Amicus Curiae Brief — Lewis v. Brunswick Corp.

No. 97.288

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

Vicky LEwis and Gary Lewis, Individually, As

Parents, as Next Friends, and as Administrators

of the Estate of Kathryn C. Lewis,

4 Petitioners,

BRUNSWICK CORPORATION,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

BRIEF OF THE NATIONAL CONFERENCE

OF STATE LEGISLATURES,

COUNCIL OF STATE GOVERNMENTS,

INTERNATIONAL CITY/COUNTY

MANAGEMENT ASSOCIATION,

NATIONAL ASSOCIATION OF COUNTIES,

NATIONAL LEAGUE OF CITIES,

AND U.S. CONFERENCE OF MAYORS

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

D. BRUCE LA PIERRE RICHARD RUDA *

WASHINGTON UNIVERSITY Chief Counsel

SCHOOL oF LAW JAMEs I. CROWLEY

One Brookings Drive STATE AND LOCAL LEGAL CENTER

St. Louis, Missouri 63130 444 North Capitol Street, N.W.

(314) 985-6477 Washington, D.C. 20001

(202) 484-4850

* Counsel of Record for the

Amici Curiae

—ũ—ñ

WiILson - Eres dr Co.. Inc. - 789-0096 - WasHINGTON. D.C. 20001

QUESTION PRESENTED

Amici will address the following question :

Whether an agency position set forth in a letter

and not promulgated pursuant to the notice and com-

ment procedures of APA §553 has the force and

effect of law so as to preempt state law.

TABLE OF CONTENTS

QUESTION PRESENTED ................22..-2-.2.--cceceoeoeeeeos

TABLE OF AUTHORITIES ..................----.-..-..00.00--=--.

INTEREST OF THE AMICI CURA

I —————

A. The Federal Boat Safety Act and Promulgation

of Federal Boat Safety Regulations ....................

B. The Coast Guard’s Decision To Accept the Rec-

ommendation of the National Boating Safety

Advisory Council To “Take No Regulatory Ac-

tion To Require Propeller Guards”

THE COAST GUARD’S “POSITION” ON

PROPELLER GUARDS DOES NOT HAVE

THE FORCE AND EFFECT OF LAW AND

CANNOT PREEMPT STATE LANKA

A. Federal Regulations That Are “Properly

Adopted in Accordance With Statutory Au-

thorization” Have the Force and Effect of

Law and Can Preempt State Law Under the

ESE —

B. The Coast Guard Did Not Intend for Its

Letter To Have the Force and Effect of Law

Because It Did Not Comply With the Proce-

cedural Requirements Imposed by Congress

e

1. Legislative Rules That Have the Force

and Effect of Law Must Be Promulgated

Through Notice and Comment Proce-

Page

10

10

11

14

14

iv

TABLE OF CONTENTS—Continued

2. A Decision Not To Regulate, Like a Deci-

sion To Regulate, Requires the Use of

Legislative Rulemaking Procedures If It

Is To Have the Force and Effect of Law..

C. The Coast Guard Did Not Comply With the

Rulemaking Procedures Imposed by Con-

gress in the Federal Boat Safety Act for

Prescribing Regulations That Preempt State

OO EEE AE IEEE EL

D. The Coast Guard Letter Adopting the Na-

tional Boating Safety Advisory Council's

Recommendation Does Not Preempt State

Law Because It Does Not Have the Binding

Force and Effect of LW —

ee —.———————————

Page

17

21

v

TABLE OF AUTHORITIES

Cases Page

Arkansas Elec. Coop. Corp. v. Arkansas Pub.

Serv. Comm'n, 461 U.S. 375 (19833) 19

Batterton v. Francis, 432 U.S. 416 (1977) 14

Batterton v. Marshall, 648 F.2d 694 (D.C. Cir.

1 15, 16

Barclays Bank PLC v. Franchise Taz Board of

California, 512 U.S. 298 (1994) 0. 23

Bethlehem Steel Co. v. New York State Labor Re-

lations Bd., 330 U.S. 767 (1947) 20

Chrysler Corp. v. Brown, 441 U.S. 281 (19799 passim

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

Ee eee See eee 10

City of New York v. FCC, 486 U.S. 57 (1988) 12, 13

Consumer Federation v. Consumer Product Safety

Commission, 990 F.2d 1298 (D.C. Cir. 1998)... 18-19

Fidelity Federal Savings and Loan Association v.

De la Cuesta, 458 U.S. 141 (1982) 12

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) 12

Hillsborough County, Fla. v. Automated Med.

