Revitalizing Cooperative Federalism by Limiting Federal Preemption of State law

As President-elect Obama and his transition team begin planning to implement the new Administration’s agenda, a flood of policy proposals can be expected to compete for the President-elect’s attention. Proposals to deal with the nation’s economic crisis surely deserve to top the agenda. This week, CPR issued Protecting Public Health and the Environment by the Stroke of a Presidential Pen: Seven Executive Orders for the President’s First 100 Days, urging President Obama to take steps early in his presidency to secure vital protections for the public health and the nation’s environment.

In particular, the white paper recommends seven Executive Orders that President Obama can issue, refocusing federal policy without need of legislative approval. Each is directed at filling a gap in the nation’s health and environmental protection laws. The Executive Orders are at once symbolic and substantively powerful. Each would symbolize the Administration’s commitment to health and environmental protection, making clear that the shameful chapter in the nation’s environmental history written by the George W. Bush Administration has ended. And each would yield important real-world health and environmental benefits.

One of the seven proposals falls under the heading of Removing Barriers to Local Innovation: Safeguarding Protective State Laws from Federal Agency Preemption. When Congress adopted the nation’s first modern environmental statutes beginning in 1970, it built on a framework of “cooperative federalism.” Statutes such as the Clean Air Act and the Clean Water Act rested on the premise that all levels of government have a role to play in environmental protection efforts and that the combined efforts of local, state, and federal governments would produce more effective health and environmental protection laws than any one level alone could do. One important component of this cooperative federalism model was the principle that states could adopt laws that were more protective than those adopted by Congress, but that they could not adopt laws that weakened federal standards. In effect, federal laws protecting health and the environment were intended as a floor, upon which states could build more protective standards, if they chose.

In recent years, and especially during the last eight years, this cooperative federalism model has foundered. The Bush Administration, virtually across the board, has endeavored to weaken federal measures for protecting public health and the environment. It has typically done so in the face of scientific evidence that existing controls are, if anything, too weak. In response to these alarming efforts by the Bush Administration to serve the interests of its business and industrial allies instead of those of the American people, many states have proposed or enacted environmental laws to provide the vitally needed protections that the federal government has failed to provide.

The most obvious (and important) examples concern global climate change. The Bush Administration has obstinately refused to take any meaningful action, either alone or in combination with other nations, to reduce greenhouse gas emissions that contribute to climate change, even though it represents the most far-reaching environmental threat the nation and the world have ever faced. State governments across the nation responded by adopting programs to address climate change. Indeed, state and local governments have been more active and innovative in the last several years than ever before in their environmental protection efforts.

The Bush Administration’s response has been to attempt to shackle these efforts by prohibiting the adoption of state and local protective measures, even in areas in which the federal government has refused to act. In a sense, then, the Bush Administration has turned the notion of cooperative federalism on its head. Instead of seeking to ensure that all levels of government cooperate to achieve necessary levels of environmental protection, the Bush Administration has worked to gut federal environmental laws while simultaneously blocking the efforts of state and local governments to do what the federal government will not.

The Administration has used different tools to implement this strategy. One of the most important -- and perverse -- of these relies on an over-reading of the doctrine of federal preemption. The Supremacy Clause of the U.S. Constitution provides that, in the event of a conflict, federal law supersedes state law. Thus, if Congress wants to preempt state law, thereby preserving for the federal government the exclusive authority to legislate in a particular field, it may do so by explicitly providing in a statute that the federal statute precludes supplemental state law. Even when a federal statute is silent on preemption matters, the Supreme Court has recognized that Congress may preempt state law implicitly, if there is evidence that Congress intended to prohibit all state and local activity in a particular field, compliance with both federal and state law would be impossible, or the pursuit of state law would frustrate federal policies.

Until recently, preemption of more stringent state environmental protection laws was rare. Many statutes include “savings clauses,” which explicitly preserve the power of states and localities to supplement federal environmental laws with their own more protective measures. This practice of preserving state power to go beyond federal requirements is an important component of the cooperative federalism model on which environmental laws are built.

The Bush Administration, however, has subverted cooperative federalism by invoking federal preemption in a variety of settings to invalidate needed state environmental laws. Agencies such as the Food and Drug Administration, the Environmental Protection Agency (EPA), and the National Highway Traffic Safety Administration (NHTSA) have all asserted that the laws they administer implicitly preempt state law. NHTSA, for example, has argued that federal fuel efficiency standards implicitly preempt state laws that restrict greenhouse gas emissions, despite the federal government’s refusal to take measures of its own.

But preemption can have effects beyond the prospective invalidation of state laws. The Bush Administration has supported arguments by industry litigants that the federal health and environmental protection laws preempt the ability of state courts to award compensation to individuals injured by the use of products (such as pharmaceutical drugs) subject to federal regulation. This result, if accepted by the courts, would leave injured individuals without recourse against those responsible for their injuries, since the relevant federal laws do not provide any mechanism for compensating injured individuals. (See Thomas McGarity’s blog entry on one such case, now before the Supreme Court.)

The Executive Order CPR’s Member Scholars propose in this area has four central provisions. The order would limit the authority of federal agencies to take or support efforts by others to invalidate state health and environmental protection laws through preemption and similar means by:

• reinforcing the executive branch’s adherence to the traditional judicially created presumption against preemption, and clarifying that states therefore remain free to adopt more protective laws;
• requiring agencies to provide a written justification to an appropriate office in the White House before taking any action that results in preemption of more protective state laws;
• where a federal statute allows states to adopt more protective standards or seek a waiver of express statutory preemption, requiring agencies to provide a written justification to an appropriate office in the White House before denying the state’s regulatory authority or waiver request ; and
• reinforcing and strengthening the obligation of federal agencies considering actions that would preempt state law to consult with appropriate state or local officials.

Congress is of course free to enact laws that explicitly preempt state law in order to achieve legitimate objectives, such as preventing states from adopting laws that shift the burdens of industrial spillovers to other jurisdictions or eliminating diverse state laws that might hamper the production of goods sold in nationals markets. In the absence of such laws, however, the courts have long held that sparing use of preemption is appropriate in order to protect the sovereignty of the states, especially when they are acting in areas of traditional state concern and prerogative, such as protection of the public health and safety.

CPR’s proposed Executive Order on preemption would prevent federal agencies from undermining cooperative federalism in the environmental area by inventing a reason to preempt state law even when Congress has not supplied one, or, indeed, in the face of evidence that Congress wanted to preserve, not oust state sovereignty. An Executive Order intent on preserving state power to go beyond federal health and environmental protection measures is perhaps more important now than it has ever been. Only by allowing the states to fill gaps in federal laws or supplement those laws with stronger measures of their own can we take full advantage of the burgeoning creativity of state and local governments in tackling problems such as climate change. Only by restricting federal preemption to situations clearly identified by Congress and clearly justified by legitimate federal policies can we revitalize the cooperative environmental federalism that the Bush Administration has worked so hard to undermine.