A turning of the tide for preemption: new developments in preemption law bode well for plaintiffs in products cases.

It's hard to imagine a drier-sounding subject than federal preemption. Yet it s even harder to imagine a doctrine that poses a bigger threat to access to justice in this country. When successful, the federal preemption defense can completely wipe out your clients' rights to obtain compensation for their injuries, regardless of the extent of the defendants' wrongdoing. This makes federal preemption very popular with defendants, who raise it every chance they get.

The preemption defense is particularly widespread in products liability litigation, where it has been asserted in a variety of cases involving products such as automobiles, flammable fabrics, disposable lighters, children's toys, medical devices, and boat engines. Over the past 20 years, preemption has been raised in all of these areas, wiping out tort liability in a number of cases.

Recently, however, help has come from the most useful of sources: the U.S. Supreme Court. The Court's two latest cases in the products area--Sprietsma v. Mercury Marine (1) and Bates v. Dow Agro-Sciences LLC (2)--both yielded sweeping antipreemption rulings, shocking many spectators on the defense side and delighting victims' rights advocates.

Preemption overview

The basics. Federal preemption is rooted in the Supremacy Clause of Article VI of the Constitution, which provides that the laws of the United States are "the supreme law of the land ... any thing in the Constitution or laws of any state to the contrary notwithstanding." In practical terms, this means that Congress, subject to the limits the Constitution imposes on its power, has authority to wipe out--or preempt--any state law that conflicts with federal law.

Generally speaking, Congress may preempt state law in any of three ways. (3) The first is by express preemption. Congress can explicitly state its intention to preempt areas of state law. (4) By the same token, Congress may also explicitly state its intention not to preempt areas of state law by including a "savings clause" expressly limiting a statute's preemptive effect. (5)

The second way is implied conflict preemption. If Congress's intent is not clear from its express language, an intention to preempt state law may be implied if the state law "actually conflicts with the federal law," either because it would be "impossible for a private party to comply with both" (6) or because the state law "stands as an obstacle to the accomplishment and execution of the full purposes of Congress." (7)

Third, under the doctrine of field preemption--which can be either express or implied--Congress may enact legislation that is so comprehensive in scope that it occupies an entire field of regulation and either explicitly or impliedly leaves no room for the states to regulate. (8)

The upshot. Those are the basics. Now why does preemption matter? Because it does not merely limit a victim's right to recovery--it abolishes it. Since preemption is a complete defense to liability involving pure questions of law, when the argument prevails, the case is over and everyone goes home, regardless of the evidence of the defendant's outrageous conduct. Federal preemption can thus wipe out entire areas of liability under state law.

Not only does preemption deprive victims of compensation, but it also threatens the health and safety of every American. When state law liability is wiped out, manufacturers lose incentives to make their products safer than federal regulations require. Federal regulations that trigger preemption are often little help to injured consumers, since regulations tend to lag far behind the best available safety technology--or even fall short of what a jury in a tort suit would deem reasonably necessary in a given case. This is not surprising, since federal agencies are slow to act and may be influenced by the industries they purport to regulate.

The upshot is that the federal government's safety standards often fail to adequately protect consumers from dangerous products. Yet, manufacturers argue that their compliance with minimum federal standards should allow them to avoid liability under state tort law. Too often, courts agree.

The sad irony. The sad irony is that Congress rarely intends federal law to have this kind of effect. The language and history of the consumer protection statutes at issue in most preemption cases invariably reveal that Congress intended to establish minimum safety standards, not to preempt state tort law. (9) That makes perfect sense, because the whole idea behind federal consumer protection laws is to promote health and safety--not to limit manufacturers' liability. Courts often look the other way, though, and conclude that Congress could not reasonably have intended to permit state tort law to coexist with federal regulations. In these cases, the result is the same: The injury victim loses and the manufacturer walks away scot-free.

That's the bad news. The good news is that the U.S. Supreme Court has recently handed down two antipreemption decisions--Sprietsma and Bates--that could help stave off federal preemption in numerous future cases.

