Opinion ID: 734105
Heading Depth: 3
Heading Rank: 1

Heading: The Law of Preemption

Text: 14 Preemption of state law occurs in three situations: first, field preemption, which occurs when Congress so thoroughly occupies a legislative field that it is reasonable to assume that Congress left no room for the states to supplement it, see Cipollone, 505 U.S. at 516, 112 S.Ct. at 2617; second, express preemption, which occurs when Congress explicitly states its intent to preempt state law, see Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309-10, 51 L.Ed.2d 604 (1977); and third, conflict preemption, which occurs when compliance with state law is rendered impossible, see Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 368, 106 S.Ct. 1890, 1898, 90 L.Ed.2d 369 (1986), or when state law stands as an obstacle to the accomplishment of Congress's goals. Id. at 368-69, 106 S.Ct. at 1898-99. 15 In this case, as counsel for the RTC agreed in oral argument, it is clear that, prior to the entry of the RTC as receiver, the agreement between Waterview and HomeFed giving Waterview an exclusive purchase option created a valid legal right under state law. Thus, the only question here is whether this state interest was somehow preempted once the RTC took over HomeFed as conservator or receiver. This question is not difficult, because there surely is no preemption in this case. 16 FIRREA does not preempt the field of state contract law, so field preemption does not extinguish Waterview's pre-receivership contract right. Furthermore, although FIRREA contains an express preemption provision, which provides that when an agency is acting as conservator or receiver, it shall not be subject to the direction or supervision of ... any State in the exercise of [its] rights, powers, and privileges, 12 U.S.C. § 1821(c)(2)(C) (1994), recognizing the continued validity of lawful pre-receivership contracts does not subject the RTC to the direction or supervision of the state. It merely uses state law to define the nature of the asset held by the failed institution and passed on to the RTC. Thus, the express preemption provision does not indicate a congressional intent to preempt pre-receivership contracts. Finally, for the reasons set forth below, in part 2., we find no conflict preemption. 17