United States Court of Appeals
For the First Circuit
No. 05-2136
NEW HAMPSHIRE MOTOR TRANSPORT ASSOCIATION;
MASSACHUSETTS MOTOR TRANSPORTATION ASSOCIATION, INC.;
VERMONT TRUCK & BUS ASSOCIATION, INC.,
Plaintiffs, Appellees,
v.
G. STEVEN ROWE, in his official capacity as Attorney General
for the State of Maine,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Chief Judge,
Stahl, Senior Circuit Judge,
and Howard, Circuit Judge.
Paul Stern, Deputy Attorney General, with whom G. Steven
Rowe, Attorney General, Melissa Reynolds O'Dea, Peter B. LaFond,
and Christopher C. Taub, Assistant Attorneys General, Office of
the Attorney General, were on brief, for appellant.
Ruth N. Borenstein, with whom Paul T. Friedman, Lawrence R.
Katzin, Morrison & Foerster LLP, Michael A. Nelson and Jensen
Baird Gardner & Henry, were on brief, for appellees.
May 19, 2006
HOWARD, Circuit Judge. In 2003, Maine enacted a law to
restrict and regulate the sale and delivery of tobacco products
purchased via the internet or other electronic means. Several
trade associations, representing air and motor carriers of
property, brought this action against the Maine Attorney General
alleging that certain provisions of this law are preempted by the
Federal Aviation Administration Authorization Act of 1994 (FAAAA).
The district court granted summary judgment for the associations
and enjoined Maine's Attorney General from enforcing the law. We
affirm in all respects but one.1
I.
A. The FAAAA
There are two FAAAA preemption provisions at issue in
this case. See Pub. L. No. 103-305, § 601; 108 Stat. 1569. The
first provides that a "State . . . may not enact or enforce a law
. . . related to a price, route, or service of any motor carrier .
. . with respect to the transportation of property." 49 U.S.C. §
14501(c)(1). The second states that a "State may not enact or
enforce a law . . . related to a price, route, or service of an air
carrier or carrier affiliated with a direct air carrier through
common controlling ownership when such carrier is transporting
1
We are grateful for the amicus curiae briefs filed by several
state attorneys general, the American Trucking Association, the
Federal Express Corporation and the United States Chamber of
Commerce.
-2-
property by aircraft or by motor vehicle . . . ." 49 U.S.C. §
41713(b)(4)(A).
These provisions combine to bar states (subject to
certain exceptions discussed later) from enacting laws related to
prices, routes, or services of air or motor carriers of property.
They are "intended to function in the exact same manner with
respect to [their] preemptive effects." H.R. Conf. Rep. 103-677 at
85, reprinted in 1994 U.S.C.C.A.N. at 1757.
B. The Maine Tobacco Delivery Law
In 2003, the Maine Legislature adopted "An Act to
Regulate the Sale of Tobacco Products and to Prevent the Sale of
Cigarettes to Minors." See L.D. 1236 (121st Maine Leg.) (codified
at 22 M.R.S.A. §§ 1551, 1555-C & 1555-D) (Tobacco Delivery Law).
The Tobacco Delivery Law was prompted by the recent increase in
internet tobacco sales which are consummated by direct delivery to
consumers through the mail or by commercial carriers. See
Testimony of Representative Glen Cummings Before the Joint Standing
Committee on Health & Human Services (Apr. 29, 2003). This
phenomenon has complicated Maine's efforts to regulate "the sale of
tobacco products to minors" and caused it to lose "tremendous tax
revenues as a result of tax free sales by unlicensed companies."
Id. The associations persuaded the district court that §§ 1555-
C(3)(C) & 1555-D are preempted by the FAAAA.
-3-
1. § 1555-C(3)(C)
Maine's Tobacco Delivery Law permits a licensed tobacco
retailer to sell tobacco products2 directly to consumers via the
internet or other electronic means so long as the retailer takes
specified steps to ensure that sales are not made to minors. See
id. §§ 1555-C(2) & (3). One such step requires the retailer to use
a carrier that will ensure that: (1) the purchaser of the tobacco
products is the same person as the addressee of the package; (2)
the addressee is of legal age to purchase tobacco products and sign
for the package; and (3) if the addressee is under 27 years of age,
that she show a valid government-issued identification verifying
that she is old enough to purchase tobacco products. Id. § 1555-
C(3)(C). Penalties are imposed only against the retailer for
violations of this provision. See id. §§ 1555-C(3)(E)&(F).
2. § 1555-D
Section 1555-D makes it illegal for any person to
knowingly deliver tobacco products to a Maine consumer if the
products were purchased from an unlicensed retailer.3 The section
also states that a person delivering a package "is deemed to know"
2
Tobacco products are broadly defined to include "any form of
tobacco and any material or device used in the smoking, chewing, or
other form of tobacco consumption, including cigarette papers and
pipes." 22 M.R.S.A. § 1551(3).
3
It does not, however, bar the delivery of tobacco products
purchased from an unlicensed retailer to a licensed tobacco
retailer or distributor operating in Maine. See id.
-4-
that the package contains tobacco products if it (1) so indicates
on any side other than the side directly opposite the label, see
Code of Me. R. ch. 203, § 11, or (2) was shipped by a person listed
by the Attorney General as an unlicensed tobacco retailer.4
C. The Effect of the Tobacco Delivery Law on United
Parcel Service (UPS)
As discussed in further detail below, one way for the
associations to prove that the challenged provisions of the Tobacco
Delivery Law are preempted by the FAAAA is to demonstrate that they
have a forbidden significant effect on carrier services. See infra
at 25. The associations have attempted to make this showing by
highlighting the effect of the challenged provisions on UPS, a
motor/air carrier of property operating in Maine.5
UPS, which delivers approximately 65,000 packages per day
in Maine, offers door-to-door delivery service of packages and
delivery of packages on an express basis. Its delivery operations
function as an integrated system, requiring extensive planning and
coordination among its operating facilities and ground and air
fleet. Delays and disruptions in the sorting and delivery of
4
The Attorney General maintains a list of unlicensed tobacco
retailers that he distributes to carriers operating in Maine. 22
M.R.S.A. § 1555-D (2).
