TLPJ HOME PAGE
v.
Neal Glaser Marine, Inc., et al., Defendants,
Outboard Marine Corp., doing business as OMC, Inc., doing business as OMCCC, doing business as Chris Craft, Defendant - Appellee.
Carter O. Bise, Esq.
Logan & Bise
2211 24th Avenue
P.O. Drawer 4207
Gulfport, MS 39502-4207
(228) 864-3666
(228) 864-3672 - fax
Leslie A. Brueckner, Esq.
Trial Lawyers for Public Justice, P.C.
1717 Massachusetts Avenue, N.W.
Suite 800
Washington, DC 20036
(202) 797-8600
(202) 232-7203 - fax
TABLE OF CONTENTS
STATEMENT OF THE ISSUES PRESENTED FOR REVIEW
STATEMENT OF FACTS RELEVANT TO THE ISSUES
SUBMITTED FOR REVIEW
1. The Boat Safety Act
2. The Coast Guard's Decision Not to Regulate
Propeller Guards
I. THE DECISION BELOW IS AN APPEALABLE FINAL ORDER OF A DULY-AUTHORIZED MAGISTRATE JUDGE
A. Appellant's Claims Are Not Expressly Preempted
1. Appellant's Claims Are Not Expressly Preempted Because the Coast Guard Has Never Regulated Propeller Guards
2. Appellant's Claims Are Not Expressly Preempted Because the Boat Safety Act Expressly Preserves Common Law Claims
a. The Act's Preemption Provision Does Not Encompass Common Law Claims
b. The Act's Savings Clause Expressly Preserves Common Law ClaimsB. Appellant's Claims Are Not Impliedly Preempted
1. The Question Of Implied Preemption Cannot Be Reached Because Congress Unambiguously Preserved Common Law Claims
2. Even Assuming That Implied Preemption Can Be Reached Here, Appellant's Claims Are Not Preempted Because They Do Not Conflict With Federal Law
TABLE OF AUTHORITIES
FEDERAL CASES:
American Tobacco Co. v. Patterson, 456 U.S. 63 (1982)
Arkansas Electric Co-Op v. Arkansas Public Service Comm'n, 461 U.S. 375 (1983)
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989)
Boyle v. United Technologies Corp., 487 U.S. 500 (1988)
Brown v. Gardner, 513 U.S. 115 (1994)
CSX Transport, Inc. v. Easterwood, 507 U.S. 658 (1993)
Carstensen v. Brunswick Corp., 49 F.3d 430 (8th Cir.), cert. denied, 516 U.S. 866 (1995)
Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984)
Chicago v. Environmental Defense Fund, 511 U.S. 328 (1994)
Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)passim
Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992)
English v. General Electric Corp., 496 U.S. 72 (1990)
Fidelity Federal Savings & Loan Association v. De La Cuesta, 458 U.S. 141 (1982)
Florida Lime & Avocado Growers v. Paul, 373 U.S. 132 (1963)
Freightliner Corp. v. Myrick, 514 U.S. 280 (1995) passim
Geier v. American Honda Motor Inc., 166 F.3d 1236 (D.C. Cir. 1999), petition for cert. filed May 5, 1999 (No. 98-1811)
Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988)
Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707 (1985)
Hines v. Davidowitz, 312 U.S. 52 (1941)
Keene Corp. v. United States, 508 U.S. 200 (1993)
Lewis v. Brunswick Corp., 107 F.3d 1494 (11th Cir.1997), cert. granted, 522 U.S. 978 (1998)
Medtronic v. Lohr, 518 U.S. 470 (1996) passim
Morrison-Knudsen Const. v. Director, Office of Workers Comp. Programs, 461 U.S. 624 (1983)
Mowery v. Mercury Marine, 773 F. Supp. 1012 (N.D. Ohio 1991)
Nolan v. Golden Rule Insurance Co., 171 F.3d 990 (5th Cir. 1999)
Ohio Manufacturers Association v. City of Akron, 801 F.2d 824 (6th Cir. 1986), cert. denied, 484 U.S. 801 (1987)
Puerto Rico Department of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 496 (1988)
Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947)
Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983)
Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984)
Smith v. United States, 508 U.S. 224 (1993)
Yamaha Motor Corp. v. Calhoun, 516 U.S. 199 (1996)
STATE CASES:
Ard v. Jensen, 1999 Mo. App. LEXIS 593 (May 4, 1999)
Drattel v. Toyota Motor Corp., 699 N.E.2d 376 (N.Y. 1998)
Ford Motor Co. v. Tebbetts, 665 A.2d 345 (N.H. 1995), cert. denied, 516 U.S. 1072 (1996)
Minton v. Honda of America Manufacturing, Inc., 684 N.E.2d 648 (Ohio 1997)
Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246 (Tex.), cert. denied, 115 U.S. 664 (1994)
Wilson v. Pleasant and General Motors Corp., 660 N.E.2d 327 (Ind. 1995)
FEDERAL STATUTES:
Administrative Procedure Act, 5 U.S.C. § 553 (1994)
Copyright Act of 1976, 17 U.S.C. § 301(a) (1977)
Domestic Housing and International Recovery and Financial Stability Act, 12 U.S.C. § 1715z-12, -18(e) (1989)
Federal Boat Safety Act of 1971, 46 U.S.C. §§ 4301-4311 (1988 & Supp. 1993) passim
National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. §§ 1381 - 1431 (1982)
15 U.S.C. § 1392
15 U.S.C. § 1397(c)
28 U.S.C. § 636(c)(1), (3)
28 U.S.C. § 1291
28 U.S.C. § 1292(a)
28 U.S.C. § 1292(b)
28 U.S.C. §1441(a)
LEGISLATIVE MATERIALS:
60 Fed. Reg. 25,191 (1995)
61 Fed. Reg. 12,123 (1996)
62 Fed. Reg. 22,991 (1997)
62 Fed. Reg. 44,507 (1997)
64 Fed. Reg. 21,566 (1999)
S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1971 U.S.C.C.A.N. 1333, 1333
S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S.C.C.A.N. 1333, 1338
H.R. Rep. No. 338, 98th Cong., 1st Sess. 122-23 (1983), reprinted in 1983 U.S.C.C.A.N. 924, 934-35
H.R. Rep. No. 154, 100th Cong., 2d Sess. 9 (1988), reprinted in 1988 U.S.C.C.A.N. 2361, 2363
Merchant Marine Subcommittee of the Senate Committee on Commerce, 92d Cong., 1st Sess., Hearing (March 22, 1971)
JURISDICTIONAL STATEMENT
The district court had subject matter jurisdiction pursuant to 28 U.S.C. § 1441(a) on the basis of diversity. See R. 1 (Notice of Removal); R. 20 (complaint). The judgment appealed from is a final judgment of the district court dated May 10, 1999, granting defendant's motion for summary judgment on federal preemption grounds. R.E. 8-13. That order was a final decision that disposed of all claims with respect to all parties. The notice of appeal was filed on June 2, 1999. R.E. 6. This Court has jurisdiction pursuant to 28 U.S.C. § 1291.
STATEMENT OF THE ISSUES
PRESENTED FOR REVIEW
I. Whether the order from which appeal is taken in this tort case, granting defendants' motion for summary judgment, is appealable based on the termination of the litigation, or whether there exists some other basis of appellate jurisdiction, see generally 28 U.S.C. §§ 1291, 1292(a), (b); and, if so, whether the matter was proceeding before the magistrate judge by consent of the parties, and therefore, whether appeal is proper to this court (see 28 U.S.C. § 636(c)(1), (3))?(1)
II. Whether the district court erred in finding federal preemption of common law claims that a boat was defective because it lacked a propeller guard where: (a) the Federal Boat Safety Act of 1971 expressly provides that "[c]ompliance with this chapter or standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law" (46 U.S.C. § 4311(g)); and (b) the Coast Guard has never issued any regulations either requiring or prohibiting propeller guards on boats?
STATEMENT OF THE CASE
This case arose out of a boating accident in which the plaintiff-appellant, Steven G. Lady ("appellant"), was injured by the propeller of a boat designed and manufactured by defendant-appellee Outboard Marine Corporation ("OMC"). Mr. Lady suffered severe head lacerations, two broken femurs, and loss of his left leg above the knee. R. 22 (Complaint ¶ 9).
