1 

RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 15a0261p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

_________________ 

BRUCE MERRICK, et al., 

Plaintiffs-Appellees, 

v. 

DIAGEO AMERICAS SUPPLY, INC., 

Defendant-Appellant. 

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No. 14-6198 

Appeal from the United States District Court 

for the Western District of Kentucky at Louisville. 

No. 3:12-cv-00334—Charles R. Simpson III, District Judge. 

Argued: August 6, 2015 

Decided and Filed: November 2, 2015 

Before: SILER, ROGERS, and STRANCH, Circuit Judges. 

_________________ 

COUNSEL 

ARGUED: Ryan A. Shores, HUNTON & WILLIAMS LLP, Washington, D.C., for Appellant. 

William F. McMurry, WILLIAM F. MCMURRY & ASSOCIATES, Louisville, Kentucky, for 

Appellees. ON BRIEF: Ryan A. Shores, William L. Wehrum, Andrew D. Knudsen, HUNTON 

& WILLIAMS LLP, Washington, D.C., Walfrido J. Martinez, HUNTON & WILLIAMS LLP, 

New York, New York, John S. Reed, Rebecca A. Naser, Brooks D. Kubik, Megan L. Renwick, 

REED WEITKAMP SCHELL & VICE PLLC, Louisville, Kentucky, for Appellant. William F. 

McMurry, WILLIAM F. MCMURRY & ASSOCIATES, Louisville, Kentucky, Douglas H. 

Morris, Lea A. Player, MORRIS & PLAYER PLLC, Louisville, Kentucky, for Appellees. Peter 

D. Keisler, Quin M. Sorenson, SIDLEY AUSTIN LLP, Washington, D.C., J. Philip Calabrese, 

PORTER WRIGHT MORRIS & ARTHUR LLP, Cleveland, Ohio, Robert L. Brubaker, L. 

Bradfield Hughes, Eric B. Gallon, PORTER WRIGHT MORRIS & ARTHUR LLP, Columbus, 

Ohio, for Amici Curiae. 

>
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 2 

_________________ 

OPINION

_________________ 

ROGERS, Circuit Judge. This interlocutory appeal concerns whether the federal Clean 

Air Act preempts common law claims brought against an emitter based on the law of the state in 

which the emitter operates. The Clean Air Act’s text makes clear that the Act does not preempt 

such claims. This conclusion is further supported by the Act’s structure and history, together 

with relevant Supreme Court precedents. 

Diageo Americas Supply, Inc. distills and ages whiskey at its Louisville facilities. The 

distillation and aging process results in tons of ethanol emissions. Ethanol vapor from the 

facilities wafts onto nearby real and personal property where the ethanol combines with 

condensation to propagate whiskey fungus. The whiskey fungus allegedly “creates an unsightly 

condition [on the property,] requiring abnormal and costly cleaning and maintenance, [and 

causes] early weathering of surfaces [and] unreasonable and substantial annoyance and 

unreasonable interference with the use and enjoyment of the property.” 

Ethanol emissions are regulated under the Clean Air Act. As explained by the Third 

Circuit in a similar case, the Clean Air Act is: 

a comprehensive federal law that regulates air emissions under the auspices of the 

United States Environmental Protection Agency (“EPA”). Congress enacted the 

law in response to evidence of the increasing amount of air pollution created by 

the industrialization and urbanization of the United States and its threat to public 

health and welfare. 42 U.S.C. § 7401(a)(2). The Clean Air Act states that air 

pollution prevention and control is the primary responsibility of individual states 

and local governments but that federal financial assistance and leadership is 

essential to accomplish these goals. Id. § 7401(a)(3)–(4). Thus, it employs a 

“cooperative federalism” structure under which the federal government develops 

baseline standards that the states individually implement and enforce. In so 

doing, states are expressly allowed to employ standards more stringent than those 

specified by the federal requirements. 42 U.S.C. § 7416. 