5
While the associations rely on UPS' experience to prove that
the Tobacco Delivery has a forbidden significant effect on
carriers, UPS is not a party to this action.
-5-
packages can affect the timely delivery of thousands of packages
within the UPS system.
Prior to the enactment of § 1555-C(3)(C), UPS did not
require that its drivers deliver a package only to the addressee,
and it did not require a signature from the recipient of the
package unless the shipper paid a premium for this additional
service. UPS determined that it would not be feasible to alter its
delivery operations to provide these new services in Maine, so it
stopped delivering all tobacco products to Maine consumers.
To make deliveries of tobacco products to licensed
retailers and distributors in Maine as permitted by § 1555-D, UPS
now has modified its uniform package delivery procedures to
identify packages that contain tobacco products. UPS requires that
its preloaders in Maine (the employees who place the packages on
the trucks for delivery) specially examine each package to
determine if it is marked as containing tobacco or if the name of
the addressee or shipper indicates that the package likely contains
tobacco.6 Packages identified as likely containing tobacco
products are then segregated so that UPS employees can research
whether the package is destined for a licensed tobacco retailer or
distributor. If UPS determines that the addressee is not a
6
UPS does not cross-reference packages against the Attorney
General's list to determine if the shipper is listed as an
unlicensed tobacco retailer.
-6-
licensed tobacco retailer or distributor, it arranges to return the
package to the shipper or otherwise to dispose of the package.
D. The District Court Decision
Proceeding from the premise that the FAAAA preempts a
state law if it "expressly references" a carrier's prices, routes,
or services or has a "forbidden significant effect" on the same,
the district court concluded that the challenged provisions of the
Tobacco Delivery Law are preempted by the FAAAA. See N.H. Motor
Transp. Ass'n v. Rowe, 377 F. Supp. 2d 197, 210 (D. Me. 2005)
(citing United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 327,
334-35 (1st Cir. 2003) (UPS I)). The court determined that, while
§ 1555-C(3)(C) did not expressly reference carrier services because
that section is directed only at retailers of tobacco products, it
has a forbidden significant effect on UPS because, for the carrier
to accept packages containing tobacco for delivery in Maine, it
would have to adopt procedures that would "alter [its] delivery
practices" for these packages. Id. at 216.
The court also ruled that § 1555-D both expressly
references and has a forbidden significant effect on carrier
services. It concluded that the provision expressly references
services because it prohibits carriers from delivering a certain
class of tobacco products, i.e., tobacco products purchased by
Maine consumers from unlicensed retailers. See id. at 211-12. It
also concluded that the provision also has a forbidden significant
-7-
effect because it forced UPS to depart from "its nationally uniform
procedure" by inspecting each package to identify the contents.
Id. at 212. The Attorney General timely appealed from this
ruling.7
II.
A. Jurisdiction
Before reaching the merits of the Attorney General's
appeal, we consider two threshold jurisdictional issues. The
Attorney General asserts that the associations lack standing and
that the action is moot in light of events occurring subsequent to
the noticing of the appeal.
1. Standing
The associations invoke the representational standing
doctrine recognized by the Supreme Court in Hunt v. Washington
State Apple Adver. Comm'n, 432 U.S. 333, 343 (1977). Under this
doctrine, "an association has standing to bring suit on behalf of
its members when: (a) its members would otherwise have standing to
sue in their own right; (b) the interests it seeks to protect are
germane to the organization's purpose; and (c) neither the claim
asserted nor the relief requested requires the participation of
individualized members in the lawsuit." Id.
7
The district court found that another section of the Tobacco
Delivery Law, which requires the shipper of tobacco products to
inform the carrier of the age of the purchaser, was not preempted.
Id. at 217 (citing 22 M.R.S.A. § 1555-C(3)(A)). The associations
have not cross-appealed from this ruling.
-8-
The Attorney General focuses his argument on the third
Hunt factor. He contends that evidence concerning the effect that
the challenged provisions of the Tobacco Delivery Law have on UPS
suffices only to justify preemption of the challenged provisions as
to UPS. Preemption against other carriers should occur only to the
extent that the other carriers individually prove that the
challenged provisions have a forbidden significant effect on their
prices, routes, or services.
The district court rejected this argument, observing that
"[a]ssociational standing is . . . granted in cases seeking
injunctive relief rather than damages, because individualized proof
is not necessary and the relief usually inures to the benefit of
all members injured." N.H. Motor Transp. Ass'n v. Rowe, 324 F.
Supp. 2d 231, 236 (D. Me. 2004). Because the associations only
sought an injunction and a declaratory judgment against the
challenged provisions, the court ruled that the third Hunt factor
was satisfied. See id. at 236 (citing Playboy Enters., Inc. v.
Pub. Serv. Comm'n of P.R., 906 F.2d 25, 35 (1st Cir. 1990)).
After the district court issued this ruling, we clarified
the requirements for establishing the third Hunt factor. In so
doing, we acknowledged that "there is no well developed test in
this circuit as to how the third prong of the Hunt test . . .
applies in cases where injunctive relief is sought."
