Electronic copy available at: http://ssrn.com/abstract=1586955. 1233. Judicial Deference and Regulatory. Preemption by Federal Agencies. William Funk*. I.
Lewis & Clark Law School Legal Research Paper Series Paper No. 2010 - 10
Judicial Deference and Regulatory Preemption by Federal Agencies William Funk Lewis & Clark Law School 84 Tulane Law Review 1233 (2010) This paper can be downloaded without charge from the Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract=1586955
An index to the papers in the Lewis & Clark Law School Research Paper Series is located at: http://www.ssrn.com/link/Lewis-Clark-LEG.html
Electronic copy available at: http://ssrn.com/abstract=1586955
Judicial Deference and Regulatory Preemption by Federal Agencies William Funk* I.
TWO DIFFERENT TYPES OF PREEMPTION BY AGENCY ACTION ....................................................................................... 1235 II. JUDICIAL INTERPRETATION AND RULES OF DEFERENCE TO AGENCY INTERPRETATIONS ....................................................... 1237 III. AGENCY STATEMENTS REGARDING PREEMPTION ISSUES MAY ARISE IN SETTINGS INVOLVING ANY OF THESE DIFFERENT TYPES OF JUDICIAL CONSIDERATION OF OR DEFERENCE TO AGENCY VIEWS................................................. 1242
A.
The Agency Adopts a Regulation Expressly Preempting State Law ...................................................... 1242 1. 2. 3.
B.
Express Grants of Authority to an Agency To Make Preemption Determinations .......................... 1242 Express Statutory Preemption Provisions Without Express Authority to the Agency To Make Preemption Determinations .......................... 1242 No Express Preemption Provision but the Agency Has Authority To Adopt Substantive Regulations That Have Preemptive Effect .............. 1247
The Agency Expresses an Opinion on the Preemptive Effect of Its Regulation ................................. 1249 1.
The Statute Contains a Statutory Preemption Provision................................................................... 1249 2. The Statute Does Not Contain a Statutory Preemption Provision .............................................. 1249 IV. A PATH TO CLARITY ................................................................... 1253 V. CONCLUSION .............................................................................. 1256 The United States Supreme Court has told us many things about the preemption of state law by federal law. We are told that there are two cornerstones of preemption jurisprudence: first, “the purpose of * © 2010 William Funk. Robert E. Jones Professor of Law, Lewis & Clark Law School. B.A., Harvard College; J.D., Columbia Law School.
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Congress is the ultimate touchstone in every pre-emption case,”1 and second, “we ‘start with the assumption that the historic police powers of the States [are] not to be superseded by [federal law] unless that was the clear and manifest purpose of Congress’”2—in short hand, a presumption against preemption. However, we are also told the presumption does not always apply.3 In addition, we know that preemption may be express or implied, and that there are two different kinds of implied preemption—field preemption and conflict preemption.4 Even within conflict preemption we find two different sorts—a direct conflict and a conflict in the nature of standing as “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”5 While questions can arise in attempting to give flesh to any of these concepts, there are two particularly recurring problems in applying preemption doctrine—interpreting the extent of an express preemption provision and discerning when a state law may be an obstacle to accomplishing the full objectives of Congress. These problems are exacerbated when the federal law in question is a federal agency’s regulation. This Article will attempt to describe the state of the law as it currently exists relating to preemption associated with agency regulations, especially in light of three preemption decisions by the Supreme Court in its October 2008 term—Wyeth v. Levine,6 Altria Group, Inc. v. Good,7 and Cuomo v. Clearing House Ass’n.8 The Article will then suggest how courts should assess claims of preemption of state law associated with federal agency regulations. While preemption questions often occur in contexts unrelated to federal agency action, since at least Gibbons v. Ogden9 preemption 1. Wyeth v. Levine, 129 S. Ct. 1187, 1194 (2009) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)). Id. at 1194-95 (quoting Medtronic, 518 U.S. at 485). 2. See United States v. Locke, 529 U.S. 89, 108 (2000) (holding that the 3. presumption does not apply “when the State regulates in an area where there has been a history of significant federal presence”). In addition, at least four justices are on record as believing the presumption does not apply when interpreting the scope of an express preemption provision. See Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710, 2732 (2009) (Thomas, J., dissenting, joined by Roberts, C.J., Kennedy & Alito, JJ.). 4. See, e.g., Wis. Pub. Intervenor v. Mortier, 501 U.S. 597, 604-05 (1991). 5. Hines v. Davidowitz, 312 U.S. 52, 67 (1941). But see Wyeth, 129 S. Ct. at 120405 (Thomas, J., concurring). 6. 129 S. Ct. 1187. 7. 129 S. Ct. 538 (2008). 8. 129 S. Ct. 2710. 9. 22 U.S. 1 (9 Wheat.) (1824).
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also has occurred as a result of federal agency action. In Gibbons, the first Supreme Court case to assess the extent of the Commerce Clause of the Constitution, the Court held that a license to engage in coastal trade given to Ogden by a federal agency preempted the New York law granting a monopoly to Gibbons for the use of steamboats in New York. Today, as a result of the growth of the administrative state, most preemption questions involve federal agencies in some way. Most recently, during the George W. Bush Administration, federal agencies in regulations, preambles to regulations, or amicus briefs increasingly claimed to decide whether their regulations (or their failure to regulate) preempted state common law tort actions.10 The possibility of significant restrictions on traditional state common law remedies by agency action without express congressional authorization raises serious federalism concerns. I.