The Clean Air Act makes the EPA responsible for developing acceptable 

national ambient air quality standards (“NAAQS”), which are meant to set a 

uniform level of air quality across the country in order to protect the populace and 

the environment. Id. § 7409(b)(1). Before such levels are adopted or modified by 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 3 

the EPA, “a reasonable time for interested persons to submit written comments” 

must be provided. Id. § 7409(a)(1)(B). The EPA itself does not typically regulate 

individual sources of emissions. Instead, decisions regarding how to meet 

NAAQS are left to individual states. Id. § 7410(a)(1). Pursuant to this goal, each 

state is required to create and submit to the EPA a State Implementation Plan 

(“SIP”) which provides for implementation, maintenance, and enforcement of 

NAAQS within the state. Id. All SIPs must be submitted to the EPA for approval 

before they become final, and once a SIP is approved, “its requirements become 

federal law and are fully enforceable in federal court.” Her Majesty the Queen in 

Right of the Province of Ontario v. Detroit, 874 F.2d 332, 335 (6th Cir. 1989) 

(citing 42 U.S.C. § 7604(a)). 

States are tasked with enforcing the limitations they adopt in their SIPs. 

They must regulate all stationary sources located within the areas covered by the 

SIPs, 42 U.S.C. § 7410(a)(2)(C), and implement a mandatory permit program that 

limits the amounts and types of emissions that each stationary source is allowed to 

discharge, id. §§ 7661a(d)(1), 7661c(a). “[E]ach permit is intended to be a 

source-specific bible for Clean Air Act compliance containing in a single, 

comprehensive set of documents, all [Clean Air Act] requirements relevant to the 

particular polluting source.” North Carolina, ex rel. Cooper v. Tenn. Valley 

Auth., 615 F.3d 291, 300 (4th Cir. 2010) (internal quotation marks omitted). 

Furthermore, pursuant to the federal Prevention of Significant Deterioration of 

Air Quality program in areas attaining NAAQS, “a covered source must, among 

other things, install the ‘best available control technology [] for each pollutant 

subject to regulation . . . .” Coalition for Responsible Regulation, Inc. v. EPA, 

684 F.3d 102, 133 (D.C. Cir. 2012) (quoting 42 U.S.C. § 7475(a)(4)). 

 . . . . 

The Clean Air Act contains a “citizen suit” provision, . . . [that in turn 

contains] a “savings clause” which provides, in pertinent part: 

Nothing in this section shall restrict any right which any person (or 

class of persons) may have under any statute or common law to 

seek enforcement of any emission standard or limitation or to seek 

any other relief (including relief against the Administrator or a 

State agency). 

 42 U.S.C. § 7604(e). This is the Clean Air Act’s “citizen suit savings clause.” 

The Clean Air Act also contains a separate savings clause entitled 

“Retention of State authority,” codified at 42 U.S.C. § 7416. This provision 

focuses on states’ rights, and reads as follows: 

Except as otherwise provided . . . nothing in this chapter shall 

preclude or deny the right of any State or political subdivision 

thereof to adopt or enforce (1) any standard or limitation respecting 

emissions of air pollutants or (2) any requirement respecting 

control or abatement of air pollution . . . . 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 4 

Id. § 7416. This is the Clean Air Act’s “states’ rights savings clause.” 

Bell v. Cheswick Generating Station, 734 F.3d 188, 190–91 (3d Cir. 2013), cert. denied sub nom.

GenOn Power Midwest, L.P. v. Bell, 134 S. Ct. 2696 (2014) (some internal citations omitted). 

Diageo’s Clean Air Act obligations with respect to the Louisville facilities are set out in 

the terms of a Federally Enforceable District Origin Operating Permit issued and overseen by the 

Louisville Metro Air Pollution Control District. The permit prescribes detailed requirements for 

data collection, recordkeeping, and reporting. It also expressly incorporates most of the 

regulations of the air pollution control district, including Regulation 1.09, which provides: 

No person shall permit or cause the emission of air pollutants which exceed the 

requirements of the District regulations or which cause injury, detriment, 

nuisance, or annoyance to any considerable number of persons or to the public or 

which endanger the comfort, repose, health, or safety of any such persons or the 

public or which cause or have a natural tendency to cause injury or damage to 

business or property. 