Pharmaceutical Care Mgmt. Ass'n v. Rowe, 429 F.3d 294, 313-14 (1st
-9-
Cir. 2005). But we did not embrace the proposition that, under
Playboy Enters. the third Hunt factor is always satisfied where an
association seeks injunctive relief on behalf of all of its
members. See Rowe, 429 F.3d at 314 ("Playboy is not an open door
for association standing in all injunction cases where member
circumstances differ and proof of them is important."). We
concluded that representational standing is inappropriate if
adjudicating the merits of an association's claim requires the
court to engage in a "fact-intensive-individual inquiry." Id.
(quoting Penn. Psychiatric Soc. v. Green Spring Health Servs.,
Inc., 280 F.3d 278, 287 (3d Cir. 2002)). We therefore turn to
whether the associations' preemption claim requires a sufficiently
fact-intensive inquiry to preclude representational standing.
The FAAAA provides that a state law is preempted if it
relates to the prices, routes, or services of "any motor carrier"
or "an air carrier." 49 U.S.C. §§ 14501(c) & 41713(b)(4)(A)
(emphases supplied). "Any" means "one . . . of whatever kind," and
"an" means "one." Merriam Webster's Collegiate Dictionary at 40,
53 (10th ed. 2001). The language of the FAAAA accordingly suggests
that, if a state law is preempted as to one carrier, it is
preempted as to all carriers.8 See N.H. Motor Transp. Ass'n, 377
8
Even if "an" as used in § 41713(b)(4)(A) is ambiguous, "any"
as used in § 14501(c) is clear, and Congress has emphasized that
these provisions were intended to "function in the exact same
manner." H.R. Conf. Rep. 103-677 at 85, reprinted in 1994
U.S.C.C.A.N. at 1757.
-10-
F. Supp. 2d at 219. Such a reading accords with one of the FAAAA's
central purposes: to establish a "level playing field" among
carriers. H.R. Conf. Rep. 103-677 at 85, reprinted in 1994
U.S.C.C.A.N. at 1757; see Californians for Safe Dump Truck Transp.
v. Mendonca, 152 F.3d 1184, 1187 (9th Cir. 1998). If preemption
were judged on a carrier-specific basis, the result would be a
"patchwork" of state laws applying to some carriers and not to
others, depending on which carriers proceeded to litigation. H.R.
Conf. Rep. 103-677 at 87 reprinted in 1994 U.S.C.C.A.N. at 1759.
Such a result would undermine Congress' goal of encouraging
uniformity in carrier regulation. Thus, the associations can
prevail by establishing that the challenged provisions of the
Tobacco Delivery Law have a forbidden significant effect on one
carrier. The district court correctly ruled that the associations
have standing to press their preemption claim. See Rowe, 429 F.3d
at 314.9
2. Mootness
After the district court granted summary judgment, UPS
settled an enforcement action brought by the New York Attorney
9
The Attorney General also argues that representational
standing should not be allowed because "the increased use of
[representational] standing by large businesses [makes] the defense
of suits . . . more difficult by controlling discovery and access
to information." We do not foreclose the possibility that
representational standing may be improper in a particular case
because of some hardship imposed on a defendant in conducting
discovery. But the Attorney General has not attempted to
demonstrate such a hardship here.
-11-
General under a New York law restricting the ability of carriers to
deliver cigarettes to consumers. See N.Y. Pub. Health Law § 1399 -
ll(2) (McKinney 2001). In that settlement, UPS promised to stop
"shipping cigarettes to individual consumers in the United States
while still permitting lawful shipments of cigarettes to licensed
tobacco businesses." To fulfill this promise, UPS agreed (1) to
identify all shippers that may be cigarette retailers and advise
them that UPS will not accept cigarettes for delivery to consumers;
(2) to discipline shippers that violate UPS's non-delivery policy;
(3) to impose measures to ensure that employees "actively" look for
indications that a package contains cigarettes; and (4) to instruct
drivers not to deliver cigarette packages to consumers.
The Attorney General argues that, as a result of the
settlement, this appeal has become moot, the judgment should be
vacated and the case should be dismissed. See Duke Power Co. v.
Greenwood County, 229 U.S. 259, 267 (1936) (stating that where a
case becomes moot while on appeal, the appellate court must set
aside the judgment and remand the case with instructions that it be
dismissed). He contends that, by agreeing not to deliver
cigarettes directly to consumers throughout the United States and
directing employees actively to look for cigarettes, UPS is no
longer affected by the Tobacco Delivery Law.
Article III considerations require that an actual case or
controversy exist between the parties throughout the course of
-12-
litigation. See Ramirez v. Sanchez Ramos, 438 F.3d 92, 100 (1st
Cir. 2006). A case must be dismissed as moot "if, at some time
after the institution of the action, the parties no longer have a
legally cognizable stake in the outcome." Goodwin v. C.N.J., Inc.,
436 F.3d 44, 46 (1st Cir. 2006). This rule applies even where the
case becomes moot while pending on appeal. See Great Western Sugar
Co. v. Nelson, 442 U.S. 92, 93 (1979) (per curiam). But "[t]he
burden of establishing mootness rests squarely on the party raising
it, and the burden is a heavy one." Mangual v. Roger-Sabat, 317
F.3d 45, 60 (1st Cir. 2003) (citation omitted). To establish
mootness, the party raising it must show that the court cannot
grant any "effectual relief whatever" to its opponent. Church of
Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992).
The Attorney General has not met this heavy burden. The
New York settlement agreement applies only to the delivery of
cigarettes, but the Tobacco Delivery Law applies to "any form of
tobacco and any material or device used in the smoking, chewing or
other form of tobacco consumption." 22 M.R.S.A. § 1551-3. UPS
could therefore adhere to the terms of the settlement agreement and
nevertheless violate the Tobacco Delivery Law by unlawfully
delivering non-cigarette tobacco products. Because enjoining the
challenged provisions would permit UPS to deliver all tobacco
products, effectual relief remains available.