Labs, Inc., 471 U.S. 707 (1989 2, 12

Lincoln v. Vigil, 508 U.S. 182 (1993) 9, 14, 15

Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S.

r 7 , scl Se 22

Natural Resources Defense Council, Inc. v. SEC,

606 F.2d 1081 (D.C. Cir. 1979) Il 19

Morton v. Ruiz, 415 U.S. 199 (1974) 1

NLRB v. Wyman-Gordon Co., 394 ‘US. 759

117 AAA ˙⁰¹ 13

New York State Conf. of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., 514 U.S. 645

T.. 10, 11, 24

Pacific Gas & Electric Co. v. State Energy Re-

sources Conserv. & Development Comm'n, 461

1 — ea REESE 12

Puerto Rico Dept. of Consumer Affairs v. Isla

Petroleum Corp., 485 U.S. 495 (198) 19

Rice v. Santa Fe Elevator Corp., 331 U.S. 218

EE NAR lal Is i A ll ER Ris 24

Silkwood v. Kerr-McGee Corp., 464 U.S. 238

(1984) 12

vi

TABLE OF AUTHORITIES—Continued

Page

State of Alaska v. U.S. Dept. of Transp., 868 F.2d

ee RR RE os 17

Thomas v. New York, 802 F.2d 1443 (D.C. Cir.

1 23

Transcontinental Gas Pipe Line Corp. v. State Oil

& Gas Board, 474 U.S. 409 (1989) 20

United Constr. Workers v. Laburnam Constr.

Corp., 347 U.S. 666 (19840) 12

Wabash Valley Power Ass’n, Inc. v. Rural Elec-

trification Admin., 903 F.2d 445 (7th Cir.

RR Ee SRE ES Se 23

Constitutional Provisions

r T ERD ATE 11-12

Statutes and Regulations

Ei CT oe 6

, . 5, 10, 18

Z 5

49 C. F. R. § 1.46 (n) () 1 5

Pub. L. No. 92-75, 85 Stat. 213 n 3

Pub. L. No. 98-89, 97 Stat. 500 (1983) 3

JJ „ 5

Z.. passim

5 U.S.C. § 553(b) _............. EA eR IO 14

K TALE 8 5

. 18, 22

1 —— 18, 22

r.... 6

r. — 3-4

0 EE 4

Pe eR EL ee ne 6

9999888. 1

Other Authorities

H.R. Rep. No. 338, 98th Cong., Ist Sess. (1983),

reprinted in 1983 U.S. C. C. AN. 924 .................. 3

vii

TABLE OF AUTHORITIES—Continued

Page

S. Rep. No. 248, 92d Cong., Ist Sess. (1971), re-

printed in 1971 U.S.C.C.A.N. 1333 1 passim

45 Fed. Reg. 18987 (19800); 5, 22

46 Fed. Reg. 3515 (1981) 5, 22

Robert A. Anthony, Interpretive Rules, ‘Policy

Statements, Guidances, Manuals, And The Like

—Should Federal Agencies Use Them To Bind

The Public?, 41 Duke L. J. 1311 (1992) 14, 15, 16, 21

Kenneth C. Davis & Richard J. Pierce, Jr., Admin-

istrative Law Treatise (3d ed. 1994)... passim

Ronald M. Levin, Understanding Unreviewability

In Administrative Law, 74 Minn. L. Rev. 689

e è Tn X 19

Bernard Schwartz, Administrative Lau (1991) 21

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

No. 97-288

Vicky Lewis and Gary LEWIS, Individually, As

Parents, as Next Friends, and as Administrators

of the Estate of Kathryn C. Lewis,

* Petitioners,

BRINSWICK CORPORATION,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

BRIEF OF THE NATIONAL CONFERENCE

OF STATE LEGISLATURES,

COUNCIL OF STATE GOVERNMENTS,

INTERNATIONAL CITY/COUNTY

MANAGEMENT ASSOCIATION,

NATIONAL ASSOCIATION OF COUNTIES,

NATIONAL LEAGUE OF CITIES,

AND U.S. CONFERENCE OF MAYORS

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

INTEREST OF THE AMICI CURIAE®

Amici, organizations whose members include state,

county, and municipal governments and officials

1The parties have consented to the filing of this brief

amicus curiae. Letters indicating their consent have been

2

throughout the United States, have a compelling in-

terest in legal issues that affect state and local gov-

ernments. This case involves an issue at the core of

amici’s interests: whether federal agency positions

arrived at by means falling short of notice and com-

ment rulemaking under § 553 of the Administrative

Procedure Act have the force and effect of law so as

to preempt state law.

The protection of their citizens’ health, safety and

welfare is one of the principal exercises by the States

of their historic police powers. See Hillsborough

County, Fla. v. Automated Med. Laboratories, Inc.,

471 U.S. 707, 719 (1985). While the Supremacy

Clause unquestionably mandates the preemption of

state law in certain circumstances, the Supremacy

Clause does not contemplate that federal agency posi-

tions not arrived at through the notice and comment

procedures of the APA—with their guarantees of

public participation, political accountability, and judi-

cial review—be given state law displacing weight by

the courts. For this reason, the court of appeals erred

in holding that the Coast Guard’s position on pro-

peller guards, set forth in a letter that was not pro-

mulgated through APA § 553 procedures, has the force

and effect of law sufficient to preempt state tort law.

