Opinion ID: 499513
Heading Depth: 2
Heading Rank: 2

Heading: Regulatory Preemption

Text: 32 The presumption against preemption is particularly strong when Congress is silent and a federal agency that exercises a detailed and constant supervisory role in the area is also silent. The courts consider regulatory silence to be a more conclusive indication than congressional silence that preemption was not intended. See Hillsborough County v. Automated Medical Laboratories, 471 U.S. 707, 717-18, 721, 105 S.Ct. 2371, 2377-78, 2379, 85 L.Ed.2d 714 (1985). Given the regulations in question and the extra showing needed to preempt by regulation, we conclude that there is indeed no preemption here.
33 When IMI appealed to the Size Appeals Board the determination that Tombs & Sons was a small business, the regulations then in effect provided for proceedings essentially fact-finding and non-adversarial in nature. Hearings, if provided, were characterized as investigative in nature and not adversary. They were to be conducted informally. 13 C.F.R. Sec. 121.3-6(a), (e)(2)(ii) (1983). These regulations have since been revised to provide for a quasi-judicial hearing process. The purpose of the revision was to avoid scheduling difficulties and delays previously associated with resolution of such appeals by the Size Appeals Board (Board) and to institute procedures that would better satisfy the requirements of due process by providing a more fair and efficient means for obtaining complete and reliable evidence.... 48 Fed.Reg. 55832 (1983). Nowhere in the regulations or in the comments to those regulations is there a statement on preemption. 34 Thus, the process provided at the time of IMI's appeal was administrative rather than quasi-judicial, and the reason given for the later revision does not speak to the availability of state common law remedies. In short, the SBA has been no more explicit on the issue of preemption than has Congress.
35 Although federal regulations have the same preemptive effect as federal statutes, Fidelity Federal Savings & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982), regulatory preemption is evaluated under a different standard than that applicable to statutory preemption. Regulations without explicit language advancing preemption are less likely than similarly silent statutes to be presumed preemptive. A comprehensive statute may be presumed to occupy the field and preempt state law; however, regulations are specifically intended to flesh out the details necessary to implement Congress' policy in a particular field. Hence, courts must be more cautious in inferring an intent to preempt from the comprehensive nature of regulations. In addition, because agencies exercise their oversight functions on a more routine basis than Congress, they are more likely to be aware of the effect of their regulations than Congress is to be aware of the effect of its laws. Furthermore, agencies are better able to address the details of implementing statutes, and can change their regulations more easily than Congress can alter its statutes. Hillsborough County v. Automated Medical Laboratories, 471 U.S. 707, 718, 105 S.Ct. 2371, 2377-78, 85 L.Ed.2d 714 (1985). 36 The questions to be answered when preemption by regulation is the issue are, first, whether the agency intended to preempt state law, and second, if so and if that decision is a reasonable one, whether Congress intended to give the agency the authority to preempt state law. Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699-700, 104 S.Ct. 2694, 2700-01, 81 L.Ed.2d 580 (1984); Arkansas Elec. Coop. Corp. v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375, 389, 103 S.Ct. 1905, 1915, 76 L.Ed.2d 1 (1983); Fidelity Federal, 458 U.S. at 154, 102 S.Ct. at 3023; State Corp. Comm'n v. Federal Communications Comm'n, 787 F.2d 1421, 1425 (10th Cir.1986). It is not necessary to address the second question here, because it is clear that the SBA has not attempted to preempt state law. 37 The language and results of cases in this area are consistent with the conclusion that unless an agency has explicitly stated an intent to preempt state law, there is a presumption that no such intent exists. The language in the cases stresses the level of detail at which agencies regulate and the relative ease of declaring regulations preemptive, as compared to legislation. Hillsborough County treats the question most eloquently. 38 We are even more reluctant to infer pre-emption from the comprehensiveness of regulations than from the comprehensiveness of statutes. As a result of their specialized functions, agencies normally deal with problems in far more detail than does Congress. To infer pre-emption whenever an agency deals with a problem comprehensively is virtually tantamount to saying that whenever a federal agency decides to step into a field, its regulations will be exclusive. Such a rule, of course, would be inconsistent with the federal-state balance embodied in our Supremacy Clause jurisprudence.... 