Stealth Preemption by Preamble

Armand Rossetti

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What is the most rapid and effective way to advance preemption? Answer: preemption by preamble. It seems that the concept doing it the traditional way; first approaching Congress, or having regulatory agencies amend regulations and open those revisions to public comment is fraught with too much interference from legislators, regulators, and/or the public.

Preemption by preamble is a phrase that Catherine M. Sharkey (New York University School of Law) used as a title for her research paper, where she pointed out that as of late, more and more federal agencies are amending regulations to include preemption language in the introductory preambles that precede the bodies of regulations, and she stated the following:

“Dubbed silent tort reform, these preemption preambles may be only the tip of the iceberg, a harbinger of a future where federal agency regulations come armed with directives to displace competing or conflicting state regulations or common-law as a matter of course.”

Alicia Mundy of the Wall Street Journal has suggested that preemption by preamble may become the ultimate Bush legacy (video). As Ms. Mundy points out, pre-emption is now pervading not one but a host of federal agencies. I thought that it would be interesting to learn how a silent preemption tsunami was pervading US regulatory agencies, and thanks to Attorney Brenda Fulmer, I came across a white paper from the American Association for Justice (AAJ).

I thought that it might be interesting to know how this clever Jonny Appleseed-like idea to drop the seeds of pre-emption into every regulatory preamble in sight, came about. According to the AAJ’s exposé, Get out of Jail Free, the idea of complete immunity preemption originated with a pharmaceutical defense attorney and lobbyist (Daniel Troy) who left his job in the private sector to become chief counsel of the FDA in the Bush Administration. From the FDA, the idea of quick fix preemption has spread to other agencies. Of course, those agencies were staffed with political appointees who had previously worked in the very industries that they were now responsible for regulating.

It seems reasonable that preemption may be necessary at times to promote orderly efficiency (e.g., Federal workers compensation regulations). However, complete immunity preemption, having the scope and pervasiveness of the current preamble preemption effort, is nothing more than an unprecedented attempt to dismantle states’ rights. In many instances that form of preemption contradicts agencies’ own prior policies.

According to the AAJ, in the last three years, the US Food and Drug Administration (FDA), the National Highway Traffic Safety Administration (NHTSA), the Consumer Product Safety Commission (CPSC), the Federal Railroad Administration (FRA), the Pipeline and Hazardous Materials Safety Administration (PHMSA), the Department of Homeland Security (DHA) and the Transportation Safety Administration (TSA) all ignored traditional agency precedents in claiming the newly found authority to provide immunity from state law.

It is no secret that when faced with the spectre of preemption by preamble, agency career officials vigorously disagreed with Bush administration agency appointees over the administration’s attempt to provide complete immunity, even when corporations have knowingly injured or endangered consumers with unsafe products.

It is also well known, and regulators have shown by their actions or inactions, that the regulatory system does not have the resources to single handedly and fully protect the public. Across the board and with few exceptions, agencies have known all along that they could not regulate single handedly. As a result, those agencies have long worked in tandem with the civil justice system to provide restitution to consumers injured by dangerous products. After studying the situation very closely, the AAJ concluded the following:

“The administration has injected politics into every aspect of Americans’ lives, from their medicine cabinets to their cars’ brakes, at the expense of consumer safety. This report will show that this movement has nothing to do with protecting the American public and everything to do with rewarding the administration’s corporate sponsors.”

The question now remains; is preemption by preamble constitutional?

The American Constitution Society for Law and Policy (ACS)'s, Professor David C. Vladek (Georgetown University) stated the following:

“While the public watches the Supreme Court wrestle with the preemption questions presented in Reigel v. Medtronic, and perhaps in Wyeth v. Levine, the more troubling action is taking place out of public view. The quiet but insidious erosion of state tort law remedies --- and the health and safety benefits that are associated with them --- continues unabated. Our health and safety agencies have been subject to a hostile-takeover by an Administration that cares more about constituent-serving outcomes than their statutory mission to protect the public. The winners will be the Administration’s corporate patrons who will be given the immunity from tort liability they never could have gotten from Congress. The loser will be the tens of thousands of Americans injured through no fault of their own but who will no longer have any means of redress.”

The videos posted (here) offer further, considerable insight concerning pervasive threat of regulatory preemption.

In his paper, The Emerging Threat of Regulatory Preemption , Professor Vladek examines the way that several agencies, mentioned above, have implemented preamble preemption. Professor Vladek goes on to address the question: “Which branch of government should decide when federal law should displace state law – Congress or the Executive Branch?”

The answer may lay within Article I, Section 1 of the US Constitution, and Professor Vladek states:

“Federal administrative agencies do not have the power to regulate with the force of law, absent a clear and express delegation of that authority from Congress. This directive takes on special force because Congress stands alone as the constitutional body structured to accommodate state interests. Certainly the Executive Branch does not — its interest is in consolidating federal power. For these reasons, a regulatory agency may exercise preemptive authority if, but only if, the agency has been explicitly delegated that power by Congress, and does so in a way that is faithful to Congress’s mandate (see Gonzales v. Oregon, 546 US 243, 255 (2006).

This Constitutional mandate is reflected in the Executive Order on Federalism, which was first issued by President Reagan. Modified only slightly by President Clinton, Executive Order 13,132 instructs agencies to construe federal law to preempt state law “only where the statute contains an express preemption provision or there is some other clear evidence that Congress intended the preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” See 64 Fed. Reg. 43,255, 43257 (Aug. 10, 1999).

The problem is that the agencies are not following the Executive Order’s essential edict: follow Congress’s lead on preemption matters unless there is an intolerable conflict between federal and state law. Agencies are instead attempting to define the scope of preemption based on the Administration’s policy goals, but with little or no guidance from Congress. In so doing, agencies have strayed from their proper function of applying the law as defined by Congress into the constitutionally impermissible role of making the law on their own — untethered by guidance from Congress, unconstrained by the political process, and using backdoor means that escape serious oversight — all in an effort to eliminate state law.” See Greer v. American Honda Motor Co., 529 US 861 (2000), Medtronic, Inc. v. Lohr, 518 US 470 (1996) and Chevron and Preemption, 102 Mich. L. Rev. 737 (2004).

I have to believe that we do live in interesting times, and as time goes on, the situation with preemption by preeamble may become even more interesting.