Because of the importance of this issue to amici

and their members, amici submit this brief to assist

the Court in its resolution of this case.

filed with the Clerk of the Court. Pursuant to Rule 37.3 of

the Rules of this Court, amici state that no counsel for a

party has authored this brief in whole or in part, and that

no person or entity, other than the amici, their members, or

their counsel, has made a monetary contribution to the prepa-

ration or submission of this brief.

3

STATEMENT

A. The Federal Boat Safety Act and Promulgation of

Federal Boat Safety Regulations

Congress enacted the Federal Boat Safety Act

(FBSA) of 1971, Pub. L. No. 92-75, 85 Stat. 213

(1971), to establish “a coordinated national boating

safety program involving both the Federal Govern-

ment and the States.” S. Rep. No. 248, 92d Cong.,

lst Sess. (1971), reprinted in 1971 U.S.C.C.A.N.

1333 (“Senate Report”). Congress intended, among

other goals, “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 op-

erating.” Id. at 1333.

Congress revised and recodified the FBSA in 1983

as part of a comprehensive revision and recodification

of the maritime laws. Pub. L. No. 98-89, 97 Stat. 500,

(1983); see H.R. Rep. No. 338, 98th Cong., Ist Sess.

(1983), reprinted in 1983 U.S.C.C.A.N. 924 (“House

Report”). It restated the provisions of the FBSA

that apply to “the establishment of national construc-

tion and performance standards for recreational ves-

sels and their assoriated equipment” in Chapter 43

of Title 46 of the United States Code. House Report

at 158, 1983 U.S.C.C.A.N. at 970. Although Congress

made some substantive changes when it revised the

maritime laws, it did not significantly alter the pro-

visions of the FBSA at issue in this case. See House

Report at 117, 120, 158-62, 1983 U.S.C.C.A.N. at 929,

932, 970-74.

The FBSA authorizes the Secretary of Transporta-

tion to “prescribe regulations . . . establishing mini-

4

mum safety standards for recreational vessels and

associated equipment.” 46 U.S.C. § 4302 (a) (1). The

FBSA also provides that “[iJn prescribing regula-

tions the Secretary shall, among other things .

consult with the National Boating Safety Advisory

Council [NBSAC]” about three specific regulatory

considerations.» Id. § 4302 (e) (4); see id. § 4302

(e) (1)-(3).

Congress intended that the regulations pre-

scribed by the Secretary would establish uniform na-

tional safety standards. See Senate Report, 1971

U.S.C.C.A.N. at 1335. Congress also intended that

the Secretary would employ the notice and comment

rulemaking procedures of the Administrative Proce-

dure Act (APA) to promulgate regulations establish-

ing national standards, that these regulations would

be subject to judicial review as provided in the APA,

and that consultation with the National Boating

Safety Advisory Council would be an addition to, and

not an alternative to, compliance with the APA.

The Senate Report on the FBSA expressly notes

that:

In addition to the specific procedural require-

ments outlined in the bill, the Secretary, in pro-

mulgating standards, is required to comply with

the informal rulemaking procedures of the Ad-

ministrative Procedure Act (5 U.S.C. 553).

Senate Report, 1971 U.S.C.C.A.N. at 1340. Congress

further intended that “[a]ny person who believes

2 As currently organized, the NBSAC has twenty-one mem-

bers, including seven state officials, seven representatives of

boating manufacturers, and seven representatives of national

recreational boating associations and the general public. See

46 U.S.C. § 18110.

5

himself to be adversely affected by the promulgation

of a standard may obtain judicial review in accord-

ance with the Administrative Procedure Act.” Id.

Congress also noted some specific responsibilities of

the Secretary in adopting regulations under the in-

formal notice and comment procedures of the APA:

The Secretary is expected to maintain in public

files the wx tn and comments received or

relied upon in carrying out the consideration and

consultation [with the National Boating Safety

Advisory Council] required by section 6 [now 46

U.S.C. § 4302] and in complying with the rule-

making provisions of the Administrative Proce-

dure Act. The information in these files is to

serve as the basis for the required findings as to

reasonableness, meeting the need for boating

safety and, where applicable, of the necessity for

an early effective date, or the necessity for the

alteration of existing vessels.

Id.

The Secretary of Transportation has delegated his

rulemaking power under the FBSA to the Command-

ant of the Coast Guard, 49 C.F.R. § 1.46(n) (1), and

the Coast Guard has prescribed extensive safety reg-

ulations governing recreational boats and associated

equipment. 33 C.F.R. Pt. 183 (1997). The Coast

Guard, as Congress intended, adopted these regula-

tions pursuant to the notice and comment rulemaking

procedures of the APA, 5 U.S.C. § 553. See 33 C. F. R.

