Opinion ID: 202224
Heading Depth: 3
Heading Rank: 1

Heading: Applicability of the FAAAA to a State's Police-Power Enactments

Text: 26 A fundamental tenet of our federalist system is that constitutionally enacted federal law is supreme to state law. See U.S. Const. Art. VI. cl. 2. As a result, federal law sometimes preempts state law either expressly or by implication. See Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992). Express preemption occurs when Congress has unmistakably . . . ordained that its enactments alone are to regulate a subject and state laws regulating that subject must fall. Mass. Ass'n of Health Maintenance Organizations v. Ruthardt, 194 F.3d 176, 179 (1st Cir.1999) (citation omitted). In every preemption case, the purpose of Congress is the ultimate touchstone. Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). The primary focus is on the plain wording of the statute because the text contains the best evidence of Congress' pre-emptive intent. Sprietsma v. Mercury Marine, 537 U.S. 51, 62, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002). But [a]lso relevant is the structure and purpose of the statute as a whole as revealed ... through the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers and the law. Medtronic, 518 U.S. at 486, 116 S.Ct. 2240. 10 27 We begin with the text. As mentioned above, the FAAAA prohibits states from enacting laws related to a price, route, or service of a carrier. 49 U.S.C. §§ 14501(c) & 41713(b)(4)(A). This language was patterned after the preemption provision of the Airline Deregulation Act of 1978. See H.R. Conf. Rep. 103-677 at 85, reprinted in 1994 U.S.C.C.A.N. 1757, 1759; Mendonca, 152 F.3d at 1184; Desardouin v. United Parcel Serv., Inc., 285 F.Supp.2d 153, 162 (D.Conn.2003). Therefore, in addition to cases interpreting the FAAAA, we look to cases interpreting the Airline Deregulation Act. UPS I, 318 F.3d at 335-36; Mastercraft Interiors, Ltd. v. ABF Freight Sys., Inc., 284 F.Supp.2d 284, 287 (D.Md.2003). 28 The seminal case is Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992). Like the FAAAA, the version of the Airline Deregulation Act considered in Morales preempted state laws relating to rates, routes or services of any air carrier. 11 The Court identified relating to as the key phrase in determining the breadth of the preemption provision and concluded that the words ... express a broad pre-emptive purpose. Id. at 383, 112 S.Ct. 2031. It relied on several cases in which the Court had interpreted a similarly-worded provision of the Employment Retirement Security Act of 1974 (ERISA) preempting all state laws that relate to an employee benefit plan. Id. at 384, 112 S.Ct. 2031. The Morales Court emphasized that this language had an expansive sweep and that it was conspicuous for its breadth. Id. In light of Congress' use of similarly broad language, the Court concluded that Congress intended the Airline Deregulation Act to preempt any state law that has a connection with or reference to airline rates, routes, or services. Id. 29 The FAAAA's drafters were familiar with Morales and approved of its reasoning. The Conference Committee Report explains that the conferees [did] not intend to alter the broad preemption interpretation adopted by the United States Supreme Court in Morales ... H.R. Conf. Rep. 103-677 at 83, reprinted in 1994 U.S.C.C.A.N. at 1755. The sweep of the FAAAA's text and the drafters' expressed intent to use Morales as a roadmap are strong evidence that the FAAAA was not intended to preempt only a narrow class of economic regulations while excluding the many laws enacted by the states under their police powers. If Congress had such a limited purpose in mind, it likely would have employed narrower language in fashioning the FAAAA preemption provisions. Cf. Botz v. Omni Air Int'l, 286 F.3d 488, 493-94 (8th Cir. 2002) (Although Congress could easily have selected more restrictive terminology to describe the type of . . . enactment the [Airline Deregulation Act] pre-empts, the provision as written is without language that would produce a more limited pre-emptive effect.). 30 The Attorney General argues that we should disregard Morales because, post- Morales, the Supreme Court has narrowed its understanding of ERISA's relat[ing] to language. We previously rejected this identical argument: 31 The Secretary argues that the broad preemption standard adopted in Morales has been overruled by a number of Supreme Court cases narrowing the preemptive effect of [ERISA]. While the Morales Court undoubtedly took its interpretive cues from the ERISA preemption jurisprudence then in existence, it does not follow that any change in the ERISA law necessitates a parallel change in the law affecting ... carriers. As Judge Easterbrook has put it: [I]f developments in pension law have under-cut holdings in air-transportation law, it is for the Supreme Court itself to make the adjustments. Our marching orders are clear: follow decisions until the Supreme Court overrules them. 32 UPS I, 318 F.3d at 335 n. 19 (quoting United Airlines, Inc. v. Mesa Airlines, Inc., 219 F.3d 605, 608 (7th Cir.2000)). Absent extraordinary circumstances not present here, we are not at liberty to disregard this ruling. See United States v. Wogan, 938 F.2d 1446, 1449 (1st Cir.1991) (We have held, time and again, that in a multi-panel circuit, prior panel decisions are binding upon newly constituted panels in the absence of supervening authority sufficient to warrant disregard of established precedent.). 33 We look also to the FAAAA's structure and legislative history. The FAAAA includes a series of exceptions to the general preemption rule. The excepted areas are: 34 the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization. 35 49 U.S.C. §§ 14501(c)(2) & 41713(b)(4)(B)(i). The Attorney General acknowledges that the challenged provisions of the Tobacco Delivery Law do not fall within any of these exceptions. He contends, however, that these statutory exceptions suggest broader congressional purpose to permit states to regulate carriers to protect citizen health and safety. The Attorney General points to a passage from the FAAAA's legislative history indicating that the enumerated exceptions were not intended to be all inclusive, H.R. Conf. Rep. 103-677 at 84, reprinted in 1994 U.S.C.C.A.N. at 1756, to argue that we may establish an additional exception to FAAAA preemption for laws enacted pursuant to a state's police power to protect the health and welfare of its citizens. 