a model of clarity, but it is not easily ignored, because powerful interests use it to shield themselves from stringent state regulation.
We can understand federal preemption as a neutral tool that can be invoked for good or ill. It is good that the Voting Rights Act of 1965 preempts state laws that restrict the rights of minority citizens to vote. It is bad when a regulated industry persuades Congress to create a weak regulatory program to preempt states with strong programs. For example, the chemical industry has long pressed Congress to preempt strict state toxic substances control laws that make it harder for them to market their products in states like California. It finally prevailed last year when Congress passed the Lautenberg Chemical Safety Act, which enhanced the EPA's ability to regulate toxic chemicals-but also preempted future state regulations. Californians will have to live with the Trump administration's regulation of future toxic chemical risks.
Recognizing that preemption can cut both ways, Congress has sometimes written preemption clauses that preempt only weaker state regulations. Thus, states like California and Connecticut have written more stringent air quality standards than the EPA's standards without fear of preemption. But Congress can always rewrite such laws to take away states' rights to be more protective than federal agencies.
Preempting the Right to Sue
One aspect of the law of preemption that comes as a surprise to most people is the power of Congress and federal agencies to preempt the ability of private individuals to sue irresponsible corporations in state courts for harms caused by badly designed products or overly risky activities. Congress can, of course, replace state common law liability regimes with federal regimes, such as the federal statutes governing claims by injured railroad workers for compensation from employers, or laws outlining liability for damaging side effects of vaccines. Or Congress can act to undercut such rights.
The Supreme Court in 1992 concluded that federal regulatory requirements can preempt state common law claims without providing an alternative compensation mechanism, leaving the victim with no remedy at all against companies whose products or activities comply with the federal requirements, even if those requirements are feeble. In Cipollone v. Liggett Group, Inc., the Court held that a statute specifying warnings for cigarette packages preempted the claim of Rose Cipollone, a 57-year-old woman from Little Ferry, New Jersey, who said the packages of the cigarettes that she smoked did not adequately warn her of the hazards of smoking. The fact that Congress had decided after she had originally filed her case that the package warning was wholly inadequate did not resurrect her claim for damages.
After the Cipollone decision, you could practically hear the wheels turning in the heads of lawyers for manufacturers of dangerous products: If federal regulations can preempt state legal claims, then all we need to do to rid ourselves of pesky lawsuits is persuade federal agencies to promulgate weak regulations.
In sum, federal preemption can both obliterate state statutes and regulations that are inconsistent with federal law and rob injured citizens of their right to seek redress from irresponsible corporations that comply with weak federal regulations. As we shall see, this means that progressives cannot simply ignore what goes on in Congress and federal agencies during the next four years and just focus on state legislatures and courts in their efforts to improve public welfare. They will have to fight at both levels of government.
The Law and Policy of Federal Preemption
In the battles in Congress, agencies, and the courts over health, safety, environmental, and consumer protection legislation, regulated companies and trade associations like the Chamber of Commerce argue that preemption is necessary to provide the uniformity required to ensure smoothly functioning national markets. Environmental groups, consumer activists, and plaintiffs respond that federal agencies are subject to capture by regulated interests and, in any event, cannot be trusted to get it right every time.
In the political realm, politicians often employ preemption opportunistically to achieve desirable outcomes, with little regard to broad principles of federalism. Conservative politicians are vocal proponents of states' rights when it comes to stringent federal voting-rights laws, but they pay little heed to state prerogatives when Congress is considering whether to preempt stringent consumer protection laws. Progressive politicians can also vary in their support for preemptive federal laws, but they consistently support federal laws that preempt less-stringent state protections and preserve tougher standards.
Decades ago, the Supreme Court established a "presumption against preemption" when Congress legislates in a field traditionally regulated by the states, such as setting local electric utility rates or writing local building codes, and it frequently alludes to that presumption in modern opinions. But the power of that presumption appears to wax and wane, depending on whether the majority of the Court thinks preemption is appropriate in particular cases. And that may depend on whether the Court trusts the preempting agency, or whether presumption leads to an outcome the justices prefer.
Express Preemption
So long as it is exercising its constitutional power to regulate interstate commerce, Congress can decide that the regulatory regime that it imposes also preempts state regulatory regimes and state common law. It does this by adding a separate provision to the statute specifying the extent to which the federal regime preempts state law. Hundreds of federal statutes contain such express preemption clauses.