§ 183.701 et seg. (Subpart L—Start-In Gear Protec-

tion) (1997); 46 Fed. Reg. 3515 (1981) (Final

Rule); 45 Fed. Reg. 18987 (1980) (Notice of Pro-

posed Rulemaking). The Coast Guard published

these regulations in the Federal Register as required

by the APA, 5 U.S.C. 5 552 (a) (1) (D), § 553 (d),

and it codified them in the Code of Federal Regula-

6

tions, which “contain[s] each Federal regulation of

general applicability and legal effect.” 1 C.F.R.

§ 8.1(a) (1997) ; see also 44 U.S.C. § 1510.

The FBSA expressly preempts a state law or regu-

lation that is not identical to a “regulation pre-

scribed” thereunder. Congress provided that:

[A] State . may not establish, continue in

effect, or enforce a law or regulation establishing

a recreational vessel or associated equipment per-

formance or other safety standard or imposing a

requirement for associated equipment . . . that

is not identical to a regulation prescribed under

section 4302

46 U.S.C. § 4306. Congress also enacted a savings

clause in the FBSA and provided that:

Compliance with [the FBSA] or standards, reg-

ulations, or orders prescribed under [the FBSA]

does not relieve a person from liability at com-

mon law or under State law.

46 U.S. C. § 4311(g).

B. The Coast Guard’s Decision To Accept the Recom-

mendation of the National Boating Safety Advisory

Council To “Take No Regulatory Action To Require

Propeller Guards”

The Coast Guard did not initiate a notice and

comment rulemaking under the APA to “consider,

review and assess available data concerning the na-

ture and incidence of recreational boating accidents

in which persons in the water are struck by propel-

lers“ and to examine the If Jeasibility of some form

of mechanical guard or other action to prevent such

contact.” See National Boating Safety Advisory

Council, Report of the Propeller Guard Subcommittee,

J.A. at 46. Instead, the Coast Guard assigned this

responsibility to the NBSAC, which in turn appointed

7

a five-person subcommittee to address these issues.

Id. The subcommittee recommended that “[t]he U.S.

Coast Guard should take no regulatory action to re-

quire propeller guards.” Jd. at 73. Subsequently,

the NBSAC voted unanimously “to accept the report

[and to] adopt the recommendations of the subcom-

mittee.” Minutes of the 44th Meeting of the National

Boating Safety Advisory Council, J.A. at 138.

On February 1, 1990, the Chief of the Coast

Guard’s Office of Navigation Safety and Waterway

Services, Rear Admiral Robert T. Nelson, wrote a

letter to A. Newell Garden, Chairman of the NBSAC.

Admiral Nelson reported that [wle have completed

our review of the ‘Report of the Propeller Guard

Subcommittee’ ”’ and that “[a]ll of the report’s rec-

ommendations are accepted.” J.A. at 163. Admiral

Nelson specifically accepted the subcommittee’s rec-

ommendation as approved by the NBSAC that “[t]he

U.S. Coast Guard should take no regulatory action to

require propeller guards.” Id. He set forth as fol-

lows the Coast Guard position on this recommendation :

Available propeller guard accident data do not

support imposition of a regulation requiring

propeller guards on motorboats. Regulatory ac-

tion 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.

Id. Admiral Nelson stated, however, that “the Coast

Guard will continue to collect and analyze data for

changes and trends” and “review and retain any

information made available regarding development

and testing of new propeller guard devices or other

information on the state of the art.” Id. The Coast

Guard did not publish Admiral Nelson’s letter in the

Federal Register.

The district court granted Brunswick’s motion for

summary judgment. The court of appeals affirmed,

holding that common law claims based on Brunswick’s

failure to equip an engine with a propeller guard are

impliedly preempted because those claims “conflict

with the Coast Guard’s position that propeller guards

should not be required.” Pet. App. 23a. The court

of appeals held that the Coast Guard’s “position re-

jecting a propeller guard requirement takes on the

character of a ruling that no such requirement may

be imposed,” and “[t]hat position impliedly preempts

state law requirements of propeller guards, even in

the form of common law claims.” Id. at 24a.

SUMMARY OF ARGUMENT

Brunswick’s claim that the Coast Guard’s position

on propeller guards preempts state tort law founders

on the shoals of a fatal defect: the Coast Guard did

not employ the notice and comment rulemaking pro-

cedures required by Congress in the Administrative

Procedure Act and the Federal Boat Safety Act that

are necessary to give its position the force and effect

of law.