36 We have cautioned that an overly broad interpretation of the FAAAA exceptions would swallow the rule of preemption. United Parcel Serv., Inc. v. Flores-Galarza, 385 F.3d 9, 14 (1st Cir.2004) ( UPS II ). An exclusion from preemption for police-power enactments would surely swallow the rule of preemption, as most state laws are enacted pursuant to this authority. Id. The exceptions preserving the states' authority to regulate motor vehicles do not support the Attorney General's argument. See id. (rejecting an argument that the FAAAA preemption exceptions indicate a congressional intent to preserve state authority over safety issues generally). 37 While the statute's structure does not support the Attorney General's police-power argument, there is some support in the legislative history for his view that the FAAAA preempts only state economic regulation. The Conference Committee Report observed that [s]tate economic regulation of motor carriers ... is a huge problem for national and regional carriers attempting to conduct a standard way of doing business. H.R. Conf. Rep. No. 103-677 at 85, reprinted in 1994 U.S.C.C.A.N. at 1757. The conferees identified typical forms of harmful regulation to include entry controls, tariff filing, price regulation, and regulation of the types of commodities carried. Id. at 1758. This history led the Supreme Court to remark that the problem to which the [FAAAA] congressional conferees attended was state economic regulation. Columbus v. Ours Garage & Wrecker Serv., 536 U.S. 424, 440, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002). 38 This history, however, does not indicate that preempting economic regulation was the FAAAA's only purpose. And, in any event, the legislative history cannot trump the statute's text. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (declining to adopt a limited interpretation of a preemption provision suggested by legislative history because the language of the [cigarette labeling] Act plainly reaches further); Morales, 504 U.S. at 385 n. 2, 112 S.Ct. 2031 (The legislative history need not confirm the details of changes in the law effected by statutory language before we will interpret that language according to its natural meaning.). Congress often acts to address a specific problem but ultimately settles on a broader remedy. See Penn. Dep't of Corr. v. Yeskey, 524 U.S. 206, 213, 118 S.Ct. 1952, 141 L.Ed.2d 215 (1998) ([T]he fact that a statute can be applied in situations not expressly anticipated by Congress does not demonstrate ambiguity. It demonstrates breadth.). 39 In addition, the legislative history reveals a second goal for FAAAA preemption which is inconsistent with the Attorney's General argument: to create a completely level playing field between air carriers ... on the one hand and motor carriers on the other. H.R. Conf. Rep. 103-677 at 85, reprinted in 1994 U.S.C.C.A.N. at 1757. In other words, the conferees intended the scope of FAAAA and Airline Deregulation Act preemption to be coterminous. See Ace Auto Body & Towing Ltd. v. City of New York, 171 F.3d 765, 772 (2d Cir.1999); Mendonca, 152 F.3d at 1187. 40 In the Airline Deregulation Act context, the Supreme Court has focused on the effect that a state law has on carrier operations, not on the state's purpose for enacting the law. In Morales, the Court found that the Airline Deregulation Act preempted a directive promulgated by several state attorneys general informing airlines that certain advertising practices would be considered to violate state consumer-protection laws. 504 U.S. at 379, 112 S.Ct. 2031. And, in American Airlines, Inc. v. Wolens, 513 U.S. 219, 227-28, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995), the Court held that the Airline Deregulation Act preempted a cause of action under the Illinois Consumer Fraud Act concerning the redemption of frequent-flier miles. In both cases, the Court's preemption analysis centered on the impact that the challenged state laws had on airline services and rates and not on the fact that the preempted laws were enacted pursuant to the states' police power to combat consumer fraud. See Fla. Lime & Avocado Growers v. Paul, 373 U.S. 132, 150, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963) (describing the traditional state authority to pass laws to combat consumer fraud). The Court reached these conclusions over dissents by Justice Stevens arguing (similarly to the Attorney General here) that the state laws at issue should not be preempted because there was insufficient evidence of congressional intent to preempt state police-power enactments. See Am. Airlines, 513 U.S. at 235-31, 115 S.Ct. 817 (Steven, J. dissenting in part); Morales, 504 U.S. at 419-27, 112 S.Ct. 2031 (Stevens, J., dissenting). 41 Morales and American Airlines thus teach that, under the Airline Deregulation Act, the focus should be on the effect that the state law has on airline operations. Accepting the Attorney General's argument would shift the analysis under the FAAAA away from that state law's effect and towards the state's purpose for enacting the law. A purpose-related limitation on FAAAA preemption would thus inevitably create a gap between the scope of FAAAA and Airline Deregulation Act preemption — a gap which the FAAAA drafters sought to avoid. 42 In the end, the Attorney General's argument founders because it cannot be reconciled with the FAAAA's text. The Act's drafters chose to express the preemptive scope of the FAAAA in words that they understood to be exceedingly broad. In the preemption context, we are to give effect to the ordinary meaning of a congressional enactment unless there is good reason to believe that Congress intended the language to have some more restrictive meaning. Cipollone, 505 U.S. at 521, 112 S.Ct. 2608. We do not find a sufficiently compelling basis in either the structure or history of the FAAAA to interpret the Act contrary to its deliberately expansive text. Morales, 504 U.S. at 384, 112 S.Ct. 2031. We therefore conclude that the FAAAA preempts state police-power enactments to the extent that they are related to a carrier's prices, routes, or services. 12 43