-13-
B. Preemption
We turn now to the merits of the district court's
preemption ruling. We review the ruling de novo, considering the
record and all reasonable inferences in the light most favorable to
the Attorney General. See Mullin v. Raytheon Co., 164 F.3d 696,
698 (1st Cir. 1999). We may affirm on any ground revealed by the
record. See Houlton Citizens' Coalition v. Houlton, 175 F.3d 178,
183-84 (1st Cir. 1999).
The Attorney General presents two arguments for reversal.
First, he contends that the FAAAA does not preempt state laws
enacted pursuant to a state's police power to protect the health
and welfare of its citizens. The Attorney General asserts that the
FAAAA preempts only state laws that impose traditional economic
regulation on carriers -- e.g. entry and commodity controls, tariff
filing requirements, and price ceilings. Because the Tobacco
Delivery Law does not impose such traditional economic
restrictions, the Attorney General argues that the FAAAA does not
apply. Alternatively, the Attorney General contends that, even if
the Act applies, neither challenged provision is "related to"
carrier services within the meaning of the FAAAA.
1. Applicability of the FAAAA to a State's
Police-Power Enactments
A fundamental tenet of our federalist system is that
constitutionally enacted federal law is supreme to state law. See
U.S. Const. Art. VI. cl. 2. As a result, federal law sometimes
-14-
preempts state law either expressly or by implication. See Gade v.
Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992). "Express
preemption occurs when Congress has unmistakably . . . ordained
that its enactments alone are to regulate a subject and state laws
regulating that subject must fall." Mass. Ass'n of Health
Maintenance Organizations v. Ruthardt, 194 F.3d 176, 179 (1st Cir.
1999) (citation omitted). In every preemption case, "the purpose
of Congress is the ultimate touchstone." Medtronic, Inc. v. Lohr,
518 U.S. 470, 485 (1996). The primary focus is on the "plain
wording" of the statute because the text "contains the best
evidence of Congress' pre-emptive intent." Sprietsma v. Mercury
Marine, 537 U.S. 51, 62 (2002). But "[a]lso relevant is the
structure and purpose of the statute as a whole as revealed . . .
through the reviewing court's reasoned understanding of the way in
which Congress intended the statute and its surrounding regulatory
scheme to affect business, consumers and the law." Medtronic, 518
U.S. at 486.10
10
The parties devote a great deal of argument to whether we
should conduct our preemption analysis with a presumption against
preemption because the state law at issue was enacted to further
Maine's police-power interest. See Rice v. Santa Fe Elevator
Corp., 331 U.S. 218, 230 (1947) (stating that a preemption analysis
starts "with the assumption that the historic police powers of the
States were not to be superseded by the Federal Act unless that was
the clear and manifest purpose of Congress"). The circumstances in
which the presumption is to apply are not altogether clear.
Compare Medtronic, 518 U.S. at 485 (stating that the presumption
against preemption applies "in all pre-emption cases") with United
States v. Locke, 529 U.S. 89, 108 (2000) (holding the presumption
inapplicable where "the State legislates in an area where there has
-15-
We begin with the text. As mentioned above, the FAAAA
prohibits states from enacting laws "related to a price, route, or
service" of a carrier. 49 U.S.C. §§ 14501(c) & 41713(b)(4)(A).
This language was patterned after the preemption provision of the
Airline Deregulation Act of 1978. See H.R. Conf. Rep. 103-677 at
85, reprinted in 1994 U.S.C.C.A.N. 1757, 1759; Mendonca, 152 F.3d
at 1184; Desardouin v. United Parcel Serv., Inc., 285 F. Supp. 2d
153, 162 (D. Conn. 2003). Therefore, in addition to cases
interpreting the FAAAA, we look to cases interpreting the Airline
Deregulation Act. UPS I, 318 F.3d at 335-36; Mastercraft
Interiors, Ltd. v. ABF Freight Sys., Inc., 284 F. Supp. 2d 284, 287
(D. Md. 2003).
The seminal case is Morales v. Trans World Airlines,
Inc., 504 U.S. 374 (1992). Like the FAAAA, the version of the
Airline Deregulation Act considered in Morales preempted state laws
"relating to rates, routes or services of any air carrier."11 The
been a history of significant federal presence"). In any event,
the presumption can be overcome where the congressional purpose is
sufficiently clear. See Egelhoff v. Egelhoff 532 U.S. 141, 151
(2001). For the reasons discussed infra, we think that the
congressional intent to preempt state police-power enactments that
are related to carrier prices, routes, or services is sufficiently
clear to overcome any presumption that would apply here.
11
In 1994 Congress replaced "relating" with "related" and
"rates" with "price" but did not intend these revisions to
substantively change the law. See Pub. L. No. 103-272, § 1(a); 108
Stat. 745. This provision is currently codified at 49 U.S.C. §
41713(b)(1).
-16-
Court identified "relating to" as the key phrase in determining the
breadth of the preemption provision and concluded that the "words
. . . express a broad pre-emptive purpose." Id. at 383. It relied
on several cases in which the Court had interpreted a similarly-
worded provision of the Employment Retirement Security Act of 1974
(ERISA) preempting all state laws that "relate to" an employee
benefit plan. Id. at 384. The Morales Court emphasized that this
language had an "expansive sweep" and that it was "conspicuous for
its breadth." Id. In light of Congress' use of similarly broad
language, the Court concluded that Congress intended the Airline
Deregulation Act to preempt any state law that has "a connection
with or reference to airline rates, routes, or services." Id.