The court of appeals’ holding—that an agency’s posi-

tion in a letter adopting the recommendations of an

advisory committee preempts state law—is inconsistent

with this Court’s recognition that only “properly pro-

mulgated, substantive agency regulations have the

‘force and effect of law’” necessary “to pre-empt

state law under the Supremacy Clause.” Chrysler

9

Corp. v. Brown, 441 U.S. 281, 295-96 (1979) (cita-

tions omitted). As applied by the court of appeals to

preempt the Lewises’ tort claims against Brunswick,

the Coast Guard’s “position” on propeller guards is in

effect a “substantive rule or ‘legislative-type rule“

because it affect [s] individual rights and obliga-

tions.“ Jd. at 302 (citations omitted). A “substan-

tive rule,” however, “must conform with any procedu-

ral requirements imposed by Congress” in order to

have the force and effect of law. Id. at 303. Congress

requires agencies to develop “legislative rules”—rules

that have the same binding effect as statutes—through

the public notice and comment procedures of the Ad-

ministrative Procedure Act, 5 U.S.C. § 553. Chrysler

v. Brown, 441 U.S. at 312-16.

The Coast Guard did not comply with the APA’s

rulemaking procedures: it did not publish notice of

a proposed rulemaking in the Federal Register, afford

interested persons an opportunity to comment on the

letter, or publish a final rule incorporating “ ‘a con-

cise general statement’ of the rule’s “ ‘basis and pur-

pose. See Lincoln v. Vigil, 508 U.S. 182, 195-96

(1993) (quoting 5 U.S.C. § 553). The Coast Guard’s

failure to comply strictly with the APA “precludes

courts from affording [the letter] the force and effect

of law.” Chrysler v. Brown, 441 U.S. at 312. Because

the Coast Guard letter plainly does not have the force

and effect of law, it cannot preempt state law. Re-

spect for the role of the States in the federal system

and for the principle of politically accountable agency

decisionmaking are further reasons to reaffirm the

fundamental requirement that an agency cannot pro-

mulgate a rule with the force and effect of law neces-

sary to preempt state law unless it complies with the

10

notice and comment rulemaking procedures of the

APA.

ARGUMENT

THE COAST GUARD'S “POSITION” ON PROPEL-

LER GUARDS DOES NOT HAV" THE FORCE AND

EFFECT OF LAW AND CANNOT PREEMPT

STATE LAW

The determination whether federal law preempts

state law is a question of congressional purpose. See,

e.g., New York State Conf. of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655

(1995) ; Cipollone v. Liggett Group, Inc., 505 U.S. 504,

516 (1992). The FBSA, by its terms, preempts only

a state “law or regulation establishing a recreational

vessel or associated equipment performance or other

safety standard or imposing a requirement for asso-

ciated equipment . . that is not identical to a regu-

lation prescribed under section 4302 [of the Act].”

46 U.S.C. § 4306.

In this case, there is no regulation prescribed under

section 4302 that has the force and effect of law

necessary to trigger preemption. Unlike the numer-

ous instances in which the Coast Guard intended

to preempt state law, see 33 C.F.R. Part 183, in

this case the Coast Guard did not comply with the

procedural requirements imposed by Congress in APA

§ 553. It did not observe the notice and comment pro-

cedures mandated by the APA and by the FBSA and

its letter was not judicially reviewable. Consequently,

the Coast Guard letter cannot be given preemptive

effect.”

Brunswick suggests that preemption under the express

preemption clause of the FBSA, section 4306, does not turn

11

A. Federal Regulations That Are “Properly Adopted

in Accordance With Statutory Authorization” Have

the Force and Effect of Law and Can Preempt

State Law Under the Supremacy Clause

The Supremacy Clause of the Constitution provides

for preemption of state law by stating that “the

on a “regulation prescribed under section 4302,” and that,

instead, section 4306 should be “read literally,” and appar-

ently without any regard to congressional intent, to provide

that “state law is preempted unless it is ‘identical to a regula-

tion prescribed by the Coast Guard.’” Opp. 21 n.15. As

Brunswick parses the text of section 4306, all state law, in-

cluding tort law, is preempted by section 4306, and state law

is restored only if (1) the Coast Guard prescribes a regula-

tion under section 4302 and (2) state law is then identical

to the newly minted federal regulation.

This construction of section 4306 ignores this Court’s

recent unanimous restatement of the framework for analysis

of express preemption provisions. Travelers Ins. Co., 514

U.S. at 654-55. If a statute, like the FBSA, contains an

express preemption provision, resolution of preemption issues

“begin[s] . .. with the text of the provision in question.” Id.

at 655. Nonetheless, because “pre-emption claims turn on

Congress’s intent,” the Court “move[s] on, as need be, to the

structure and purpose of the Act.” Id. Moreover, this Court

addresses an express preemption provision, like other claims

of preemption, “with the starting presumption that Congress

does not intend to supplant state law.” Id. at 654.

Brunswick’s construction of section 4306 is inconsistent

with these principles. Congress enacted the FBSA to improve

boating safety. Senate Report, 1971 U.S.C.C.A.N. at 1333.

