Also known as: preempt · preempts · preempted · preempting · pre-emption · federal preemption
Written by attorneys — see sources below.
The constitutional principle grounded in the Supremacy Clause by which valid federal law supersedes conflicting state law or regulation. Federal statutes may also displace specific provisions of the Uniform Commercial Code governing security interests when the federal requirements control priority over lien creditors.
Parker Phillips granted a security interest in specialized manufacturing equipment to Peak Performance Finance. A federal statute governing that equipment required a different method to obtain priority over lien creditors. Peak Performance complied with the federal method. When a judgment creditor later asserted a lien, the federal requirements controlled and Peak Performance prevailed without filing a financing statement under Article 9.
State A enacted a statute authorizing licensed sports betting operators to accept wagers from residents. The federal Professional and Amateur Sports Protection Act prohibited states from authorizing such schemes. Operators challenged the state law. The Supreme Court held that the federal statute improperly targeted state legislative action rather than private conduct and therefore could not stand under the anti-commandeering doctrine.
After David Egelhoff's divorce, his employer-sponsored life insurance policy still listed his former spouse as beneficiary under the plan documents. Washington state law automatically revoked the designation upon divorce. The former spouse claimed the proceeds. The Supreme Court held that ERISA preempted the state revocation statute because it impermissibly altered the plan's distribution scheme.
Donna Rae Egelhoff was married to David A. Egelhoff. Mr. Egelhoff was employed by the Boeing Company, which provided him with a life insurance policy and a pension plan. Both plans were governed by ERISA, and Mr. Egelhoff designated his wife as the beneficiary under both. In April 1994, the Egelhoffs divorced. Just over two months later, Mr. Egelhoff died intestate following an automobile accident. At that time, Mrs. Egelhoff remained the listed beneficiary under both the life insurance policy and the pension plan. The life insurance proceeds, totaling $46,000, were paid to her. Respondents Samantha and David Egelhoff, Mr. Egelhoff's children by a previous marriage, are his statutory heirs under state law. They sued petitioner in Washington state court to recover the life insurance proceeds. In a separate action, respondents also sued to recover the pension plan benefits. The trial courts, concluding that both the insurance policy and the pension plan "should be administered in accordance" with ERISA, granted summary judgment to petitioner in both cases. The Washington Court of Appeals consolidated the cases and reversed. Applying the statute, it held that respondents were entitled to the proceeds of both the insurance policy and the pension plan. The Supreme Court of Washington affirmed. Courts have disagreed about whether statutes like that of Washington are pre-empted by ERISA. The Supreme Court granted certiorari to resolve the conflict.
Shady Grove Orthopedic Associates sued Allstate in federal court seeking statutory damages for delayed insurance payments. New York law barred class actions seeking those damages. Allstate argued the state limitation applied. The Supreme Court held that Federal Rule of Civil Procedure 23 governed the availability of class actions in federal court and preempted the conflicting state rule.
Shady Grove Orthopedic Associates, P.A., provided medical care to Sonia E. Galvez for injuries she suffered in an automobile accident. As partial payment for that care, Galvez assigned to Shady Grove her rights to insurance benefits under a policy issued in New York by Allstate Insurance Co. Shady Grove tendered a claim for the assigned benefits to Allstate, which under New York law had 30 days to pay the claim or deny it. Allstate apparently paid, but not on time, and it refused to pay the statutory interest that accrued on the overdue benefits at two percent per month. Shady Grove filed this diversity suit in the Eastern District of New York to recover the unpaid statutory interest. Alleging that Allstate routinely refuses to pay interest on overdue benefits, Shady Grove sought relief on behalf of itself and a class of all others to whom Allstate owes interest. The individual claim was worth roughly $500, which fell far short of the amount-in-controversy requirement for individual suits under 28 U.S.C. § 1332(a). The District Court dismissed the suit for lack of jurisdiction. It reasoned that N.Y. Civ. Prac. Law Ann. § 901(b), which precludes a suit to recover a penalty from proceeding as a class action, applies in diversity suits in federal court despite Federal Rule of Civil Procedure 23. Concluding that statutory interest is a penalty under New York law, it held that § 901(b) prohibited the proposed class action.
Jones set fire to his own single-family home that he occupied. The government prosecuted him under the federal arson statute covering property used in interstate commerce. Jones moved to dismiss. The Supreme Court held that the statute did not reach owner-occupied dwellings and therefore did not preempt state arson law in that setting.
On February 23, 1998, Dewey Jones tossed a Molotov cocktail through a window into a home in Fort Wayne, Indiana, owned and occupied by his cousin. No one was injured in the ensuing fire, but the blaze severely damaged the home. A federal grand jury returned a three-count indictment charging Jones with arson under 18 U.S.C. § 844(i), using a destructive device during and in relation to a crime of violence under 18 U.S.C. § 924(c), and making an illegal destructive device under 26 U.S.C. § 5861(f). Jones was tried in the Northern District of Indiana and convicted by a jury on all three counts. The District Court sentenced Jones to a total prison term of 35 years, to be followed by five years of supervised release, and ordered him to pay $77,396.87 in restitution to the insurer of the damaged home. Jones appealed to the Court of Appeals for the Seventh Circuit, which affirmed the judgment of the District Court. Jones had argued before the District Court and on appeal that the statute, when applied to the arson of a private residence, exceeds Congress's authority under the Commerce Clause. The Supreme Court granted certiorari after noting divisions among the Courts of Appeals on the statute's coverage of noncommercial buildings and on the constitutionality of such applications.