The FAAAA's drafters were familiar with Morales and
approved of its reasoning. The Conference Committee Report
explains that "the conferees [did] not intend to alter the broad
preemption interpretation adopted by the United States Supreme
Court in Morales . . . ." H.R. Conf. Rep. 103-677 at 83, reprinted
in 1994 U.S.C.C.A.N. at 1755. The sweep of the FAAAA's text and
the drafters' expressed intent to use Morales as a roadmap are
strong evidence that the FAAAA was not intended to preempt only a
narrow class of economic regulations while excluding the many laws
enacted by the states under their police powers. If Congress had
such a limited purpose in mind, it likely would have employed
narrower language in fashioning the FAAAA preemption provisions.
-17-
Cf. Botz v. Omni Air Int'l, 286 F.3d 488, 493-94 (8th Cir. 2002)
("Although Congress could easily have selected more restrictive
terminology to describe the type of . . . enactment the [Airline
Deregulation Act] pre-empts, the provision as written is without
language that would produce a more limited pre-emptive effect.").
The Attorney General argues that we should disregard
Morales because, post-Morales, the Supreme Court has narrowed its
understanding of ERISA's "relat[ing] to" language. We previously
rejected this identical argument:
The Secretary argues that the broad preemption
standard adopted in Morales has been overruled
by a number of Supreme Court cases
narrowing the preemptive effect of [ERISA].
While the Morales Court undoubtedly took its
interpretive cues from the ERISA preemption
jurisprudence then in existence, it does not
follow that any change in the ERISA law
necessitates a parallel change in the law
affecting . . . carriers. As Judge Easterbrook
has put it: [I]f developments in pension
law have under-cut holdings in air-
transportation law, it is for the Supreme
Court itself to make the adjustments. Our
marching orders are clear: follow decisions
until the Supreme Court overrules them.
UPS I, 318 F.3d at 335 n.19 (quoting United Airlines, Inc. v. Mesa
Airlines, Inc., 219 F.3d 605, 608 (7th Cir. 2000)). Absent
extraordinary circumstances not present here, we are not at liberty
to disregard this ruling. See United States v. Wogan, 938 F.2d
1446, 1449 (1st Cir. 1991) ("We have held, time and again, that in
a multi-panel circuit, prior panel decisions are binding upon newly
-18-
constituted panels in the absence of supervening authority
sufficient to warrant disregard of established precedent.").
We look also to the FAAAA's structure and legislative
history. The FAAAA includes a series of exceptions to the general
preemption rule. The excepted areas are:
the safety regulatory authority of a
State with respect to motor vehicles,
the authority of a State to impose
highway route controls or limitations based on
the size or weight of the motor vehicle or the
hazardous nature of the cargo, or the authority
of a State to regulate motor carriers with
regard to minimum amounts of financial
responsibility relating to insurance
requirements and self-insurance authorization.
49 U.S.C. §§ 14501(c)(2) & 41713(b)(4)(B)(i). The Attorney General
acknowledges that the challenged provisions of the Tobacco Delivery
Law do not fall within any of these exceptions. He contends,
however, that these statutory exceptions suggest broader
congressional purpose to permit states to regulate carriers to
protect citizen health and safety. The Attorney General points to
a passage from the FAAAA's legislative history indicating that the
enumerated exceptions were "not intended to be all inclusive," H.R.
Conf. Rep. 103-677 at 84, reprinted in 1994 U.S.C.C.A.N. at 1756, to
argue that we may establish an additional exception to FAAAA
preemption for laws enacted pursuant to a state's police power to
protect the health and welfare of its citizens.
We have cautioned that an overly broad interpretation of
the FAAAA exceptions "would swallow the rule of preemption." United
-19-
Parcel Serv., Inc. v. Flores-Galarza, 385 F.3d 9, 14 (1st Cir. 2004)
(UPS II). An exclusion from preemption for police-power enactments
would surely "swallow the rule of preemption," as most state laws
are enacted pursuant to this authority. Id. The exceptions
preserving the states' authority to regulate motor vehicles do not
support the Attorney General's argument. See id. (rejecting an
argument that the FAAAA preemption exceptions indicate a
congressional intent to preserve state authority over safety issues
generally).
While the statute's structure does not support the
Attorney General's police-power argument, there is some support in
the legislative history for his view that the FAAAA preempts only
state economic regulation. The Conference Committee Report observed
that "[s]tate economic regulation of motor carriers . . . is a huge
problem for national and regional carriers attempting to conduct a
standard way of doing business." H.R. Conf. Rep. No. 103-677 at 85,
reprinted in 1994 U.S.C.C.A.N. at 1757. The conferees identified
"typical forms" of harmful regulation to include "entry controls,
tariff filing, price regulation," and regulation of the "types of
commodities carried." Id. at 1758. This history led the Supreme
Court to remark that "the problem to which the [FAAAA] congressional
conferees attended was state economic regulation." Columbus v. Ours
Garage & Wreckers Serv., 536 U.S. 424, 440 (2002).
This history, however, does not indicate that preempting
-20-
economic regulation was the FAAAA's only purpose. And, in any
event, the legislative history cannot trump the statute's text.
See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521 (1992)
(declining to adopt a limited interpretation of a preemption
provision suggested by legislative history because "the language of
the [cigarette labeling] Act plainly reaches" further); Morales, 504
U.S. at 385 n.2 (The "legislative history need not confirm the
details of changes in the law effected by statutory language before
we will interpret that language according to its natural meaning.").
Congress often acts to address a specific problem but ultimately
settles on a broader remedy. See Penn. Dep't of Corr. v. Yeskey,
524 U.S. 206, 213 (1998) ("[T]he fact that a statute can be applied
in situations not expressly anticipated by Congress does not
demonstrate ambiguity. It demonstrates breadth.").
