TLPJ - Briefs - Lady v. Outboard Marine Corp.

No. 00-1031

__________________________________________________

IN THE

Stephen G. Lady,

Petitioner,

Outboard Marine Corp.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the

Fifth Circuit

PETITION FOR A WRIT OF CERTIORARI

Carter O. Bise

Logan & Bise

2211 24^th Avenue

P.O. Drawer 4207

Gulfport, MS 39502-4207

228/864-3666

Arthur Bryant

Trial Lawyers for Public Justice, P.C.

One Kaiser Plaza, Suite 275

Oakland, CA 94612-3684

510/622-8150

Leslie A. Brueckner

(Counsel of Record)

Anne Bloom

Trial Lawyers for Public

Justice , P.C.

1717 Massachusetts Avenue,

NW, Suite 800

Washington, D.C. 20036

202/797-8600

QUESTION PRESENTED

This case involves the same issue raised by Lewis v. Brunswick Corp., No. 97-288 (October Term, 1997), cert. granted, 522 U.S. 978 (1997), cert. dismissed, 523 U.S. 1113 (1998): whether common law tort claims that a boat was defectively designed because it lacked a propeller guard are preempted by federal law. In Lewis, the United States submitted an amicus curiae brief stating the federal government’s view that such claims are not preempted. Lewis, however, settled after oral argument, before any decision was rendered. This case presents the first opportunity for the Court to consider this preemption issue since Lewis. The question presented is:

Whether the Federal Boat Safety Act of 1971, 46 U.S.C. §§ 4301-4311 (1988 & Supp. 1993), preempts state common law claims that a recreational motor boat was defectively designed because it lacked a propeller guard when: (1) the Act 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)); (2) the U.S. Coast Guard has not adopted any standard or regulation with respect to propeller guards; and (3) the United States has taken the position that common law no-propeller-guard claims do not conflict with or otherwise frustrate any federal statutory or regulatory purpose?

TABLE OF CONTENTS

Page

QUESTION PRESENTED i

PARTIES TO THE PROCEEDING................. ii

TABLE OF AUTHORITIES v-vii

OPINIONS BELOW... 1

JURISDICTION.... 1

STATUTORY PROVISIONS INVOLVED 1-2

STATEMENT OF THE CASE 2

REASONS FOR GRANTING THE WRIT 11

1. This Case Presents the Same Federal Preemption Issue that the Court Considered in Lewis, But Could Not Resolve Because Lewis Settled After Oral Argument... 11

2. There is a Direct Split Between the Texas Supreme Court and Three Federal Courts of Appeals,

Including the Decision Below, as to Whether

No‑Propeller-Guard Claims are Preempted by

the Boat Safety Act............ 12

3............ The Decision Below Conflicts with Relevant Decisions of this Court........... 15

CONCLUSION.............. 26

TABLE OF AUTHORITIES

Cases

Askew v. American Waterways Operators, 411 U.S. 325

(1973)...... 23

Arkansas Elec. Co-Op v. Arkansas Pub. Serv. Comm’n, 461

U.S. 375 (1983)........ 18

Carstensen v. Brunswick Corp., 49 F.3d 430 (8^th Cir.), cert.

