FEDERAL AGENCY PREEMPTION OF STATE LAW
Catherine M. Sharkey*

Introduction ......................................................................................................................... 3
I.
A.
B.

II.

Executive Directives on Preemption and Federalism ................................................. 7
May 2009 Presidential Memorandum on Preemption ............................................ 7
Federalism Executive Order 13132 ........................................................................ 7
1. Consultation Process ........................................................................................... 8
2. Federalism Impact Statements ............................................................................ 9
3. Enforcement ........................................................................................................ 9

Federal Agency Response: Rulemaking and Litigation............................................ 11
NHTSA ................................................................................................................. 12
1. Response to May 2009 Presidential Memorandum on Preemption .................. 13
2. Rulemaking ....................................................................................................... 15
(a)
Removal of Preemptive Language ............................................................ 16
(i)
Rearview Mirror Rule ........................................................................... 17
(ii)
Roof Crush Rule ................................................................................... 18
(iii) Designated Seating Position Amendment ............................................. 19
(b)
Evolution of Boilerplate Language on the Issue of Preemption ............... 21
(i)
Implied Preemption Language .............................................................. 21
(ii)
Express Preemption Language .............................................................. 24
3. Litigation ........................................................................................................... 24
(a)
Automobile Safety Standards ................................................................... 24
(b)
Fuel Economy Standards .......................................................................... 26
B. FDA....................................................................................................................... 28
1. Response to May 2009 Presidential Memorandum on Preemption .................. 29
2. Rulemaking ....................................................................................................... 29
3. Litigation ........................................................................................................... 31
C. OCC ...................................................................................................................... 36
1. Response to May 2009 Presidential Memorandum on Preemption .................. 39
2. Congressional Response: Dodd-Frank Wall Street Reform and Consumer
Protection Act ................................................................................................... 41
D. CPSC ..................................................................................................................... 45
1. Congressional Response: Consumer Product Safety Improvement
Act of 2008 ....................................................................................................... 46
A.

*

Professor of Law, New York University School of Law. Matthew Shahabian (NYU 2011)
provided phenomenal research and editorial assistance. This Report was prepared for the
consideration of the Administrative Conference of the United States. The views expressed
are those of the author and do not necessarily reflect those of the members of the Conference
or its committees.

© Copyright, Catherine M. Sharkey. All rights reserved.

2.
3.
4.

Response to May 2009 Presidential Memorandum on Preemption .................. 48
Rulemaking ....................................................................................................... 51
Litigation ........................................................................................................... 52
E. FTC ....................................................................................................................... 53
1. Response to May 2009 Presidential Memorandum on Preemption .................. 56
2. Rulemaking ....................................................................................................... 56
3. Litigation ........................................................................................................... 58
F. EPA ....................................................................................................................... 59
1. Response to May 2009 Presidential Memorandum on Preemption .................. 59
2. Uniqueness of EPA: Agency and States as Co-regulators ................................ 62
III.
A.

Recommendations ................................................................................................. 63
Agencies ................................................................................................................ 65
1. Internal Guidelines on Procedures for Implementing the Preemption
Provisions of the Federalism Executive Order (13132) .................................... 65
2. Consultation with the States.............................................................................. 69
(a)
Expand Appropriate Representatives of State Regulatory Interests ......... 72
(i)
The Big Seven ....................................................................................... 72
(ii)
Encourage Development of Agency-Specific Liaison Groups ............. 75
(iii) Introduce Attorney General Notification Provision .............................. 77
(b)
Focus on Earlier Outreach to States .......................................................... 79
3. Internal Oversight ............................................................................................. 80
B. OIRA/OMB........................................................................................................... 85
1. Direct Agencies to Publish Reports of Agency Compliance with May 2009
Presidential Memorandum ................................................................................ 85
2. Update OMB Guidance Document ................................................................... 86
3. Include a More Thorough Review of Preemption in Regulatory Review
Process .............................................................................................................. 87

2

INTRODUCTION
Federal agency preemption of state law is a significant, high-profile issue. The
Administrative Conference of the United States (ACUS) last considered the topic in 1984
and issued several recommendations. The Reagan Executive Order on Federalism (E.O.
12612) incorporated two of the procedural requirements ACUS recommended.1 In 1988,
the American Bar Association (ABA) adopted the ACUS recommendations almost
verbatim.2 At that time, the most pressing concern was federal preemption of state
regulations and whether agencies had authority to preempt those state regulations via
notice-and-comment rulemaking. Since that time, the major controversy has become
federal preemption of state tort law. In 1992, the U.S. Supreme Court held in Cipollone
v. Liggett Group3 that state law ―requirements‖ subject to preemption by federal statutes
(in this case, one regulating cigarette labeling) could be read to include common law tort
actions (in addition to state statutes and regulations).
Federal preemption of state tort law has become one of the most high-profile
issues today, arising in a variety of contexts ranging from health, safety and
environmental regulation to banking regulation and consumer protection. During the
George W. Bush Administration, executive department agencies and independent
regulatory agencies aggressively pursued preemption.4 The United States Supreme Court
has decided a rash of preemption cases in recent years.5 Congress has held hearings on
1

Section 4 (―Special Requirements for Preemption‖) of E.O. 12612 reads:
(d) As soon as an Executive department or agency foresees the possibility of a conflict
between State law and Federally protected interests within its area of regulatory
responsibility, the department or agency shall consult, to the extent practicable,
with appropriate officials and organizations representing the States in an effort to
avoid such a conflict.
(e) When an Executive department or agency proposes to act through adjudication or
rule-making to preempt State law, the department or agency shall provide all
affected States notice and an opportunity for appropriate participation in the
proceedings.

Exec. Order No. 12,612, 3 C.F.R. 252 (1988), reprinted in 5 U.S.C. § 601 (1994). These
subsections copy (almost verbatim) 1984 ACUS recommendations #3 and #4.
ADMINISTRATIVE CONFERENCE OF THE UNITED STATES, RECOMMENDATION NO. 84-5,
PREEMPTION OF STATE REGULATION BY FEDERAL AGENCIES (1984).
2

Arthur E. Bonfield, Preemption Recommendation, 113 ANN. REP. A.B.A. 291 (1988).

3

505 U.S. 504 (1992).

4

For elaboration, see Catherine M. Sharkey, Preemption by Preamble: Federal Agencies and the
Federalization of Tort Law, 56 DEPAUL L. REV. 227 (2007) [hereinafter Sharkey,
Preemption by Preamble].

5

See Cuomo v. Clearing House Ass‘n, 129 S. Ct. 2710 (2009) (holding that the National Banking
Act does not preempt a state attorney general‘s action to enforce state fair lending laws
against a national bank); Wyeth v. Levine, 129 S. Ct. 1187, 1191 (2009) (holding that FDA

proposed legislation that would undo the Court‘s preemption decision in the realm of
medical devices,6 and the issue of preemption is at the forefront of debates surrounding
the Motor Vehicle Safety Act7 and the newly created Consumer Financial Protection
Agency.8 In May 2009, President Obama issued a Presidential Memorandum on
Preemption.9
Federal agencies play a significant role in statutory interpretation. While
Congress, with the stroke of a pen, could definitively resolve preemption questions,
simply by clearly specifying the fate of state law when it enacts legislation, the reality is
that Congress often falls short of this benchmark. Some legislation—such as the Motor
Vehicle Safety Act and the Consumer Product Safety Act—are marked by Congress‘
inclusion of both an express preemption provision that would seem to oust competing
approval of warnings on a pharmaceutical company‘s label did not provide a complete
defense to state tort claims); Altria Group, Inc. v. Good, 129 S. Ct. 538, 551 (2008) (holding
that a state fraud claim against a cigarette manufacturer was not preempted by federal law);
Desiano v. Warner-Lambert & Co., 467 F.3d 85, 87 (2d Cir. 2006) (holding that federal law
did not preempt a state tort law providing a ―fraud-on-the-FDA‖ exception to state immunity
for drug manufacturers whose drugs are approved by the FDA), aff’d by an equally divided
court, Warner-Lambert Co. v. Kent, 128 S. Ct. 1168 (2008); Riegel v. Medtronic, Inc., 128
S. Ct. 999, 1011 (2008) (holding that a federal statute regulating medical devices preempts
state tort law when the device at issue had received FDA premarket approval). The Supreme
Court has two additional preemption cases on its docket this Term. In Williamson v. Mazda
Motor of Am., Inc., the Court will decide whether compliance with a motor vehicle safety
standard preempts state common law liability. See United States Supreme Court, Order List:
560 U.S. at 2 (May 24, 2010) (granting cert), available at
http://www.supremecourt.gov/orders/courtorders/052410zor.pdf. And in Bruesewitz v.
Wyeth, the Court will determine whether the National Childhood Vaccine Injury Act of 1986
preempts all design defect claims against vaccine manufacturers. See United States Supreme
Court, Order List: 559 U.S. at 3 (Mar. 8, 2010) (granting cert), available at
http://www.supremecourt.gov/orders/courtorders/030810zor.pdf; Brief for Petitioners,
Bruesewitz v. Wyeth, No. 09-152, at i (May 24, 2010) (question presented).
6

But ―it appears that legislative attempts to curtail the scope of the MDA‘s pre-emption clause in
the wake of Riegel have lost momentum, at least for the time being.‖ See John A. Tartaglia
III, Guest Post - H.R. 6381: Will Congress Strip Class III Medical Device Manufacturers of
Their Pre-Emption Defenses?, DRUG & DEVICE L. (May 5, 2010),
http://druganddevicelaw.blogspot.com/2010/05/guest-post-hr-6381-will-congress-strip.html.

7

The House Energy and Commerce Committee has reported out a bill, H.R. 5381, that amends
the Motor Vehicle Safety Act by adding language to end federal preemption for motor
vehicle safety regulations. See Motor Vehicle Safety Act of 2010, H.R. 5381, 111th Cong.
(2010).

8

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 § 315 (2010).

9

Memorandum for the Heads of Executive Departments and Agencies (May 20, 2009), 74 Fed.
Reg. 24, 693, 24,693-94 (May 22, 2009), available at http://www.gpo.gov/fdsys/pkg/FR2009-05-22/pdf/E9-12250.pdf#page=1.

4

state law and an express ―savings‖ provision that would seem to have the opposite effect.
Other legislation, such as the provisions of the Food, Drug, and Cosmetic Act pertaining
to pharmaceutical drugs, is silent on the question. Where Congress is less than pellucid,
courts play an increasing role in deciding preemption questions that come before them.
And while courts reiterate that congressional intent is the touchstone of preemption
analysis, even in express preemption cases, let alone in implied preemption cases, there is
vast interpretive room. It is here that the views propounded by federal agencies—either
in regulations or else in preambles or litigation briefs—have held sway in the courts.
Agency interpretations of preemption have come under enhanced scrutiny in the
past few years. The Presidential Memorandum on Preemption came close on the heels of
the U.S. Supreme Court‘s decision in Wyeth v. Levine, which held that a state tort lawsuit
brought by a woman injured by an FDA-approved drug was not impliedly preempted by
the Food Drug and Cosmetic Act or FDA regulations. Moreover, the U.S. Supreme
Court looked with particular disdain upon the procedural irregularities that accompanied
the FDA‘s inclusion of its statement of preemptive intent in the preamble to the drug
labeling rule:
When the FDA issued its notice of proposed rulemaking in December 2000, it
explained that the rule would ―not contain policies that have federalism
implications or that preempt State law.‖ 65 Fed. Reg. 81103; see also 71 id., at
3969 (noting that the ―proposed rule did not propose to preempt state law‖). In
2006, the agency finalized the rule and, without offering States or other
interested parties notice or opportunity for comment, articulated a sweeping
position on the FDCA‘s pre-emptive effect in the regulatory preamble. The
agency‘s views on state law are inherently suspect in light of this procedural
failure.10
The FDA‘s approach to ―preemption by preamble‖ bypassed vetting under the noticeand-comment process as well as the state consultation mandates of the Federalism
Executive Order 13132; accordingly, the Court did not accord deference to the FDA‘s
pro-preemption position. The disregard shown by the FDA (and other federal agencies)
towards procedural and consultative requirements for preemption determinations
highlights the concern of an agency‘s interpretation of preemption substituting for
congressional intent.11
10

Wyeth v. Levine, 129 S. Ct 1187, 1201 (2009).

11

In August 2010, the American Bar Association adopted a resolution proposed by its Task Force
on Federal Agency Preemption of State Tort Law, which calls upon the President to ―require
three particular procedures . . . before an agency regulation should be able to preempt state
law.‖ AM. BAR ASS‘N, TASK FORCE ON FEDERAL AGENCY PREEMPTION OF STATE TORT
LAWS 8 (2010) [hereinafter ABA TASK FORCE REPORT]; Am. Bar Ass‘n, H.R. 117, Tort
Law Preemption Issues § 3 (2010), available at http://www.abanow.org/wordpress/wpcontent/files_flutter/1282164714Resolution117Summary080910.doc [hereinafter ABA H.R.
117] (passing resolution). The Task Force‘s recommendations were issued against a
backdrop where, ―[d]espite the [Executive Order 13132], some have asserted that executive
agencies are not consistently following its directions.‖ ABA TASK FORCE REPORT, supra, at
6.

5

The Supreme Court has not, however, precisely specified the level of deference to
give to agency preemptive rulemakings, or positions embedded in preambles to rules or
briefs in litigation. Since Chevron was decided in 1984,12 courts defer to agency
interpretations of ambiguous statutory language.13 But whether courts should similarly to
defer to agency interpretations that preempt state law has been the subject of an ongoing
debate.14 In Cuomo v. Clearing House Association,15 the Court held that the OCC‘s
interpretation of visitorial powers to preempt state enforcement of state law went beyond
the ―outer limits‖ of the ambiguity inherent in the term and was therefore not entitled to
Chevron deference.16 Together, Wyeth and Cuomo illustrate the Supreme Court‘s
reluctance to confer Chevron deference to agency preemption determinations. But, at the
same time, the Court has only intimated (albeit not consistently) that the lesser form of
Skidmore ―power to persuade‖ deference should apply.
This Report presents the first look at federal agency compliance with the
Presidential Memorandum on Preemption, which, in addition to articulating the new
Administration‘s policy on preemption, condemned the practice of ―preemption by
preamble‖ and contained a directive to agencies to conduct a ten-year retrospective
review of all preemptive rulemakings17 to ensure that they were legally justified and
comported with the Administration‘s principles.
As the Supreme Court has recognized, preemption determinations may be unique,
in part because of the federalism values at stake when state law is pitted against federal
12

Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

13

See id. at 840–41, 866 (holding EPA interpretation as a ―permissible construction of the
statute‖).

14

See, e.g., Catherine M. Sharkey, Federalism Accountability: “Agency Forcing” Measures, 58
DUKE L.J. 2125, 2180 (2009) [hereinafter Sharkey, Federalism Accountability]; Nina A.
Mendelson, A Presumption Against Agency Preemption, 102 NW. L. REV. 695 (2008)
[hereinafter Mendelson, Presumption]; Thomas W. Merrill, Preemption and Institutional
Choice, 102 NW. U.L. REV. 727 (2008); Nina A. Mendelson, Chevron and Preemption, 102
MICH. L. REV. 737 (2004) [hereinafter Mendelson, Chevron]; William Funk, Judicial
Deference and Regulatory Preemption by Federal Agencies, 84 TULANE L. REV.
(forthcoming 2010), available at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1586955; Arthur E. Wilmarth, Jr.,
Cuomo v. Clearing House: The Supreme Court Responds to the Subprime Financial Crisis
and Delivers a Major Victory for the Dual Banking System and Consumer Protection, in
THE PANIC OF 2008: CAUSES, CONSEQUENCES AND IMPLICATIONS FOR REFORM (manuscript
at 20) (Lawrence E. Mitchell & Arthur E. Wilmarth, Jr. eds., forthcoming 2010), available at
http://ssrn.com/abstract=1499216.

15

Cuomo v. Clearing House Ass‘n, 129 S. Ct. 2710 (2009).

16

Id. at 2715.

17

The Presidential Memorandum defines ―preemptive rulemaking‖ as one that contains
―statements in regulatory preambles or codified provisions intended by the department or
agency to preempt State law.‖

6

law and must cede ground. The recommendations included in this ACUS Report are
directed towards federal agencies with the twofold goals of (1) creating a ―home‖ within
agencies for consideration of the federalism values at stake in preemptive rulemaking and
ensuring participation in the rulemaking process by suitable representatives of the state
regulatory interests; and (2) establishing a system of internal agency policing of the
empirical and factual predicates to arguments for preemption, coupled with external
oversight exercised by the Office of Information and Regulatory Affairs (OIRA) within
the Office of Management and Budget (OMB).
I. EXECUTIVE DIRECTIVES ON PREEMPTION AND FEDERALISM
A.

May 2009 Presidential Memorandum on Preemption

On May 20, 2009, President Barack Obama issued a Presidential Memorandum
announcing his administration‘s official policy on preemption: ―[P]reemption of State
law by executive departments and agencies should be undertaken only with full
consideration of the legitimate prerogatives of the States and with a sufficient legal basis
for preemption.‖18 The memorandum specifically admonished department and agency
heads to cease the practice of ―preemption by preamble‖—where preemption statements
are included in the preamble, but not in the codified regulation.19 Moreover, the
memorandum directed agencies to employ preemption provisions in codified regulations
only to the extent ―justified under legal principles governing preemption, including the
principles outlined in Executive Order 13132.‖20
The Preemption Memo asks for agencies to ―review regulations issued within the
past 10 years that contain statements in regulatory preambles or codified provisions
intended by the department or agency to preempt State law, in order to decide whether
such statements or provisions are justified under applicable legal principles governing
preemption.‖21
B.

Federalism Executive Order 13132

Executive Order 13132, ―Federalism,‖ issued by President Clinton on August 4,
1999,22 is adverted to in Obama‘s Presidential Memorandum and also serves as the
centerpiece of numerous reform proposals for agency preemption of state law. E.O.
18

Memorandum for the Heads of Executive Departments and Agencies (May 20, 2009), 74 Fed.
Reg. 24, 693, 24,693-94 (May 22, 2009), available at http://www.gpo.gov/fdsys/pkg/FR-200905-22/pdf/E9-12250.pdf#page=1.
19

Id. (―Heads of departments and agencies should not include in regulatory preambles statements
that the department or agency intends to preempt State law through the regulation except
where preemption provisions are also included in the codified regulation.‖).

20

Id.

21

Id.

22

Exec. Order No. 13,132, 3 C.F.R. 206 (2000), reprinted in 3 U.S.C. § 301 (2006).

7

13132 is an amended version of E.O. 12612, President Reagan‘s Executive Order on
Federalism.23 E.O. 13132 identifies federalism principles and policymaking criteria and
designates specific procedures for intergovernmental consultation. The Order designates
special requirements for agencies in taking action that preempts state law.24 The Order
emphasizes consultations with State and local governments and enhanced sensitivity to
their concerns. The Order applies to all federal agencies, except for independent
regulatory agencies,25 which are nonetheless encouraged to comply voluntarily with its
provisions.26
1.

Consultation Process

E.O. 13132 directs that agencies must have ―an accountable process to ensure
meaningful and timely input by State and local officials in the development of regulatory
policies that have federalism implications.‖27 The Order establishes specific procedures

23

President Clinton issued a short-lived order (E.O. 13083) that attempted a more comprehensive
rewriting of the Reagan Federalism Order. See Exec. Order No. 13,083, 63 Fed. Reg. 27,651
(May 19, 1998). Clinton‘s order stated that problems of national scope would arise in
numerous circumstances and provided nine examples. The Order stated that federal action
was justified ―[w]hen there is a need for uniform national standards‖; ―[w]hen
decentralization increases the cost of government‖; or ―[w]hen States would be reluctant to
impose necessary regulations because of fears that regulated business activity will relocate to
other States.‖ Id. at 27,652. President Clinton suspended his order after a ―firestorm of
criticism,‖ including charges that he failed to consult with state and local elected
governmental officials. John Dinan, Strengthening the Political Safeguards of Federalism:
The Fate of Recent Federalism Legislation in the U.S. Congress, 34 PUBLIUS 55, 64 (2004).
He then issued E.O. 13132 after consulting with the ―Big Seven‖ national organizations of
state and local elected officials. See Summary of Executive Order 13132 on Federalism
Issued by Clinton Administration, NAT‘L CONFERENCE OF STATE LEGISLATURES (last
updated Nov. 18, 2005),
http://web.archive.org/web/20051118212006/http://www.ncsl.org/statefed/federalism/exec1
3132.htm (describing ―extensive negotiations between the White House and seven national
organizations . . . representing state and local government officials‖).

24

Exec. Order No. 13,132 § 4 (―Special Requirements for Preemption‖). The Order also furthers
the policies of the Unfunded Mandates Reform Act, which is not the focus of this Report.
Section 6(b) establishes procedures for unfunded mandates, defined as ―any regulation that
has federalism implications, that imposes substantial direct compliance costs on State and
local governments, and that is not required by statute.‖ Id. § 6(b). That said, the specific
procedures outlined for intergovernmental consultation are identical for regulations that
impose unfunded mandates and those that preempt state law.

25

Exec. Order No. 13,132 § 1(c).

26

Id. § 9.

27

Id. § 6(a). The consultation process must involve ―elected officials of State and local
governments or their representative national organizations.‖ Id. §§ 1(d), 6(a).

8

for intergovernmental consultation if a rule preempts state law.28 Each agency must
consult with state and local officials ―early in the process of developing the proposed
regulation.‖29
2.

Federalism Impact Statements

E.O. 13132 also requires agencies to provide a federalism impact statement (FIS)
whenever regulations will have federalism implications30 and preempt state law.31 Prior
to the formal promulgation of the regulation, the agency must provide OMB with a
―federalism summary impact statement‖ in ―a separately identified portion of the
preamble to the regulation.‖32
The FIS must include (1) ―a description of the extent of the agency‘s prior
consultation with State and local officials;‖ (2) ―a summary of the nature of their
concerns and the agency‘s position supporting the need to issue the regulation;‖ and (3)
―a statement of the extent to which the concerns of State and local officials have been
met.‖33
3.

Enforcement

Within OMB, OIRA has ―primary responsibility for implementing . . .
[Executive] Order 13132.‖34 In October, 1999, OIRA Administrator John Spotila
28

Section 6(c) establishes procedures for ―any regulation that has federalism implications and that
preempts State law.‖ Id. § 6(c).

29

Id. § 6(c)(1).

30

Id. § 1(a) (defining federalism implications as ―substantial direct effects on the States, on the
relationship between the national government and the States, or on the distribution of power
and responsibilities among the various levels of government‖).

31

Id. § 6(c)(2) (requiring FIS for regulations and orders with ―federalism implications and that
preempt[] State law‖).

32

Id.. OIRA has urged agencies to include FIS earlier, as part of the Notice of Proposed
Rulemaking (NPRM). See Memorandum from Jacob J. Lew, Director, Office of Mgmt. &
Budget, to the Heads of Executive Departments and Agencies, and Independent Regulatory
Agencies, Guidance for Implementing E.O. 13132, ―Federalism‖ (Oct. 28, 1999), at 6,
available at http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/m0002.pdf [hereinafter OMB Guidance for E.O. 13132] (―To the extent that an agency has
carried out intergovernmental consultations prior to publication of the [NPRM], we strongly
recommend that the agency help State and local governments, and the public as a whole, by
including a ‗federalism summary impact statement‘ in its preamble to the NPRM.‖) .

33

Exec. Order No. 13,132 § 6(c)(2). The agency must also submit to OMB at that time, a copy of
any formal policy-related correspondence from State and local officials. Id. § 6(c)(3).

34

OMB Guidance for E.O. 13132, supra note 32 (cover sheet). As the OMB Guidance states:
―Under Executive Order 12866, [OIRA] already coordinates our regulatory review and

9

circulated to all heads of executive departments and agencies and independent regulatory
agencies ―Guidance for Implementing E.O. 13132‖35 The guidelines are procedural in
nature, focusing on ―what agencies should do to comply with the Order and how they
should document that compliance to OMB.‖36
Pursuant to the Guidelines, each agency and department was to designate a
federalism official with primary responsibility for the agency‘s implementation of the
Order.37 Federalism officials are to (1) ―ensure that the agency considers federalism
principles in its development of regulatory and legislative policies with federalism
implications;‖ (2) ―ensure that the agency has an accountable process for meaningful and
timely intergovernmental consultation in the development of regulatory policies that have
federalism implications;‖ and (3) ―provide certification of compliance to OMB.‖38
The federalism official must submit to OMB ―a description of the agency‘s
consultation process.‖39 The description ―should indicate how the agency identifies those
policies with federalism implications and the procedures the agency will use to ensure
meaningful and timely consultation with affected State and local officials.‖40
For any draft final regulation with federalism implications that is submitted for
OIRA review under Executive Order 12866 (―Regulatory Planning and Review‖),41 the
federalism official must certify that the requirements of E.O. 13132 concerning both the
evaluation of federalism policies and consultation have been met in a meaningful and
timely manner.42

planning functions.‖ Id.; see also Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4,
1993), amended by Exec. Order No. 13,422, 72 Fed. Reg. 2763 (Jan. 18, 2007).
35

OMB Guidance for E.O. 13132, supra note 32.

36

Id. at 1.

37

Exec. Order No. 13,132 § 6(a). Each agency was to notify OIRA of the designated federalism
official. OMB Guidance for E.O. 13132, supra note 32, at 2.

38

Id.

39

Exec. Order No. 13,132 § 6(a); OMB Guidance for E.O. 13132, supra note 32, at 2.

40

OMB Guidance for E.O. 13132, supra note 32, at 4–5.

41

There are four criteria that trigger OMB review under E.O. 12866: 1) Have an annual effect on
the economy of at least $100 million or adversely affect the economy in a ―material‖ way; 2)
Create a ―serious‖ inconsistency between the proposed action and another federal agency
action; 3) ―Materially alter the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof‖ or; 4) ―Raise novel legal or
policy issues . . . .‖ Exec. Order No. 12,866 § 3(f) (defining ―significant regulatory action‖).

42

Exec. Order No. 13,132 § 8(a).

10

II. FEDERAL AGENCY RESPONSE: RULEMAKING AND LITIGATION
A central contribution of this Report is an evaluation of agencies‘ responses to
President Obama‘s Memorandum on Preemption and efforts taken to ensure compliance
with the relevant provisions of Executive Order 13132 (―Federalism‖) governing
preemptive rulemaking. This empirical work, focusing on agencies‘ awareness of the
issue and their compliance efforts, draws from extensive interviews with agency officials
as well as an independent review of the agencies‘ respective rulemaking docket and
intervention in litigation. In the past, some have noted that whether agencies follow E.O.
13132 is a matter of ―culture‖ within the agency. This Report probes inter-agency
differences in their responses to the Presidential Memorandum and E.O. 13132.
Sharkey conducted sets of in-person and telephone interviews with officials at
each of the federal agencies surveyed. At these interviews (or shortly thereafter),
Sharkey requested various documents to support information gleaned from the
interviews. She also extensively reviewed the respective federal agency‘s rulemaking
and intervention in litigation over the past decade in publicly available databases. Where
possible, the Report cites to documents (published and unpublished) as opposed to the
unrecorded informal interviews. Nonetheless, the interviews were pivotal in terms of
steering the inquiries as well as in confirming and/or raising questions about ambiguities
in the documented record.
The May 2009 Presidential Memorandum on Preemption caught the attention of
federal agencies and led to serious internal review, at least in the majority of agencies
surveyed. Officials at National Highway Traffic Safety Administration (NHTSA), Office
of the Comptroller of the Currency (OCC), Consumer Product Safety Commission
(CPSC), and Environmental Protection Agency (EPA) provided Sharkey with either a
report or information regarding the agency‘s ten-year retrospective review of all rules
intended to preempt state law.
Moreover, both the change in Administration and the Presidential Memorandum
on Preemption have had wider-ranging effects in terms of shifts in preemption policy
within the agencies. This policy shift has been most pronounced at NHTSA. On the
rulemaking front, NHTSA removed the preemptive language in two 2005 rulemakings43
and, beginning in 2008 but especially in 2009, has drafted increasingly toned down
―boilerplate‖ language on the possibility of preemption which has evolved over the past
several years. NHTSA‘s revised position in rulemakings is mirrored by its recent
litigation stances. Perhaps most significantly, NHTSA argued against preemption in the
Williamson v. Mazda case (now pending before the U.S. Supreme Court), and gave its
most tepid embrace of Geier‘s implied preemption holding, which the Court will revisit
in Williamson.
CPSC—an independent regulatory agency, technically not bound by E.O.
13132—has also experienced a significant shift in its rulemaking and intervention in
litigation, largely at the behest of Congressional direction. CPSC has adopted an
extremely cautious stance. In its rulemakings, the agency refrains from offering its
interpretive gloss on preemption, choosing instead mere recitation of governing express
43

A third 2005 rulemaking was withdrawn in July 2008. 73 Fed. Reg. 42,309 (July 21, 2008).

11

statutory preemption provisions. CPSC is likewise hesitant to intervene in litigation
where preemption is at stake.
The Food and Drug Administration (FDA) is more difficult to evaluate. Due to
the then-pending invitation for the Solicitor General to submit its views on implied
preemption to the U.S. Supreme Court, which is considering granting certiorari in a pair
of generic drug preemption cases, agency officials were less forthcoming with
information.44 There is some evidence from the regulatory record and intervention in
pending litigation from which to infer that FDA has revised its preemption policy under
the new Administration. In its most recent rulemakings, the agency appears to be
proceeding full speed ahead with respect to express statutory preemption, but pulling
back from its prior reliance on Geier implied preemption.
At the OCC, the recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act has occluded any developments in the rulemaking or litigation realms.
Pursuant to this Act, OCC will be classified as an independent agency, no longer subject
to the mandates of E.O. 13132, and review of OCC rulemaking has effectively shifted
from the Executive to Congress.
The Federal Trade Commission (FTC), like CPSC (and now OCC), is an
independent regulatory agency, and as such, is not formally required to submit to the
provisions of E.O. 13132. In contrast with both the CPSC and OCC, however, the FTC
has consistently refrained from preemption.
Finally, like FTC, EPA stands in fairly sharp relief against the background of the
history of preemptive actions by NHTSA, FDA, and OCC. Preemption in EPA rules is
relatively rare, and always pursuant to express statutory provisions. Moreover, EPA has
a unique relationship with the states as co-regulators.
A.

NHTSA

Of all the agencies surveyed in this Report, NHTSA showed the most evidence of
a shift in policy on preemption under the Obama Administration. A recent 2010 rule on
Electric-Powered Vehicles contains a lengthy discussion of the evolution of the agency‘s
thinking on preemption, including a disavowal of the preemptive language contained in
three 2005 Notice of Proposed Rulemakings (NPRMs) as well as a lengthy adumbration
of the agency‘s revisions to its boilerplate language discussing the issue of preemption
since 2007, culminating in its weakest embrace of implied preemption to date in more
recent rulemakings. These policy shifts in the rulemaking process are echoed in its recent
participation in litigation. In two high-profile cases—one now pending before the U.S.
Supreme Court and another decided by the Second Circuit—NHTSA submitted amicus
briefs arguing against implied preemption and outlining a sharply circumscribed view of

44

On November 2, 2010, the Solicitor General submitted its brief (co-signed by officials at the
Department of Health and Human Services) arguing against a grant of certiorari. Brief for
the United States as Amicus Curiae, PLIVA, Inc. v. Mensing, No. 09-993 (U.S. Nov. 2,
2010).

12

implied preemption under the Motor Vehicle Safety Act and Energy Policy and
Conservation Act, respectively.
Sharkey conducted extensive in-person interviews with NHTSA and DOT
officials.45
1.