Boat safety

Sprietsma helped clarify the limits of both express preemption and implied conflict preemption, holding that a wrongful death claimant's state-law tort claims against the manufacturer of an outboard motorboat with an unguarded propeller are not preempted either by the Federal Boat Safety Act of 1971 (10) or by the U.S. Coast Guard's decision not to issue regulations requiring propeller guards on all boat engines.

Jeanne Sprietsma fell from a recreational boat and was killed by the motor's propeller blades. Her surviving husband sued the engine's manufacturer, charging that the engine was defectively designed because it was not equipped with a propeller guard.

Before the case could even be tried, the trial court, the court of appeals, and a divided Illinois Supreme Court held that because the Coast Guard considered issuing a regulation requiring installation of propeller guards on all boats--and decided not to do so--no injury victim can ever sue any boat engine manufacturer for failing to install a propeller guard. (11) (This was also the view of the three federal courts of appeals that considered the same question. (12)

In its unanimous ruling, the U.S. Supreme Court first rejected the defense's broad argument that the Boat Safety Act expressly preempts all state-law tort claims involving recreational motor boat design. (13) The Court emphasized that the act's "express preemption" clause preempts only state "laws or regulations" that are not identical to federal standards--language that, the Court reasoned, merely encompasses state legislation and administrative standards, not tort claims. (14)

This interpretation, the Court further reasoned, is heavily "buttresse [d]" by the act's savings clause, which provides that a manufacturer's compliance with federal standards "does not relieve a person from liability at common law or under state law." (15) In light of this language, no state law claims are expressly preempted under the Boat Safety Act. (16)

The Court then addressed--and rejected--the manufacturer's argument that Sprietsma's claims were impliedly preempted because they conflict with the Coast Guard's decision not to require propeller guards on all motor boat engines. The Court emphasized that the agency had never decided that propeller guards are unsafe, or that they should never be installed on any boat engine. To the contrary, the Coast Guard's decision not to regulate merely stemmed from concerns about the costs of requiring a propeller-guard retrofit on "millions" of existing boats, as well as the "lack of any 'universally acceptable' propeller guard for 'all modes of boat operation." (17)

Thus, Justice John Paul Stevens wrote, "nothing in [the Coast Guard's] official explanation would be inconsistent with a tort verdict premised on a jury's finding that some type of propeller guard should have been installed on this particular kind of boat equipped with respondent's particular type of motor." (18)

Why does Sprietsma matter? First, it means that propeller-injury victims can finally recover compensation for their injuries. Since 1990, when the Coast Guard decided not to require propeller guards, propeller-injury victims were virtually shut out of the courts. (At the time the Supreme Court granted review in Sprietsma, only one court--the Supreme Court of Texas--had ever recognized propeller-injury victims' right to sue. (19)) Not only were victims deprived of compensation, but the absence of tort liability also left little incentive for boat-engine makers to develop newer and better propeller-guard technology. In the wake of the Supreme Court's ruling, there may be fewer tragic accidents like the one that killed Jeanne Sprietsma.

Sprietsma's lessons, however, extend far beyond the boat safety realm:

Mere regulatory inaction does not preempt. The broadest and most important holding is that regulatory inaction, standing alone, does not exert any preemptive force. The defendant relied heavily on Supreme Court decisions holding that, in some cases, the "failure of ... federal officials affirmatively to exercise their full authority takes on the character of a rifling that no such regulation is appropriate. ..." (20) The defendant seized on this language to argue that the Coast Guard's regulatory inaction preempted all state law claims involving propeller guards.

If the Supreme Court had bought this argument, it would have dramatically broadened the scope of federal preemption to include all sorts of cases where the federal government considers issuing a regulation, but ultimately decides not to, for whatever reason. Thankfully, Sprietsma rejected this alarmingly broad view of preemption, making clear that a decision not to regulate is preemptive only when it is based on a particular federal policy (such as a finding that the device would be unsafe) that would be directly undermined by imposition of tort liability.

