Tuesday, September 24, 2013
The en banc Sixth Circuit divided sharply today over whether Michigan workers could sue their employer, claims manager, and employer's doctor under federal civil RICO for engaging in a fraudulent scheme involving the mail to deny the workers state workers' compensation benefits.
The case, Jackson v. Sedgwick Claims Management Services, Inc., arose when employees of Coca-Cola applied for, and were denied, workers' compensation benefits under Michigan law. The employees sued Coca-Cola, Coke's claims management service, and a cooperating doctor under federal civil RICO for colluding to deny them their benefits. The defendants moved to dismiss, arguing that the claim wasn't cognizable.
The en banc Sixth Circuit agreed. The court held that the plaintiffs failed to allege that they were "injured in [their] business or property" as required by RICO for civil damages.
But then the court went on to say that this conclusion "is confirmed by" the clear-statement principle in Gregory v. Ashcroft. The majority said that under the clear-statement principle Congress must make clear when it intends federal law to displace state law in an area traditionally regulated by the states. Here, the majority held that RICO doesn't have a sufficiently clear statement of intent to displace state workers' compensation law, and so the clear-statement principle confirms the court's conclusion that the plaintiffs can't use federal civil RICO to attack the state workers' compensation scheme.
Judge Moore dissented, joined by four other judges. Judge Moore argued that "the majority makes the erroneous assumption that the clear-statement rule would even apply in this context." She argued that the majority's approach is inconsistent with the Supreme Court's clear instruction to read RICO broadly.
Wednesday, August 28, 2013
Judge Thomas Durkin (N.D. Ill.) ruled last week in Federal Housing Finance Agency v. City of Chicago that a Chicago ordinance that requires mortgagees of vacant buildings in the city to register with the city, pay a registration fee, and maintain the building under certain standards cannot apply to the FHFA or to Fannie Mae or Freddie Mac. The court held that the Chicago ordinance was preempted by federal law and constituted an impermissible tax against the federal government.
The ruling means that Chicago cannot apply its vacant-building requirements to the FHFA or Fannie Mae and Freddie Mac, but the city can still apply the ordinance to private mortgagees of vacant (that is, abandoned or foreclosed) properties.
The ruling is significant, because Fannie and Freddie together hold about 258,000 loans secured by properties in the city. The ruling means that the city cannot compel the FHFA to include Fannie- and Freddie-backed properties in its vacant-property registry, cannot collect a registration fee from the FHFA (or its servicers), and cannot fine the FHFA (or its servicers) for violation of the city's maintenance standards. On the other hand, Fannie and Freddie have their own standards for continuing maintenance of vacant properties. So for Fannie- and Freddie-backed properties, federal standards, not the city's, apply.
The ruling is also significant, because it telegraphs a federalism concern to the thousand or so local governments around the country that have adopted similar vacant-property ordinances. While the ruling doesn't directly touch ordinances outside the City of Chicago, other local governments will do well to revisit their ordinances in light of the ruling.
The FHFA challenged the city's ordinance as running up against the federal Housing and Economic Recovery Act of 2008, or HERA. HERA gives the FHFA authority to place Fannie and Freddie into conservatorship "for the purpose of reorganizing, rehabilitating, or winding up [their] affairs." It also empowers the FHFA to "preserve and conserve the assets and properties of [Fannie and Freddie]."
The FHFA directed Fannie and Freddie to implement consistent mortgage loan servicing and delinquency management requirements and authorized them to contract with servicers who perform activities related to loan defaults, consistent with those requirements. HERA includes a preemption clause that says that the FHFA "shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of [the FHFA]."
The FHFA sued the city, arguing that HERA preempted the city's vacant-property ordinance and seeking a declaration and injunction prohibiting the city from enforcing the ordinance against it, or Fannie or Freddie. The court agreed with the FHFA that HERA preempted the city's ordinance and awarded the requested relief.
The court held that Chicago's Ordinance was field- and conflict- preempted by federal law. As to field preemption, Judge Durkin ruled that HERA's charge to the director of the FHFA to take care of Fannie's and Freddie's assets occupies the field, even if HERA's express preemption provision doesn't mention municipal ordinances:
Here, in contrast, it is evident that the Ordinance encroaches on an area of regulation that Congress reserved exclusively for FHFA. As applied to FHFA as conservator and mortgagee, the Ordinance regulates how FHFA manages its collateral, including specifically how this collateral--which FHFA does not actually own--should be preserved. For instance, when FHFA issues guidelines and instructions to servicers regarding the nature and frequency of inspections of vacant and abandoned properties, it is taking those steps it believes necessary to preserve and conserve Fannie and Freddie's assets and property.
HERA expressly prohibits other federal agencies and states from interfering with actions taken by FHFA as conservator. Although HERA's preemption provision . . . does not expressly include laws enacted by municipalities . . . Congress enacted an extensive federal statutory scheme which specifically requires the Director of FHFA to "establish risk-based capital requirements for [Fannie and Freddie] to ensure that [they] operate in a safe and sound manner, maintaining sufficient capital and reserves to support the risks that arise in the operations and management of [Fannie and Freddie]." HERA sets forth various grounds for the Director of FHFA to exercise his discretion to appoint FHFA as conservator of Fannie and Freddie. Once placed in conservatorship, Congress intended for FHFA to be the sole entity responsible for operating Fannie and Freddie's nationwide business of purchasing and securitizing mortgages.
Op. at 24-25.
As to conflict preemption, Judge Durkin held that Chicago's Ordinance "obstructs Congress's intent to have one conservator take control of Fannie Mae and Freddie Mac, and take action as may be 'appropriate to carry on [their business] and preserve and conserve [their] assets and property' without being 'subject to the direction or supervision of any other agency of the United States or any States . . . ." Op. at 29.
Finally, Judge Durkin ruled that Chicago's registration fee was an impermissible tax on the federal government, in violation of McCulloch v. Maryland.
Thursday, August 1, 2013
The Third Circuit has had yet another opportunity to review the constititionality of the city of Hazleton's extensive immigration ordinances in its new opinion in Lozano v. City of Hazleton [Pennsylvania]. Recall that the United States Supreme Court granted the City's petition for a writ of certiorari and vacated the Third Circuit's previous decision in light of Chamber of Commerce of United States of America v. Whiting.
In 2010, the Third Circuit panel, affirming the district court, had rendered an extensive 188 page opinion in unanimously finding that the two ordinances of Hazleton, Pennsylvania regulating immigration were pre-empted by the federal immigration scheme. The employment provision in Hazleton made it unlawful “for any business entity” to “recruit, hire for employment, or continue to employ” or “permit, dispatch, or instruct any person” who is an “unlawful worker” to perform work within Hazleton, and required employer affidavits. The ordinances also had a housing provision making it unlawful for landlords to rent to unlawful residents.
In its new opinion, the panel - - - again consisting of Chief Judge McKee and Judge Nygaard, with the previous designated judge now replaced by Judge Vanaskie - - - found that Whiting, as well as the Court's subsequent decision in Arizona v. United States regarding the notorious SB1070, did not command a different result. Instead, the court again concluded that " both the employment and housing provisions of the Hazleton ordinances are pre-empted by federal immigration law.”
Regarding the employment provisions of the Hazleton ordinance, the Third Circuit panel found that the Court's opinions in Whiting and Arizona did alter some of its previous analysis, but that the employment provisions of the Hazleton ordinance were so broad in their coverage of both actors and activities that they were an obstacle to the federal immigration law and were thus pre-empted.
As to the housing provisions, the court found:
No part of Whiting or Arizona considered provisions of a state or local ordinance that, like the housing provisions here, prohibit, and define “harboring” to include, allowing unauthorized aliens to reside in rental housing. Moreover, nothing in Whiting or Arizona undermines our analysis of the contested housing provisions here. On the contrary, the Court‟s language reinforces our view that Hazleton‟s attempt to prohibit unauthorized aliens from renting dwelling units in the City are pre-empted.
Thus, the Third Circuit reaffirmed its view that the Hazelton ordinance is unconstitutional as pre-empted.
In considering whether or not to pursue a second petition for writ of certiorari to the United States Supreme Court, the City of Hazleton will undoubtedly be considering the extensive litigation costs it has already expended and deciding whether it should spend even more, although reportedly some costs have been paid by private contributions.
Monday, June 24, 2013
A sharply divided Supreme Court ruled (5-4) today in Mutual Pharmaceutical Co., Inc. v. Bartlett that the Federal Food, Drug, and Cosmetic Act, or FDCA, preempted a state-law design-defect claim against a generic drug manufacturer. Our last post on the case is here.