Response to May 2009 Presidential Memorandum on Preemption

In response to the President‘s Memorandum on Preemption, the Department of
Transportation sent OIRA a list of all current DOT rulemakings asserting preemptive
effect, along with what corrective action should be taken, if any.46 For NHTSA, DOT
identified six rules with preemptive effect: Designated Seating Positions,47 Air Bag
Labeling,48 Detachable Seat Belts,49 Event Data Recorders,50 and two Average Fuel
Economy standards.51 Only one of these rules, Designated Seating Positions, was listed
as including a preemptive provision in the codified regulation.52 That rule is also the only
45

Sharkey conducted separate interviews with Kevin Vincent, NHTSA Chief Counsel (June 30,
2010), Steve Wood, NHTSA Assistant Chief Counsel (June 30, 2010), Neil Eisner, DOT
Assistant General Counsel for Regulation and Enforcement (June 30, 2010), and Paul Geier,
DOT Assistant General Counsel for Litigation (July 6, 2010). Moreover, Sharkey had
corresponded independently via email with Steve Wood (who was ―Acting Chief Counsel‖
of NHTSA for the first seven months in 2009) between 2006-10 during which time Sharkey
was working on various research projects concerning agency preemption of state law.

46

Letter from Robert S. Rivkin, Office of Gen. Counsel, U.S. Dep‘t of Transp., to Kevin
Neyland, Acting Admin., Office of Info. & Reg. Affairs (Aug. 17, 2009). This document
was provided to Sharkey by Neil Eisner.

47

Federal Motor Vehicle Safety Standards; Designated Seating Positions and Seat Belt Assembly
Anchorages, 73 Fed. Reg. 58,887 (Oct. 8, 2008). Note that this is the pre-reconsideration
rule. For a discussion of the post-reconsideration rule (issued after NHTSA‘s letter to
OIRA), see infra notes 80–87 and accompanying text.

48

Federal Motor Vehicle Safety Standards; Occupant Crash Protection, 66 Fed. Reg. 65,376,
65,402 (Dec. 18, 2001).

49

Federal Motor Vehicle Safety Standards; Occupant Crash Protection, 69 Fed. Reg. 70,904,
70,912 (Dec. 8, 2004).

50

Event Data Recorders, 71 Fed. Reg. 50,998, 51,029–30 (Aug. 28, 2006).

51

Average Fuel Economy Standards for Light Trucks, MY 2008-2011, 71 Fed. Reg. 17,566 (Apr.
6, 2006); Average Fuel Economy Standards, Passenger Cars and Light Trucks; MY 20112015, available at
http://www.regulations.gov/search/Regs/contentStreamer?objectId=09000064807a98a5&dis
position=attachment&contentType=pdf. (This is a notice of proposed rulemaking; for
discussion of the final rule, see infra notes 121–125 and accompanying text).

52

Letter from Robert S. Rivkin, supra note 46, at 7.

13

rule listed where NHTSA believed further action was warranted.53 NHTSA said that it
began with a list of only those notices that either contained a statement that the agency
intended to preempt tort civil actions or identified a specific factual situation in which
such actions would create a conflict or frustrate a federal purpose. It then removed those
notices whose statements had already been rendered inoperative by a subsequent notice.54
NHTSA‘s identification of only six preemptive rules and just a single one in need
of further action may, at first, seem surprising in light of the charges—from Congress,
stakeholder groups and in the legal academic literature—of aggressive preemptive
rulemaking during the George W. Bush Administration. According to the American
Association for Justice 2008 Report, over the period from 2001 to 2008, NHTSA issued
more notices claiming preemption than any other federal agency, accounting for nearly
half (twenty-four of fifty-three) of all rulemakings characterized by AAJ as preemptive
rulemakings.55 Moreover, as of July 2010, AAJ compiled a list of seven proposed
NHTSA rules and seven final rules from 2007 to 2009 that it claims ―still contain
preemption language.‖56 By NHTSA‘s count, only 3 of the 24 notices listed in AAJ‘s
2008 report and none of the 14 noti ces listed in AAJ‘s July 2010 email identified a
conflict or stated an intent to preempt and thus can be accurately characterized as
―preemptive rulemakings.‖ In the agency‘s view, notices that simply contain the
boilerplate discussion of the issue of preemption do not meet either of those criteria and
thus are not in any sense ―preemptive rulemakings.‖
The discrepancy between NHTSA and AAJ is explained by two factors. First,
several rules that contained aggressive assertions of preemption in the NPRMs did not
contain preemption language in their final versions. Second—and the source of
continuing disagreement between NHTSA and AAJ—NHTSA did not include rules that
53

For the Air Bag Labeling rule, NHTSA stated that preemption was limited solely to
impossibility preemption, i.e. a state tort judgment would require labeling standards such
that a manufacturer could not meet both the NHTSA requirements and the state requirement.
Id. at 7–8. For the Detachable Seat Belts rule, the preemption provision is limited to
preempting state tort suits where NHTSA affirmatively stated that Type 2 seatbelts could be
used in Type 2 approved vehicles. Id. at 8. For the Event Data Recorders (EDRs) rule,
NHTSA offered a lengthy explanation for why, though it saw no conflicts at the time, it
needed to proactively assert that state regulation of data recorders should be preempted:
conflicting regulation would reduce the benefits of standardized data and operation and
make it less likely that manufacturers would voluntarily develop EDRs and improve the
technology. Id. at 9–12. For the two Average Fuel Economy rules, NHTSA cited DOJ
Civil‘s advice that no comments on preemption were necessary, as greenhouse gas
regulation will be national in nature. Id. at 12–13.

54

Email from Steve Wood to Catherine M. Sharkey, Oct. 13, 2010, 1:55 A.M.

55

AM. ASS‘N FOR JUSTICE, GET OUT OF JAIL FREE: HOW THE BUSH ADMINISTRATION HELPS
CORPORATIONS ESCAPE ACCOUNTABILITY (2008), available at
http://www.atlanet.org/cps/rde/xbcr/justice/Preemption_Rpt.pdf.

56

Email from Sarah Rooney, Regulatory Counsel, American Association for Justice, to Catherine
M. Sharkey, July 20, 2010, 3:30 P.M.

14

contain ―boilerplate‖ discussion of the issue of preemption.57 In a recent 2010
rulemaking on Electric-Powered Vehicles, in response to AAJ, NHTSA stated that the
boilerplate language was not intended to preempt state law, noting that the language did
not include any finding of a conflict and did not state any intent to preempt. The agency
also relayed the history of the evolutionary changes it made to the language over time to
make the absence of conflict identification and of any preemptive statements or intent
increasingly clear. 58 According to NHTSA, the boilerplate simply describes the
possibility that preemption could occur if there is an actual conflict between state and
federal law, as was the case in Geier, and no more.59 The boilerplate makes no effort to
identify or serve warning of preemption, and simply serves as a notice for potential future
conflicts in the courts.60 Given that the Presidential Memorandum on Preemption directs
agencies to review all rules ―intended by the department or agency to preempt state
law,‖61 it is not surprising that NHTSA concluded that the boilerplate language did not
fall within the Memorandum and thus did not include the rules with the boilerplate
language.
2.

Rulemaking

NHTSA has acknowledged a policy shift on preemption under the Obama
Administration. At a recent Congressional hearing on proposed amendments to the
Motor Vehicle Safety Act, NHTSA Administrator David Strickland made clear that the
era of ―preemption by preamble‖ in rulemakings was over:
REP. BRALEY: All right. Now, one of the concerns that I had and many people
had during the period of the Bush administration and its operation of NHTSA
was that the agency, during that period, specifically from 2005 to 2008, seemed
to many of us to usurp its own regulatory authority and take on the role of
Congress by including in many of its preambles issued in response to regulation
language preempting state law claims. Are you familiar with that?
57

Each of the rules on AAJ‘s July 2010 list from 2007-09, see supra note 56, contain such
―boilerplate‖ language—with the exception of one rule that seems to have been listed in
error. AAJ lists the Windshield Zone Intrusion Rule, 73 Fed. Reg. 38,372 (July 7, 2008), as
asserting preemptive effect. The rule, however, states that NHTSA tentatively concluded
that states are free to regulate in this area and that the rule would not preempt state law. Id.
at 38,373-74.

58

Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage and
Electrical Shock Protection, 75 Fed. Reg. 33,515, 33,524 (June 14, 2010) (stating that AAJ‘s
discerning of preemptive intent in the boilerplate ―fundamental[ly] misunderstand[s]‖
NHTSA‘s intent and noting that AAJ had not pointed to any specific language that identified
a conflict that could be the basis for preemption or that stated an intent to preempt).

59

Id. (citing Geier v. Am. Honda Corp., 529 U.S. 861 (2000)).

60

Id.

61

Presidential Memorandum on Preemption, supra note 21.

15

MR. STRICKLAND: Yes, sir, I am.
REP. BRALEY: And I know that the president himself at the beginning of his
administration took a strong position rolling back some of those decisions—
some of those statements made by agency representatives in those preambles
and in the regulations themselves. Are you able here today as a representative of
the administration in your capacity able to assure us that those practices will not
continue while you are administering?
MR. STRICKLAND: I can make that obligation, absolutely. There is a notion
that states' rights are incredibly important and those preambles that will place
not only in districts rules, but there were several rules throughout executive
branch agencies and safety agencies which undermined safety. And I know the
Obama administration felt very strongly that those should not be used to
undercut the notion of safety whether—by the federal government or in the
states.62
NHTSA‘s clarifying actions in the preemption realm began in late summer 2008,
and in fact preceded the May 20, 2009 Presidential Memorandum on Preemption.63 But
only in its recent 2010 rulemaking on Electric-Powered Vehicles did NHTSA provide a
comprehensive account of the 2009 removal of preemptive language from two of the
three 2005 rulemakings and the 2008 withdrawal of the third 2005 rulemaking and the
evolution of the boilerplate language on the issue of preemption that continues to date.
(a)

Removal of Preemptive Language

In three 2005 rulemakings, NTHSA gave an extended discussion of preemption
and claimed the safety standard preempted state tort law.64 In its recent 2010 rulemaking
on Electric-Powered Vehicles, NHTSA noted that the three 2005 NPRMs ―contrast
markedly‖ with their other 2007-09 rules that use boilerplate language.65 For each rule,
NHTSA had identified a specific potential conflict or obstacle state tort law would pose
for each of the federal standards.

62

Motor Vehicle Safety Act: Hearing on H.R. 5381 Before the Subcomm. on Commerce, Trade,
and Consumer Protection of the H. Comm. on Energy and Commerce, 111th Cong. (2010).
This sentiment was echoed by NHTSA Chief Counsel, who maintained that ―the 2005 policy
is not the 2010 policy.‖ Sharkey Interview with Kevin Vincent.

63

Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage and
Electrical Shock Protection, 75 Fed. Reg. 33,515, 33,524–25 (June 14, 2010).

64

The three rules were: the NPRM for roof crush resistance, 70 Fed. Reg. 49,223, 49,245-46
(Aug. 23, 2005), rearview mirrors on trucks, 70 Fed. Reg. 53,753, 53,768-69 (Sept. 12,
2005), and amending the definition of a ―designated seating position,‖ 70 Fed. Reg. 36,094,
36,101-02 (June 22, 2005).

65

See Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage
and Electrical Shock Protection, 75 Fed. Reg. 33,515, 33,524 (June 14, 2010).

16

(i)

Rearview Mirror Rule

The 2005 NPRM for the Rearview Mirror Rule paradoxically asserted preemption
while disclaiming any federalism implications warranting consultation with state and
local officials. This NPRM not only stated that the proposed amendments ―would
preempt all state statutes, regulations and common law requirements that differ from it,‖
but also specifically named New Jersey, New York, and Washington as states whose
statutes would be preempted under the rule.66 Despite this explicit, targeted preemption,
the NPRM asserted the rule ―would not have sufficient Federalism implications to
warrant consultations with State and local officials or the preparation of a Federalism
summary impact statement.‖67
Before the Final Rule was promulgated, Congress passed the Cameron
Gulbranson Kids Transportation Safety Act of 2007, which required NHTSA to issue
new rules expanding the driver‘s field of vision behind certain vehicles.68 The Act
applied only to cars and light trucks (light trucks include SUVs and vans (both passenger
and cargo) under 10,000 pounds, gross vehicle weight rating (GVWR) while NHTSA‘s
rule was targeted at straight trucks with GVWRs between 10,000 and 26,000 pounds.
For that reason, and because post-NPRM data and analysis indicated that the class of
vehicles covered by the NPRM accounted for only four of the annual deaths resulting
from backover accidents, NHTSA decided to withdraw the NPRM in order to take a
―comprehensive look at backing safety for all types of motor vehicles.‖69
In March 2009, NHTSA issued a revised Advanced NPRM for rearview
mirrors.70 This revised ANPRM replaced the language discussing preemption with
boilerplate stating there was a ―possibility‖ the MVSA would preempt state law, but,
according to NHTSA, ―we do not know of any State laws or regulations that currently
exist that are potentially at risk of being preempted.‖71 For implied preemption, NHTSA
said it had ―considered today‘s ANPRM and [did] not currently foresee any potential

66

Federal Motor Vehicle Safety Standards; Rearview Mirrors, 70 Fed. Reg. 53,753, 53,768 &
nn.23–24 (Sept. 12, 2005) (citing N.J. Stat. Ann. § 39:3-71.1 (West 2004); N.Y. Vehicle and
Traffic Law § 375(9)(e) (McKinney 2003); Wash. Rev. Code Ann. § 46.37.400 (West
2004)).

67

Id. at 53,768. NHTSA, however, noted that New York commented on the Advanced NPRM,
and NHTSA responded to New York‘s comments. See id. at 53,764–65, 53,768.

68

Cameron Gulbranson Kids Transportation Safety Act of 2007, Pub. L. No. 110-189 § 2(b).

69

See Federal Motor Vehicle Safety Standards; Rearview Mirrors, 73 Fed. Reg. 42,309, 42,312
(July 21, 2008).

70

Federal Motor Vehicle Safety Standard; Rearview Mirrors; Proposed Rule, 74 Fed. Reg. 9477
(Mar. 4, 2009).

71

Id. at 9516.

17

State requirements that might conflict with it. Without any conflict, there could not be
any implied preemption.‖72
(ii)

Roof Crush Rule

In the NPRM for the Roof Crush Rule, NHTSA was clear that: ―[I]f the proposal
were adopted as a final rule, it would preempt all conflicting State common law
requirements, including rules of tort law.‖73 NHTSA also asserted (just as it did in the
rearview mirror NPRM)—paradoxically, given the preemptive intent of the rule—that the
new rule ―would not have any substantial impact on the States‖ and therefore did ―not
have sufficient federalism implications to warrant consultation with State and local
officials or the preparation of a federalism summary impact statement.‖74
NHTSA received twenty-five comments in response to the preemption discussion,
including comments from National Conference of State Legislatures (NCSL), Public
Citizen, and twenty-seven attorneys general. Also, during the comment period, Jeffrey
Rosen, Department of Transportation General Counsel, and Steve Wood, a NHTSA
attorney, met with representatives of NCSL and National Association of Attorneys
General (NAAG) at their request and discussed the proposal and preemptive effects.75
The Roof Crush Rule also caught Congress‘ attention. NHTSA‘s preemptive rule
was touched upon during Congress‘ wide ranging 2007 hearing on regulatory
preemption.76 Then, in 2008, the Senate held a hearing on the Roof Crush Rule, during
which it confronted NHTSA Deputy Administrator James Ports with questions on
preemption.77 Members from both sides of the aisle criticized NHTSA. Senator Coburn
72

Id.

73

Federal Motor Vehicle Safety Standards; Roof Crush Resistance, 70 Fed. Reg. 49,223, 49,246
(Aug. 23, 2005).

74

Id. at 49,245.

75

Jeffrey Rosen and Steve Wood met with NAAG and NCSL at a meeting at OMB. Sharkey
Interview with Wood, June 30, 2010.

76

See Regulatory Preemption: Are Federal Agencies Usurping Congressional and State
Authority?: Hearing Before S. Comm. on the Judiciary, 110th Cong. (2007). Donna Stone,
on behalf of the NCSL, criticized the NHTSA as being the first agency to skirt E.O. 13132 in
its roof crush rule by claiming no federalism implications but preempting state tort law in the
rule. Id. at 11 (statement of Hon. Donna Stone, State Rep., Dela. Gen. Assembly, President,
Nat‘l Conf. of State Legis.). Professor David Vladeck also discussed the irony of a roof
crush rule that would have little practical impact because tort litigation that should be
protected by the Motor Vehicle Safety Act‘s savings clause had already forced carmakers to
increase rollover protection. Id. at 21.

77

Oversight Hearing on Passenger Vehicle Roof Strength: Hearing before the Subcomm. on
Consumer Affairs, Ins., & Auto. Safety of the S. Comm. on Commerce, Science, & Transp.,
110th Cong. (2008), available at
http://commerce.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=50f68af1c5f8-4494-907a-4af5d734a78d&ContentType_id=14f995b9-dfa5-407a-9d35-

18

(R) stated he had ―heartburn‖ over the lack of transparency in this rulemaking. Senator
Pryor (D) warned NHTSA that preemption was a ―bad idea‖ and that NHTSA was
―overstepping its bounds‖ into the legislative arena.78
After the hearing, the Roof Crush rule was shelved. After the change in
administration, and just before the issuance of the Presidential Memorandum on
Preemption, NHTSA promulgated the final rule. The May 12, 2009 final rule
―reconsidered‖ the tentative position presented in the NPRM: ―We do not foresee any
potential state tort requirements that might conflict with today‘s final rule. Without any
conflict, there could not be any implied preemption.‖79
(iii)

Designated Seating Position Amendment

The Designated Seating Position Amendment was the sole rule warranting further
action that NHTSA identified in its response to the Presidential Memorandum on
Preemption. Subsequently, in a December 2009 final rule (in response to petitions for
reconsideration), NHTSA removed the preemptive regulatory text.80
The original final rule was issued in October 2008 and added preemptive
regulatory text. After the 2008 rule, both AAJ and Public Citizen petitioned NHTSA to
reconsider. AAJ argued that neither express nor implied preemption was warranted:
56cc7152a7ed&Group_id=b06c39af-e033-4cba-9221de668ca1978a&MonthDisplay=6&YearDisplay=2008 [hereinafter Oversight Hearing on
Roof Strength]; see also WILLIAM BUZBEE ET AL., THE TRUTH ABOUT TORTS: RETHINKING
REGULATORY PREEMPTION AND ITS IMPACT ON PUBLIC HEALTH 8 (Ctr. for Progressive
Reform White Paper #902, 2009), available at
http://www.cprblog.org/articles/RethinkingPreemption902.pdf (describing how ―[m]embers
of both political parties present at the hearing sought to persuade NHTSA to remove a
provision of the proposed rule that indicated the agency believed the rule would preempt
state tort law‖).
78

Moreover, Senator Pryor warned NHTSA that if they kept the preemptive language in the final
rule, Congress would take action. He cited Senator Coburn‘s unease with the rulemaking as
evidence that there would be bipartisan support for action by Congress to countermand
NHTSA‘s actions. Senator McCaskill (D) likewise made her dissatisfaction known. She
pointed out that the last rule on roof crush standards was issued thirty years ago, and that
preemption forces the rest of the country to wait around for NHTSA to update the rule.
NHTSA responded by stating that preemption language was included because NHTSA had a
comprehensive plan on balancing roof strength with stability. Senator McCaskill retorted by
pressing NHTSA on when it started preempting state law through boilerplate preamble
preemption. She wanted to know who ordered preemption boilerplate in NHTSA rules.
Specifically, she wanted to know if it was the White House and when this practice began.
She said, ―There‘s preemption popping up everywhere like spring flowers!‖ She feared
there was a ―plot‖ in the Bush administration to wipe out people‘s access to courts.
Oversight Hearing on Roof Strength, supra note 77.

79

74 Fed. Reg. 22,348, 22,382 (May 12, 2009).

80

74 Fed. Reg. 68,7185 (Dec. 29, 2009).

19

express preemption was contrary to congressional intent and Geier was an ―unusual, fact
driven case‖ that rested on a range of options available under the rule and its lengthy
history.81 Public Citizen (with the Consumer Federation of America) argued that
NHTSA‘s preemption statements were ―harmful and unnecessary,‖ that tort law did not
―frustrate‖ the purposes of the rule, that Geier was ―fact-specific,‖ and disputed
NHTSA‘s claims that tort law would force automakers to install ―more seatbelts than
necessary,‖ which NHTSA argued would reduce safety.82
After reconsideration and further analysis, NHTSA removed the preemptive
regulatory text in its December 2009 Rule, stating that it agreed with Public Citizen‘s
argument that it was ―unlikely‖ tort law would actually conflict with the Designated Seat
Position amendment.83 In making this determination, NHTSA researched state tort law
and pending litigation and consulted with organizations representing the interests of state
and local governments and officials.84
NHTSA replaced the preemptive text in the preamble with boilerplate language
stating that while conflict preemption was theoretically possible, NHTSA could discern
no potential for a conflict.85 The agency included a lengthy explanation of ―How
NHTSA‘s Regulations May Give Rise to a Judicial Finding of Preemption‖86 as well as a
detailed explanation of how it believed Geier should be interpreted.87 NHTSA‘s bottom

81

See Letter from Les Weisbrod, Pres., Am. Ass‘n for Justice et al., to David Kelly, Acting
Admin., NHTSA (Nov. 24, 2008), available at
http://www.atlanet.org/resources/NHTSA_dsp_petition.pdf.

82

Letter from Joan Claybrook, Pres., Pub. Citizen, to David Kelly, Acting Admin., NHTSA (Nov.
24, 2008), available at
http://www.regulations.gov/search/Regs/contentStreamer?objectId=090000648095315a&dis
position=attachment&contentType=pdf.

83

74 Fed. Reg. at 68,188-89. While Public Citizen argued vociferously against preemption, it did
not specifically argue that it was ―unlikely‖ that tort law would conflict with the federal
regulation. See Letter from Joan Claybrook, supra note 82.

84

74 Fed. Reg. at 68,188-89. NHTSA engaged in this consultation outside of E.O. 13132, as it
determined that the rule did not raise sufficient federalism implications to warrant a
federalism impact statement. Id. at 68,189. NCSL, which had actively opposed the roof
crush rule and took part in the notice-and-comment process, did not submit any comment on
the seating designated seating position rule. Id.

85

Id. at 68,187-88.

86

Id. at 68,187-88 (emphasis added).

87

The basic summary of NHTSA‘s interpretation of Geier is: The savings clause allows state tort
law to go beyond NHTSA standards but the savings clause does not bar conflict preemption
principles. According to NHTSA, in Geier, the Supreme Court paid careful attention to
NHTSA‘s ―detailed explanation of the ‗significant considerations‘ underlying the multiple
approaches in the airbag rule.‖ Id.

20

line was that ―[a] court should not find preemption too readily in the absence of clear
evidence of a conflict.‖88
(b)

Evolution of Boilerplate Language on the Issue of
Preemption

In most of its rulemakings in 2007-08, NHTSA included a boilerplate discussion
of preemption indicating that state law could potentially conflict with the federal
standard, but that NHTSA had not outlined any conflicts at the present time.89 NHTSA‘s
recent rulemakings from 2008 to 2010 include a variation on the boilerplate language.90
In its recent 2010 Electric-Powered Vehicles rule, NHTSA describes
modifications in the boilerplate language from the 2007-2008 NPRMs to present as an
ongoing attempt to clarify its position as one simply of notice of the results of its
examination whether there was any potential to preempt, succinctly stating ―Without any
conflict, there could not be any implied preemption.‖91
(i)

Implied Preemption Language

In its 2008 NPRM on Seat Belt Lockability, the agency changed its language on
implied preemption from ―NHTSA has not outlined such potential [conflicts]‖ to
―NHTSA has not discerned any conflict.‖92
According to NHTSA, because AAJ kept petitioning the agency to change its
preemption language, the agency‘s March 2009 Air Brakes Rule added language stating
―NHTSA has considered today‘s interim final rule and does not currently foresee any

88

Id. at 68,188.

89

WILLIAM FUNK ET AL., THE TRUTH ABOUT TORTS: REGULATORY PREEMPTION AT THE
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION 6 (Ctr. for Progressive Reform
White Paper #804, 2008), available at
http://www.progressivereform.org/articles/NHTSA_Preemption_804.pdf (citing Federal
Motor Vehicle Safety Standards: Door Locks and Door Retention Components, 72 Fed. Reg.
5385, 5397 (Feb. 5, 2007)).

90

My research assistant, Matthew Shahabian, searched the regulations.gov database for
NHTSA‘s rules from 2008 to 2010. He was unable to find any recent rules that used
anything other than the boilerplate. To search through the database, he went to the view all
rules section, then limited to ―NHTSA‖ and ―Rules.‖ He then clicked on each Federal Motor
Vehicle Safety Standard rule from November 2008 to July 2010 and searched within the rule
for ―preempt‖ to see whether the rule addressed preemption with anything other than the
boilerplate language.

91

Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage and
Electrical Shock Protection, 75 Fed. Reg. 33,515, 33,525–26 (June 14, 2010).

92

Compare id., with Federal Motor Vehicle Safety Standard; Seat Belt Lockability, 73 Fed. Reg.
52,939, 52,941 (Sept. 12, 2008) (emphasis added). At this time, NHTSA‘s language on
express preemption remained unchanged. See 73 Fed. Reg. 52,941.

21

potential State requirements that might conflict with it. Without any conflict, there could
not be implied preemption.‖93
In August 2009, NHTSA began outlining how it assesses potential conflicts and
obstacles for implied preemption, while retaining the language on not ―discerning‖ any
conflict.94 The 2010 Electric-Powered Vehicles Rule uses similar language, expanding
slightly on NHTSA‘s conflict analysis: ―NHTSA has considered the nature (e.g., the
language and structure of the regulatory text) and objectives of today‘s final rule and does
not discern any existing State requirements that conflict with the rule or the potential for
any future State requirements that might conflict with it.‖95
NHTSA and AAJ continue to disagree over the interpretation of the boilerplate
language. According to NHTSA, its inclusion of boilerplate discussion under the section
of its preambles discussing Executive Order 13,132 issues was not intended to preempt
State tort law, while AAJ contends that it was so intended. This Report has identified
twenty-nine NHTSA rules with boilerplate language discussing the issue of preemption
that NHTSA did not include in its list to OIRA.96 These rules can be grouped into three
broad categories of NHTSA‘s evolving boilerplate.97 Eleven rules follow NHTSA‘s most
93

See Federal Motor Vehicle Safety Standard; Air Brake Systems, 74 Fed. Reg. 9173, 9175 (Mar.
3, 2009) (to be codified at 49 C.F.R. pt. 571), as cited in Federal Motor Vehicle Safety
Standards; Electric-Powered Vehicles; Electrolyte Spillage and Electrical Shock Protection,
75 Fed. Reg. 33,515, 33,525 & nn.26–27 (June 14, 2010).

94

See Federal Motor Vehicle Safety Standards; Controls, Telltales, and Indicators, 74 Fed. Reg.
40,760, 40,7063-64 (Aug. 13, 2009) (―However, NTHSA has considered the nature and
purpose of today‘s rule and does not currently foresee any potential [conflicts].‖).

95

See Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage
and Electrical Shock Protection, 75 Fed. Reg. 33,515, 33,525–26 (June 14, 2010).

96

My research assistant, Matthew Shahabian, used the LEXIS Federal Register database to search
for NHTSA rules from the past ten years. His search terms were: ―Department of
Transportation (DOT)‖ /2 ―National Highway Traffic Safety Administration (NHTSA)‖ [this
screened out non-NHTSA authored rules] & 13132 & preemp! (249 results). He also used
the docket numbers to search in the regulations.gov database to see if there were more recent
responses to petitions for reconsideration not reflected in the LEXIS search results. He
focused on the most recent disposition of each rule, e.g., he ignored rules that were modified
after reconsideration.

NHTSA reiterated its point that none of the notices in any of the categories identifies a conflict or
states an intent to preempt and thus cannot be accurately characterized as a ―preemptive
rulemaking.‖ Email from Steve Wood to Catherine M. Sharkey, Oct. 13, 2010, 1:55 A.M.
97

Two rules did not fit in any of these categories. The Lamp and Reflective Devices rule states
that ―NHTSA does not believe that such conflicts are likely to arise from today‘s
rulemaking, because this final rule only results in an administrative rewrite of the existing
requirements of FMVSS No. 108. However, if such a conflict were to become evident,
NHTSA may opine on such conflicts in the future, if warranted.‖ Federal Motor Vehicle
Safety Standards; Lamps, Reflective Devices, and Associated Equipment, 72 Fed. Reg.
68,234, 68,265 (Dec. 4, 2007). NHTSA did not suggest that a conflict was likely to become

22

recent tack (as seen in the 2010 Electric-Powered Vehicles rule) of stating that it cannot
discern any conflict with state law and concluding ―Without any conflict, there could not
be any implied preemption.‖98 Five rules from 2008 state that NHTSA ―cannot
completely rule out the possibility that conflict might become apparent.‖99 And eleven
rules from mid-2007 through mid-2008 state that while NHTSA had not identified a
conflict, a conflict creating preemption was ―conceivable.‖100
evident. The second rule, the Fuel System Integrity Rule, mentions the Supreme Court‘s
Geier implied preemption standard without expressing an opinion as to how Geier applies to
that specific rule. Occupant Crash Protection; Fuel System Integrity 72 Fed. Reg. 62,135,
62,139 (Nov. 2, 2007).
98

See Federal Motor Vehicle Safety Standards; Electric-Powered Vehicles; Electrolyte Spillage
and Electrical Shock Protection, 75 Fed. Reg. 33,515 (June 14, 2010) (including most
detailed discussion of boilerplate evolution); Theft Protection and Rollaway Prevention, 75
Fed. Reg. 15,621 (Mar. 30, 2010); Final Rule, Federal Motor Vehicle Safety Standards;
Door Locks and Door Retention Components, 75 Fed. Reg. 7370 (Feb. 19, 2010); Motor
Vehicle Brake Fluids, 75 Fed. Reg. 5553 (Feb. 3, 2010); Bus Emergency Exits and Window
Retention and Release, 74 Fed. Reg. 68,558 (Dec. 28, 2009); Ejection Mitigation; Phase-In
Reporting Requirements, 74 Fed. Reg. 63,180 (Dec. 2, 2009); New Pneumatic and Certain
Specialty Tires, 74 Fed. Reg. 56,166 (Oct. 30, 2009); Federal Motor Vehicle Safety
Standards; Air Brake Systems 74 Fed. Reg. 42,781 (Aug. 25, 2009); Federal Motor Vehicle
Safety Standards; Controls, Telltales and Indicators, 74 Fed. Reg. 40,759 (Aug. 13, 2009);
Federal Motor Vehicle Safety Standard; Rearview Mirrors, 74 Fed. Reg. 9478 (Mar. 4,
2009).

99

Federal Motor Vehicle Safety Standards; Seating Systems, Occupant Crash Protection, Seat
Belt Assembly Anchorages, School Bus Passenger Seating and Crash Protection, 73 Fed.
Reg. 62,744 (Oct. 21, 2008); Federal Motor Vehicle Safety Standards; Motorcycle Helmets,
73 Fed. Reg. 57,297 (Oct. 2, 2008); Electronic Stability Control Systems, Controls and
Displays, 73 Fed. Reg. 54,526 (Sept. 22, 2008) (Response to reconsideration petition), 72
Fed. Reg. 17,236 (Apr. 6, 2007) (final rule); Federal Motor Vehicle Safety Standards;
Motorcycle Brake Systems, 73 Fed. Reg. 54,020 (Sept. 17, 2008); Occupant Crash
Protection, 73 Fed. Reg. 52,939 (Sept. 12, 2008) (seat belt lockability).