TWO DIFFERENT TYPES OF PREEMPTION BY AGENCY ACTION
Agency action may preempt state law in either of two ways. First, and most typically, an agency may adopt a regulation (or issue an order after an adjudication) that simply has the effect of preempting state law due to a conflict that arises between federal law and state law. An example would be the situation in Ray v. Atlantic Richfield Co.11 There the Secretary of Transportation, pursuant to the federal Ports and Waterways Safety Act, had adopted regulations concerning the size of ships navigating Puget Sound, but the state of Washington adopted regulations that would exclude ships not excluded by the Secretary’s regulation. The Supreme Court held that the federal regulations preempted the state regulations. In this case, the agency’s regulations said nothing regarding preemption. The second way an agency may preempt state law is to adopt a regulation or order that by its terms preempts state law. This is less common than the former situation, but it does happen. For example, pursuant to the Hazardous Material Transportation Act,12 the Secretary of Transportation decided that certain Nevada regulations requiring an annual permit by railroads before they might load or unload hazardous 10. See, e.g., Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products, 71 Fed. Reg. 3922, 3933-36 (Jan. 24, 2006); Federal Motor Vehicle Safety Standards; Roof Crush Resistance, 70 Fed. Reg. 49,223, 49,245-46 (Aug. 23, 2005); Final Rule: Standard for the Flammability (Open Flame) of Mattress Sets, 71 Fed. Reg. 13,472, 13,481, 13,496-97 (Mar. 15, 2006); Reflectorization of Rail Freight Rolling Stock, 70 Fed. Reg. 144, 152 (Jan. 3, 2005). 11. 435 U.S. 151 (1978). 12. 49 U.S.C. § 5125(d) (2006).
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materials in the state were preempted by the Secretary’s regulations governing the transportation of such materials.13 In either case, Congress must grant authority to the agency to take the action it did. In the usual case, a statute’s grant of authority to an agency to take certain actions implicitly or explicitly includes a decision that the agency’s actions will preempt conflicting state law.14 For example, the Medical Device Amendments Act of 1976 expressly preempts any state or local requirement that is different from or additional to any requirement relating to medical devices adopted by the Food and Drug Administration (FDA) under the act.15 Thus, a requirement adopted by the FDA automatically preempts different or additional state or local requirements. Even in the absence of an applicable express preemption provision, courts may find that the statutory authority to adopt substantive regulations implicitly results in those regulations preempting conflicting state and local regulations pursuant to judicial preemption doctrine.16 In the less common situation, where an agency itself in its regulation or order expressly preempts state law, Congress must have delegated to the agency the authority to make preemption determinations. For example, the Federal Communications Act provides that the Federal Communications Commission, after notice and an opportunity for public comment, shall preempt any state law that the Commission finds has the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.17 Similarly, in the case noted above in which the Secretary of Transportation ruled that certain Nevada regulations were preempted by the Hazardous Materials Transportation Act, that Act specifically granted authority to the Secretary to make preemption determinations.18 In this type of situation, where Congress has delegated to the agency the authority to make the preemption determination itself, the preemption question is not one simply of statutory interpretation or application of preemption doctrine. Rather it is a typical 13. See S. Pac. Transp. Co. v. Pub. Serv. Comm’n of Nev., 909 F.2d 352 (9th Cir. 1990). 14. See, e.g., Fid. Fed. Sav. & Loan Ass’n v. De la Cuesta, 458 U.S. 141, 153-54, 158 (1982). 15. 21 U.S.C. § 360k(a) (2006). 16. See, e.g., United States v. Shimer, 367 U.S. 374, 381-83 (1961). 17. See, e.g., 47 U.S.C. § 253(d) (2006) (authorizing the FCC to determine that a state or local law is preempted). 18. See 49 U.S.C. app. § 1811(b) (1988) (repealed and replaced by 49 U.S.C. § 5125(d) (2006)).
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administrative law question—whether the agency has acted arbitrarily or capriciously within its delegated power.19 The difference between these two types of preemption is that the former involves the agency taking some substantive regulatory action pursuant to a statute, and the preemptive effect of that action is governed by the statute itself—either through an express preemption provision in the statute or through application of the Court’s doctrine of implied preemption. The latter type of preemption, however, involves the agency itself determining the preemptive effect of its regulations or a statute it administers pursuant to a statutory delegation to make that determination. Or more simply, in the former situation it is Congress (or a court by interpreting the statute) that makes the preemption determination; in the latter it is the agency pursuant to delegated power, albeit subject to judicial review. II.
JUDICIAL INTERPRETATION AND RULES OF DEFERENCE TO AGENCY INTERPRETATIONS
When Congress has not expressly authorized an agency to make a preemption determination, but has only authorized it to make substantive regulations, the most common question that may arise is whether the statute or the agency’s substantive regulation has the effect of preempting a particular state law. In some cases this may be due to a lack of clarity in an express preemption provision. For example, in Riegel v. Medtronic, Inc., it was not clear if the statutory preemption provision in the Medical Device Amendments Act preempted state common-law actions.20 The provision stated that “no State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement—(1) which is different from, or in addition to, any requirement applicable under this chapter to the device.”21 The question was whether the term “requirement” included state common law, so as to preempt tort actions claiming that a medical device approved by the FDA was unreasonably dangerous. The Court held, on the basis of prior precedent, that the term did include state common law.22 Another example is Watters v. Wachovia Bank, N.A., where it was not clear if 19. See 5 U.S.C. § 706(2)(A) (2006). 20. 128 S. Ct. 999, 1007-08 (2008). 21. 21 U.S.C. § 360k(a) (2006). 22. See Riegel, 128 S. Ct. at 1007-08, 1011 (citing Medtronic, Inc. v. Lohr, 518 U.S. 470, 512 (1996); Bates v. Dow Agrosciences L.L.C., 544 U.S. 431 (2005); Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)).
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the statutory preemption provision in the National Bank Act preempted states from exercising visitorial powers over mortgagelending activities of subsidiaries of national banks.23 The agency had adopted a regulation saying that it did, and the Court agreed. When there is no express preemption provision, whether an agency’s regulation preempts state law turns on an application of the Supreme Court’s implied preemption doctrine. Where there is a direct, unavoidable conflict between the agency’s regulation and state law, almost invariably courts will find preemption, presuming that Congress would intend federal law to govern over conflicting state law. It is a more difficult decision when there is no direct conflict, but the allegation is that the state “law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”24 As Justice Thomas complained in Wyeth v. Levine, this standard “facilitates freewheeling, extratextual, and broad evaluations of the ‘purposes and objectives’ embodied within federal law.”25 For example, in Geier v. American Honda Motor Co., the Court found that a state tort action holding a manufacturer liable for not having provided an airbag was preempted because such an action would interfere with the full accomplishment of the federal automobile safety program.26 Here, the Department of Transportation (DOT) had considered a regulation requiring airbags but instead decided on a regulation that would phase in passive restraints. That is, the DOT decided that the best means of furthering the statute’s purpose was not to require airbags at that time. The Court held that to allow a state to maintain a tort claim for a failure to provide airbags would thwart that regulatory decision. This is an example of a court finding that an agency made a substantive policy decision pursuant to a federal statute (here the specific decision not to require airbags) and that decision then had the effect of preempting state law under the implied preemption doctrine. Another example is Sprietsma v. Mercury Marine, a case reaching the opposite conclusion.27 There, the Coast Guard had decided not to adopt a requirement of propeller guards on outboard motors, and a person injured by an unguarded propeller sued in tort for damages. The defendant argued that the Coast Guard’s decision not to require propeller guards preempted state tort law, but 23. 24. 25. 26. 27.