Under Brunswick’s reading of section 4306, Congress pre-

empted all state law with respect to recreational vessels and

completely freed manufacturers of their duties of care under

state tort law even in the absence of any applicable federal

safety standard. Brunswick would read the FBSA to create

a common law and regulatory void with respect to manu-

facturing safe recreational vessels and boating equipment

until such time, if ever, that the Coast Guard, with limited

12

Laws of the United States which shall be made in

Pursuance” of the Constitution “shall be the supreme

Law of the Land.” U.S. Const., art. VI, cl. 2; see

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 209 (1824) ;

City of New York v. FCC, 486 U.S. 57, 63 (1988).

Federal regulations, as well as federal statutes, can

preempt state law. See, ¢.g., Hillsborough County,

Fla. v. Automated Med. Labs, Inc., 471 U.S. 707,

713 (1985); Fidelity Federal Savings & Loan Asso-

ciation v. De la Cuesta, 458 U.S. 141, 153 (1982).

resources and numerous responsibilities, decides to prescribe

a federal safety standard. This void would obviously be

inconsistent with Congress’ purpose of improving boating

safety.

Brunswick’s analysis of the preemptive effect of section

4306 would also be inconsistent with two well-settled rules:

in the absence of a federal regulation, federal statutes should

not be construed to create a regulatory void by preempting

state regulation, see Pacific Gas & Elec. Co. v. State Energy

Resources Conserv. & Development Comm'n, 461 U.S. 190,

207-08 (1983), and state common law remedies are not pre-

empted where federal law provides no comparable or alterna-

tive remedy, see Silkwood v. Kerr-McGee Corp., 464 U.S.

238, 251 (1984) ; United Constr. Workers v. Laburnam Con-

str. Corp., 347 U.S. 656, 663-64 (1954).

Ironically, and somewhat perversely, under Brunswick's

reading of section 4306, the States cannot enforce traditional

common law duties of care where there is no federal safety

standard to protect consumers; the States can only act to

protect consumers after the Coast Guard has acted to protect

them by prescribing a federal safety standard. Brunswick

in effect reads the express preemption clause of the FBSA

as if it is a prospective savings clause: all state law is pre-

empted, subject to reinstatement if the Coast Guard issues a

regulation and if it is identical to the federal regulation. Of

course, the FBSA contains a savings clause, section 431108).

and Brunswick’s construction of the express preemption clause

would, contrary to settled principles of statutory construction,

reduce the savings clause to mere surplusage.

13

If they are to have the same preemptive effect as

federal statutes, federal regulations must be “properly

adopted in accordance with statutory authorization.”

City of New York v. FCC, 486 U.S. at 63 (the Su-

premacy Clause embraces “both federal statutes

themselves and federal regulations that are properly

adopted in accordance with statutory authorization’’).

Such federal regulations can preempt state law be-

cause, like federal statutes, they have the “force and

effect of law.” Chrysler v. Brown, 441 U.S. at 295.

See id. at 295-96.

In order “to have the ‘force and effect of law,’” a

federal regulation “must have certain substantive

characteristics and be the product of certain pro-

cedural requisites.” Jd. at 301 (citation omitted).

As a substantive matter, a regulation does not have

the “force and effect of law” unless the agency has

acted within its statutory authority: “[t]he legisla-

tive power of the United States is vested in the Con-

gress, and the exercise of quasi-legislative authority

by governmental departments and agencies must be

rooted in a grant of such power by the Congress and

subject to limitations which that body imposes.” /d.

at 302. As a procedural matter, a regulation does not

have the “force and effect of law” unless it “con-

form[s] with any procedural requirements imposed

by Congress.” Id. at 303. “[A]gency discretion is

limited not only by substantive, statutory grants of

authority, but also by the procedural requirements

which ‘assure fairness and mature consideration of

rules of general application.’” Jd. (quoting NLRB

v. Wyman-Gordon Co., 394 U.S. 759, 764 (1969) ).

The Coast Guard letter adopting the recommenda-

tion of the National Boating Safety Advisory Council

14

is not a legislative rule because it did not conform

with the procedural requirements imposed by Con-

gress in the APA and the FBSA. Consequently,

the Coast Guard letter does not have the force and

effect of law and cannot preempt state law under the

Supremacy Clause.

B. The Coast Guard Did Not Intend for Its Letter To

Have the Force and Effect of Law Because It Did

Not Comply With the Procedural Requirements

Imposed by Congress in the APA

1. Legislative Rules That Have the Force and

Effect of Law Must Be Promulgated Through

Notice and Comment Procedures

The Administrative Procedure Act distinguishes

two types of substantive rules: (1) legislative rules,

also referred to as “substantive” rules, and (2) in-

terpretive rules (sometimes called “non-legislative”

rules) or general statements of policy. See Lincoln v.