100

Federal Motor Vehicle Safety Standards; Power-Operated Window, Partition, and Roof Panel
Systems, 73 Fed. Reg. 38,331 (July 7, 2008); Occupant Protection in Interior Impact; Side
Impact Protection; Side Impact Phase-In Reporting Requirements, 73 Fed. Reg. 32,470 (June
9, 2008); Vehicle Identification Number Requirements, 73 Fed. Reg. 23,367 (Apr. 30, 2008);
Federal Motor Vehicle Safety Standards, Child Restraint Systems; Anthropomorphic Test
Devices (Hybrid III 10-Year-Old and Hybrid III 6-Year-Old Child Dummies), 73 Fed. Reg.
3901 (Jan. 23, 2008); Federal Motor Vehicle Safety Standards; Platform Lifts for Motor
Vehicles; Platform Lift Installations in Motor Vehicles, 72 Fed. Reg. 72,326 (Dec. 20,
2007); Cargo Carrying Capacity, 72 Fed. Reg. 68,422 (Dec. 4, 2007); Federal Motor Vehicle
Safety Standards; Brake Hoses, 72 Fed. Reg. 57,459 (Oct. 9, 2007); Federal Motor Vehicle
Safety Standards; Occupant Protection in Interior Impact, 72 Fed. Reg. 50,900 (Sept. 5,
2007); Occupant Crash Protection, 72 Fed. Reg. 40,252 (July 24, 2007); Federal Motor
Vehicle Safety Standards; Tire Pressure Monitoring Systems, 72 Fed. Reg. 38.017 (July 12,
2007); Federal Motor Vehicle Safety Standards; Head Restraints, 72 Fed. Reg. 25,483 (May
4, 2007).

23

(ii)

Express Preemption Language

In addition to its evolving boilerplate discussion of implied preemption, NHTSA
altered its boilerplate language on express preemption under the Motor Vehicle Safety
Act—although this latter change was not acknowledged or discussed by NHTSA in its
lengthy comments in the Electric-Powered Vehicle rule. Throughout 2007-08, as
NHTSA altered the implied preemption boilerplate, the express preemption boilerplate
remained untouched with an unqualified statement that the Motor Vehicle Safety Act
preempted ―State law‖ that was not identical to the NHTSA standard.101
Then, in the March 2009 Air Brake Rule, NHTSA limited its claim of express
preemption to state positive law, stating ―It is this statutory command [49 U.S.C. §
30103(b)(1)] that unavoidably preempts State legislative and administrative law, not
today‘s rulemaking, so consultation would be unnecessary.‖102 The clear import is that
state common law does not fall within the purview of express preemption claims.103
3.

Litigation
(a)

Automobile Safety Standards

NHTSA has taken an anti-preemption position in Williamson v. Mazda Motor of
America, Inc.,104 a case pending this Term before the U.S. Supreme Court that will define
101

See, e.g., Federal Motor Vehicle Safety Standards, Occupant Crash Protection, 73 Fed. Reg.
52,939, 52,941 (Sept. 12, 2008) (―It is this statutory command [49 U.S.C. § 30103(b)(1)]
that preempts State law, not today‘s rulemaking, so consultation would be inappropriate.‖).

102

Federal Motor Vehicle Safety Standard; Air Brake Systems, 74 Fed. Reg. 9173, 9175
(emphasis added).

103

According to Steve Wood, although he had not previously thought anyone would reasonably
read ―state law‖ to include tort law—especially in light of Geier‘s holding of no express
preemption of state tort law—he decided to add qualifying language to ensure that no one
could henceforth interpret NHTSA‘s express preemption discussion as extending to tort law.
Email from Steve Wood to Catherine M. Sharkey, Oct. 13, 2010, 1:55 A.M.

104

See United States Supreme Court, Order List: 560 U.S. at 2 (May 24, 2010) (granting cert),
available at http://www.supremecourt.gov/orders/courtorders/052410zor.pdf; Petition for
Cert., Williamson v. Mazda Motor of Am., Inc., No. 08-1314 (Apr. 22, 2009). The question
presented is:
Where Congress has provided that compliance with a federal motor vehicle safety
standard ―does not exempt a person from liability at common law,‖ 49 U.S.C. §
30103(e), does a federal minimum safety standard allowing vehicle manufacturers to
install either lap-only or lap/shoulder seatbelts in certain seating positions preempt a
state common-law claim alleging that the manufacturer should have installed a
lap/shoulder belt in one of those seating positions?

Id. at i.

24

the scope of the Court‘s implied preemption holding in Geier.105 According to the
Solicitor General‘s amicus brief, since Geier, lower courts around the country have
misread the Supreme Court‘s holding to create a much broader standard of preemption,
finding implied preemption ―even though the federal agency that promulgated and
administers that regulation disagrees.‖106 The brief, signed by Paul Geier, Assistant
General Counsel for Litigation at NHTSA, argues that lower courts have incorrectly read
Geier to suggest that any time NHTSA gives manufacturers different options to satisfy a
safety standard, state tort law is preempted.107 Because of this broadening of Geier
preemption, the brief seeks, like NHTSA‘s rulemaking shift,108 to clarify the
―acknowledged confusion‖ and ―widespread error in lower courts over the decade since
Geier . . . .‖109
The rule at issue in Williamson allowed manufacturers to choose between lapbelts and shoulder-belts for the middle seat position in cars.110 When the plaintiff sought
to hold Mazda liable for its decision to use a lap-belt in its minivan, contributing to the
death of a passenger, Mazda claimed, and the trial court agreed, that the claim was
preempted by the NHTSA safety standard.111 The California state appellate court held
that the same policy concerns of testing multiple forms of passive restraints (e.g. airbags)
that led to preemption in Geier also applied to seatbelts and affirmed, and the California
Supreme Court denied certiorari.112
The United States and NHTSA argue that, unlike in Geier, there is no
―affirmative[] encourag[ing]‖ of diverse forms of seatbelts, and a Federal Motor Vehicle
Safety Standard should normally be read to be no more than a ―minimum standard.‖113
NHTSA appears to favor a standard whereby courts should defer to its judgment when it
states that a rule does not have preemptive effect. Moreover, according to NHTSA, the
agency‘s ―longstanding‖ position has been that NHTSA standards do not generally
105

Geier v. Am. Honda Corp., 529 U.S. 861 (2000).

106

Brief for the United States as Amicus Curiae at 17, Williamson v. Mazda Motor of Am., Inc.,
No. 08-1314 (U.S. Apr. 2010).

107

Id. at 17-18 (citing many federal and state cases).

108

Specifically, in NHTSA‘s December 2009 Designated Seating Position Amendment rule, the
agency set forth a similar interpretation of Geier. See supra note 87 and accompanying text.

109

Brief for the United States as Amicus Curiae at 21, Williamson, No. 08-1314.

110

Id. at 1-4.

111

See Williamson v. Mazda Motor of Am., Inc., 167 Cal. App. 4th 905, 908–910 (2008)
(describing trial court order).

112

Id. at 919; Brief for the United States as Amicus Curiae at 6–8, Williamson, No. 08-1314.

113

Brief for the United States as Amicus Curiae at 9, Williamson, No. 08-1314 (citing 49 U.S.C. §
30102(a)(9) (2010)).

25

preempt state tort law, aside from situations where the agency‘s affirmative policy
presents an outright conflict, as in Geier.114
(b)

Fuel Economy Standards

In addition to the Motor Vehicle Safety Act, NHTSA also administers average
fuel economy standards under the Energy Policy and Conservation Act (EPCA).115 In
Metropolitan Taxicab Board of Trade v. City of New York, the Second Circuit affirmed
the trial court‘s ruling that New York City‘s regulation of the fares taxis could charge for
hybrid vs. non-hybrid vehicles was preempted by the EPCA (and the Clean Air Act), as it
―related to‖ fuel economy standards.116 In the Second Circuit appeal, the United States,
joined by NHTSA, filed an amicus brief asking the court to reverse the trial court‘s
interpretation of the EPCA as preempting local taxi regulation.117 NHTSA argued that
Congress did not intend to preempt local taxi regulation when it passed the EPCA in the
1970s, given the widespread local regulation that existed both before and after its
passage.118
NHTSA appears to be trying to craft a fine line for ECPA preemption between
regulation that ―directly‖ regulates fuel economy standards and regulation that only
114

Indeed, NHTSA has consistently taken this position in cases before the U.S. Supreme Court.
However, it is in some tension with its rulemaking, at least during the period of use of the
preemption preambles in 2005 and arguably with some of the later rulemakings in 2007-08.
For example, in its Response to an AAJ comment on Electronic Stability Control Systems,
NHTSA declined to disavow its boilerplate discussion of preemption, arguing that the
discussion neither asserted the existence of a conflict giving rise to implied preemption nor
stated an intent to preempt. NHTSA also rejected AAJ‘s contention that Geier was an
―unusual, fact-driven case.‖ See Federal Motor Vehicle Safety Standards; Electronic
Stability Control Systems; Controls and Displays, 73 Fed. Reg. 54,526, 54,536 (Sept. 22,
2008). As this was a pre-―boilerplate evolution‖ rule, NHTSA did not distinguish between
state tort law and positive law when it discussed how state requirements could be preempted
expressly through the Motor Vehicle Safety Act or impliedly through Geier.

However, according to NHTSA, Geier had long settled the issue of whether there was an express
preemption of state tort law under the Motor Vehicle Safety Act and that therefore the
reference to ―state law,‖ while inartful, could not reasonably be interpreted as including state
tort law. Email from Steve Wood to Catherine M. Sharkey, Oct. 13, 2010, 1:55 A.M.
115

49 U.S.C. § 32902(a); 49 C.F.R. §§ 1.50(f), 501.2(a)(8).

116

See Metropolitan Taxicab Board of Trade v. City of New York, No. 09-2901-CV, 2010 WL
2902501 (2d Cir. July 27, 2010). A case in the District of Massachusetts held similarly for
Boston‘s taxi regulation. See Ophir v. City of Boston, 647 F.Supp.2d 86 (D. Mass. 2009)
(citing Metropolitan Taxicab, 633 F. Supp. 2d 83).

117

See Brief for the United States as Amicus Curiae at 9, Metropolitan Taxicab Board of Trade v.
City of New York, No. 09-2901-CV (2d Cir. Jan. 15, 2010).

118

Id. at 9-12 (quoting Buck v. California, 343 U.S. 99, 102 (1952)) (―‗The operation of taxicabs
is a local business,‘ and ‗Congress has left the field largely to the states.‘‖).

26

―indirectly‖ affects fuel economy standards. Its amicus brief argued that ―indirect‖
regulation like taxicab lease rates should not be preempted, but did not take a position on
―direct‖ regulation.119 Moreover, NHTSA has not stated a clear position on how it
determines which regulations ―directly‖ regulate fuel economy standards and which ones
merely ―indirectly‖ regulate fuel economy, but its amicus brief suggests the significance
of the actual impact of the state rule on federal objectives may drive NHTSA‘s
position.120
NHTSA‘s position also appears to be in line with a recent shift in policy.
Originally, the text of NHTSA‘s 2006 NPRM on Average Fuel Economy Standards for
Light Trucks Model Years 2008-2011121 claimed ―broad preemption‖ under the EPCA of
all state laws related to fuel economy standards, including those regulating greenhouse
gases.122 In contrast, in its 2009 Final Rule for Average Fuel Economy Standards,
Passenger Cars and Light Trucks, MY 2011, NHTSA decided to defer any decision to
preempt under the EPCA for MY 2011.123 NHTSA noted that this deferral was in
response to President Obama‘s request for NHTSA to reconsider preemption in light of
how to implement the Energy Independence and Security Act of 2007 and the Supreme
Court‘s decision in Massachusetts v. EPA.124 And in its 2009 NPRM for fuel economy
standards for MY 2011-2015, NHTSA notes that the issue of preempting state emissions
standards remains ―an ongoing public dialogue,‖ and meanwhile, NHTSA had been in
consultation with the States.125
119

See id. at 12 & n.3.

120

See Brief for the United States as Amicus Curiae at 14, Metropolitan Taxicab, No. 09-2901CV (―The Supreme Court has observed that, even in statutes containing the broad ‗relating
to‘ language, the ‗significan[ce]‘ of the actual impact of a state rule on federal ‗pre-emptionrelated objectives‘ has some bearing on a court‘s inquiry.‖ (quoting Rowe v. N.H. Motor
Transport Ass‘n, 128 S. Ct. 989, 995 (2008))).

121

See 71 Fed Reg. 17,566 (Apr. 6, 2006).

122

See id. at 17,654-70 (stating that regulating carbon dioxide emissions from vehicles has ―direct
effect‖ of regulating fuel consumption and is ―related to‖ fuel economy standards); see also
Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172, 1181 n.1 (9th Cir. 2008) (not
addressing preamble preemption because rule was not yet final).

123

See Final Rule, Average Fuel Economy Standards, Passenger Cars and Light Trucks, MY
2011, at 43-44, 818, available at
http://www.nhtsa.gov/DOT/NHTSA/Rulemaking/Rules/Associated%20Files/CAFE_Update
d_Final_Rule_MY2011.pdf (―As noted above, NHTSA has decided not to include any
preemption provisions in the regulatory text at this time and will re-examine the issue of
preemption in the context of the rulemaking for MY 2012 and later years.‖).

124

Id. at 787-88.

125

See Notice of Proposed Rulemaking, Average Fuel Economy Standards, Passenger Cars and
Light Trucks, MY2011-2015, at 374-75, available at
http://www.nhtsa.gov/DOT/NHTSA/Rulemaking/Rules/Associated%20Files/CAFE_1115_NPRM_April_21.pdf (referring to Green Mountain Chrysler Plymouth Dodge Jeep v.

27

In affirming the district court‘s decision in Metropolitan Taxicab, the Second
Circuit implicitly rejected NHTSA‘s argument that the EPCA does not preempt NYC‘s
favorable lease rates for hybrid cabs. The court, however, did not even address
NHTSA‘s argument that Congress intended to leave taxi regulation alone. It instead
relied on the analogy to ERISA preemption standards that preempt state laws directly
―related to‖ the subject matter of the federal standard. The court held that the regulations
―directly relate‖ to fuel economy standards ―because they rely on fuel economy, and
nothing else, as the criterion for determining the applicable lease cap.‖126
B.

FDA

Of the agencies surveyed in this Report, FDA has been the most difficult one to
assess. Like NHTSA, FDA came under sharp attack during the George W. Bush
Administration for its efforts to preempt state tort law while skirting the requirements of
E.O. 13132.127 According to the AAJ study, from 2001 to 2008, FDA issued twenty of
the fifty-three total notices issued by federal agencies claiming preemption, second only
to NHTSA.128 Most notably, the FDA preempted state tort law for drug labeling through
the preamble of a regulation, after it had previously disclaimed any preemptive intent in
the initial proposed rulemaking.129 The U.S. Supreme Court refused to rely upon the
preemption preamble in Wyeth v. Levine.130
There is some evidence from the regulatory record and intervention in pending
litigation that indicates that the FDA has revised its preemption policy under the Obama
Crombie, 508 F. Supp. 2d 295 (D. Vt. 2007); Cent. Valley Chrysler-Jeep, Inc. v. Goldstene,
529 F. Supp. 2d 1151 (E.D. Cal. 2007)).
After its reconsideration, NHTSA noted that its position on tailpipe emissions remained
―unchanged,‖ and maintained that state regulation of CO2 emissions is preempted by the
EPCA, despite two district court cases to the contrary. Id. at 374-79.
126

Metropolitan Taxicab Board of Trade v. City of New York, No. 09-2901-CV, 2010 WL
2902501, at *5 (2d Cir. July 27, 2010).

127

See, e.g., Sharkey, Federalism Accountability, supra note 14, at 2131–41.

128

See AM. ASS‘N FOR JUSTICE, supra note 55 (note that this total included proposed rules that
had not yet resulted in a final or interim final rule).

129

Sharkey, Federalism Accountability, supra note 14, at 2131-34.

130

129 S. Ct. 1187, 1201 (2009) (―In 2006, the agency finalized the rule and, without offering
States or other interested parties notice or opportunity for comment, articulated a sweeping
position on the FDCA‘s pre-emptive effect in the regulatory preamble. The agency‘s views
on state law are inherently suspect in light of this procedural failure.‖); Sharkey, Federalism
Accountability, supra note 14, at 2173-74 (―[T]he Court looked askance at the FDA‘s
‗proclamations of pre-emption‘ in its 2006 preemption preamble. The Court specifically
mentioned that the FDA‘s failure to ‗offer[] States or other interested parties notice or
opportunity for comment‘ rendered its views on state law ‗inherently suspect.‘‖).

28

Administration. Sharkey‘s interview with FDA‘s Chief Counsel provided some (albeit
limited) evidence of a change in tone on preemption at the agency.131
Fuller exposition of the FDA‘s position on preemption is expected now that the
Solicitor General has responded to the U.S. Supreme Court‘s call for its views in two
generic drug preemption cases.132
1.

Response to May 2009 Presidential Memorandum on Preemption

In response to whether FDA had conducted the ten-year retrospective review of
preemptive rulemakings, FDA Chief Counsel stated that the agency has conducted an
extensive review, as requested by the Presidential Memorandum, and explained that FDA
anticipates issuing the results of its review after appropriate clearance.133
Prospectively, the Chief Counsel explained that ―we seek to avoid finding
preemption when we can in a principled way.‖134
2.

Rulemaking

Searches of recent FDA rulemakings did not turn up the kind of extensive
commentary on an evolving position on preemption that NHTSA, for example, included
in its recent Electric-Powered Vehicles Rule. FDA, however, administers myriad
statutory schemes (some of which include express preemption provisions) and the agency
therefore does not have the same opportunity as does NHTSA to opine on preemption
across the different areas in which they regulate.
The rulemaking record, nonetheless, contains some hints that FDA may have
retreated from its aggressive pro-preemption stance. For example, in the context of the
Federal Food, Drug and Cosmetic Act‘s (FDCA) non-prescription drug express
preemption provision, 21 U.S.C. § 379r(a), while the pre-publication version of the
FDA‘s over-the-counter (OTC) labeling rule contained a preemption provision (which
was quickly removed from the Fed. Reg. website),135 the Final Rule contained only
131

Sharkey Interview with Ralph Tyler, Chief Counsel, FDA, July 6, 2010, 4–5 PM.

132

See Brief for the United States as Amicus Curiae, PLIVA, Inc. v. Mensing, No. 09-993 (U.S.
Nov. 2, 2010); Supreme Court of the United States, Order List, 560 U.S. at 2 (May 24, 2010)
(inviting the Solicitor General to file briefs in PLIVA, Inc. v. Mensing, No. 09-993 and
Actavis Elizabeth, LLC v. Mensing, No. 09-1039).

133

Sharkey Telephone Interview with Ralph Tyler, Chief Counsel, FDA, Ann Wion, Deputy
Chief Counsel for Program Review, FDA, and Leslie Kux, Acting Assistant Commissioner
for Policy, FDA, October 4, 2010, 5–5:30 PM.

134

Sharkey Interview with Ralph Tyler, Chief Counsel, FDA, July 6, 2010, 4-5 PM.

135

See Kurt R. Kast, Change in FDA Preemption Position? New Rule Largely Eliminates
Preemption Discussion, FDA L. BLOG (Apr. 29, 2009, 10:41 AM),
http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2009/04/change-in-fda-

29

limited discussion of express preemption that does not preempt state law as clearly as the
NPRM did.136
On the other hand, FDA has continued to assert statutory preemption in its
rules—for example, the recent Skin Protectant and Bottled Water rules.137 The Skin
Protectant rule, issued one month before the over-the-counter drug labeling rule, likewise
interprets preemption under § 379r(a).138 The rule claims express preemption under
preemption-position-new-rule-largely-eliminates-preemption-discussion.html. Sharkey also
interviewed Kurt Karst, author of FDA Law Blog, by telephone on July 8, 2010.
136

The NPRM‘s section on express preemption stated: ―FDA has analyzed this proposed rule in
accordance with the principles set forth in Executive Order 13132. FDA has determined that
the proposed rule, if finalized as proposed, would have a preemptive effect on State law.‖ It
then quotes 21 U.S.C. § 379r(a) and explains: ―Currently, this provision operates to preempt
States from imposing requirements related to the regulation of nonprescription drug
products. (See section 751(b), (c), (d), and (e) of the act for the scope of the express
preemption provision, the exemption procedures, and the exceptions to the provision.) . . . .‖
Internal Analgesic, Antipyretic, and Antirheumatic Drug Products for Over-the-Counter
Human Use; Proposed Amendment of the Tentative Final Monograph; Required Warnings
and Other Labeling, 71 Fed. Reg. 77,314, 77,345 (Dec. 26, 2006).

In contrast, the final rule says only:
―On December 27, 2006, FDA‘s Division of Federal and State Relations provided notice via
email transmission of a letter to elected officials of State governments and their
representatives. The letter advised the States of the publication of the proposed rule and
stated that when published as a final rule, this regulation would preempt State law in
accordance with section 751 of the Federal Food, Drug, and Cosmetic Act (the act) (21
U.S.C. 379r(a)). The letter encouraged State and local governments to review the proposed
rule and to provide any comments to the docket (Docket No. 1977N-0094L) by May 25,
2007, or to contact certain named individuals. FDA did not receive any comments in
response to this notice, or any comments from the States in response to the publication of the
proposed rule.‖ Organ-Specific Warnings; Internal Analgesic, Antipyretic, and
Antirheumatic Drug Products for Over-the-Counter Human Use; Final Monograph, 74 Fed.
Reg. 19,385, 19,406 (Apr. 29, 2009).
Unlike the NPRM, this discussion in the final rule merely cites the letter to the states, and
provides no context as to how § 379r applies to the OTC rule. The final rule does include
language saying, ―In conclusion, we believe that we have complied with all of the applicable
requirements under the Executive order and have determined that the preemptive effects of
this rule are consistent with Executive Order 13132.‖ Id. The rule, however, never explains
what the preemptive effect is, other than citing its mention of § 379r in the letter to the
states.
137

See, e.g., Final Rule on Beverages: Bottled Water, 74 Fed. Reg. 25,651, 25,664 (May 28,
2009); Final Rule on Astringent Drug Products That Produce Aluminum Acetate; Skin
Protectant Drug Products for Over-the-Counter Human Use; Technical Amendment, 74 Fed.
Reg. 9759, 9763-64 (Mar. 6, 2009).

138

21 U.S.C. § 379r(a) (2006).

30

379r(a) with a justification similar to the NPRM in the OTC Drug rule, and also claims
implied preemption under Geier.139 The rule also mentions that FDA reached out to state
and local officials on preemption and received no comment.140
The Bottled Water rule asserts preemption under a different provision of the
FDCA: § 403A‘s preemption of misbranded food regulation.141 The rule quotes 403A
and explains:
FDA has determined that the revisions to the standard of quality for bottled
water relating to microbiological quality (§ 165.110(b)(2)) will have a
preemptive effect on State law. Although this rule has a preemptive effect in that
it will preclude States from issuing requirements for microbiological testing in
bottled water that are not identical to the requirements for microbiological
testing in bottled water as set forth in this rule, this preemptive effect is
consistent with what Congress set forth in section 403A of the act. Section
403A(a)(1) of the act displaces both State legislative requirements and State
common law duties (Riegel v. Medtronic, 128 S. Ct. 999 (2008)).142
The Final Rule actually appears to go further than the NPRM, which did not include the
last portion asserting 403A(a)(1) preempted state common law duties.143 As the first
FDA rule claiming preemption since President Obama‘s Memorandum on preemption,
however, the rule states it is now treating preemption ―in light of the President‘s
Memorandum.‖144 The FDA appears to be relying exclusively on express preemption
principles, with no reliance on Geier implied preemption.
3.

Litigation

Pending litigation—and FDA‘s attempts to keep its preemption position close to
the vest until it had fully analyzed the issues—may explain the opacity of FDA‘s position
to date.
The U.S. Supreme Court called for the views of the Solicitor General on whether
to grant certiorari in two circuit court cases,145 raising the issue whether Wyeth‘s holding
139

74 Fed. Reg. 9759, 9763-64 (claiming express and implied preemption). The rule is a
―technical amendment‖ updating a 1993 rule on skin protectants; there was no preemption
provision in the 1993 rule. See 58 Fed. Reg. 54458 (Oct. 21, 1993).

140

Id.

141

See Final Rule on Beverages: Bottled Water, 74 Fed. Reg. 25,651, 25,664.

142

Id.

143

See 73 Fed. Reg. 53,775, 53,791–92 (Sept. 17, 2008).

144

74 Fed. Reg. 25,651, 25,664 n.3.

145

See PLIVA, Inc. v. Mensing, No. 09-993 (2010); Actavis Elizabeth v. Mensing, No. 09-1039
(2010); see also SCOTUSWIKI,

31

extends to blocking preemption claims by generic drug manufacturers.146 The question
presented in the cert petition is:
Whether the [court] abrogated the Hatch-Waxman Amendments by allowing
state tort liability for failure to warn in direct contravention of the Act‘s
requirement that a generic drug‘s labeling be the same as the Federal Drug
Administration-approved labeling for the listed (or branded) drug.147
Both of the federal courts of appeals148 (and the majority of lower federal courts149) that
have addressed the issue rejected preemption. In Mensing v. Wyeth, the Eighth Circuit
held that because generic manufacturers could have proposed a labeling change to the
http://www.scotuswiki.com/index.php?title=PLIVA%2C_Inc._v._Mensing%3B_Actavis_El
izabeth_v._Mensing (last visited Aug. 25, 2010).
146

See SUPREME CT. OF THE U.S.,
http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/09-993.htm (last visited
Aug. 25, 2010); see also Kurt R. Kast, U.S. Supreme Court Invites Solicitor General to
Express the Views of the United States in Generic Drug Preemption Cases, FDA L. BLOG
(May 25, 2010, 12:51 PM),
http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2010/05/us-supreme-court-invitessolicitor-general-to-express-the-views-of-the-united-states-in-generic-drug.html.

Ralph Tyler, FDA‘s Chief Counsel, and Lou Bograd, Senior Litigation Counsel for the Center for
Constitutional Rights and lead appellate counsel for plaintiffs in Mensing, confirmed that
FDA had meetings with plaintiffs and representatives from the generic drug industry to hear
their arguments. Sharkey Interview with Ralph Tyler; Sharkey Telephone Interview with
Lou Bograd (July 12, 2010).
147

Petition for certiorari, PLIVA, Inc. v. Mensing, No. 09-993 (Feb. 19, 2010), available at
http://www.scotusblog.com/wp-content/uploads/2010/05/09-993_pet.pdf.

148

See Mensing v. Wyeth, 588 F.3d 603 (8th Cir. 2009); Demahy v. Actavis, Inc., 593 F.3d 428,
436–39, 444–45 (5th Cir. 2010).

149

See Bartlett v. Mut. Pharm., Co., Inc., 659 F. Supp. 2d 279 (D.N.H. 2009); Stacel v. Teva
Pharm., 620 F. Supp. 2d 899 (N.D. Ill. 2009); Schrock v. Wyeth, Inc., 601 F. Supp. 2d 1262
(W.D. Okla. 2009). But see Morris v. Wyeth, Inc., 582 F. Supp. 2d 861 (W.D. Ky 2008)
(allowing preemption because generics cannot unilaterally heighten labeling requirements
under CBE procedures without FDA approval), motion for reconsideration denied, 642 F.
Supp. 2d 677 (W.D. Ky 2009) (appeal pending in 6th Cir.); Gaeta v. Perrigo Pharm. Co., 672
F. Supp. 2d 1017 (N.D. Cal. 2009) (appeal pending in 9th Cir.).

The Sixth Circuit (where Morris v. Wyeth is pending) asked the FDA for its opinion. DOJ (along
with official from Department of Health and Human Services, including Ralph Tyler, Chief
Counsel of FDA) filed an amicus brief that set forth the same position as the United States‘
amicus brief in the Mensing cases (discussed below in text). Brief for Amicus Curiae U.S.
Food and Drug Administration at 12 n.5, Morris v. Wyeth, No. 09-5509 (6th Cir. Nov. 16,
2010) (―On November 2, 2010, at the Supreme Court‘s invitation, the United States filed an
amicus brief in the Mensing cases recommending the certiorari be denied, reflecting the
same position on the preemption question as this brief.‖).

32

FDA or requested that the FDA send out a warning letter, there was no conflict between
the state law tort claim and federal standards that warranted preempting the plaintiff‘s
claims.150
In its amicus brief submitted at the request of the U.S. Supreme Court, the
Solicitor General (joined by agency officials from Department of Health and Human
Services151) opined that the Eighth Circuit ―correctly held that FDA mediates the
channels available to an ANDA [abbreviated new drug application for generic drug
manufacturers] holder under federal law for disseminating strengthened warnings (though
the court misunderstood precisely which processes were appropriate).‖152 According to
the FDA, generic drug manufacturers are constrained in their ability to alter their labels,
which by statutory mandate must be exactly the same as that approved for the brand
name drug.153 Unlike a brand name manufacturer, a generic drug manufacturer cannot
unilaterally change its approved labeling under the ―changes being effected‖ [CBE]
process.154 Moreover, should a generic drug manufacturer unilaterally send out a ―Dear
Health Care Professional‖ letter (as brand name drug manufacturers may do), it risks
having its generic drug deemed ―misbranded.‖155 Nonetheless, FDA maintains that
generic drug manufacturers are obliged to provide the FDA with any new information
about risks and can do so by proposing either labeling changes or ―Dear Health Care
Professional‖ letters to the FDA, who can then act as appropriate.156

150

See Mensing, 588 F.3d at 608–12 (rejecting both impossibility and obstacle preemption
arguments).

151

Ralph Tyler, Chief Counsel of FDA, signed the brief in his capacity as Associate General
Counsel of the Department of Health and Human Services.

152

Brief for the United States as Amicus Curiae at 18, PLIVA, Inc. v. Mensing, No. 09-993 (U.S.
Nov. 2, 2010).

153

21 U.S.C. § 355(j)(4)(G) (generic drugs must bear labeling ―the same as the labeling approved
for the [name brand drug]‖).

154

The Eighth Circuit did not weigh in on this issue in Mensing. The Fifth Circuit, however,
concluded that the CBE process was available to generic drug manufacturers. Demahy, 593
F.3d at 439–44. According to the SG, the Fifth Circuit‘s holding ―misunderstands FDA‘s
regulations.‖ Brief for the United States as Amicus Curiae at 22 n.10, PLIVA, No. 09-993.

155

For this reason, ―[s]tate law may not impose liability on an ANDA holder for failing to send
such a letter unilaterally.‖ Id. at 18.

156

Id. (―[E]ither would have involved bringing the relevant information to FDA‘s attention with a
view to providing consistent warnings for the [brand name drug] and its generic
equivalents.‖); id. at 13 (―ANDA holders were nonetheless required to provide FDA with
new information about risks, and FDA would have acted on such information if appropriate .
. . . ‖); id. at 15 (generic drug manufacturers are ―obligated to provide FDA with information
about labeling concerns‖).