denied, 516 U.S. 866 (1995)........ 15

Cipollone v. Liggett Group, Inc., 505 U.S. 504

(1992)...... 23

Freightliner Corp. v. Myrick, 514 U.S. 280

(1995) 16-18, 20

Geier v. Honda, 529 U.S. 1913, 120 S. Ct. 1913

(1999)...... 24

Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988)........ 14

Hillsborough County v. Automated Medical Laboratories, Inc.,

471 U.S. 707 (1985).. 13, 24

Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440

(1960)...... 23

Kelly v. State of Washington, 302 U.S. 1 (1937)........ 23

Lewis v. Brunswick Corp., 107 F.3d 1494 (11^th Cir. 1997),

cert. granted, 522 U.S. 978 (1997), cert. dismissed,

523 U.S. 1113 (1998) passim

Medtronic v. Lohr, 518 U.S. 470 (1996).. 3, 21-24

Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d

246 (Tex.), cert. denied, 115 U.S. 664 (1994) 3, 13-15, 19

Paccar, Inc. v. NHTSA, 573 F.2d 632 (9th Cir.), cert. denied,

439 U.S. 862 (1978)... 16-17

Puerto Rico Dep’t of Consumer Affairs v. Isla Petroleum Corp.,

485 U.S. 496 (1988).. 18, 20

United States v. Locke, 529 U.S. 89, 120 S. Ct. 1135

(2000) 9, 22-23

Statutes and Legislative Materials

Administrative Procedure Act, 5 U.S.C. § 553 (1994).. 7, 20

Federal Boat Safety Act of 1971, 46 U.S.C. § 4301‑4311

(1988 & Supp. V. 1993).......... passim

National Traffic and Motor Vehicle Safety Act of 1966, 15

U.S.C. §§ 1381 et seq. (1982)....... 16

S. Rep. No. 248, 92d Cong., 1st Sess. (1971), reprinted in

1971 U.S.C.C.A.N. 1333........ 3-4

46 U.S.C. § 4302 (a)(1).. 3

46 U.S.C. § 4302 (b)...... 4

46 U.S.C. § 4302 (c)(2).. 4

46 U.S.C. § 4302 (c)(4).. 3

46 U.S.C. § 4306.. passim

46 U.S.C. § 4311(g) .......... passim

Regulations

49 C.F.R. § 571.121(S3)(1993) 16-17, 20

60 Fed. Reg. 25,1919 (1995) ........ 7

61 Fed. Reg. 12,123 (1996)................... 7

62 Fed. Reg. 22,991 (1997)................... 7

62 Fed. Reg. 44,507 (1997)................... 7

64 Fed. Reg. 21,566 (1999)................... 7

Miscellaneous

Brief for the United States as Amicus Curiae Supporting

Petitioners, Lewis v. Brunswick Corp., 522 U.S. 978 (1997)

(No. 97-288).......... passim

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the 5^th Circuit (App. 1‑39) is reported at 228 F.3d 598 (5th Cir. 2000). The opinion of the district court (App. 40‑ 47) was entered on May 7, 1999.

JURISDICTION

The judgment of the court of appeals was entered on September 26, 2000. This Court has jurisdiction under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The express “preemption clause” of the Federal Boat Safety Act of 1971, 46 U.S.C. § 4306 (1988), reads as follows:

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 (except insofar as the State or political subdivision may, in the absence of the Secretary's disapproval, regulate the carrying or use of marine safety articles to meet uniquely hazardous conditions or circumstances within the State) that is not identical to a regulation prescribed under section 4302 of this title.

The express “savings clause” of the Federal Boat Safety Act of 1971, 46 U.S.C. § 4311(g) (1988), reads as follows:

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.

The Coast Guard has not issued any regulations governing propeller guards on recreational vessels. The agency did consider whether to begin the process of developing a regulation requiring propeller guards on recreational boats, but it decided not to do so. The Coast Guard’s decision not to take any regulatory action with respect to such devices was not the subject of any formal rulemaking or agency publication.

STATEMENT OF THE CASE

This case presents the question of whether a state common law claim that a boat engine was defectively designed because it lacks a propeller guard is preempted by the Federal Boat Safety Act of 1971, 46 U.S.C. § 4301‑4311 (1988 & Supp. V. 1993) (“Boat Safety Act” or “Act”), and by a decision of the United States Coast Guard not to begin developing a regulation that would require the use of propeller guards on recreational motor boats. The Fifth Circuit held that such claims are impliedly preempted by federal law, even though the Coast Guard has never regulated propeller guards and even though the United States, in an amicus curiae brief filed with this Court, took the position that no-propeller-guard claims like petitioner’s are not preempted by federal law. See Brief for the United States as Amicus Curiae Supporting Petitioners, Lewis v. Brunswick Corp., 522 U.S. 978 (1997) (No. 97-288). In so doing, the lower court disregarded repeated teachings of this Court that the federal government’s own view of the preemptive effect of agency regulations is entitled to at least “substantial weight.” E.g., Medtronic v. Lohr, Inc., 518 U.S. 470, 496 (1996) (majority opinion); id. at 505-07 (Breyer, J., concurring). The Fifth Circuit’s decision, which is in direct conflict with the Texas Supreme Court’s holding in Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246 (Tex.), cert. denied, 115 U.S. 664 (1994), is the subject of this petition.