The ruling means that the plaintiff's state-law design-defect case against the drug manufacturer, in which she received a jury award over $21 million for severe disfigurement and permanent disabilities after taking a generic version of the pain reliever "sulindac," is dismissed--a big victory for Mutual, and a huge victory for generic drug manufacturers in general. It also forecloses another state-law cause of action against a generic drug manufacturer, coming, as it does, just two years after the Court in PLIVA, Inc. v. Mensing (2011) held that the FDCA preempted a state-law failure-to-warn claim against a generic manufacturer. Under these rulings, a state law could only escape preemption by establishing a liability scheme that's not tied to a standard of care that would require changing the composition or label of a drug--perhaps an absolute liability scheme that imposes liability without any showing of breach of duty (as opposed to a strict liability scheme, like this one, according to the Court, that is tied to a breach of duty, even if not negligence). It may be hard to imagine this scheme, however, after today's ruling. The dissenting Justices and Barlett read the state-law claim here as an absolute liability scheme; the majority disagreed.
Of course, Congress could change this result. Congress could simply re-write the FDCA in a way that would explicitly allow state-law claims to complement the FDCA scheme for generic manufacturers, or to otherwise provide for manufacturer-paid compensation for those injured by generic drugs.
According to the majority, Bartlett's claim ran right into PLIVA. That's because the Court today said that (1) the state design-defect law imposed a duty on drug manufacturers to design their drugs reasonably safely, (2) both the FDCA and the drug's simple composition prevented Mutual from changing the design of the drug (to comply with that state-law standard), and (3) therefore the only way for Mutual to satisfy the state-law standard was to strengthen its warning. But a label change for a generic manufacturer is foreclosed by PLIVA. Thus, according to the Court, the state-law design-defect claim conflicts with the FDCA, and it is preempted.
(The Hatch-Waxman Act, part of the FDCA, provides a easy path for generic manufacturers to put their drugs on the market, provided they show that their drugs are identical to branded equivalents and provided that they use equivalent labels. Once approved, generic manufacturers cannot change the composition of their drug or their label without prior FDA approval. The whole purpose of Hatch-Waxman was to ease entry into the market for generics and thus make less expensive drugs more widely available.)
Justice Breyer dissented, joined by Justice Kagan. Justice Breyer wrote that it was not impossible for Mutual to comply with both the FDCA and the state-law design-defect judgment: Mutual could have declined to do business in the state entirely, or it could simply pay the judgment (without altering its drug's composition or label). Moreover, Justice Breyer wrote that there was no sign that the design-defect claim stood as an obstacle to FDCA objectives.
Justice Sotomayor, joined by Justice Ginsburg. Justice Sotomayor wrote that the FDCA allows room for state law to complement federal law and to provide remedies in cases like this. In particular, Justice Sotomayor wrote that the state law at issue did not require Mutual to violate federal law to comply, because state law did not depend on meeting a different state standard, that is, even if it encouraged a different design it didn't require a different design.
Sunday, June 23, 2013
A divided three-judge panel of the Ninth Circuit this week upheld Arizona's Proposition 100, a ballot measure passed by Arizona voters that amended the state constitution to preclude bail for persons charged with certain serious felonies if the person entered or remained in the United States without proper authorization.
The ruling gives states some space for regulating unauthorized immigrants through the state criminal justice system, even as it reaffirms federal authority over immigration matters generally. What makes Prop 100 valid, according to the court, is that (1) it's not punitive (it's regulatory), (2) it's reasonably related to the state's interest in preventing flight of individuals charged with crimes, and (3) it piggy-backs on federal immigration determinations (and doesn't make those determinations itself).
The court in Valenzuela v. County of Maricopa ruled that Prop 100 didn't violate due process, Eighth Amendment excessive bail, or the Sixth Amendment right to counsel, and that it wasn't preempted by federal immigration law.
As to due process, the court held under the two-prong test in United States v. Salerno (1987) (1) that there was no punitive purpose (the purpose was regulatory) and (2) that Prop 100 wasn't excessive in relation to its legitimate alternative purpose (because states often categorically deny bail for classes of charges). The court upheld Prop 100 as reasonably related to the state's (more than) legitimate interest in controlling flight risk. (The court upheld Prop 100 against the Eighth Amendment challenge based on the same balance.) The court also upheld Prop 100 against a procedural due process challenge.
As to the right to counsel, the court held that the initial appearance isn't a critical stage of prosecution triggering the right, and that "[b]oth we and the Supreme Court of Arizona have held that there is no constitutional right to an attorney at initial appearances." Op. at 27.
Finally, with regard to preemption, the court held that Prop 100 doesn't regulate immigration or impermissibly create a state-law immigration classification (because it piggy-backs on the federal determination of immigration status); that Prop 100 isn't field-preempted, because it deals with bail determinations for state-law crimes (that Congress didn't intend to preempt); and that Prop 100 isn't conflict-preempted, because pretrial detention without bail does not impose incarceration for federal immigration law violations--"such detention is not meant to punish an alleged immigration violation but rather to ensure presence in Arizona to stand trial for alleged state-law crimes." Op. at 35.
Judge Fisher dissented, arguing that Prop 100 is clearly punitive and is too rough a cut at achieving the state's interest: Without any evidence that unauthorized immigrants released on bail have been or are less likely to appear for trial compared to arrestees who are lawful residents, the majority accepts Arizona's unsupported assertion that all unauthorized immigrants necessarily pose an unmanageable flight risk." Op. at 37.
June 23, 2013 in Cases and Case Materials, Congressional Authority, Federalism, Fundamental Rights, News, Opinion Analysis, Preemption, Procedural Due Process, Sixth Amendment | Permalink | Comments (0) | TrackBack (0)
Monday, June 17, 2013
The Supreme Court ruled today in Arizona v. InterTribal Council of Arizona, Inc. that the federal requirement under the National Voter Registration Act, NVRA, that the states "accept and use" an approved and uniform federal form for registering voters preempted Arizona's requirement that voters present evidence of citizenship at registration. The ruling strikes Arizona's proof-of-citizenship requirement for users of the federal form, but also invites Arizona to try to get the federal Election Assistance Commission to provide state-specific instructions requiring proof of citizenship through an administrative process. We posted on the case earlier here; our argument preview is here; our argument review is here.
The ruling is a strong statement of federal authority over the states when Congress acts pursuant to its Elections Clause power. But the case doesn't change the basic federalism framework that the Court uses in its ordinary preemption cases (under the Supremacy Clause)--including its presumption against preemption in those cases--and it of course says nothing about the likely direction the Court will take in Shelby County, the pending decision on the challenge to Section 5 of the Voting Rights Act.
Justice Scalia wrote for the Court, joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan. Justice Kennedy, writing separately, concurred in part and concurred in the judgment.
The case arose out of Arizona's Proposition 200, a ballot initiative that required county recorders to reject any voter registration application not accompanied by a proof of citizenship. The problem is that the NVRA requires states to "accept and use" a uniform federal form designed by the Election Assistance Commission; and the federal form only requires an applicant to attest, under penalty of perjury, that he or she meets the state voting requirements (including citizenship). (The EAC rejected Arizona's request to include a state-specific instruction on the federal form that applicants must provide proof of citizenship.)
So the question in InterTribal was whether the NVRA requirement that states "accept and use" the federal form preempted Arizona's proof-of-citizenship requirement. The Court ruled that it did.
Congress enacted the NVRA pursuant to its authority under the Elections Clause. The Elections Clause, Article I, Sec. 4, cl. 1, provides:
The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the places of chusing Senators.
The Court recognized that the Clause was designed to give Congress certain authority over federal elections in order to ensure that states wouldn't undercut the federal government by refusing to provide for the election of representatives to Congress. Thus, the preemptive power of the Clause, even if a "default," is sweeping:
In practice, the Clause functions as "a default provision; it invests the States with responsibility for the mechanics of congressional elections, but only so far as Congress declines to pre-empt state legislative choices." . . . The power of Congress over the "Times, Places and Manner" of congressional elections "is paramount, and may be exercised at any time, and to any extent which it deems expedient; and so far as it is exercised, and no farther, the regulations effected supercede those of the State which are inconsistent therewith."
Op. at 5-6 (citations omitted). More, the Court rejected Arizona's argument that there is a presumption against preemption in the Elections Clause context. It said that when Congress regulates under the Elections Clause, "it necessarily displaces some element of a pre-existing legal regime erected by the States." Op. at 11 (emphasis in original). "Moreover, the federalism concerns underlying the presumption in the Supremacy Clause context are somewhat weaker here. Unlike the States' 'historic police powers,' . . . the States' role in regulating congressional elections--while weighty and worthy of respect--has always existed subject to the express qualification that it 'terminates according to federal law.'" Op. at 12 (citations omitted).
Thus, the Court said that there was no reason not to give the congressional requirement that states "accept and use" the federal form its plain meaning. And that meaning prohibits the states from adding a proof-of-citizenship requirement over and above what the federal form already requires.