33

The Solicitor General‘s (and FDA‘s) response to the U.S. Supreme Court is the
first statement of the FDA‘s position on implied preemption under the Obama
Administration.157 FDA claims that its interpretations of its regulations governing drug
labeling are entitled to deference.158 Perhaps of even greater significance, FDA would
preserve its own preemptive authority: ―A fully informed, actual decision by FDA that a
particular warning would be inconsistent with the FDCA or FDA‘s regulations would
presumably preempt a state law claim predicated on the necessity of such a warning.‖159
Key to the preemption determination, then (and an issue that must be addressed in the
litigation) is ―what action FDA would have taken in response to a hypothetical warning
proposal‖;160 and here, FDA suggests that the drug manufacturers will have to shoulder
the burden of demonstrating ―the likelihood of FDA inaction.‖161
What remains elusive is precisely what kind of evidence that FDA considered the
new risk information but declined to take further action to alter the labeling would suffice
to preempt a state failure to warn claim.162 FDA nonetheless takes the position that such

157

The FDA gave an earlier hint that its position might be different than that under the previous
George W. Bush Administration. Beginning in 2000, FDA intervened as amicus in
numerous pharmaceutical cases, taking the position that the Supremacy Clause bars state tort
liability for failure to include a warning in a drug label that is in conflict with, or contrary to,
warnings approved by the FDA. See Catherine M. Sharkey, Products Liability Preemption:
An Institutional Approach, 76 GEO. WASH. L. REV. 449, 505 n.267 (2008) [hereinafter
Sharkey, Products Liability Preemption] (citing cases in which FDA intervened).

But, shortly after the Obama Administration took office, DOJ withdrew an amicus brief
submitted by FDA espousing a pro-preemption position in Colacicco v. Apotex, Inc., 521
F.3d 253 (3d Cir. 2008), vacated, Colacicco v. Apotex Inc., 129 S.Ct. 1578 (2009) (mem.).
158

Brief for the United States as Amicus Curiae at 13, PLIVA, No. 09-993 (citing Auer v.
Robbins, 519 U.S. 452, 462 (1997); Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837, 842–43 (1984)).

159

Id. at 19 n.9 (citing Wyeth, 129 S. Ct. at 1203 & n.14; id. at 1204 (Breyer, J., concurring)).

160

Id. at 19.

161

Id.

162

This issue was front and center in an earlier case. Colacicco v. Apotex, Inc., 521 F.3d 253 (3d
Cir. 2008), vacated, Colacicco v. Apotex Inc., 129 S.Ct. 1578 (2009) (mem.). In Colacicco,
the Third Circuit preempted state-law failure to warn claims against the manufacturer of
selective serotonin reuptake inhibitors, or SSRI, drugs, finding that ―a state-law obligation to
include a warning asserting the existence of an association between SSRIs and suicidality
directly conflicts with the FDA‘s oft-repeated conclusion that the evidence did not support
such an association.‖ Id. at 271. The court accorded the FDA‘s pro-preemption position
Skidmore deference, finding it persuasive on account of the consistency, care, formality, and
relative expertise of the agency. Id. at 274–75 (quoting Skidmore v. Swift & Co., 323 U.S.
134 (1994)).

34

clashes, whereby it is impossible for the defendant manufacturer to comply with both the
state law duty and the federal regulatory requirements, ―arise infrequently, and when they
do, there tend to be unique, fact-specific considerations at issue.‖163
FDA likewise signaled that the scope of obstacle, or frustration of purposes,
implied preemption was narrow. First, FDA reiterated the Wyeth Court‘s characterization
of the pro-consumer purpose of the FDCA to ―bolster consumer protection against
harmful products,‖ which it said reflected Congress‘ ―determin[ation] that widely
available state rights of action provide[] appropriate [compensatory] relief for injured
consumers.‖164 Next, FDA reasoned that it would not make sense for Congress to have
deprived consumers injured by generic drugs of state law remedies against the
manufacturer whereas similarly situated consumers injured by brand name drugs would
The United States argued before the Third Circuit that it was not the preemption preamble of the
FDA‘s drug labeling rule that preempted plaintiffs‘ claims, but rather the FDA‘s repeated
findings that there was insufficient scientific evidence of an association between adult use of
antidepressants and suicidality to permit a warning on the labeling for those drugs. Brief of
the United States as Amicus Curiae in Support of Defendants-Appellants at 28–29,
Colacicco, 521 F.3d 253 (No. 08-437), 2006 WL 5691532.
The U.S. Supreme Court vacated and remanded Colacicco in light of Wyeth. Colacicco, 129 S.
Ct. 1578. The Third Circuit then remanded the consolidated cases back to their respective
district courts.
The U.S. rescinded its amicus brief in support of defendants-appellees, stating that ―[t]he [FDA]
has not yet conducted the sort of reexamination of various preemption issues following the
Supreme Court‘s decision in Wyeth that would be necessary to inform a position of the
United States in this case.‖ Letter from Sharon Swingle, U.S. Dep‘t of Justice, Civil Div.,
Appellate Staff, to Marcia M. Waldron, Clerk, U.S. Court of Appeals for the Third Circuit
(Apr. 28, 2009).
The district court removed GlaxoSmithKline as a party after it dismissed claims against GSK
unrelated to preemption. See Colacicco v. Apotex, Inc., No. 05-CV-5500, 2009 WL
4729883, at *1 (E.D. Pa. Dec. 10, 2009). The case against Apotex, the generic drug
manufacturer, later settled. Colacicco v. Apotex, Inc., No. 05-CV-5500, 2010 WL 1707003
(E.D. Pa. Mar. 5, 2010) (―Stipulation of All Parties for Voluntary Dismissal of Entire
Action‖).
The U.S. rescinded its amicus brief in support of defendants-appellees, stating that ―[t]he [FDA]
has not yet conducted the sort of reexamination of various preemption issues following the
Supreme Court‘s decision in Wyeth that would be necessary to inform a position of the
United States in this case.‖ Letter from Sharon Swingle, U.S. Dep‘t of Justice, Civil Div.,
Appellate Staff, to Marcia M. Waldron, Clerk, U.S. Court of Appeals for the Third Circuit
(Apr. 28, 2009).
163

Brief for the United States as Amicus Curiae at 16, PLIVA, No. 09-993. According to FDA,
―[f]or that and other reasons, FDA has not promulgated a formal regulation for this process.‖
Id.

164

Id. at 21

35

have recourse.165 Finally, FDA concluded that the modest state law duty to provide
information to the FDA ―seems unlikely to affect the availability of generic
pharmaceuticals.‖166 At the same time, FDA recognized that ―imposing on a generic
manufacturer a state law duty not to market its product without developing for itself
knowledge as comprehensive as FDA‘s or the NDA holder‘s could pose [different]
preemption questions.‖167
C.

OCC

The Supreme Court addressed the OCC‘s preemption positions on a number of
occasions. Most recently, in 2009, the Court considered whether the OCC‘s visitorial
powers rule, claiming preemption through its interpretation of the National Bank Act
(NBA),168 prevented states from enforcing their consumer protection laws against
national banks, thwarting the states‘ asserted interest in protecting consumers from
discrimination and predatory lending.169 In Cuomo v. Clearing House Association, the
Supreme Court held that the National Bank Act (NBA) provision addressing visitation
could not be construed to preempt the ability of state attorneys general to bring legal
action against a national bank in order to enforce an otherwise valid state law.170 The
Court did, however, conclude that state attorneys general may not investigate national
banks‘ conduct or practices using administrative subpoenas (the action attempted by the
New York Attorney General) because it would be an impermissible visitation preempted
by the NBA.171 In 2007, the OCC had used the same preemptive rule to preempt states
from exercising supervisory powers over state-chartered subsidiaries of national banks,
an action that was upheld by the Supreme Court in Watters v. Wachovia Bank, N.A.172

165

Id. (―[I]ndividuals harmed by inadequately labeled generic drugs would (on petitioner‘s view)
have no remedy, while individuals who took the same drug with the same labeling in its
brand-name form would (by virtue of Wyeth) have a state tort remedy.‖).

166

Id. at 22.

167

Id.

168

12 C.F.R. § 7.4000.

169

See Clearing House Ass‘n v. Cuomo, 510 F.3d 105, 119 (2d Cir. 2007).

170

129 S. Ct. 2710 (2009).

171

Id. at 2721–22.

172

550 U.S. 1 (2007). Unlike Cuomo, which focused on the scope of the express preemption
inherent in the term ―visitorial powers,‖ the Court found implied conflict preemption in
Watters, holding that state supervision of state-chartered subsidiaries of national banks
would conflict with the exercise of the national bank‘s federally authorized powers. See
Watters, 550 U.S. at 20–21. But see infra note 216 (discussing how Congress overturned
Watters in the Dodd-Frank Act).

36

The visitorial powers preemptive rule in Cuomo was issued in 2004, along with a
broader rule preempting all state laws that ―‗obstruct, impair, or condition a national
bank‘s ability to fully exercise its Federally authorized powers‘ in four broadly-defined
areas–real estate lending, lending not secured by real estate, deposit-taking, and other
‗operations.‘‖173 At the time of OCC‘s consideration of these rules, members of
Congress wrote to OCC to ask for a delay in promulgating the rule, as they wanted to
consider whether to clarify Congressional intent to the OCC after Congress returned from
recess.174 OCC did not wait. In response, both the House and Senate committees
conducted hearings on whether OCC‘s actions exceeded the boundaries of what Congress
intended.175
Additionally Congress commissioned the Government Accountability Office
(GAO) to study the OCC‘s rulemaking process, its process and its capacity to handle
consumer complaints, and to assess the potential impact of the rules on consumer
protection and the dual banking system.176 The 2005 GAO Report evaluated the OCC‘s
apparent disregard of state interests in passing the preemptive rules at issue in Cuomo and
Watters, and concluded that ―opportunities existed to enhance [OCC‘s] consultative
efforts.‖177 Because GAO found that OCC had followed the requirements of E.O. 13132,

173

12 C.F.R. §§ 7.4007-7.4009, 34.4; see Wilmarth, Jr., supra note 14, at 20 n.89.

174

See Congressional Review of OCC Preemption: Hearing Before the Subcomm. on Oversight
and Investigations of the H. Comm. on Fin. Servs., 108th Cong. 274–89 (2004) (Letters from
various members of Congress to Hon. John D. Hawke, Jr., Comptroller of the Currency).
The OCC stated it failed to heed Congress‘ request because of a ―compelling reason‖—
namely, new state consumer protection laws that were about to become effective. See id. at
20-21 (colloquy between Hon. Sue Kelly (Chair of Subcomm. on Oversight and
Investigations) and Hon. Julie L. Williams (Chief Counsel of OCC)); see also id. at 52
(statement of Chairwoman Sue Kelly) (―Unfortunately, this is not the first time that
Congress has had difficulty working with the OCC, which indicates to me that there may be
larger systemic problems at the agency. Congress must, and will, take all necessary steps to
ensure that the interests of the American people come first—even if means a ‗culture of
change‘ at the OCC.‖).

175

See generally id.; Review of the National Bank Preemption Rules: Hearings Before the S.
Comm. on Banking, Hous., and Urban Affairs, 108th Cong. (2004).

176

U.S. GOV‘T ACCOUNTABILITY OFFICE, GAO-06-387, OCC PREEMPTION RULES: OCC
SHOULD FURTHER CLARIFY THE APPLICABILITY OF STATE CONSUMER PROTECTION LAWS
TO NATIONAL BANKS 2 (2006). The GAO addressed each of these questions in three
separate reports.

177

U.S. GOV‘T ACCOUNTABILITY OFFICE, GAO-06-08, OCC PREEMPTION RULEMAKING:
OPPORTUNITIES EXISTED TO ENHANCE THE CONSULTATIVE EFFORTS AND BETTER
DOCUMENT THE RULEMAKING PROCESS 45 (2005), available at
http://www.gao.gov/new.items/d068.pdf [hereinafter 2005 GAO REPORT] (―In the face of an
executive order [13,132] specifically calling for state and local consultation on preemption
rules, OCC‘s limited additional effort may have contributed to an impression that it did not
genuinely seek or consider input from [state bank supervisors]. Stakeholders representing

37

GAO did not make formal recommendations to Congress.178 GAO cautioned, however,
that it ―could not fully determine the basis for some of the other agency actions or assess
the extent of its consultations with stakeholders, because OCC did not always document
its actions and lacked written guidance and procedures detailing the rulemaking
process.‖179 The GAO criticized both the lack of documentation for consultative efforts
and procedural requirements, warning ―Without such documentation, it may not be
clear—to agency management, auditors, or oversight committees—that an agency
followed applicable requirements.‖180
Sharkey conducted a telephone interview with a group of OCC officials.181 From
the perspective of the OCC officials, preemption is a ―tool for conducting nationwide
business.‖182 Others have made the point more pejoratively, claiming that preemption
was a ―selling point‖ used by the OCC to market charters. Competing with state banking
charters, the OCC has used preemption as an inducement to persuade banks to
incorporate under national charters, increasing its revenues and its budget.183 Assessment
fees collected from nationally chartered banks are OCC‘s primary source of revenue.184
Congress believed that because OCC admitted that preemption was about attracting

such diverse interests as consumer protection advocates, state bank regulators, state attorneys
general, and some Members of Congress continue to maintain that the agency genuinely did
not seek their input.‖).
178

Id. at ―Highlights.‖

179

Id. at 5.

180

Id. at 5, 46 (―Without documentation about matters such as how decisions were reached, who
was consulted, and what their views were, we were not able to present information in this
report that might have contributed to a better understanding of OCC‘s process.‖).

181

Participants in the telephone interview conducted by Sharkey (August 5, 2010) were: Horace
Sneed, Director of the Litigation Division; Karen Solomon, Director of the Legislative and
Regulatory Activities Division; Michele Meyer, Assistant Director of the Legislative and
Regulatory Activities Division; Ursula Bass, Counsel in the Legislative and Regulatory
Activities Division; and Douglas Jordan, Senior Counsel in the Litigation Division
[hereinafter OCC Telephone Interview].

182

OCC Telephone Interview.

183

See Wilmarth, Jr., supra note 14, at 20 ((―A former head of the OCC described preemption as
‗a significant benefit of the national [bank] charter—a benefit that the OCC has fought hard
over the years to preserve.‘‖ (quoting John D. Hawke, Jr., Comptroller of the Currency,
Remarks Before the Women in Housing and Finance (Feb. 12, 2002))).

184

See Oren Bar-Gill & Elizabeth Warren, Making Credit Safer, 157 U. PA. L. REV. 1, 93–94
(2007) (―Assessments compromise 95% of the OCC‘s budget . . . .‖).

38

additional charters, which in turn increased the size of OCC‘s budget, reform was
needed.185
Largely overshadowing any developments in the rulemaking or litigation realms
at the OCC is the recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act. Pursuant to this Act, OCC will be classified as an independent agency,
no longer subject to the mandates of E.O. 13132.186
1.

Response to May 2009 Presidential Memorandum on Preemption

The OCC‘s law department conducted a review and submitted it to OIRA in
August 2009.187 OCC identified eight preemptive rulemakings since 1999 and concluded
that, with one exception, all were ―justified under the established legal principles that
185

S. COMM. ON BANKING, HOUS., AND URBAN AFFAIRS, THE RESTORING FINANCIAL STABILITY
ACT OF 2010, S. Rep. No. 111-176, at 16 (2010), available at
http://www.gpo.gov/fdsys/pkg/CRPT-111srpt176/pdf/CRPT-111srpt176.pdf (―At a hearing
on the OCC‘s preemption rule, Comptroller Hawke acknowledged, in response to
questioning from Senator Sarbanes, that one reason Hawke issued the preemption rule was
to attract additional charters, which helps to bolster the budget of the OCC.‖). In the hearing
the Senate Report cites, Comptroller Hawke, responding to Senator Sarbanes, stated:
―Preemption is an important attribute of the national bank charter and I am a strong believer
in the quality of the national bank charter.‖ Review of the National Bank Preemption Rules:
Hearing Before the S. Comm. on Banking, Hous., and Urban Affairs, 108th Cong., at 37
(2004) (discussing Jess Bravin & Paul Beckett, Friendly Watchdog: Federal Regulator
Often Helps Banks Fighting Consumers, WALL ST. J., Jan. 28, 2002, at A1).

186

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 § 315 (2010) (amending the definition of ―independent regulatory agency, 44 U.S.C. §
3502(5) (2006), to include OCC); see also OCC Telephone Interview (confirming change).
Interestingly, this section of the Act is merely titled ―Federal Information Policy,‖ and gives
no indication of this change in OCC‘s status other than amending the relevant section of the
U.S. Code, unlike the section of the Dodd-Frank Act that states the new Bureau of Consumer
Financial Protection will be an independent agency. Compare § 315 , with § 1100D(a)
(titled ―Designation as an Independent Agency‖). Prior to this legislative change, OCC was
not considered an ―independent regulatory agency,‖ under § 3502(5), exempt from E.O.
13132. See, e.g., Bank Activities and Operations, Final Rule, 69 Fed. Reg. 1895, 1903 (Jan.
13, 2004). It has always had, however, some semblance of independence within the
Executive. OCC‘s enabling statute states: ―[T]he chief officer of which bureau shall be
called the Comptroller of the Currency and shall perform his duties under the general
directions of the Secretary of the Treasury.‖ 12 U.S.C. § 1. The statute continues: ―The
Secretary of the Treasury may not delay or prevent the issuance of any rule or the
promulgation of any regulation by the Comptroller of the Currency,‖ id., giving OCC some
insulation from political influence even before the Dodd-Frank Act was passed.

187

See Julie L. Williams, First Senior Deputy Comptroller and Chief Counsel of OCC,
Memorandum to Kevin F. Neyland, Deputy Administrator, Office of Info. and Reg. Affairs,
at 2–3 & n.9 (Aug. 13, 2009) [hereinafter Williams Memorandum to Neyland]. This
document was provided to Sharkey by the OCC.

39

govern national bank preemption, including the principles in E.O. 13132.‖188 The one
exception—the Visitorial Powers rule—was deemed in need of further revision in light of
Cuomo.189 But, according to OCC officials, OCC determined that, prior to undertaking
revisions to rules, it would await the end of the legislative process.190
With respect to compliance with E.O. 13132, OCC stated:
The OCC complied with the principles and requirements of E.O. 13132 in
promulgating each of the 8 preemption rules . . . . Each rule was issued using the
notice-and-comment procedures prescribed by the Administrative Procedure
Act. We received detailed and thoughtful comments from state officials
individually and collectively on many of the proposals and, in some cases, we
met with state representatives to discuss them. We considered those comments
fully, and summarized and responded to them in the preambles to the final rules.
We prepared and published with each final rule a federalism summary impact
statement specific to that rule. The preambles to those rules, including the
federalism summary impact statements, demonstrate the OCC‘s adherence to the
applicable constitutional and legal principles, detail the comments and concerns
submitted by state and local officials, and provide the OCC‘s response to those
comments.191
OCC‘s response to the Presidential Memorandum was comprehensive.192 In light
of the Dodd-Frank Act, however, an additional rule—the Bank Operations Preemption
rule—may warrant revisiting. The rule adopts a loose interpretation of the Barnett
standard for preempting state law, omitting ―significantly impairs‖ from the standard for
188

Id. The rules identified were: Operating Subsidiary Rule, 12 C.F.R. 7.4006; Deposit-Taking,
12 C.F.R. 7.4007; Non-Real Estate Lending, 12 C.F.R. 7.4008; National Bank Operations,
7.4009; Real Estate Lending, 12 C.F.R. 34.4; Fiduciary Powers, 12 C.F.R. 9.7(e); Debt
Cancellation Contracts, 12 C.F.R. 37.1(c); and Visitorial Powers, 12 C.F.R. 7.4000.

189

Id. (―We are currently preparing revisions to that regulation to conform with the Court‘s
decision in Cuomo.‖).

190

OCC Telephone Interview. At the time, an Administrative Regulatory Reform proposal was
on the table, calling for an evaluation of federal preemption with respect to national banks.
Id.

191

Williams Memorandum to Neyland, supra note 187, at 4.

192

A parallel Lexis search conducted by my research assistant, Matthew Shahabian, did not turn
up any additional preemptive rules. In fact, OCC‘s listing of preemptive rules was perhaps
even more inclusive than necessary. For example, the Debt Cancellation Contracts (DCCs)
and Debt Suspension Agreements (DSAs) Rule, 67 Fed. Reg. 58,962, 58,975 (Sept. 19,
2002), classifies DCCs and DSAs as banking products as opposed to insurance products, and
the preemption comes from the statutory and regulatory implications of declaring them
banking products, not from preemptive language in the rule itself. The review did not
include OCC opinion letters that preempt state law on a case-by-case basis, e.g., 68
Fed. Reg. 46264 (Aug. 5, 2003), but the Presidential Memorandum only targets preemptive
regulations.

40

conflict preemption.193 Thus, though the OCC claims in its Review of Preemption
Regulations Pursuant to the Presidential Memorandum to OMB that the preemption
standard used in this rule was ―confirmed‖ by the Supreme Court‘s interpretation of
banking preemption in Watters,194 it is not clear whether OCC‘s interpretation of Barnett
is still appropriate in light of Congress‘s reiteration of ―significantly‖ as part of the
Barnett standard in the Dodd-Frank Act.195
2.

Congressional Response: Dodd-Frank Wall Street Reform and
Consumer Protection Act

As mentioned above, legislative activity has dominated preemption policy
developments at the OCC to the exclusion of rulemaking and litigation efforts. OCC
deferred revisiting its Visitorial Powers rule until the conclusion of the legislative
process.196 Congress recently passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act.197 Under the Dodd-Frank Act, OCC is designated as an independent
regulatory agency within the Department of the Treasury198 and assumes the functions of
the Office of Thrift Supervision (OTS) relating to Federal savings associations and the
OTS‘s rulemaking authority for all savings associations.199
Additionally, the Act creates a ―Bureau of Consumer Financial Protection‖ to
promulgate and enforce federal financial consumer protection laws.200 For financial
consumer protection, Congress inserted a general preemption standard provision that
193

See Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904,
1910 (Jan. 13, 2004) (using only ―obstruct‖ or ―impair‖). But see id. (―The OCC intends this
phrase as the distillation of the various preemption constructs articulated by the Supreme
Court, as recognized in Hines and Barnett, and not as a replacement construct that is in any
way inconsistent with those standards.‖).

194

See Williams Memorandum to Neyland, supra note 187, at 2–3 & n.9 (Aug. 13, 2009). Lower
federal courts have also upheld this regulation. See Rose v. Chase Bank USA, N.A., 513
F.3d 1032 (9th Cir. 2008); Aguayo v. U.S. Bank, 658 F. Supp. 2d 1226, 1233 (S.D. Cal.
2009) (finding conflict preemption using OCC‘s interpretation of Barnett).

195

See infra notes 204–213 and accompanying text.

196

In the Dodd-Frank Act, Congress endorsed the Cuomo standard on visitorial powers. DoddFrank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 § 1047(a) (2010) (modifying 12 U.S.C. § 5136C(i)(1)). OCC will presumably now
revise that rule.

197

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 (2010).

198

See supra note 186 and accompanying text.

199

Dodd-Frank Wall Street Reform and Consumer Protection Act §§ 312(b)(2)(B), 314.

200

Id. § 1011. The Bureau will likewise be an independent regulatory agency, and therefore not
subject to E.O. 13132. Id. § 1100D(a).

41

mirrors the provisions in some of the Federal Trade Commission acts—federal law sets a
floor, and state law that goes beyond federal law should not be preempted,201 and state
law that is ―inconsistent‖ with federal law is only preempted to the extent of the
inconsistency.202 The Bureau has the authority to determine whether state law is
inconsistent with federal law, either on its own motion or in response to a petition.203
In the highly contentious ―Barnett paragraph,‖ Congress set forth the preemption
standard for how state consumer financial protection laws apply to national banks. State
consumer laws are preempted only if: (1) the state law discriminates against national
banks;204 (2) in accordance with Barnett Bank v. Nelson,205 state law ―prevents or
significantly interferes with the exercise by the national bank of its powers‖;206 or (3)
state consumer law is preempted by another federal law. Preemption determinations
under the Barnett standard can be made by courts, or by regulation or order of the OCC
―on a case-by-case basis.‖207 ―Case-by-case basis‖ is defined as evaluating one specific
201

Id. § 1041(a)(2).

202

Id. § 1041(a)(1).

203

Id. § 1041(a)(2).

204

Id. § 1044(a) (modifying 12 U.S.C. § 5136C(b)(1)(A)).

205

517 U.S. 25 (1996).

206

Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a) (modifying §
5136C(b)(1(B)). There is a debate over whether the OCC, over the past decade, has gone
further than the original Barnett standard in its preemption determinations, and whether the
bill will actually change the substantive preemption standard. See Stacy Kaper & Cheyenne
Hopkins, Regulatory Reform Conferees Clip Preemption, AM. BANKER, June 23, 2010
(quoting various scholars and commentators as stating that Barnett‘s ―significantly
interferes‖ standard is higher than the mere ―obstructs‖ or ―impairs‖ standard used by OCC
in its 2004 Rulemakings); A. PATRICK DOYLE, HOWARD N. CAYNE, JOHN D. HAWKE, JR. &
LAWRENCE J. HUTT, ARNOLD & PORTER LLP, NEW FINANCIAL REGULATORY REFORM
ACT: HAS IT MATERIALLY ALTERED THE PREEMPTION LANDSCAPE FOR FEDERALLY
CHARTERED INSTITUTIONS? 4 (July 2010), available at
http://www.aporter.net/public_document.cfm?u=NewFinancialRegulatoryReformActHasitM
ateriallyAlteredthePreemptionLandscapeforFederallyCharteredInstitutions&id=16154&key=
6E2 (stating Barnett standard‘s impact on national banks ―will to some extent be limited by
the fact that the . . . amendments primarily codify existing precedent,‖ but will greatly affect
the standards for thrifts and savings bank as it moves away from OTS‘s ―field preemption‖
standard); see also Cheyenne Hopkins, Bad to Worse: OCC Sees Flaws in Dodd Reform Bill,
AM. BANKER, Mar. 18, 2010, available at http://www.banking.state.ny.us/art100318.htm
(explaining debate between simply citing Barnett in bill and actually codifying a standard, as
―[t]he OCC has always interpreted Barnett to give it more flexibility to applying
preemption‖). The final bill added the standard of ―significantly interferes,‖ as opposed to
merely citing Barnett. Dodd-Frank Wall Street Reform and Consumer Protection Act §
1044(a) (modifying § 5136C(b)(1(B)).

207

Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a) (modifying 12
U.S.C. § 5136C(b)(1)(B)).

42

state law at a time, not blanket preemption.208 The OCC may, however, attempt to
preempt more than one state‘s law at a time if it determines that the laws of multiple
states are ―substantively equivalent,‖ but OCC must consult with the Bureau when
determining whether state law is ―substantively equivalent.‖209
According to the OCC officials, the Barnett paragraph does not alter the status
quo because OCC‘s preemptive rulemakings have explicitly cited Barnett.210 Nor, in
their opinion does the ―case-by-case basis‖ language exclude categorical preemptive
rulemakings because of the ―substantively equivalent‖ provision.211 The legislative
history, however, suggests that the ―case-by-case‖ provision was a compromise provision
that gave OCC some preemptive power whereas earlier versions of the bill would have
stripped OCC of preemptive power entirely.212 Moreover, former OCC Comptroller John
Hawke coauthored a client report on the financial reform bill for his law firm, Arnold &

208

Id. (modifying 12 U.S.C. § 5136C(b)(3)(A)).

209

Id. (modifying 12 U.S.C. § 5136C(b)(3)(B)); see also S. COMM. ON BANKING, HOUS., AND
URBAN AFFAIRS, THE RESTORING FINANCIAL STABILITY ACT OF 2010, S. Rep. No. 111176, at 176 (2010), available at http://www.gpo.gov/fdsys/pkg/CRPT111srpt176/pdf/CRPT-111srpt176.pdf (―The term ‗case-by-case basis‘ is defined to permit
the OCC to make a single determination concerning multiple States‘ consumer financial
laws, so long as the law contains substantively equivalent terms.‖).

210

OCC Telephone Interview. But see supra note 206 (presenting debate on this issue).

211

Id. Though the ―substantively equivalent‖ provision does allow the OCC to issue a
preemptive rule that applies to more than one state, functionally OCC must still make the
case-by-case determination, in consultation with the BCFP, that each state‘s law is
―substantively equivalent‖ in terms to the others‘. See supra note 209 and accompanying
text.

212

See 156 Cong. Rec. H14496, 14678 (Dec. 10, 2009) (statement of Rep. Bean (D-IL)) (―The
manager‘s amendment addresses key concerns many of my colleagues and I had with the
underlying text, which included changes to existing law in preemption standard and judicial
deference. The compromise allows for the national bank regulator to make case-by-case
preemption determinations on an individual State‘s consumer financial laws and then apply
that determination to categories of State consumer financial laws that have equivalent
terms.‖). Compare Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a)
(final bill preemption standard), with H.R. 3126 § 143 (modifying § 5136C(b)) (proposed
bill) (―State Consumer Laws of General Application—Notwithstanding any other provision
of Federal law and except as provided in subsection (d), any consumer protection provision
in State consumer laws of general application, including any law relating to unfair or
deceptive acts or practices, any consumer fraud law and repossession, foreclosure, and
collection law, shall apply to any national bank.‖), and id. § 5136C(d) (limiting exceptions
to ―inconsistencies‖ where state law provides less protection than federal law according to
new consumer protection agency, not OCC).

43

Porter, in which he wrote that preemption of state consumer financial laws by OCC
―must be made on a ‗case-by-case‘ basis.‖213
That said, the ―case-by-case‖ provision applies only to ―state consumer financial
laws,‖ which are narrowly defined as ―State law[s] that do[] not directly or indirectly
discriminate against national banks and that directly and specifically regulate[] the
manner, content, or terms and conditions of any financial transaction (as may be
authorized for national banks to engage in), or any account related thereto, with respect to
a consumer.‖214 Thus, preemption of state laws regulating issues like bank registration
would not be subject to this provision.215
Congress also included a savings clause in the Act, which appears to reverse
Watters v. Wachovia with respect to the applicability of state law to state-chartered
subsidiaries of national banks.216
Finally, OCC must conduct a periodic review (through notice and comment
rulemaking proceedings) of any regulations or orders with preemptive effect every five
years after promulgating that regulation.217 This list must be forwarded to both the House
Committee on Financial Services and the Senate Committee on Banking, Housing and
Urban Affairs.218 Given the OCC‘s new designation as an independent regulatory
agency,219 the Dodd-Frank Act shifts review of OCC rulemaking from the Executive to
Congress. The OCC is also required to publish and update quarterly a list of all agency
determinations with preemptive effect.220
213

Doyle et al., supra note 206, at 2–3 (stating that OCC has ―leeway‖ for broader preemption
under the substantively equivalent/consultation provision).

214

Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a) (modifying 12
U.S.C. § 5136C(a)(2)).

215

See Doyle et al, supra note 206, at 2.

216

Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a) (modifying 12
U.S.C. §§ 5136C(b)(2), 5136C(e)); see also Doyle et al., supra note 206, at 2 (―As amended,
the NBA [National Banking Act] and the HOLA [Home Owners Loan Act] will no longer
preempt state law as applied to state-chartered subsidiaries and affiliates of national banks or
federal savings banks (unless such entities are themselves national banks or federal savings
banks). This is a highly significant change in the law and effectively reverses the holding of
Watters v. Wachovia Bank . . . .‖).

217

Dodd-Frank Wall Street Reform and Consumer Protection Act § 1044(a) (modifying §
5136C(d)(1)).

218

Id. (modifying § 5136C(d)(2)) (―The report submitted to the respective committees shall
address whether the agency intends to continue, rescind, or propose to amend any
determination that a provision of Federal law preempts a State consumer financial law, and
the reasons therefore.‖).

219

See supra note 186 and accompanying text.