39 Moreover, because agencies normally address problems in a detailed manner and can speak through a variety of means, including regulations, preambles, interpretive statements, and responses to comments, we can expect that they will make their intentions clear if they intend for their regulations to be exclusive. Thus, if an agency does not speak to the question of pre-emption, we will pause before saying that the mere volume and complexity of its regulations indicate that the agency did in fact intend to preempt.... 40 ... 41 Finally, the FDA possesses the authority to promulgate regulations pre-empting local legislation that imperils the supply of plasma and can do so with relative ease.... Moreover, the agency can be expected to monitor, on a continuing basis, the effects on the federal program of local requirements. Thus, since the agency has not suggested that the county ordinances interfere with federal goals, we are reluctant in the absence of strong evidence to find a threat to the federal goal of ensuring sufficient plasma. 42 471 U.S. at 717-18, 721, 105 S.Ct. at 2377, 2379. 43 To the same effect are R.J. Reynolds Tobacco Co. v. Durham County, --- U.S. ----, 107 S.Ct. 499, 511-12, 93 L.Ed.2d 449 (1986) (Although the regulations are not themselves controlling on the pre-emption issue ... where ... Congress has entrusted an agency with the task of promulgating regulations to carry out the purpose of a statute, ... as part of pre-emption analysis we must consider whether the regulations evidence a desire to occupy the field completely.) and California Coastal Comm'n v. Granite Rock Co., --- U.S. ----, 107 S.Ct. 1419, 1426, 94 L.Ed.2d 577 (1987) (If ... it is the federal intent that Granite Rock conduct its mining unhindered by any state environmental regulation, one would expect to find the expression of this intent in these Forest Service regulations.... [I]t is appropriate to expect an administrative regulation to declare any intention to pre-empt state law with some specificity....). 44 As far as results are concerned, neither the Supreme Court nor this Circuit has found preemption by federal regulation since Fidelity Federal unless the agency had made an explicit statement. See Granite Rock, --- U.S. ----, 107 S.Ct. 1419, 94 L.Ed.2d 577; R.J. Reynolds, --- U.S. ----, 107 S.Ct. 499, 93 L.Ed. 449; Hillsborough County, 471 U.S. 707, 105 S.Ct. 2371, 85 L.Ed.2d 714; Arkansas Elec. Coop. Corp., 461 U.S. 375, 103 S.Ct. 1905, 76 L.Ed.2d 1; Guschke v. City of Oklahoma City, 763 F.2d 379 (10th Cir.1985). 9 A number of other circuits have also looked to the absence of an explicit statement by an agency to find no preemption. See In re Kennedy, 785 F.2d 1553, 1556 (11th Cir.1986); Tousley v. North American Van Lines, 752 F.2d 96, 102 (4th Cir.1985); KVUE, Inc. v. Austin Broadcasting Corp., 709 F.2d 922, 933-34 (5th Cir.1983), aff'd, 465 U.S. 1092, 104 S.Ct. 1580, 80 L.Ed.2d 114 (1984); Chicago Title Ins. Co. v. Sherred Village Assocs., 708 F.2d 804, 808 (1st Cir.1983). 45 Conversely, preemption has invariably been found where the agency has made an explicit statement and acted within its authority. See Capitol Cities Cable, 467 U.S. at 701, 104 S.Ct. at 2701; State Corp. Comm'n, 787 F.2d at 1425; see also Ohio Mfrs. Ass'n v. City of Akron, 801 F.2d 824, 832 (6th Cir.1986), cert. denied and appeal dismissed, --- U.S. ----, 108 S.Ct. 44, 98 L.Ed.2d 9 (1987); United Steelworkers of America v. Auchter, 763 F.2d 728, 735-36 (3d Cir.1985); New York State Comm'n on Cable Television v. Federal Communications Comm'n, 749 F.2d 804, 812 (D.C.Cir.1984); KVUE, Inc., 709 F.2d at 934. 46 The SBA's silence on preemption of state remedies is thus strong, although not conclusive, evidence that no preemption is intended. The nature of the size appeals process the SBA has established is further evidence. As described above, the process was deliberately non-judicial at the time of IMI's appeal and was revised for reasons unconnected to preemption. Furthermore, the appeals process is not a remedy in the traditional sense. There is no guarantee that the complaining bidder will be awarded the contract at issue even if the SBA finds that the winning bidder does not meet the size standards. 10 Moreover, if the contract has already been awarded, the winning bidder may suffer no penalty with respect to that contract. 11 It is merely prohibited from bidding on future contracts until it is recertified as a small business.