A. The Federal Statutory and Regulatory Framework

1. The Boat Safety Act.

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 App. 9. 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).

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., 1^st Sess. (1971), reprinted in 1971 U.S.C.C.A.N. 1333, 1338. In addition, the Coast Guard is prohibited from establishing regulations that would compel substantial alterations of existing boats unless compliance with those regulations 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 proposed safety 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., 1^st Sess. (1971), reprinted in 1971 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:

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).

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 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 and to opine whether “the Coast Guard [should] move towards a federal requirement for some form of propeller guard.” App. 11. In November 1989, based in part on its conclusion that propeller guards “would not necessarily increase boat safety” (App. 15), the Subcommittee recommended that “the U.S. Coast Guard should take no regulatory action to require propeller guards.” App. 16. This recommendation was then adopted by the Advisory Council and forwarded to the Coast Guard for its consideration. App. 16.

On February 1, 1990, the Coast Guard adopted the Advisory Council’s recommendation that it “take no regulatory action to require propeller guards.” App. 16. In a letter setting forth the rationale underlying the agency’s decision not to begin the formal regulatory process, Rear Admiral Robert T. Nelson explained the Coast Guard’s position on propeller guards as follows:

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.

App. 16-17. Rear Admiral Nelson 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 Rear Admiral Nelson’s letter – or anything else issued by the Coast Guard – indicate that the agency had concluded that propeller guards are dangerous, or that it intended 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 begin the process of developing a regulation to require 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.^[1]

B. The Proceedings Below

This case arose out of a boating accident in Mississippi state waters in which the petitioner, Steven G. Lady, was seriously injured by the propeller of a boat designed and manufactured by respondent Outboard Marine Corporation (“OMC”). App. 2. In a Mississippi state court complaint filed on March 11, 1998, Mr. Lady alleged that the boat was defectively designed because it lacked a propeller guard. 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, 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, based on diversity jurisdiction. App. 3.

Shortly after removal, the case was placed on inactive status pending resolution of Lewis v. Brunswick Corp., 107 F.3d 1494 (11^th Cir. 1997), cert. granted, 522 U.S. 978 (1998). That case, which raised the issue of whether no-propeller-guard claims like petitioner’s are preempted, was then pending before this Court. As noted above, however, Lewis settled after oral argument but before any decision was rendered, and so this Court dismissed the petition for certiorari. See 523 U.S. 1113 (1998). After Lewis settled, OMC moved for summary judgment on the ground that Mr. Lady’s claim is preempted by federal law. App. 3. The district court agreed, 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 . . ..” App. 44 (citations and internal quotation marks omitted).

On appeal, the Fifth Circuit rejected the district court’s express preemption ruling, but nonetheless held that petitioner’s claims are impliedly preempted by federal law. At the outset, the court held that the case was not subject to the strong presumption against federal preemption that traditionally has been applied to health and safety issues – “matters that historically have been areas of state jurisdiction.” App. 18 (quoting MacDonald v. Monsanto Co., 27 F.3d 1021, 1023 (5^th Cir. 1994)). Relying on this Court’s recent decision in United States v. Locke, 529 U.S. 89, 120 S. Ct. 1135 (2000), which held that the presumption against preemption does not apply to cases involving international maritime commerce, the Fifth Circuit reasoned that “a presumption against preemption does not guide our analysis of whether federal law precludes Lady’s common law tort claims against OMC.” App. 21.

The lower court then considered the questions of express and implied preemption under the Boat Safety Act. Regarding the former, the court concluded that the Act’s broadly-worded savings clause, which provides that “compliance with this chapter . . . does not relieve a person from liability at common law or under state law,” precludes any finding of express preemption of common law claims. App. 27. The Fifth Circuit went on to hold, however, that petitioner’s claims are impliedly preempted by federal law on the theory that a jury verdict finding OMC liable for not installing a propeller guard would frustrate the Coast Guard’s regulatory purposes. Despite its acknowledgment that the Coast Guard has never issued any regulations governing propeller guards (yet retains the authority to do so if it so chooses), the court found that the agency’s regulatory inaction amounted to an affirmative decision to preclude any common law claims seeking to hold a manufacturer liable for failing to install propeller guards. In the court’s view, “[a] damage award in favor of Lady would effectively require boat manufacturers to install propeller guards, in direct contravention to the Coast Guard’s policy against mandating such a device in favor of affording manufacturers flexibility on the matter.” App. 36 (citations omitted).