220

Id. (modifying § 5136C(G) (―Transparency of OCC Preemption Determinations‖)).

44

D.

CPSC

The Consumer Product Safety Commission (CPSC) is an example of an
independent regulatory agency (and thus not bound by E.O. 13132) that took advantage
of preamble preemption, notwithstanding its lack of historical precedent for issuing
preemptive rules. The CPSC, issuing a rule on flammability standards for mattress sets,
included language in the rule‘s preamble that preempted any ―inconsistent‖ state law—
both in the form of statutory law and tort law.221 In the Senate Judiciary Committee‘s
hearing on regulatory preemption, Senators criticized the CPSC‘s inclusion of the
preemptive preamble in its mattress rule.222
The statute CPSC used to assert preemption, the Flammable Fabrics Act of 1953
(FFA), is one of four product safety statutes that were transferred to the Commission‘s
jurisdiction when it was created in 1972; the other three statutes are the Federal
Hazardous Substances Act of 1960 (FHSA), the Poison Prevention Packaging Act of
1970 (PPPA), and the Refrigerator Safety Act of 1956 (RSA).223 Three of the four
―transferred acts‖ contain express preemption clauses.224 Courts have been inconsistent
over which statutes preempt state law, and which do not. ―[C]ourts have generally found
that the FHSA preempts state common law,225 [but] the opposite is true of the FFA,226
and the cases are mixed with respect to preemption of common law under the PPPA.‖227

221

Final Rule: Standard for the Flammability (Open-Flame) of Mattress Sets, 71 Fed. Reg.
13,471, 13,496. (Mar. 15, 2006); see Sharkey, Preemption by Preamble, supra note 4, at
227, 230-33.

222

Regulatory Preemption: Are Federal Agencies Usurping Congressional and State Authority?:
Hearing Before S. Comm. on the Judiciary, 110th Cong. 3 (2007) (statement of Sen.
Specter); id. at 16 (statement of Sen. Leahy).

223

WILLIAM FUNK ET AL., THE TRUTH ABOUT TORTS: REGULATORY PREEMPTION AT CPSC 5–6
(Ctr. for Progressive Reform White Paper #807, 2008), available at
http://progressivereform.org/articles/Truth_About_Torts_CPSC_807.pdf [hereinafter FUNK
ET AL., CPSC] (citing 15 U.S.C. § 1203 (FFA); 15 U.S.C. § 1261 note (b)(1)(A) (FHSA); 15
U.S.C. § 1476 (PPPA); 15 U.S.C. § 1211 (RSA)).

224

The Refrigerator Safety Act does not. See 15 U.S.C. §§ 1211–1214.

225

FUNK ET AL., CPSC, supra note 223, at 6–7 (citing Busch v. Graphic Color Corp., 662 N.E.2d
397 (Ill. 1996), cert. denied, 519 U.S. 810 (1996); Sherman v. Sunsong Am., Inc., 485 F.
Supp. 2d 1070 (D. Neb. 2007)).

226

Id. (citing Wilson v. Bradlees of New Eng., Inc., 96 F.3d 552 (1st Cir. 1996), cert. denied 519
U.S. 1149 (1999); O‘Donnell v. Big Yank, Inc., 696 A.2d 846 (Pa. Super. 1997); Gryc v.
Dayton-Hudson Corp., 297 N.W.2d 727 (Minn. 1980)).

Somewhat ironically, then, the CPSC chose to preempt state common law through the FFA when
it issued its mattress flammability rule— the one statute courts generally hold to not preempt
state common law. Professor Funk and his coauthors suggest this blatant contradiction may
help explain why the CPSC backed away from preemption under the FFA when it issued its

45

The main statute under CPSC‘s jurisdiction, the Consumer Product Safety Act,
contains both a preemption clause228 and a savings clause.229 Several courts, following
the Supreme Court‘s reading of the interplay between preemption and savings clauses in
Geier, have found state tort law preempted.230 Against the backdrop of these court
preemption decisions and the CPSC‘s preemption preamble, Congress passed the
Consumer Product Safety Improvement Act of 2008,231 which explicitly stated that state
tort law was not to be construed as preempted by CPSC‘s rulemaking and disclaimed any
preemptive rulemaking authority in the CPSC itself.232
Sharkey conducted an interview with the General Counsel at CPSC.233 While
Congress‘ statutory direction has had the most pronounced effect on rulemaking and
intervention in litigation at the CPSC, the change in Administration and the Presidential
Memorandum on Preemption likewise seem to have had some impact. Compared to its
activities under the George W. Bush Administration, CPSC seems less inclined to offer
any interpretive gloss on preemption in rulemakings, beyond simply citing relevant
express statutory preemption provisions and likewise is more hesitant to enter the
litigation fray where preemption is at issue.
1.

Congressional Response: Consumer Product Safety Improvement
Act of 2008

The Consumer Product Safety Improvement Act of 2008 (CPSIA)234 was less a
response to CPSC preemption and more a response to the ―implosion‖ of the agency and
more recent clothing textile rulemaking. FUNK ET AL., CPSC, supra note 223, at 7 (citing
Standard for the Flammability of Clothing Textiles, 73 Fed. Reg. 15,636 (Mar. 25, 2008)).
227

Id. (citing Miles v. S.C. Johnson & Son, Inc., 2002 WL 31655188 (N.D. Ill. Nov. 25, 2002)
(holding that the PPPA preempts any common law claims that ―seek to impose . . .
packaging requirements that are different from those imposed by [the] statute‖); Hunnings v.
Texaco, Inc., 29 F.3d 1480, 1488 (11th Cir. 1994) (holding that PPPA did not preempt
common law claim because the suit was filed against a bulk packager, not a packager of
retail products)).

228

15 U.S.C. §§ 2074-2075.

229

§ 2074(a).

230

See, e.g., Bic Pen Corp. v. Carter, 251 S.W.3d 500, 505-06 (Tex. 2008) (quoting Geier v.
American Honda Motor Co., 529 U.S. 861, 869-73 (2000)); see also FUNK ET AL., CPSC,
supra note 223, at 4-5 & nn.6-12 (describing various court decisions).

231

Pub. L. No. 110-314, 122 Stat. 3016 (Aug. 14, 2008).

232

Id. at § 231(a); see also FUNK ET AL., CPSC, supra note 223, at 8.

233

Sharkey interview with Cheryl Falvey, General Counsel, CPSC, July 7, 2010.

234

Pub. L. No. 110-314, 122 Stat. 3016.

46

the ―fever pitch‖ of recalls in 2007 that forced Congress to act to strengthen product
safety protection generally.235 In addition to strengthening product safety regulation,
Congress also attempted to clarify preemption as it applies to the CPSC. The Act
explicitly states that the Commission ―may not construe any such Act [under its
jurisdiction] as preempting any cause of action under state or local common law or state
statutory law regarding damage claims.‖236
CPSC General Counsel suggested that the CPSIA simply ―slaps the hand‖ of the
CPSC with respect to its past preemption by preamble (e.g., the mattress rule), while
leaving general preemption standards alone (or even buttressing them).237 The CPSIA‘s
legislative history confirms the General Counsel‘s view that Congress pursued a
compromise, ―split the baby‖ approach. Democratic members of Congress championed
that the bill protected state labeling laws regulating product safety (through the § 231(b)
provision),238 while Republicans were pleased that the bill preempts the ―confusing‖
235

Amy Widman, Advancing Federalism Concerns in Administrative Law Through a
Revitalization of Enforcement Powers – A Case Study of the Consumer Product Safety and
Improvement Act of 2008, 29 YALE L. & POL‘Y REV. (forthcoming Fall 2010) (manuscript at
14–16), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1588884.

Reasons proffered for the compromised state of CPSC include agency capture by industry,
limited resources, and excessive procedural requirements that stymied quick recalls and
bans. FUNK ET AL., supra note 223, at 9-11; Widman, supra, at 12–16 (describing Bush
CPSC as ―a shell of an agency‖).
236

CPSIA § 231(a). Schwartz and Silverman construe this provision as a ―gag order‖ on the
agency that ―deprive[s] courts of guidance that they come to expect from the entity in the
best position to understand whether federal health and safety objectives would be impeded
by application of inconsistent state tort claims.‖ Victor E. Schwartz & Cary Silverman,
Preemption of State Law by Federal Agency Action: Striking the Appropriate Balance that
Protects Public Safety, 84 TULANE L. REV. 1203, 1223 (2010).

237

Sharkey Interview with Falvey. For example, while the CPSIA does not change the
preemption standard, by prescribing safety standards for lead, the statute affects the scope of
preemption by triggering the FHSA preemption provisions. See Doug Farquhar & Scott
Hendrick, State Authority to Regulate Toxins in Children‘s Consumer Products (unpublished
manuscript), at 12 (2009), available at http://works.bepress.com/doug_farquhar/1.

Those FHSA provisions that preempt state law affecting performance are triggered when the
federal government issues a performance standard, as the CPSIA does for lead. See, FHSA,
15 U.S.C. § 1261 n. (b)(1)(A); Toy Mfgs. of Am. v. Blumenthal, 986 F.2d 615 (2d Cir. 1992)
(holding because CPSC standard only regulated toys for children younger than three, it was
not a standard applying to toys for children older than three that would preempt
Connecticut‘s safety standard).
238

See, e.g., 153 CONG. REC. H16882 (2007) (colloquy between Rep. Waxman (D-CA), and Rep.
Dingell (D-MI)) (noting that bill protects state labeling laws like California‘s Prop 65).

The CPSIA includes a provision for states to apply directly to the CPSC for an exemption from
any preemption of state positive law specifically regulating toy safety performance
standards, through notice and comment proceedings. CPSIA § 106(h). According to the

47

patchwork of state laws on lead regulation.239 The conference report notes that the bill
―reiterat[es]‖ existing preemption standards while ―preserv[ing]‖ state laws.240
Unlike the Dodd-Frank financial reform bill,241 with one exception, the Act does
not attempt to clarify the relationship between state law and federal law for the courts, but
is only specifically directed towards the CPSC.242 Professor William Funk nonetheless
suggests that, in slapping the hand of the CPSC with respect to preemption, the CPSIA
may lead courts to hesitate to find preemption.243
2.

Response to May 2009 Presidential Memorandum on Preemption

According to the General Counsel, the office surveyed its attorneys about the
existence of any preemptive rules.244 The CPSC identified sixteen rules issued over the
past ten years that contained preemptive language. Of the sixteen, the General Counsel

CPSC, four states applied for an exemption by the November 12, 2008 deadline: Arizona,
California, Illinois, and New York. See FAQs for Section 231: Preemption, CPSC,
http://www.cpsc.gov/about/cpsia/faq/231faq.html.
239

See, e.g., 154 CONG. REC. H7581 (2008) (statement of Rep. Barton (R-TX)) (―[O]ne of the
compromises in the bill is that there is Federal preemption, that there is one standard for all
the States, and I am very pleased that that is in the bill.‖); id. at H7586 (statement of Rep.
Whitfield (R-KY)) (―I am glad that this conference report preempts State standards—notably
for lead, lead paint and the phthalates I mentioned—and that the authority of the State
Attorneys General is appropriately limited to ensure that enforcement is swift, efficient, and
consistent across the country.‖).

240

H. REP. NO. 110-787, at 74 (2008) (conf. report on H.R. 4040), available at
http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=110_cong_reports&docid=f:hr787.110.pdf.

241

See, e.g., Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203,
124 Stat. 1376 (2010). For discussion of the ―Skidmore deference‖ provision directed to
reviewing courts, see infra notes 421–422 and accompanying text.

242

See id.; H. REP. NO. 110-501, at 15 (2008) (committee report on H.R. 4040). The exception,
added only after the conference committee, is for the Federal Hazardous Substances Act, and
states the FHSA is not to be interpreted as preempting warning requirements established
pursuant to state law in effect as of August 31, 2003. Compare id., with Pub. L. No. 110-314,
§ 231(b). This provision was intended to exempt California Proposition 65, California‘s
Safe Drinking Water Act of 1986, from preemption. H. REP. NO. 110-787, at 74 (2008)
(Conf. Rep.).

243

FUNK ET AL., supra note 223, at 8.

244

Sharkey Interview with Falvey. According to the General Counsel, though CPSC did the
retrospective analysis required by the Memorandum, they did not submit a formal report to
OMB. Email from Cheryl Falvey to Catherine Sharkey, Nov. 1, 2010, 1:49 P.M.

48

stated they identified only two rules that ―appear to go beyond what the statute says.‖245
The first, a rule on bunk bed safety standards issued in 1999, started by quoting the
preemption provisions of the CPSA and the FHSA.246 The rule went on to state that rules
promulgated by California and Oklahoma differ from the federal rule and would thus be
preempted in accord with congressional intent under the issuing statutes, and that failure
to preempt state law ―could have an adverse economic effect on manufacturers and
distributors.‖247 Because the CPSIA requires the Commission to update the bunk bed
rule, the Commission plans to defer addressing the preemption asserted in the current rule
until the update is issued.248 The second rule identified by the General Counsel is the
previously discussed mattress flammability rule.249 The mattress flammability rule is the
only rule that explicitly preempts state tort law.250 According to the General Counsel,
because of the amount of regulatory activity currently on the CPSC‘s plate, and because
the language of CPSIA would prevent a court from giving preemptive effect to the
mattress flammability rule, revoking the preemption language in the rule ―hasn‘t been a
priority.‖251
Of the remaining fourteen rules, ten identified by the CPSC follow the same basic
boilerplate structure: They first quote the applicable preemption clause from the statute,
and then state that the rule would therefore preempt non-identical state and local laws
under the statute. For example, rules issued under the FFA preempt non-identical
―standards or regulations,‖252 rules issued under the PPPA preempt non-identical ―special

245

Email from Cheryl Falvey, to Catherine Sharkey, Oct. 12, 2010, 9:41 P.M.

246

See Safety Standard for Bunk Beds, 64 Fed. Reg. 71,887, 71,899 (Dec. 22, 1999).

247

Id.

248

Email from Cheryl Falvey to Catherine Sharkey, Nov. 1, 2010, 1:49 P.M.

249

See Standard for the Flammability (Open Flame) of Mattress Sets; Final Rule, 71 Fed. Reg.
13,471, 13,496 (Mar. 15, 2006); supra notes 221–226.and accompanying text.

250

Standard for the Flammability (Open Flame) of Mattress Sets; Final Rule, 71 Fed. Reg. at
13,496 (―The Commission intends and expects that the new mattress flammability standard
will preempt inconsistent state standards and requirements, whether in the form of positive
enactments or court created requirements.‖) (emphasis added).

251

Email from Cheryl Falvey to Catherine Sharkey, Nov. 1, 2010, 1:49 P.M.

252

Standard for the Flammability of Mattresses and Mattress Pads, 65 Fed. Reg. 12,935, 12,937–
38 (Mar. 10, 2000); Standard for the Surface Flammability of Carpets and Rugs; Standard
for the Surface Flammability of Small Carpets and Rugs, 65 Fed. Reg. 12,929, 12,932 (Mar.
10, 2000); Standard for the Flammability of Children‘s Sleepwear: Sizes 0 Through 6X;
Standard for the Flammability of Children‘s Sleepwear: Sizes 7 Through 14, 65 Fed. Reg.
12,924, 12,926–27 (Mar. 10, 2000); Final Technical Changes; Standard for the Flammability
of Children‘s Sleepwear: Sizes 0 Through 6X; Standard for the Flammability of Children‘s
Sleepwear: Sizes 7 Through 14, 64 Fed. Reg. 2833, 2838 (Jan. 19, 1999).

49

packaging standards,‖253 and rules issued under the FHSA preempt non-identical
―requirements.‖254 Several of these rules also mentioned that, although the CPSC is not
bound by E.O. 13,132, the Commission evaluated preemption ―in light of the principles‖
stated in E.O. 13,132.255
Two rules on safety standards for garage door openers simply quote the relevant
preemption provision without offering any interpretation or application to the rule.256 A
2007 rule on portable generator labeling requirements disclaims express preemption
under the relevant statute, but reserves the possibility of conflict preemption where it
would be impossible for a manufacturer to comply with both the federal rule and a state
requirement.257 Finally, a 2008 rule on certificates of compliance cites (but does not
253

Poison Prevention Packaging Requirements; Exemption of Hormone Replacement Therapy
Products, 67 Fed. Reg. 66,550, 66,552 (Nov. 1, 2002); Household Products Containing
Hydrocarbons; Final Rules, 66 Fed. Reg. 53,951, 53,956 (Oct. 25, 2001); Child-Resistant
Packaging for Certain Over-The-Counter Drug Products, 66 Fed. Reg. 40,111, 40,115 (Aug.
2, 2001); Final Rule: Requirements for Child-Resistant Packaging; Household Products
Containing Methacrylic Acid, 64 Fed. Reg. 32,799, 32,803 (June 18, 1999).

254

Exemptions From Classification as Banned Hazardous Substances; Exemption for Certain
Model Rocket Propellant Devices for Use With Rocket-Powered Model Cars, 68 Fed. Reg.
4697, 4698–99 (Jan. 30, 2003); Dive Sticks; Final Rule, 66 Fed. Reg. 13,645, 13,650 (Mar.
7, 2001).

255

Compare Exemptions From Classification as Banned Hazardous Substances; Exemption for
Certain Model Rocket Propellant Devices for Use With Rocket-Powered Model Cars, 68
Fed. Reg. at 4698–99 (citing 13,132); Dive Sticks; Final Rule, 66 Fed. Reg. at 13,650
(same); Standard for the Flammability of Mattresses and Mattress Pads, 65 Fed. Reg. at
12,937–38 (same); Standard for the Surface Flammability of Carpets and Rugs; Standard for
the Surface Flammability of Small Carpets and Rugs, 65 Fed. Reg. at 12,932 (same);
Standard for the Flammability of Children‘s Sleepwear: Sizes 0 Through 6X; Standard for
the Flammability of Children‘s Sleepwear: Sizes 7 Through 14, 65 Fed. Reg. at 12,926–27
(same); Final Technical Changes; Standard for the Flammability of Children‘s Sleepwear:
Sizes 0 Through 6X; Standard for the Flammability of Children‘s Sleepwear: Sizes 7
Through 14, 64 Fed. Reg. at 2838 (same); Safety Standard for Bunk Beds, 64 Fed. Reg. at
71,899 (same), with Standard for the Flammability (Open Flame) of Mattress Sets; Final
Rule, 71 Fed. Reg. at 13,496 (not citing 13,132); Household Products Containing
Hydrocarbons; Final Rules, 66 Fed. Reg. at 53,956 (same); Child-Resistant Packaging for
Certain Over-The-Counter Drug Products, 66 Fed. Reg. at 40,115 (same); Final Rule:
Requirements for Child-Resistant Packaging; Household Products Containing Methacrylic
Acid, 64 Fed. Reg. at 32,803 (same).

There does not seem to be any reason why some rules cite E.O. 13,132 and others do not.
256

Safety Standard for Automatic Residential Garage Door Operators, 72 Fed. Reg. 54,816,
54,817 (Sept. 27, 2007); Safety Standard for Automatic Residential Garage Door Operators,
65 Fed. Reg. 70,656, 70,656 (Nov. 27, 2000).

257

Portable Generators; Final Rule; Labeling Requirements, 72 Fed. Reg. 1443, 1445 (Jan. 12,
2007).

50

quote) the relevant preemption provision, and punts on its interpretation, stating ―the
preemptive effect of this rule would be determined in an appropriate proceeding in a
court of competent jurisdiction.‖258
On a prospective basis, according to the General Counsel, the agency would
reference the relevant statute(s) in its rulemakings, but would not offer any interpretive
gloss, especially where state common law was at issue.259
3.

Rulemaking

According to the General Counsel, in response to the Presidential Memorandum
on Preemption, the agency has deliberately included a more passive statement regarding
preemption in recent rulemakings.260 Five recent preemptive rulemakings—each of
which addresses nursery products—use the same boilerplate language:
Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a ―consumer
product safety standard under [the CPSA]‖ is in effect and applies to a product,
no State or political subdivision of a State may either establish or continue in
effect a requirement dealing with the same risk of injury unless the State
requirement is identical to the Federal standard. (Section 26(c) of the CPSA also
provides that States or political subdivisions of States may apply to the
Commission for an exemption from this preemption under certain
circumstances.) Section 104(b) of the CPSIA refers to the rules to be issued
under that section as ―consumer product safety rules, ‖ thus implying that the
preemptive effect of section 26(a) of the CPSA would apply. Therefore, a rule
issued under section 104 of the CPSIA will invoke the preemptive effect of
section 26(a) of the CPSA when it becomes effective.261
The boilerplate language is limited to the express preemption provisions of the CPSA, in
addition to citing the CPSIA for further preemptive support.

258

Certificates of Compliance, 73 Fed. Reg. 68,328, 68,331 (Nov. 18, 2008).

259

Sharkey Interview with Falvey.

260

Id.

261

Safety Standards for Full-Size Baby Cribs and Non-Full-Size Baby Cribs; Notice of Proposed
Rulemaking, 75 Fed. Reg. 43,307, 43,321 (July 23, 2010); Draft Notice of Proposed
Rulemaking (―NPR‖) for Full-Size and Non-Full Size Cribs, at 55 (July 12, 2010), available
at http://www.cpsc.gov/library/foia/foia10/brief/104cribsRev.pdf; Safety Standard for Infant
Walkers: Final Rule, 75 Fed. Reg. 35,266, 35,272–73 (June 21, 2010); Safety Standard for
Infant Bath Seats: Final Rule, 75 Fed. Reg. 31,691, 31,697–98 (June 4, 2010); see also
Safety Standard for Bassinets and Cradles; 16 CFR Part 1218 - Notice of Proposed
Rulemaking, 75 Fed. Reg. 22,303, 22,311 (Apr. 28, 2010) (using same boilerplate language,
but adding citation to federal district court opinion that was not included in the other four
rules).

51

Other rules issued before 2010 but after the CPSIA only briefly touch on
preemption, if at all. The CPSC‘s rule on lead content limits for children‘s toys states:
―According to Executive Order 12988 (February 5, 1996), agencies must state in clear
language the preemptive effect, if any, of new regulations. The preemptive effect of
regulations such as this proposal is stated in section 18 of the FHSA. 15 U.S.C.
1261n.‖262 The rule on labeling for children‘s toy advertisements does not address
preemption.263
According to the General Counsel, the CPSC is not venturing an interpretive gloss
on preemption even in areas that are of particular concern to it, such as whether states
could enact different testing regime requirements.264 The most recent 2010 rule on
testing punts on this preemption question:
Executive Order 12988 (February 5, 1996), requires agencies to state in clear
language the preemptive effect, if any, of new regulations. The proposed
regulation would be issued under authority of the CPSA and the CPSIA. The
CPSA provision on preemption appears at section 26 of the CPSA. The CPSIA
provision on preemption appears at section 231 of the CPSIA. The preemptive
effect of this rule would be determined in an appropriate proceeding by a court
of competent jurisdiction.265
4.

Litigation

According to the General Counsel, under the Obama Administration, the agency
has been extremely reluctant to ―step into the fray‖ of litigation surrounding preemption
issues, whereas under the George W. Bush Administration, the agency likely would have
taken a position.266 The General Counsel mentioned the example of a recent Illinois
statute, the Lead Poisoning Prevention Act of 2010,267 which prescribes a labeling
requirement for lead in toys. If the CPSC issues warning labels for lead, state labeling
requirements are preempted.268 Proponents of the Illinois statute argue that, because
262

Children‘s Products Containing Lead; Determinations Regarding Lead Content Limits on
Certain Materials or Products; Final Rule, 74 Fed. Reg. 43,031, 43,041 (Aug. 26, 2009).

263

Labeling Requirement for Toy and Game Advertisements; Final Rule, 73 Fed. Reg. 67,730
(Nov. 17, 2008).

264

Sharkey Interview with Falvey.

265

Testing and Labeling Pertaining to Product Certification [Children‘s Toys], 75 Fed. Reg.
28,336, 28,361 (May 20, 2010).

266

Sharkey Interview with Falvey.

267

410 ILL. COMP. STAT. ANN. 45 (West 2010).

268

See 15 U.S.C. § 1261 n. (b)(1)(A). This preemption provision is subject to the grandfathering
clause in § 231(b) of the CPSIA, which grandfathers warning requirements issued under
state statutes that were passed before August 31, 2003. This means California can continue
to issue new warning regulations for lead under its grandfathered statute (Proposition 65).

52

there is no current federal lead labeling standard for children‘s toys, the FHSA
preemption provision is not triggered.269 Commentators have noted that this statute is
likely to be challenged.270 According to the General Counsel, while the toy industry has
urged CPSC to challenge the statute, the agency‘s current position is not to engage, but
instead wait for the toy industry to sue on its own.271
E.

FTC

The Federal Trade Commission (FTC), like CPSC, is an independent regulatory
agency,272 and as such, is not formally required to submit to the provisions of E.O.
13132.273 In contrast with the CPSC, however, the FTC has consistently refrained from
preemption.

269

See John W. Moss, Winston & Strawn LLP, New State Labeling Laws: Preempted?, LAW 360,
Apr. 9, 2009, available at
http://www.winston.com/siteFiles/Publications/New_State_Product_Labeling_Laws_Preem
pted.pdf (discussing arguments for and against preemption of Ill. law); Illinois Lead
Warning Label Required in 2010, STR TECH. RES., http://www.strquality.com/enus/newsevents/Pages/illinois-lead-warning-label-required-in-2010.aspx (―Illinois Attorney
General Lisa Madigan maintains that the CPSIA does not preempt the Illinois Lead
Poisoning Prevention Act on the basis that the Illinois law merely prescribes a warning and
does not impose actual lead limits.‖).

This ―absence of regulation‖ argument is similar to the argument the Second Circuit upheld in
Toy Mfgs. of Am. v. Blumenthal, 986 F.2d 615 (2d Cir. 1992). The court held that the
FHSA did not preempt Connecticut‘s law requiring choking warnings on toys designed for
children aged three to seven. The existing CPSC standard only regulated labeling
requirements for toys designed for children under three and there was no standard for toys on
children between three and seven years old. The court held that because CPSC did not
demonstrate a ―clear and manifest‖ intent to preempt state law by deciding not to regulate
toys for children older than three years, the court would not find express preemption. Id. at
621–23. Moreover, because the express preemption of the FHSA provides ―a reliable
indicium of congressional intent with respect to state authority,‖ the court declined to engage
in implied preemption analysis outside of the express preemption provision. Id. at 623–24.
270

See, e.g., Greenberg Taurig, Presentation to American Apparel & Footwear Ass‘n, State Law
Updates, at 10 (Oct. 29, 2009), available at
https://www.apparelandfootwear.org/UserFiles/File/Presentations/102909cpsia/citera.pdf.

271

Sharkey Interview with Falvey.

272

44 U.S.C. § 3502(5) (2006)

273

See Exec. Order No. 13,132, 3 C.F.R. 206 § 1(c) (2000), reprinted in 3 U.S.C. § 301 (2006)
(defining ―agency‖ subject to E.O. 13132 as ―any authority of the United States that is an
‗agency‘ under 44 U.S.C. § 3502(1), other than those considered to be independent
regulatory agencies, as defined in 44 U.S.C. § 3502(5)).

53

The FTC administers many statutes within the purview of consumer protection.
Some of these statutes contain express preemption provisions from Congress,274 others
give the FTC express authority to preempt ―inconsistent‖ state law.275 FTC also has the
power to issue rules to enforce its mandate. For the statutes where the FTC is given the
power to preempt, the statute typically states that state law shall be preserved, ―except to
the extent that such [law] is inconsistent with the provisions of this chapter, and then only
to the extent of the inconsistency.‖276 Additionally, the preemption provision explicitly
only preempts weaker state laws, as the statute allows the FTC to save state law that
provides stronger protection.277
Despite this broad range of power over different consumer protection areas,
coupled with express preemptive authority, the FTC has shown little interest in
preempting state law.278 For example, after nearly a decade of privacy regulation, the
FTC has yet to rule that federal law preempts a state‘s privacy law as ―inconsistent‖ with
federal law under the Gramm-Leach-Bliley Act.279 Members of Congress have at times
expressed frustration with the FTC‘s indifference towards preemption of state law.280
274

E.g. Federal Cigarette Labeling and Advertising Act, 15 U.S.C. § 1334(b) (2006).

275

E.g. Fair Credit Reporting Act, 15 U.S.C. § 1681t; Gramm-Leach-Bliley Act, 15 U.S.C. §
6807; Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692n; see also Fair Debt
Collection Practices Act, 15 U.S.C. § 1692o (allowing FTC to exempt state regulation
entirely from FDCPA where state regulation is ―substantially similar‖ to federal
requirements).

276

E.g. Gramm-Leach-Bliley Act, 15 U.S.C. § 6807(a).

277

§ 6807(b).

278

See Arnold & Porter LLP, Farewell Federal Preemption: Effect on FTC Likely Minimal,
CONSUMER ADVERTISING L. BLOG (May 29, 2009),
http://www.consumeradvertisinglawblog.com/2009/05/farewell-federal-preemption-obamaclears-the-path-for-state-suits.html (―While most agency heads are busy parsing through regs
[in response to President Obama‘s Memorandum on Preemption], the folks over at the
Consumer Protection Bureau at the FTC should have little to do. For the most part the FTC
has opted not to preempt state and local regulation of advertising and marketing claims.‖).

279

15 U.S.C. §§ 6801-6809 (2006). See, e.g., Fed. Trade Comm‘n, Letter to Flagstar Bank, May
12, 2005, available at http://www.ftc.gov/os/2005/05/052405flagstarbankletter.pdf (finding
no preemption of California Online Privacy Protection Act of 2003); Fed. Trade Comm‘n,
Letter to Connecticut re Preemption Issues, June 7, 2002, available at
http://www.ftc.gov/privacy/glbact/conn020607.htm (finding no preemption of Connecticut
privacy laws); cf. Fed. Trade Comm‘n , Committee Advisory Opinion Concerning Section
809 of the FDCPA (Mar. 31, 2000), available at
http://www.ftc.gov/os/2000/04/fdcpaadvisoryopinion.htm (finding that the Fair Debt
Collection Practices Act requiring validation notice of debt collection did not preempt state
laws that forbid including validation notices in court documents).

280

See, e.g., Fair Credit Reporting Act and Issues Presented by Reauthorization of the Expiring
Preemption Provisions: Hearing Before S. Comm. on Banking, Housing, and Urban Affairs,
108th Cong. 13 (2003) (statement of Sen. Tim Johnson) (telling former FTC Director of

54

And, even when pressed by members of Congress about the FTC‘s stance on preemption,
the FTC has at times been unwilling to express an opinion.281
Sharkey conducted an interview with the Director of the Consumer Protection
Bureau at the FTC.282 The Director takes the position—relying upon a law review article
by Paul Verkuil283— that the FTC has very limited power to preempt state law via
rulemaking: in the 1970s, Congress enacted a statute that governs how the FTC must
exercise its preemptive authority; namely, it subjected FTC rules defining ―unfair or
deceptive practices‖ to stricter procedural requirements than the Administrative
Procedure Act requires of other agencies.284
Consumer Protection Bureau J. Howard Beales, III, he has been ―disappointed‖ with
Administration‘s ―unwillingness‖ to push for renewal of credit reporting preemption).
281

Testifying in front of Congress in 2003, former Director of the Consumer Protection Bureau J.
Howard Beales simply outlined the case in favor of preemption (national uniformity) and
the competing position in favor of encouraging states to develop new ways to protect
consumers:
The Commission hasn‘t taken a position on [renewing preemption of credit reporting]. I
think that the failure to renew the preemptions runs the risk that what is now a national
system begins to fragment, that it does so in ways that make it harder to share
information across state lines and within what are increasingly national credit markets. I
believe the potential benefit of allowing the preemption to expire, would be letting States
innovate with different approaches and try out different schemes to try to protect
consumers or to try to balance these conflicting interests in slightly different ways. And
as I say, the downside of that is we may not like some of those experiments and they may
interfere with the uniformity that we currently enjoy in credit markets.

