Supreme Court rejects federal preemption in boating case.

In Sprietsma v. Mercury Marine, the U.S. Supreme Court recently held that a federal law requiring national safety standards for recreational boats does not preempt common law tort claims arising out of a manufacturer's failure to install propeller guards on a boat engine. (123 S. Ct. 518 (2002).)

Rex Sprietsma's wife, Jeanne, died after falling off a speedboat and becoming entangled in the motor's propeller. He sued motor manufacturer Mercury Marine for damages in Illinois state court, claiming the motor was unreasonably dangerous because it did not have a propeller guard.

There is no pertinent federal requirement; in 1990, the Coast Guard, which is in charge of safety regulations for pleasure boats, considered and rejected requiring the guards.

The trial court dismissed Sprietsma's complaint, and the court of appeals agreed, concluding that the tort action was preempted by the Federal Boat Safety Act (FBSA) of 1971. The Illinois Supreme Court affirmed on implied preemption grounds.

Sprietsma asked the U.S. Supreme Court to decide whether the FBSA or the Coast Guard decision not to require propeller guards preempted the state lawsuit. The Court also considered whether the potential conflict between diverse state rules and federal interest in a uniform system of regulation impliedly preempts such claims.

In a unanimous opinion by Justice John Paul Stevens, the Court held that the express preemption clause of the FBSA did not preempt the suit, and that the Coast Guard had not intended to preclude claims for damages involving specific products.

"The decision prevents the defendant from unduly extending the federal doctrine of preemption to instances where an agency has simply not acted," said Jeff White, senior counsel for amicus curiae at ATLA, which filed an amicus brief in the case. "The mere fact that the agency decides not to promulgate a regulation is not itself a regulation."

The Court acknowledged the FBSA's stated purpose to encourage greater "uniformity of boating laws and regulations as among the several states and the federal government." But this goal "is not unyielding," Stevens wrote. "[T]he concern with 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."

The FBSA contains an express preemption clause that applies to state and local regulation, which the Court interpreted as "most naturally read as not encompassing common law claims." But a savings clause states that compliance "does not relieve a person from liability at common law or under state law."

Compensation is the focus of the clause, said the Court: "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."

In making this point, "the Supreme Court has finally adopted the argument ATLA has been making," said White, "that there's a distinction between a judicial cause of action and an administrative action."

The Court rejected Mercury Marine's contention that state common law claims are implicitly preempted by the Coast Guard's decision not to regulate propeller guards.

"It is quite wrong to view that decision as the functional equivalent of a regulation prohibiting all states and their political subdivisions from adopting such a regulation," Stevens wrote. The Court noted that the agency's decision was consistent with an intent to preserve state regulatory authority until specific federal standards are created.

While the Coast Guard's apparent focus was on the lack of any "universally acceptable" propeller guard, "nothing in its 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," wrote Stevens. The Coast Guard's decision not to adopt a requirement "does not convey an `authoritative' message of a federal policy against propeller guards."