In a state court complaint filed on March 11, 1998, Mr. Lady alleged that the boat was defective because it lacked a propeller guard.(2) Originally, the suit named as defendants both the retail distributor of the boat (Neal Glaser Marine, Inc.) and the boat manufacturer (OMC). Shortly after filing, Neal Glaser Marine, Inc. was voluntarily dismissed from the case, R. 20, leaving only OMC as a defendant. OMC thereafter removed the case to the United States District Court for the Southern District of Mississippi, Southern Division. R. 1-2.
Shortly after removal, the case was placed on an inactive status pending resolution of Lewis v. Brunswick Corp., 107 F.3d 1494 (11th Cir. 1997), cert. granted, 522 U.S. 978 (1998), then-pending before the United States Supreme Court. See R. 111-12 (Suspension Order). In Lewis, the Eleventh Circuit Court of Appeals held that a common law claim that a boat is defective because it lacked a propeller guard is preempted by the Federal Boat Safety Act of 1971, 46 U.S.C. §§ 4301-4311 (1988 & Supp. 1993) ("Boat Safety Act" or "Act"), and by a decision by the U.S. Coast Guard not to issue a regulation requiring propeller guards on all boats. The Supreme Court granted review in Lewis, but the case was settled after oral argument, prior to a decision on the merits. See Supp. R. Exhibit E ("Unusual Settlement Removes Third Case from Justices' Reach," The Washington Post, May 26, 1998).
After Lewis settled, OMC moved for summary judgment on the ground that Mr. Lady's claim is preempted by federal law. R. 116. Shortly thereafter, the parties consented to have a United States Magistrate Judge conduct all further proceedings. R. 125. The case was referred to Magistrate Judge Louis Guirola, Jr. for "all further proceedings and the entry of judgment in accordance with 28 U.S.C. 636(c), Fed. R. Civ. P. 73, and the foregoing consent of the parties." R. 125.
In response to OMC's motion, appellant argued that the Boat Safety Act neither expressly nor impliedly preempts his damage claims. Appellant also noted that the United States itself had filed an amicus brief in Lewis arguing that claims like Mr. Lady's are not preempted by either the Boat Safety Act or the U.S. Coast Guard's decision not to regulate propeller guards. Appellant argued, inter alia, that the district court should defer to the United States' position on this important question of federal law.(3)
The district court disagreed, holding that the Coast Guard's decision not to require propeller guards expressly preempts common law claims. While acknowledging that the Coast Guard has never issued any regulations governing propeller guards, the court reasoned that the agency's decision not to require propeller guards on all boats "'takes on the character of a ruling that no such regulation is appropriate,' and precludes states from imposing liability based on the absence of such guards . . .." R.E. 11 (Memorandum Opinion and Order at 4) (citations omitted). The lower court did not mention the United States' contrary position in Lewis. Rather, the court granted OMC's motion in its entirety, leaving appellant with no compensation for his injuries. R.E. 13 (id. at 6).
STATEMENT OF FACTS RELEVANT
TO THE ISSUES SUBMITTED FOR REVIEW
This case arises against the backdrop of the Boat Safety Act and the U.S. Coast Guard's decision not to regulate propeller guards. Because the preemption question hinges on the statutory and regulatory framework, it is necessary to review the relevant provisions in some detail.(4)
The Boat Safety Act was enacted to "improve boating safety by requiring manufacturers to provide safer boats and boating equipment to the public through compliance with safety standards to be promulgated by the Secretary of the Department in which the Coast Guard is operating - presently the Secretary of Transportation." S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1971 U.S.C.C.A.N. 1333, 1333. The Act provides that the Secretary of Transportation "may prescribe regulations establishing minimum safety standards for recreational vessels and associated equipment . . .." 46 U.S.C. § 4302(a)(1). This rulemaking authority has been transferred to the Commandant of the United States Coast Guard. See H.R. Rep. No. 338, 98th Cong., 1st Sess. 122-23 (1983), reprinted in 1983 U.S.C.C.A.N. 924, 934-35; H.R. Rep. No. 154, 100th Cong., 2d Sess. 9 (1988), reprinted in 1988 U.S.C.C.A.N. 2361, 2363. The National Boating Safety Advisory Council (the "Advisory Council") is charged with assisting the Coast Guard in evaluating the need for safety regulations. 46 U.S.C. § 4302(c)(4) (1988).
Under the Act, the Coast Guard's authority to issue minimum safety standards is permissive, not mandatory. Id. See also S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S.C.C.A.N. 1333, 1338. In addition, the Coast Guard may not establish regulations compelling substantial alterations of existing boats and associated equipment unless compliance would "avoid a substantial risk of personal injury to the public." 46 U.S.C. § 4302(c)(2).
The Act sets forth the procedures that the Coast Guard must follow to prescribe such regulations, including the actual publishing of a standard and the express provision of a future effective date after its initial publication. See 46 U.S.C. § 4302(b). Thus the Act requires certain actions by the [Coast Guard] in the development of safety standards . . . In addition to the specific procedural requirements outlined in the [Act], the [Coast Guard], in promulgating standards, is required to comply with the formal rulemaking procedures in the Administrative Procedure Act (5 U.S.C. 553).
S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S.C.C.A.N. 1333, 1340. Under this scheme, any party adversely affected by a standard prescribed under the Act is entitled to seek judicial review of the standard in accordance with the Administrative Procedure Act. Id.
The Boat Safety Act also contains two provisions addressing the effect of Coast Guard regulations on state law. First, Congress included in the legislation an express preemption clause providing, in pertinent part, that:
Unless permitted by the Secretary under section 4305 of this title, a State or political subdivision of a State may not establish, continue in effect, or enforce a law or regulation establishing a recreational vessel or associated equipment performance or other safety standard or imposing a requirement for associated equipment . . . that is not identical to a regulation prescribed under section 4302 of this title.
46 U.S.C. § 4306. Second, Congress included an express anti-preemption provision, or "savings clause," that expressly preserves all common law claims. It provides:
[c]ompliance with this chapter or standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law.
46 U.S.C. § 4311(g).
This savings clause is found in the "Penalties and Injunctions" section of the Act, which also outlines criminal and civil penalties to which violators of the Boat Safety Act may be subject. See 46 U.S.C. § 4311(a)-(g). Under this section, a person or corporation found to be in violation of the Act may be either criminally liable or "liable to the Government" for a civil penalty. Id. § 4311(b) (1988). The savings clause provides, therefore, that if a person or corporation is in compliance with the Act, he or she will not be held liable to the federal government, but is still subject to liability "at common law or under State law." Id. § 4311(g).
Together, the preemption provision and the savings clause govern the preemptive effect of federal regulations issued pursuant to the Boat Safety Act.
2. The Coast Guard's Decision Not to Regulate Propeller Guards.
In this case, the district court held that Mr. Lady's propeller guard claim is preempted by a decision of the U.S. Coast Guard not to issue any regulations regarding propeller guards. As explained below, however, although the Coast Guard considered issuing a regulation that would have required propeller guards on all boats, it ultimately decided that there was insufficient support for such a broad rule. The district court parlayed this absence of any federal regulation requiring propeller guards into an affirmative decision to ban any common law claims that a boat is defective because it lacks a propeller guard.
The Coast Guard's inquiry was prompted by a series of alarming reports about serious injuries and deaths caused by unguarded boat propellers. In recent years, public attention has become increasingly focused on motor-boat propellers "as instruments of devastation that are injuring and killing large numbers of people." See Supp R. Exhibit A at 1 (Jon S. Vernick and Associates, Motorboat Propeller Injuries, published by the Johns Hopkins University Injury Prevention Center and the Institute for Injury Reduction (Sept. 1992)). Propeller-related injuries "are often characterized by massive trauma, including significant blood loss or death." Id. at i. Between 1976 and 1990, the Coast Guard officially reported 175 fatalities and 1,438 non-fatal injuries in its Boating Statistics category "struck by boat or propeller" - an average of approximately 100 per year. Id.
The injuries associated with unguarded boat propellers have given rise to numerous lawsuits against marine engine manufacturers since the 1970s. Id. at 31. However, despite this litigation, as of 1992, no major marine engine manufacturer had equipped any of its boats with any type of propeller guard to protect people in the water. Id.