Id. at 11 (statement of J. Howard Beales, III)
282

Sharkey Interview with David Vladeck, Director, Bureau of Consumer Protection, Federal
Trade Commission, July 1, 2010.

283

Paul R. Verkuil, Preemption of State Law by the Federal Trade Commission, 1976 DUKE L.J.
225, 243. According to Verkuil, the statute imposed three main requirements: additional
hearing procedures for states that allowed for oral presentation and cross-examination on
factual issues; expanded scope of review by the courts ―to ensure that the courts look[ed]
closely at [a rule‘s] basis and rationale‖; and exemptions for the states from a rule‘s effect.
Id. at 242–43.

284

Sharkey Interview with Vladeck. Vladeck elaborated this position in an amicus brief in Altria
on behalf of the Tobacco Control Legal Consortium. See Brief of Amici Curiae Tobacco
Control Legal Consortium, AARP, and Public Justice in Support of Respondents at *31,
Altria Group, Inc. v. Good, 129 S. Ct. 538 (2008) (No. 07-562), 2008 WL 2472392 (arguing
that Congress enacted heightened procedures ―designed to provide notice to the states and
‗to ensure the preemption decision will be carefully made‘‖; see also Brief of Amicus Curiae
Constitutional and Administrative Law Scholars in Support of Respondents, Altria Group,
Inc. v. Good, 129 S. Ct. 538 (2008) (No. 07-562), 2008 WL 2489869 (arguing that an FTC
policy statement that fails to follow the §57a procedures lacks force of law and thus could
not be used to preempt state law); id. at *32–35 (―We are unaware of any cases where

55

1.

Response to May 2009 Presidential Memorandum on Preemption

FTC apparently did not file a report with OMB in response to the Presidential
Memorandum on Preemption.285 FTC has included, in its semiannual regulatory agendas,
boilerplate language on E.O. 13132:
In addition, the Agency has responded to the optional information question that
corresponds to Executive Order 13132 . . . which does not apply to independent
regulatory agencies. The Commission believes to the extent that any of the rules
in this agenda may have ―substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government‖ within the meaning of E.O. 13132, it has consulted with the
affected entities. The Commission continues to work closely with the States and
other governmental units in its rulemaking process, which explicitly considers
the effect of the Agency‘s rules on these governmental entities.286
2.

Rulemaking

FTC cited the Presidential Memorandum on Preemption in its 2009 rule on
disclosing breaches of patient information confidentiality under HIPAA.287 In the section

preemptive effect has been accorded to agency ―policies‖ not embodied in rules that have the
force of law . . . .‖).
Vladeck (in his previous position as a law professor) has consistently been a strong opponent of
federal preemption, filing an amicus brief in Cipollone on behalf of the American Cancer
Society arguing against preemption, see Brief of Amicus Curiae of the American Cancer
Society, American College of Cardiology, American Heart Association, American Lung
Association, American Public Health Association, and Public Citizen in Support of
Petitioner, Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (No. 90-1038), 1991 WL
11003930, and an amicus brief arguing against preemption in Wyeth on behalf of former
FDA Commissioners Donald Kennedy and David Kessler, see Brief of Amici Curiae Former
FDA Commissioners Dr. Donald Kennedy & Dr. David A. Kessler in Support of
Respondent, Wyeth v. Levine, 129 S. Ct. 1187 (2009) (No. 06-1249). See also, David A.
Kessler & David C. Vladeck, A Critical Examination of the FDA’s Efforts To
PreemptFailure-To-Warn Claims, 96 GEO. L. J. 461, 463 (2008); David C. Vladeck,
Preemption and Regulatory Failure, 33 PEPP. L. REV. 95 (2005).
285

Sharkey Interview with Vladeck.

286

See, e.g., 75 Fed. Reg. 21,951 (Apr. 26, 2010); 72 Fed. Reg. 70,199 (Dec. 10, 2007).

287

Final Rule, Health Breach Notification Rule, 74 Fed. Reg. 42,962, 42,965-66 (Aug. 25, 2009).
The rule was promulgated jointly with HHS. It regulates what constitutes a breach of
personal information that must be disclosed. The rule was prompted by a provision of the
2009 stimulus bill that heightened HIPAA enforcement. American Recovery and
Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009); 74 Fed. Reg. 42,962.

56

on preemption, FTC noted that the stimulus bill incorporated the Social Security Act‘s
express preemption provision.288 In response to comments questioning the preemptive
effect of the FTC‘s regulation, FTC stated that the rule would only preempt ―contrary‖
state law, and would not preempt state laws that impose requirements in addition to
federal law.289 FTC noted that because an entity could set forth all the required
information on a disclosure notice even if a state imposes additional requirements, there
was no impossibility preemption and ―because it is possible to comply with both laws,
and the state laws do not thwart the objectives of the federal law, there is no conflict
between state and federal law.‖290
More recently, the FTC issued a rule amending acceptable practices for
telemarketing sales, particularly focusing on debt settlement practices.291 In response to
comments about whether state regulation is preferable to FTC regulation, the rule
discusses the preemption of existing state laws regulating debt settlement practices in a
footnote.292 The footnote states that in this context ―Congress has not totally foreclosed
state regulation,‖ and thus the preemptive effect of the FTC rule is limited to conflict
preemption.293 The rule also asserts that state statutes are preempted only to the extent of
a conflict with the federal regulation, defining conflict as either an impossibility conflict
or an obstacle conflict.294 Citing an earlier version of the Telemarketing Sales Rule from
the mid-90s, ―The Commission has emphasized that state laws can impose additional
requirements as long as they do not directly conflict with the [federal Telemarketing
Sales Rule].‖295 The FTC seems to take a very narrow definition of conflict preemption,
as even though the FTC rule bans ―advance fees‖ entirely, the footnote points out that a

HHS is given the lead on enforcing HIPAA, but the stimulus bill gives FTC the power to enforce
―temporary‖ breach requirements (which this rule implements) until HHS has a chance to
study the issue (in consultation with FTC) and present a report to Congress, which will then
enact final legislation. See 74 Fed. Reg. 42,962; Pub. L. No. 111-5 § 13407 (temporary
enforcement and sunset provision conditioned on new legislation).
288

12 U.S.C. § 1320d-7.

289

74 Fed. Reg. 42,962, 42,966.

290

Id. (citing Wyeth v. Levine, 129 S. Ct. 1187 (2009), for ―a discussion of the issue of federal
preemption when state laws frustrate federal objectives‖).

291

Telemarketing Sales Rule, 75 Fed. Reg. 48,458 (Aug. 10, 2010).

292

Id. at 48,480 n.312.

293

Id. (citing Ray v. Atl. Richfield Co., 435 U.S. 151, 158 (1978)).

294

Id.

295

Id. (citing Telemarketing Sales Rule, 60 Fed. Reg. 43,842, 43,862–63 (Aug. 23, 1995)). The
mid-90s rule discusses the FTC rule as setting a federal floor, but allows states to regulate
beyond federal regulations. 60 Fed. Reg. at 43,862–63.

57

state law setting merely a cap on advance fees is not technically preempted, since
compliance is possible with both state and federal law (by charging no fee).296
3.

Litigation

In the past, the FTC has intervened in preemption disputes in the tobacco context.
In the Supreme Court‘s most recent tobacco preemption case, Altria Group, Inc. v. Good,
the tobacco companies asserted that the Federal Cigarette Labeling and Advertising Act
expressly preempted fraud claims asserted under Maine‘s deceptive practice statute
against the tobacco companies‘ promotion of ―light‖ or ―low tar‖ cigarettes,297 and that
FTC regulation of cigarette advertising and labeling impliedly preempted the plaintiffs‘
claims.298 The United States filed an amicus brief, which the FTC joined, on behalf of
the plaintiffs.299 The FTC took the position that its regulation of cigarette advertising and
labeling did not impliedly preempt state tort law.300
In Altria, the Court held that ―the FTC‘s various decisions with respect to
statements of tar and nicotine content do not impliedly pre-empt respondents‘ [consumer
fraud] claim.‖301 The Court reasoned that ―even if such a regulatory policy could provide
a basis for obstacle pre-emption, petitioner‘s description of the FTC‘s actions in this
regard are inaccurate. The Government itself disavows any policy authorizing the use of
‗light‘ and ‗low tar‘ descriptors.‖302

296

75 Fed. Reg. at 48,480 n.312.

297

See Altria Group, Inc. v. Good, 129 S. Ct. 538, 542 (2008).

298

See id. at 549.

299

Brief for the United States Amicus Curiae Supporting Respondents, Altria, 129 S. Ct. 538 (No.
07-562).

300

See id. at 14-33. The FTC took no position on the express preemption question. See Altria,
129 S. Ct. at 561 n.5 (Thomas, J., dissenting) (―The United States, in its amicus brief and at
oral argument, conspicuously declined to address express pre-emption or defend the
Cipollone opinion‘s reasoning.‖) (internal citations omitted); see also Transcript of Oral
Argument, at *42-43, Altria, 129 S. Ct. 538 (No. 07-562) (―MR. HALLWARDDRIEMEIER: Your Honor, the United States has not taken a position on the bottom line of
the first question presented.‖).

301

129 S. Ct. 538, 551. With respect to express preemption, the Court distinguished a prior
tobacco case (not involving the FTC) that preempted state common law that imposed a
―requirement or prohibition based on smoking and health . . . with respect to . . . advertising
or promotion.‖ Altria, 129 S. Ct. at 545 (majority op.) (quoting Cipollone v. Liggett Group,
Inc., 505 U.S. 504, 524 (1992)). Because fraud claims only depend on falsity, not ―smoking
and health,‖ the court held the cigarette labeling act did not preempt those claims. Id. at 545,
551.

302

Id. at 559 (citing Brief for the United States as Amicus Curiae at 16–33).

58

F.

EPA

In contrast to the aggressive preemptive efforts in the past by NHTSA, FDA, and
OCC, the policies of the Environmental Protection Agency (EPA) stand as a possible
springboard to develop a model ―best practices‖ for involving state and local government
officials in the federal regulatory process.303 Whereas other federal agencies sidestepped
the consultation and reporting requirements of E.O. 13132, the EPA published its official
policies on how to comply with E.O. 13132.304 For this reason, this Report will analyze
recent EPA rulemaking in the context of its recommendations in Part IV.
Here, the Report considers the extent to which the relationship between EPA and
the states is unique, and therefore potentially less generalizable to other federal agencies.
Because environmental protection laws mandate enforcement of federal law by state
regulatory agencies, the EPA has gained knowledge, experience, and practice cooperating
with state authorities and being sensitive to state interests.305
Sharkey conducted in-person interviews with several EPA officials.306
1.

Response to May 2009 Presidential Memorandum on Preemption

The EPA‘s memo to OMB lists nine rules the EPA‘s Office of Policy, Economics
and Innovation and the Office of General Counsel determined preempt state law.307 All
303

See Sharkey, Federalism Accountability, supra note 14, at 2159-60.

304

U.S. ENVTL. PROT. AGENCY, EPA‘S ACTION DEVELOPMENT PROCESS: GUIDANCE ON
EXECUTIVE ORDER 13132: FEDERALISM (2008).

Although EPA is sometimes referred to as an independent agency, it is not considered an
―independent regulatory agency‖ under 44 U.S.C. § 3502(5), and is thus subject to E.O.
13132. Exec. Order No. 13,132 § 1(c) (defining ―agencies‖ subject to order).
305

See Sharkey, Federalism Accountability, supra note 14, at 2159-60.

306

In one group setting, on July 14, 2010, Sharkey interviewed Ken Munis, Associate Director of
the Office of Regulatory Policy and Management; Eileen McGovern, Office of Regulatory
Policy and Management; David Coursen, Attorney Advisor, Cross-Cutting Issues Law
Office, Office of General Counsel; Sonja Rodman, Attorney, Cross-Cutting Issues Law
Office, Office of General Counsel.

Sharkey interviewed Carol Ann Siciliano, Associate General Counsel, Cross-Cutting Issues Law
Office, Office of General Counsel on July 15, 2010.
307

Email from Nicole Owens, EPA to Dominic J. Mancini, OMB, ―Re: Preemption guidance,‖
Aug. 4, 2009, 08:24 A.M; see also EPA Process for Identifying ―Preemption‖ per
President‘s Memo, at 1. These documents were provided to Sharkey by Ken Munis.

EPA described its review process as follows:
In order to respond to the President‘s request, EPA searched the Federal Register
database on LEXIS for any final EPA rule in the last ten years that contained the

59

nine of these rules preempted state law through express statutory preemption, not using
implied conflict preemption or preamble preemption. The four Clean Air Act (CAA)
rules listed, for example, preempted state regulation of air pollution (except for
California) under the CAA‘s express preemption provisions by setting federal standards
for nonroad emission controls308 and sulfur fuel controls.309 Out of the four CAA rules,
only the most recent rule from 2008 found that promulgating a rule that triggered
statutory preemption invoked the ―federalism implications‖ provision E.O. 13132.310 The
other three rules, though they explained the rules‘ effect on state law in the preamble,
stated that the rules did not have significant federalism implications and simply relied on
continuing statutory preemption that triggered E.O. 13132 under the ―preemption‖

word preempt (and its derivatives such as preempted, preemption, etc). Our search
term was: AGENCY(epa)and ACTION(Final) and TEXT(PREEMPT!) and date
geq (1/1/1999). This query returned 1892 final rules that contained the term
preempt, or a derivative of that word.
EPA then used CFR part numbers to eliminate, from the total search result, those
classes of rules that did not preempt state law. For example, EPA approvals of
Clean Air Act state implementation plans (SIP) do not preempt state law, rather
such actions approve (or disapprove) state law as consistent (or inconsistent) with
federal requirements. Of the remaining 166 rules, the Office of Policy, Economics
and Innovation and the Office of General Council reviewed the actions to
determine which rules preempted state law . . . .
EPA Process for Identifying ―Preemption‖ per President‘s Memo, supra, at 1.
308

Control of Emissions From Nonroad Spark-Ignition Engines and Equipment, 73 Fed. Reg.
59,034 (Oct. 8, 2008) (promulgating under Clean Air Act § 209(e)(2)); Phase 2 Emission
Standards for New Nonroad Spark-Ignition Handheld Engines At or Below 19 Kilowatts and
Minor Amendments to Emission Requirements Applicable to Small Spark-Ignition Engines
and Marine Spark-Ignition Engines, 65 Fed. Reg. 24,268 (Apr. 25, 2000) (same).

309

Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle
Standards and Highway Diesel Fuel Sulfur Control Requirements, 66 Fed. Reg. 5002 (Jan.
18, 2001) (promulgating under Clean Air Act § 211(c)(4)); Control of Air Pollution From
New Motor Vehicles: Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur
Control Requirements, 65 Fed. Reg. 6698 (Feb. 10, 2000) (same).

310

73 Fed. Reg 59,034, 59,172 (citing Exec. Order No. 13,132 § 6) (―This final rule has
federalism implications because it preempts State law. It does not include any significant
revisions from current statutory and regulatory requirements, but it codifies existing
statutory requirements.‖).

60

provision.311 For all four of the CAA rules, EPA noted that it met and consulted with
state and local officials in developing each rule.312
EPA listed two rules that preempted state regulation of hazardous materials under
the Toxic Substances Control Act (TSCA).313 Similar to the CAA rules, these rules did
not assert preemption on their own accord, but simply referred to the statutory
preemption provision in the TSCA.314 In terms of consulting with the states, EPA did not
meet with state and local officials, stating that the notice and comment process gave state
and local officials sufficient opportunity to participate in the rulemaking in compliance
with E.O. 13132.315
EPA listed two rules regulating the transportation of hazardous materials,
promulgated with the Department of Transportation.316 The first rule, which reduced the
paperwork required for transporting hazardous material, preempted any state laws
requiring different documentation for hazmat manifests under the Hazardous Material
Transportation Act (HMTA).317 Though the rule described the changes to manifest
requirements as ―minor,‖ EPA and DOT still held two public meetings for state and local
officials, which twenty-three states attended.318 State and local officials were also invited
to participate in the EPA workgroup developing the rule.319 The other HMTA rule,
311

65 Fed. Reg. 24,268, 24,304 (citing Exec. Order No. 13,132 § 4) (―This final rule does not
have federalism implications.‖); 66 Fed. Reg. 5002, 5134 (same); 65 Fed. Reg. 6698, 6821
(same).

312

73 Fed. Reg. 59,034, 59,172 (describing consultation with Nat‘l Ass‘n of Clean Air Agencies
and with states that asked EPA to tighten federal standards if under new statutory
preemption they would be unable to piggyback on California standards); 65 Fed. Reg.
24,268, 24,304 (describing consultation with California to develop ―harmonized regulations‖
since California was already regulating in this area under their CAA preemption exemption);
66 Fed. Reg. 5002, 5134 (noting consultation with California and Alaska to develop diesel
sulfur rules exempted from federal standard); 65 Fed. Reg. 6698, 6821 (noting ―consulted‖
with states in developing rule).

313

Reclassification of PCB and PCB-Contaminated Electrical Equipment, 66 Fed. Reg. 17,602
(Apr. 2, 2001); Asbestos Worker Protection, 65 Fed. Reg. 69,210 (Nov. 15, 2000).

314

66 Fed. Reg. 17,602, 17,616; 65 Fed. Reg. 69,210, 69,215.

315

Id.

316

Hazardous Waste Management System; Modification of the Hazardous Waste Manifest
System, 70 Fed. Reg. 10,776 (Mar. 4, 2005); Accidental Release Prevention Requirements:
Risk Management Programs Under Clean Air Act Section 112(r)(7); Amendments to the
Worst-Case Release Scenario Analysis for Flammable Substances, 64 Fed. Reg. 28,696
(May 26, 1999).

317

70 Fed. Reg. 10,776, 10,813.

318

Id.

319

Id.

61

promulgated before E.O. 13132 took effect, preempted state law by clarifying the
interaction between the HMTA and the CAA.320 EPA, interpreting the CAA, said that
states could not use the lighter preemption standards in the CAA to promulgate rules for
hazardous materials that fall under the CAA that would otherwise be preempted by the
HMTA.321
Finally, EPA also listed a rule preempting state law under the Clean Water Act.322
Another pre-E.O. 13132 rule, this rule again used statutory preemption, as the CWA
preempts state law regulating discharges from vessels once the EPA sets standards.323 In
developing this discharge standard for Armed Forces vessels, EPA noted it consulted
with both the Environmental Council of the States and the Armed Forces, and also
―representatives from the Navy (as the lead for the DOD), EPA, and the Coast Guard met
with each State expressing an interest in the [rule‘s] development.‖324
2.

Uniqueness of EPA: Agency and States as Co-regulators

EPA and the states have developed a collaborative relationship as co-regulators,
particularly over the past twenty years. EPA has an internal Office of Congressional and
Intergovernmental Relations (OCIR), which coordinates a variety of state-EPA
performance partnerships. For example, as a result of the National Environmental
Performance Partnership System (NEPPS), environmental policies are designed using a
collaborative process: ―EPA and states set priorities, design strategies, and negotiate
grant agreements together.‖325 As Denise Scheberle explains, many of the more formal
EPA/state coordination efforts began in earnest during the early years of the Clinton

320

64 Fed. Reg. 28,696, 28,698

321

Id.

322

Uniform National Discharge Standards for Vessels of the Armed Forces, 64 Fed. Reg. 25,126
(May 10, 1999).

323

Id. at 25,131 (―[S]ection 312(n)(6) of the CWA preempts States from regulating these
discharges once the UNDS regulations are effective, including issuing a wasteload allocation
(WLA) for these discharges. A State, however, may avail itself of the provisions in CWA
section 312(n)(7) to establish a no-discharge zone, either through State prohibition or EPA
prohibition . . . .‖).

324

Id. at 25,129.

325

OFFICE OF CONG. & INTERGOVERNMENTAL RELATIONS, U.S. ENVT‘L PROT. AGENCY,
NATIONAL ENVIRONMENTAL PERFORMANCE PARTNERSHIP SYSTEM: FY 2008-2011
NATIONAL GUIDANCE 9-10 (2008), available at
http://www.epa.gov/cfo/npmguidance/ocir/2009/nepps_2009_npm_guidance_final.pdf
(emphasis in original).

62

administration.326 For example, the discussions at the State/EPA Capacity Steering
Committee, formed in 1993, led to the 1995 NEPPS Plan, ―which uses negotiated state
performance agreements ‗to increase state participation and flexibility, while improving
EPA‘s working relationship with the states and reducing the costs of implementing
federal environmental statutes.‘‖327 The most current iteration of the NEPPS plan (FY
2008-2011) lists several objectives for the partnership between EPA and the states.328
These objectives, targeted at strengthening communication and information flow, include
―[c]onduct[ing] joint strategic planning and reflect[ing] the results in the Performance
Partnership Agreements,‖ ―[a]dvance partnership principles through effective
collaboration with states on policy and implementation issues,‖ ―[f]ocus[ing] state
reporting on information needed to set goals and objectives, measur[ing] progress in
achieving them, and ensur[ing] accountability,‖ and ―[s]et[ting] the future direction for
performance partnerships.‖329
III. RECOMMENDATIONS
There appears to be a near-consensus that the procedural requirements of the
Federalism Executive Order—including consultation with the states and the requirement
for ―federalism impact statements‖—are sound. But the Federalism Executive Order has
been a perennial source of discontent. A 1999 GAO Report identified a paltry five
rules—out of a total of 11,000 issued between April 1996 and December 1998 while the
Reagan-era Federalism Executive Order (E.O. 12612) was in effect330—that included a
federalism impact statement.331 Nor has agency compliance under the Clinton-era
326

See DENISE SCHEBERLE, FEDERALISM AND ENVIRONMENTAL POLICY: TRUST AND THE
POLITICS OF IMPLEMENTATION 2-7 (1997) (describing initial outreach efforts by EPA and
organization efforts by states to negotiate implementation with EPA).

327

Christopher Terranova, Challenging Agency Preemption 8 n.40 (Working Paper) (May 12,
2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1403628 (quoting
Fla. Ctr. For Pub. Mgmt., National Environmental Performance Partnership System
(NEPPS) 1).

328

See OFFICE OF CONG. & INTERGOVERNMENTAL RELATIONS, supra note 325, at 3-4.

329

Id. Each objective provides a brief, but clear picture of how EPA thinks the collaborative
relationship in this cooperative federalism scheme can be improved. For example, objective
3, ―advancing partnership principles through effective collaboration‖ lists strategies for
collaboration, the history of developing policy, remaining challenges, and the key contacts
and infrastructure to accomplish the objective. See id. at 22-24.

330

Exec. Order No. 12,612, 52 Fed. Reg. 41,685 (Oct. 26, 1987).

331

U.S. GOV‘T ACCOUNTABILITY OFFICE, GAO/T-GGD-99-93, IMPLEMENTATION OF
EXECUTIVE ORDER 12612 IN THE RULEMAKING PROCESS 1 (1999). According to the report,
the GAO found that 27% of all rules issued over this period of time cited E.O. 12612. Id. at
4. Not counting the five rules that included a FIS, those 27% that cited E.O. 12612 included
only ―boilerplate certifications with little or no discussion of why the rule did not trigger the
executive order‘s requirements.‖ Id.

63

(continued under the Bush and Obama administrations) E.O. 13132 escaped criticism.
Professors Mendelson and Sharkey have documented empirical evidence and case
examples of agencies‘ disregard of their responsibility to conduct federalism impact
statements.332
Any reform recommendation must confront this backdrop of decades of
dissatisfaction with the enforcement of the federalism mandates. Professors Nicolaides
and Howse astutely commented:
This lack of impact by 12612 is unsurprising. Federalism criteria, like benefitcost, do not have a natural home in agencies. Further, unlike benefit-cost
analysis, they do not have a natural home in OMB. This, combined with a lack
of attention by the Reagan, Bush, and Clinton administrations, made 12612 a
non-priority.333
The goal of any reform effort directed at federal agency preemptive rulemaking
should be to create a suitable ―home‖ for federalism analysis to take place within federal
agencies. As a threshold matter, agencies should be encouraged to develop
comprehensive internal guidelines on compliance with the preemption provisions of the
Federalism Executive Order. Such internal guidelines should be coupled with an internal
oversight procedure, whereby the agency scrutinizes the underlying factual predicate or
empirical claims in support of any preemptive stance. Moreover, to the extent possible,
this internal agency scrutiny must be insulated from political pressures.
This Report makes recommendations for how best to secure meaningful
participation in the agency decisionmaking process by state and local governmental
officials (and the organizations that represent them) as well as other key constituencies.
Sharkey conducted a roundtable discussion with the so-called ―Big Seven‖ national
organizations of state and local governmental officials.334 Given that with respect to the
332

See Mendelson, Chevron, supra note 14, at 784 n. 192 (estimating that for proposed rules
during one quarter in 1998, FISs are included in only 9 of 2456 agency rulemakings); id. at
783 (finding six FISs in one quarter of 2003, a time period in which roughly 600 final rules
were issued); id. at 783-84 (demonstrating that federalism impact statements are relatively
rare and of ―poor quality‖); Mendelson, Presumption, supra note 14, at 719 (reporting
results from a further study of 2006 preemptive rules, which disclosed only a single
substantive federalism impact statement out of six preemptive rules); Sharkey, Federalism
Accountability, supra note 14, at 2139 (―The story is one of outright contradictions—
agencies initially claimed that the proposed rule would not have a substantial effect on the
federal-state balance, only to assert the preemptive effect upon promulgation of the final
rule—coupled with cavalier denials of any impact on federalism, even where the preemptive
intent of the agency‘s rule was apparent.‖); id. at 2139–43 (providing numerous examples of
FDA and NHTSA rulemakings whereby the agency disclaimed any federalism implications
in a proposed or interim rule, followed by an assertion of preemption in the final rule, or else
the agency denied federalism impact of a clearly preemptive rule).

333

KALYPSO NICOLAIDES & ROBERT HOWSE, THE FEDERAL VISION: LEGITIMACY AND LEVELS
OF GOVERNANCE IN THE UNITED STATES 131 (2001).

334

The ―Big Seven‖ include the National Governors Association (NGA), National Conference of
State Legislatures (NCSL), Council of State Governments (CSG), U.S. Conference of

64

issue of federal preemption of state tort law (as opposed to state regulations), it is not
altogether clear who best represents the ―state interest‖ at hand,335 additional input was
solicited from representatives of state judges,336 state attorneys general,337 and various
consumer- and business-oriented groups. The Report recommends a novel Attorney
General notification procedure, modeled after the Class Action Fairness Act settlement
Attorney General notification provision.
Finally, the Report recommends that OIRA/OMB (a) direct agencies to publish
their reports on compliance with the Presidential Memorandum on Preemption; (b)
update its guidance document on compliance with the preemption provisions of E.O.
13132; and (c) include a more thorough review of the federalism implications of agency
proposals to preempt state law as part of its regulatory review process.
A.

Agencies
1.

Internal Guidelines on Procedures for Implementing the
Preemption Provisions of the Federalism Executive Order (13132)

Internal agency guidelines on procedures for implementing the preemption
provisions serve a practical function in terms of structuring the agency‘s compliance with
the Federalism Executive Order. Agencies should be able to cite their own internal
Mayors, National League of Cities (NLC), International City/County Management
Association (ICMA), and National Association of Counties (NAC).
Sharkey met with the following individuals on July 6, 2010: Carolyn Coleman, NLC; Edward
Ferguson, NAC; Susan Parnas Frederick, NCSL; Elizabeth Kellar, ICMA; David Parkhurst,
NGA; David Quam, NGA; Stephanie Spirer, NLC; Chris Whatley, CSG. A representative
from U.S. Conference of Mayors was invited, but did not attend.
335

See Sharkey, Federalism Accountability, supra note 14, at 2158-63.

336

The Conference of Chief Justices, an association of the presiding officers of every state
supreme court, has ―traditionally adopted formal positions to defend against proposed
policies that threaten principles of federalism or that seek to preempt state court authority.‖
Letter from Jean Hoeffer Toal, President, Conf. of Chief Justices, to Div. of Docket Mgmt.,
FDA 1 (Mar. 17, 2008), available at http://
www.regulations.gov/fdmspublic/ContentViewer?
objectId=09000064803ff415&disposition=attachment&contentType=pdf. It has
occasionally responded to outreach from federal agencies. See, e.g., id. at 2–3. Sharkey
interviewed Judge Gregory Mize, Judicial Fellow, National Center for State Courts on July
7, 2010. Judge Mize monitors policy proposals in the federal government that likely raise
federalism issues for state courts.

337

Sharkey interviewed James McPherson, Executive Director of NAAG, by telephone on
November 2, 2010 and November 10, 2010, and Dan Schweitzer, Supreme Court Counsel,
National Association of Attorneys General, in person on July 19, 2010. Sharkey also
interviewed James Tierney, Director of the National State Attorneys General Program at
Columbia Law School, by telephone on October 20, 2010.

65

guidelines in federalism impact statements (FIS) to explain whether or not a specific
rulemaking implicates federalism concerns, what specific actions were taken, and to
justify why those decisions were made. Such internal guidelines would foster
consistency in the agency‘s federalism review. In addition to the practical function, the
existence and dissemination of such internal guidelines would also help foster an internal
agency culture that is committed to ensuring compliance with the Federalism Executive
Order.
EPA‘s November 2008 ―Guidance on Executive Order 13132: Federalism‖
provides a model of an easy-to-follow, comprehensive set of internal guidelines. EPA‘s
guidance document goes beyond what E.O. 13132 requires, ―reflecting EPA‘s
commitment to early and meaningful intergovernmental consultation,‖338 but is consistent
with this Report‘s further recommendations on state consultation below.
EPA‘s Guidance document presents logical step-by-step questions that an agency
desk officer could follow to ensure compliance with E.O. 13132.339 This step-by-step
process is organized both textually and with flow charts that make it useful for staff on
the ground implementing E.O. 13132. Moreover, all the information necessary to write
the FIS and comply with E.O. 13132 is contained in this one document.
EPA‘s comprehensive, fifty-six page Guidance document gives direction for
implementing E.O. 13132 for rules, proposed legislation, informal policy statements,
adjudications, and waivers.340 The Guidance document provides flowcharts for
determining if a rule has federalism implications under E.O. 13132.341 The guidelines
provide answers to regulatory questions like ―What do I do if my rule does not have
[federalism implications] . . . but [it] has more than minimal adverse impacts on [state

338

U.S. ENVT‘L PROT. AGENCY, EPA‘S ACTION DEVELOPMENT PROCESS: GUIDANCE ON
EXECUTIVE ORDER 13132: FEDERALISM at 2 (2008) [hereinafter EPA GUIDANCE]; see also
id. at 11 (―Even if your rule does not have [federalism implications], if it has any adverse
impact on [state/local] governments above a minimal level, then you are subject to EPA‘s
consultation requirements. . . . This internal policy is broader than EO 13132.‖).

339

For example, Part 1 (Regulations) proceeds as follows:
1. ―How will I know if my rule is subject to the Order?‖
2. ―What are the thresholds for determining if my rule has Federalism Implications (FI)?‖
3. ―What do I do if my rule has FI?‖
4. ―What do I do if my rule does not have FI?‖
5. ―What steps do I follow for my rule?‖
6. ―What help and participation can I expect from OCIR [Office of Congressional and
Intergovernmental Relations] as I develop my rule?‖
7. ―About consulting with S[tate]/L[ocal] elected officials‖
8. ―How will EPA ensure compliance with the order?‖

Id. at i-ii.
340

See id.