The Court noted that the "alternative means of enforcing its constitutional power to determine voting qualifications"--petitioning the EAC to alter the federal form, and challenging the EAC's rejection of a petition under the Administrative Procedures Act--"remains open to Arizona here." Op. at 16.
Justice Kennedy concurred, but wrote separately to take issue with the Court's creation of "a hierarchy of federal powers so that some statutes pre-empting state law must be interpreted by different rules than others, all depending upon which power Congress has exercised." He would have applied a presumption against preemption in this case--and any case involving federal legislation under the Elections Clause--but thought that that presumption was satisfied here.
Justice Thomas dissented, arguing that the Voter Qualifications Clause and the Seventeenth Amendment reserve the power to the states to determine qualifications of voters in federal elections. The Voter Qualifications Clause, Article I, Sec. 2, cl 1., says that "the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature" in elections for the federal House of Representatives. The Seventeenth Amendment contains similar language for elections for the Senate. Because both parties' interpretations of the "accept and use" language were plausible, according to Justice Thomas, these other provisions tilt the scale in favor of Arizona--and state determination of voter qualifications.
Finally, Justice Alito dissented, arguing that the NVRA language is ambiguous, but "their best reading is that the States need not treat the federal form as a complete voter registration application."
The Supreme Court ruled today in Arizona v. InterTribal Council of Arizona, Inc. that the National Voter Registration Act, NVRA, preempts Arizona's requirement that voters show evidence of citizenship before registering to vote using the federal form. Justice Scalia wrote for the Court, joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan. Justice Kennedy joined in part. Justices Thomas and Alito dissented.
The Court held that the NVRA's requirement that states "accept and use" the federal form preempted, under the Elections Clause, Arizona's proof-of-citizenship requirement.
Thursday, June 13, 2013
The Supreme Court ruled today in American Trucking Associations, Inc. v. City of Los Angeles that the Federal Aviation Administration Authorization Act, the FAAAA, preempted certain requirements of a concession agreement between the Port of Los Angeles and short-haul truck drayage companies that was adopted as part of the Port's Clean Truck Program. The Court held that the placard and off-street parking provisions of the agreement were preempted, but it declined to rule that the financial capacity and truck-maintenance requirements were preempted.
The ruling halts components of the Port's broader efforts to address community concerns about traffic, clean air and the environment, and safety, even as it leaves two disputed provisions in place, as the Port looks to expand. (It's already the largest port in the United States.) The ruling may thus set back negotiations between the Port and the local community and environmental groups--already tied up in lawsuits for almost 10 years--and ultimately throw a wrench into further Port development. Our argument preview is here.
The case arose when the Port required drayage truck operators to enter into a standard-form concession agreement as part of the Port's Clean Truck Program in 2007. Under the agreement, truck operators had to affix a placard on each truck with a phone number for reporting environmental or safety concerns, and submit a plan listing off-street parking locations for each truck when not in service. They also had to comply with financial capacity and truck-maintenance requirements. Under the plan, the Port would ban trucks that hadn't registered under an agreement and impose a criminal violation for trucks that entered the Port without an agreement.
Drayage truck operators sued to enjoin enforcement, arguing that the terms were preempted by the FAAAA. The FAAAA preemption clause says,
[A] State [or local government] may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.
49 U.S.C. Sec. 14501(c)(1). Operators also argued that even if the terms were valid, the Port couldn't enforce them by withdrawing a defaulting company's right to operate at the Port. This argument turned on Castle v. Hayes Freight Lines, Inc. (1954), which held that a state couldn't entirely bar a federally licensed motor carrier from its highways for prior violations of state safety regulations.
The Court, in a uninamous ruling by Justice Kagan, held that the FAAAA preemption clause expressly preempted the placard and parking requirements. In particular, it said that the concession agreement had the "force and effect of law" (in violation of the FAAAA preemption clause) because the Port required the agreement and enforced it with criminal sanctions. That is, the Port adopted the agreement pursuant to its regulatory authority of the state, and not in its position as a market participant. "So the contract here functions as part and parcel of a governmental program wielding coercive power over private parties, backed by the threat of criminal punishment. That counts as action 'having the force and effort of law' if anything does." Op. at 8.
As to the financial capacity and truck-maintenance requirements, the Court held that in the pre-enforcement posture of the case, it was impossible to tell whether the Port would enforce those provisions in violation of Castle or not. Those two provisions thus stay in place, at least for now.
Justice Thomas concurred in full, but wrote separately to express his doubt that Congress had authority under the Commerce Clause to regulate the placards and parking arrangements of drayage trucks in the first place.
Monday, June 3, 2013
The Supreme Court ruled today in Hillman v. Maretta that the Federal Employees' Group Life Insurance Act, or FEGLIA, preempted Virginia's effort to prioritize the widow or widower of a deceased federal employee over the employee's designated beneficiary. The Court ruled that Virginia's law conflicted with congressional purposes and objectives in enacting FEGLIA. The judgment was unanimous, but Justices Thomas and Alito wrote separate concurrences.
The ruling means that a state cannot upset or side-step a deceased federal government employee's designation of beneficiary on his or her life insurance plan, even if the state prioritizes a current spouse over a former spouse.
The case pitted the widow of a federal employee, Hillman, against the employee's former spouse, Maretta, who was also the designated beneficiary on the employee's FEGLIA plan. Maretta, as designated beneficiary, collected $124,558.03 from the plan upon the employee's death. But Hillman sued, arguing that Maretta was liable to her under Secion 20-111.1(D), or just Section D, of the Virginia Code. Section D said that when a former spouse receives a death benefit, that former spouse is liable to "the person who would have been entitled to it were [Section A, another Section within the Viginia Code] not preempted"--in this case, Hillman, the widow.
Maretta argued that FEGLIA preempted Section D. FEGLIA says that life insurance proceeds go first to the employee's designated beneficiary. It allows proceeds to go to another person, if "expressly provided for in the terms of any court decree of divorce, annulment, or legal separation," so long as the decree is received by the government before the employee's death. Finally, FEGLIA has an express preemption provision that says that federal law preempts state law "to the extent that the law or regulation is inconsistent with the contractual provisions."
The Court ruled for Maretta, and struck Section D. Justice Sotomayor, for the Court, wrote:
Section D interferes wtih Congress' scheme, because it directs that the proceeds actually "belong" to someone other than the named beneficiary by creating a cause of action for their recovery by a third party. . . . It makes no difference whether state law requires the transfer of the proceeds . . . or creates a cause of action, like Section D, that enables another person to receive the proceeds upon filing an action in state court. In either case, state law displaces the beneficiary selected by the insured in accordance with FEGLIA and places someone else in her stead.
Op. at 10.
Justice Thomas concurred in the judgment but wrote separately to emphasize his view that the majority's "purposes and objectives" approach is "illegitimate," but that FEGLIA nevertheless preempts Section D, because the ordinary meaning of Section D directly conflicts with the plain language in FEGLIA. Justice Alito also concurred in the judgment but wrote separately to argue that the majority's analysis swept too broadly. Justice Alito said that FEGLIA preempted, because Section D overrides the insured's actual and articulated choice of beneficiary. He said that the majority's approach went too far, because it prioritizes the designated beneficiary "even if the insured's contrary and expressed intent is indisputable."
Monday, May 13, 2013
The Supreme Court ruled today in Dan's City Used Cars, Inc. v. Pelkey that federal law does not preempt a plaintiff's state law claim against a towing company for the illegal sale of his car. The ruling affirms the New Hampshire Supreme Court's ruling in favor of the plaintiff and settles a split among state high courts on the question. Otherwise, the ruling doesn't break any new ground, and it's not a particular surprise.
The case arose when Dan's City towed Pelkey's car from his landlord's parking lot and later traded it away without compensating Pelkey. (Pelkey was suffering with a serious medical condition for which he was later hospitalized, and thus left his car in the parking lot during a snow--a towing offense under the landlord's rules.) Pelkey sued for wrongful sale (but not wrongful towing) under state law. The lower state court said that the Federal Aviation Administration Authorization Act, FAAAA, preempted Pelkey's suit and dismissed the case. (The FAAAA applies to motor carriers.) The New Hampshire Supreme Court reversed, and this appeal followed.
The FAAAA preemption clause says,
[A] State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.
In an opinion by Justice Ginsburg, the unanimous Supreme Court held that Pelkey's suit wasn't "with respect to the transportation of property," because it was based on the allegedly wrongful sale of his car after it was transported--that is, post-towing. The Court said that this result is consistent with congressional purposes is enacting the FAAAA preemption clause.
Friday, May 3, 2013
Kansas thumbed its nose at the federal government and its current and future gun laws recently in SB 102, the Second Amendment Protection Act, which declares federal gun laws unenforceable in the state.