Finally, the permit sets limits for emissions of various pollutants from the facilities. For 

purposes of these limits, the permit distinguishes between fugitive and non-fugitive emissions. 

Fugitive emissions are those emissions that “could not reasonably pass through a stack, chimney, 

vent, or other functionally equivalent opening,” i.e., emissions that cannot reasonably be 

channeled through some kind of screening mechanism. 40 C.F.R. § 52.21(b)(20). Non-fugitive 

emissions, by contrast, are those emissions that can reasonably be channeled through a screening 

mechanism. For volatile organic compounds, including ethanol, the permit caps non-fugitive 

emissions at 100 tons per year. The permit does not cap fugitive ethanol emissions, i.e., those 

from Diageo’s storage warehouses. 

 The plaintiffs in this case—owners, lessors, and renters of nearby properties affected by 

whiskey fungus—complained to the air pollution control district about the proliferation of 

whiskey fungus on their properties. In response, the district undertook an investigation that 

resulted in the issuance of a Notice of Violation letter to Diageo on September 7, 2012. In the 

letter, the district stated that, between June 2011 and May 2012, it received 27 complaints from 

residents living near the facilities of a “black, sooty substance covering . . . everything exposed 

to the outdoors.” The district found that Diageo had violated District Regulation 1.09 because: 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 5 

Diageo caused and allowed the emission of an air pollutant which crossed its 

property line causing an injury and nuisance to nearby neighborhoods and the 

public. Diageo’s warehouse emissions present a current and continuing threat to 

[the] public, endangering the comfort and repose of its neighbors. Diageo’s 

warehouse emissions cause damage to nearby property and have the natural 

tendency to continue causing damage. 

The Notice of Violation letter instructed Diageo to “submit to the District for approval a 

compliance plan for the abatement and control of emissions from its warehouses that are 

contributing to a nuisance, in accordance with District Regulation 1.12 by October 5, 2012.” 

Diageo disputed that its operations at the facilities violated any district regulation, but 

nevertheless committed to vacating two of its whiskey aging warehouses to eliminate the 

problems of which plaintiffs complain. The record does not show whether Diageo followed 

through with its commitment and what effect, if any, that had on the growth of whiskey fungus 

on plaintiffs’ properties. 

In addition to complaining to the air pollution control district, plaintiffs filed a class 

action complaint in federal district court, seeking compensatory and punitive damages from 

Diageo for negligence, nuisance, and trespass, and an injunction requiring Diageo to abate its 

ethanol emissions by implementing certain control technologies at the facilities. Diageo moved 

to dismiss the complaint on two grounds. First, Diageo argued that it had no duty to curb ethanol 

emissions from its Louisville facilities. In support of this contention, Diageo relied on EPA 

decisions, agency actions from other jurisdictions, and its own permits. Second, in a notice of 

supplemental authority, Diageo argued that plaintiffs’ claims were preempted by the Clean Air 

Act. 

The district court largely rejected Diageo’s arguments. Addressing Diageo’s preemption 

argument first, the district court considered the Act’s text in connection with decisions by the 

Supreme Court, this court, and other federal courts of appeals. The district court concluded that 

“Plaintiffs’ state common law tort claims against Diageo are not preempted by the [Clean Air 

Act].” 