A good example of express preemption is the Atomic Energy Act of 1954, under which Nuclear Regulatory Commission regulations preempt all state laws dealing with the construction and operation of nuclear power plants and other facilities handling high-level nuclear materials. Similarly, the Medical Device Amendments Act of 1976, which prohibits manufacturers of Class III medical devices from marketing them without Food and Drug Administration approval, expressly preempts common law claims that devices approved by the FDA are nonetheless defective. When it comes to highly complex and potentially dangerous technologies like nuclear power plants and medical devices, Congress has decided to place responsibility for ensuring that they are designed, constructed, and operated safely in a single highly expert federal agency, without interference from state agencies or courts.
Since Congress rarely speaks with perfect clarity, courts must still interpret express preemption clauses in regulatory statutes. And sometimes they do a very poor job. For example, the express preemption clause in the Consumer Product Safety Act preempts only state "standards or regulations," and it has a "savings clause" stating that compliance with standards issued by the Consumer Product Safety Commission (CPSC) "shall not relieve" manufacturers from "liability at common law." Despite the clarity of the savings clause, the Eighth Circuit Court of Appeals held that 17-year-old Brian Moe could not receive a jury trial on his claim that a defectively manufactured lawnmower cost him all the fingers on his right hand, because the product's design complied with CPSC standards.
Implied Preemption
The Supreme Court has also held that "[i]f Congress has not entirely displaced state regulation over the matter in question, state law is … pre-empted to the extent it actually conflicts with federal law." This form of "conflict" preemption comes in two varieties. "Impossibility" preemption occurs when compliance with both the state law and the federal law is impossible because conduct that complies with state law will violate federal law and vice versa. This species of preemption makes a great deal of sense. A company should not be put in a position where it is subject to federal prosecution for complying with state law and subject to state prosecution for complying with federal law. It turns out, however, that such situations are exceedingly rare.
The most frequently encountered (and most controversial) variety of conflict preemption, known as "obstacle preemption," occurs when "the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress." Obstacle preemption gives courts fairly broad discretion to throw out state regulatory laws and common law claims. And that gives federal agencies an opportunity to promulgate weak regulations that preempt more protective state regulations or lawsuits claiming that companies should have done more to protect victims than the federal regulations require.
A good example is Gade v. National Solid Wastes Management Association, in which the Supreme Court held that the minimal training requirements that the Occupational Safety and Health Administration mandated for workers at hazardous waste disposal facilities during the Reagan and George H.W. Bush administrations preempted Illinois's attempt to protect those workers (and the general public) by requiring them to have special licenses. The Court found that the licensing regime, which had its own arguably more stringent training requirements, presented an obstacle to achieving the federal training requirements.
Obstacle preemption is especially worrisome when companies seek to avoid liability by claiming that compensating victims presents an obstacle to attaining the purposes and objectives of a federal regulation. During the George W. Bush administration, some federal agencies aggressively insisted that federal regulatory requirements impliedly preempted state common law claims. The newly appointed chief counsel at the FDA made it his mission in life to change that agency's position on whether FDA approval of labels for prescription drugs preempted common law claims that the labels contained inadequate warnings of their side effects. The agency had for 40 years taken the position that its approval of drug labels ensured that they met a threshold standard for warning, but common law juries could hold companies to a higher standard. Taking the opposite position, the chief counsel's office wrote several amicus briefs in pending state litigation asserting that the plaintiffs' claims were preempted.
After a great deal of litigation, the Supreme Court in 2009 held that FDA approval of drug labels did not provide an obstacle to compliance with the FDA's labeling requirements, because FDA regulations allowed drug manufacturers to amend their labels at any time to contain more stringent warnings. The Court in a later case, however, held that claims against manufacturers of generic drugs were preempted, because a generic manufacturer had to use the original manufacturer's label and lacked the power to insist that the FDA amend that label. Purchasers of generic drugs probably don't know that the lower price comes with a prohibition on suing generic manufacturers.
