Opinion ID: 202224
Heading Depth: 3
Heading Rank: 2

Heading: FAAAA Preemption of the Tobacco Delivery Law

Text: 44 We turn now to whether the challenged provisions of the Tobacco Delivery Law are preempted because they are related to carrier services. The parties do not contest that carriers provide the service of delivering packages on an express or time-guaranteed basis. See N.H. Motor Transp. Ass'n, 377 F.Supp.2d at 209 (quoting UPS I, 318 F.3d at 336). But they disagree over whether the challenged provisions are related to this service. 45 We have previously interpreted the phrase related to as used in the FAAAA: 46 The phrase related to has a broad meaning in ordinary usage: to stand in some relation; to have bearing or concern; to pertain; refer; to bring in association or connection with. When used in a preemption provision, such as [in the FAAAA], it has a similarly broad reach. State laws and regulations having a connection with or reference to a ... carrier's ... services are preempted under the [FAAAA]. A sufficient nexus exists if the law expressly references the ... carriers' ... services or has a forbidden significant effect on the same. 47 UPS I, 318 F.3d at 335. We therefore consider whether the district court correctly concluded that the challenged provisions of the Tobacco Delivery Law either expressly reference carrier services or have a forbidden significant effect on UPS' services. 48 We begin with § 1555-C(3)(C). As set forth above, this statute requires tobacco retailers seeking to ship tobacco products directly to Maine consumers to use only carriers that deliver the package directly to the addressee/purchaser, require a signature from the addressee/purchaser, and conduct age verification if the addressee/purchaser is under 27 years of age. Another section penalizes retailers that use carriers that do not provide these services. 22 M.R.S.A. §§ 1555-C(3)(E) & (F). 49 Section 1555-C(3)(C) expressly references a carrier's service of providing the timely delivery of packages. The statute prescribes the method by which a carrier operating in Maine must deliver packages containing tobacco products in a way that would affect the ability of the carrier to meet package-delivery deadlines. Delays in searching for the purchaser, making multiple delivery attempts if the purchaser cannot be located, obtaining the purchaser's signature, and verifying the purchaser's age all could affect timely deliveries. See UPS I, 318 F.3d at 336 (finding that the FAAAA preempted a state law that affect[ed] the timeliness and effectiveness of a carrier's service). 50 The Attorney General responds that there is no FAAAA preemption because § 1555-C(3)(C) regulates retailers of tobacco products and not carriers. He also argues that we should decline to find preemption because any carrier can avoid the requirements of § 1555-C(3)(C) by declining to provide tobacco-product deliveries to Maine consumers. 51 The Attorney General's first argument amounts to a claim that there can be no FAAAA preemption unless the state law imposes a direct regulation on carriers. This argument cannot be squared with the FAAAA's text because it reads the broad phrase related to out of the statute and replaces it with the narrower term regulates. See Morales, 504 U.S. at 385, 112 S.Ct. 2031 (rejecting an argument that would have read relating to out of the Airline Deregulation Act and replaced it with regulate); UPS I, 318 F.3d at 335 (rejecting an argument for narrowing scope of the FAAAA that would read `the related to language' out of the statute). 52 Moreover, limiting preemption to direct regulation of carriers is inconsistent with the FAAAA's purpose to bar states from policing carrier operations. See Am. Airlines, 513 U.S. at 228, 115 S.Ct. 817. A state may use its coercive power to cause carriers to conform to state-imposed rules in at least two ways: it may directly regulate carriers or it may limit retailers to hiring only those carriers that comply with the state-imposed mandates. Either way the state is employing its coercive power to police the method by which carriers provide services in the state. In short, the Attorney General's argument would lead to the untenable result of permitting states to regulate carrier services indirectly by regulating shippers. Cf. Abington Sch. Dist. v. Schempp, 374 U.S. 203, 230, 83 S.Ct. 1560, 10 L.Ed.2d 844 (1963) (declining to adopt an interpretation that would permit states to do indirectly what they cannot do directly). 53 The Attorney General's alternative argument — that there is no preemption because a carrier can forgo certain tobacco-product deliveries in Maine — also fails. Declining to find preemption simply because a carrier can limit its in-state business to avoid a particular requirement would undermine the FAAAA's goal of creating an environment in which [s]ervice options will be dictated by the marketplace, and not by state regulatory regimes. H.R. Conf. Rep. 103-677 at 88, reprinted in 1994 U.S.C.C.A.N. at 1760. The district court correctly concluded that the FAAAA preempts § 1555-C(3)(C). 54 We turn finally to whether the FAAAA preempts § 1555-D. In considering this question, we are mindful that courts should not nullify more of a legislature's work than is necessary, for ... a ruling of unconstitutionality frustrates the intent of the elected representative of the people. Ayotte v. Planned Parenthood of N. New England, ___ U.S. ___, ___, 126 S.Ct. 961, 967, 163 L.Ed.2d 812 (2006) (internal citation omitted). The first part of § 1555-D makes it unlawful for any person knowingly to deliver to Maine consumers certain contraband tobacco products — i.e., those tobacco products purchased by consumers from unlicensed retailers. The second part of § 1555-D charges a carrier with knowledge that a package contains tobacco products if the package is so marked or if the shipper appears on the Attorney General's list of unlicensed tobacco retailers. 