The growing public controversy over the use of propeller guards led the Coast Guard to consider whether to begin the process of developing a federal regulation mandating their use on passenger boats. In 1988, at the Coast Guard's request, a subcommittee of the Advisory Council (the "Subcommittee") was formed to investigate the feasibility of requiring guards to prevent underwater propeller accidents. See R. 185 ("Report of the Propeller Guard Subcommittee of the National Boating Safety Advisory Council," November 7, 1989).
In November 1989, the Subcommittee recommended that the agency take no regulatory action regarding propeller guards. See R. 197 ( id. at 24). Although it recognized the hazards presented by unguarded boat propellers, it found that [n]o simple universal design suitable for all boats and motors in existence has been described or demonstrated to be technologically or economically feasible. To retrofit the some 10 to 15,000,000 existing boats would thus require a vast number of guard models at prohibitive cost.
R. 196 (id. at 22). See also R. 197 (id. at 24) ("there are no indications that there is a generic or universal solution currently available or foreseeable in the future.") Thus, the Subcommittee concluded that "[t]he U.S. Coast Guard should take no regulatory action to require propeller guards." Id.(5)
The Advisory Council subsequently adopted the Subcommittee's recommendation that the Coast Guard not issue regulations requiring propeller guards on all recreational boats. See R. 215 ("Minutes of the National Boating Safety Advisory Counsel, Report of the Committee on Propeller Guards," November 6-7, 1989, at 18). However, in response to a presentation by a propeller strike victim that the search for new technology should continue, the Advisory Council's Chair "assured the Council and guests that this is not a dead issue. If new pertinent information becomes available, a subcommittee will be reconvened." R. 216 (id. at 19).
On February 1, 1990, the Coast Guard adopted the Advisory Council's recommendation that it "take no regulatory action to require propeller guards." See R. 217 (Letter from Robert T. Nelsen, Rear Admiral, U.S. Coast Guard, to Mr. A. Newell Garden, Chairman, National Boating Safety Advisory Council, Feb. 1, 1990 ("the Coast Guard Letter")). In his letter, Rear Admiral Nelson reiterated the concern that there was no universal solution currently available to solve the propeller guard problem:
The regulatory process is very structured and stringent regarding justification. Available propeller guard accident data do not support imposition of a regulation requiring propeller guards on motorboats. Regulatory action is also limited by the many questions about whether a universally acceptable propeller guard is available or technically feasible in all modes of boat operation. Additionally, the question of retrofitting millions of boats would certainly be a major economic consideration.
R. 217. The Coast Guard Letter added, however, that the agency would "continue to collect and analyze accident data for changes and trends . . . [and] review and retain any information made available regarding development and testing of new propeller guarding devices . . ." Id. At no point did the Coast Guard Letter - or anything else issued by the Coast Guard - indicate that the agency intended to ban state regulation with respect to propeller guards, or to preempt common law claims relating to a manufacturer's failure to install propeller guards in its boats.
The Coast Guard's 1990 decision not to regulate propeller guards was not the product of any formal rulemaking proceeding and did not result in any regulatory action. The Coast Guard Letter describing the agency's decision not to regulate was not exposed to public notice and comment and it was never published in the Federal Register. Thus, there was no attempt to conform to the notice-and-comment rulemaking requirements of the Administrative Procedure Act. See 5 U.S.C. § 553 (1994). To date, there is still no federal regulation with respect to propeller guards, and their use is neither mandated nor prohibited by federal law.
Notably, however, the Coast Guard has continue to study various policy proposals to prevent propeller-related injuries. In 1995, for example, the Coast Guard issued an Advance Notice of Proposed Rulemaking ("ANPRM") requesting comment on "the public's present feelings about the use of propeller guards on these vessels," a request occasioned by a serious accident involving a houseboat. See 60 Fed. Reg. 25,191 (1995). In 1996, the Coast Guard issued an ANPRM "to gather current, specific, and accurate information about the injuries involving propeller strikes and rented boats." 61 Fed. Reg. 12,123 (1996). And, in 1997, the Coast Guard sought "comments on the effectiveness and interventions which have been suggested for reducing the number of recreational boating accidents involving rented power boats in which individuals are injured by the propeller." 62 Fed. Reg. 22,991 (1997). Because it received few responses to that request, the Coast Guard extended the period for comments. See 62 Fed. Reg. 44,507 (1997). To date, the rulemaking is still open, and the Coast Guard is still considering what action, if any, to take with regard to propeller guards. See 64 Fed. Reg. 21,566 (1999).
SUMMARY OF ARGUMENT
In determining whether a state cause of action is preempted by federal law, a court's sole task is to ascertain the intent of Congress. This determination of Congressional intent is not made in a vacuum; rather, it is informed by a strong presumption against preemption that can be overcome only by a clear manifestation of Congressional intent to the contrary.
Seen in this light, the lower court erred in finding appellant's common law claims expressly preempted by the Boat Safety Act. First, there can be no finding of express preemption here because the Coast Guard has not issued any regulation regarding propeller guards. Instead, after an internal review that never reached the rulemaking stage, the agency decided that regulatory action was not warranted at that time. Finding express preemption under these circumstances is at odds with the plain language of the Boat Safety Act's preemption provision, which only applies where the Coast Guard has issued a duly promulgated federal safety standard governing the product at issue. See 46 U.S.C. § 4306. It also violates the Supreme Court's teaching in Freightliner Corp. v. Myrick, 115 S. Ct. 1483 (1995), that, absent clear Congressional intent to preempt the entire field of state action, federal regulatory inaction does not preempt the States' power to act.
Even assuming, however, that the Coast Guard's decision not to regulate propeller guards could preempt the States' power to issue legislative and administrative standards, it still would not expressly preempt appellant's common law claims. The reason is simple: The Boat Safety Act makes clear that Congress did not intend to preempt any common law claims. See 46 U.S.C. § 4306. The Act's savings clause, moreover, states in sweeping terms that "compliance with standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law." 46 U.S.C. § 4311(g). Both the plain language of this "anti-preemption" provision and its legislative history make plain that appellant's claims are expressly preserved, not preempted, thereby foreclosing any finding of express preemption here.
That being so, a court is barred from even considering whether appellant's claims are impliedly preempted by federal law. The U.S. Supreme Court has made clear that where Congress has spoken directly and clearly on the issue of preemption - as it did in the Boat Safety Act - there can be no finding of implied preemption. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992). Because the Act contains both an express preemption provision and an express "anti-preemption" provision manifesting a Congressional intent not to preempt, any inquiry into implied conflict preemption is precluded.
In any event, there is no implied conflict preemption here since appellant's claims do not conflict with the Coast Guard's decision not to regulate propeller guards. Implied preemption only lies where it is impossible for a private party to comply with both state and federal requirements or where state law would frustrate the full purposes and objectives of Congress. "Impossibility" is not an issue here, because federal law imposes no requirements whatsoever regarding propeller guards. Thus, OMC can do whatever is necessary to comply with Mississippi tort law - including compensating Mr. Lady for his injuries - without running afoul of federal law. Similarly, appellant's claims would not "frustrate" Congress' purposes, since a federal decision not to regulate propeller guards in no way conflicts with a common law claim that a specific engine design was defective because it lacked a propeller guard. Moreover, a claim that a specific boat engine is unsafe because it lacks a propeller guard is entirely consistent with the central goal underlying the Act: improving boat safety. Thus, there can be no holding of express or implied preemption in this case.
ARGUMENT
Because both issues in this appeal involve pure questions of law, the standard of review is de novo. See Nolan v. Golden Rule Ins. Co., 171 F.3d 990 (5th Cir. 1999).
I. THE DECISION BELOW IS AN APPEALABLE FINAL ORDER OF A DULY-AUTHORIZED MAGISTRATE JUDGE.
This Court has asked the parties to address whether (1) the order granting defendants' motion for summary judgment is appealable based on the termination of the litigation; and, if so, (2) whether the matter was proceeding before the magistrate judge by consent of the parties, and therefore, whether appeal is proper to this court. See n.2, supra. The answer to both questions is yes.