In particular, SB 102 says that the state legislature "declared" that firearms and accessories "manufactured commercially or privately and owned in Kansas and that remain within the borders of Kansas . . . have not traveled in interstate commerce" and therefore are not subject to federal regulation, including any federal registration requirement, under the Commerce Clause. In short, the law seeks to insulate firearms and accessories that are made and kept only within the state from federal regulation under the Commerce Clause. This reading of the Clause would deny the federal government authority to regulate activities that have a substantial effect on interstate commerce--a well settled congressional authority. (The law also says that component parts imported from other states don't transform an otherwise Kansas-made firearm into an item in interstate commerce.) To that extent, the law seems well tailored to test this long-standing aspect of congressional Commerce Clause authority--the power to regulate intrastate activities that have a substantial effect on interstate commerce. If so, that's unlikely to go anywhere. (Even in last summer's ACA/individual-mandate case, the Court gave no indication that it would wholly reconsider Congress's power to regulate activities that have a substantial effect on interstate commerce.)
More, SB 102 outlaws enforcement of federal law--even by federal law enforcement. Enforcement of federal law is a felony in Kansas, but the legislature gave federal law enforcement officials this gift: Kansas won't arrest or detain them prior to, or during the pendancy of, any trial for a violation. In other words, the charge, trial, and conviction are all just part of the political theater surrounding this obviously invalid law.
(In addition to the substantive portions of the law, SB 102 also includes the usual statements for this kind of law--statements about the Tenth Amendment (in support of a robust idea of states' rights) and the Second Amendment (as an absolute bar to any gun regulation). It also has a section on the Ninth Amendment.)
Attorney General Eric Holder shot back, reminding the state of the Supremacy Clause, and concluding that "the United States will take all appropriate action, including litigation if necessary, to prevent the State of Kansas from interfering with the activities of federal officials enforcing federal law."
Governor Brownback responded, arguing that the measure enjoyed wide bi-partisan support in the state. He said that this meant that "[t]he people of Kansas have clearly expressed their sovereign will. It is my hope that upon further review, you will see their right to do so."
Wednesday, April 17, 2013
The Supreme Court heard oral arguments yesterday in American Trucking Association v. City of Los Angeles, the case asking whether federal law preempts the Port of Los Angeles's "concession agreement" that it requires of all drayage truck operators. Our argument preview is here.
Two points got the Court's attention. First, the justices tested whether the Port was acting in a proprietary way in enforcing the concession agreement, thus triggering the market participant exception. This question turns on whether the Port's enforcement of the agreement had "the force and effect of law"--language from the preemption clauses in the Federal Aviation Administration Authorization Act that means that enforcement by a state as state is preempted, but enforcement by a state as market actor is not. Here, the Port's concession agreements are contracts with drayage truck operators (making the Port look like a market actors), but they are ultimately backed by criminal penalties, even if not for breach of the contract, and the whole operation relates to regulation of public land (making the Port look like the state). Take a look at this exchange with the attorney for the Port:
JUSTICE KENNEDY: You are saying that you can do by contract what you cannot do by regulation. And I don't understand that argument when there are criminal penalties that attach to the breach of the contract.
MR. ROSENTHAL: But, Justice Kennedy, let me say again, there are no criminal penalties that attach to the breach of the contract. It is purely a contract. The remedies are purely civil. Even our other side in their argument has conceded there are no criminal penalties to the breach of the concession agreement.
JUSTICE SCALIA: I'm not sure that's crucial. You think a state can say nobody's going to come on our highways until it signs a contract? Okay? These highways belong to us, they are State land, and anybody who wants to ride on the highways, you have to enter a contract with the State. And that's going to get around this Federal statute?
Others, too, asked about the criminal penalties and the scope of the Port's regulatory authority--all to the end of determining whether the Port looks more like the state, or more like a market actor, when it enforces its concession agreement.
Next, the Court pressed on the scope of Castle, the case overturning Illinois's punishment of a carrier's repeated violations of the state's freight-weight restriction by completely suspending the carrier's right to use Illinois state highways for certain periods. Here, the arguments turned on whether the Port's enforcement mechanism was a punishment for prior violations (as in Castle), or whether it simply operated to ensure that only currently compliant trucks had access to the Port. There's also an issue about the continued vitality of Castle, given that the federal regulatory scheme that governed at the time has since been superceded.
The Port seemed to have the tougher time at arguments, but that's no (necessary) bellweather. There were plenty of open questions to suggest that there are no easy answers here. As a practical matter, if the Court rules against the Port, it would undo years of litigation and negotiation between the Port and the surrounding community related to environmental and health concerns and send those paties back to the drawing table. That, in turn, could impact both community health and the environment, and the Port's plans for even more expansion.
Monday, April 15, 2013
The Supreme Court will hear oral arguments tomorrow in American Trucking Association v. Los Angeles, testing whether the Federal Aviation Administration Authorization Act preempts certain provisions of the "concession agreement" that the Port of Los Angeles requires of all Port drayage service providers, as part of the Port's efforts to reduce drayage truck emissions.
Here's my ABA Preview of United States Supreme Court Cases article on the case, reprinted here with permission:
The Port of Los Angeles (POLA, or the Port) is an independent division of the City of Los Angeles. That is, it raises and manages its own revenue, independent of the City, by leasing its terminal facilities to shipping lines and stevedoring companies, which load and unload cargo from docking ships.
Drayage trucks are an integral part of the operations at the Port. They transport cargo from the Port’s marine terminals directly to customers, or to off-Port long-distance trucks or railroads for further transport. But POLA does not contract for any drayage services. Instead, cargo owners, ocean carriers, railroads, and other transportation providers arrange for drayage services through Licensed Motor Carriers (LMCs). Most LMCs, in turn, contract with independent truck owners and operators to provide drayage services.
In 2008, the Port adopted a “concession agreement” system for drayage service providers. The system was part of an earlier-adopted “Clean Action Plan” designed to address community opposition to Port expansion and to reduce air pollution produced by Port activities. Under the system, the Port requires any drayage service provider seeking access to the Port’s premises to enter into a standard-form “concession agreement” with the Port. That agreement grants the concessionaire “a non-exclusive license to access [the] Port property for the purpose of transporting containers and/or other cargo to and from marine terminals.” In exchange, the concessionaire agrees to comply with several requirements. In particular, the concessionaire must (1) submit an off-street parking plan for all of its permitted trucks, (2) display placards on its trucks that provide a phone number for reporting environmental or safety concerns, (3) demonstrate that it has sufficient financial resources to perform its obligations under the agreement, and (4) ensure that vehicle maintenance is conducted in accordance with the manufacturer’s instructions.
The standard-form agreement also lists penalties for failure to comply with these requirements. The penalties for a default, if not timely cured, include suspension or revocation of the concession agreement and the right of the concessionaire to use the Port’s facilities. In other words, the Port could altogether exclude a drayage service provider for significant noncompliance with the agreement—what the agreement calls a “Major Default.”
Moreover, violation of the agreement can result in criminal penalties. This is because the Port incorporates the concession agreement system into the preexisting tariff that governed Port operations. A violation of the tariff constitutes a misdemeanor subjecting the violator to a $500 fine and imprisonment up to six months.
American Trucking Associations, Inc. (the ATA), a trucking-industry trade group, sued the City and the Port in federal court, arguing that certain concession agreement requirements were preempted by the Federal Aviation Administration Authorization Act (FAAA). The district court found none of the requirements preempted. A divided panel of the Ninth Circuit largely affirmed, reversing the district court only as to a requirement that is not relevant here. This appeal followed. The federal government petitioned to participate as amicus in support of reversal.
This case raises two distinct issues of federal preemption of state law. The first issue, an express preemption issue, involves two sections of the FAAA. The first section, 49 U.S.C. § 14501(c)(1), covers general state regulation of motor carriers, like the concession agreement’s off-street parking requirement. It provides that:
a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier.
This first section exempts “the safety regulatory authority of a State with respect to motor vehicles.” 49 U.S.C. § 14501(c)(2)(A).
The second section, 49 U.S.C. § 14506(a), specifically addresses vehicle identification requirements, like the concession agreement’s placard requirement. It provides that:
[n]o State, political subdivision of a State, interstate agency, or other political agency of two or more States may enact or enforce any law, rule, regulation standard, or other provision having the force and effect of law that requires a motor carrier . . . to display any form of identification on or in a commercial motor vehicle . . ., other than forms of identification required by the Secretary of Transportation.
The first issue asks whether the concession agreement’s off-street parking and placard requirements “hav[e] the force and effect of law” under these sections so that the requirements are preempted by the sections. That question, in turn, depends on whether the concession agreement looks more like a state regulation or more like an ordinary commercial contract. If the concession agreement looks more like a state regulation, it is covered by these sections, and it is preempted. On the other hand, if it looks more like an ordinary commercial contract, it is not covered by these sections, and it is not preempted.