550 U.S. 1, 9-10 (2007). Hines v. Davidowitz, 312 U.S. 52, 67 (1941). 129 S. Ct. 1187, 1217 (2009). 529 U.S. 861, 886 (2000). 537 U.S. 51 (2002).
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the Supreme Court rejected the argument, distinguishing Geier. The Coast Guard, the Court said, did not decide that propeller guards should not be regulated at all, just that there was not sufficient evidence to justify regulating them under the federal statute. Thus, the application of state tort law did not interfere with the full accomplishment of the federal law.28 Whether there is an unclear express preemption provision or whether the issue is one of implied preemption, the agency may have an opinion concerning the preemptive effect of its substantive regulation, and the question arises as to what sort of consideration courts should give to such an opinion. A substantial body of case law relates to judicial deference to agency opinions generally, not all of which is consistent. The Chevron doctrine, from Chevron U.S.A. Inc. v. NRDC, establishes what is commonly called a two-step test.29 First, a court asks whether a statute that the agency is responsible for administering is ambiguous; if it is, the court is then to defer to the agency’s reasonable interpretation of the statute.30 The Chevron doctrine, however, does not apply to all agency interpretations of ambiguous statutes that the agency administers. The Court has said that Chevron deference should be given to agency interpretations of unclear statutory provisions that the agency administers, if the agency interpretation has “the force of law.”31 However, the Court has not provided any bright line test for when an interpretation has “the force of law” other than when the interpretation is contained within a regulation or an order following a formal agency adjudication.32 However, the basis for this strong deference is the understanding that Congress has delegated to the agency the authority to make the legal determination. As the Court stated in United States v. Mead Corp., “[A]dministrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the
28. Id. at 67-68. 29. 467 U.S. 837 (1984). 30. The agency must be particularly responsible for administering the statute; it must not be just one of many agencies that must apply the statute. For example, as in Chevron, the Environmental Protection Agency is responsible for administering the Clean Air Act. On the other hand, no single agency is responsible for administering the Freedom of Information Act, so no agency’s interpretation of that Act would ever receive Chevron deference. 31. United States v. Mead Corp., 533 U.S. 218, 226-27, 229, 232-33 (2001). 32. “Formal” agency adjudication is adjudication conducted pursuant to the adjudication provisions of the Administrative Procedure Act. 5 U.S.C. §§ 554, 556-557 (2006).
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force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.”33 While Mead is the primary restatement of the Chevron doctrine, the Court has occasionally applied Chevron in other circumstances. For example, in Barnhart v. Walton, the Court said, “the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time” all are indicators that Chevron deference is appropriate.34 Because the Court has not definitively explained how to reconcile these two different tests of when Chevron applies, the applicability of Chevron in particular cases remains unclear. There is, moreover, a further wrinkle on the application of Chevron. Some have called this “Chevron Step Zero.”35 That is, there are cases where the statute is clearly ambiguous, and the agency is clearly established as the agency to administer the statute, but the Court finds that Congress could not have intended to delegate the authority to make the particular interpretation the agency makes. For example, in FDA v. Brown & Williamson Tobacco Corp., the FDA attempted to regulate cigarettes under the Food, Drug and Cosmetic Act’s language that authorized FDA regulation of “articles (other than food) intended to affect the structure or any function of the body.”36 The Court conceded that this language was ambiguous, but given the history of the FDA’s nonaction relating to cigarettes and Congress’s actions regarding cigarettes, the Court concluded that it was impossible to believe that Congress had indeed delegated the authority to regulate cigarettes to the FDA by this language. When Chevron deference is not in order, courts should still give respectful consideration to the agency’s views, but this is characterized as weak or Skidmore deference, after the case in which the Court stated that the weight given to the agency interpretation “will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and
33. 533 U.S. at 226-27. 34. 535 U.S. 212, 222 (2002). 35. See Cass R. Sunstein, Chevron Step Zero, 92 VA. L. REV. 187 (2006) (borrowing the term from Thomas W. Merrill & Kristin E. Hickman, Chevron’s Domain, 89 GEO. L.J. 833, 836 (2001)). 36. 529 U.S. 120, 126-27 (2000) (quoting 21 U.S.C. § 321(g)(1)(C) (1994) (current version at 21 U.S.C. § 321(g)(1)(C) (2006)).
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all those factors which give it power to persuade, if lacking power to control.”37 When a court upholds an agency interpretation of a statute under the Chevron doctrine, the court is not itself deciding what the statute means or what is the best interpretation. Rather, it is deciding that the agency’s interpretation is acceptable and within the bounds of reasonableness, even if the court itself might not have reached that interpretation, because Congress has delegated to the agency, not the courts, the power to make that interpretation.38 On the other hand, when a court reviews an agency interpretation under the Skidmore doctrine, the court is deciding what it believes is the best interpretation of the law. The court is interpreting the statute, aided by the views of the agency, not merely reviewing the reasonableness of what the agency has decided. This much is commonly accepted.39 When an agency interprets not a statute, but its own regulation, a different rule of deference applies. First articulated in Bowles v. Seminole Rock & Sand Co., the rule is that “the administrative interpretation [of the agency’s regulation] becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.”40 Today, this is viewed as strong deference, on a par with Chevron deference. Finally, the Supreme Court and the lower courts regularly take into consideration the views of agencies in a variety of contexts without attempting to fit that consideration into any particular doctrinal category.41
37. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). 38. See, e.g., Gen. Elec. Co. v. U.S. EPA, 53 F.3d 1324 (D.C. Cir. 1995). 39. Unfortunately, further muddying the Chevron waters, it is not universally understood by all the members of the Supreme Court. Justice Scalia famously has stated that Skidmore was replaced by Chevron, and all deference is now strong deference. See United States v. Mead Corp., 533 U.S. 218, 239-40 (2001) (Scalia, J., dissenting). Justice Breyer has stated that he believes Skidmore and Chevron are essentially interchangeable, Christensen v. Harris County, 529 U.S. 576, 596 (2000) (Breyer, J., dissenting), an opinion that may be shared by Justice Ginsburg who joined his opinion in Christensen. 40. 325 U.S. 410, 414 (1945). 41. See William N. Eskridge, Jr. & Lauren E. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 GEO. L.J. 1083 (2008).