First, the decision below resolved all claims with respect to all parties, and thus was properly appealable under 28 U.S.C. § 1291. As explained above, although the complaint originally named both the boat seller (Neal Glaser Marine, Inc.) and the boat manufacturer (OMC) as defendants, Neal Glaser was voluntarily dismissed from the case, R. 20, leaving OMC as the sole defendant. As to OMC, the sole remaining claim is that the boat was defective because lacked a propeller guard. See n.3, supra. This claim was rejected in its entirety on preemption grounds, R. 227, thereby resolving all claims in the case. Thus, the district court's order is a final decision properly appealable under 28 U.S.C. § 1291.
Second, the United States Magistrate Judge clearly had authority to issue a final judgment in case, as the matter was before him for all purposes pursuant to full consent of the parties. R. 125. There is accordingly no question that this appeal is properly before this Court.
II. THE COAST GUARD'S DECISION NOT TO REGULATE PROPELLER GUARDS DOES NOT PREEMPT APPELLANT'S COMMON LAW CLAIMS.
This case is governed by three bedrock legal principles regarding federal preemption. First, as the U.S. Supreme Court reaffirmed in Medtronic v. Lohr, 518 U.S. 470, 485 (1996), a party seeking preemption of state law bears a heavy burden of overcoming the long-standing "presum[ption] that Congress does not cavalierly pre-empt state-law causes of action." In all preemption cases, a court must start with an assumption "that the States' historic police powers cannot be superseded by a Federal Act unless that is Congress' clear and manifest purpose." Id. (citing Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
This presumption is even stronger where, as in this case, preemption would displace the historic power of the states to protect the health and safety of their citizens. Rice, 331 U.S. at 230. Moreover, where preemption of common law claims would leave injured individuals without any state or federal remedy, which is the result sought by OMC here, a court may find preemption only in the most compelling circumstances. See English v. General Electric Corp., 496 U.S. 72, 87-90 (1990); Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251 (1984).
Second, in determining whether a state cause of action is preempted by federal law, the Court's "sole task is to ascertain the intent of Congress." California Fed. Sav. and Loan Ass'n v Guerra, 479 U.S. 272, 280) (1987) (plurality opinion). See also Medtronic, 518 U.S. at 494 ("'[t]he purpose of Congress is the ultimate touchstone' in every preemption case.") (quoting Retail Clerks v. Schermerhorn, 375 U.S. 96, 103 (1963)). In Medtronic, the Supreme Court explained that "Congress' intent, of course, primarily is discerned from the language of the pre-emption statute and the 'statutory framework' surrounding it." 518 U.S. at 585. Medtronic added, however, that a court must also give close consideration to the "'structure and purpose of the statute as a whole,' . . . as revealed not only in the text, but 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." Id. at 486 (quoting Gade v. National Solid Wastes Management Assn., 505 U.S. 88, 98 (1992)).
Finally, in the preemption context, as in others, the courts must give deference to the views of the expert agency that Congress has charged with implementing a statutory scheme. See id. at 496 (court should give "substantial weight" to agency's view of the preemptive effect of statute it is authorized to implement). See also Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 714-15 (1985); Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45 (1984).
Applying these core principles here, it is clear than there is no preemption of appellant's common law claims.
A. Appellant's Claims Are Not Expressly Preempted.
The lower court held that that Mr. Lady's no-propeller-guard claims are expressly preempted by the Federal Boat Safety Act and by the U.S. Coast Guard's 1990 decision not to regulate propeller guards. As explained below, this holding is in error, as there is no federal regulation in place to trigger preemption and, even if there were, the Act's preemption clause merely governs state legislative and regulatory standards, and does not encompass common law claims.
1. Appellant's Claims Are Not Expressly Preempted Because the Coast Guard Has Never Regulated Propeller Guards.
The first reason there can be no finding of express preemption in this case is simple: the Coast Guard has never promulgated any safety standard governing propeller guards. This fact alone is dispositive of the preemption question, because the Boat Safety Act's preemption provision only applies where there is a duly promulgated federal regulation.
The U.S. Supreme Court has established a common-sense approach to determining the preemptive scope of a federal act: "If the statute contains an express pre-emption clause, the task of statutory construction must in the first instance focus on the plain wording of the clause, which necessarily contains the best evidence of Congress' pre-emptive intent." CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). The first task in the analysis is thus to determine the "domain expressly preempted" by the terms of the Boat Safety Act. Medtronic, 518 U.S. at 484.
The Act's express preemption clause provides that, subject to certain exceptions, a State or political subdivision of a State may not establish, continue in effect, or enforce a law or regulation establishing a recreational vessel or associated equipment performance or other safety standard or imposing a requirement for associated equipment . . . that is not identical to a regulation prescribed under section 4302 of this title.
46 U.S.C. § 4306 (emphasis added). As the italicized language reveals, a federal regulation "prescribed under section 4302" of the Act must be in effect before a state law or regulation can be preempted by Section 4306.
This threshold requirement is not met in this case. It is undisputed that the Coast Guard has never promulgated any standard governing propeller guards; rather, the only action taken by the agency was to adopt an internal advisory committee recommendation not to undertake any regulatory action because (in part) it could not arrive at a universal design for boat engines. This decision, moreover, was not the subject of any rulemaking proceeding; was never published in the Federal Register; and was never made subject to a "future effective date," as the Act requires. See 46 U.S.C. § 4302(b). Thus, there is no federal regulation in place to trigger the Act's preemption provision, rendering any finding of express preemption invalid.
In this respect, this case is markedly similar to Freightliner Corp. v. Myrick, 514 U.S. 280 (1995), which involved claims that tractor-trailer manufacturers were negligent by not including antilock brake systems ("ABS") on their trucks. The manufacturers argued that these claims were preempted by the National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. §§ 1381 et seq. (1982) (the "Motor Vehicle Safety Act").(6)
The Supreme Court ultimately rejected the preemption defense on the ground that "[t]here is no express federal standard addressing [antilock brakes] for trucks or trailers." 514 U.S. at 286. In so holding, Myrick explicitly rejected the truck manufacturers' claim "that the absence of regulation itself constitutes regulation." Id. Mere regulatory inaction, said the Court, carries no preemptive force whatsoever, especially where "there is no evidence that [the federal agency] decided that [the product] should be free from all state regulation . . .." Id.
Myrick mandates reversal of the lower court's preemption ruling. In ruling that Mr. Lady's propeller-guard claim is preempted by the Coast Guard's regulatory inaction, the lower court effectively embraced the very proposition that was rejected in Myrick: i.e., that "the absence of regulation itself constitutes regulation." Id. This ruling has the nonsensical effect of transforming a federal decision not to require propeller guards on all motor boats into an affirmative decision to ban any state regulation requiring a propeller guard on any motor boat, as well as any state common law claim simply requiring a manufacturer to pay damages for failing to include a specific propeller guard on a specific boat. Not only is this result contrary to Myrick, but it flies in the face of numerous prior Supreme Court decisions holding that mere federal regulatory inaction, without more, does not imply an authoritative federal determination that the area is best left unregulated. See Puerto Rico Dep't of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 496, 503-04 (1988) (federal inaction alone does not have preemptive effect); Arkansas Elec. Co-Op v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375, 384 (1983) (regulatory inaction only has preemptive force where Congress has made clear that its intention is "to fill a regulatory gap, not to perpetuate one.") (footnote omitted).
In addition, here, as in Myrick, "there is no evidence that [the federal agency] decided that [the product at issue] should be free from all state regulation . . .." 514 U.S. at 286. As explained above, the Coast Guard's decision not to even begin drafting a federal regulation requiring propeller guards stemmed from its "many questions about whether a universally acceptable propeller guard is available or technically feasible in all modes of boat operation." R. 217. The agency never even considered whether some or all state regulations (much less some or all common law claims) were desirable. The Coast Guard also never considered, much less decided, whether there is some technology appropriate for use in some boats. Rather, the agency merely found that there was no technology appropriate for a national, across-the-board regulation applicable to all types of boats. This determination is entirely consistent with - and leaves the States free to adopt - state regulations mandating propeller guards on specific boats or on boats used for a particular purpose. It is also, of course, entirely consistent with a finding that OMC would be liable under Mississippi common law by failing to install a propeller guard on the boat engine that maimed Mr. Lady.