The district court then addressed the sufficiency of the three state-law causes of action 

listed in the complaint, along with the claim for injunctive relief. In doing so, the district court 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 6 

first considered plaintiffs’ argument that, because Diageo had offered materials outside the 

pleadings—concerning its federal and state permits and the feasibility of implementing 

technologies to control its ethanol emissions—the district court was required to convert Diageo’s 

motion to dismiss into a motion for summary judgment. The district court excluded the 

documents from its consideration, deciding that the documents “[were] not necessary for the 

resolution of the issues argued in Diageo’s motion to dismiss.” Because it had excluded the 

documents from consideration, the district court concluded, the documents did not obligate it to 

convert Diageo’s motion to dismiss into a motion for summary judgment. 

Turning to the substance of plaintiffs’ state common law claims, the district court 

dismissed plaintiffs’ negligence claim on the ground that plaintiffs had not pled facts sufficient to 

establish that Diageo owed them a duty of care, or that Diageo had breached that duty. The court 

denied Diageo’s motion, however, with respect to plaintiffs’ remaining causes of action, 

concluding that plaintiffs had alleged facts sufficient to establish nuisance and trespass, and to 

entitle them to injunctive relief. 

On Diageo’s motion, the district court certified its ruling for interlocutory appeal. A 

panel of this court granted the petition to appeal pursuant to 28 U.S.C. § 1292(b). On appeal, 

Diageo argues that plaintiffs’ state common law claims conflict with the Clean Air Act methods 

for regulating emissions and, therefore, that allowing such claims to proceed would frustrate the 

purposes and objectives of the Act. 

The states’ rights savings clause of the Clean Air Act expressly preserves the state 

common law standards on which plaintiffs sue. The clause saves from preemption “the right of 

any State or political subdivision thereof to adopt or enforce (1) any standard or limitation 

respecting emissions of air pollutants or (2) any requirement respecting control or abatement of 

air pollution,” except that the “State or political subdivision may not adopt or enforce any 

emission standard or limitation” that is “less stringent” than a standard or limitation under an 

applicable implementation plan or specified federal statute. 42 U.S.C. § 7416. State courts are 

arms of the “State,” and the common law standards they adopt are “requirement[s] respecting 

control or abatement of air pollution.” Id. Thus, the states’ rights savings clause makes clear 

that states retain the right to “adopt or enforce” common law standards that apply to emissions. 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 7 

A federal statute does not preempt state law if Congress did not intend the statute to do so, and 

“the best evidence of” Congress’s intent “is the statutory text adopted by both Houses of 

Congress and submitted to the President.” W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 98 

(1991). 

The phrase “any requirement,” as used in the states’ rights savings clause, clearly 

encompasses common law standards. As a four-Justice plurality of the Supreme Court has 

reasoned with respect to preempting language in a different statute, “[t]he phrase ‘[n]o 

requirement or prohibition’ sweeps broadly and suggests no distinction between positive 

enactments and common law; to the contrary, those words easily encompass obligations that take 

the form of common law rules.” Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 521 (1992) 

(plurality opinion). The phrase “any requirement” is similarly broad in its sweep, suggesting that 

it, too, encompasses common law rules. An expansive reading of “any requirement” is 

consistent, moreover, with the Court’s historical tendency to treat common law standards as 

“requirements” for purposes of a variety of statutes. In Bates v. Dow Agrosciences LLC, for 

instance, the Court determined that the word “requirements” in the Federal Insecticide, 

Fungicide, and Rodenticide Act “reaches beyond positive enactments, such as statutes and 

regulations, to embrace common-law duties.” 544 U.S. 431, 443 (2005). In Riegel v. Medtronic, 

Inc., the Court concluded that common law causes of action for negligence and strict liability 

imposed “requirement[s]” for purposes of the Federal Food, Drug, and Cosmetic Act. 552 U.S. 

312, 324 (2008). State common law standards therefore qualify as “requirements” for purposes 

of the Clean Air Act states’ rights savings clause. 