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III. AGENCY STATEMENTS REGARDING PREEMPTION ISSUES MAY ARISE IN SETTINGS INVOLVING ANY OF THESE DIFFERENT TYPES OF JUDICIAL CONSIDERATION OF OR DEFERENCE TO AGENCY VIEWS Agencies may express opinions about the preemptive effect of the statutes they administer or their regulations in a variety of ways and in a variety of circumstances. This Part will address how those different circumstances might affect the nature and level of judicial deference to the agency’s opinion.
A. The Agency Adopts a Regulation Expressly Preempting State Law First, an agency may adopt a regulation that expressly preempts state law. In adopting such a regulation, the agency may be acting under one of three different statutory schemes: one in which the statute expressly grants to the agency the power to make preemption determinations, one in which the statute grants the agency substantive rulemaking authority and contains an express preemption provision applicable to those regulations, and one in which the statute grants to the agency substantive rulemaking authority but without an applicable express preemption provision. 1.
Express Grants of Authority to an Agency To Make Preemption Determinations
In the first of these statutory schemes—in which there is an express grant of authority to an agency to make preemption determinations—the agency’s determination of preemption should under normal rules receive Chevron deference. This is an easy case. Congress has clearly delegated the authority to the agency, and the agency has exercised that authority in a manner having the force of law.42 2.
Express Statutory Preemption Provisions Without Express Authority to the Agency To Make Preemption Determinations
In the second statutory scheme—in which an agency has authority to make substantive regulations, and the statute expressly contains a preemption provision applicable to those regulations, but the statute does not contain an authorization to the agency to make 42.
See Mead, 533 U.S. at 226-27.
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preemption determinations—it is less clear how courts should treat a preemption determination made by the agency in a regulation. In defending such a regulation, the agency would likely invoke Chevron and argue that by giving the agency the authority to make substantive regulations, Congress implicitly authorized the agency to administer the statute generally, including the statutory preemption provision. Thus, it would be said that Congress has implicitly given to the agency the authority to determine the meaning of an ambiguous preemption provision, just as the agency has the implicit authority to determine the meaning of an ambiguous substantive statutory provision it administers. Others, however, have argued that “agencies can make preemption determinations on their own authority only if this power has been expressly delegated to them by Congress.”43 Consequently, according to this view, agencies should not receive Chevron deference regarding preemption, absent such express delegation. In Watters v. Wachovia Bank, N.A., the Court pointedly ducked this issue,44 but a dissent by Justice Stevens, joined by Chief Justice Roberts and Justice Scalia, plainly sided with the argument that there must be express authorization from Congress for an agency to have the power itself to make a preemption determination, and that an agency’s regulation purporting to preempt state law without such authorization should not be entitled to Chevron deference.45 In the recent case of Cuomo v. Clearing House Ass’n, this issue might have been addressed.46 The National Banking Act (NBA) contains an express preemption provision: “No national bank shall be subject to any visitorial powers except as authorized by Federal law . . . .”47 The NBA makes the Office of the Comptroller of the Currency (OCC) responsible for regulating national banks, and in the exercise of that authority the OCC had adopted a regulation stating that “[s]tate officials may not exercise visitorial powers with respect to national banks, such as conducting examinations, inspecting or requiring the production of books or records of national banks, or prosecuting enforcement actions.”48 The Attorney General of New York had sought to inspect the records of several national banks to determine if they had violated the state’s fair lending laws. The banks brought suit to enjoin 43. Thomas W. Merrill, Preemption and Institutional Choice, 102 NW. U. L. REV. 727, 730 (2008). 44. 550 U.S. 1, 21 n.13 (2007). 45. See id. at 22, 38-43. 46. 129 S. Ct. 2710 (2009). 47. 12 U.S.C. § 484(a) (2006). 48. 12 C.F.R. § 7.4000 (2004) (emphasis added).
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the Attorney General from enforcing the state’s fair lending laws, relying upon the OCC’s regulation. The Court, by a 5-4 vote, held that the regulation was invalid to the extent that it preempted state enforcement of its fair lending laws, but that it was valid to the extent it preempted the administrative inspection of the bank’s records.49 The enforcement of fair lending laws was not included with the term “visitorial powers,” while the administrative inspection of the bank’s records was included. The majority, in an opinion by Justice Scalia, refused to grant Chevron deference to the OCC regulation. The Court conceded that the term “visitorial powers” was ambiguous, but the Court said that “the presence of some uncertainty does not expand Chevron deference to cover virtually any interpretation of the NBA.”50 Instead, the Court concluded that it was clear from history and precedent that “visitorial powers” did not include “ordinary enforcement of the law.”51 Moreover, the majority appeared to read the OCC’s regulation as declaring preemption. Was the OCC’s regulation a declaration of preemption for which it had no express statutory authority? On its face, it certainly could be read that way. Or, was the OCC’s regulation merely an interpretation of the statutory term “visitorial powers,” which the statute itself expressly preempted states from exercising? The regulation could also be read that way. The dissent, which was written by Justice Thomas and joined by the Chief Justice (one of the three dissenters in Watters), would have upheld the regulation.52 He read the regulation as merely an interpretation of the statutory provision, not a declaration of preemption. He quoted from Smiley v. Citibank (South Dakota), N.A.,53 in which the Court said: This argument confuses the question of the substantive (as opposed to pre-emptive) meaning of a statute with the question of whether a statute is pre-emptive. We may assume (without deciding) that the latter question [deciding whether a statute or regulation preempts] must 54 always be decided de novo by the courts.
