PREEMPTING PLAINTIFF CITIES.

Author:Swan, Sarah L.
 
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INTRODUCTION 1242 I. Forms of Litigation Preemption 1246 A. State Settlements that Preclude City Claims 1246 B. State-City Lawsuits 1248 C. Preemption through Legislation: Implied, Express, and Super 1250 1. Implied Preemption 1250 2. Express Preemption 1252 3. Super Preemption 1255 II. Explaining Litigation Non-Preemption 1256 A. Litigation Bipartisanship 1260 B. Political Divisiveness 1262 C. Litigation v. Regulation 1262 III. The Space for Plaintiff City Litigation 1264 CONCLUSION 1767 INTRODUCTION

Within the city-state relationship, states hold enormous power. (1) Lately, states have been exercising that power by passing extremely broad, extremely aggressive laws that preempt and prohibit cities' regulatory efforts on many fronts. (2) Variously called "hyper preemption," (3) the "new preemption," (4) "super preemption," (5) "nuclear preemption," (6) or "maximum preemption," (7) these new state efforts remove significant regulatory authority from cities, and typically function to stop municipalities from enacting socially progressive or liberal-leaning regulation. (8) They occur in a wide variety of contexts, targeting everything from sprinklers and plastic bags, to minimum wage ordinances, and anti-discrimination laws. (9)

While "conflicts between statehouses and city halls" are nothing new, (10) these new preemption laws dramatically differ from the old ones in both quantity and quality. Quantitatively, preemption activity has increased significantly every year since 2011, and shows no signs of slowing down. (11) In fact, given that conservative political groups like the American Legislative Exchange Council (ALEC) offer and encourage the use of preemption law templates, (12) preemption activity is only expected to grow.

Qualitatively, the new preemption laws differ from the old in a number of ways. First, the new preemption laws are punitive. (13) Individual local officials can be sued, fined, or removed (or some combination of all three) for trying to enact regulations in prohibited fields. (14) Local governments can also be fiscally penalized for such attempts, either through the withholding of state funds, or through fines. (15) Second, some new preemption laws fundamentally alter what steps local governments can take to challenge state preemption. (16) In part because of these features, preemption laws have been the source of intense consternation, and are a site of deepening animosity between state and local governments. (17)

Given the high-intensity city-state conflict evident in regulatory preemption, it is perhaps surprising that when we move away from the world of city regulation and into the world of city litigation, things look drastically different. Cities have increasingly been using litigation, in addition to regulation, as a tool to achieve progressive ends and have been bringing forward hundreds of quite controversial claims against corporate wrongdoers in contexts like the opioid epidemic, the financial crisis, lead paint poisoning, and climate change. (18) Yet states have not responded with anywhere near the fury that they have displayed on the regulatory front. Rather, states have adopted a relatively restrained approach to city litigation, and much city litigation continues unimpeded by state intervention. (19)

This Article addresses this paradox. It describes the current state of city litigation preemption, explains the reasons why states have been relatively non-confrontational in this area, and argues that even in this era of rampant regulatory preemption, plaintiff city litigation presents a viable means of accomplishing certain progressive goals. While the possibility of litigation preemption battles constantly looms over plaintiff city litigation, city litigation is often in the shared interest of both cities and states. Such interest alignment suggests that plaintiff city litigation may well continue to escape the fate of preempted regulation.

Part I of this Article descriptively maps the litigation preemption landscape. It sets out the means by which states can preempt city litigation and explores the instances in which states have done so. This Part shows that while there have been strong state-city disagreements over plaintiff city litigation, to date, litigation preemption has not undergone nearly the same kind of aggressive overhaul as regulatory preemption. Indeed, in a number of recent examples, states have actually backed down from legal confrontations with cities over such litigation. (20)

Part II explains why city litigation has thus far been mostly spared the venomous state response that has befallen regulation. First, the new regulatory preemption is largely the result of extreme political polarization--specifically Republican-led states clashing with Democratic-led cities. (21) This political dynamic is muted in the litigation context. States themselves have a history of engaging in bipartisan litigation against third-party wrongdoers and have long been able to overlook partisan differences when it comes to litigation. (22) Institutionally, such historical flexibility likely enables states to avoid myopic political entrenchment about city litigation as well. States and cities are typically compelled to expend enormous resources as a result of the litigated harms, (23) and where there is a possibility of recouping some of this expense, states are able to look past their ideological differences in favor of a shared benefit for all.