It is also plain that state courts are parts of the “State” for purposes of the states’ rights 

savings clause. The states’ rights savings clause implies that “State” refers to something that can 

“adopt or enforce . . . requirement[s].” State courts “adopt” state law “requirements” by making 

and modifying the common law, and state courts are the branch of state government most often 

tasked with “enforcing” state law “requirements.” Indeed, the Supreme Court has interpreted the 

word “State” in the Clean Water Act states’ rights savings clause, 33 U.S.C. § 1370(1)—which is 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 8 

materially indistinguishable from the Clean Air Act states’ rights savings clause,1see Bell, 

734 F.3d at 195—to cover state courts and the common law rules they shape. See Int’l Paper 

Co. v. Ouellette, 479 U.S. 481, 497–98 (1987). The Court’s interpretation of the word “State” in 

the Clean Water Act states’ rights savings clause strongly indicates that the same word in the 

Clean Air Act states’ rights saving clause, 42 U.S.C. § 7416, includes state courts. State 

common law standards are thus “requirements” adopted by “States,” such that the Clean Air Act 

states’ rights savings clause preserves them against preemption. 

 Other parts of the text of the Clean Air Act are fully consistent with this conclusion. For 

instance, Congress set out the Act’s purposes and objectives in a section of the Act labeled 

“Congressional findings and declaration of purpose,” which provides in part “that air pollution 

prevention (that is, the reduction or elimination, through any measures, of the amount of 

pollutants produced or created at the source) and air pollution control at its source is the primary 

responsibility of States and local governments.” 42 U.S.C. § 7401(a)(3). Allowing states to 

apply their common law to emissions advances the Act’s stated purposes by empowering states 

to address and curtail air pollution at its source. See id. at § 7401(a)(3), (c). Regulation of 

emissions under state common law, moreover, is consistent with Congress’s declaration that it 

“is the primary responsibility of States” to prevent and reduce air pollution “through any 

measures.” Id. at § 7401(a)(3) (emphasis added). 

The legislative history of the Clean Air Act also indicates that it was not Congress’s 

purpose to preempt state common law claims like those of the plaintiffs. For instance, the Report 

of the Senate Committee on Public Works explained that the citizen suit provision of the Clean 

Air Act “would specifically preserve any rights or remedies under any other law. Thus, if 

 1

Diageo argues that the Clean Water Act states’ rights savings clause is distinguishable from its Clean Air 

Act counterpart because the Clean Water Act states’ rights savings clause contains the following sub-clause not 

found in the Clean Air Act states’ rights savings clause: 

[N]othing in this chapter shall . . . be construed as impairing or in any manner affecting any right 

or jurisdiction of the States with respect to the waters (including boundary waters) of such States. 

33 U.S.C. § 1370(2). That sub-clause is irrelevant for purposes of preemption because it does not purport to affect 

or expand the application of state common law under the Act. Rather, the sub-clause merely “preserve[s] the 

authority of each State to allocate water quantity as between users; [it does] not limit the scope of water pollution 

controls that may be imposed [by states] on users who have obtained, pursuant to state law, a water allocation.” 

PUD No. 1 of Jefferson Cnty. v. Wash. Dep’t of Ecology, 511 U.S. 700, 720 (1994). The sub-clause thus does not 

affect the symmetry, for purposes of preemption analysis, between the Clean Water Act states’ rights savings clause 

and the Clean Air Act states’ rights savings clause. See Bell, 734 F.3d at 195–97. 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 9 

damages could be shown, other remedies would remain available. Compliance with standards 

under this Act would not be a defense to a common law action for pollution damages.” S. Rep. 

No. 91-1196, at 38 (1970). 