Despite the foregoing, the Eleventh Circuit in Lewis distinguished Myrick on the ground that, in contrast to the Motor Vehicle Safety Act, the Boat Safety Act bars states from issuing any laws or regulations except where the federal government has already promulgated an identical regulation:
While an absence of regulation under the [Motor] Vehicle Safety Act does not prevent states from regulating motor vehicle safety standards, an absence of federal regulation under the [Boat Safety Act] means that no regulation, state or federal, is appropriate. [Myrick] is distinguishable for that reason.
Lewis, 107 F.3d at 1504. Based on its view that the Boat Safety Act only permits state regulations that are identical to federal standards, the Eleventh Circuit held that the Coast Guard's decision not to issue a regulation requiring propeller guards was more than just regulatory inaction, but rather demonstrated an intention to "mandate[ ] an absence of both federal and state propeller guard requirements." Id. (citations omitted).
This argument rests on the radical - and wholly unsupported - notion that the Boat Safety Act preempts the entire field of boat safety regulation. This, however, is not the law. It is well established that courts may not infer Congressional authority to supercede the "historic police powers of the States . . . unless that was the clear and manifest purpose of Congress." Rice, 337 U.S. at 230. "Federal occupation of a field of commerce may not be deemed preemptive of state regulatory power in the absence of persuasive reasons - either that the nature of the regulated subject matter permits no other conclusion or that Congress has unmistakenly so ordained." Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 142 (1963).
Here, there is no basis for concluding that Congress has "unmistakenly ordained" its intent to preempt the entire field of state regulatory power with respect to boat safety. To begin with, the Boat Safety Act's express preemption clause contains no language barring States from regulating in the absence of federal action. Rather, it simply provides that "a State . . . may not establish . . . a [boat] safety standard . . . that is not identical to a regulation prescribed under section 4302." 46 U.S.C. § 4306. This language merely limits what a State can do in the event the Coast Guard has prescribed a regulation (i.e., the State is limited to prescribing an identical standard); it says nothing about what a State can or cannot do where - as here - the Coast Guard has decided not to take any regulatory action. In light of the strong presumption against preemption, see Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992), this silence can only be taken to mean that Congress intended to limit preemption to instances in which the Coast Guard has promulgated actual regulations according to the specific procedures set forth in the Boat Safety Act. See 46 U.S.C. § 4302 (setting forth procedures for promulgation of minimum safety standards under the Act).
At the same time, another provision of the Boat Safety Act limits the Coast Guard's authority to prescribing "minimum safety standards" (46 U.S.C. § 4302(a)(1)) - language that this Court has previously construed as not evidencing Congressional intent to preempt all safety regulation in a particular field. See Florida Lime, 373 U.S. at 147-48. Not only does the Act limit the Coast Guard's authority to the promulgation of "minimum" standards, but it also gives the Coast Guard the option not to promulgate any standards at all. See 46 U.S.C. § 4302(a) ("[t]he Secretary may prescribe regulations . . . establishing minimum safety standards for recreational vessels and associated equipment . . .") (emphasis added). Given that the Coast Guard is not required to take any regulatory action with respect to recreational vessels, it is hard to imagine that Congress intended the Boat Safety Act automatically to preempt the entire field of state positive law. Such a result would effectively read the word "Safety" out of the Boat Safety Act.
Of course, language accomplishing total preemption of the regulatory field would have been easy to fashion had Congress so intended. See, e.g., Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-101 (1983) (field preemption where federal law expressly preempted "any and all state laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA); Rice, 337 U.S. at 233-35 (field preemption where federal law expressly states that "the power, jurisdiction, and authority conferred upon [the agency] under this Act shall be exclusive with respect to all persons securing a license hereunder so long as said language remains in effect"). The absence of any such language in the Boat Safety Act further demonstrates that Congress did not expressly preempt the entire field of state regulation in the boat safety area.
Nor could there be any claim that "the nature of the regulated subject matter" - boat safety - "permits no other conclusion" than that Congress intended to bar all state regulation in the area. Florida Lime, 373 U.S. at 142. Even the Eleventh Circuit in Lewis recognized that the Boat Safety Act regulates an area (safety) that "historically has been regulated by the states through their police powers . . .." 107 F.3d at 1501. This is therefore not a case where Congressional intent to preempt state law may be inferred from a "dominant federal interest" in the field. Compare Hillsborough County, Fla. v. Auto Med. Labs., 471 U.S. 707, 718 (1985) (no dominant federal interest in regulating health and safety sufficient to support implied preemption of entire field of state regulation) with Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 152 (1989) (state intellectual-property action held preempted notwithstanding absence of explicit federal regulation of the field because the Supreme Court's "past decisions have made clear that state regulation of intellectual property must yield to the extent that it clashes with the balance struck by Congress in our patent laws"); Boyle v. United Technologies Corp., 487 U.S. 500, 505-06 (1988) (implying intent to preempt field from uniquely federal interest in liability of independent contractors performing work for federal government), and Hines v. Davidowitz, 312 U.S. 52, 62 (1941) (implying intent to preempt field from dominance of federal interest in foreign affairs).
Nor is this a case where the "scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress 'left no room' for supplementary state regulation." Hillsborough, 471 U.S. at 713 (quoting Rice, 331 U.S. at 230). The Act itself does not require the Coast Guard to prescribe any regulations governing boat safety; instead, it merely states that "[t]he Secretary may prescribe regulations . . . establishing minimum safety standards for recreational vessels . . .." 46 U.S.C. § 4302(a) (emphasis added). The fact that the agency has issued some regulations in the area of boat safety (although not with regard to propeller guards!) is hardly sufficient to infer Congressional intent to preempt the entire field of boat safety. See Hillsborough, 471 U.S. at 718 ("[w]e are even more reluctant to infer preemption from the comprehensiveness of regulations than from the comprehensiveness of statutes"). See also Medtronic, 116 S. Ct. at 2261 (Breyer, J., concurring) ("this Court has previously said that it would 'seldom infer, solely from the comprehensiveness of federal regulations, an intent to pre-empt in its entirety a field related to health and safety.'") (quoting Hillsborough, 471 U.S. at 718).
For all these reasons, Myrick cannot be distinguished on the ground that the Boat Safety Act preempts the field of state law even in areas where the Coast Guard has chosen not to regulate. Thus, Myrick's holding is squarely applicable here, and mandates a conclusion that the Coast Guard's regulatory inaction cannot support any finding of express preemption under Section 4306. As a result, this Court need not even reach the question of whether federal regulations actually issued under the Boat Safety Act would preempt state common law claims. As explained below, however, even if the Coast Guard's decision not to regulate could have preemptive force under the Boat Safety Act (which it cannot), the Boat Safety Act itself makes crystal clear that Congress did not intend to preempt any common law claims.
2. Appellant's Claims Are Not Expressly Preempted Because the Boat Safety Act Expressly Preserves Common Law Claims.
The two provisions of the Boat Safety Act that set forth Congress' intent with respect to preemption - the preemption provision (46 U.S.C. § 4306) and the savings clause (46 U.S.C. § 4311(g)) - reveal that common law claims are expressly preserved, not preempted.
a. The Act's Preemption Provision Does Not Encompass Common Law Claims.
To begin with, Section 4306 merely preempts any "law or regulation establishing a recreational vessel or associated equipment performance or other safety standard or imposing a requirement for associated equipment . . . that is not identical to a regulation prescribed under section 4302 of this title." Id. (emphasis added). Perhaps the most notable feature of this provision is the absence of any reference at all to common law damage claims. Congress has repeatedly shown its ability expressly to refer to "common law" when it intends to include it within the scope of a preemption clause. Compare, e.g., Copyright Act of 1976, 17 U.S.C. § 301(a) (1977) (preempting rights "under the common law, rule, or public policy"); Domestic Housing and International Recovery and Financial Stability Act, 12 U.S.C. § 1715z-12, -18(e) (1989) (preempting any "State constitution, statute, court decree, common law, rule or public policy"). Indeed, the express reference to "common law" in the Act's savings clause, 46 U.S.C. § 4311(g) (see infra at 35), shows that Congress was cognizant of common law in this very piece of legislation, thereby defeating any notion that Congress intended the preemption provision to encompass common law claims. See, e.g., Chicago v. Environmental Defense Fund, 511 U.S. 328, 337 (1994) ("It is generally presumed that Congress acts intentionally and purposely when it includes particular language in one section of a statute but omits it in another") (internal quotation marks omitted). Accord Keene Corp. v. United States, 508 U.S. 200, 208 (1993).