Obstacle preemption can void state common law claims even when Congress has provided a savings clause allowing such claims. The National Traffic and Motor Vehicle Safety Act of 1966 empowers the National Highway Traffic Safety Administration (NHTSA) to promulgate safety standards for automobiles. Concluding that varying state regulatory standards would destroy the national market in cars, Congress included an express preemption clause prohibiting states from establishing safety standards for autos that are not identical to the federal standards. But it also added a crystal-clear savings clause providing that compliance with an NHTSA-promulgated standard does "not exempt a person from any liability at common law."
When 17-year-old Alexis Geier's car slammed into a tree in Washington, D.C., she suffered serious injury despite the fact that she was wearing a shoulder harness and lap belt. Her attorney claimed that her 1987 Honda Accord was defectively designed because it lacked an airbag, a technology that had at the time been effective and available for years. Honda responded that the NHTSA's passive restraint standard did not require airbags. Although the agency had required airbags during the Carter administration, it reversed itself at the outset of the Reagan administration to give auto manufacturers a choice between airbags and shoulder harness–lap belt combinations. Disregarding the savings clause, the Supreme Court found that a jury conclusion that Honda should have installed airbags would present an obstacle to attaining NHTSA's goal of giving auto manufacturers a choice. Congress later required newly manufactured cars to come equipped with life-saving airbags, but that did nothing to ameliorate Alexis Geier's injuries.
Field Preemption
The Supreme Court has also held that "[i]f Congress evidences an intent to occupy a given field, any state law falling within that field is pre-empted." A court, in other words, may conclude that Congress meant for a regulatory program to co-opt an entire field of regulation of private conduct. Thus, for example, the federal immigration laws preempt all state laws addressing immigration into the United States of persons from other countries. And the National Labor Relations Act preempts state law in the field of collective bargaining between employers and employees.
Field preemption can also deprive victims of corporate misconduct of their day in court. In a recent case, Jill Sikkelee claimed that her husband, David, was killed because the engine of the Cessna aircraft he was piloting was defectively designed. The manufacturer of the engine, Precision Airmotive Corporation, claimed that regulations promulgated by the Federal Aviation Administration establishing minimum standards for airplanes and airplane parts preempted Sikkelee's claim because the FAA's airplane safety program preempted the entire "field of air safety." In one of the increasingly rare cases that rigorously apply the presumption against preemption, the Third Circuit Court of Appeals held that the FAA's minimum standards did not go that far. The court went on to hold, however, that Sikkelee's claim might be preempted as an obstacle to the FAA's implementation of its aircraft certification program, despite the fact that the agency delegates 90 percent of its certification activities to private entities, including the manufacturers themselves. The case is now pending before the lower court.
Floor Preemption: A Double-Edged Protection
The extent to which federal law preempts state law is entirely a matter for Congress to decide. Congress has wisely decided to employ federal preemption as a one-way ratchet in some statutes by prescribing a hybrid form of preemption called "floor" preemption. These express preemption clauses preempt state laws that are less stringent than the federal regulations, but not those that are more stringent. The Fair Labor Standards Act, for example, contains a floor preemption provision that allows states to prescribe higher minimum wages and shorter workweek hours than the federal requirements.
Fortunately, most of the federal pollution control statutes contain floor preemption clauses. Thus, California may be able to invoke its environmental regulations to restrict the Trump administration's efforts to build a wall along its border with Mexico. Of course, the current Republican-controlled Congress could respond by enacting a border wall statute that preempts all California environmental laws. The bad news is that nearly all of the federal statutes protecting the public from fraud and risks to health and safety, not to mention systemic risks to the economy, do not employ floor preemption. And the current Congress could revise other floor preemption clauses as well.
When Federal Preemption Is a Bad Thing
Federal preemption is a bad thing when it prevents states from protecting their citizens more effectively than federal agencies that sometimes fail to fulfill their statutory responsibilities. Regulatory failure is clearly a problem when federal agencies are run by political appointees who are ideologically opposed to their agencies' statutory missions. But even under the leadership of non-ideological technocrats, agencies can become captured by regulated interests. The experts who review new drug applications at the FDA, for example, bear the "dual" responsibilities of advising drug companies on how to get their drugs approved and reviewing those drugs to determine whether their benefits outweigh the risks of adverse side effects. During the hundreds of closed-door meetings they have with drug company representatives, they can lose some of their objectivity, especially when there is the possibility of a higher-paying job in the pharmaceutical industry sometime in the future.