49. 50. 51. 52.
Cuomo, 129 S. Ct. at 2715, 2717-22. Id. at 2715. Id. Id. at 2722 (Thomas J., dissenting, joined by Roberts, C.J., & Kennedy & Alito,
53. 54.
Cuomo, 129 S. Ct. at 2732.
JJ.). 517 U.S. 735, 744 (1996).
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Unlike the majority, the dissent would have given Chevron deference to the whole of the OCC’s regulation as a mere interpretation of an ambiguous statutory term. The majority, however, took issue with the dissent’s statement that the OCC’s regulation was not a declaration of preemption. It noted that the regulation was contained in a subpart of the OCC’s regulations entitled “Preemption.” In addition, “The purpose and function of the statutory term ‘visitorial powers’ is to define and thereby limit the category of action reserved to the Federal Government and forbidden to the States. Any interpretation of ‘visitorial powers’ necessarily ‘declares the pre-emptive scope of the NBA.’”55 The majority appears to concede that the OCC’s regulation was interpreting the statute, but the statute that it was interpreting was the preemption provision itself.56 The majority, unlike the dissent, seems to equate interpretation of a preemption provision with “declaring preemption.” As the dissent in Watters had reasoned, there is a difference between making substantive regulations that have a preemptive effect and “agency regulations . . . that ‘purpor[t] to settle the scope of federal preemption’ and ‘reflec[t] an agency’s effort to transform the preemption question from a judicial inquiry into an administrative fait accompli.’”57 An agency interpretation of a preemption provision, if it is deemed subject to Chevron deference, becomes an administrative determination, and consequently an administrative determination of preemption, not a judicial determination of preemption. The dissent’s reliance on Smiley, which seems to sanction deference to an agency interpretation, is not on point; there the provision the agency interpreted was not itself a preemption provision, a distinction that the Court there found important.58 There is still a further problem with the dissent’s position. While agencies are entitled to receive Chevron deference with respect to interpretations of statutes they administer, they do not receive Chevron deference with respect to interpretations of other statutory provisions. 55. Id. at 2721. 56. The term “visitorial powers” only appears in the statutory preemption provision, see 12 U.S.C. § 484 (2006); it does not appear in those portions of the NBA that provide authority to the OCC to regulate the national banks. 57. Watters v. Wachovia Bank, N.A., 127 S. Ct. 1559, 1583 n.24 (2007) (alteration in original) (quoting Nicholas Bagley, Note, The Unwarranted Regulatory Preemption of Predatory Lending Laws, 79 N.Y.U. L. REV. 2274, 2289 (2004)). 58. See Smiley, 517 U.S. at 744 (“What is at issue here is simply the meaning of a provision that does not . . . deal with pre-emption . . . .”).
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For example, in Adams Fruit Co. v. Barrett, agricultural workers injured on the job sued their employer for damages for violation of the federal Migrant and Seasonal Agricultural Worker Protection Act (AWPA).59 The employer defended on the ground that the exclusivity provisions of the state workers’ compensation laws barred the workers from exercising the private right of action granted by AWPA. The Department of Labor (DOL) was responsible generally for administering the AWPA, and it had adopted a regulation providing that, where applicable to migrant or seasonal agricultural workers, state workers’ compensation laws were the exclusive remedy for a loss under AWPA. The defendant employer argued that the Court should afford Chevron deference to the DOL’s regulation interpreting AWPA. The Court, however, recognizing the role that the DOL played under the Act in setting standards,60 said that Congress had not empowered the agency to administer, and therefore to interpret, the provision of the AWPA relating to workers’ private rights of action in federal court. This, the Court said, was reserved to the courts. One can make the same claim with respect to statutory preemption provisions, where the agency is not expressly authorized to make preemption determinations. While an agency, such as the OCC, may generally administer the NBA, the separate statutory preemption provision is reserved to the courts to enforce and interpret. Finally, we have the Court’s statement in Wyeth v. Levine that “agencies have no special authority to pronounce on pre-emption absent delegation by Congress.”61 While in Wyeth there was neither a statutory preemption provision nor an agency regulation pronouncing preemption, the agency having merely expressed its views on preemption in the preamble to the regulation in question, the Court’s statement of the requirement for a congressional delegation as a prerequisite to a preemption pronouncement would apply as well to a situation where there is a statutory preemption provision but there is no authorization to the agency to make a preemption determination. What this leaves us with is some confusion and no clear Supreme Court decision. On the one hand, we have the Court’s statement in Wyeth, the explicit statement by the three dissenters in Watters requiring express statutory authorization for an agency to make a preemptive determination and the Court’s apparent reflection of that 59. 494 U.S. 638, 640-41 (1990). 60. See 29 U.S.C. § 1861 (2006) (authorizing the Secretary of Labor to issue rules and regulations as necessary to carry out the requirements of the Act). 61. Wyeth v. Levine, 129 S. Ct. 1187, 1201 (2009).
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sentiment in Cuomo in its rejection of deference to the agency’s interpretation of the statutory preemption provision. On the other hand, we have the dissent in Cuomo, joined by one of the dissenters in Watters, that suggests that an agency’s interpretation should qualify for Chevron deference even when it adopts a regulation that interprets a statutory preemption provision. Additionally, we have the Adams Fruit doctrine suggesting that an agency without express authority to make preemption determinations does not have the authority to interpret the statutory preemption provision. 3.