A related question is whether the market participant doctrine applies. The market participant doctrine says that the FAAA preempts only state regulation, not actions a state takes as a market participant. The parties and the federal government disagree about whether the market participant doctrine applies in this case—in particular, whether it applies when the FAAA does not contain an explicit market participant exception.
The second issue involves the application of a 1954 Supreme Court case on preemption, Castle v. Hayes Freight Lines, Inc. In Castle, the Court considered an Illinois statute that limited the weight of freight that could be carried in commercial trucks registered under the federal Motor Carrier Act. The Illinois law punished a carrier’s repeated violations by suspending the carrier’s right to use Illinois state highways for periods of ninety days and one year. The Court said that the Motor Carrier Act left regulation of the size and weights of trucks to the states. But it also held that Illinois’s law forbidding an offending carrier from using all of the state’s highways was “equivalent to a partial suspension of [the carrier’s] federally granted certificate” and was therefore preempted.
The parties and the federal government disagree about the meaning, the scope, and even the continued vitality of Castle. For example, they disagree about whether Castle prohibits the Port from punishing drayage service providers by banning them merely from the Port, even if not from the entire state highway system (as in Castle). The parties also disagree about which concession agreement requirements might be covered by Castle. Finally, they disagree about whether Castle remains good law. The government, for its part, is unsure whether the Port will punish only past, cured violations (as in Castle), and thus whether the punishment even falls under Castle.
The ATA argues first that the plain language of the FAAA expressly preempts the off-street parking and placard provisions of the concession agreement. It says that the parking provision regulates drayage trucks’ “price, route, or service” in violation of § 14501(c)(1), and that the placard provision requires drayage trucks “to display any form of identification . . . other than forms . . . required by the Secretary of Transportation” in violation of § 14506(a). Moreover, it claims that the concession agreement amounts to a “comprehensive licensing scheme” that is “penally enforceable” through the tariff and thus have “the force and effect of law.”
The ATA argues that the market participant exception does not apply. It says that because Congress enacted the FAAA, and because it does not contain a market participant exception, there is no market participant exception to the Act’s provisions. But the ATA claims that even if the FAAA contains an implicit market participant exception, it does not apply here. According to the ATA, that is because the parking and placard requirements are not aimed at the efficient procurement of goods and services or at the use of state-allocated funds, the purposes of the exception; instead, the provisions are aimed at a traditional regulatory goal, to reduce air pollution. Moreover, the ATA contends that the Port is not even a direct participant in the drayage market; instead, it is a regulator of drayage services.
Next, the ATA argues that Castle bars the Port from enforcing even non-preempted regulations on drayage service providers by suspending or revoking their access to the Port. The ATA says that the concession agreement permits the Port to deny a drayage service provider “any and all access” to the Port for certain defaults of the concession agreement, and that this penalty is directly at odds with the Court’s holding in Castle. It claims that Castle forbids even a partial suspension of a drayage operator’s federally licensed activities, even though a denial of access to the Port may not rise to the level of the comprehensive ban at issue in Castle. Finally, the ATA contends that Castle is still good law, and that Congress has only reaffirmed the federal government’s exclusive authority to issue interstate-commerce permits, and to revoke them.
The federal government supports the ATA, but takes a more nuanced tack. It says that the FAAA does not naturally preempt all arms-length commercial agreements between the government and motor carriers. But it says that the Port’s concession agreement looks more like a regulatory scheme than an arms-length commercial agreement between market participants. In particular, the government points to four features of the Port’s agreement and its operations that together suggest that the agreement is really a regulation (and not a commercial agreement): the criminal sanctions that back the agreement; the public ownership of the Port; the generally regulatory character of the agreement’s provisions; and the fact that the government generally does not contract with drayage service providers. For these reasons, the government claims that the FAAA preempts the off-street parking and placard requirements.
Next, the federal government says that it is unclear whether the concession agreement provisions at issue here would contravene Castle. The government argues that Castle prevents the Port from barring a motor carrier’s access to the Port only for a past, cured infraction, and not for the carrier’s current failure to comply with otherwise non-preempted state safety regulations. In other words, it says that nothing in Castle prevents the Port from prohibiting a carrier’s truck from operating at Port facilities until it complies with non-preempted regulations. Given that we do not know whether the Port might punish past, cured violations of the agreements by barring Port access, the government urges the Court to remand the case for a determination on that question.
The Port argues first that the market participant exception shields the off-street parking and placard provisions from preemption. It claims that the Court’s precedents and related acts suggest that the market participant exception applies to the FAAA, even with its express preemption clauses. Moreover, the Port claims that its adoption of the concession agreements fall within the market participant exception. In particular, the Port claims that the concession agreements do not have the “force and effect of law,” because they are contractual in nature, not regulatory in nature. (It claims that under the terms of the tariff and the concession agreement, the criminal sanctions under the tariff do not apply to LMCs.)
Next, the Port claims that Castle does not bar the concession agreements’ safety-based restrictions on access to the Port. The Port says that Castle only prohibits a ban on using all of a state’s freeways, not a ban on a single Port, as here. But even aside from the Ninth Circuit’s approach, the Port claims that the ATA’s argument that Castle prevents the Port from suspending or revoking a motor carrier’s access for safety-related violations would improperly read the safety exception out of § 14501(c)(2)(A). Finally, the Port contends that Castle is no longer good law with respect to the concession contract requirement. That is because Castle arose under an earlier, and superseded, regulatory regime.
The Port of Los Angeles is the largest container port in the United States in terms of both shipping container volume and cargo volume. In 2007, it was the thirteenth busiest port in the world, and the fifth busiest in the world when combined with the cargo volume at the adjacent Port of Long Beach. In both 2007 and 2008, the Port handled more than $240 billion in cargo. The Port’s activities are connected with over 900,000 jobs in the greater Los Angeles region. As big as it is, however, the Port projects that increased global trade and larger ships will double the demand for its cargo handling capacity over the next decade. To meet demand and stay competitive, the Port seeks to expand.
At the same time, Port activities produce pollution that significantly affects the air quality of the surrounding area and the health of local residents. Community and environmental groups tied up Port expansion plans in court for years because of these concerns. (They continue to oppose expansion efforts, for example, by protesting the Port’s plan to develop a new rail yard, approved just last month.) The Port’s Clean Action Plan, including the concession agreements, was designed to address these kinds of environmental concerns.
In this way, the case is a classic conflict between economic growth and environmental justice. If the Court reverses the Ninth Circuit and holds that the FAAA preempts some or all of the Port’s concession agreement requirements, the ruling will frustrate the Port’s efforts to reduce pollution in order to address the concerns of community and environmental groups. This could lead community and environmental groups to redouble their efforts to halt expansion and thus deal a significant set-back to Port expansion efforts. The Los Angeles Chamber of Commerce, as amicus in support of affirming the Ninth Circuit, put it this way: “If the Port is not permitted to take such modest and reasonable steps as those represented by the off-street and placard provisions, its ability to adopt limited measures tailored to specific, local issues arising from Port activity will be compromised, which may result in additional litigation and delays.”
On the other hand, if the Court affirms the Ninth Circuit and holds that the FAAA does not preempt the concession agreement requirements, the Port’s efforts will stay on the books. This may be a victory for community and environmental groups, and for the Port itself. But given the issues that have come to a head just recently with the rail yard project, it is safe to say that this case will certainly not resolve all the problems or in any way mark the end of this ongoing dispute.
Thursday, March 21, 2013
The Supreme Court heard oral arguments earlier this week in Mutual Pharmaceutical v. Bartlett, a case testing whether the federal Food, Drug, and Cosmetic Act (and in particular the Hatch-Waxman Act) preempts a state design-defect claim against a generic drug manufacturer.
The case is important because of the large and increasing role that more affordable generics play in the prescription drug market. But as Justice Kagan pointed out early in the argument, the case may also affect branded drugs. That's because both branded and generics need to get FDA approval for new or changed formulas, and yet they both could be subject to state-law design-defect claims, as in this case. If so, depending on the nature of the state law claim, the state court ruling could set a different standard than the FDA standard--making it impossible for a manufacturer, branded or generic, to comply with both. But again: that depends on the nature of the state-law claim.
Recall that the Court just two years ago ruled in PLIVA v. Mensing that the FDCA did preempt a state failure-to-warn claim against a generic manufacturer. The reason: Under the FDA's process for generic approval (under Hatch-Waxman), a generic has to bear the same label as its branded counterpart. Under the federal FDCA, the generic has no control over the label, and so the Court said that it can't be held to a higher labeling requirement under state tort law. In other words, the requirement under federal law (to bear the same label as its branded counterpart) conflicted with duties set by the state tort suit (to include different warnings).