Even federal agencies that are trying to do the right thing cannot do an adequate job if they lack sufficient resources. For example, company documents and depositions produced in state court litigation have revealed many successful attempts by devious drug companies to manipulate overworked FDA drug reviewers by submitting misleading data and withholding information that sheds a bad light on their products. Despite this ongoing risk of fraud, it looks like the Trump administration and a Republican-controlled Congress will be cutting agencies' budgets right through the bone and into the marrow, thereby reducing their ability to protect the public.
While the technical experts that inhabit federal agencies undoubtedly have more expertise than judges and juries and many state agencies, federal agencies are notoriously bad at anticipating and responding to technological change. The NHTSA's recent publication on self-driving cars, for example, explained that it was providing guidelines, rather than writing enforceable regulations, for those vehicles because it did not have the capacity to keep up with the rapidly evolving technology.
Even when a federal agency does have a good understanding of the risks posed by a newly emerging product or technology, it takes a long time to move from initial hazard recognition to a final regulation because of the current highly ossified rulemaking environment that requires lengthy cost-benefit analyses and review by small-business panels, the Office of Management and Budget, and other federal agencies. And the House of Representatives, challenging existing regulations, has just passed the Regulatory Accountability Act, which adds even more analytical and review requirements that cling like barnacles to the federal regulatory process. As slow as they are, jury trials and some state agencies can get issues resolved far more expeditiously than federal agencies.
Once an agency has undertaken the Herculean task of promulgating a major regulation, it is generally reluctant to revisit that regulation in the light of new information or changes in technology. Consequently, federal regulations can become obsolete and fail to provide the protections they were designed to yield. For example, the CPSC amended the original flammability standard for mattresses after numerous tragic fires had clearly demonstrated that it was woefully out of date. When the agency finally brought the 50-year-old standard up to date during the George W. Bush administration, it also declared that the new standard would preempt state standards and common law litigation. At the agency's current pace, we might expect an updated standard again in another 50 years, even though fire prevention technologies may improve considerably in the interim. In the meantime, victims of mattress fires will lose their right to persuade juries that manufacturers should have adopted those more effective protections.
Finally, because it is so difficult to promulgate major regulations and defend them in reviewing courts, federal agencies tend to set standards at the minimum level necessary to protect the public, rather than the optimum level or a level that provides a margin of safety. A former head of the NHTSA observed that agencies often set standards at the level of a "20-yard field goal" because they are "easier to make than miss." In fact, the Regulatory Accountability Act that the House just passed would require all federal agencies to adopt the "least costly" of the available regulatory alternatives, even if a more stringent alternative could achieve a great deal more safety at little additional cost. State agencies and common law juries might legitimately conclude that companies should be kicking 45-yard field goals when it comes to protecting the public from dangerous products and activities. But that won't matter, because any more protective state standards will be preempted.
Upcoming Battles
As the Trump administration begins to promulgate weak regulations and roll back existing standards, preemption battles are likely to flare up over attempts by state legislatures and courts to protect their citizens from risks posed by poorly regulated products and activities.
One battle that is already brewing concerns the EPA's standards for greenhouse gas (GHG) emissions from automobiles. One exception to the Clean Air Act's floor preemption clause is a provision that prohibits states from promulgating automobile emissions standards that are more stringent than those prescribed by the EPA. An exception to that exception, however, allows California (and states following California's lead) to enforce more stringent emissions standards if California first obtains a waiver from the EPA to do so. With one exception, which it later overturned, the EPA has never disapproved such a waiver request.
In 2011, the EPA and California entered into an agreement in which the EPA approved the state's request to regulate GHG emissions more stringently, and California agreed to link its overall GHG reduction targets to the EPA's national targets from 2017 through 2025. At the industry's insistence, however, the EPA agreed to conduct a "midterm evaluation" of the federal standards for model years 2022 through 2025 with an eye toward reducing their stringency. On January 12, 2017, the EPA rushed out a final determination that "automakers are well positioned to meet the standards at lower costs than previously estimated." Since this is an adjudication, and not a regulation, it is not technically subject to the memorandum that Chief of Staff Reince Priebus wrote on January 20 freezing all non-final federal regulatory actions. But the auto industry is pressing the administration to withdraw the final determination anyway. If the EPA reverses itself, California should be on solid legal ground in insisting that its standards nevertheless remain in effect, because of the 2011 agreement. Since California is such a large market, that should ensure that auto manufacturers comply with the California standards nationwide through model year 2025.