No Express Preemption Provision but the Agency Has Authority To Adopt Substantive Regulations That Have Preemptive Effect
In the third statutory scheme there is no express preemption provision, but the agency has the authority to adopt substantive regulations that can have preemptive effect. However, the agency goes further and itself adopts a regulation declaring the preemptive effect of one or more of its regulations. Because there is no statutory preemption provision, the agency’s regulation could not be deemed to rely on the implicit authority to interpret a preemption provision. Rather, the agency would be deciding whether its regulations impliedly preempted state law and declaring in a regulation its determination that state law was accordingly preempted. There do not appear to be any Supreme Court cases involving this precise situation. Nevertheless, Justice Breyer, concurring in Wyeth v. Levine, indicated his willingness to consider that an agency’s determination of preemption embodied in a regulation would be valid, even in the absence of a statutory preemption provision.62 There, as discussed more fully below, the FDA had indicated in the preamble to a regulation that, despite the absence of any statutory preemption provision relating to prescription drugs in the Federal Food, Drug, and Cosmetic Act (FDCA), it believed its regulation preempted certain state tort law with respect to injuries caused by prescription drugs. In the agency’s view, its regulation prescribed the optimum level of safety for prescription drugs, and any state law imposing stricter safety limits would conflict with the full achievement of the federal purposes. The Court rejected the FDA’s opinion and held that state tort law was not preempted by the substantive regulation. Justice Breyer agreed with that conclusion but wrote separately “to emphasize the Court’s statement that ‘we have no occasion in this case to consider the pre62.
Id. at 1204.
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emptive effect of a specific agency regulation bearing the force of law.’”63 Justice Breyer went on to relate that some have argued that state tort law sometimes interferes with the FDA’s determinations as to the needs of federal prescription drug policy. The FDA may seek to determine whether and when state tort law acts as a help or a hindrance to achieving the safe drug-related medical care that Congress sought. It may seek to embody those determinations in lawful specific regulations describing, for example, when labeling requirements serve as a ceiling as well as a floor. And it is possible that 64 such determinations would have pre-emptive effect.
It is not clear why Justice Breyer was willing to make a distinction between the agency adopting a specific regulation to this effect and merely expressing its view that its labeling requirements were both a floor and a ceiling. To justices who make a distinction between strong Chevron deference accorded agency regulations and weak Skidmore deference accorded mere agency opinions, the distinction makes sense. However, Justice Breyer has notably departed from other justices in his interpretation of when Chevron deference is applicable, or even that there is a difference between Chevron and Skidmore deference. To him, deference is due to agency pronouncements if “they represent ‘specialized experience,’ even if they do not constitute an exercise of delegated lawmaking authority.”65 And the characterization of this deference as Skidmore or Chevron is unimportant; to Justice Breyer, “Chevron made no relevant change.”66 Given his general willingness to afford deference where there is specialized expertise, without regard to whether the agency is exercising delegated authority, it is strange that in Wyeth he insisted upon that distinction. Where there is neither a statutory preemption provision nor a delegation to the agency to make a preemption determination, the case is the strongest that the agency simply lacks the authority to make a preemption determination with the force of law. To be sure, an agency’s experience in administering its substantive regulations, as well as with the effects of state laws on the administration of those regulations, may provide a particularly valuable perspective on the question of whether those state laws should be preempted by the agency’s regulations. Nevertheless, there is a difference between 63. Id. 64. Id. (citations omitted). 65. Christensen v. Harris County, 529 U.S. 576, 596 (2000) (Breyer, J., dissenting) (citation omitted). 66. Id.
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providing the public and courts with the benefit of that experience by expressing an opinion on the subject of preemption and making a determination with the force of law in a regulation.
B.
The Agency Expresses an Opinion on the Preemptive Effect of Its Regulation
Rather than adopt a regulation that expressly purports to preempt state law, an agency may express its opinion in a manner that does not have the force of law. Most commonly this would occur in the preamble to a substantive regulation, where an agency may opine as to the preemptive effect the agency believes the regulation will have. The agency may also file an amicus brief in a case to which it is not a party.67 The question is what deference courts should give to such expressions. 1.
The Statute Contains a Statutory Preemption Provision
If the statute contains an express statutory preemption provision, the agency’s opinion may interpret how that provision relates to its regulation. This is similar to the situation previously discussed, where there was a statutory preemption provision and the agency actually adopted a regulation purporting to preempt state law, except that here the agency would not even pretend that its opinion has the force of law. Thus, this situation would raise all the same issues as the previous discussion as well as the general Chevron issue—the extent to which Chevron only can apply when an agency exercises delegated authority with the force of law or also can apply when a combination of factors militates in favor of deferring to an agency’s special expertise.68 Even if Chevron does not apply, however, Skidmore deference should still apply.69 2.
The Statute Does Not Contain a Statutory Preemption Provision
If the statute does not contain a statutory preemption provision, the agency’s opinion that its regulation is preemptive would not be an interpretation of a preemption provision. Moreover, the agency’s 67. Of course, an agency may also express its views on the preemptive effect of a regulation in litigation to which it is a party, but the Court has been fairly consistent in rejecting deference to positions taken by agencies in litigation. See, e.g., Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988). 68. See Barnhart v. Walton, 535 U.S. 212, 221-22 (2002). 69. See United States v. Mead Corp., 533 U.S. 218, 226-27 (2001).
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opinion would not really be an interpretation of its own regulation. Rather, the agency’s opinion would likely be an opinion as to how the effect of state law would conflict or stand as an obstacle to the full accomplishment of the agency’s regulation. For example, in Wyeth, the FDA concluded in the preamble to its prescription drug labeling rule that the effect of state tort law would interfere with the full accomplishment of the goals of the labeling regulation.70 In part, this could occur, the FDA said, because there would be a possibility of state tort judgments resulting in companies engaging in “overwarning.” Overwarning could have several effects that would interfere with the accomplishment of the goals of the FDA’s labeling regulation. For one, it could result in the warnings losing their significance, as the risks involved might be so speculative and unlikely that readers of the warnings would no longer take the warnings seriously.71 For another, overwarning might result in patients being dissuaded from taking the drugs when it would be in their best interest to take them.72 In either case, according to the FDA, such overwarning would interfere with the federal regulation’s goals. These views were later reiterated in an amicus brief filed by the government in Wyeth.73 Another example of an agency opinion as to the effects of state law on the accomplishment of the goals of the federal regulation was expressed in the government’s amicus brief in Geier v. American Honda Motor Co.74 There, as noted earlier, the DOT had adopted a regulation that provided for phasing in passive restraints. [The Agency] determined—based on the history of consumer (and congressional) responses to passive restraint requirements—that diversity would best promote safety by helping to ensure public acceptance of passive protection systems, encouraging the development of new and improved technologies, and enabling the agency to acquire 75 more data to make regulatory decisions.
