2.10 Preemption and Abstention

• Library: Federal Civil Practice in Virginia (Virginia CLE) (2023 Ed.)

2.10 PREEMPTION AND ABSTENTION

2.1001 Federal Preemption.

A. "Field" Versus "Conflict" Preemption.

Preemption generally takes two forms: (i) "field" preemption; and (ii) "conflict" preemption.

"Field" preemption occurs where a federal regulation in the area is so pervasive that it occupies an entire field, leaving no room for state regulation in that area. ⁶⁷⁷ For example, Congress intended the Foreign Sovereign Immunities Act ⁶⁷⁸ to deal comprehensively, and exclusively, with actions against foreign states, precluding any other sources of jurisdiction over foreign states in United States courts. ⁶⁷⁹

"Conflict" preemption concentrates on whether state law makes it either impossible to follow federal law or provides a significant obstacle to adhering to federal law. ⁶⁸⁰

"Conflict" preemption sometimes raises extremely sophisticated and complex questions. For example, the result reached by the Supreme Court in Geier v. American Honda Motor Co., ⁶⁸¹ could be seen as difficult to reconcile with the result reached 11 years later in Williamson v. Mazda Motor of America, Inc. ⁶⁸² Both cases involved the National Traffic and Motor Vehicle Safety Act of 1966, ⁶⁸³ and both involved Federal Motor Vehicle Safety Standard 208 (FMVSS 208) promulgated by the Department of Transportation (DOT). In Geier, the plaintiffs attempted to argue that Honda's failure to equip its cars with passenger-side airbags conflicted with FMVSS 208, which required car manufacturers to equip some, but not all, of their 1987-model vehicles with passive restraints. As a result, the plaintiffs' tort suit was preempted by the federal legislation and the implementing regulation. In Williamson, by contrast, which also involved FMVSS 208, the tort suit involved was held not to be preempted because the federal regulations regarding shoulder strap, as opposed to lap-strap, restraints were minimum standards that left car manufacturers with a choice of whether to employ one or the other. The Court concluded that the tort suit did not conflict with the DOT's decision to provide auto manufacturers with a choice of whether to employ one or the other. ⁶⁸⁴ Both cases involved detailed analysis of the regulations, and representations made by the Solicitor-General, concerning the effects of the tort litigation at issue upon the federal regulatory system.

B. "Complete" Versus "Ordinary" Preemption.

As noted in paragraph 2.703(C) above, dealing with removal, there is also a clearly defined difference between "ordinary" preemption (where a federal defense may be available to a state law claim) and "complete" preemption (where a federal statute completely displaces state law).

Even where state law claims appear to predominate in a complaint, the preemption inquiry may reveal that those state law claims actually arise under federal law and may, thus, be removable. ⁶⁸⁵ Accordingly, even when the plaintiff never intended to raise any federal question and intended to confine his or her claims to purely state law claims, where the substantive law is completely preempted by federal law, and this preemption is apparent from the face of the complaint itself, the case may still be removable to federal court. ⁶⁸⁶

The Supreme Court has established that state law is preempted under the Supremacy Clause of the Constitution (article VI, clause 2) in three circumstances: (i) where Congress has defined explicitly the extent to which its enactments preempt state law; (ii) where state law may be preempted because it attempts to regulate conduct in a field that Congress intended the federal government to occupy exclusively; and (iii) where state law is preempted because it actually conflicts with federal law. ⁶⁸⁷ Thus, the Court has found preemption where it is impossible for a private party to comply with both federal and state requirements; ⁶⁸⁸ where state law "stands as an obstacle to the accomplishment and execution of the full purpose and objectives of Congress"; ⁶⁸⁹ or where state law permitting class action treatment for claims arising out of consumer contracts conflicts with the liberal policies of the Federal Arbitration Act ⁶⁹⁰ favoring arbitration of such claims without class action treatment being available. ⁶⁹¹

It is well established that federal law, under the Supremacy Clause of the United States Constitution, can completely preempt state law attempts to regulate. Since McCulloch v. Maryland, ⁶⁹² "[i]t has been settled that state law that conflicts with federal law is 'without effect.'" ⁶⁹³ Using this rationale, the United State Supreme Court has ruled that federal legislation dealing with the health warnings issued in connection with the sale of cigarettes preempts all "failure to warn" theories under state law but does not preempt state law damages actions for breach of express warranty, intentional fraud, misrepresentation, or conspiracy. ⁶⁹⁴