AT&T Mobility included an arbitration clause with a class-action waiver in its consumer contracts. California courts refused to enforce the waiver under a state unconscionability doctrine. The Supreme Court held that the Federal Arbitration Act preempted the state rule because it stood as an obstacle to the federal policy favoring enforcement of arbitration agreements.
In February 2002, Vincent and Liza Concepcion entered into an agreement for the sale and servicing of cellular telephones with AT&T Mobility LLC. The contract provided for arbitration of all disputes between the parties but required that claims be brought in the parties' individual capacity and not as a plaintiff or class member in any purported class or representative proceeding. The agreement authorized AT&T to make unilateral amendments, which it did to the arbitration provision on several occasions. The parties agree that the December 2006 revisions control. The revised agreement requires customers to complete a one-page Notice of Dispute form. It allows AT&T to offer settlement. It provides that AT&T must pay all costs for nonfrivolous claims. Arbitration must take place in the county where the customer is billed. For claims of $10,000 or less, the customer may choose in-person, telephone, or submission-based proceedings. The agreement preserves the right to bring claims in small claims court. It requires AT&T to pay a $7,500 minimum recovery plus twice the claimant's attorney's fees if the arbitration award exceeds AT&T's last written settlement offer. The Concepcions purchased AT&T service advertised as including free phones but were charged $30.22 in sales tax based on the phones' retail value. In March 2006, the Concepcions filed a complaint against AT&T in the United States District Court for the Southern District of California. Their suit was consolidated with a putative class action alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. In March 2008, AT&T moved to compel arbitration under the terms of its contract with the Concepcions. The Concepcions opposed the motion on the ground that the arbitration agreement was unconscionable under California law because it disallowed classwide procedures. The District Court denied AT&T's motion. It described the arbitration agreement favorably in several respects. Nevertheless, the court found the provision unconscionable under the California Supreme Court's Discover Bank decision because AT&T had not shown that bilateral arbitration adequately substituted for the deterrent effects of class actions. The Ninth Circuit affirmed. It also found the provision unconscionable under California law as announced in Discover Bank. The court held that the Discover Bank rule was not preempted by the Federal Arbitration Act because the rule was simply a refinement of the unconscionability analysis applicable to contracts generally in California. The Supreme Court granted certiorari.
Express preemption occurs when a federal statute contains explicit language displacing state law. Implied preemption arises when federal law occupies a field or when state law conflicts with federal objectives even without explicit statutory language.
The anti-commandeering doctrine prevents Congress from issuing direct orders to state legislatures or executive officers. A federal statute that targets state authorization of private conduct rather than regulating private parties directly is invalid commandeering rather than valid preemption.
…see, e. g. , Murdock v. Memphis , 20 Wall. 590 (1875); Michigan v. Long , 463 U. S. 1032 (1983), the whole jurisprudence of pre-emption, see, e. g. , Rice v. Santa Fe Elevator Corp. , 331 U. S. 218 (1947); Cipollone v. Liggett Group, Inc. , 505 U. S. 504 (1992), and many of the rules governing our habeas jurisprudence,…
…535 U. S. 391, 411 (2002) (O’Connor, J., concurring). Therefore, although I adhere to my views on purposes-and-objectives pre-emption, see Wyeth v. Levine , 555 U. S. 555, (2009) (opinion concurring in judgment), I reluctantly join the Court’s opinion. I The FAA generally requires courts to enforce arbitration…
…reading. It also seems appropriate, however, to emphasize the kinship between our well-established presumption against federal pre-emption of state law, see Ray v. Atlantic Richfield Co. , 435 U. S. 151, 157 (1978), and our reluctance to "believe Congress intended to authorize
…the Washington statute governs family property law — a “fiel[d] of traditional state regulation,” where courts will not find federal preemption unless such was the “‘clear and manifest purpose of Congress,’ ” Travelers , 514 U. S., at 655 (quoting Rice v. Santa Fe Elevator Corp. , 331 U. S. 218, 230 (1947)), or the state statute…
…supreme court’s pronouncement of the law’s purpose would settle the issue, since existence of the factual predicate for avoiding federal preemption
ERISA preempts state laws that relate to employee benefit plans by altering plan terms or distribution rules. State statutes that automatically change beneficiary designations upon divorce are preempted because they interfere with the plan documents.
Compliance with FDA labeling rules does not automatically preempt state tort claims. A product may satisfy federal labeling standards yet still be found defective under state law for inadequate warnings unless Congress clearly intended preemption.
The FAA preempts state rules that disproportionately invalidate arbitration agreements. A state doctrine treating class-action waivers in arbitration clauses as unconscionable conflicts with the federal policy favoring enforcement of arbitration agreements.