Vigil, 508 U.S. 182, 196 (1993) (distinguishing

(1) “so-called ‘legislative’ or ‘substantive’ rules” and

(2) “ ‘interpretative rules, general statements of

policy, or rules of agency organization, procedure, or

practice?) (quoting 5 U.S.C. § 553 (b)); Chrysler v.

Brown, 441 U.S. at 301-02 & n. 31 (distinguishing

(1) “a substantive rule—or a ‘legislative-type rule“

from (2) “interpretive rules” and “general state-

ments of policy”); Batterton v. Francis, 432 U.S.

416, 425 n. 9 (1977) (distinguishing (1) “legisla-

tive, or substantive regulations” and (2) “interpre-

tative regulation [s]“).

See generally Robert A. Anthony, Interpretive Rules,

Policy Statements, Guidances, Manuals, And The Like—

Should Federal Agencies Use Them To Bind The Public?,

41 Duke L.J. 1311, 1319-27 (1992); Kenneth C. Davis &

15

A “legislative” or “substantive” rule is one that

“ ‘affect[s] individual rights and obligations.“ Chrys-

ler v. Brown, 441 U.S. at 302 (quoting Morton v.

Ruiz, 415 U.S. 199, 232, 236 (1974)); Batterton v.

Marshall, 648 F.2d 694, 701-02 (D.C. Cir. 1980).

Legislative or substantive rules, unlike interpretive

rules or general statements of policy, may have the

same force and effect of law as statutes. Chrysler v.

Brown, 441 U.S. at 302 & n. 31; see Kenneth C.

Davis & Richard J. Pierce, Jr., Administrative Law

Treatise § 6.2, at 228 (3d ed. 1994) (“a valid legisla-

tive rule has the same binding effect as a statute; a

general statement of policy has no binding effect on

members of the public or on courts’).

In order to have the binding effect of a statute,

a legislative rule must be promulgated under the

notice and comment procedures of the APA. See

Chrysler v. Brown, 441 U.S. at 312-14 (APA’s notice

and comment procedures apply “in the context of

‘legislative’ or ‘substantive’ rulemaking,” but inter-

pretive rules and general statements of policy “are

exempt from these requirements”); see also Lincoln

v. Vigil, 508 U.S. at 196 (APA’s notice and comment

procedures apply to “legislative” or “substantive”

rules). As one leading authority has observed:

Richard J. Pierce, Jr., Administrative Law Treatise § 6.2, at

228 (3d ed. 1994) (discussing “three main differences be-

tween a legislative rule and a general statement of policy“);

id. § 6.3, at 233 (discussing “four main differences between

legislative rules and interpretative rules”).

See also Anthony, 41 Duke L.J. at 1355 (defining a legis-

lative rule as one that changes substantive law or policy) ;

id. at 1355 n. 269 (collecting cases identifying various classes

of substantive changes subject to legislative rulemaking

requirements).

16

The most important category of rules—legislative

rules—have the same binding effect as statutes.

With specified exceptions, “rules” of this type can

be promulgated only through use of procedures

set forth in APA § 553—>public notice of the pro-

posed rule, receipt and consideration of comments

on the proposed rule, and issuance of the final

rule incorporating a statement of basis and

purpose.

Davis & Pierce § 6.1, at 225. “The essential purpose

of according § 553 notice and comment opportunities

is to reintroduce public participation and fairness to

affected parties after government authority has been

delegated to unrepresentative agencies.” Batterton v.

Marshall, 648 F. 2d at 703.

The court of appeals erred in holding that the

Coast Guard’s “position” that it “should take no regu-

latory action to require propeller guards,” Pet. App.

8a-9a, preempts state law. The Coast Guard’s posi-

tion was not adopted under the APA’s notice and

comment procedures, and it is not a valid legislative

rule. The Coast Guard’s position is at most a gen-

eral statement of policy.“ It does not have the

force and effect of law because it was not promulgated

under legislative rulemaking procedures and was not

subject to judicial review. The Coast Guard’s position

* This Court has defined “general statements of policy” as

“ ‘statements issued by an agency to advise the public pro-

spectively of the manner in which the agency proposes to

exercise a discretionary power.“ Chrysler v. Brown, 441

U.S. at 302 n.31 (quoting Attorney General’s Manual on

the Administrative Procedure Act 30 n.3 (1947)); see

Anthony, 41 Duke L.J. at 1321-27 (distinguishing and defin-

ing legislative rules, interpretive rules, and general statements

of policy).

17

thus does not have the force and effect of law neces-

sary to preempt state law. See State of Alaska v.

U.S. Dept. of Transp., 868 F.2d 441, 445 (D.C. Cir.

1989) (agency’s legislative rules held invalid and of

no preemptive effect because agency failed to employ

APA notice and comment procedures).