In the government’s amicus brief, the agency expressed the opinion that tort judgments finding manufacturers liable for not providing 70. See Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products, 71 Fed. Reg. 3922, 3934-35 (Jan. 24, 2006). 71. See id. at 3935. 72. See id. 73. Brief for the United States as Amicus Curiae, Wyeth v. Levine, 129 S. Ct. 1187 (2009) (No. 06-1249), 2007 WL 4555760, at *10-11. 74. Brief for the United States as Amicus Curiae Supporting Respondents, Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000) (No. 98-1811), 1999 WL 1045115. 75. Id. at *23-24 (citing to the agency’s regulatory preamble at 49 Fed. Reg. 28,987, 28,987-97, 29,000-01 (July 17, 1984).
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airbags would have the effect of thwarting the agency’s regulation by motivating all auto manufacturers to install airbags. The recent case of Altria Group, Inc. v. Good provides yet a third example.76 In Altria, cigarette smokers sued tobacco products manufacturers that claimed their cigarettes were “light” and had “lowered tar and nicotine,” alleging that those claims were misrepresentations under the Maine Unfair Trade Practices Act. The manufacturers argued that the state law was preempted because such claims based upon their allegedly deceptive use of descriptors such as “light” or “lowered tar and nicotine” would frustrate the purposes of the Federal Trade Commission’s (FTC) regulatory policies. However, the United States on behalf of the FTC filed an amicus brief concluding that the effect of such state unfair trade claims would not undermine the FTC’s policies in any way.77 In each of these examples, the agency was expressing its view as to the effect state law would have on its regulations or policies. In the Court’s most recent explanation of how it should view such opinions, it said: While agencies have no special authority to pronounce on pre-emption absent delegation by Congress, they do have a unique understanding of the statutes they administer and an attendant ability to make informed determinations about how state requirements may pose an “obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The weight we accord the agency’s explanation of state law’s impact on the federal scheme depends on its thoroughness, 78 consistency, and persuasiveness.
The Court then cited to Mead’s discussion of Skidmore deference and to Skidmore itself.79 In short, such opinions should not merit Chevron deference. The Court’s treatment of the agency’s opinions in each of these examples is consistent with the application of weak or Skidmore deference. In both Geier and Altria, while the outcome as to preemption differed, the Court noted the agency’s position but did not ascribe any particular deference to it.80 Rather, the Court tested the agency’s opinion against the history and record of the regulation in Geier and 76. 129 S. Ct. 538 (2008). 77. See Brief for the United States Amicus Curiae Supporting Respondents, Altria Group, Inc. v. Good, 129 S. Ct. 538 (2008) (No. 07-562), 2008 WL 2472389. 78. Wyeth, 129 S. Ct. at 1201 (citation omitted). 79. Id. 80. See Altria, 129 S. Ct. 538; Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000).
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against the history of the FTC’s policy in Altria. In Geier that history and record supported the agency’s opinion that state tort judgments requiring airbags would undermine the goals of the federal regulation. In Altria the history of the FTC’s application of its policy regarding the use of the terms “light” and “lowered tar and nicotine” supported the agency’s opinion that allowing state misrepresentation suits would not interfere with the federal policy. In Wyeth itself, the Court assessed the history of the adoption of the regulation, the reversal of the longstanding policy of the agency regarding preemption, and the lack of any discussion by the FDA as to how state tort law had interfered with FDA drug labeling regulation during the previous decades.81 In light of this assessment, the Court concluded that the agency’s opinion was neither thorough, consistent, nor persuasive. The above discussion assumed the agency’s opinion would relate to the effects that state law would have on the accomplishment of the goals of the agency’s regulation. That indeed is the normal case. In Wyeth, however, the agency did more than just opine as to the practical effect of state tort law on the accomplishment of the goals of the agency’s labeling regulation. The FDA’s preamble also expressed a view as to the preemptive effect of the FDCA itself.82 That is, the FDA said that the FDCA did not just establish a minimum level of safety but established both a floor and a ceiling on safety, so that regulations thereunder would likewise set both a floor and a ceiling on safety. Consequently, any greater warning requirement required by state tort law would necessarily conflict with the FDA’s regulation. The Court noted that courts perform their own conflict determinations, “relying on the substance of state and federal law and not on agency proclamations of pre-emption,”83 and the FDCA does not authorize the FDA to preempt state law directly.84 The agency’s opinion on the preemptive effect of the FDCA was entitled to the same Skidmore deference as the agency’s opinion on the effect of state law on the accomplishment of the goals of the agency regulation. And its opinion on the preemptive effect of the FDCA was equally faulty. If the Court in Wyeth is to be believed and its opinion followed, it seems clear that an agency’s opinion as to the preemptive effect of its regulation, expressed in a preamble to the regulation or an amicus brief, is entitled to no more than Skidmore deference, and that 81. 82. 83. 84.
Wyeth, 129 S. Ct. 1187. See id. at 1200. Id. at 1201. See id.
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Skidmore deference does not preclude, but in fact requires, a court to assess fully the history and record of the regulation. Alas, there is another wrinkle. When an agency expresses an opinion that a regulation does not have preemptive effect, courts are much more likely to afford Chevron deference to that opinion. For example, in Hillsborough County v. Automated Medical Laboratories, Inc., although Congress had not explicitly provided the FDA with any authority to make preemption determinations regarding the federal regulation of biological products, the Court gave Chevron deference to the agency’s statement in the preamble that the regulation would not preempt state law.85 Thus, there is an asymmetry between judicial consideration of an agency’s opinion that a statute or regulation does preempt state law and an agency’s opinion that a statute or regulation does not preempt state law. There are two possible justifications for this asymmetry. First, in the absence of an express preemption provision, agencies always have the authority not to preempt state law. Congress need not delegate the authority not to preempt any more than it need not delegate the authority not to regulate at all. Consequently, an agency’s intentional failure to preempt does not raise any question of a lack of authority. Second, this asymmetric result may reflect the underlying federalism issues involved. That is, when the federal agency’s interests and the state’s interests are coincident in having no preemption, there is less need for courts to play an active role than when the federal agency’s interest in preemption is contrary to the state’s interest. In the latter case, policing the boundaries of federalism becomes the judicial duty. IV. A PATH TO CLARITY Preemption law alone is difficult enough. The doctrine describing judicial deference to federal agency opinions is riddled with inconsistencies and disparate application. Combine the two and you have a major headache. There is, however, a relatively straightforward resolution of the difficulties if the courts would attend to principles of both lines of doctrine. Presumptions or default rules serve the important and valuable goal of providing greater certitude. We start with the accepted presumption that when there is a direct and unavoidable conflict between a federal law or substantive regulation and a state law, the federal law or regulation preempts the state law. The justification for 85.
