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Conclusion: What Are the Merits of Dual Federalism in Preemption Doctrine?

If one accepts the argument set forth so far, then one would find that the Roberts Court’s preemption decisions suggest a broad pattern of disfavoring preemption in regulatory contexts and encouraging preemption in commercial contexts. These two different contexts are loosely defined by general social norms regarding alienability and entitlement as well as by the specific purposes underlying the state and federal laws in a specific case. Where there is a general social norm that parties can freely alienate some interest and that the purpose of federal law is merely to facilitate efficient bargaining over that interest, then the Roberts Court tends to favor preemption. Where there are social norms suggesting that an interest should not be freely alienable and where federal law seems to redefine baseline entitlements rather than simply facilitate their efficient allocation through bargaining, then the Roberts Court seems to be more skeptical about finding preemption.

Is there any normative justification for such a pattern? I write to describe rather than justify the Roberts Court. Nevertheless, there are two plausible justifications for the distinction between commercial and regulatory preemption that bear brief consideration.

First, the facilitating of commercial intercourse in a national market is the traditional function of the Court’s preemption jurisprudence. As Richard Bensel has noted, the US Supreme Court played a major role in creating a national market through its elimination of state protectionism through its dormant commerce clause doctrines of the late nineteenth century.[1] That three of the five federal statutes (the FAA, SLUSA, and FAAAA) had such a deregulatory mission likely made statutory preemption seem like less controversial invasions of states’ traditional powers and more like fulfillments of the federal government’s market-protecting role.

Second, the preemption of state law by federal law will likely be less politically or culturally divisive to the extent that federal and state law purport to define a “neutral” bargaining framework rather than rival private entitlements to property or personhood. Machinist preemption under Section 301 of the NLRA, for instance, self-consciously proclaims itself to protect a neutral bargaining framework rather than a preference for either labor or management. Likewise, the FAA, SLUSA, and FAAAA purport only to enforce the voluntary market bargains struck by private parties rather than redefine private entitlements. These federal statutes eliminated state procedural or remedial entitlements to (e.g.) adjudications by governmental officials instead of private arbitrators or classwide procedures rather than bilateral arbitration. But these state entitlements to procedural and remedial rights were one step removed from the private substantive rights to tort and property that form the primary interest of private citizens.

As the Court in Merrill Lynch noted, SLUSA “simply denies plaintiffs the right to use the class-action device to vindicate certain claims” and does not “deny any individual plaintiff ... the right to enforce any state-law cause of action that may exist.”[2] One could indeed construe the Merrill Lynch Court’s skepticism that SLUSA “eliminated a historically entrenched state-law remedy”[3] as skepticism that there was any interest at stake about which the people of any state passionately cared.

By contrast, preemption of state tort and property law or extension of federal criminal statutes encroach on citizens’ substantive private legal entitlements under state law. Some of these state-law entitlements are the subject of intense debates regarding the proper scope of constitutional rights. The right to develop one’s property free from wetlands regulations that eliminate all of the property’s economically beneficial use comes close to being a taking of property that is constitutionally prohibited absent just compensation. Likewise, the right to physician-assisted suicide protected by Oregon’s Death With Dignity Act bears more than a family resemblance to the constitutionally protected entitlement to refuse unwanted medical care.[4] As John Goldberg has explained, there is a deep constitutional tradition suggesting that rights to tort remedies are also constitutionally protected by due process principles.[5] The Court has refrained from protecting such rights to property, personal autonomy, and tort, but one could argue that such judicial self-restraint was the result of institutional limits on the judiciary rather than any judicial assessment that the underlying interests were not fundamental.

In refusing to find that federal statutes preempt these state-law entitlements, the Court can be seen as promoting the devolution of deeply divisive questions of private entitlement to subnational government. One might reasonably regard this devolution as an attribute of a well-functioning federal system. Presumptions against preemption, on this account, stand in for private liberties that the Court will not directly enforce but instead will devolve to subnational governments for debate in venues that permit more diverse values to be free from the views of a national majority.[6] The commercial/regulatory distinction, on this account, is a crude proxy for the distinction between the efficient bargaining over entitlements and the ethically just definition of entitlements. That the former might be less divisive than the latter, and, therefore, more properly lodged in the national government is a plausible assumption. In any case, the best explanation for the Court’s otherwise mysterious switches back and forth between aggressive preemption requiring states laws to make special exemptions for federal interests and narrowly defined preemption requiring only that states not specifically discriminate against federal interests.

  • [1] Richard Franklin Bensel, The Political Economy of American Industrialization,1877-1900 325-57 (2000).
  • [2] Merrill Lynch, 547 U.S. at 87.
  • [3] As the Merrill Lynch Court noted, private attorneys filed these class security fraud cases instate court only after Congress enacted the Private Securities Litigation Reform Act (PSL^A) toblock securities fraud class actions in federal court: SLUSA was Congress’s effort to plug this state-court hole in the PSL^A’s efforts to suppress vexatious litigation. Merrill Lynch, 547 U.S. at 88. Thenovelty of those state-court securities fraud cases suggested that such litigation was driven by privatelawyers’ pecuniary self-interest and litigating strategy, not any popular upwelling of interest amongstate elected officials or voters to undertake the business of policing securities fraud. Merrill Lynch,547 U.S. at 80-83.
  • [4] See Cruzan v. Director, Mo. Dept. of Health, 497 U.S. 261, 279 (1990) (joined by Scalia, J.)(“[W] e assume that the United States Constitution would grant a competent person a constitutionally protected right to refuse lifesaving hydration and nutrition.”).
  • [5] John C. P. Goldberg, The Constitutional Status of Tort Law: Due Process and the Right to a Lawfor the Redress of Wrongs, 115 Yale L.J. 524 (2005).
  • [6] Roderick M. HillsJr., The Individual Right to Federalism in the Rehnquist Court, 74 Geo. Wash.L. Rev. 888 (2006).
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