But that was a failure-to-warn claim. Bartlett involves a design-defect claim, going to the generic's design, not (or maybe not) its label.
Still, the label was one sticking point, maybe the most important sticking point, at argument this week. The justices struggled to figure out whether the plaintiff's design-defect claim turned at all on faulty labeling. (If it did, the case would more likely be governed by Mensing, and the claim more likely to be preempted.) The plaintiff argued that the trial court judge carefully distinguished between considering the label for its adequacy as opposed to its effectiveness. According to the plaintiff, the judge ruled out the former consideration, because the defendants waived a defense that would have turned on adequacy. Moreover, according to the plaintiff, the label's effectiveness goes to limiting the danger of an inherently dangerous drug--and is therefore not a consideration of labeling in its own right, but rather a consideration of labeling as related to a pure design-defect claim. It's not clear that the Court bought this distinction, however, and the defendant argued strenuously against it.
Another and related sticking point was the nature of the state design-defect claim. Was it a pure strict liability claim, in which the plaintiff simply received compensation for injuries resulting from an inherently dangerous drug? If so, the claim operated more like a drug compensation fund, and even the defendant said there was no preemption. That's because the defendant could comply with both the federal requirements for generics and the state duty to pay. Stated differently, the state tort suit wouldn't set a new standard of care; instead, it would simply require compensation. But if the label was relevant to the design-defect claim--and if, as the Court held in Mensing, the defendant had no control over the label--the state tort suit could be understood as setting a new standard (in the same way the failure-to-warn claim did in Mensing)--and the FDCA would preempt.
Yet another sticking point was the FDA approval process as opposed to the process of state-court juries. The FDA puts new drugs through a rigorous ringer to weigh the costs and benefits before approval. But state court juries grant damage awards based on the judgments of a handful of lay individuals. The question is: If the FDA approves a drug and thus its counterpart generic--based on thorough and expert cost-benefits analyses--why should a state court lay jury be able to second-guess and even overrule it?
The Court divided 5-4, along conventional ideological lines, in Mensing. That seems like a plausible, even likely, result here, too.
Monday, March 18, 2013
The Supreme Court heard oral arguments today in Arizona v. Inter Tribal Council of Arizona, the case testing whether the federal National Voter Registration Act preempts Arizona's requirement that voter applicants show additional proof of citizenship in order to register to vote. We posted a preview here.
If the questions from the bench are any indication, this could be a very close one. Justice Sotomayor and Kagan seemed to line up squarely behind the respondents (and against Arizona's proof-of-citizenship requirement). Justices Ginsburg and Breyer did too, but perhaps a little less forcefully. On the other side, Justice Scalia seemed set with Arizona on the merits (focusing on the NVRA text), but he wondered why the state didn't challenge the EAC's rejection of its state-specific proof-of-citizenship requirements earlier, right after the EAC rejected them. Chief Justice Roberts and Justice Alito seemed to lean toward Arizona, too, largely for pragmatic reasons, suggesting that the NVRA scheme wouldn't make a lot of sense by the respondent's reading. Justice Kennedy seemed concerned that Arizona's position could destroy the "utility of the single form" (on the one hand), but also that the Ninth Circuit applied a preemption test under the Elections Clause that was too federal friendly (on the other).
The Justices were concerned about everything from legislative purpose behind the NVRA, to legislative language, to the role of the EAC (the administrative agency that approves the federal form and state-specific additions to it), to Arizona's failure to challenge the EAC's rejection of its state-specific citizenship requirements. The standard for Elections Clause preemption (as opposed to more ordinary Supremacy Clause preemption) got very little attention (notably just from Justice Kennedy).
Justices Sotomayor and Kagan seemed to be the most active and skeptical in questioning Arizona's attorney. They asked whether Arizona's additional citizenship requirements wouldn't undermine the purpose of the NVRA, to ease and simplify voter registration; whether Arizona is actually accepting and using the federal form (as required by the NVRA), especially when it apparently rejects mail-in ballots that don't satisfy Arizona's extra citizenship requirements; and whether Arizona's position would make the federal form "just another hoop to jump through." (Those were Justice Kagan's words. Justice Kennedy earlier suggested a similar sentiment--"But otherwise, the whole utility of the single form is missing--is gone"--but framed it as a question about what opposing counsel would argue.)
Justice Breyer wanted to know how Arizona accepted and used the federal form's attestation-under-perjury requirement, again, as required by the NVRA, suggesting that Arizona wasn't accepting and using it, and therefore not complying with the NVRA.
Justice Scalia asked why Arizona didn't challenge the EAC's rejection of its state-specific citizenship requirements earlier--after the EAC rejection, and not now, only after voters challenged Arizona's requirements.
On the other side, Justice Alito wondered how the federal form alone could ensure that an applicant was qualified--giving an example of a minor who completed and signed the form--suggesting that the federal form alone wasn't sufficient. Justice Scalia looked to the language of the NVRA--states "may require only"--and argued that the "may" made it permissive--and that state's therefore could add requirements. Chief Justice Roberts and Justice Alito wondered whether under the respondent's reading and the government's reading the NVRA wouldn't create an unworkable system, with the possibility of a state-form voter registration list and a federal-form voter registration list in each state.
Chief Justice Roberts asked whether the respondent's reliance on the EAC's decision to reject Arizona's request to include its citizenship requirement wasn't undermined by the EAC's bad decision (according to respondent) allowing Louisiana to supplement the requirements on the federal form. (Arizona first raised Louisiana's state-specific requirement, approved by the EAC, to include a driver's license number or Social Security number or, if neither is available, to attach certain other documents as an argument that a requirement for additional documents does not violate the NVRA. The Court spent some time trying to figure out if the parties thought this was a good decision, and, if so, why Louisiana's requirement is the same or different than Arizona's.)
Friday, March 15, 2013
Arizona is once again before the Supreme Court, on Monday, with a major federalism case, this time testing whether federal law preempts the state's efforts to add a proof-of-citizenship requirement, over and above the federal requirement, to its voter registration application. The case, Arizona v. Inter Tribal Council of Arizona, asks whether the preemption standard under the Elections Clause is the same as the ordinary preemption standard under the Supremacy Clause, and whether the National Voter Registration Act preempts Arizona's proof-of-citizenship requirement.
The former issue--going to the standard of preemption under the Elections Clause--is an important one. The Court puts a thumb on the scale against preemption in ordinary Supremacy Clause preemption cases. This case will tell us whether states get that thumb in Elections Clause cases, too. If so, and if the Court rules Arizona's proof-of-citizenship requirement not preempted, we're likely to see certain states move toward more requirements like Arizona's, making it tougher for certain citizens to vote.
Here's an excerpt from my preview of the case in the ABA Preview of United States Supreme Court Cases (with permission):
May Arizona require applicants for voter registration to provide additional evidence of U.S. citizenship without conflicting with the requirements of the National Voter Registration Act?
Congress enacted the National Voter Registration Act, the “NVRA,” or the “Motor Voter Act,” in 1993 in order to enhance voter participation by eligible citizens in federal elections while at the same time protecting the integrity of the electoral process. To these ends, the NVRA requires states to accept three kinds of registration applications from would-be voters in federal elections. First, the NVRA requires states to treat any application for a driver’s license as an application for voter registration. Next, it requires states to accept mail-in applications. Finally, the NVRA requires states to accept in-person applications at sites designated by state law.
In connection with these three methods, the NVRA provides for the creation of certain voter registration applications. Thus the NVRA requires states to create a combined driver’s license and voter registration application form commonly called the “Motor Voter Form.” (The Motor Voter Form is not at issue in this case.) The NVRA also directs the U.S. Election Assistance Commission, the “EAC,” to create the Federal Form, a nationally uniform voter application that applicants can use to register by mail or in person at designated locations. The NVRA requires that the Federal Form “shall include” a statement that specifies each eligibility requirement (including citizenship), contains an attestation of eligibility, and requires the applicant’s signature. It says that the Federal Form “may not include any requirement for notarization or other formal authentication.” And it says that the Federal Form “may require only such identifying information . . . and other information as is necessary to enable the appropriate state elections official to assess the eligibility of the applicant.” The NVRA requires states to “accept and use” the Federal Form, but it also allows a state to “develop and use” its own form, so long as the state form meets all of the NVRA criteria for the Federal Form. (Even if a state develops and uses its own form, however, the NVRA still requires every state to “accept and use” the Federal Form.) Moreover, a state may ask the EAC to add state-specific instructions to the Federal Form.