 Supreme Court precedents interpreting and applying the Clean Water Act confirm that 

the Clean Air Act does not preempt plaintiffs’ state common law claims. Clean Water Act 

precedents are persuasive with respect to the Clean Air Act because many provisions in the 

Clean Water Act—including the savings clauses—were modeled on the Clean Air Act, so that 

the two acts are often in pari materia. United States v. Stauffer Chem. Co., 684 F.2d 1174, 1187 

(6th Cir. 1982). As the Third Circuit has explained: 

[T]here is little basis for distinguishing the Clean Air Act from the Clean Water 

Act—the two statutes feature nearly identical savings clauses and employ similar 

‘cooperative federalism’ structures. Both Acts establish a regulatory scheme 

through which source states, and not affected states, play the primary role in 

developing the regulations by which a particular source will be bound. Both Acts 

contain citizen suit provisions which allow individuals to bring suit to enforce 

their terms under certain circumstances, and both Acts contain two savings 

clauses: one located within the citizen suit provision which focuses on the rights 

of individuals to sue, and a second independent savings clause which focuses on 

states’ rights. 

Bell, 734 F.3d at 196 (internal quotation marks and citation omitted). 

The Supreme Court has reasoned that the Clean Water Act preserves source state 

common law claims, even though it preempts application of source state common law claims to 

out-of-state sources: 

The saving clause specifically preserves other state actions, and therefore nothing 

in the Act bars aggrieved individuals from bringing a nuisance claim pursuant to 

the law of the source State. By its terms the CWA allows States . . . to impose 

higher standards on their own point sources, and in [City of Milwaukee v. Illinois 

& Michigan, 451 U.S. 304 (1981),] we recognized that this authority may include 

the right to impose higher common-law as well as higher statutory restrictions. 

451 U.S. at 328 (suggesting that “States may adopt more stringent limitations . . . 

through state nuisance law, and apply them to in-state dischargers”); see also 

Comm. for Jones Falls Sewage Sys. v. Train, 539 F.2d 1006, 1009, and n.9 

(4th Cir. 1976) (CWA preserves common-law suits filed in source State). 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 10 

Ouellette, 479 U.S. at 497–98. The Ouellette Court’s interpretation of the Clean Water Act 

states’ rights savings clause to preserve claims based on the law of the source state leads directly 

to the conclusion that the analogous states’ rights savings clause in the Clean Air Act similarly 

preserves claims based on the law of the source state. 

 This conclusion is directly supported by holdings of the Third Circuit and the Iowa 

Supreme Court. In cases materially indistinguishable from this one, those courts have held that 

the Clean Air Act does not preempt claims brought by plaintiffs under the common law of the 

source state. See Bell, 734 F.3d at 196–98; Freeman v. Grain Processing Corp., 848 N.W.2d 58, 

80 (Iowa), cert. denied, 135 S. Ct. 712 (2014). Diageo points to North Carolina, ex rel. Cooper 

v. TVA, 615 F.3d 291 (4th Cir. 2010), in which the Fourth Circuit held that the Clean Air Act 

preempted a plaintiff’s state common law claims. Cooper, however, did not involve claims 

under the common law of the source state. Rather, Cooper involved claims against Alabama and 

Tennessee sources brought under North Carolina law. Id. at 297. That difference was 

dispositive on the preemption issue, for reasons having to do with federalism and the holding in 

Ouellette: 

[T]he district court’s decision compromised principles of federalism by applying 

North Carolina law extraterritorially to TVA plants located in Alabama and 

Tennessee. There is no question that the law of the states where emissions 

sources are located, in this case Alabama and Tennessee, applies in an interstate 

nuisance dispute. The Supreme Court’s decision in Ouellette is explicit: a “court 

must apply the law of the State in which the point source is located.” 479 U.S. at 

487. While Ouellette involved a nuisance suit against a source regulated under 

the Clean Water Act, all parties agree its holding is equally applicable to the 

Clean Air Act. 

Id. at 306. The Fourth Circuit in Cooper applied the same framework the Third Circuit applied 

in Bell and the Iowa Supreme Court applied in Freeman. All three courts distinguished between 

claims based on the common law of the source state—which are not preempted by the Clean Air 

Act—and claims based on the common law of a non-source state—which are preempted by the 

Clean Air Act. Applying that framework here leads to the conclusion that the Clean Air Act 

does not preempt plaintiffs’ claims. 