Notwithstanding its purported reliance on the agency’s “policy” as a basis for its implied preemption ruling, the lower court chose to disregard the United States’ only articulated view on the matter: the anti-preemption position set forth in the Solicitor General’s amicus curiae brief in Lewis, which argued 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.” Brief for the United States as Amicus Curiae Supporting Petitioners at 26, Lewis v. Brunswick Corp., 522 U.S. 978 (1997) (No. 97-288) (emphasis added). The Lewis brief 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. The United States further noted that,

[i]f it had reached that conclusion, the Coast Guard may well have prohibited propeller guards. The Coast Guard stated only that the “available propeller guard accident data do not support imposition of a regulation requiring propeller guards.”

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. Id. at 25-30.

In the face of these arguments, and despite its characterization of the implied preemption issue as an “extremely close one” (App. 35), the Fifth Circuit ultimately held that the United States’ position in Lewis was not persuasive because “[t]he Solicitor General . . . has not appeared before us in this case” and, in any event, “the weight we would place on [the Lewis brief] would not be sufficient to overcome the reasons supporting the application of implied preemption.” App. 38-39 n.22.

REASONS FOR GRANTING THE WRIT

I. This Case Presents the Same Federal Preemption Issue that the Court Considered in Lewis, But Could Not Resolve Because Lewis Settled After Oral Argument.

This case presents the same issue of federal preemption that was before the Court in Lewis v. Brunswick Corp., 107 F.3d 1494 (11^th Cir. 1997), cert. granted, 522 U.S. 978 (1997), cert. dismissed, 523 U.S. 1113 (1998): whether state common law tort claims that a boat was defectively designed because it lacked a propeller guard are preempted by federal law. In Lewis, the United States submitted an amicus curiae brief arguing that, because the Coast Guard never issued any regulations relating to propeller guards, common law no-propeller-guard claims do not conflict with or undermine any federal regulatory purpose. Unfortunately, Lewis settled after oral argument, so no opinion was ever rendered in the case. See 523 U.S. 1113 (1998). The lower courts remain split on the issue, with one state supreme court (Texas) holding that no-propeller-guard claims are not preempted and a host of federal courts (including the Fifth Circuit in the decision below) holding just the opposite (see infra at II).

The decision below is the first opinion issued by a federal court of appeals in the wake of Lewis. (No state supreme court has since revisited the issue.) Although the Fifth Circuit agreed with petitioner that the Act does not expressly preempt no-propeller-guard claims, it held that such claims are impliedly preempted because the U.S. Coast Guard has considered taking, but ultimately decided not to take, regulatory action requiring propeller guards. In so doing, the lower court emphasized that the case presents a “close and difficult issue” as to which the lower courts remain deeply conflicted. App. 6. Review is warranted because this case presents the first opportunity since Lewis for this Court to resolve this important issue of federal law.

II. There is a Direct Split Between the Texas Supreme Court and Three Federal Courts of Appeals, Including the Decision Below, as to Whether No‑Propeller-Guard Claims are Preempted by the Boat Safety Act.

Review is also warranted because there is a direct split between the Supreme Court of Texas and the Fifth Circuit Court of Appeals (along with two other federal circuit courts) as to whether a common law claim that a manufacturer is liable for failing to equip its boats with propeller guards is preempted by the Boat Safety Act. This split creates the anomalous situation whereby the viability of no-propeller-guard claims in Texas depends entirely on whether a case proceeds in state or federal court.