Cost/benefit considerations are not preemptive. Sprietsma also clarified that mere cost/benefit considerations do not constitute the sort of federal policy that can preempt state-law tort claims. As noted above, the Coast Guard's decision not to require propeller guards on boat engines was not based on a determination that such guards are unsafe; rather, it reflected the agency's concerns about the technical difficulties of requiring propeller guards on all boat engines and the economic burden such a universal rule would impose on manufacturers. By holding that these sorts of concerns do not possess preemptive force, Sprietsma will undoubtedly provide powerful antipreemption ammunition in other cases where the federal government's decision not to require a particular safety device is grounded in economic, rather than safety-based, considerations.

State-law tort claims matter. Sprietsma also confirmed the special role of the tort system in compensating victims. In reaching its decision on express preemption, the Court emphatically rejected the manufacturer's claim that it would have been illogical for Congress to preempt state statutes and regulations and yet preserve state-law tort claims. To the contrary, the Court ruled, "it would have been perfectly rational for Congress not to preempt common law claims, which--unlike most administrative and legislative regulations--necessarily perform an important remedial role in compensating accident victims." (21)

"Uniformity" is not a justification for wiping out state tort law. Finally, Sprietsma confirmed that an alleged governmental interest in regulatory uniformity does not create a basis for a finding of implied conflict preemption. The boat-engine manufacturer and its amici had strenuously argued that an alleged need for regulatory uniformity in the design of recreational motorboats mandated a finding of federal preemption on implied conflict grounds. In rejecting this argument, Stevens wrote that "the concern for uniformity does not justify the displacement of state common law remedies that compensate accident victims and their families and that serve the act's more prominent objective, emphasized by its title, of promoting boating safety." (22)

Pesticides

And then came Bates, in which the Supreme Court rejected express federal preemption of most pesticide-related tort claims. The eagerly awaited decision--involving the scope of federal preemption under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (23)--held 7-2 that common law design defect, manufacturing defect, negligent testing, and breach-of-express-warranty claims are entirely exempt from express preemption. In so lading, the Court did not even consider whether the claims were subject to implied conflict preemption.

The issue in Bates was whether FIFRA barred 29 Texas peanut farmers from suing herbicide manufacturer Dow Agro-Sciences for crop damage allegedly caused by its product Strongarm. The farmers had purchased the weed killer in spring 2000, the same year the EPA approved the chemical to kill weeds in peanut plantations. Although the herbicide did kill some weeds, the farmers said it also stunted their plants' growth and caused crop productivity to plummet.

The farmers claimed losses of several million dollars. When Strongarm is used in alkaline soil, like that of West Texas, it damages peanut roots, a warning that Dow now includes on the product's label. The farmers sought economic damages based on various common law causes of action (breach of warranty, fraud, defective design and manufacture, and negligent failure to warn) and violations of the Texas Deceptive Trade Practices Act. The district court dismissed all the claims on express preemption grounds, and the Fifth Circuit affirmed. (24) The Court of Appeals based its decision on FIFRA's express-preemption clause, which prohibits states from imposing "any requirements for labeling or packaging in addition to or different from those re quired" by FIFRA. (25) Following the lead of many other courts across the country, the circuit court reasoned that all of the farmers' claims, including those for design and manufacturing defects, were preempted "because success on such claims would necessarily induce Dow to alter its product label." (26)

The Supreme Court reversed, holding that most of the plaintiffs' claims could proceed. The Court ruled first that FIFRA's prohibition of state "requirements for labeling or packaging" does not encompass any claims for defective design, defective manufacture, negligent testing, and breach of express warranty. Such claims, the Court reasoned, "plainly do not qualify as requirements for 'labeling or packaging,'" because "none of these common law rules requires that manufacturers label or package their products in any particular way." (27)

Bates went on to hold that the farmers' remaining claims of negligent failure to warn and fraud might be preempted depending on whether they seek to impose a requirement that is "in addition to or different from" federal law. (28) On this point, the farmers had argued that those claims are not preempted became they merely replicate FIFRA's requirements that a pesticide label not contain "false or misleading" statements or inadequate instructions or warnings.