341

See id. at 36-39.

66

and local] governments[?]‖342 With respect to the federalism implications of a
preemptive rule, the EPA is notably clear: ―EPA rules would have [federalism
implications] because they . . . preempt state or local law.‖343
EPA‘s Guidance document goes step-by-step through the rulemaking process,
from ―tiering‖ the rule, to convening a federalism workgroup within EPA, to preparing a
consultation plan, to consulting, to drafting the preamble, to agency and OMB review, to
preparing an ―Action memo‖ and finally to publishing.344 EPA has formalized many
aspects of the regulatory review process, and lists what is expected of agency officials
shepherding a rule through the regulatory process. The Guidance document states at
many points that officials attempting to determine whether their rule has federalism
implications are required to consult with ―your [Office of General Counsel] workgroup
representative and your Regulatory Steering Committee Representative.‖345 These
standing representatives are to be consulted to determine if the rule preempts state law
and has federalism implications,346 to prepare a consultation plan, and to review draft
FISs.347
The Guidance document also gives direction and advice on interacting with state
and local officials. It includes a list of contact information for the ―Big Ten‖
organizations that EPA mandates be contacted.348 While inclusion of such contact
information may seem basic, it is apparently missing at other agencies. Members of the
―Big Seven‖ frequently tell anecdotes about misdirected correspondence from
agencies.349
342

Id. at 11. Answer: ―Even if your rule does not have [federalism implications], if it has any
adverse impact on state or local governments above a minimal level, then you are subject to
EPA‘s consultations requirements. In the spirit of EO 13132, it is EPA‘s policy to promote
communications between EPA and [state and local] governments and solicit input from
[state and local] government representatives . . . . This internal policy is broader than EO
13132.‖ Id. (emphases added).

343

Id. at 5.

344

Id. at 14–18.

345

See, e.g., id. at 7.

346

See id. at 7, 14, 18.

347

See id. at 19–20.

348

Id. at 4, 45–47 (listing ―Big 10‖ and ―more forums for contacting elected officials‖).
According to the EPA, the ―Big 10‖ include the more traditional ―Big 7‖ state and local
organizations, plus the National Association of Towns and Townships, County Executives of
America, and the Environmental Council of the States. Id. at 4 n.3.

349

At the roundtable discussion with ―The Big Seven,‖ representatives told of mail addressed to
former officials of their organization, instances where the agency claimed contact was made
but could not verify to whom correspondence was sent, and the like. Sharkey Interview with
―Big Seven,‖ July 6, 2010.

67

The EPA document addresses questions like ―How much consultation is
enough?‖350 Moreover, it provides further advice by highlighting the main concerns of
elected officials as expressed to the EPA: money required for program implementation;
requiring the state/local government to comply as a regulated party; interfering with
division of responsibilities between levels of government; command and control rules;
impact on local industry, employment, or land use.351 To develop a consultation plan for
state and local officials, the document provides an appendix with three pages of factors to
consider in building the plan.352
EPA‘s Guidance document also tries to address the biggest problem with agency
procedures for considering federalism issues: enforcement of those procedures. The
Guidance document states that, to ensure compliance with E.O. 13132, EPA‘s Office of
Policy, Economics, and Innovation will gather information for EPA‘s semi-annual
Regulatory Agenda, including a listing of all rules with any adverse impact on state and
local governments, all rules under development with federalism impact, status of
federalism consultation plans, and any problems in carrying out the consultation plan that
would affect the Federalism Official‘s ability to certify EPA is in compliance with E.O.
13132.353
With EPA‘s Guidance document as a benchmark, each of the other agencies
surveyed in this Report came up short. Some agencies, such as FDA—which apparently
does not have any published guidelines354—must begin at square one, whereas others,
such as NHTSA and OCC, should focus on updating and expanding upon their existing
guidelines. Moreover, EPA‘s Guidance document is the only one that is publicly
available. It would go a long way towards reassuring the state interest stakeholders as
well as the public at large for agencies to make their internal guidelines publicly
available.
Of the agencies surveyed subject to E.O. 13132, only the EPA provides a publicly
available, comprehensive document providing step-by-step direction to its officials in
conducting federalism review pursuant to E.O. 13132. The other agencies should devise
and implement (and make publicly available) similar internal guidelines. The focus
should be on a simple, easy-to-follow, comprehensive document that can be cited in the
agency‘s FIS.
Internal guidelines, moreover, can have a significant practical effect. In recent
rulemakings, the EPA has cited its Guidance document. In its recent Coal Rule, for
example, EPA noted that even though the rule did not preempt state law, EPA included
350

EPA GUIDANCE, supra note 338, at 21 (―For rules with FI . . . at a minimum you should
consult . . . with each of the relevant representative national organizations in the Big 10.‖).

351

Id. 23–24.

352

Id. at 49–51 (―Attachment E‖).

353

Id. at 24.

354

Sharkey Interview with Ralph Tyler, Chief Counsel, FDA.

68

an FIS because the rule would impose ―substantial compliance costs‖ on the states
(defined as greater than $25 million), citing its Guidance document.355 EPA frequently
cited the document to explain other actions it took under the rule, like sending letters to
the ―Big Ten‖ organizations EPA and OMB identified that represent state and local
interests.356
The existence of publicly available guidelines can also serve as an accountability
check on the agency. For example, in promulgating its recent Stormwater Rule, EPA
acknowledged that the rule had ―federalism implications,‖357 but nonetheless neglected to
consult with state and local officials or the Environmental Council of the States (ECOS)
as per its internal guidelines.358 These groups were then able to direct the EPA‘s
attention to this lapse in following its own guidelines—which prompted an
apology/explanation from EPA.359
In sum, the provision of comprehensive internal guidelines creates consistency in
an agency‘s federalism review, which in turn creates a culture that internally ensures
adequate measures are taken to meet the requirements of E.O. 13132. It is the first
necessary step in creating a ―home‖ for federalism review of preemptive rulemakings
within federal agencies.
2.

Consultation with the States

Federal agencies have come under consistent criticism for falling short in their
efforts to consult with the states during the rulemaking process, especially where
preemptive rules are at issue. Congressional hearings on regulatory preemption
highlighted FDA‘s failure to consult with state and local officials pursuant to E.O.
13132.360 NHTSA likewise came under fire for bypassing state consultation.361 And
355

Hazardous and Solid Waste Management System; Identification and Listing of Special
Wastes; Disposal of Coal Combustion Residuals From Electric Utilities; Proposed Rule, 75
Fed. Reg. 35,128, 35,226 (June 21, 2010).

356

Id.

357

See Effluent Limitations Guidelines and Standards for the Construction and Development
Point Source Category, 74 Fed. Reg. 62,996, 63,055 (Dec. 1, 2009).

358

See id. at 63,055–56 (While EPA did not consult with State and local elected officials, the
Agency did consult with all of the state Stormwater Coordinators in attendance at EPA‘s
Annual Stormwater Coordinator‘s conferences in 2008 and 2009. EPA also attended several
conferences where governmental officials were present, such as the International Erosion
Control Association (IECA) conference in February 2009, the MAC-IECA conference in
September 2009, and the Northwest Environmental Business Council meeting in March of
2009.) (emphasis added).

359

Email from Steve Brown, Executive Director, ECOS, to Catherine M. Sharkey, Oct. 12, 2010,
3:15 P.M.

360

Regulatory Preemption: Are Federal Agencies Usurping Congressional and State Authority?:
Hearing Before the S. Comm. on the Judiciary, 110th Cong. 144 (2007); see also Letter from

69

finally the 2005 GAO Report criticized OCC for failing to document any of its
consultation with state representatives and officials during the rulemaking process.362
GAO also noted that the representative state groups felt OCC did not do an adequate job
in consulting them in the rulemaking process.363 Though the OCC disputed most of the
GAO‘s factual findings and asserted that they complied with the requirements of E.O.
13132, OCC stated they intended to make improvements to their consultation process and
told GAO they had already held several meetings to further this goal.364
Two separate, albeit related, issues present formidable challenges with respect to
the Federalism Executive Order‘s state consultation mandate. First, it is not at all clear
who best represents state regulatory interests, particularly in the context of consumer
health and safety issues. OMB has specifically designated ―The Big Seven‖ national
organizations as being representative of state and local government officials for purposes
of complying with the consultative requirements of E.O. 13132.365 Such elected officials
Ill. State Senator Steven J. Rauschenberger, President, Nat‘l Conference of State
Legislatures, to Michael O. Leavitt, Sec‘y, U.S. Dep‘t Health & Human Servs. (Jan. 13,
2006) (―It is unacceptable that FDA would not permit the states to be heard on language that
has a direct impact on state civil justice systems nationwide.‖).
361

See Sharkey, Federalism Accountability, supra note 14, at 2141 (criticizing NHTSA‘s defense
of its decision to forego state consultation in its preemptive rulemaking on head restraint
requirements); see also Letter from Carl Tubbesing, Deputy Exec. Dir., Nat‘l Conference of
State Legislatures, to William Schoonover, Docket Operations, U.S. Dep‘t of Transp. (May
16, 2008) (―NCSL does not believe that one mailing constitutes meaningful consultation as
contemplated by E.O. 13132. In sum, [the agency‘s] attempts at meaningful consultation
were feeble at best and disingenuous at worst.‖); Oversight Hearing on Passenger Vehicle
Roof Strength: Hearing Before the Subcomm. on Consumer Affairs, Ins., and Automotive
Safety of the S. Comm. on Science, Commerce and Transp., 110th Cong. (2008) (criticizing
NHTSA‘s use of preamble preemption in its roof crush rule).

362

2005 GAO REPORT, supra note 177, at 1.

363

Id. at 6-7; see also Congressional Review of OCC Preemption: Hearing Before the Subcomm.
on Oversight and Investigations of the H. Comm. on Fin. Servs., 108th Cong. 16 (2004)
(statement of Thomas J. Miller, Attorney Gen., State of Iowa, on Behalf of the Nat‘l Ass‘n
of Attorneys Gen.) (stating it ―does not make any sense at all‖ to take states out of consumer
protection when OCC has only been administering laws for three years); Review of the
National Bank Preemption Rules: Hearings Before the S. Comm. on Banking, Hous., and
Urban Affairs, 108th Cong. 2–3 (2004) (statement of Sen. Paul S. Sarbanes) (quoting from
comment letters from the NAAG, letters from other commenters, and newspaper articles)
(describing reaction of interested parties as claiming OCC‘s preemption is ―self-serving‖).

364

See 2005 GAO REPORT, supra note 177, at 46-47, 53. OCC officials were not able to identify
specific reforms that had been undertaken in response to the 2005 GAO Report. Sharkey
Interview with OCC Officials.

365

Letter from Micky Ibarra, Assistant to the President and Director of Intergovernmental Affairs
to Donald J. Borut, Chair, Big 7 Organizations (Mar. 9, 2000), reprinted in EPA GUIDANCE,
supra note 338, at 43–46 (―White House Letter on Consultation and List of ‗Representative
National Organizations‘ Contacts‖); see also EPA GUIDANCE, supra note 338, at 4. The

70

may seem the natural representatives of states, and best equipped to assess the impact of a
federal regulation on a state statute or regulation. But, increasingly, preemption
determinations displace state common law liability, as opposed to state legislative or
regulatory standards. And it is by no means clear who represents the interests served by
state tort law. State tort law wears at least two hats—one compensatory, the other
regulatory. With respect to suitable representatives of state regulatory interests, should it
be those who represent injured victims (potential and actual) or those who are engaged in
health and safety regulation at the state level, or both?
Second, the consultative process breaks down at both ends; namely, while federal
agencies have rightly been criticized for bypassing consultation with the states, at the
same time, it appears as though some of the state representatives have not held up their
end of the bargain.366 When state government groups intervene in preemption disputes,
they generally assert an anti-preemption agenda, focusing on protection of state
autonomy and issues of structural concern to all states, eschewing policy positions on
specific regulations. Participation in the rulemaking process by state and local
government representatives is, however, sparse. Most rules with potential preemptive
power receive no comments from state or local government officials or their
representatives. Granted, of the fifty-three preemptive notices included in AAJ‘s
study,367 twenty of them inserted preemptive language into the final rule only after the
notice-and-comment period had closed. But, in the remaining thirty-three proposed rules,
the state representatives only submitted comments in four rulemakings: one by the
Department of Homeland Security (chemical facility security regulation) and three by
NHTSA (fuel economy standards for passenger vehicles; standards for light trucks;
vehicle roof crush strength).368 NCSL submitted two comments and the state attorneys

―Big 7‖ include the National Governors Association, National Conference of State
Legislatures, Council of State Governments, U.S. Conference of Mayors, National League of
Cities, International City/County Management Association, and National Association of
Counties.
366

See Sharkey, Federalism Accountability, supra note 14, at 2168 (―Some responsibility . . . lies
with the state governmental groups who may have opted out of engaging with the federal
agencies.‖); id. at 2166-67 (providing some examples where federal agency reached out to
consult with the state governmental groups but received no comments back). See also supra
note 84 (mentioning that NCSL failed to submit any comment to NHTSA during its
reconsideration of the Designated Seating Position Amendment rule); supra note 136
(mentioning lack of comments from the states, after providing ―notice via email transmission
of a letter to elected officials of State governments and their representatives,‖ in FDA overthe-counter labeling rule); supra note 140 (mentioning that no states commented on FDA
Skin Protectant rule).

367

See AM. ASS‘N FOR JUSTICE, supra note 55.

368

Michael Jo, Who Represents the States? State Government Groups, Preemption, and
Horizontal Federalism 27 (Fall 2009) (unpublished directed research paper, supervised by
Professor Catherine Sharkey).

71

general submitted three (one under the auspices of the National Association of Attorneys
General (NAAG)).369
(a)

Expand Appropriate Representatives of State Regulatory
Interests
(i)

The Big Seven

Of the agencies surveyed in this Report, EPA and NHTSA appear to be making
concerted, good faith efforts to reach out to the ―Big Seven‖ to reestablish good working
relations. By contrast, the OCC maintains that they do no specific outreach to the ―Big
Seven,‖ but instead hear from governors and state legislators during the notice-andcomment process.370 (FDA did not provide any relevant information and there were no
relevant examples in its recent rulemakings.)
As mentioned above, EPA‘s Guidance document contains a list of contact
information for the ―Big Ten‖ organizations.371 Moreover, the EPA Office of
Congressional and Intergovernmental Relations hosts quarterly meetings with the Big
Ten.372 It would behoove the other federal agencies to compile an updated contact list for
reaching out to the ―Big Seven‖ and also to consider establishing some form of
regularized personal contact in order to build relationships.373
Given the structure of the federal statutes that it implements, the EPA conducts
relatively few formal consultations with the states pursuant to E.O. 13132. In a case
study, Terranova noted that EPA formally consulted with the states under E.O. 13132 in
only two of thirty Clean Air Act regulations it had issued.374 In the two regulations
where it did solicit comment from the states, the EPA noted E.O. 13132 did not mandate
consultation, ―[r]ather, the EPA merely felt it would be good policy to consult with state
representatives because of their ‗substantial interest‘ in the rule.‖375 Terranova also
identified three examples of NPRMs where EPA solicited comment from state and local

369

Id.

370

Sharkey Interview with OCC Officials.

371

See supra note 348.

372

Sharkey Interview with EPA Officials.

373

See Jody Freeman, Collaborative Governance in the Administrative State, 45 UCLA L. REV. 1,
81–82 (1997) (recommending agencies designate staff advocate or ombudsman to help
develop meaningful participation in rulemaking process).

374

Terranova, supra note 327, at 11 (describing this as an unsurprising function of the fact that
Congress, not EPA, already set the distribution of power between the states and federal
government when it passed the CAA).

375

Id. at 12 & n.61 (citing 71 Fed. Reg. 60,612 (2006) (Regional Haze Regulations); 72 Fed. Reg.
20,586 (2007) (Clean Air Fine Particle Implementation Rule)).

72

officials.376 According to EPA, these consultations have led to direct implementation of
specific recommendations from the states.377
Over the past three years, EPA determined that a rule invoked E.O. 13132 in two
final regulations and one NPRM.378 For each of these rules (save the Stormwater Rule
discussed above), EPA noted the steps it took to consult with state and local officials and
meet the E.O. 13132 requirements. For the NPRM on National Emissions Standards for
Hazardous Air Pollutants for Area Sources: Boilers, EPA said the NPRM ―may‖ have
federalism implications, included a brief FIS, and stated:
EPA consulted with State and local officials in the process of developing the
proposed action to permit them to have meaningful and timely input into its
development. EPA met with 10 national organizations representing State and
local elected officials to provide general background on the proposal, answer
questions, and solicit input from State/local governments. . . . In the spirit of
Executive Order 13132, and consistent with EPA policy to promote
communications between EPA and State and local governments, EPA
specifically solicits comment on this proposed action from State and local
officials.379

376

Id. (citing 71 Fed. Reg. 5985 (Feb. 6, 2006) (Protection of Stratospheric Ozone); 71 Fed. Reg.
61,144 (Oct. 17, 2006) (National Ambient Air Quality Standards for Particulate Matter); 73
Fed. Reg. 3567 (Jan. 18, 2008) (National Emissions Standards for Reciprocating Internal
Combustion Engines)).

377

See, e.g., 71 Fed. Reg. 60,612, 60,629-30 (Oct. 13, 2006) (Regional Haze Regulations).

378

My research assistant, Matthew Shahabian, took advantage of EPA‘s ―Gateway‖ website for
searches. According to Ken Munis:
The EPA Regulatory Gateway,
(http://yosemite.epa.gov/opei/rulegate.nsf/content/index.html?opendocument),
represents one advancement that we launched earlier this year. The ―Gateway‖
enables the public and those affected by our regulations to better track EPA action
on priority rulemakings. For example, the Gateway enables the public to see
which actions the Agency believes may have federalism effects. We hope this
additional information will facilitate timely consultation and help us provide
meaningful opportunities for participation by outside parties. The Gateway also
enables the public to track our actions as they relate to key areas such as
federalism.
Email from Ken Munis, EPA, to Catherine M. Sharkey, Aug. 15, 2010, 10:44 A.M.

379

National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial,
Commercial, and Institutional Boilers, 75 Fed. Reg. 31,896, 31,922 (June 4, 2010).

73

For the Regulation of Fuels and Fuel Additives in the Denver area, EPA noted its
regulation would have federalism implications and ―may preempt State law.‖380
Accordingly, EPA consulted with Colorado state and local government ―early in the
process . . . to permit meaningful and timely input . . . .‖381 Based on this consultation,
the final rule reflected what the state requested EPA enact as ―necessary to ensure the
success of Colorado‘s ozone action plan.‖382
NHTSA likewise appears to be making renewed efforts to reach out and consult
with state and local officials. In a recent rulemaking on tire fuel efficiency information
for consumers, which does not currently have preemptive effect, NHTSA expressly
sought comment on preemption from state and local officials.383 NHTSA stated:
In the NPRM, NHTSA sought public comment on the scope of Section 111
generally, and in particular on whether, and to what extent, Section 111 would
or would not preempt tire fuel consumer information regulations that the
administrative agencies of the State of California may promulgate in the future
pursuant to California‘s Assembly Bill 844 (AB 844). Given the ambiguity of
the statutory language regarding preemption, the agency sent a copy of the
NPRM directly to the State of California, the National Governor‘s Association,
the National Conference of State Legislatures, the Council of State
Governments, and the National Association of Attorneys General. Of these
organizations, only the California Energy Commission submitted comments on
the NPRM. A summary of all comments the agency received on this issue is
presented here. . . . Given that California has not promulgated final regulations
yet, NHTSA believes that it is premature to consider the applicability of the
EISA section 111 preemption provision. Moreover, NHTSA notes that it is
ultimately a court, not NHTSA, which would determine whether or not future
regulations established by the State of California are preempted under Federal
law.384

380

EPA Regulation of Fuels and Fuel Additives: Federal Volatility Control Program in the
Denver-Boulder-Greeley-Ft. Collins-Loveland, CO, 1997 8-Hour Ozone Nonattainment
Area, 75 Fed. Reg. 9107, 9110 (Mar. 1, 2010).

381

Id.

382

Id.

383

Tire Fuel Efficiency Consumer Information Program, 75 Fed. Reg. 15,894 (Mar. 30, 2010).
See also supra note 84 (describing NHTSA‘s consultation outside of E.O. 13132 with state
and local officials during its reconsideration of the Designated Seating Position Amendment
rule).

384

Id. at 15,941–42.

74

(ii)

Encourage Development of Agency-Specific Liaison
Groups

Several of the agencies have added organizations with relevant expertise to the list
of consultative groups. As mentioned above, EPA has expanded the Big Seven to the Big
Ten. The Environmental Council of the States (ECOS) plays a particularly influential
role. Indeed, it was in dialogue with ECOS that EPA decided to lower its threshold for
federalism impact from $100 million to $25 million at the time it issued its November
2008 Guidance document.385
Like EPA, OCC reaches out to the representative of its state regulatory
counterparts. The Conference of State Bank Supervisors (CSBS) is a trade association of
state banking regulators. According to OCC officials, OCC shares draft proposals with
CSBS shortly before they are published; CSBS then distributes the draft proposals to
state bank supervisors. In 1999, OCC established by way of a series of letters regarding
E.O. 13132 that CSBS would serve as the liaison between OCC and states with respect to
rulemaking.386 With OCC, CSBS developed the model consumer complaint forms to
standardize information sharing.387 For state chartered banks that establish interstate
branches, CSBS helped negotiate a nationwide state/federal agreement for overlapping
regulatory spheres,388 and has negotiated several other agreements and understandings
385

Sharkey Interview with EPA Officials; Sharkey Telephone Interview with Steve Brown,
Executive Director, ECOS, July 30, 2010.

386

OCC Telephone Interview. Moreover, OCC has expanded its collaborative outreach to CSBS
over the years. In 2006, Comptroller Dugan and the head of CSBS drafted joint procedures
for consumer complaint information; 43 states have entered into a similar model. And in
that same year, a designee from CSBS was added to the Federal Financial Institution
Examination Council, the coordinating body of federal banking regulators. Id.

387

See CONFERENCE OF STATE BANK SUPERVISORS, CONSUMER COMPLAINT MANAGEMENT:
BEST PRACTICES 3, available at http://www.csbs.org/regulatory/CooperativeAgreements/Documents/CSBS-ConsumerComplaintBestPractices.pdf (stating
recommendations are based on state experience and ―CSBS‘s ongoing work with the federal
banking agencies to develop referral procedures and a Common Consumer Complaint
Form‖); CSBS, Model Complaint Form, available at
http://www.csbs.org/regulatory/CooperativeAgreements/Documents/ModelComplaintFormMaster.doc; Testimony of John G. Walsh,
Chief of Staff and Public Affairs, Office of the Comptroller of the Currency, Before the
Subcomm. on Fin. Insts. and Consumer Credit of the H. Comm. on Fin. Servs., at 4–5 (Dec.
12, 2007) (describing OCC‘s collaboration with CSBS on consumer complaint form),
available at http://www.occ.treas.gov/ftp/release/2007-133b.pdf.

388

NATIONWIDE COOPERATIVE AGREEMENT (Dec. 9, 1997), available at
http://www.csbs.org/regulatory/CooperativeAgreements/Documents/nationwide_coop_agrmnt.pdf; NATIONWIDE FEDERAL/STATE
SUPERVISORY AGREEMENT (Nov. 14, 1996), available at
http://www.csbs.org/regulatory/CooperativeAgreements/Documents/nationwide_state_fed_supervisory_agrmnt.pdf.

75

with federal regulators involved in banking.389 CSBS frequently comments on regulatory
proposals from federal agencies involved in banking,390 and also occasionally files
amicus briefs on behalf of state banking regulators.391 However, it appears that OCC has
focused on CSBS to the exclusion of state and local elected officials. The 2005 GAO
Report noted that ―[a]lthough OCC sent the drafts of the proposed rules to CSBS, the
extent to which it consulted with state officials appears limited.‖392
Like EPA and OCC—albeit with the information buried in the Department of
Transportation website as opposed to in its Guidance document—DOT lists three
organizations on its contact list in addition to the Big Seven: the American Association of
State Highway and Transportation Officials, the Association of Metropolitan Planning
Organizations, and the National Association of Regional Councils.393 NHTSA has also
experimented with a kind of focus group, comprised not only of state officials, but also
industry representatives and others representing state regulatory interests (including tort):
NHTSA initiated a rulemaking process to determine whether to amend
requirements for crash safety protection in small and large school buses. Early
in the process, prior to the issuance of the notice of proposed rulemaking,
NHTSA convened a ―roundtable of State and local government policymakers,
school bus and seat manufacturers, pupil transportation associations and
consumer associations to address . .. [s]tate and local policy perspectives‖ on the
feasibility and desirability of a national uniform requirement. Participants at the
roundtable included representatives from states with compulsory seatbelt
requirements, individuals with expertise in seatbelt installation (and effects on
389

See, e.g., Memorandum of Understanding between the U.S. Dep‘t of Treas., Financial Crimes
Enforcement Network and [State Agency] (Apr. 28, 2005), available at
http://www.csbs.org/regulatory/Cooperative-Agreements/Documents/MOU-DOTFINCEN.pdf.

390

CSBS COMMENT LETTERS,
http://www.csbs.org/regulatory/policy/Pages/CSBS%20Comment%20Letters.aspx (last
visited Aug. 25, 2010) (listing ten comment letters so far this year).

391

See, e.g., Brief of CSBS as Amicus Curiae in Support of the Petitioner, Cuomo v. Clearing
House Ass‘n, No. 08-453, 129 S. Ct. 2710 (2009), 2009 WL 685656; Brief of Amicus
Curiae, CSBS, in Support of Appellee, Urging Affirmance, State Farm Bank, FSB v.
Reardon, No. 07-4260, 539 F.3d 336 (6th Cir. 2008), 2008 WL 2740657; Brief of the Big 7,
Joined by the CSBS, as Amici Curiae Supporting Petitioner, Watters v. Wachovia Bank,
N.A., No. 05-1342, 550 U.S. 1 (2006), 2006 WL 2570993.

It is worth mentioning that state banking regulators and the OCC compete for chartering fees
from banks, and given that competition, it is not surprising to see CSBS is one of the more
aggressive representatives of state interests in regulations, legislation, and court battles.
392

2005 GAO REPORT, supra note 177, at 19.

393

Gov‘tl Affairs, Office of the Sec. of Transp., U.S. Dep‘t of Transp., State & Local
Organizations, http://www.dot.gov/ost/govaffairs/statelocal.htm.

76

passenger capacity), and a representative from the National School
Transportation Association.394
(iii)

Introduce Attorney General Notification Provision

Given the twin problems of identifying appropriate representatives of state
regulatory interests and the paucity of comments during the rulemaking process from
state governmental organizations, this Report proposes the introduction of a novel
notification provision to the Attorneys General395 and to the National Association of
Attorneys General (NAAG).396 The proposal borrows from the Class Action Fairness
Act (CAFA) settlement notice provision, which mandates that notice of every class action
settlement within CAFA‘s purview must be provided to ―appropriate‖ federal and state
officials and provides, by default, that the state representative be the attorney general of
any state in which any class member lives.397 The intuition behind this approach is that
the top legal officer of the state ought to be able to distribute the information to the
relevant state agencies or officials or other appropriate representatives of the state
interest.
The addition of an Attorney General notification provision would provide a
formal mechanism to a party that is well positioned to alert any and all interested
participants in the rulemaking process. It is premised on the intuition that not all
interested participants comb the Federal Register for relevant rulemakings and the
exclusive singling out of the Big Seven organizations may no longer make sense,
particularly in light of the rise of rulemakings that preempt state tort law.
State AGs are given a special role in the new Dodd-Frank Wall Street Reform and
Consumer Protection Act. The States can force the new Bureau of Consumer Financial
Protection to take regulatory action on consumer protection issues. If a majority of the
states pass a resolution in support of establishing or modifying a Bureau regulation, the
394

Sharkey, Federalism Accountability, supra note 14, at 2171-72 (citing Federal Motor Vehicle
Safety Standards; Seating Systems, Occupant Crash Protection, Seat Belt Assembly
Anchorages, School Bus Passenger Seating and Crash Protection, 72 Fed. Reg. 65,509,
65,511 (Nov. 21, 2007)); see also 73 Fed. Reg. 62,744, 62,777–78 (Oct. 21, 2008)
(describing consultation in final rule as ―discuss[ing] the safety, policy and economic issues
related to seat belts on school buses‖).

395

All fifty state AGs have general permanent email addresses. For a current listing of all AGs
and contact information, see http://www.naag.org/current-attorneys-general.php.

396

James McPherson, Executive Director of NAAG, indicated his willingness to serve as the
point of contact for the federal agencies. Depending upon the subject matter of the
regulation, he would first send it to a relevant NAAG staff member, who would then forward
it on to his or her relevant contact person in each of the AGs offices. Telephone Interview
with McPherson, November 10, 2010.

397

28 U.S.C. § 1715 (a) (2) (Supp. V 2005). For an analysis of this provision and its early
implications, see Catherine M. Sharkey, CAFA Settlement Notification Provision: Optimal
Regulatory Policy?, 156 U. PENN. L. REV. 1971 (2008).

77

Bureau must issue a notice of proposed rulemaking on the issue.398 This provision also
requires the Bureau to publish findings on certain specific considerations in response a
State petition, and it must send copies of those findings to the House and Senate Finance
committees.399 Under the Act, state AGs also have the power to bring lawsuits against
banks in order to enforce federal regulations issued by the Bureau.400
The Chairman of the CPSC, according to its General Counsel, instituted a
monthly call with the state attorneys general offices.401 Anywhere from twenty to thirtyfive participants from state AG offices with consumer protection responsibilities typically
participate in these calls.402 According to the General Counsel, ―This direct line of
communication has proven very useful in engendering state participation in rulemakings
with preemptive effect.‖403 This CPSC state AG initiative supports both focusing on
reaching out to states early in the rulemaking process and providing notification to state
attorneys general offices.
Over the years, Attorneys General, sometimes coordinated by NAAG, have
challenged federal agencies‘ decisions to preempt state law, often via amicus briefs.
Historically, the Attorneys General have focused their opposition to preemption in areas
of robust state regulation, such as environmental law, banking, and consumer
protection.404

398

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 § 1041(c) (2010).

399

Id. § 1041(c)(2)-(3).

400

Id. § 1042(a)(1). If an AG wishes to bring an action under § 1042, he or she must first consult
with the Bureau. Id. § 1042(b). Moreover, the AGs may enforce only those rules, not the
statute itself. Id. § 1042(a)(2). As the OCC officials pointed out, this was a deliberate
omission to prevent states from creating fifty different interpretations of the statute. OCC
Telephone Interview; see also 156 Cong. Rec. S3868–72 (May 18, 2010) (debate on State
AG enforcement provision discussing how amendments ―strike a balance‖ and
―compromise‖ to allow supplemental enforcement from states without creating conflicting
authorities).

401

Email from Cheryl Falvey to Catherine Sharkey, Nov. 1, 2010, 1:49 P.M.

402

Id.

403

Id.