Even the broadest reading of Section 4306 ultimately breaks down, however, in light of other aspects of the preemption provision that make clear that Congress never intended to preempt tort suits against boat manufacturers.
First, the Act merely preempts state "law[s] or regulation[s]" that are not identical to federal requirements. Although "law," standing alone, is susceptible to a broad reading, "[l]anguage . . . cannot be interpreted apart from context." Smith v. United States, 508 U.S. 224, 229 (1993). Here, the term "law" does not stand in isolation, but rather as a counterpart to the word "regulation," which is a prescriptive requirement promulgated by an administrative rather than legislative body. Indeed, the U.S. Supreme Court in Cipollone repeatedly noted that the word "regulation" is a reference only to positive law and not to common law duties or damages liability. See 505 U.S. at 504, 519, 523. Thus, if "a word is known by the company it keeps," Brown v. Gardner, 513 U.S. 115, 118 (1994) (citation omitted), and if this Court is to adhere to the oft-stated "assum[ption] 'that the legislative purpose is expressed by the ordinary meaning of the words used,'" American Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982) (quoting Richards v. United States, 369 U.S. 1, 9 (1962)), the phrase "law or regulation" cannot plausibly be read to encompass the damage claims in Mr. Lady's suit. See also Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246, 249-250 (Tex.) (Boat Safety Act's preemption provision does not encompass common law claims), cert. denied, 115 U.S. 664 (1994); Ard v. Jensen, 1999 Mo. App. LEXIS 593 (May 4, 1999) (same); R.E. 40-44 (Brief of United States in Lewis at 17-21).
Second, the preemption provision merely prohibits a State from imposing a nonidentical "law or regulation establishing . . . a performance or other safety standard or imposing a requirement for associated equipment . . .." 46 U.S.C. § 4306 (emphasis added). "Safety standard" is a term used at various places in the Act to refer to the administrative standards the Coast Guard is authorized to adopt pursuant to Section 4302. See, e.g., id. at § 4302(a)(1); § 4302(a)(2); § 4304; § 4311(f)(1); § 4311(f)(2). The use of the same term to refer to the state norms that may be displaced by a federal "safety standard" is, under normal rules of statutory construction, indicative that the term is meant to have the same meaning. See Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 479 (1992) (it is a "basic canon of statutory construction that identical terms within an Act bear the same meaning") (citing cases); Morrison-Knudsen Const. v. Director, Office of Workers Comp. Programs, 461 U.S. 624, 633 (1983) ("a word is presumed to have the same meaning in all subsections of the same statute"). See also Medtronic, 518 U.S. at 489 (plurality opinion) (citing other uses of the term "requirements" throughout statute to demonstrate that Congress merely intended to preempt "enactments of positive law by legislative or administrative bodies, not the application of general rules of common law by judges and juries"). Thus, the only sensible reading of the Act's preemption provision is that a "safety standard" promulgated under the Act (or a requirement for equipment associated with such a standard) will only preempt a state legislative or administrative "safety standard" that is not identical to the federal standard.
Third, the preemption provision only applies to a safety standard "establish[ed], continue[d] in effect, or enforce[d]" by a "State or a political subdivision of a State." Construing an award of damages to a tort victim as "establishing, continuing in effect, or enforcing" a boat safety standard is at odds the ordinary meaning of Congress' words. The duties relied on by tort claimants are general duties under the common law that have evolved over hundreds of years. Although a jury award of damages would represent confirmation of a pre-existing common law duty - for instance, the duty to act non-negligently - only an inept grammarian could construe an award of damages in a tort suit as "establishing, continuing in effect, or enforcing" a boat safety standard or other regulation. On the other hand, it is common parlance to say that a previously "established" statute or regulation "continues in effect" or is "enforced."
Fourth, it makes no sense to construe the term "State or a political subdivision of a State" as encompassing a jury (or judge) in a tort case. Political subdivisions of states, such as counties and towns, often enact health and safety laws. For this reason, it was logical for Congress to include "political subdivisions" in the coverage of Section 4306, lest there be some ambiguity as to the breadth of the term "State." At the same time, no one would ordinarily describe an award of damages by a jury or judge as being issued by a "State or political subdivision of a State." And it is impossible to say that a federal jury or judge is in any sense a "State or political subdivision thereof." Thus, the Boat Safety Act's express preemption provision cannot reasonably be read to encompass common law claims.(7)
b. The Act's Savings Clause Expressly Preserves Common law Claims.
If any doubt remained as to the inapplicability of the Boat Safety Act's express preemption provision to common law claims, it would be dispelled by the Act's express anti-preemption provision - the savings clause - which plainly and unambiguously preserves all common law claims. It states in simple and straightforward terms: "Compliance with this chapter or standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law." 46 U.S.C. § 4311(g).
On its face, the savings provision is sweeping and unambiguous. "Compliance with standards, regulations, or orders prescribed under this chapter" is a phrase that does not admit of qualification. It cannot be read to mean only compliance with certain federal safety standards, or to exempt from its scope safety standards that deal with the particular question of design or performance at issue in a given common law action. Similarly, the phrase "does not relieve a person from liability at common law or under State law" does not on its face admit of qualification. "[L]iability at common law or under State law" is all-inclusive. That phrase cannot fairly be read to mean that the Boat Safety Act provides any basis for exempting any defendant from any common law liability.
The Boat Safety Act's legislative history confirms that Congress enacted the savings clause to make crystal clear that common law claims are not preempted under any circumstances. Section 4311(g) was added to the Act at the urging of Richard Schwartz, the Executive Director of the Boat Owners Association of the United States, who testified that:
we would recommend a savings provision with respect to the consumers' private remedies, which is not touched on by the present Bill. We would like to see it explicitly clarified that compliance with standards issued under the Act does not relieve the manufacturer from liability under State or common law in private law suits. It should be made clear that this Act does not preempt state or common law. It addition, we would further state that the failure of the Secretary to promulgate a standard shall not be admissible in a private proceeding. This would preclude a manufacturer from utilizing against the consumer the lack of a standard as evidence of a safe condition.
Merchant Marine Subcommittee of the Senate Committee on Commerce, 92d Cong., 1st Sess., Hearing (March 22, 1971), 88 (emphasis added).
At the same hearing, the Commandant of the Coast Guard, in response to a Senator's question about the inclusion of an express savings clause, also stated that [w]e do not believe that compliance with promulgated standards under the Act has the effect of relieving a manufacturer from liability under the usual tort law concerning negligence or warranties. For many years the Coast Guard has required compliance with "standards" by inspected vessels. Courts have consistently held that a vessel owner's compliant with Coast Guard inspection requirements is not synonymous with "seaworthiness" under maritime law. Though the analogy is apparent we would have no objection to an express provision to clarify that a manufacturer's compliance with promulgated standards does not by itself relieve him of any tort liability which otherwise could pertain.
Id. at 66 (emphasis added).
Congress responded by adding an express savings clause, and commented that the new provision is intended to clarify that compliance with the Act or standards, regulations, or orders promulgated thereunder, does not relieve any person from liability at common law or under State law. The purpose of the section is to assure that in a product liability suit mere compliance with the minimum standards promulgated under the Act will not be a complete defense to liability. Of course, depending on the rules of evidence of the particular judicial forum, such compliance may or may not be admissible for its evidentiary value.
S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1971 U.S.C.C.A.N. at 1352 (emphasis added).
Thus, at the time of the bill's drafting, Congress was presented with the very question at issue in this case: the preemptive scope of the Boat Safety Act in the absence of an applicable federal regulation. Faced squarely with this issue, Congress did not enact or otherwise provide any "clear and manifest intent" to preempt such laws as is required to find preemption. See Cipollone, 505 U.S. at 516. Rather, its response (in the form of the savings clause) demonstrates that Congress fully intend to preserve common law claims even in cases where a manufacturer could demonstrate compliance with a minimum federal standard. See also R.E. 44-45 (Brief of United States in Lewis at 21-22) (arguing that the Act's savings clause "also makes clear Congress's explicit intent to preserve tort liability").