The Supreme Court held that the claims would not be preempted if they merely seek to impose "parallel requirements" to federal law. (29) It found, however, that it lacked sufficient evidence to determine whether the state fraud and failure-to-warn claims did, in fact, merely replicate federal law, and remanded for further proceedings on that point.

Why does Bates matter? As with Sprietsma, the Bates decision is more than just the sum of its parts. Not only did the Court reach the right result in rejecting federal preemption of most state-law tort claims relating to dangerous pesticides, but it also did so in a way that undoubtedly will prove helpful in future preemption battles:

Return of the presumption against preemption. Bates is the first preemption decision in years to embrace the long-standing presumption against preemption of tort claims. Myriad older Supreme Court decisions articulated a "strong" presumption against preemption of state law, especially in areas of public health and safety. (30) Recently, however, the presumption has scarcely been mentioned at all in the Court's preemption cases, leading some Court-watchers to opine that it had become a dead letter. (31) Bates, however, brings back the presumption with full force, emphasizing that state tort claims are preempted only where "Congress has made such an intention 'clear and manifest.'" (32)

Deference has its limits. Bates also flatly rejected the government's radically broad pro-preemption position, set forth in amicus briefs filed with the Court. During the Clinton administration, the federal government had taken the position that pesticide-related tort claims are not preempted by FIFRA. (33) The Bush administration abandoned this position in 2003, when it submitted an amicus brief to the Court on a certiorari petition in a FIFRA preemption case from Texas (review was denied), (34) and again in Bates, when it filed an amicus brief urging the Court to find express preemption of all state-law claims involving hazardous pesticides. (35)

Bates rejected this politically motivated about-face, slamming the government for failing to offer any "plausible" interpretation of FIFRA's preemption provision. (36) In so doing, the Court made clear that the normal deference afforded the administration's views on preemption (37) does not extend to cases where the government's position is self-serving and implausible.

Believe that Congress means what it says. Bates also teaches that, when it comes to federal preemption, a court's job is to believe that Congress means what it says--period. Bates turned on an interpretation of the statute's express-preemption clause, which, the Court concluded, does not encompass most state law claims. And such clauses, the Court emphasized, are to be construed narrowly, taking into account the presumption against preemption, the history of tort litigation, and Congress's silence with respect to an intent "to deprive injured parties of a long available form of compensation." (38)

Don't be so quick to consider implied preemption. Having found that FIFRA's express preemption clause does not encompass most state law claims, Bates did not ask whether the plaintiffs' claims conflicted with federal regulatory purposes (and thus were impliedly preempted). Instead, it simply found that the claims could proceed. As Justice Clarence Thomas (joined by Justice Antonin Scalia) wrote in a separate opinion, this approach "comports with this Court's increasing reluctance to expand federal statutes beyond their terms through doctrines of implied preemption." (39)

This reluctance, Thomas noted, "reflects that preemption analysis is not 'a freewheeling judicial inquiry into whether a state statute is in tension with federal objectives,' but an inquiry into whether the ordinary meanings of state and federal law conflict." (40) This may signal a shift away from the approach of cases like Geier v. American Honda Motor Co., where a bare 5-4 majority found preemption of "no air bag claims" on an implied-conflict theory that the dissent labeled an "unprecedented extension of the doctrine of preemption." (41)

Tort law does not have the same regulatory effect as state positive law. Bates also laid to rest a specious argument that has caused no end of trouble for plaintiffs battling federal preemption. Defendants often argue that tort claims should be preempted to the same extent as state positive law (such as statutes and regulations) on the ground that an adverse jury verdict in, for example, a design defect case might "induce" a manufacturer to alter its conduct.

The Supreme Court itself has been conflicted on the subject, at times stating that tort claims are just as "regulatory" as state positive law (and thus should be preempted with equal force), (42) and at times stating just the opposite point. (43)

Bates may have resolved this debate once and for all, holding that "an occurrence that merely motivates an optional decision does not qualify as a requirement" within the meaning of FIFRA. (44) The ruling will provide forceful ammunition against manufacturers' arguments that state law claims are just as regulatory as state statutes and regulations, and thus are preempted to the same extent as state positive law.