The Supreme Court’s decision in American Electric Power Co. v. Connecticut (AEP), 

131 S. Ct. 2527 (2011), does not undermine that conclusion. AEP involved a suit against “the 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 11 

five largest emitters of carbon dioxide in the United States.” Id. at 2534. The AEP plaintiffs 

alleged that, by contributing to global warming, “defendants’ carbon-dioxide emissions created a 

‘substantial and unreasonable interference with public rights,’ in violation of the federal common 

law of interstate nuisance,” and sought injunctive relief through a court-ordered imposition of 

emissions caps. Id. The Supreme Court, however, held “that the Clean Air Act and the EPA 

actions it authorizes displace any federal common law right to seek abatement” of such 

emissions. Id. at 2537. In so holding, the Court emphasized two considerations. First, when it 

comes to setting federal emissions standards, the Act entrusts expert agencies, not courts, with 

primary decisionmaking authority. Second, relative to expert agencies, courts are ill suited to the 

complex balancing required in setting emissions standards. Id. at 2539–40. 

Diageo argues that the Supreme Court’s reasons for concluding that the Clean Air Act 

displaces federal common law all militate with equal force in favor of holding that the Act 

preempts state common law. There are fundamental differences, however, between displacement 

of federal common law by the Act and preemption of state common law by the Act. For one 

thing, the Clean Air Act expressly reserves for the states—including state courts—the right to 

prescribe requirements more stringent than those set under the Clean Air Act. 42 U.S.C. § 7416. 

The Act does not grant federal courts any similar authority. 

In addition, the displacement of federal common law with applicable statutory law is a 

natural occurrence in a common law legal system where courts with jurisdiction over disputes 

must come up with legal principles in the absence of statutory rules of decision. See AEP, 131 S. 

Ct. at 2536. As the Supreme Court explained in AEP: 

“[W]hen Congress addresses a question previously governed by a decision 

rested on federal common law,” the Court has explained, “the need for such an 

unusual exercise of law-making by federal courts disappears.” Legislative 

displacement of federal common law does not require the “same sort of evidence 

of a clear and manifest [congressional] purpose” demanded for preemption of 

state law. “‘[D]ue regard for the presuppositions of our embracing federal system 

. . . as a promoter of democracy,’” does not enter the calculus, for it is primarily 

the office of Congress, not the federal courts, to prescribe national policy in areas 

of special federal interest. The test for whether congressional legislation excludes 

the declaration of federal common law is simply whether the statute “speak[s] 

directly to [the] question” at issue. 

Id. at 2537 (internal citations omitted). 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 12 

 The question whether state law is preempted demands due “regard for the presuppositions 

of our embracing federal system.” Id. (internal citation omitted). When Congress acts to 

preempt state law—especially in areas of longstanding state concern—it treads on the states’ 

customary prerogatives in ways that risk upsetting the traditional federal-state balance of 

authority. See Geib v. Amoco Oil Co., 29 F.3d 1050, 1058 (6th Cir. 1994). This is why there is a 

strong presumption against federal preemption of state law, one that operates with special force 

in cases “in which Congress has legislated . . . in a field which the States have traditionally 

occupied.” Medtronic, Inc v. Lohr, 518 U.S. 470, 485 (1996). Environmental regulation is a 

field that the states have traditionally occupied. See Huron Portland Cement Co. v. City of 

Detroit, 362 U.S. 440, 442 (1960). Accordingly, even if the express language of the states’ 

rights savings clause here did not preserve state common law claims, principles of federalism 

and respect for states’ rights would likely do so in the absence of a clear expression of such 

preemption. 

Finally, the AEP Court itself explicitly stated that its holding was not dispositive of 

whether the Clean Air Act preempts state common law claims involving emissions. 