Second, the issues that cities litigate are often much less politically polarizing than those that they regulate. There is general, widespread, bipartisan agreement that the opioid epidemic, lead paint poisoning, and the sub-prime mortgage crisis are serious harms. (24) Conversely, there is much less agreement on issues like sanctuary cities, local minimum wage laws, and the appropriate scope of anti-discrimination laws. (25)

Third, while regulation is obviously a form of governance, litigation is a much subtler tool. (26) Litigation is more commonly viewed as a form of law enforcement, rather than law creation, and in that sense, it appears non-threatening to those who prefer maintenance of the status quo to progressive change. Plaintiff city litigation does have important political functions, in that it helps to define polities and sends valuable expressive messages, (27) but it does not implicate questions of governing power the way regulation does.

Part III explores the political possibilities for plaintiff city litigation. Although such litigation does not address the contentious issues forming the basis of regulatory battles, it does, as I have argued earlier, offer a means of protecting vulnerable communities in other ways. (28) Thus, even in an era of rampant regulatory preemption and deep political animosity between cities and states, plaintiff city litigation currently remains a viable parallel track for cities to continue pursuing urban social justice.

  1. FORMS OF LITIGATION PREEMPTION

    Just as states can preempt and prohibit city regulation, they can also preempt and prohibit plaintiff city litigation. This Part describes the means by which states preempt plaintiff city litigation: namely, by entering into settlements that preclude cities from litigating, directly suing cities to stop plaintiff city litigation, and by passing legislation that prohibits such litigation.

    1. State Settlements that Preclude City Claims

      State-city preemption can occur through state settlements with third parties. The best example of this arose in the tobacco litigation context, when state-initiated tobacco litigation ultimately resulted in the Master Settlement Agreement (the "MSA"), one of the largest civil settlements in American history. (29) The story of this preemption-by-settlement actually begins with a story of typical, standard regulatory preemption. In 1985, Florida, influenced heavily by the tobacco lobby, became the first state to preempt local smoking laws. (30) But soon after this regulatory preemption occurred, the tobacco lobby's fortunes changed, as states (and two cities) began to sue tobacco companies in the late 1980s. (31) When the MSA was eventually signed, it both ended the existing litigation and functioned as a form of litigation preemption for cities that did not join the initial litigation. (32) It precluded prospective plaintiff cities from litigation harms caused by tobacco. (33)

      As "creatures of the state," municipalities and other sub-state governmental entities "have only those powers granted to them by the state." (34) Accordingly, in the MSA, many state attorneys general could agree not only to relinquish their own future legal claims against the tobacco industry, but also those of their municipalities and other sub-state governmental entities. (35) So when Wayne County, Michigan, for example, filed a suit against tobacco companies shortly after the MSA was signed, the County's case was dismissed on the basis that the state attorney general had released the tobacco defendants from the County's potential claims. (36) Wayne County was thus unable to seek or obtain compensation for its alleged tobacco related injuries. (37)

      However, not every state was able to so easily preclude its municipalities from initiating tobacco suits. The authority of state attorneys general to bind their municipalities ultimately depends on state law, and states' laws differ. (38) Accordingly, at least one city, St. Louis, successfully defeated a preclusion challenge when it launched a suit against tobacco. (39) The MSA, though, foresaw and prepared for this potential complication. It incorporated terms to minimize the effect of such plaintiff city suits, and included a provision that deducts any damages a locality might recover from those received by the state. (40) The MSA also explicitly gives states the right to intervene in such city suits. (41) The MSA thus leaves states well-incentivized and well-equipped to deter any...

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