State law claims that reinforce federal requirements are not preempted. The decision also teaches that state law claims that merely seek to reinforce existing federal requirements are not preempted. The majority emphasized that, under FIFRA, state law claims that relate directly to a product's label (such as a failure-to-warn claim) are preempted only if they seek to impose a labeling requirement that is "in addition to or different from" a federal requirement. (45)

The Court ruled that a failure-to-warn claim that merely seeks to reinforce the federal prohibition against "false or misleading" labels would not be preempted, even though success on such a claim would impose new liability. (46) This holding provides important reinforcement for a prior Supreme Court ruling (in the medical device context) that tort claims that merely "parallel," or seek to reinforce, federal requirements are not preempted by federal law. (47)

The tort system is our friend. Finally, Bates reaffirmed the importance of the tort system in creating a safer world. The decision emphasized "the long history of tort litigation against manufacturers of poisonous substances"--a history that, in the Court's words, "provid[ed] an incentive to manufacturers to use the utmost care in the business of distributing inherently dangerous items." (48)

The Court also emphasized that tort suits, by "aid[ing] in the exposure of new dangers," can serve as a "catalyst" for better government regulation of hazardous products. (49) This reminder of the importance of the tort system--not just for individual victims' rights, but for the safety of the country as a whole--could not have come at a better time.

Although both Sprietsma and Bates are big wins for victims' rights, the fight is not over. There are many battles to be fought and (let us hope) won over the coming years, as the lower courts sort out the lessons of the two rulings in other preemption cases involving different statutes and different products.

Notes

(1.) 537 U.S. 51 (2002).

(2.) 125 S. Ct. 1788 (2005).

(3.) See Cal. Fed. Say. & Loan Ass'n v. Guerra, 479 U.S. 272,280-81 (1987).

(4.) Id. at 280.

(5.) See, e.g., Sprietsma, 537 U.S. 51, 63; Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000).

(6.) Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995) (quoting English v. Gen. Elec. Co., 496 U.S. 72,79 (1990)).

(7.) Id. (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

(8.) See Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372 (2000).

(9.) Both the National Traffic and Motor Vehicle Safety Act of 1966 and the Federal Boat Safety Act of 1971, for example, contain savings clauses expressly preserving common law liability. See 49 U.S.C. [section]30103 (2000) (formerly 15 U.S.C. [section]1397 (k)); 46 U.S.C. [section]4311 (g) (2000).

(10.) 46 U.S.C. [section][section]4301-4311.

(11.) Sprietsma v. Mercury Marine, 757 N.E.2d 75 (Ill. 2001), rev'd, 537 U.S. 51 (2002).

(12.) Lady v. Neal Glaser Marine, Inc., 228 F.3d 598 (5th Cir. 2000); Lewis v. Brunswick Corp., 107 F.3d 1494 (llth Cir. 1997); Carstensen v. Brunswick Corp., 49 F.3d 430 (8th Cir. 1995).

(13.) Sprietsma, 537 U.S. 51, 64.

(14.) Id. at 63.

(15.) See id. (citing 46 U.S.C. [section]4311 (g)).

(16.) Id. at 64.

(17.) Id. at 67.

(18.) Id.

(19.) Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246 (Tex. 1994).

(20.) See, e.g., Ray v. Atl. Richfield Co., 435 U.S. 151,178 (1978) (quoting Bethlehem Steel Co. v. N.Y. State Labor Relations Bd., 330 U.S. 767, 774 (1947)).

(21.) Sprietsma, 537 U.S. 51, 64.

(22.) Id. at 70.

(23.) 7 U.S.C. [sub section]136 et seq. (2000 ed. and Supp. II).

(24.) Dow AgroSciences v. Bates, 332 F.3d 323 (5th Cir. 2003).

(25.) 7 U.S.C. [section]136v (2000).

(26.) Dow, 332 F.3d 323, 333.

(27.) Bates, 125 S. Ct. 1788,1799.

(28.) Id. at 1801.

(29.) Id.

(30.) See, e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (medical devices); CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (1993) (railroad crossings); Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (cigarettes).