In addition, the legislative history reveals a second goal
for FAAAA preemption which is inconsistent with the Attorney's
General argument: "to create a completely level playing field
between air carriers . . . on the one hand and motor carriers on the
other." H.R. Conf. Rep. 103-677 at 85, reprinted in 1994
U.S.C.C.A.N. at 1757. In other words, the conferees intended the
scope of FAAAA and Airline Deregulation Act preemption to be
coterminous. See Ace Auto Body & Towing Ltd. v. City of New York,
171 F.3d 765, 772 (2d Cir. 1999); Mendonca, 152 F.3d at 1187.
-21-
In the Airline Deregulation Act context, the Supreme Court
has focused on the effect that a state law has on carrier
operations, not on the state's purpose for enacting the law. In
Morales, the Court found that the Airline Deregulation Act preempted
a directive promulgated by several state attorneys general informing
airlines that certain advertising practices would be considered to
violate state consumer-protection laws. 504 U.S. at 379. And, in
American Airlines, Inc. v. Wolens, 513 U.S. 219, 227-28 (1995), the
Court held that the Airline Deregulation Act preempted a cause of
action under the Illinois Consumer Fraud Act concerning the
redemption of frequent-flier miles. In both cases, the Court's
preemption analysis centered on the impact that the challenged state
laws had on airline services and rates and not on the fact that the
preempted laws were enacted pursuant to the states' police power to
combat consumer fraud. See Fla. Lime & Avocado Growers v. Paul,
373 U.S. 132, 150 (1973) (describing the traditional state authority
to pass laws to combat consumer fraud). The Court reached these
conclusions over dissents by Justice Stevens arguing (similarly to
the Attorney General here) that the state laws at issue should not
be preempted because there was insufficient evidence of
congressional intent to preempt state police-power enactments. See
Am. Airlines, 513 U.S. at 235-31 (Steven, J. dissenting in part);
Morales, 504 U.S. at 419-27 (Stevens, J., dissenting).
-22-
Morales and American Airlines thus teach that, under the
Airline Deregulation Act, the focus should be on the effect that the
state law has on airline operations. Accepting the Attorney
General's argument would shift the analysis under the FAAAA away
from that state law's effect and towards the state's purpose for
enacting the law. A purpose-related limitation on FAAAA preemption
would thus inevitably create a gap between the scope of FAAAA and
Airline Deregulation Act preemption -- a gap which the FAAAA
drafters sought to avoid.
In the end, the Attorney General's argument founders
because it cannot be reconciled with the FAAAA's text. The Act's
drafters chose to express the preemptive scope of the FAAAA in words
that they understood to be exceedingly broad. In the preemption
context, we are to give effect to the ordinary meaning of a
congressional enactment "unless there is good reason to believe that
Congress intended the language to have some more restrictive
meaning." Cipollone, 505 U.S. at 521. We do not find a
sufficiently compelling basis in either the structure or history of
the FAAAA to interpret the Act contrary to its "deliberately
expansive text." Morales, 504 U.S. at 384. We therefore conclude
that the FAAAA preempts state police-power enactments to the extent
that they are "related to" a carrier's prices, routes, or services.12
12
The Attorney General offers a narrower argument for excluding
from FAAAA preemption state laws intended to address underage
smoking. He cites the Synar Amendment, a federal law conditioning
-23-
2. FAAAA Preemption of the Tobacco Delivery Law
We turn now to whether the challenged provisions of the
Tobacco Delivery Law are preempted because they are "related to"
carrier services. The parties do not contest that carriers provide
the service of delivering "packages on an express or time-guaranteed
basis." See N.H. Motor Transp. Ass'n, 377 F. Supp. 2d at 209
(quoting UPS I, 318 F.3d at 336). But they disagree over whether
the challenged provisions are "related to" this service.
We have previously interpreted the phrase "related to" as
used in the FAAAA:
The phrase "related to" has a broad meaning in
ordinary usage: to stand in some relation; to
have bearing or concern; to pertain; refer; to
bring in association or connection with. When
used in a preemption provision, such as
[in the FAAAA], it has a similarly broad reach.
State laws and regulations having a connection
with or reference to a . . . carrier's . . .
services are preempted under the [FAAAA]. A
sufficient nexus exists if the law expressly
references the . . . carriers' . . . services
the states' receipt of certain federal funds on their enacting laws
to ban the sale of tobacco products to minors. See 42 U.S.C. §
300x-26. The Attorney General contends that the Synar Amendment
demonstrates Congress' intent that the states be able to regulate
the delivery of tobacco products irrespective of the FAAAA. We
disagree. The Synar Amendment indicates Congress' intent that the
states take the lead in addressing the underage smoking problem.
But the Attorney General has not identified any evidence that
Congress intended the states do so in derogation of other federal
laws. The FAAAA and Synar Amendment can exist harmoniously because
the states may pass laws to curb underage smoking without passing
laws "related to" carrier prices, routes, or services. See UPS I,
318 F.3d at 333-34 (stating that courts should endeavor to read
congressional enactments in harmony whenever possible).
-24-
or has a forbidden significant effect on the
same.
UPS I, 318 F.3d at 335. We therefore consider whether the district
court correctly concluded that the challenged provisions of the
Tobacco Delivery Law either expressly reference carrier services or
have a forbidden significant effect on UPS' services.
We begin with § 1555-C(3)(C). As set forth above, this
statute requires tobacco retailers seeking to ship tobacco products
directly to Maine consumers to use only carriers that deliver the
package directly to the addressee/purchaser, require a signature
from the addressee/purchaser, and conduct age verification if the
addressee/purchaser is under 27 years of age. Another section
penalizes retailers that use carriers that do not provide these
services. 22 M.R.S.A. §§ 1555-C(3)(E)&(F).
