"Areas of Traditional State Regulation”: Shadowy Enumerated Powers in the Roberts Court?

As I shall explain in the following text, the Roberts Court’s preemption decisions have a peremptory quality similar to their predecessors. If one looks beyond the Court’s frequently abstract and conclusory assertions, however, one can trace a pattern in the Court’s choices. I suggest that the Roberts Court has shown a greater willingness to infer preemption of state law in contexts that I call “commercial" and less willing to infer preemption in contexts I call “regulatory.” A context is commercial on my account when the purpose of the federal and state laws is to define the rules for bargaining rather than assign entitlements over which the parties bargain. A context is, by contrast, regulatory when the purpose of the state and federal laws is to define the baseline entitlements over which the parties bargain. For example, a rule requiring a signed document to transfer title to land would be a commercial rule, because its purpose is to define the process by which parties can assign title to an asset through bargaining rather than to define which of the parties is entitled to the asset in absence of the bargain. By contrast, a rule prohibiting a landowner from dredging and filling a wetland is regulatory, because it is defining the landowner’s and government’s baseline entitlements in absence of any bargain: the landowner might be able to buy her way out of the regulation (by, e.g., contributing to a wetlands bank), but the law’s definition of baseline entitlements insures that the landowner will have to compensate the government and not vice versa.

Based on these definitions, I classify seven of the Roberts Court’s decisions as commercial. The decisions construing the Federal Arbitration Act of 1925 (FAA), the Federal Aviation Administration Authorization Act of 1994 (FAAAA), the Securities Litigation Uniform Standards Act of 1998 (SLUSA), the National Labor Relations Act of 1935 (NLRA), and the National Bank Act (NBA 1883 and 1884) all interpreted statutes that purport to define an outcome- neutral bargaining framework. The FAA, for instance, protects a procedure— private arbitration—for resolving disputes about the meaning of contracts; it does not purport to assign an initial entitlement over any topic of bargaining. Likewise, Section 301 of the NLRA defines a process for resolving disputes between labor and management, without defining which side ultimately should prevail in their demands.

The state laws at issue in these seven cases are also characterized by their commercial character. None of the cases involved interests of safety, health, or public morality that are typically excluded from the realm of the marketplace through inalienability rules. To be sure, the preempted state laws imposed limits on freedom of contract in each case for the sake of fuller disclosure of information or general commercial fairness. But the interests being protected by these limits on contractual freedom were a more fully informed bargaining process, not the safeguarding of preexisting entitlements to one’s property or personal security. Price and quality are matters over which one generally bargains and concerning which no independent duty is owed to anyone outside of the bargain.

Of course, every bargaining or remedial procedure has an effect on outcome, but the character of a law is, on my account, determined by its ostensible purpose, not its effects: if a statute has the proclaimed purpose of facilitating bargaining without assigning the initial entitlement over which the parties bargain, then it is commercial in character.

By contrast, I classify ten decisions as regulatory, because they involve state and federal laws that have the purpose of defining an initial entitlement to be free from some harm. These harms include gangrene resulting in an amputated arm,[1] lung disease induced by smoking cigarettes,[2] ruptured blood vessels,[3] neurological disorders,[4] seizures,[5] death in a car collision,[6] physician-induced death,[7] loss of wetlands,[8] murder ofwitnesses,[9] or the hiring of undocumented aliens.[10] In each of these cases, state and federal laws take arguably different views about what constitutes a harm—that is, which side of a dispute is initially entitled to some level of safety or health in absence of any bargain—rather than what constitutes a fair bargaining process by which the entitlement ought to be resolved.

Admittedly, this taxonomy has some fuzzy boundaries, because it requires one to characterize the purposes of state and federal laws that may have ambiguous goals. In Altria Group, Inc. v. Good.,[11] for instance, Justice Stevens narrowly characterized the state fraud law as having a merely commercial purpose of promoting well-informed bargains, while the federal Cigarette Labeling Act (CLA) had the regulatory purpose of protecting consumers’ health from the hazards of smoking. The majority then held that, because this state commercial purpose did not contradict the federal regulatory purpose about the adequacy of the federally approved warning for the protection of health, the state fraud claim was not preempted.[12] The characterization of the CLAs purpose as regulatory was debatable, given that, as Altria noted, the CLA also had the purpose of protecting commerce in cigarettes.[13]

Debatable or not, the more plausibly one can characterize a law’s purpose as commercial, the more likely it is that the Roberts Court uses sweeping theories of preemption. The more plausible a regulatory characterization of protecting interests in safety and health that are not rooted merely in the principles of fair bargaining, the more likely that the Roberts Court uses much narrower theories of preemption and found state law to be preempted much less frequently. As I shall suggest in the text that follows, this pattern might not be an accident: there may be sound reasons rooted in the relative competence of national and subnational governments in a federal regime to let the federal government take the lead in defining frameworks for bargaining but not to define the underlying entitlements over which parties bargain.

  • [1] Wyeth v. Levine, 555 U.S. 555 (2009).
  • [2] Altria Group, Inc. v. Good, 555 U.S. 70 (2008).
  • [3] Riegel v. Medtronic, 552 U.S. 312 (2008).
  • [4] Brusewitz v. Wyeth, 131 S. Ct. 1068 (2011).
  • [5] PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011).
  • [6] Williamson v. Mazda Motors, 131 S. Ct. 1131 (2011).
  • [7] Gonzales v. Oregon, 546 U.S. 243 (2006).
  • [8] Rapanos v. United States, 547 U.S. 715 (2006).
  • [9] Fowler v. United States, 131 S. Ct. 2045 (2011).
  • [10] U.S. Chamber of Commerce v. Whiting, 131 S. Ct. 1968 (2011).
  • [11] 555 U.S. 70 (2008).
  • [12] Id. at 79 (Cigarette Labeling Act preempts state laws only if the latter “are based on an assumption that the federal warnings are inadequate”).
  • [13] Id. at 78-79.
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