Even absent explicit preemptive language, Congress's intent to supersede state law altogether can be inferred where a scheme of federal regulation is so pervasive that it is reasonable to conclude that Congress intended to leave no room for the states to supplement it. ⁶⁹⁵

In one case, dealing with state regulation of the insurance industry, the Fourth Circuit held that, under the McCarran-Ferguson Act, ⁶⁹⁶ South Carolina law did not "reverse preempt" the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, partially in view of the importance of preserving the United States' ability to "speak with one voice" in the regulation of foreign commerce. ⁶⁹⁷

For an analysis of various types of preemption involving the Natural Gas Act ⁶⁹⁸ and zoning laws, see Dominion Transmission, Inc. v. Town of Myersville. ⁶⁹⁹

2.1002 Abstention.

Federal courts may delay or decline to hear a case in deference to ongoing or potential state court litigation.

"Federal courts have a strict duty to exercise the jurisdiction that is conferred on them by Congress." ⁷⁰⁰

The distinction between law and equity can have significance when abstention issues arise. The authority of a federal court to abstain from exercising its jurisdiction extends "to all cases in which the court has discretion to grant or deny relief." ⁷⁰¹ Thus, the abstention doctrine has been applied to suits for injunctive relief, certain classes of declaratory judgments, and other forms of relief committed to a federal court's equitable discretion.

The Supreme Court has also ruled, however, that this principle of abstention does not apply to common law suits for damages. ⁷⁰² So,

[u]nder our precedents, federal courts have the power to dismiss or remand cases based on abstention principles only where the relief being sought is equitable or otherwise discretionary. Because this was a damages action, we conclude that the district court's remand order was an unwarranted application of the Burford doctrine.

Abstention is a purely discretionary, judge-made doctrine. Abstention is the exception, not the rule. ⁷⁰³ Abuse of discretion is the standard of review on appeal. ⁷⁰⁴

The following are examples of rationales supporting a decision to abstain:

A. Federalism/comity—avoidance of friction between federal and state courts; ⁷⁰⁵

B. Reduction of the likelihood that a federal court will make an erroneous interpretation of state law; ⁷⁰⁶

C. Avoidance of unnecessary constitutional rulings; ⁷⁰⁷ and

D. Judicial economy. ⁷⁰⁸

Abstention-based stay orders may be appealable as a "final decision" under 28 U.S.C. § 1291 because those orders put litigants "effectively out of court." ⁷⁰⁹ In addition, remand orders are equally "final" because, when the district court remands a case to state court, "the district court disassociates itself from the case entirely, retaining nothing of the matter on the federal court's docket." ⁷¹⁰

2.1003 Five Traditionally Recognized Types of Abstention.

A. Pullman Abstention.

Pullman abstention refers to a court abstaining when an unresolved issue of state law could, if decided, obviate a federal constitutional issue presented in the federal case. ⁷¹¹

1. Basic Facts Required.

Under Pullman abstention, there must be (i) an unsettled or ambiguous question of state law and (ii) the possibility that the state court's construction of the unsettled question will avoid the need to reach a federal constitutional question.

2. Development in the United States Supreme Court.

Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 500-01 (1941) (abstaining in a case involving a constitutional challenge to state railroad commission regulation when the state court had never decided whether the commission had the authority to issue the regulation under state law).

City of Meridian v. Southern Bell Telephone & Telegraph Co., 358 U.S. 639, 640 (1959) (abstaining in a case challenging state law regulating public utilities in order to allow the state court to decide whether the law violates the state constitution).

Fornaris v. Ridge Tool Co., 400 U.S. 41, 44 (1970) (abstaining where the state court interpretation of an as-yet unconstrued Puerto Rican law might narrow or avoid a federal constitutional question).

Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 237 (1984) (declining to abstain where state law was certain and unambiguous).

3. England Reservation.

In an England reservation, to avoid preclusion of its federal claims, the plaintiff must inform the state court of those federal claims and expressly reserve them for later decision by the federal court. ⁷¹²

For a good example of a botched England reservation, see Sheptock v. Fenty. ⁷¹³

4. Leading Fourth Circuit Cases.

Hunter v. Virginia State Bar, 786 F. Supp. 2d 1107, 1112-13 (E.D. Va. 2011) (dismissing the plaintiff-attorney's first amendment claims, under Younger v. Harris, ⁷¹⁴ and attempts to enjoin pending state disciplinary proceedings).

Chase Brexton Health Services, Inc. v. Maryland, 411 F.3d 457 (4th Cir. 2005) (holding that Colorado River abstention doctrine did not apply to require federal...