A different fate may await the ambitious climate action plan that California launched on Trump's inauguration day. It calls for reducing petroleum use in the transportation sector by 50 percent by 2030. To the extent that achieving that goal will require even tougher standards for automobiles sold in California after the 2025 model year, the state will have to seek another waiver from the EPA. If the agency disapproves, any more stringent state standards will be preempted by weaker EPA standards. When Senator Kamala Harris raised the issue at prospective EPA administrator Scott Pruitt's confirmation hearings in January, he ducked the question. In briefs challenging several EPA regulations, Pruitt has argued that states should be allowed to craft their own environmental requirements. It remains to be seen whether he will adhere to that principle when California, rather than his home state of Oklahoma, is doing the regulating.
A number of other preemption battles may loom just over the horizon. The Federal Hazardous Substances Act, for example, authorizes the CPSC to require consumer products containing hazardous substances to have one of three specified warnings (DANGER, WARNING, or CAUTION) on their labels, depending on the degree of hazard. An express preemption clause preempts any other warning on the label, but it allows a state to petition the CPSC to waive the preemptive effect of the federal requirement upon a showing that a more stringent warning would not burden interstate commerce. When the next child-poisoning tragedy prompts states to file waiver petitions, don't expect a CPSC dominated by Trump-appointed commissioners to bend over backward to grant them.
The possibility of preemption should intensify the fights in the federal agencies over the stringency of new regulations. For example, we can expect a battle royal over the Department of Agriculture's implementation of the recently passed GMO labeling law, because that statute provides that once the department's regulations are in place, all existing and any future state GMO labeling requirements will be preempted. The residents of Vermont, which already has a stringent labeling law on the books, may find themselves stuck with vaguer warnings on foods that contain larger "adventitious" (unavoidable) amounts of GMOs.
We could see an even bigger fight if the NHTSA decides to regulate self-driving cars. If a proactive state attempts to promulgate standards relating to design and manufacture because it finds NHTSA guidelines insufficiently protective, you can bet that the automobile industry will beat a hasty path to NHTSA headquarters to insist that it promulgate "flexible" regulations that, under the express preemption clause discussed above, would preempt the fledgling state efforts.
Avoiding Preemption
Policymakers in progressive states should be thinking about creative ways to avoid federal preemption in the upcoming preemption wars. For example, state governments can exercise their power to spend to insist that manufacturers of the products they purchase meet stricter standards than applicable federal requirements. In addition, Congress usually leaves to the states power over siting requirements for federally regulated activities like nuclear power plants, and states can creatively use that power to make it difficult or impossible for companies to undertake such activities within their borders. And states might creatively use their taxing power to incentivize companies to exceed the minimal expectations of federal agencies, though the federal courts may view brute force exercises of tax policy with a jaundiced eye.
In a passage often quoted by conservative opponents of a strong federal government, Justice Louis Brandeis called the states "laboratories" of democracy, where governments can experiment with different approaches to solving social problems. And many of President Trump's recent appointees to powerful positions in his new administration profess to be strong proponents of federalism. Yet it is safe to predict that the Trump administration will attempt to reduce the role of states in exploring progressive alternatives to regulatory rollbacks and to social problems that arise in the future.
The Trump administration will also aggressively urge courts to dismiss claims by victims of irresponsible companies whose products and activities comply with weak federal regulations. Former Supreme Court Justice John Paul Stevens has written that allowing federal regulations to preempt state common law claims has "the perverse effect of granting complete immunity from … liability to an entire industry that, in the judgment of Congress, needed more stringent regulation." Preemption of state common law claims will also grant immunity when regulatory agencies in the Trump administration weaken stringent federal regulations.
It will therefore not be enough for advocates of progressive change to retreat to progressive states and ignore what the Trump administration is doing in Washington, D.C., to reduce regulatory protections. Efforts at the state level are essential to keep the ball moving forward, but progressives must also be prepared to engage in upcoming federal preemption wars.