55 Under Maine law, tobacco products purchased by a consumer from an unlicensed retailer are contraband. See 22 M.R.S.A. § 1555-C(7). The first part of § 1555-D is a corollary to § 1555-C(7) in that it makes the knowing delivery of contraband tobacco products illegal. Thus, the question we face is whether a generally applicable law barring any person from knowingly delivering contraband tobacco is preempted by the FAAAA insofar as the law pertains to carriers. 56 While the FAAAA's preemptive effect is broad, see UPS I, 318 F.3d at 335, it is not unlimited, see Mendonca, 152 F.3d at 1188. State laws that only have a tenuous, remote, or peripheral relation to services are beyond the FAAAA's reach. Morales, 504 U.S. at 390, 112 S.Ct. 2031; Mendonca, 152 F.3d at 1188. In describing this limitation on preemption in the Airline Deregulation Act context, the Supreme Court explained that its broad interpretation of the statute's preemption provision did not place it on a road that leads to pre-emption of gambling and prostitution as applied to airlines. Morales, 504 U.S. at 390, 112 S.Ct. 2031. We understand the Morales Court to have meant that states may continue to enjoy the power to ban primary conduct, and that the ADA and FAAAA do not preempt laws applying these prohibitions to airlines and carriers. 57 Accordingly, Morales suggests that § 1555-D's ban on the knowing delivery of contraband tobacco products is not preempted by the FAAAA — even only insofar as it pertains to carrier services. Section 1555-D requires that carriers do not act as knowing accomplices in the illegal sale of tobacco products. It does not, however, require that carriers modify their delivery methods other than by declining to transport a product that Maine has legitimately banned. We think that this effect on services is too tenuous to warrant preemption. Mendonca, 152 F.3d at 1189 (stating that a state law is too tenuous to be preempted by the FAAAA where the law does not frustrate the FAAAA's deregulatory purposes). 58 If the rule were otherwise, states would be unable to bar a primary method by which contraband crosses state lines. We do not believe that this was Congress' intent in enacting the FAAAA. Other courts applying the FAAAA to prohibitions on the delivery of contraband tobacco have reached similar conclusions. See Robertson v. Liquor Control Bd., 102 Wash.App. 848, 10 P.3d 1079, 1084-85 (2000) (concluding that the FAAAA did not preempt a state law banning the transport of contraband cigarettes because otherwise a motor carrier would be exempt from forfeiture for transporting a methamphetamine lab or poached game); see also N.Y. State Motor Truck Ass'n v. Pataki, No. 03-CV-2386 (GBD), 2004 WL 2937803, at  (W.D.N.Y. Aug.19, 2003) (concluding that the FAAAA did not preempt a state law making it unlawful for carriers to deliver cigarettes directly to New York consumers because the mere fact that a statute concerns the transportation of a particular cargo by ... carriers ... does not render it ... unconstitutional on preemption grounds); Ward v. New York, 291 F.Supp.2d 188, 210-211 (S.D.N.Y.2004) (similar). 13 59 But, while Maine may ban a carrier from knowingly transporting contraband tobacco products, it may not dictate the procedures that a carrier should employ to locate these products in its delivery chain. See UPS I, 318 F.3d at 336 (concluding that the FAAAA preempted a Puerto Rico revenue-collection scheme that mandated procedures that carriers had to follow to deliver certain packages). The second part of § 1555-D violates this principle. 60 As noted, § 1555-D imposes upon a carrier constructive knowledge that it has delivered a tobacco product if the package containing the product is marked as containing tobacco or if the seller's name appears on the Attorney General's list. As UPS' experience demonstrates, a carrier seeking to comply with § 1555-D must specially inspect every package destined for delivery in Maine. Once the carrier has finished this inspection, it must segregate the packages that contain tobacco and research whether the addressee is a Maine-licensed retailer or distributor who can receive the package. While the second part of § 1555-D does not expressly reference carrier services, it impermissibly affect[s] ... services ... because it requir[es] UPS to identify the contents of the packages (a deviation from standard procedures used in deliveries elsewhere in the United States). . . . UPS II, 385 F.2d at 14 (parenthesis in original). UPS can only provide timely package delivery if it follows uniform procedures that allow for an orderly flow of packages. UPS I, 318 F.3d at 336. Because the second part of § 1555-D has the effect of forcing UPS to change its uniform package-processing procedures, the district court correctly found it to be preempted. 14 61 In reaching this conclusion, we recognize that there is a potential tension between saying that, on the one hand, Maine is free to punish the knowing delivery of material that it has classified as contraband, while, on the other hand, ruling that it may not dictate or interfere with a carrier's delivery procedures. What we are saying here, however, is that Maine cannot use the mechanisms outlined in the statute to impute knowledge based on a failure to read labels or consult lists — an imputation which would amount to prescribing how carriers must operate. 62 If, however, Maine could prove that a carrier employee had actual knowledge that a package being delivered was contraband tobacco, then it might have a colorable enforcement case — although such circumstances, as a practical matter, may be difficult to prove. True, the related to language could stretch to such a case but it could also stretch to the knowing delivery of hard drugs — and Congress cannot have intended such a result.