Section 1555-C(3)(C) expressly references a carrier's
service of providing the timely delivery of packages. The statute
prescribes the method by which a carrier operating in Maine must
deliver packages containing tobacco products in a way that would
affect the ability of the carrier to meet package-delivery
deadlines. Delays in searching for the purchaser, making multiple
delivery attempts if the purchaser cannot be located, obtaining the
purchaser's signature, and verifying the purchaser's age all could
affect timely deliveries. See UPS I, 318 F.3d at 336 (finding that
the FAAAA preempted a state law that "affect[ed] the timeliness and
-25-
effectiveness" of a carrier's service).
The Attorney General responds that there is no FAAAA
preemption because § 1555-C(3)(C) regulates retailers of tobacco
products and not carriers. He also argues that we should decline to
find preemption because any carrier can avoid the requirements of §
1555-C(3)(C) by declining to provide tobacco-product deliveries to
Maine consumers.
The Attorney General's first argument amounts to a claim
that there can be no FAAAA preemption unless the state law imposes
a direct regulation on carriers. This argument cannot be squared
with the FAAAA's text because it reads the broad phrase "related to"
out of the statute and replaces it with the narrower term
"regulates." See Morales, 504 U.S. at 385 (rejecting an argument
that would have read "relating to" out of the Airline Deregulation
Act and replaced it with "regulate"); UPS I, 318 F.3d at 335
(rejecting an argument for narrowing scope of the FAAAA that "would
read 'the related to language' out of the statute").
Moreover, limiting preemption to direct regulation of
carriers is inconsistent with the FAAAA's purpose to bar states from
policing carrier operations. See Am. Airlines, 513 U.S. at 228. A
state may use its coercive power to cause carriers to conform to
state-imposed rules in at least two ways: it may directly regulate
carriers or it may limit retailers to hiring only those carriers
that comply with the state-imposed mandates. Either way the state
-26-
is employing its coercive power to police the method by which
carriers provide services in the state. In short, the Attorney
General's argument would lead to the untenable result of permitting
states to regulate carrier services indirectly by regulating
shippers. Cf. Abington Sch. Dist. v. Schemp, 374 U.S. 203, 230
(1963) (declining to adopt an interpretation that would permit
states to do indirectly what they cannot do directly).
The Attorney General's alternative argument -- that there
is no preemption because a carrier can forgo certain tobacco-product
deliveries in Maine -- also fails. Declining to find preemption
simply because a carrier can limit its in-state business to avoid a
particular requirement would undermine the FAAAA's goal of creating
an environment in which "[s]ervice options will be dictated by the
marketplace," and not by state regulatory regimes. H.R. Conf. Rep.
103-677 at 88, reprinted in 1994 U.S.C.C.A.N. at 1760. The district
court correctly concluded that the FAAAA preempts § 1555-C(3)(C).
We turn finally to whether the FAAAA preempts § 1555-D.
In considering this question, we are mindful that courts should "not
nullify more of a legislature's work than is necessary, for . . .
a ruling of unconstitutionality frustrates the intent of the
elected representative of the people." Ayotte v. Planned Parenthood
of N. New England, 126 S. Ct. 961, 967 (2006) (internal citation
omitted). The first part of §1555-D makes it unlawful for any
person knowingly to deliver to Maine consumers certain contraband
-27-
tobacco products -- i.e., those tobacco products purchased by
consumers from unlicensed retailers. The second part of § 1555-D
charges a carrier with knowledge that a package contains tobacco
products if the package is so marked or if the shipper appears on
the Attorney General's list of unlicensed tobacco retailers.
Under Maine law, tobacco products purchased by a consumer
from an unlicensed retailer are contraband. See 22 M.R.S.A. § 1555-
C(7). The first part of § 1555-D is a corollary to § 1555-C(7) in
that it makes the knowing delivery of contraband tobacco products
illegal. Thus, the question we face is whether a generally
applicable law barring any person from knowingly delivering
contraband tobacco is preempted by the FAAAA insofar as the law
pertains to carriers.
While the FAAAA's preemptive effect is broad, see UPS I,
318 F.3d at 335, it is not unlimited, see Mendonca, 152 F.3d at
1188. State laws that only have a "tenuous, remote, or peripheral"
relation to services are beyond the FAAAA's reach. Morales, 504
U.S. at 390; Mendonca, 152 F.3d at 1188. In describing this
limitation on preemption in the Airline Deregulation Act context,
the Supreme Court explained that its broad interpretation of the
statute's preemption provision did not place it "on a road that
leads to pre-emption of gambling and prostitution as applied to
airlines." Morales, 504 U.S. at 390. We understand the Morales
Court to have meant that states may continue to enjoy the power to
-28-
ban primary conduct, and that the ADA and FAAAA do not preempt laws
applying these prohibitions to airlines and carriers.
Accordingly, Morales suggests that § 1555-D's ban on the
knowing delivery of contraband tobacco products is not preempted by
the FAAAA -- even only insofar as it pertains to carrier services.
Section 1555-D requires that carriers do not act as knowing
accomplices in the illegal sale of tobacco products. It does not,
however, require that carriers modify their delivery methods other
than by declining to transport a product that Maine has legitimately
banned. We think that this effect on services is "too tenuous" to
warrant preemption. Mendonca, 152 F.3d at 1189 (stating that a
state law is too tenuous to be preempted by the FAAAA where the law
does not frustrate the FAAAA's deregulatory purposes).