In light of our holding that the Clean Air Act displaces federal common law, the 

availability vel non of a state lawsuit depends, inter alia, on the preemptive effect 

of the federal Act. [Ouellette, 479 U.S.] at 489, 491, 497 (holding that the Clean 

Water Act does not preclude aggrieved individuals from bringing a “nuisance 

claim pursuant to the law of the source State”). None of the parties have briefed 

preemption or otherwise addressed the availability of a claim under state nuisance 

law. We therefore leave the matter open for consideration on remand. 

AEP, 131 S. Ct. at 2540. The distinction the AEP Court drew—between displacement of federal 

law and preemption of common law—mirrors the distinction the Court drew in the context of the 

Clean Water Act. In City of Milwaukee v. Illinois & Michigan, 451 U.S. 304 (1981), the Court 

held that the Clean Water Act displaced federal common law governing water pollution because, 

by enacting a comprehensive federal water statute, Congress had supplanted federal common 

law. See id. at 322–25. The AEP Court’s description of the structure and scope of the Clean Air 

Act closely mirrors the City of Milwaukee Court’s description of the structure and scope of the 

Clean Water Act. Notwithstanding the displacement holding in City of Milwaukee, however, the 

Supreme Court subsequently held in Ouellette that the Clean Water Act does not preempt claims 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 13 

based on source state common law. See Ouellette, 479 U.S. at 498–99. Given the parallels 

between the two acts, City of Milwaukee and Ouellette together indicate that AEP’s holding 

concerning displacement of federal common law does not support Clean Air Act preemption of 

source state common law. Indeed, the citation of Ouellette in AEP suggests the opposite 

conclusion: that the Clean Air Act does not preempt source state common law. For all of the 

foregoing reasons, AEP does not support Diageo’s preemption arguments. 

Many of Diageo’s remaining arguments mistake regulatory overlap for regulatory 

conflict. The bare fact that Kentucky law may impose more stringent requirements than the 

Clean Air Act does not mean that the Act preempts Kentucky law. “The fact that a state has 

more stringent regulations than a federal law does not constitute conflict preemption.” Patriotic 

Veterans, Inc. v. Indiana, 736 F.3d 1041, 1049 (7th Cir. 2013). “[S]tates frequently, and without 

preemption by federal law, create more stringent laws regarding minimum wage, employment 

discrimination, educational standards, gambling, and highway safety, to name a few.” Id. Nor is 

Kentucky law preempted simply because it is the product of a less sophisticated or expert-driven 

process than that of the Clean Air Act. The question, for preemption purposes, is whether 

compliance with the state law defeats the purposes and objectives of the federal law, not whether 

the two laws impose different standards by different means. There is no evidence that Congress 

intended that all emissions regulation occur through the Clean Air Act’s framework, such that 

any state law approach to emissions regulation would stand as an obstacle to Congress’s 

objectives. 

 Diageo suggests that allowing state common law claims would “disrupt the CAA’s 

balance of authority between federal and state law and conflict with the mechanism by which the 

CAA allows states to impose more stringent standards than the ‘floor’ established by federal 

law.” The Supreme Court disposed of an identical argument in Ouellette, remarking that: 

An action brought against [a polluter] under [source-state] nuisance law would 

not frustrate the goals of the CWA as would a suit governed by [affected-state] 

law. [A]pplication of the source State’s law does not disturb the balance among 

federal, source-state, and affected-state interests. Because the Act specifically 

allows source States to impose stricter standards, the imposition of source-state 

law does not disrupt the regulatory partnership established by the permit system. 

479 U.S. at 498–99. What was true for the Clean Water Act holds true for the Clean Air Act. 
No. 14-6198 Merrick, et al. v. Diageo Americas Supply Page 14 

 We acknowledge the concern that a comprehensive federal scheme imposes substantial 

costs on industries, and that some suggest it is unduly burdensome for such industries to remain 

subject, in addition, to the requirements and remedies of state common law. Such a concern 

must however be directed to Congress. There is no basis in the Clean Air Act on which to hold 

that the source state common law claims of plaintiffs are preempted. 

The order of the district court is affirmed.