404

Sharkey Interview with Dan Schweitzer, Supreme Court Counsel, NAAG, July 19, 2010.
State AGs have tended to be most engaged in OCC preemption, where the focus is on
enforcement of state laws. NAAG‘s Interim Brief for the Transition team highlighted
consumer protection as one of their priorities. NAT‘L ASS‘N OF ATT‘YS GEN., INTERIM
BRIEFING PAPER PREPARED FOR PRESIDENT-ELECT BARACK OBAMA TRANSITION TEAM 7
(2009), available at
http://www.naag.org/assets/files/pdf/policy/Transition_Team_Briefing_Paper_20090110.pdf
Specifically, they requested that the new administration roll back preemption of consumer

78

In addition to advocating state interests in preserving state positive law, state AGs
have also intervened to protest preemption of state common law.405 The AG notification
provision would capitalize on this burgeoning development and further expand the role of
state AGs in identifying the relevant state regulatory interest at stake in preemptive
rulemakings.
(b)

Focus on Earlier Outreach to States

An effort should be made in terms of encouraging agencies to consult with state
representatives early in the rulemaking process. The 1999 OMB Guidance document
suggests that consultation should take place before the NPRM and that the results of that
consultation should be discussed in an FIS preamble in the NPRM.406
However, most of the agencies still focus primarily, if not exclusively, on state
consultation during the notice-and-comment process. The DOT Guidance document
focuses on notice and comment process, directing that states should receive copies of
NPRM with preemptive effects and that agencies should respond to any comment
submitted by a state during notice and comment proceedings.407 There are no provisions
for any ―meaningful‖ consultation outside of the notice-and-comment process or before

protection laws as asserted by both OCC and the soon-to-be-defunct Office of Thrift
Supervision. Id.
405

See, e.g., Brief for Vermont et al. as Amici Curiae Supporting Respondent at *1, Wyeth v.
Levine, 129 S. Ct. 1187 (2009) (No. 06-1249), 2008 WL 3851613 (―The forty-seven amici
states, as separate sovereigns in our federal system . . . have a fundamental interest in
preserving the appropriate balance of authority between the states and the federal
government. . . . In our view, courts should only rarely infer that Congress, although silent
on the issue, nonetheless intended to displace state law where it is possible to comply with
both state and federal law.‖); see also Daniel Schweitzer, Supreme Court Counsel, Nat‘l
Ass‘n of Att‘ys Gen., Panelist Remarks at the New York University Annual Survey of
American Law: Tort Law in the Shadow of Agency Preemption (Feb. 27, 2009) (noting that,
over time, states have gotten increasingly interested in the preemption of state common law
claims because of their experience with preemption in other realms, such as banking, where
state agencies are explicitly at risk).

406

OMB Guidance for E.O. 13132, supra note 32.

407

U.S. DEP‘T OF TRANSP., DOT GUIDANCE: FEDERALISM 6 (1988) [hereinafter DOT GUIDANCE]
(―The consultation is generally met with respect to rulemaking through the use of the notice
and comment process. . . . In addition, for the rulemakings [that invoke federalism
implications] the agency should make a special effort to ensure that the document is
distributed directly to the States . . . .‖). This document was provided to Sharkey by Neil
Eisner, Ass‘t General Counsel for Regulation and Enforcement, Dep‘t of Transportation.

79

the NPRM is published.408 OCC likewise maintains that the primary mechanism of
consultation with the states is the notice-and-comment procedure.409
This focus only on notice and comment proceedings denies States substantial
opportunities to contribute meaningfully to the development of the regulation, as they can
only respond once the NPRM has already been published.410
3.

Internal Oversight

Federal agencies should develop an internal standard for evaluating the evidence
asserted in support of a preemptive rulemaking. This standard should be akin to the
―agency reference model‖ standard that Sharkey has proposed for court review of agency
positions on preemption, which is premised upon judicial scrutiny of the
contemporaneous agency record to determine precisely the risks weighed by the
agency.411
The core idea is to force the agency to provide documented empirical evidence
that supports its preemption conclusion and then to submit the factual predicate to some
systematic scrutiny within the agency. The agency should be required to identify and
408

There is just a cryptic addendum: ―To the extent additional consultation is believed to be
warranted, contact should be made with the Office of the General or Chief Counsel, as
appropriate, for advice or approval . . . .‖ Id. There is no discussion of when additional
consultation is warranted or how DOT determines if it should be approved.

409

Sharkey Interview with OCC Officials.

410

See, e.g., Freeman, supra note 373, at 12 (―[T]he notice-and-comment process often fails to
make the best use of available data and information. This is in part a product of timing: only
after the Notice of Proposed Rule Making (NPRM) do parties supply detailed arguments
about the technical and practical difficulties of implementing a rule, instead of much earlier
when the information might be more valuable to the agency in formulating the proposed
rule.‖).

411

Sharkey, Products Liability Preemption, supra note157, at 453 (―Behind agency decisions to
regulate or to refrain from regulating is a rich body of empirical cost-benefit (or increasingly
risk-risk) analyses. These analyses made by the agency at the time of its action (or inaction),
as well as the nature of the agency action and the contemporaneous reasons given by the
agency to justify it, can guide courts‘ judgments regarding the need for, and equally
significantly, the present feasibility of, uniform national regulatory standards.‖); id. at 477–
521 (developing agency reference model); see also Sharkey, Federalism Accountability,
supra note 14, at 2130 (―Courts have an opportunity to scrutinize both the empirical
substrate of the regulatory record compiled by the agency as well as its articulated reasons
underlying any interpretive policy. Anticipation of such judicial review at this stage would
force agencies . . . not only to adhere to the strictures of the executive order, but also to
compile a diligent agency record that would serve as the basis of the court‘s evaluation of
whether the state tort action seeks to ‗redo‘ the analysis conducted by the agency and should
therefore be ousted.‖); id. at 2188-89 (elaborating on the ―agency record‖ necessary to
justify preemption).

80

analyze the data that demonstrates the existence of the asserted factual predicate of a
conflict between state law and the federal regulatory scheme.412 This empirical evidence
should be included in a document signed by the head of the program office and inserted
into the public docket for the rulemaking.413 The rulemaking notice should note the
existence of the document and invite comment on it.
Exhibit A for the need for such an internal agency standard and review process is
the FDA‘s 2006 drug labeling rule. The FDA asserted its preemptive intent in the
preamble to the final rule: ―FDA believes that under existing preemption principles, FDA
approval of labeling under the act . . . preempts conflicting or contrary State law.‖ The
main thrust of the FDA‘s federalism impact statement was that the FDA had legal
authority to preempt state law in this area.414 Such purely legalistic determinations would
not suffice to satisfy the proposed factual predicate standard. Moreover, as the U.S.
Supreme Court complained in Wyeth:
[T]he Office of Chief Counsel ignored the warnings from FDA scientists and
career officials that the preemption language [of the 2006 preamble] was based
on erroneous assertions about the ability of the drug approval process to ensure
accurate and up-to-date drug labels.415

412

The ABA has adopted a resolution recommending that federal agencies subject to E.O. 13132
should have to provide: ―(a) factual support in the record for any assertions that state tort law
has in the past interfered or is currently interfering with the operation of federal laws or
regulations, or (b) reasoning to support any predictions or concerns that state tort law would
in the future interfere with the operation of federal laws or regulations.‖ ABA H.R. 117,
supra note 11. Part (a) is akin to the factual predicate recommended here (and in Sharkey‘s
―agency reference model‖). Though the ABA specifically limited its focus to agency
preemption of state tort law, this Report applies more generally to preemption of state law
(including state statutes and regulations).

This Report‘s recommendation goes even further by calling for this factual predicate evidence to
be included in a document signed by the head of the program office and to be made part of
the public rulemaking docket for comments.
413

Attention must be paid to the practical realities of how different offices in an agency function
in relation to each other. Cf. Elizabeth Magill & Adrian Vermeule, Allocating Power Within
Agencies, YALE L.J. (forthcoming 2010) (―In this essay, we will examine how administrative
law allocates power within agencies, and how arguments from expertise, legalism and
politics apply inside agencies rather than across institutions.‖), available at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1577723.

414

71 Fed. Reg. 3922, 3969 (Jan. 24, 2006) (―If State authorities, including judges and juries
applying State law, were permitted to reach conclusions about the safety and effectiveness
[of labels] . . . the federal system for regulation of drugs would be disrupted.‖).

415

Wyeth v. Levine, 129 S. Ct. 1187, 1202 n.11 (2009) (quoting H. COMM. ON OVERSIGHT &
GOV‘T REFORM, MAJ. STAFF REP., FDA CAREER STAFF OBJECTED TO AGENCY
PREEMPTION POLICIES 4 (2008)).

81

It seems that in at least that instance there was a need for a counterbalance to the Office
of the Chief Counsel.
Exhibit B for the need for such internal oversight is NHTSA‘s 2005 roof crush
rule. As its 2009 rewrite of the rule makes clear, the factual predicates for NHTSA‘s
preemption conclusion simply did not hold up. In a relatively lengthy three-page
discussion, NHTSA took apart the earlier asserted factual predicates one-by-one.416 First,
after further testing by NHTSA, the Final Rule disclaimed the NPRM‘s argument that
improving roof safety would also increase rollover propensity.417 Additionally, where the
NPRM asserted state tort laws requiring improved roof crush resistance would divert
resources away from developing new technologies to avoid rollovers in the first instance,
the Final Rule rebuked that assertion, stating ―there is not a basis to conclude that such
[diverted] resources would otherwise have been used for improving rollover resistance or
improving safety.‖418 The Final Rule also disagreed with the automotive industry‘s
argument that increased roof crush resistance from state tort law would create dangerous
disparities in vehicle mass, stating the industry ―did not provide technical analysis
addressing . . . the issue.‖419 NHTSA Assistant Chief Counsel, Vehicle Rulemaking and
Harmonization—who has been involved with preemption policymaking at NHTSA for
more than twenty years—likewise agreed that the original roof crush rule would not have
survived scrutiny by NHTSA engineers and statisticians.420
The ―substantial evidence‖ provision in the Dodd-Frank Wall Street Reform and
Consumer Protection Act—which requires agency preemption determinations to be
416

74 Fed. Reg. 22,348, 22,380–83 (May 12, 2009).

I therefore take issue with Schwartz and Silverman‘s characterization of NHTSA‘s shift in
preemption policy as an unprincipled ―abrupt change of course.‖ Schwartz & Silverman,
supra note 236, at 1221. They claim NHTSA reversed preemption in the Roof Crush Rule
with only a ―two-sentence explanation.‖ Id. It appears that the authors looked only at the
Executive Summary‘s description of ―How This Final Rule Differs from the NPRM,‖ 74
Fed. Reg. 22,348, 22,349 (May 12, 2009), as opposed to the Federalism discussion thirty
pages later, which spans three pages. See id. at 22,380–83. The authors also give short
shrift to NHTSA‘s explanation of its policy shift in the Designated Seating Position Rule.
Compare 74 Fed. Reg. 68,185, 68,187–89 (Dec. 23, 2009) (NHTSA‘s two-page explanation
of how it interprets preemption and its analysis of state law, why it would not conflict, and
soliciting comment from state and local officials), with Schwartz & Silverman, supra note
236, at 1221–22 (―The agency‘s explanation for this turn was only that it later found such
conflicts ‗unlikely,‘ speculating that manufacturers would reduce seat width or install an
impediment or void in vehicles rather than undertake the additional expenses of providing an
additional seat belt.‖).
417

74 Fed. Reg. 22,382.

418

Id.

419

Id. at 22,382–83.

420

Sharkey Interview with Steve Wood, June 30, 2010.

82

evaluated under a ―substantial evidence‖ standard421—is also instructive. The Act
requires the evidence to be made ―on the record,‖ supporting the ―specific finding of
preemption‖ under the Barnett standard, which requires a finding that the state law
―significantly interfere or impair‖ the national bank‘s exercise of its national bank
powers. The Act further directs courts evaluating agency preemption determinations by
OCC to assess their validity based on ―thoroughness of consideration,‖ ―validity of
reasoning,‖ and ―consistency with other determinations.‖422 This Skidmore standard for
review is likewise consistent with the agency reference model.423
Exhibit C here would be the 2004 OCC preemptive rule that will have to be
rescinded in light of Cuomo. In Cuomo, the Second Circuit commented that ―the OCC
does not appear to have found any facts at all in promulgating its visitorial powers
regulation. It accretes a great deal of regulatory authority to itself at the expense of the
states through rulemaking lacking any real intellectual rigor or depth.‖424 Indeed, both
the Final Rule425 and the NPRM426 read like legal briefs (complete with argument
subheadings), not like agency rulemakings.427 There were no factual findings in either
rule explaining why preemption was necessary in the specific case or what conflicts
between state authorities and federal banks justified this ―clarification‖ that resulted in
preemption. There was nothing to suggest that state law ―significantly interfered‖ with
national bank activities under the relevant banking preemption standard.428 Rather, the
421

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.
1376 § 1044(a) (2010) (modifying 12 U.S.C. § 5136C(c)).

422

Id. (modifying § 5136C(b)(5)(A)).

423

Sharkey, Products Liability Preemption, supra note 157, at 491-98 (making the case for
Skidmore, not Chevron deference, to agency determinations of preemption); id. at 498
(―[T]he choice of granting Skidmore as opposed to Chevron deference would fuel the agency
reference model by encouraging agencies to engage in . . . notice-and-comment rulemaking
processes that, arguably, vet the agency decisionmaking process and make the agency
respond to substantive concerns raised by all affected parties.‖); see also Sharkey,
Federalism Accountability, supra note 14, at 2180 (―My own view has been that the
agency‘s views should be accorded Skidmore ‗power to persuade‘ (not Chevron mandatory)
deference—a position apparently endorsed by the Court in Wyeth.‖)..

424

Clearing House Ass‘n v. Cuomo, 510 F.3d 105, 119 (2d Cir. 2007).

425

Bank Activities and Operations, Final Rule, 69 Fed. Reg. 1895 (Jan. 13, 2004).

426

Rules, Policies, and Procedures for Corporate Activities; Bank Activities and Operations; Real
Estate Lending and Appraisals, NPRM, 68 Fed. Reg. 6363 (Feb. 7, 2003).

427

Clearing House Ass’n, 510 F.3d at 118 (―The administrative record here consists almost
entirely of the agency‘s interpretation of case law, legislative history, and statutory text.‖).

428

See Barnett Bank v. Nelson, 517 U.S. 25 (1996); see also Dodd-Frank Wall Street Reform and
Consumer Protection Act § 1044 (modifying 12 U.S.C. 5136C(b)(1)(B)) (codifying Barnett
as preemption standard for banking preemption).

83

rule laid out an argument for why OCC was legally allowed to preempt state law, and
responded to CSBS‘s arguments that OCC was not authorized to preempt state law and
that preemption would undermine the dual state/federal banking system.429
OCC officials expressed skepticism that the ―substantial evidence‖ standard
would appreciably affect their rulemakings, apart from perhaps mandating explicit
reference to the new standard.430 One of the OCC attorneys specifically cited American
Bankers Association v. Lockyer,431 as an example where the OCC has made factual
findings to support preemption determinations in the past. In Lockyer, California passed
statutes requiring banks to give more information to credit card customers about the
implications of carrying credit card debt and to provide options for customers to phone in
for explanations and receive referrals for credit counseling.432 In its amicus brief, OCC
argued that the requirements should be preempted because they imposed significant
operating costs on national banks and therefore on customers, and interfered with
national banks‘ ability to exercise their powers to set terms, conditions, and interest rates
for credit cards.433 The court agreed with OCC‘s interpretation and found California law
preempted.434 Additionally, the court cited an OCC opinion letter that found portions of a
West Virginia statute preempted under the Gramm-Leach-Bliley Act because they
imposed significant operating costs on national banks.435 It is notable that OCC‘s West
Virginia opinion letter distinguished between preempting the ―significant‖ provisions and
not preempting West Virginia‘s requirement that credit and insurance documents for a
loan be processed separately when the insurance was a condition for the loan, as it
imposed only paperwork burdens and some administrative costs.436 Given this level of
specificity and the significant factual findings made by the OCC in Lockyer, including the
precise cost of the state rule on national banks, the complete absence of a factual record
in the visitorial powers rule could hardly pose a sharper contrast.437

429

69 Fed. Reg. 1896–1903.

430

Sharkey Interview with OCC Officials.

431

239 F. Supp. 2d 1000 (E.D. Cal. 2002).

432

Id. at 1002–04.

433

Id. at 1013–15.

434

Id. at 1022.

435

See id. at 1015.

436

Id.

437

The other OCC rulemaking issued contemporaneously with the Visitorial Powers (VP) Rule,
which preempted various state regulations affecting national bank operations, seems
significantly more justified than the VP rule. Bank Activities and Operations; Real Estate
Lending and Appraisals, 69 Fed. Reg. 1904 (Jan. 13, 2004). The OCC spent a considerable
amount of time in the preamble explaining why the regulation preempts state law, arguing
that banking is now more national in nature and crosses state-boundaries on a regular basis.

84

B.

OIRA/OMB
1.

Direct Agencies to Publish Reports of Agency Compliance with
May 2009 Presidential Memorandum

Publication of the reports of agency responses to the Presidential Memorandum‘s
directive to conduct a 10-year retrospective review of preemptive rulemaking would, at
least in part, debunk one view that the Presidential Memorandum on Preemption has not
induced any significant agency action or follow-up with respect to the 10-year
retrospective review.438
Publication of these reports would—along with individual agency‘s publication of
internal guidelines on compliance with E.O. 13132—signal renewed focus and attention
on the part of agencies to issues of federalism and agency preemption of state law.

Too many different state laws were arguably preventing national banks from exercising the
full extent of their powers under federal charters, reducing the availability of credit to
consumers and increasing the price of banking services. Id. at 1907–08. The OCC pointed
to its case-by-case preemption of the Georgia Fair Lending Act (GFLA), 68 Fed. Reg.
462,64 (Aug. 5, 2003), as a justification for blanket preemption, arguing in the Georgia case
mortgage lenders simply were not making loans to Georgia consumers because the costs
imposed by the GFLA were too high. 69 Fed. Reg. at 1908. (This GFLA justification was
also asserted by former Comptroller Hawke in his prepared testimony for the Financial
Crisis Inquiry Commission. See Statement of John D. Hawke, Former Comptroller of the
Currency, Before the Financial Crisis Inquiry Commission 5 (Apr. 8, 2010), available at
http://www.fcic.gov/hearings/pdfs/2010-0408-Hawke.pdf.) Though OCC still made legal
arguments explaining why it had preemptive power in the first instance, 69 Fed. Reg. at
1908–11, this rule was at least supported with factual arguments and justifications, unlike the
VP rule.
438

Ashutosh Avinash Bhagwat, Wyeth v. Levine and Agency Preemption: More Muddle or
Creeping to Clarity? 44 TULSA L. REV. (forthcoming 2010) (manuscript at 36–42), available
at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1474470 (arguing it remains to be
seen whether Memorandum will have lasting effect); Agency Appraisal: President Obama
Orders Review of Federal Pre-emption Clauses, INSIDE COUNSEL MAG., Aug. 8, 2009,
http://www.insidecounsel.com/Issues/2009/August-2009/Pages/Agency-Appraisal.aspx
(quoting law firm partners as stating memorandum is ―purely political‖ move); Lawrence S.
Ebner, President Obama's "Preemption Memo": Much To Do About Very Little, 24 LEGAL
BACKGROUNDER, June 19, 2009,
http://www.wlf.org/publishing/publication_detail.asp?id=2084 (arguing Memo will have
little impact on preemption beyond forcing agencies to conduct ―vague review‖ of
regulations).

85

2.

Update OMB Guidance Document

OMB‘s 1999 Guidance document (and E.O. 13132) directs agencies to send OMB
their designated ―federalism official‖ as well as a ―consultation plan‖ that describes how
agencies identify policies with federalism implications and the procedures agencies will
use to ensure meaningful and timely consultation.439
OMB/OIRA should bring this document up to date.440 Here would be an
appropriate place to include a current list of state consultation groups and their contact
information.
In an effort to encourage greater transparency with respect to agency compliance
with E.O. 13132, OMB/OIRA should also direct agencies to publish their designated
federalism officials and consultation plans (along with the agencies‘ internal guidelines
for compliance with E.O. 13132).441
This Report‘s survey of federal agencies found spotty compliance with these
mandates. The Report did not uncover any evidence that OMB/OIRA took steps to
monitor agencies‘ provision of required federalism official designations or consultation
plans, nor was this information generally publicly available. Apart from EPA, which
incorporates its consultation plan in its publicly available Guidance document, DOT was
the only agency to provide an explicit consultation plan that had been submitted to
OMB.442 The ―plan,‖ however, is merely a statement that says ―The Department intends
to expand its efforts [to consult] by proactively soliciting the involvement of the Big
Seven or elected officials in those actions it identifies as warranting such
participation.‖443 This statement is followed by four pages of examples of agency
consultation and working groups set up by the various DOT agencies on their own

439

Exec. Order No. 13,132 § 6(a); OMB Guidance for E.O. 13132, supra note 32, at 4–5.

440

At a minimum, OIRA should inform the agencies whom to contact with respect to submission
of the name of their designated federalism official and the description of the agency‘s
consultation process. The current document lists Stuart Shapiro (who is currently an
associate professor at Rutgers University, see infra note 451) as the contact person for this
and any other questions relating to E.O. 13132. See OMB Guidance for E.O. 13132, supra
note 32, at 2, 4, 7.

441

OIRA should encourage agencies to post their relevant information in a fairly consistent
manner, such that the information is easy for interested parties to compile, assess, and
compare.

442

Letter from Nancy E. McFadden, Gen. Counsel, U.S. Dep‘t of Transp., to John Spotilla, Office
of Mgmt. & Budget (Mar. 13, 2000) [hereinafter DOT 3/13/00 Letter]. This document was
provided to Sharkey by Neil Eisner.

OCC has no record of sending any such description to OMB/OIRA. Sharkey Telephone
Interview with OCC Officials.
443

DOT 3/13/00 Letter, supra note 442, at 1.

86

accord.444 There is no general plan that explains how consultation should happen, and
notably, NHTSA is mentioned only once in the entire plan: ―The [NHTSA] meets
annually with State Highway Safety Offices to share information and solicit ideas on
grant projects.‖445
3.

Include a More Thorough Review of Preemption in Regulatory
Review Process

At present, OIRA is responsible for monitoring agencies‘ compliance with E.O.
13132.446 Under Executive Order 12866, OIRA reviews ―significant‖ proposed
regulations on a transactional, or rule-by-rule, basis.447
According to OIRA officials, preemption and other federalism issues are given
significant attention in the regulatory review process.448 But OIRA‘s review is hampered
when agencies evade the requirements of E.O. 13132.449 A 2003 GAO Report cast some
doubt on the vigor of OIRA‘s policing of agency compliance with E.O. 13132, finding
only a single instance—examining a subset of 85 rules over a year-long period—in which
OMB questioned an agency‘s conclusion regarding the absence of federalism
implications in a rule.450 Moreover, this impression was confirmed by Stuart Shapiro,
444

Id. at 1–4.

445

Id. at 3.

446

See supra note 34.

447

See supra notes 41–42 (outlining four criteria triggering OIRA review under E.O. 12866 and
certification for compliance with E.O. 13132).

448

Sharkey conducted an interview with Kevin Neyland, OIRA Deputy Administrator, on July
14, 2010. Sharkey followed up with Neyland and Michael Fitzpatrick, OIRA Associate
Administrator, by telephone conversations on November 1, 2010, November 9, 2010, and
November 12, 2010. Sharkey also conducted an interview with Preeta Bansal, OMB
General Counsel and Senior Policy Advisor, and Boris Bershteyn, OMB Deputy General
Counsel, on June 30, 2010.

449

See Sharkey, Federalism Accountability, supra note 14, at 2177-78 (―[S]uch theoretical
[OMB] review provides cold comfort in the face of a reality in which agencies evade the
requirements to produce [Federalism Impact Statements.]‖); Mendelson, Chevron, supra
note 14, at 783-86 (describing poor record of agency compliance with E.O. 13132).

450

In a study by U.S. General Accounting Office that looked at a subset of eighty-five health,
safety, or environmental rules that were submitted to OMB for review between July 2001
and June 2002, only one rule was cited in which OMB was ―concerned with EPA‘s
conclusion that th[e] proposed rule did not have federalism implications.‖ U.S. GEN.
ACCOUNTING OFFICE, GAO-03-989, RULEMAKING: OMB‘S ROLE IN REVIEW OF AGENCIES‘
DRAFT RULES AND THE TRANSPARENCY OF THOSE REVIEWS 182 (2003), available at
www.gao.gov/new.items/d03929.pdf. In one other case, OMB changed the language in the
federalism section in a rule‘s preamble, but did not require further agency action. Id. at 139.

87

who worked on federalism issues as assistant branch chief at OIRA in the late 1990s and
early 2000s:
These issues were a lower priority at OIRA than those more central to the
analytical mission of the agency. If OIRA were to be able to exercise
meaningful oversight of federalism issues, the staff would have to be expanded
to include a couple of individuals with expertise in this area.451
In response to the increasing aggressiveness of federal agencies in preempting
state law, several scholars have proposed strengthening OIRA‘s role to directly oversee
federal regulatory policy and better ensure compliance with E.O. 13132.452 The
American Bar Association has adopted a resolution that ―urges the President to improve
agency compliance with Executive Order 13132 by requiring inclusion of an entity
independent of the agency regulatory office with sufficient autonomy, authority, and
resources to conduct an effective review in the rule-making process before a preemptive
rule is adopted.‖453 The accompanying ABA Report explains that ―[s]uch an independent
entity might be OIRA, an office in the Department of Justice, or simply an office in the

451

Email from Stuart Shapiro, Associate Professor and Director of Public Policy Program,
Rutgers University, to Catherine M. Sharkey, Nov. 2, 2010, 10:32 A.M. Sharkey conducted
telephone interviews with Professor Shapiro on May 28, 2010 and October 21, 2010.
Shapiro may understate the extant legal expertise at OIRA, where both the Administrator
(Cass Sunstein) and Associate Administrator (Michael Fitzpatrick) are lawyers. Moreover,
OIRA could take advantage of the legal expertise within OMB‘s General Counsel office, by
having that office review agency preemptive regulations as a matter of course.

According to some scholars, however, OMB sees its primary role as cost reduction, not
regulatory oversight. See, e.g., Nicholas Bagley & Richard L. Revesz, Centralized
Oversight of the Regulatory State, 106 COLUM. L. REV. 1260, 1263-68 (2006) (describing
how OIRA focused on cost reduction at the expense of regulatory coordination).
452

See, e.g., Memorandum from Authors of Advancing the Public Interest through Regulatory
Reform to Michael Fitzpatrick, OIRA Associate Administrator (Mar. 31, 2009) (comments
on the relationship between OIRA and federal agencies), available at
http://www.reginfogov/public/jsp/EO/fedRegReview/advancing_attachment.pdf; Sharkey,
Federalism Accountability, supra note 14, at 2178 & n.209 (citing RICHARD L. REVESZ &
MICHAEL A. LIVERMORE, INST. FOR POLICY INTEGRITY, N.Y.U. SCHOOL OF LAW, FIXING
REGULATORY REVIEW, RECOMMENDATIONS FOR THE NEXT ADMINISTRATION 4-5 (2008))
(describing OIRA review under E.O. 12866 as a potential ―template‖ for expanded review
under E.O. 13132); WILLIAM FUNK ET AL., LIMITING FEDERAL AGENCY PREEMPTION
RECOMMENDATIONS FOR A NEW FEDERALISM EXECUTIVE ORDER 5-6 (Ctr. For Progressive
Reform White Paper #809, 2008) (―President Obama could use the new Federalism
Executive Order to establish an office within OIRA that would have the legal expertise to
review agencies‘ compliance with the Order.‖), available at
http://www.progressivereform.org/articles/ExecOrder_Preemption_809.pdf.

453

ABA H.R. 117, supra note 11.

88

agency proposing the rule if that office has sufficient autonomy, authority, and resources
for effective review.‖454
OIRA, as the central coordination locus for regulatory review, is well positioned
to be the entity charged with a more thorough review of agency proposals to preempt
state law. For certain regulations—those subject to OMB review under E.O. 12866455—
the federalism executive order requires a designated federalism official in each agency to
certify that the order‘s requirements ―have been met in a meaningful and timely manner‖
in developing regulations with federalism implications.456 But OMB is given little to
review;457 it is asked simply for a vote of confidence in the federalism officer‘s
conclusion. If the recommendations in this Report are followed, however, agencies
would have their own internal review of the factual predicates supporting preemption and
their analyses could be reviewed by OIRA. This would go a long way toward enhancing
OIRA‘s level of trust and confidence in the agency‘s submissions.
As an initial matter, OIRA should also include review of the federalism
implications of agency preemptive rules within its checklists under the A-4 circular.458
454

ABA TASK FORCE REPORT, supra note 11, at 8.

455

Certification to OMB is required only for ―significant‖ regulations. See supra notes 41–42.

456

Exec. Order No. 13,132 § 8(a). See also OMB Guidance for E.O. 13132, supra note 32, at 3
(―For any draft final regulation with federalism implications that is submitted for OIRA
review under E.O. 12866, the federalism official must certify that the requirements of E.O.
13132 concerning both the evaluation of federalism policies and consultation have been met
in a meaningful and timely manner.‖).

457

See OMB Guidance for E.O. 13132, supra note 32, at Appendix B (―Recommended Format
for Section 8(a) Certification‖). The recommended certification reads in its entirety: ―I
certify that [agency] complied with the requirements of E.O. 13132 for the attached draft
final regulation, [title, RIN #].‖ Id.

458

See OFFICE OF INFO. & REGULATORY AFFAIRS, CIRCULAR A-4 ON REGULATORY ANALYSIS
(2003), available at http://www.whitehouse.gov/omb/circulars_a004_a-4/. The A-4 circular
―provides the [OMB‘s] guidance to Federal agencies on the development of regulatory
analysis.‖ Id. The A-4 checklist includes a designation for ―effect on state and local
government.‖ But the description implies that it is focused primarily on costs imposed on
state and local government (the focus of UMRA) and not on agency assertions of
preemption. See id. (―Effects on State, Local, and Tribal Governments, Small Business,
Wages and Economic Growth. You need to identity the portions of benefits, costs, and
transfers received by State, local, and tribal governments.‖). Nowhere in the A-4 circular is
there direction to ensure that agencies have met the procedural requirements of the
preemption provisions of E.O. 13132.

Note that the A-4 circular applies only to economically significant rules under § 3(f)(1) of E.O.
12866 (defined as having an annual effect on the economy of at least $100 million), and
would therefore not apply to rules reviewed under other provisions, for example the ―novel
legal/policy‖ review. See supra note 41. According to an empirical study of OMB
regulatory review during the period 1981-2000, 5% percent of the rules OMB reviewed met
the ―economically major/significant‖ criterion (i.e., § 3(f)(1)); the remaining 95% were

89

Moreover, OIRA should consider the feasibility of requiring agency certification of
compliance with the consultation and FIS mandates of E.O. 13132 for all agency
rulemakings that preempt state law (not just those subject to E.O. 12866).459

―otherwise major/significant‖ (i.e., § 3(f)(2)-(4)). See Steven Croley, White House Review of
Agency Rulemaking: An Empirical Investigation, 70 U. CHI. L. REV. 821, 846 (2003)
459

OIRA review under any of the four criteria for E.O. 12866 review (listed in § 3(f), see supra
note 41, should trigger a certification of compliance with E.O. 13132 by the agency per E.O.
13132 § 8(a). But it remains unclear whether every preemptive rulemaking—for which
agencies are required to submit a federalism impact statement to OMB per E.O. § 6 (c)—
would meet the E.O. 12866 § 3(f) criteria.

One possibility would be for OIRA to interpret E.O. 12866 § 3(f)(4) (―[r]aise novel legal or
policy issues‖) to apply categorically to agency preemptive rulemakings and so instruct the
agencies.

90