The EAC-created Federal Form specifies each eligibility requirement, including U.S. citizenship, but does not, by its plain terms, require proof of citizenship. Thus the Federal Form requires an applicant to tick a box that says that the applicant is a U.S. citizen and to swear or affirm, by signature, that he or she is a U.S. citizen and that “the applicant, to the best of his or her knowledge and belief, meets each of his or her state’s specific eligibility requirements.” The Federal Form’s state-specific instructions for Arizona require an applicant to include the number of his or her valid Arizona driver’s license or non-operating identification license, or the last four digits of his or her Social Security number. The state-specific instructions say that if an applicant does not have these numbers, “[a] unique identifying number will be assigned by the Secretary of State.” (The Federal Form, with Arizona’s state-specific instructions, is here.) In short, the Federal Form relies on an applicant’s attestation, without further proof, to determine U.S. citizenship. Arizona’s state-specific instructions only require proof if an applicant has an Arizona driver’s license or identification license, or a Social Security number.
In 2004, Arizona sought to add a proof-of-citizenship requirement. Thus Arizona voters approved Proposition 200, requiring applicants for voter registration to provide evidence of U.S. citizenship beyond the attestation requirement and the state-specific instructions in the Federal Form. In particular, Proposition 200 says that an applicant must provide his or her driver’s license number, non-operating identification number, a number associated with Native American tribal status, his or her certificate of naturalization number, or a legible photocopy of his or her U.S. birth certificate or passport. (Proposition 200 also requires registered voters to present identification in order to cast their ballots at the polls. The voter-ID component of Proposition 200 is not at issue in this case.) By its terms, this proof-of-citizenship requirement applies to both the federal form and to Arizona’s state form.
About a year after Arizona voters enacted Proposition 200, the U.S. Department of Justice precleared it under the Voting Rights Act. Arizona then asked the EAC to include its proof-of-citizenship requirement on the state-specific instructions on the federal form. The EAC declined. (The Executive Director of the EAC initially declined the request, stating that the NVRA preempted the requirement. The full EAC later upheld this decision.)
Nevertheless, Arizona implemented the new proof-of-citizenship requirements in Proposition 200 with respect to its state-specific voter registration application form and with respect to the Federal Form. As to the state-specific form, Arizona now specifically requires the proof of citizenship specified in Proposition 200. Its instructions say that an applicant must provide a driver’s license or non-operating identification license number, or, if those are not available, a birth certificate, U.S. passport, naturalization documents or an alien registration number, or proof of Native American Indian tribal membership. The instructions say that without this proof of citizenship, “the form will be rejected.” (Arizona’s state specific form is here.) As to the Federal Form (which, again, did not change in the wake of Proposition 200), Arizona officials now ask Federal Form applicants for evidence of citizenship pursuant to Proposition 200 whenever their Federal Form does not include such evidence of citizenship.
Just to be clear: Before Proposition 200, Arizona required only a driver’s license or non-operating identification license, or, when those were not available, a “unique identifying number . . . assigned by the Secretary of State,” in order to register to vote. After Proposition 200, Arizona now requires a driver’s license or non-operating identification license, or, when those are not available, a birth certificate, U.S. passport, naturalization documents or an alien registration number, or proof of Native American Tribal membership. Thus Proposition 200 added a significant proof-of-citizenship requirement, but only for those applicants who do not have a driver’s license or non-operating identification license.
Soon after Proposition 200 passed, two groups of plaintiffs sued, arguing, among other things, that the new proof-of-citizenship requirements were preempted by the NVRA. In particular, the plaintiffs argued that the new proof-of-citizenship requirements went beyond the requirements of the NVRA in a way that conflicted with the NVRA. In a first round of litigation, the plaintiffs’ case went to the Supreme Court on preliminary motions, and the Court remanded it for a determination on the merits. In the second round, on remand, the district court ruled in favor of Arizona on the plaintiffs’ preemption claim. The Ninth Circuit reversed. This appeal followed.
This case tests the boundary between congressional authority and state authority in the special context of regulation of federal elections. That boundary is set in the Constitution’s Elections Clause: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of chusing Senators.” In other words, states get the first crack at regulating the mechanics of federal elections, but Congress has ultimate authority to override, or preempt, state regulation. The framers gave Congress this special power over federal elections in order to safeguard against potential state efforts, through manipulation of their election laws, to undermine the national government. (At the extreme, the framers were concerned that states could frustrate the very creation of the national government by neglecting to hold federal elections.) Here, the Elections Clause governs, because Congress enacted the NVRA pursuant to its Elections Clause power.
The Supreme Court first examined congressional authority to preempt state law under the Elections Clause in Ex Parte Siebold, 100 U.S. 371 (1879). The Court in that case said that federal law preempts state law whenever they conflict: “the laws of the State, in so far as they are inconsistent with the laws of Congress on the same subject, cease to have effect as laws.” Over a century later, the Court in Foster v. Love, 522 U.S. 67 (1997), reaffirmed this principle and held that federal law setting the date for congressional elections (the Tuesday after the first Monday in November) preempted a Louisiana statute that established an open primary in October with a run-off on Congress’s specified election day only if the primary failed to produce a majority candidate.
While Siebold and Foster go specifically to Elections Clause preemption, the Court has also developed an approach to preemption under the Supremacy Clause. According to that approach, the Court seeks to preserve the “delicate balance” between the states and federal government, especially in those areas traditionally under state control. Thus under Supremacy Clause preemption the Court applies a “presumption against preemption” and holds that federal law preempts state law only when it is the “clear and manifest” purpose of Congress to do so. In short, the Court puts a thumb on the scale against preemption in its Supremacy Clause analysis.
The Court has not specifically said whether its approach to preemption under the Supremacy Clause applies also to preemption under the Elections Clause. If so, Congress would face a higher bar in preempting state law under the Elections Clause; if not, Congress could more easily preempt state law.
The parties dispute this, with Arizona arguing for the higher Supremacy Clause standard, and the plaintiffs-respondents arguing for a lower preemption standard. They also dispute whether under either standard Proposition 200 actually conflicts with the NVRA, and thus whether the NVRA preempts it.
[Summary of specific arguments omitted.]
This case tests the boundary between congressional authority and state authority in the special context of the Elections Clause. The Supreme Court has not ruled directly on this issue; in particular, it has not specifically set a standard for federal preemption of state law under this Clause. Thus this case is important because the Court’s ruling will (at least partially) fill this void and tell us something about the scope and extent of congressional authority, and therefore the scope and extent of state authority, under this Clause.
That, in turn, is important, because it will set the standard for federalism in relation to regulation of federal elections. If the Court borrows and applies the standard for preemption under the Supremacy Clause—with all its deference to state sovereignty, in the interest of maintaining the “delicate balance” between the states and federal government—the states could have more latitude to regulate elections, even affecting the composition of the federal government. (Various state efforts to strategically manipulate voting requirements in the 2012 elections in order to seek political advantage in federal elections stand as a stark and recent reminder of how state regulation could affect the federal government—exactly what the framers were concerned about.) But on the other hand if the Court applies a lower standard, one without deference to state sovereignty or considerations of federalism, the ruling could restrict the states in how they regulate elections, even restricting states from imposing additional proof-of-citizenship requirements (as in this case).
Still, the standard that the Court sets for preemption may be distinct from its ruling on preemption in this case. Whatever standard the Court adopts, its ruling in this case will tell us how much flexibility states have in adding to the NVRA requirements. If the Court holds that the NVRA does not preempt Proposition 200, this could invite states to impose all manner of additional requirements, potentially undercutting the congressional purpose of uniformity in voter registration in the NVRA and, again, potentially affecting the very composition of the federal government. But if the Court holds that the NVRA preempts Proposition 200, the ruling will restrict states in imposing additional requirements and will underscore national uniformity in voter registration.
In the end, whatever the Court rules, Congress could get the last word. That’s because Congress can always go back and rewrite its legislation in response to any preemption ruling from the Court. Here, Congress could rewrite the NVRA to more explicitly preempt state requirements like those in Proposition 200 (on the one hand), or to allow those requirements (on the other). In this way, Congress could effectively undo any decision in this case. The Court’s ruling will be important, to be sure, but it will not necessarily be the final decision on this issue.
Outside of these considerations, this case is also important because it comes to the Court just one month after the Court heard oral arguments in Shelby County v. Holder, testing the constitutionality of the preclearance provision in the Voting Rights Act. A bare majority of justices seemed skeptical in those arguments that preclearance and the related coverage formula were still necessary in 2013 to enforce the constitutional prohibitions against voting discrimination. In particular, a number of justices expressed concern about congressional infringement on state sovereignty and equality among the states. Between this case and Shelby County, we will learn quite a bit about where the Roberts Court stands on federalism and voting rights.