If the rule were otherwise, states would be unable to bar
a primary method by which contraband crosses state lines. We do not
believe that this was Congress' intent in enacting the FAAAA. Other
courts applying the FAAAA to prohibitions on the delivery of
contraband tobacco have reached similar conclusions. See Robertson
v. Liquor Control Bd., 10 P.3d 1079, 1084-85 (Wash. App. Ct. 2000)
(concluding that the FAAAA did not preempt a state law banning the
transport of contraband cigarettes because otherwise "a motor
carrier would be exempt from forfeiture for transporting a
methamphetamine lab or poached game"); see also N.Y. State Motor
Truck Ass'n v. Pataki, No. 03-CV-2386 (GBD), 2004 WL 2937803, at *6
-29-
(W.D.N.Y. Aug. 19, 2003) (concluding that the FAAAA did not preempt
a state law making it unlawful for carriers to deliver cigarettes
directly to New York consumers because "the mere fact that a
statute concerns the transportation of a particular cargo by . . .
carriers . . . does not render it . . . unconstitutional on
preemption grounds"); Ward v. New York, 291 F. Supp. 2d 188, 210-211
(S.D.N.Y. 2004) (similar).13
But, while Maine may ban a carrier from knowingly
transporting contraband tobacco products, it may not dictate the
procedures that a carrier should employ to locate these products in
its delivery chain. See UPS I, 318 F.3d at 336 (concluding that the
FAAAA preempted a Puerto Rico revenue-collection scheme that
mandated procedures that carriers had to follow to deliver certain
packages). The second part of § 1555-D violates this principle.
As noted, § 1555-D imposes upon a carrier constructive
13
There are many state laws barring the transport and delivery
of contraband. E.g., Ala. Code § 2-14-5 (barring transport of
certain products related to bee keeping); Ariz. Rev. Stat. § 3-209
(barring the transport of quarantined produce); Ariz. Rev. Stat. §
13-3102 (barring transport of prohibited weapons); Cal. Bus. &
Prof. Code § 17533.9 (barring transport of tear gas); Cal. Fish &
Game Code § 4800 (barring the transport of mountain lions); N.Y.
Penal Law § 190.50 (barring transport of slot machines or other
gambling devices). We have not a found a single case, outside the
tobacco context, in which bans on the transport of contraband have
been challenged as preempted by the FAAAA. Cf. Sir Arthur Conan
Doyle, Silver Blaze (1890) (William S. Baring-Gould, ed., The
Annotated Sherlock Holmes, Vol. II, 1967) (Detective Gregory: "'Is
there any other point to which you would wish to draw my
attention?" Sherlock Holmes: "To the curious incident of the dog in
the night-time." Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident.").
-30-
knowledge that it has delivered a tobacco product if the package
containing the product is marked as containing tobacco or if the
seller's name appears on the Attorney General's list. As UPS'
experience demonstrates, a carrier seeking to comply with § 1555-D
must specially inspect every package destined for delivery in Maine.
Once the carrier has finished this inspection, it must segregate the
packages that contain tobacco and research whether the addressee is
a Maine-licensed retailer or distributor who can receive the
package. While the second part of § 1555-D does not expressly
reference carrier services, it "impermissibly affect[s] . . .
services . . . because it requir[es] UPS to identify the contents of
the packages (a deviation from standard procedures used in
deliveries elsewhere in the United States). . . ." UPS II, 385 F.2d
at 14 (parenthesis in original). UPS can only provide timely
package delivery if it follows uniform procedures that allow for "an
orderly flow of packages." UPS I, 318 F.3d at 336. Because the
second part of § 1555-D has the effect of forcing UPS to change its
uniform package-processing procedures, the district court correctly
found it to be preempted.14
14
The Attorney General argues that the associations have failed
to establish a forbidden significant effect on UPS because they did
not offer studies conducted by UPS on the cost of compliance. We
agree with the district court that there is no such quantification
requirement. The cases in this area have looked to the logical
effect that a particular scheme has on the delivery of services or
the setting of rates and have not required the presentation of
empirical evidence. See N.H. Motor Transp. Ass'n, 377 F. Supp. 2d
at 217 n. 92 (collecting cases).
-31-
In reaching this conclusion, we recognize that there is a
potential tension between saying that, on the one hand, Maine is
free to punish the knowing delivery of material that it has
classified as contraband, while, on the other hand, ruling that it
may not dictate or interfere with a carrier's delivery procedures.
What we are saying here, however, is that Maine cannot use the
mechanisms outlined in the statute to impute knowledge based on a
failure to read labels or consult lists -- an imputation which
would amount to prescribing how carriers must operate.
If, however, Maine could prove that a carrier employee had
actual knowledge that a package being delivered was contraband
tobacco, then it might have a colorable enforcement case -- although
such circumstances, as a practical matter, may be difficult to
prove. True, the "related to" language could stretch to such a case
but it could also stretch to the knowing delivery of hard drugs --
and Congress cannot have intended such a result.
III.
"[T]obacco use, particularly among children and
adolescents, poses perhaps the single most significant public health
problem in the United States." FDA v. Brown & Williamson Tobacco
Corp., 529 U.S. 120, 161 (2000). There is no question that Maine
has sought to achieve a worthy objective by passing the Tobacco
Delivery Law to combat this pernicious problem. See N.H. Motor
Transp. Ass'n, 377 F. Supp. 2d at 219. But the FAAAA focuses on the
-32-
effect that a state's law has on carriers, and not on the state's
objective in passing the law. To the extent that Maine's Tobacco
Delivery Law requires (or has the effect of requiring) carriers to
implement state-mandated procedures in the processing and delivery
of packages, it is preempted by the FAAAA. But to the extent that
the Tobacco Delivery Law merely bars all persons (including
carriers) from knowingly transporting contraband tobacco into Maine,
the FAAAA is not implicated.
We affirm the judgment as it pertains to 22 M.R.S.A. §
1555-C(3)(C) and the second part of 22 M.R.S.A. § 1555-D but reverse
the judgment as it pertains to the first part of § 1555-D. We
remand the case to the district court with instructions to amend the
judgment consistent with this opinion. No costs are awarded.
So ordered.
-33-
New Hampshire Motor Transport Ass'n v. Rowe
Court: Court of Appeals for the First Circuit
Date filed: 2006-05-19
Citations: 448 F.3d 66
Copy Citations