The lower court attempted to avoid the obvious meaning of the savings clause by finding that it merely precludes federal preemption as a defense in cases where a manufacturer has actually installed a defective product. See R.E. 13 (Memorandum Opinion and Order at 6).(8) In this view, the savings clause only "saves" common law claims involving a tort of commission (e.g., negligent installation of a guard) but not a tort of omission (e.g., failure to install a guard at all). This position, however, finds no support in the language of the savings clause itself, which broadly asserts that compliance with any "standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law." 46 U.S.C. § 4311(g). Moreover, since no federal regulation prohibits or requires propeller guards, OMC complies with the Act whether it provides a guard ("commission") or not ("omission"). The "compliance" does not relieve OMC from common law liability under the express terms of the Act. There is thus no logical or textual reason to imply an unstated limitation into the terms chosen by Congress when it added the savings clause to the Boat Safety Act.
In short, the Boat Safety Act expressly and unequivocally preserves all common law claims. Some courts have nonetheless rejected this result on the theory that Congress could not logically have intended to permit common law claims to proceed when state regulations addressing the same matters would be preempted. See, e.g., Carstensen v. Brunswick Corp., 49 F.3d 430, 432 (8th Cir.), cert. denied, 516 U.S. 866 (1995); Mowery v. Mercury Marine, 773 F. Supp. 1012, 1016 (N.D. Ohio 1991). Congress, however, has repeatedly preserved common law claims, despite their arguably regulatory effect, while preempting direct state regulation. For example, in Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988), the Supreme Court held:
The effects of direct regulation on the operation of federal projects are significantly more intrusive than the incidental regulatory effects of such an additional award provision. Appellant may choose to disregard Ohio safety regulations and simply pay an additional workers' compensation award if an employee's injury is caused by a safety violation. We believe Congress may reasonably determine that incidental regulatory pressure is acceptable, whereas direct regulatory authority is not. Cf. Silkwood v. Kerr McGee Corp., 464 U.S. at 256 (Congress was willing to accept regulatory consequences of application of state tort law to radiation hazards even though direct state regulation of safety aspects of nuclear energy was pre-empted).
Id. at 185-86 (footnote omitted; emphasis added).
Similarly, in Cipollone, seven members of the U.S. Supreme Court agreed that, although a 1965 cigarette labeling act expressly preempted state regulatory law, it did not preempt state common law, noting that "there is no general, inherent conflict between [express] federal pre-emption of state [regulatory] warning requirements and the continued vitality of state common law [damages] actions." 505 U.S. at 518 (plurality); id. at 533-34 (Blackmun, J., concurring). See also, e.g., Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 211 (1996) (variations in state remedies have "long been deemed compatible with federal maritime interests," and the lack of a federal comprehensive tort recovery regime in the federal act suggests that state tort actions are not preempted); English v. General Electric Co., 496 U.S. 72, 85 (1990) (state minimum wage laws, child labor laws, and tort claims would not be preempted by federal law at nuclear power plants even though they may affect resource allocation decisions and may alter radiological safety policies).(9)
This approach, moreover, makes good sense. As OMC well knows, and Congress certainly understood when it passed the Boat Safety Act, regulatory agencies are notoriously subject to capture by those they are intended to regulate and, even in the best circumstances, move laboriously and cautiously. Given the purpose of the Boat Safety Act, it was unquestionably reasonable for Congress to preempt state legislative and administrative standards that are different than federal regulations, but continue to allow the common law tort system to play its traditional role of prompting the federal government and boat manufacturers to set higher standards for safety features. That is precisely the approach reflected in the Act, which expressly preserves all common law claims.
B. Appellant's Claims Are Not Impliedly Preempted.
Despite Congress' clear language expressly preserving common law claims, OMC argued below that Mr. Lady's claims are impliedly preempted by the Coast Guard's decision not to require propeller guards on all passenger boats.(10) This is wrong on two counts: first, given Congress' clearly expressed intention to preserve common law claims, this Court is prohibited from even considering whether appellant's claims are impliedly preempted by virtue of a conflict with federal law. Second, even if implied conflict preemption could be considered here (which it cannot), there is no preemption because appellant's claims are entirely consistent with the Coast Guard's decision not to regulate propeller guards.
1. The Question Of Implied Preemption Cannot Be Reached Because Congress Unambiguously Preserved Common Law Claims.
The U.S. Supreme Court has made clear that, where Congress has spoken directly and clearly on the preemption issue at stake - as it did in the Boat Safety Act - a court is prohibited from considering any doctrine of implied preemption. In Cipollone, a seven-member majority stated:
When Congress has considered the issue of pre-emption and has included in the enacted legislation a provision explicitly addressing that issue, and when that provision provides a 'reliable indicium of congressional intent with respect to state authority,' there is no need to infer congressional intent to preempt state laws from the substantive provisions of the legislation.
505 U.S. at 517 (quotations deleted). This approach, the Court said "is a variant of the familiar principle of expressio unius est exclusio alterius: Congress' enactment of a provision defining the pre-emptive reach of a statute implies that matters beyond that reach are not preempted." Id.(11)
This maxim applies with full force here to bar any inquiry into implied preemption. As explained above, Congress has made crystal clear in the Safety Act that common law claims are not preempted. Indeed, it is hard to imagine a more "reliable indicium" of Congressional intent than the Act's plainly worded savings clause, which expressly preserves common law claims. That being so, it would fly in the face of Congress' intent to imply preemption here on the basis of an alleged conflict between a common law claim and a (nonexistent) regulatory standard. Cipollone flatly prohibits such a result, which would effectively turn the presumption against preemption on its head.
2. Even Assuming That Implied Preemption Can Be Reached Here, Appellant's Claims Are Not Preempted Because They Do Not Conflict With Federal Law.
Even assuming, however, that implied preemption analysis is proper in this case, there is no preemption here since Mr. Lady's claims do not conflict with the Boat Safety Act or with the Coast Guard's decision not to regulate propeller guards. As Myrick explained, implied preemption only arises when there is an "actual conflict" between federal and state law - either because it would be "impossible for a private party to comply" with both or because the state law "stands as an obstacle to the accomplishment and execution of the full purposes of Congress." 514 U.S. at 287 (citations omitted). Neither situation is even remotely present in this case.
To begin with, any claim of implied preemption is definitively rebutted by the fact that, in Lewis, the United States itself took the position that "[t]he Coast Guard's conclusion in 1990 that the available data did not justify the issuance of regulations concerning propeller guards is not a basis for implied conflict preemption of petitioners' common law tort claims." R.E. 49 (Brief at 26) (emphasis added). In so arguing, the United States emphasized that "[t]he Coast Guard has never formally determined that a requirement [of propeller guards] would be contrary to the interests of boat safety.'" Id. Given this fact, and the absence of any federal regulation governing propeller guards, the United States concluded that the petitioners' claims did not in any way conflict with the federal regulatory scheme. R.E. 48-53 (Brief at 25-30).
The United States' position on
this point is truly the end of the matter, since the brief encompasses
and reflects the Coast Guard's own position on propeller
guards. As the Supreme Court held in Medtronic, the agency's
interpretation on the scope of preemption is entitled to "substantial
weight." 518 U.S. at 496 (majority opinion); id.
at 505-07 (Breyer, J., concurring). See also Hillsborough
County v. Automated Medical Laboratories, Inc., 471 U.S.
707, 714-15 (1985) ("[t]he [agency's] statement is dispositive
on the question of implicit intent to pre-empt unless either the
agency's position is inconsistent with clearly expressed congressional
intent, . . . or subsequent developments reveal a change in that
position") (citations omitted); Fidelity Federal Savings
& Loan Ass'n. v. De La Cuesta, 458 U.S. 141, 158 (1982)
(regulatory preamble is valid evidence of administrative construction
of regulation); Ohio Mfrs. Ass'n v. City of Akron, 801
F.2d 824, 833 (6th Cir. 1986), cert. denied, 484 U.S.