In Moore, 889 S.W.2d 246, the Texas Supreme Court held that the Boat Safety Act neither expressly nor impliedly preempts no‑propeller-guard claims. The court emphasized the strong presumption against federal preemption of state common law claims – a presumption that “particularly obtains when, as in this case, state regulation of health and safety matters is involved.” Id. at 249 (citing Hillsborough County v. Automated Medical Labs., Inc., 471 U.S. 707, 715 (1985)). In light of this strong presumption against preemption, Moore rejected the boat manufacturers’ claim that the reference to “law or regulation” in the Boat Safety Act’s preemption provision encompasses – and expressly preempts – common law claims. 889 S.W.2d at 250.

The Texas Supreme Court also rejected the boat manufacturers’ argument that the plaintiff’s no‑propeller-guard claims were impliedly preempted under the Act. Id. at 251. On this point, the defendants argued that “a jury award in this case will conflict with and undermine the goals of the Act by creating a standard requiring propeller guards, in the face of the Coast Guard’s determination that guards should not be mandated.” Id. The Texas Supreme Court disagreed, stating, first, that the Coast Guard’s decision not to commence rulemaking did not “reflect an intention to foreclose state tort liability.” Id.

As to the boat manufacturers’ claim that preemption must be implied because permitting no‑propeller-guard claims would undermine Congress’ goal of creating uniform safety regulations, the Texas Supreme Court stated: “the [Act’s] 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.” Id. at 252. This approach makes sense, in the Texas Supreme Court’s view, because “the regulatory effect of damage awards is not equivalent to that of positive enactments: a manufacturer who incurs tort liability for failing to install propeller guards has a choice not available to the regulated manufacturer – installing guards on future boats or taking no action and bearing the liability as a cost of doing business.” Id. at 251 (citing Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 185‑86 (1988)).

The decision below is squarely in conflict with Moore. Although the two courts agree that there is no express preemption of common law claims under the Boat Safety Act (in light of the Act’s savings clause), the Fifth Circuit split with Moore in holding that no-propeller-guard claims are impliedly preempted by the Coast Guard’s regulatory inaction. To reach this conclusion, the Fifth Circuit began by abandoning a core proposition of law embraced in Moore: that such claims are subject to a strong presumption against federal preemption. See App. 18-21. Having jettisoned the presumption against preemption, the lower court went on to conclude – again directly contrary to the holding in Moore – that “[a] damage award in favor of Lady would effectively require boat manufacturers to install propeller guards” on recreational boats. App. 36. Such an outcome, the court held, “would frustrate the Coast Guard’s decision that recreational boats should not be required to be equipped with propeller guards.” App. 6.

Thus, the decision below is manifestly at odds with the Texas Supreme Court’s decision in Moore. In addition, as the Fifth Circuit recognized, this split is reflected in numerous other court decisions regarding the scope of preemption under the Boat Safety Act, including Carstensen v. Brunswick Corp., 49 F.3d 430 (8th Cir.), cert. denied, 516 U.S. 866 (1995), and Lewis v. Brunswick Corp., 107 F.3d 1494 (11th Cir. 1997), cert. dismissed, 523 U.S. 1113 (1998). See App. 6 (collecting cases). Review is warranted here to finish the job started in Lewis: to resolve this split, prevent further confusion among the lower courts, and ensure that state common law claims that Congress intended to preserve are not preempted.

III. The Decision Below Conflicts with Relevant Decisions of this Court.

Review is also warranted because the lower court’s ruling conflicts with decisions of this Court in at least three ways: first, it improperly affords preemptive effect to federal regulatory inaction; second, it improperly abandons the long-standing presumption against preemption; and, third, it fails to give any – let alone sufficient – weight to the federal government’s own interpretation of the preemptive effect of the Coast Guard’s decision not to regulate propeller guards.

1. The Lower Court Erroneously Afforded Preemptive Effect to the Federal Government’s Regulatory Inaction.

To begin with, the Fifth Circuit’s holding that the Coast Guard’s decision not to commence rulemaking with respect to propeller guards has preemptive force directly conflicts with Freightliner Corp. v. Myrick, 514 U.S. 280 (1995), which made clear that the mere absence of federal regulation with respect to a particular product has no preemptive effect whatsoever. In Myrick, this Court considered whether a claim that a manufacturer was negligent for failing to install antilock brakes in tractor‑trailer trucks was preempted by the National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. §§ 1381 et seq. (1982), and by a federal motor vehicle safety regulation governing airbrake systems in buses, trucks, and trailers. 49 C.F.R. § 571.121 (S3) (1993) (“Standard 121”).