(31.) Three products liability cases from the past decade--Sprietsma, 537 U.S. 51; Geier, 529 U.S. 861; and Myrick, 514 U.S. 280--did not even mention the presumption against preemption, although the presumption was fully briefed in each case. In Geier, four dissenting justices noted that the majority's decision, which found implied conflict preemption of tort claims that a car was defective because it lacked a driver's-side air bag, "simply ignores the presumption against preemption." 529 U.S. 861,906 (Stevens, J., dissenting). This result, the dissenters wrote, "is profoundly unwise," because (among other things) the presumption properly "places the power of preemption squarely in the hands of Congress, which is far more suited than the judiciary to strike the appropriate state/federal balance (particularly in areas of traditional state regulation)...." Id. at 907.

(32.) Bates, 125 S. Ct. 1788, 1801.

(33.) In 1999, the EPA submitted a brief in a California pesticide case, arguing that FIFRA's express-preemption clause does not encompass any state law claims. See Appellant's Brief of Amicus Curiae for the United States, Etcheverry v. TRI-AG Serv., Inc., 993 E2d 366 (Cal. 2000) (No. S072524).

(34.) See Appellant's Brief of Amicus Curiae for the United States, Am. Cyanamid Co. v. Geye, 537 U.S. 1017 (2002) (No. 02-367).

(35.) See Appellant's Brief of Amicus Curiae for the United States, Bates v. Dow AgroSciences, 2004 WL 2681684 (U.S. Nov. 24, 2004) (No. 03-388).

(36.) Bates, 125 S. Ct. 1788, 1801.

(37.) See, e.g., Sprietsma, 537 U.S. 51, 67-68 (deferring to United States' position regarding the preemptive effect of federal regulations) ; Geier, 529 U.S. 861,870-72 (same); Medtronic, 518 U.S. 470, 495-97 (same).

(38.) Bates, 125 S. Ct. 1788, 1801 (citation omitted).

(39.) Id. at 1807 (Thomas,J., concurring in part and dissenting in part).

(40.) Id. (quoting Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 111 (1992) (Kennedy, J., concurring)).

(41.) Geier, 529 U.S. 861, 886 (Stevens, J., dissenting).

(42.) In San Diego Bldg. Trades Council v. Garmon (359 U.S. 236, 247 (1959)), for example, the Court wrote that state regulation "can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy." See generally Geier, 529 U.S. 861, 882-83 (discussing schism in Supreme Court jurisprudence on regulatory effect of state tort law).

(43.) In Goodyear Atomic Corp. v. Miller (486 U.S. 174, 185-86 (1988)), for example, the Supreme Court held that "the effects of direct regulation on the operation of federal projects are significantly more intrusive than the incidental regulatory effects of [damages awards] ." See also Cipollone, 505 U.S. 504,518 (noting that "there is no general, inherent conflict between [express] federal preemption of state warning requirements and the continued vitality of state common law damages actions") (plurality); id. at 533-34 (Blackmun, J., concurring in part and dissenting in part); Silkwood v. Kerr-McGee Corp., 464 U.S. 238,256 (1984) (noting "it may be that the award of damages based on the state of negligence or strict liability is regulatory in the sense that a nuclear plant will be threatened with damages liability if it does not conform to state standards").

(44.) Bates, 125 S. Ct. 1788, 1798.

(45.) Id. at 1800.

(46.) Id. at 1801-03.

(47.) See Medtronic, 518 U.S. 470, 495 (unanimous holding that state law actions for damages are not preempted when those state law duties "parallel federal requirements"); accord id. at 507 (Breyer, J., concurring).

(48.) Bates, 125 S. Ct. 1788, 1801-02.

(49.) Id. at 1802.

LESLIE A. BRUECKNER is a staff attorney with Trial Lawyers for Public Justice in Washington, D.C. She was cocounsel in Geier v. American Honda Motor Co. and lead counsel in Sprietsma v. Mercury Marine, and she assisted with an amici brief filed by TLPJ and a host of other public interest groups in Bates v. Dow Agrosciences.