801 (1987). Given that the Coast Guard itself takes the view that
no-propeller-guard claims like Mr. Lady's are entirely consistent
with its own decision not to regulate propeller guards, there
is no basis for finding implied conflict preemption here.(12)
Even putting aside the United States' position in Lewis, there is no sound basis for a claim that this lawsuit conflicts with federal law. First, as in Myrick, "it is not impossible for [the manufacturer] to comply with both federal and state law because there is simply no federal standard for a private party to comply with." Myrick, 514 U.S. at 289. Once again, the bottom line in this case is that there is no federal regulation regarding propeller guards. As the Coast Guard has not enacted any standard either requiring or prohibiting propeller guards on boats, OMC would not run afoul of federal law by installing propeller guards on its boat engines. (Of course, jury verdicts finding it liable in this and other cases would not compel it to do any such thing, since OMC could always opt to compensate the plaintiffs for their injuries rather than avoid such suits altogether by installing propeller guards.) In any event, given the absence of any federal regulation regarding propeller guards, there can be no claim of impossibility here.
Nor can there be any serious claim that permitting lawsuits like this one would "stand[ ] as an obstacle to the accomplishment and execution of the full purposes of Congress." Myrick, 514 U.S. at 287. To again use the words of Myrick,
[W]e cannot say that the respondents' lawsuits frustrate "the accomplishment and execution of the full purposes and objectives of Congress." In the absence of a promulgated safety standard, the Act simply fails to address the need for ABS devices at all. Further, Standard 121 currently has nothing to say concerning ABS devices one way or the other, and NHTSA has not ordered truck manufacturers to refrain from using ABS devices. A finding of liability against petitioners would undermine no federal objectives or purposes with respect to [propeller guards], since none exist.
Id. at 289-90 (emphases added). Here, too, the absence of any federal standard regarding propeller guards is the end of the matter.
Nor would permitting appellant's claims conflict with any regulatory uniformity purpose of the Act. Although OMC argued this point below, in reality, the Act has no such stated goal. And, although the legislative history references uniformity as one of Congress' goals, the Senate Report reveals that the main purpose behind the Boat Safety Act is - as the name implies - boat safety. See S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in 1971 U.S.C.C.A.N. at 1333-35. A jury verdict in appellant's favor would be perfectly consistent with - and substantially further - that overriding goal. Moreover, under current law, there is a total lack of uniformity regarding propeller guards, given that the Coast Guard's regulatory inaction allows manufacturers to provide a myriad of guard designs, or no guards at all, in any hodgepodge manner they elect. In any event, as the Texas Supreme Court held in Moore, "the savings clause reflects that Congress was willing to tolerate some tension between the concept that uniform safety regulations should be established at the federal level and the concept that a state may nevertheless award tort damages for unsafe products. Cf. Silkwood, 464 U.S. at 256." 889 S.W.2d at 252. Thus, any claim that an alleged interest in regulatory uniformity is sufficient to trigger implied preemption of common law claims should be rejected.
In sum, given the strong presumption against federal preemption of common law claims, Congress' explicit preservation of common law claims in the Boat Safety Act, and the Coast Guard's decision not to promulgate any federal regulation regarding propeller guards, OMC's motion for summary judgment should be denied. Appellant's common law claims are not preempted.
CONCLUSION
For the foregoing reasons, the district court's order finding that appellant's no propeller guard claim is expressly preempted by federal law should be reversed.
Respectfully submitted,
______________________________
Leslie A. Brueckner
Trial Lawyers for Public Justice, P.C.
1717 Massachusetts Avenue, NW
Suite 800
Washington, DC 20036
(202) 797-8600
(202) 232-7203 - fax
Carter O. Bise
Logan & Bise
2211 24th Avenue
P.O. Box 4207
Gulfport, MS 39502-4207
(228) 864-3666
(228) 864-3672 - fax
Dated: August 23, 1999
ENDNOTES
1. This issue is included pursuant to this Court's letter of June 28, 1999.
2. The complaint also alleged that the boat had a defective throttle. R. 3 (Complaint ¶¶ 11-14); R.E. 9 (Memorandum Opinion and Order at 2 n.1). This claim was later withdrawn in response to OMC's Motion for Summary Judgment, and is not at issue here. R.E. 9 (same).
3. A copy of the United States' brief in Lewis is included in the Record Excerpts filed with this brief at Tab 5.
4. Copies of the relevant statutory provisions are set forth in an addendum to this brief.
5. In its report, the Subcommittee also discussed that "[a] number of lawsuits have been filed by victims of alleged propeller strikes to recover damages from the operator of the striking vessel and also against the manufacturer of the propulsion unit and/or boat." R. 187 (id. at 4). The Subcommittee went on to note that, if the Coast Guard were to adopt a regulation mandating propeller guards, "[s]uch mandate would . . . establish prima facie manufacturer liability in having failed to provide them." Id. at 5. It said nothing about what effect, if any, a decision not to issue a regulation would have on those lawsuits.
6. The Motor Vehicle Safety Act is similar to the Boat Safety Act insofar as it preempts states from establishing "any safety standard applicable to the same aspect of performance of such vehicle or item of equipment which is not identical to a federal standard." 15 U.S.C. § 1392(d) The Motor Vehicle Safety Act also has a savings clause nearly identical to the Boat Safety Act. Compare 46 U.S.C. § 4311(g) with 15 U.S.C. § 1397(c).
7. In addition, as the United States argued in Lewis, the reference to "State or political subdivision of a State" cannot be read to include courts or juries because the Act's preemption provision "requires executive officers of the State or political subdivision to apply to the Secretary for permission 'to establish, continue in effect, or enforce a law or regulation establishing a . . . safety standard.' Absent much clearer textual language, it would be anomalous to compel state judicial officers to apply to the Secretary for authority to continue a damages action premised on a negligent design theory of liability." R.E. 42 (Brief at 19).
8. Specifically, the lower court held that "if the manufacturer installed a defectively designed propeller guard, § 4311(g) would preclude [Boat Safety Act] preemption as a defense. However, § 4311(g) does not apply where the manufacturer merely chooses not to install a device or appliance which the [Boat Safety Act] does not require." R.E. 13 (Memorandum Opinion and Order at 6).
9. The United States' amicus brief in Lewis similarly argued that "[t]he regulatory effect of a common law judgment is not as direct as that of positive law." R.E. 45 (Brief at 22).
10. The lower court did not reach this issue since it held that appellant's claims are expressly preempted by the Coast Guard's regulatory inaction. R.E. 5-6.
11. Contrary to OMC's claim below, Myrick did not repudiate Cipollone in this regard. In Myrick, this Court clarified that an express preemption clause, standing alone, does not automatically preclude implied preemption; it only does so when it provides a "reliable indicium of congressional intent" with respect to preemption. The Court explained:
The fact that an express definition of the pre-emptive reach of a statute "implies" - i.e. supports a reasonable inference - that Congress did not intend to pre-empt other matters does not mean that the express clause entirely forecloses any possibility of implied pre-emption . . . At best, Cipollone supports an inference that an express pre-emption clause forecloses implied pre-emption; it does not establish a rule.
115 S. Ct. at 1488. As the Ohio Supreme Court recently held in a case arising under the similarly-worded Motor Vehicle Safety Act, "Myrick did not overrule Cipollone. Rather, it is apparent that Myrick sought merely to disapprove of decisions interpreting Cipollone to mean that implied preemption can never exist when Congress has included an express preemption clause in the legislation in question." Minton v. Honda of America Mfg., Inc., 684 N.E.2d 648, 658 (Ohio 1997). Minton went on to hold, however, that where a statute's express preemption provision clearly reveals Congressional intent not to preempt, any inquiry into implied conflict preemption is prohibited. See id. See also Ford Motor Co. v. Tebbetts, 665 A.2d 345, 348 (N.H. 1995) (same), cert. denied, 516 U.S. 1072 (1996); Drattel v. Toyota Motor Corp., 699 N.E.2d 376, 382-83 (N.Y. 1998) (same); Wilson v. Pleasant and General Motors Corp., 660 N.E.2d 327, 334-36 (Ind. 1995) (same). But see, e.g., Geier v. American Honda Motor Inc., 166 F.3d 1236 (D.C. Cir. 1999), petition for cert. filed May 5, 1999 (No. 98-1811).
12. Deference to the expert agency's understanding of the Boat Safety Act is particularly appropriate where, as here, the Coast Guard is ceding authority to the states, not trying to claim power for itself. The concern behind the preemption doctrine - protection of federal interests from inconsistent state or local activity - is not implicated where the federal agency charged with enforcing those interests does not object to - indeed welcomes - state participation. See Hillsborough County, 471 U.S. at 714-15.