471 U.S. 707, 714-15, 723 (1985).
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this presumption is the Supremacy Clause of the Constitution.86 There will, of course, still be questions of application. There may be a question as to the precise scope of the federal law or regulation. One interpretation might create a conflict and one might not. There may be a question as to whether there is a direct and unavoidable conflict. For example, does a federal authorization of private conduct intend to preclude a state prohibition of that conduct or is that authorization only permissive, allowing states to regulate or preclude that conduct. Answering these questions would be aided by the accepted presumption against preemption. That is, when there is a question as to preemption, the presumption should be that there is no preemption. Thus, the presumption against preemption would apply when there is a question as to the extent of an express preemption provision of a statute. It would also apply when there is a question as to whether state law conflicts with federal law or stands as an obstacle to the full achievement of the goals of a federal statute or regulation. Of course, it is only a presumption and may be rebutted. It is impossible to capture in words what showing would be necessary to effect the rebuttal, but it should be enough to say that the burden to show preemption is on the one who seeks it, and the court should find preemption only if it is convinced that it was the intent of Congress.87 The justification for this presumption is respect for the concepts of federalism and the fact that only if Congress does exercise its constitutional powers can it preempt state law. Another presumption should come into play when there is a question regarding a federal agency’s regulation. This presumption should be against an agency having the independent power to preempt state law. The justification for this presumption is the same as that for the presumption against preemption itself. Because of respect for the principles of federalism and the necessity of positive congressional action to preempt state law, it is reasonable to assume that delegating the power to preempt should not occur without the positive intent of Congress expressed in statutory language. If there is an express delegation to the agency to make preemption determinations, there is no question. If, however, the agency does not have such a delegation, 86. See U.S. CONST. art. VI, cl. 2. 87. Rather than creating exceptions to the presumption, as the Court has done on occasion, see United States v. Locke, 529 U.S. 89 (2000), the factors that might justify such exceptions would weigh in the decision as to whether the presumption has been rebutted. In a case such as Locke, in which the Court said the presumption did not apply, the presumption, if it applied, would clearly have been rebutted.
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the presumption would be that it cannot make a preemption determination with the force of law. As the Court said in Wyeth, “[A]gencies have no special authority to pronounce on pre-emption absent delegation by Congress.”88 This presumption would exist whether or not there was a statutory preemption provision. The fact that Congress intends there to be preemption within the scope of a statutory preemption provision does not necessarily mean that Congress intended to delegate to the agency the authority to determine with the force of law the scope of that preemption provision. Indeed, as Adams Fruit explained, merely because an agency has been delegated the authority to administer a statute generally and adopt necessary regulations does not mean that Congress delegated the power to define the scope of other provisions in the statute more appropriately interpreted by the courts.89 Congress can and does sometimes expressly authorize agencies to make preemption determinations, so, when a statute specifically provides for preemption of state law but does not expressly authorize the agency to make preemption determinations, the presumption should be that the agency does not have that power. Of course, this presumption against the agency having the authority to make preemption determinations does not preclude the agency from expressing an opinion on the subject, whether or not the statute contains a statutory preemption provision. Courts, however, should not provide more than Skidmore deference to such opinions, and Skidmore deference means that the courts should test that opinion against the history and record of the agency opinion. Moreover, this presumption does not implicate the substantive powers of regulation delegated to the agency. The exercise of that authority may well “have a preemptive effect should it conflict with state law.”90 And if the agency exercises its delegated power to make substantive regulations with the force of law, its interpretations of that delegated power are entitled to Chevron deference, subject to the general Chevron limitations.91 The agency may well express opinions regarding the effect of those regulations or the effect of state law on the full accomplishment of the objectives of those regulations, but again those opinions would only be entitled to Skidmore deference.
88. 89. 90. 91.
Wyeth, 129 S. Ct. at 1201. Adams Fruit Co. v. Barrett, 494 U.S. 638, 649-50 (1990). Watters v. Wachovia Bank, N.A., 550 U.S. 1, 40 n.24 (2007). See Sunstein, supra note 35, at 188-98.
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The use of these presumptions on a consistent basis, the first two of which are commonly accepted, if not always utilized,92 and the third of which would only make explicit what a number of the justices have been alluding to in various opinions, would go a long way toward making preemption law more predictable. V.
CONCLUSION
This Article has attempted to describe an outline of the current doctrine regarding preemption generally and in more detail the doctrine relating to preemption resulting from agency action. It then elaborated on the law relating to judicial deference to agency opinions as to preemption, however expressed. Congress, acting within its constitutional powers, clearly can preempt state law. However, because preemption does such violence to states’ interests, the respect for those interests inherent in our concept of federalism demands that Congress knowingly take such action. This is the origin of the judicially created presumption against preemption. When agencies act pursuant to congressional direction, the same principles of federalism should apply. If Congress intends for agencies to be able to preempt state law, it should make that intent manifest, as it sometimes has. Similarly, unless Congress makes clear that an agency has the power to make preemption decisions, an agency’s opinion as to the preemptive effect of a statute or its regulation should not command Chevron deference from the courts, but only the respectful consideration mandated by Skidmore. In the absence of a clear statement by Congress, only when a state law would directly and necessarily conflict with an otherwise lawful agency action should that state law be preempted. For the most part, courts have followed this path, but the Supreme Court has been neither clear nor consistent on the subject, so it is no surprise that the path is not clear. However, this Article suggests an approach that, building on existing presumptions, would light this path.
92.
See, e.g., Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710, 2720 (2009).