As originally promulgated in 1974, Standard 121 required that all truck manufacturers install antilock brakes. This requirement was invalidated by the Ninth Circuit’s decision in Paccar, Inc. v. NHTSA, 573 F.2d 632, 640 (9th Cir.), cert. denied, 439 U.S. 862 (1978), which held that, although the braking performance of some trucks was improved by antilock brakes, “critical problems began with mass production of vehicles designed to meet the Standard.” Id. at 641. Due to the unforeseen manufacturing difficulties encountered during mass production of antilock systems, the Ninth Circuit ordered the federal regulatory agency to suspend the antilock requirements of Standard 121. Id. at 643. In response, the agency added language to the regulation stating that the antilock brake provisions invalidated by the Paccar ruling “are not applicable to trucks and trailers.” 49 C.F.R. § 571.121(S3).

In Myrick, the truck manufacturers argued that Standard 121 preempted common law claims that their trucks were defective because they lacked antilock brakes. This Court disagreed, holding that there could be no express preemption because there was no federal standard in place regarding antilock brakes in trucks. See 514 U.S. at 286. In so holding, Myrick explicitly rejected the truck manufacturers’ claim “that the absence of regulation itself constitutes regulation,” especially where “there is no evidence that [the federal agency] decided that [the product] should be free from all state regulation . . ..” Id. Regarding implied preemption, the Court ruled, first, that “it is not impossible for petitioners to comply with both federal and state law because there is simply no federal standard for a private party to comply with.” Id. at 289. Frustration of federal objectives was also not an issue, in the Court’s view, because the federal regulation “currently has nothing to say concerning [antilock brake] devices one way or another, and [the federal agency] has not ordered truck manufacturers to refrain from using [such] devices. A finding of liability against petitioners would undermine no federal objectives or purposes with respect to [antilock brake] devices, since none exist.” Id. at 289-90.

Myrick is squarely at odds with the decision below. In finding federal preemption of petitioner’s no‑propeller-guard claim, the Fifth Circuit embraced the very proposition that was rejected in Myrick: that an agency’s decision not to regulate has the same preemptive force as a decision to regulate. This ruling has the perverse effect of transforming a federal decision not to commence rulemaking regarding propeller guards on motor boats into an affirmative decision to ban any common law claim seeking to require a manufacturer to pay damages for failing to include a specific propeller guard on a specific boat. Not only is this conclusion contrary to Myrick, but it flies in the face of numerous prior decisions of this Court holding that mere federal regulatory inaction, without more, does not imply an authoritative federal determination that the area is best left unregulated. See, e.g., 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).

The lower court also ignored the fact that, 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 supra at 5-7, the Coast Guard’s decision not to commence rulemaking regarding 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.” App. 17. Due to the lack of a “universally acceptable” solution, and the high statutory threshold of having to demonstrate that federal regulation would “avoid a substantial risk of personal injury to the public,” 46 U.S.C. § 4302(c)(2), the Coast Guard declined to commence rulemaking to consider a nationwide standard for propeller guards. Id. The agency never stated, however, that there was no technology appropriate for use in any mode of boat operation; rather, the Coast Guard found that there was no technology appropriate for a national, across‑the‑board regulation applicable to all types of boats. Contrary to the Fifth Circuit’s apparent reasoning, this determination would be entirely consistent with a state’s decision to allow some boat manufacturers to be held liable for failing to install a certain type of propeller guard on specific boats or on boats used for a particular purpose.

There is also no evidence that the Coast Guard intended to restrict the ability of victims of propeller accidents to seek compensation through the common law tort system. To the contrary, the record demonstrates that the Coast Guard was well aware of the on‑going litigation regarding propeller guards (see App. 13), yet the agency said nothing to suggest that it intended to preempt such actions in the future. As the Texas Supreme Court found in Moore, supra, the Propeller Subcommittee report that was the basis for the Coast Guard’s decision not to regulate propeller guards “mentions that manufacturers have been sued for not installing propeller guards, and recognizes that a federal requirement of propeller guards would establish a prima facie case of manufacturer liability in some states . . . Thus even if the Coast Guard made a policy determination, carrying preemptive weight, that propeller guards should not be regulated, its preemptive effect would not necessarily include common law.” 889 S.W.2d at 252.

