Don't tread on me: states resist federal preemption.

• Author: Waren, William T.
• Position: Includes related articles

Congress, federal agencies and even the Supreme Court are constantly encroaching on state jurisdiction, but states can and do fight back.

Rose Cipollone began smoking in 1942 and died of lung cancer in 1984. Her family sued three tobacco companies under New Jersey tort law. In their defense, the cigarette manufacturers claimed that federal statutes enacted in 1965 and 1969, which require a health warning on all packages of cigarettes, preempted the family's state law claim. The federal district court granted the Cipollones' motion to strike the preemption defense, but the court of appeals reversed, accepting the cigarette manufacturers' argument that preemption was implied.

The Cipollone case eventually reached the U.S. Supreme Court, which in 1992 reversed the appeals court decision in part. The high court's decision was important not simply because of the hot political issue of cigarette company liability for lung cancer deaths, but more fundamentally because of what the Court had to say about the federalism issues raised by the cigarette manufacturers' defense.

The federalism concerns of states relate not to the outcome of the liability issues in the case, but rather to issues of process - to questions about who decides. In this circumstance, if it is unfair for cigarette manufacturers to be sued and held liable for lung cancer deaths when the victim was arguably warned and assumed the risk of her behavior, then the state legislature, not a federal court, is the appropriate body to make the decision to restrict such claims (especially when Congress has not directly addressed the question of liability in federal legislation).

The Cipollone case is more high profile than most such cases, but it is not unusual. Every year (and 1994 is no exception) the U.S. Supreme Court considers several important preemption cases. And every year, Congress considers bills, federal agencies consider rules, and international agencies consider decisions that would supplant state statutory or common law. Adverse decisions may result not only in nullifying state legislative acts or state court decisions, but also in narrowing the range of issues that legislatures may address. The threat is the steady, incremental, year-by-year erosion of the jurisdiction of state legislatures.

Interest groups of every stripe that are unsuccessful in pursuing their agendas at the state level increasingly are tempted to "forum shop" and come to Washington, D.C., seeking reversal of state legislative or court action. Federal moves frequently result in undoing the work of sponsors of state legislation who may have labored for months or years to pass a bill. But perhaps the most insidious consequence of preemption from the state perspective is its impact in the future. Unless a federal statute can be amended or a court decision reversed in new federal legislation, state jurisdiction over large areas of public policy is ceded for the indefinite future to the federal government. This is particularly harmful when federal action results in "field" preemption, which ma bar future state legislative action even when there is no direct conflict with federal law. This may happen when state standards are simply more stringent than or supplementary to federal standards or even when state law touches tangentially on the same subject as federal legislation.

Preemption by Legislation

Before Congress this session are proposals related to intrastate telecommunications, interstate banking and branching, product liability, and credit reporting. All would undermine state law, and all have a chance of passing.

States are opposing congressional proposals to strip them of substantial authority to regulate intrastate telecommunications, and it's an uphill battle.

In January, the Clinton administration presented its "Communications Act Reforms," intended to encourage investment in the national information infrastructure (NII), the so-called "information superhighway." The administration's NII white paper, which contemplates a new and largely federal regulatory framework for advanced communications and information services, builds upon legislative proposals offered by Congressman Edward Markey of Massachusetts.

Senator Carol Fukunaga of Hawaii, chair of NCSL's Communications Committee, objects to proposals that would inappropriately override state laws. Although agreeing with the goals of promoting competition and encouraging investment in information infrastructure, Fukunaga has told Congress that the Markey bill "would jeopardize the federal-state partnership in developing telecommunications policy by preempting states and shifting authority to the Federal Communications Commission." California Assemblywoman Gwen Moore, in testimony before an administrative hearing, expressed similar concerns about the House and administration plans. "If enacted, these proposals effectively eviscerate state regulatory authority."

States are also battling proposals to usurp their authority over interstate and branch banking.

The federal government, says Kansas Senator Alicia Salisbury, "should not mandate the form of interstate banking and branching regulation." States are particularly concerned about retaining authority to regulate interstate branching, to tax banks and to coordinate banking and economic development policy. At the very least, she says, states should be able to "opt out" of the federal regulatory scheme.

State regulation of credit reporting agencies is also under challenge in the current Congress. Many states have passed legislation responding to constituent complaints that they lost money, were denied credit or lost a job because of erroneous credit reports. Now Congress is considering similar legislation. Lobbyists for the credit reporting and banking industries, however, have been demanding preemption of stricter state laws as their price for accepting additional federal regulation.

Congress has considered proposals for federal product liability legislation for the past 13 years. This session, the Senate Commerce Committee has updated a bill, S 687, that would selectively override state tort law on product injuries. Representative Mike Box of...