This case also comes just a year after Arizona v. U.S., 567 U.S. ___ (2012), another case testing Arizona’s authority, as against the federal government, to regulate non-citizens, when the regulation spills over and affects how Arizona treats U.S. citizens. Arizona v. U.S. involved the state’s efforts to clamp down on illegal immigration by authorizing its officers to check the immigration status of individuals that they detain and to regulate undocumented aliens in various ways. That case was a partial victory for Arizona and a partial victory for the United States. This case is yet a different test of Arizona’s authority, as against the federal government, to address illegal immigration.
Wednesday, December 12, 2012
The Fifth Circuit earlier this week ruled in Teltech Systems, Inc. v. Bryant that Mississippi's Caller ID Anti-Spoofing Act was preempted by the federal Truth in Caller ID Act of 2009. The ruling strikes Mississippi's law, until and unless Mississippi successfully appeals.
Mississippi's Caller ID Anti-Spoofing Act prohibits a person from entering false information into a telephone caller identification system with the intent to deceive, defraud, or mislead the recipient of a call. (Think solicitations that come up as an apparently legitimate local residential or cell phone number.) Plaintiffs, organizations that provide third-party spoofing services, sued, arguing that the Act violated free speech and the dormant Commerce Clause, and that it was preempted by the federal Truth in Caller ID Act. The court ruled only on this last claim.
The federal TCIA makes it unlawful for any person "to cause any caller identification service to knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value." 47 U.S.C. Sec. 227(e)(1).
Preemption turned on the Mississippi ACA's sweep. As the court explained, the Mississippi ACA sweeps somewhat broader than the TCIA, as it bans not only "harmful" spoofing but also "non-harmful" spoofing (done simply to deceive or mislead, but not to harm). There was good evidence that Congress not only did not ban non-harmful spoofing, but sought to protect it. "Congress apparently regarded some forms of spoofing worthy of protection from more restrictive state regulation." Op. at 10.
Thus, said the court, the TCIA preempted the state ACA. The court explained, drawing on Arizona v. United States, the immigration-and-preemption case from last Term:
Arizona v. United States is illustrative. The Immigration Reform and Control Act of 1986 subjects employers who hire unauthorized aliens to criminal and civil sanctions, but imposes no such penalties on the hired unauthorized aliens. An Arizona statute . . . went further, making it a misdemeanor for unauthorized aliens to apply for, or solicit, work. Although the Arizona statute advanced the same goal as IRCA--preventing hiring unauthorized aliens--the Court held the Arizona statute's enforcement scheme conflicted with the federal regulatory scheme. Examining the "text, structure, and [legislative] history of IRCA," the Court held the Arizona statute posed an obstacle to "the careful balance struck by Congress with respect to unauthorized employment of aliens."
Op. at 11 (citations omitted).
So too with Mississippi's ACA, because it banned non-harmful spoofing, a category that Congress protected.
Thursday, November 8, 2012
The constitutional "rights" of noncitizens are now less likely to be successfully argued under equal protection theories than under federalism (preemption) or administrative agency power issues according to Geoffrey Heeren in his article Persons Who Are Not The People: The Changing Rights of Immigrants in The United States, forthcoming in 44 Colum. Hum. Rts. L. Rev. and available in draft on ssrn.
Heeren reminds us that in the 1886 case of Yick Wo v. Hopkins, the United States Supreme Court recognized the Fourteenth Amendment equal protection claims by noncitizens, including immigrants within its definition of "we the people." Yet, although such early Supreme Court cases upheld immigrants’ right to work in the face of state restrictions, relying heavily on the logic and rhetoric of natural rights, in more recent cases such as Arizona v. United States these equality norms are missing. Heeren argues this is a loss given the importance of "rights." He concludes:
In this climate, perhaps the best that can be hoped is for immigrants to invoke individual rights proxies like federalism or agency skepticism. But history, even U.S. legal history, is full of sudden change. The contemporary Supreme Court may prioritize structural rights based on federalism over individual rights and administrative law claims over constitutional ones. But these currently prevailing doctrines evolved from a very different state of affairs—one in which immigrants succeeded to a remarkable extent in pressing claims as equals.
Heeren's article is worth considering not only in light of his excellent discussion of various constitutional doctrines but also in terms of the political consequences of "rights" for noncitizens.
Friday, October 26, 2012
In its opinion in Planned Parenthood of Indiana v. Commissioner of Indiana Department of Health, the Seventh Circuit this week affirmed a district judge's injunction against the state's defunding of Planned Parenthood.
However, the Seventh Circuit upheld the district court on the statutory claim under the Medicaid Act's "free choice of provider" provision, and rejected the constitutional claims of preemption and unconstitutional conditions.
On the preemption claim, the Seventh Circuit panel reversed the district judge's finding that the federal block-grant program for the diagnosis and monitoring of sexually transmitted diseases conflicted with Indiana's defunding of Planned Parenthood in contravention of the Supremacy Clause. The panel applied a presumption in favor of a lack of preemption and found no conflicts, even as implied.
While the district judge had not reached the unconstitutional conditions claim - - - having granted relief on the other claims - - - the Seventh Circuit stated that "it makes sense" to address it. The panel focused on the constitutional right at stake, reasoning that it is a "right against coercive government burdens," but this "implies no limitation on the authority of a State to make a value judgment favoring childbirth over abortion." Thus, the panel concluded that the unconstitutional conditions claim was not likely to succeed on the merits: given that "the government’s refusal to subsidize abortion does not unduly burden a woman’s right to obtain an abortion, then Indiana’s ban on public funding of abortion providers—even for unrelated services—cannot indirectly burden a woman’s right to obtain an abortion."
Thus, although the Seventh Circuit opinion's result requires the funding of Planned Parenthood, the court foreclosed constitutional claims.
Monday, October 15, 2012
Today the United States Supreme Court granted the petition for certiorari of the State of Arizona in Arizona v. The Inter-Tribal Council of Arizona, from the Ninth Circuit's en banc opinion in Gonzalez v. Arizona. (The Inter Tribal Council of Arizona, ITCA, was a named plaintiff in Gonzales).
The central issues, as have been the case with other recent Arizona laws before the Supreme Court, involve pre-emption and citizenship. Here, Arizona's law derives from a ballot initiative, Proposition 200, passed in 2004. It requires prospective voters in Arizona to provide proof of U.S. citizenship in order to register to vote and requires registered voters to show identification to cast a ballot at the polls. The plaintiffs contended that these provisions were pre-empted by the National Voter Registration Act and the Voting Rights Acts.
With regard to the polling place requirements, the en banc Ninth Circuit affirmed the district judge and rejected the plaintiffs' claims that the requirements were inconsistent with the Voting Rights Act, violated the Twenty Fourth Amendment's prohibition of poll taxes, or violated the Fourteenth Amendment's Equal Protection Clause.
However, the Ninth Circuit found the challenge to the registration to vote provisions had merit. As a grounds of pre-emption, the plaintiffs relied on the Supremacy Clause, Article VI, but also upon the Elections Clause, Art. I, § 4, cl. 1. Recall that the Elections Clause provides: "The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of chusing Senators." The Ninth Circuit en banc extensively discussed Election Clause pre-emption and compared the provisions of the NVRA and the Proposition 200 regulations. The court found:
Although Arizona has offered a creative interpretation of the state and federal statutes in an effort to avoid a direct conflict, we do not strain to reconcile a state’s federal election regulations with those of Congress, but consider whether the state and federal procedures operate harmoniously when read together naturally. Here, under a natural reading of the NVRA, Arizona’s rejection of every Federal Form submitted without proof of citizenship does not constitute “accepting and using” the Federal Form. Arizona cannot cast doubt on this conclusion by pointing out that the NVRA allows states to reject applicants who fail to demonstrate their eligibility pursuant to the Federal Form. Congress clearly anticipated that states would reject applicants whose responses to the Federal Form indicate they are too young to vote, do not live within the state, or have not attested to being U.S. citizens. Indeed, the NVRA instructs the EAC [Election Assistance Commission] to request information on the Federal Form for the precise purpose of “enabl[ing] the appropriate State election official to assess the eligibility of the applicant.” Thus, a state that assesses an applicant’s eligibility based on the information requested on the Federal Form is “accepting and using” the form in exactly the way it was meant to be used. In contrast, Proposition 200’s registration provision directs county recorders to assess an applicant’s eligibility based on proof of citizenship information that is not requested on the Federal Form, and to reject all Federal Forms that are submitted without such proof. Rejecting the Federal Form because the applicant failed to include information that is not required by that form is contrary to the form’s intended use and purpose.
In its petition for writ of certiorari, Arizona argues that the Ninth Circuit mistakenly created a "new, heightened preemption test" under the Elections Clause and incorrectly concluded that the Proposition 200 requirements were preempted by the NVRA.
The litigation has already garnered a few amicus curiae briefs at the certiorari stage; it is sure to be another closely watched case on Arizona's attempts to regulate citizenship.
[image: ITCA,"Tribal Homelands in Arizona" via]