The absence of any preemptive intent on the part of the Coast Guard is dramatically underscored by the manner in which its decision was rendered. Under the Boat Safety Act, the Coast Guard is directed to “prescribe regulations . . . establishing minimum safety standards . . ..” 46 U.S.C. § 4302(a)(1) (emphasis added). In keeping with this directive, Congress clearly intended that only properly promulgated regulations would exert preemptive force under the Act. In this case, however, there was no rulemaking proceeding of any sort, let alone a federal regulation proclaiming the Coast Guard’s intention to ban state regulation of propeller guards. Instead, the agency’s decision not to commence rulemaking was the product of internal deliberations (as opposed to the notice‑and‑comment rulemaking procedures mandated by the Administrative Procedure Act, see 5 U.S.C. § 553 (1994)), and was embodied in an informal letter to the Chairperson of the Advisory Council setting forth the agency’s decision not to regulate propeller guards. App. 16-17. This is hardly the type of “clear and manifest” expression of preemptive purpose that must be evident before preemption may be found based on regulatory inaction. Isla Petroleum, 485 U.S. at 503.

At bottom, the Coast Guard’s decision not to commence rulemaking with regard to propeller guards is markedly similar to the fate of antilock brake regulation described in Myrick. In both cases, the absence of regulation was due to a determination that the current state of technology did not warrant a universal regulatory solution to a safety problem. In Myrick, that decision was made by the Ninth Circuit and then memorialized in the amendment to Standard 121 eliminating the antilock brake requirement for trucks and trailers; in this case, the decision not to commence rulemaking was made by the agency in the first instance. But the result in both instances was the same: an absence of any federal regulation mandating or prohibiting the use of the technology in question. Myrick makes clear that federal preemption does not exist under these circumstances.

The Fifth Circuit’s decision, moreover, has implications far beyond the narrow issue of preemption under the Boat Safety Act. If the decision below is permitted to stand, it could massively broaden the scope of federal preemption far beyond what Congress ever intended. Under the lower court’s reasoning, any federal decision not to regulate could be deemed to have preemptive force, regardless of the reason for federal inaction and regardless of the extent to which Congress made clear its intent not to intrude on States’ regulatory power and/or strip individuals of their common law remedies. Not only would this constitute a grievous blow against the traditional rights of victims to seek redress for injuries caused by dangerous products, but it would strip the States of their historic power to protect the health and welfare of their citizens. Review is warranted to prevent this deep encroachment on the rights of the States to protect their citizens and of citizens to use the common law to protect themselves – rights that neither Congress nor the Coast Guard ever expressed any intention to restrict.

2. The Lower Court Erroneously Disregarded the Presumption Against Preemption.

Review is also warranted to correct the lower court’s decision to abandon any presumption against preemption of common law claims in all cases in the “maritime” context – even those involving a small recreational boat in state waters. See App. 38 (“we conclude that, at least in the instant maritime context, where the federal interest and presence has traditionally been so significant and there is no presumption against preemption, implied preemption precludes Lady’s actions against OMC.”) This approach does violence to the rights of the States to provide compensation for their citizens and flies in the face of long-standing decisions of this Court recognizing a strong presumption against federal preemption in health and safety matters. See generally Medtronic, 518 U.S. at 485.

The Fifth Circuit’s error stemmed from a misreading of this Court’s recent decision in Locke, 529 U.S. 89, 120 S. Ct.1135 (2000), which involved state regulations of the operation and design of ocean-going oil tankers used in international commerce. Locke merely held that, in a case where “[t]he state laws in question bear upon national and international maritime commerce, . . . there is no beginning assumption that concurrent regulation by the State is a valid exercise of its police powers.” Id. at 1148 (emphasis added). A presumption against preemption is inappropriate in such cases, this Court reasoned, given Congress’ longstanding authority “to regulate interstate navigation, without embarrassment from intervention of the separate States and resulting difficulties with foreign nations.” Id. at 1143. The Court also expressed concern that regulations governing international ocean-going oil tankers implicated “the substantial foreign affairs interests of the Federal Government.” Id. at 1142.

