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10/26/2019

Justice Thomas on Preemption by Agency Policy
Michael Ramsey

Via Josh Blackman at Volokh Conspiracy, earlier this week the Supreme Court denied cert in Lipschultz v. Charter Advanced Services, which presented the question whether the Federal Communications Commission's "policy of nonregulation" of Voice over Internet services preempted state regulation.  Justice Thomas, joined by Justice Gorsuch, objected that the policy was not a law, and thus couldn't be preemptive in any event (some citations omitted): 

I agree with the Court’s determination that this case does not satisfy our criteria for certiorari. I write to explain why, in an appropriate case, we should consider whether a federal agency’s policy can pre-empt state law.  The Supremacy Clause of the Constitution provides:

“This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Art. VI, cl. 2.

The Clause contains a non obstante provision, a common device used by 18th-century legislatures to signal the implied repeal of conflicting statutes. See PLIVA, Inc. v. Mensing, 564 U. S. 604, 621 (2011); see also Nelson, Preemption, 86 Va. L. Rev. 225, 237–242, 245–246 (2000). At the time of the founding, this Clause would have been understood to pre-empt state law only if the law logically contradicted the “Constitution,” the “Laws of the United States,” or “Treaties.” See id., at 260.

It is doubtful whether a federal policy—let alone a policy of nonregulation—is “Law” for purposes of the Supremacy
Clause. Under our precedent, such a policy likely is not final agency action because it does not mark “the consummation of the agency’s decisionmaking process” or determine Charter’s “rights or obligations.” Even if it were final agency action, the Supremacy Clause “requires that pre-emptive effect be given only to those federal standards and policies that are set forth in, or necessarily follow from, the statutory text that was produced through the constitutionally required bicameral and presentment procedures.” Wyeth v. Levine, 555 U. S. 555, 586 (2009) (THOMAS, J., concurring in judgment); ...

Giving pre-emptive effect to a federal agency policy of nonregulation thus expands the power of both the Executive and the Judiciary. It authorizes the Executive to make “Law” by declining to act, and it authorizes the courts to conduct “a freewheeling judicial inquiry” into the facts of federal nonregulation, rather than the constitutionally proper “inquiry into whether the ordinary meanings of state and federal law conflict,” Wyeth, supra, at 588 (THOMAS, J., concurring in judgment).

Agreed.  Mere federal policy should not preempt state law.  The issue is similar to American Insurance Association v. Garamendi (2003), in which the Court unfortunately held that an executive branch policy relating to foreign affairs could preempt state law (5-4, with Justices Thomas and Scalia on the right side).  I criticized that decision in this article: American Insurance Association v. Garamendi and Executive Preemption in Foreign Affairs (written with Brannon Denning of Cumberland Law School).  Fortunately the Court substantially retreated from Garamendi in Medellin v. Texas (2007) (see my further discussion here), so it shouldn't be an obstacle to getting this issue right.