These concerns have no bearing here. First, this case is entirely unrelated to “interstate navigation,” as the accident that harmed petitioner occurred on Mississippi waters. Second, this case has nothing to do with “maritime commerce,” international or otherwise, as the Boat Safety Act merely involves federal regulation of recreational vessels, such as the speed boat that struck petitioner. See 46 U.S.C. § 4301. Finally, the United States’ “foreign affairs interests” – so paramount in Locke that “the governments of 13 ocean-going nations expressed their concerns [about conflicting state regulations] through a diplomatic note” (120 S. Ct. at 1142) – are clearly not implicated here. The United States has no greater interest in maintaining presumptively exclusive authority over safety features on small recreational boats than it has in other areas, such as medical devices, cigarettes, and myriad other spheres where the federal government has regulatory authority and yet the presumption against preemption has been applied by this Court with full force. See, e.g., Medtronic, 518 U.S. at 485 (medical devices); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (cigarettes).

At the same time, Locke reaffirmed that the “beginning assumption” against preemption continues to apply in cases involving the “historic police powers of the States.” 120 S. Ct. at 1147 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). Numerous prior decisions of this Court have made clear that such powers may be exercised concurrently with the federal government’s jurisdiction over maritime matters, see, e.g., Askew v. American Waterways Operators, 411 U.S. 325 (1973); Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440 (1960); Kelly v. State of Washington, 302 U.S. 1, 10 (1937), and that, absent express Congressional intent to preempt the entire field of state law, preemption only lies where the conflict between state and federal law is “so ‘direct and positive’ that the two acts cannot ‘be reconciled or consistently stand together.’” Kelly, 302 U.S. at 10 (citations omitted). See also Askew, 411 U.S. at 341; Huron, 362 U.S. at 444. Nothing in Locke suggests that these cases are no longer good law, or that the presumption against preemption no longer applies in cases – such as this one – that involve the historic police powers of the states to compensate accident victims through the tort system. See, e.g., Medtronic, 518 U.S. at 488. Review is warranted to correct the Fifth Circuit’s unprecedented holding to the contrary.

3. The Lower Court Erroneously Disregarded the United States’ Own Interpretation of the Preemptive Effect of the Coast Guard’s Regulatory Inaction.

Finally, review is warranted because the Fifth Circuit improperly disregarded this Court’s repeated teachings that the views of the federal government are entitled to deference when determining the preemptive effect of an agency’s regulatory decisions. As this Court held in Medtronic, the United States’ interpretation of 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 Geier v. Honda, 529 U.S. 1913, 120 S. Ct. 1913, 1928 (1999) (federal government’s interpretation of preemptive scope of agency regulations is entitled to “special weight”); Hillsborough County, 471 U.S. at 714-15 (“[t]he [federal government’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). Deference to the federal government’s understanding of the Boat Safety Act is particularly appropriate where, as here, the United States 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 United States itself does not object to – and indeed welcomes – state participation. See Hillsborough County, 471 U.S. at 714-15.

The Fifth Circuit paid lip service to these principles, but then substituted its judgment for that of the United States in holding that petitioner’s common law claims are impliedly preempted by federal law. Such an approach was warranted, in the lower court’s view, because the United States had not entered an appearance before it – even though the federal government’s brief in Lewis was made part of the record in this proceeding and even though the Fifth Circuit itself recognized the implied preemption question as a “close and difficult issue.” App. 6. Review is warranted to ensure that the lower courts are not left free to disregard the federal government’s own view on the preemptive scope of agency decisions.

Carter O. Bise

Logan & Bise

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Arthur Bryant

Trial Lawyers for Public

Justice, P.C.

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Leslie A. Brueckner

(Counsel of Record)

Anne Bloom

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^[1] The Coast Guard has, however, continued to study various policy proposals to prevent propeller-related injuries. App. 17-18 n.12. 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 another 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).