2. A Decision Not To Regulate, Like a Decision To

Regulate, Requires the Use of Legislative Rule-

making Procedures If It Is To Have the Force

and Effect of Law

The Coast Guard’s position that it should take

no regulatory action to require propeller guards is

not excused from compliance with the APA’s notice

and comment legislative rulemaking procedures on

the ground, suggested by Brunswick, that the agency

made a negative decision not to regulate” as opposed

to an affirmative decision to regulate propeller guards.

Opp. 16. Any agency decision concerning propeller

guards—whether to require them or to prohibit

them— must, if it is to preempt state law creating

“individual rights and obligations,” Chrysler v.

Brown, 441 U.S. at 302 (quoting Morton v. Ruiz,

415 U.S. at 232), be made under the notice and com-

ment, legislative rulemaking procedures of the APA,

5 U.S.C. § 553. The Coast Guard did not follow these

procedures. Its letter is therefore not a “legislative”

or “substantive” rule having the force and effect of

law necessary to preempt state law under the Su-

premacy Clause.

An affirmative decision by the Coast Guard to regu-

late propeller guards would undoubtedly have to be

made under the APA’s notice and comment rulemak-

ing procedures in order to preempt state law. The

Coast Guard apparently recognizes as much, and has

18

followed the APA’s notice and comment rulemaking

procedures in prescribing numerous regulations under

section 4302 of the FBSA. See 33 C. F. R. Pt. 183

(1997). The Coast Guard, for example, would have

to follow the APA’s notice and comment rulemaking

procedures to prescribe a regulation requiring a par-

ticular type of propeller guard or setting performance

criteria for propeller guards. Such a regulation

would affect individual rights and obligations of boat

users like Kathryn Lewis and engine manufacturers

like Brunswick. It could prevent States from enacting

laws or regulations requiring propeller guards that

were not identical to the types of guards required by

federal law and, under the court of appeals’ reading

of the FBSA, it could also preclude liability under

state tort law. The court of appeals erred in giving

similar preemptive effect to the Coast Guard’s posi-

tion that it should take no regulatory action to re-

quire propeller guards, because the agency did not

follow the procedures required by the APA.

There is, in short, no difference between affirmative

and negative regulatory decisions intended by the

agency to affect individual rights and obligations.

Both must comply with the APA. If the Coast Guard

intended its position that it should take no regulatory

action to require propeller guards to have the force

and effect of law and preempt state law, then it

should have conducted a rulemaking proceeding and

issued a final rule, subject to judicial review, to that

effect. See 5 U.S.C. §§ 704, 706; see also Senate Re-

port, 1971 U.S.C.C.A.N. at 1340. Agencies fre-

quently conduct rulemaking proceedings, examine

a regulatory problem on the merits, and then decide

for substantive reasons not to promulgate a regula-

tion. See, e.g., Consumer Federation v. Consumer

Product Safety Comm’n, 990 F.2d 1298, 1304-08

19

(D.C. Cir. 1993) (reviewing an agency decision not

to regulate and to terminate a rulemaking proceed-

ing) ; Natural Resources Defense Council, Inc. v. SEC,

606 F.2d 1031, 1047 (D.C. Cir. 1979) (reviewing an

agency’s failure to issue a rule after conducting a

rulemaking proceeding) ; see also Ronald M. Levin,

Understanding Unreviewability In Administrative

Law, 74 Minn. L. Rev. 689, 769-70 & n. 405 (1990)

(noting that this Court has recognized for fifty years

2 — — negative orders“ decisions not

regulate made after conducting a rulemaking pro-

ceeding). This, however, did not occur here.

Brunswick has offered no authority to support its

position that affirmative and negative regulatory

decisions that have substantial effects on individual

rights and obligations should be subject to different

procedural requirements under the APA. See Opp.

16. Moreover, the distinction proposed by Brunswick,

between decisions not to regulate’ and decisions to

* Brunswick also characterizes the Coast Guard’s decision

not to regulate as a type of “inaction” that “preempts state

law.” Opp. 19. It is true, as Brunswick notes, that this Court

has stated that “a federal decision to forgo regulation in a

given area may imply an authoritative federal determination

that the area is best left unregulated, and in that event would

have as much pre-emptive force as a decision to regulate.”

Arkansas Elec. Coop. Corp. v. Arkansas Pub. Serv. Comm'n,

461 U.S. 375, 384 (1983); see Puerto Rico Dep’t of Con-

sumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 503

(1988). This principle, however, has only rarely found appli-

cation. Indeed, this Court refused to find preemption of state

law in the two principal “inaction” cases discussed by Bruns-

wick. See Opp. 19-20 (citing Arkansas Elec. Coop. Corp.,

461 U.S. at 384-85, and Isla Petroleum Corp., 485 U.S.

at 503-04).

These inaction cases, and others, are best understood as

according preemptive effect to a federal decision not to regu-

20

regulate, would negate public participation in the rule-

making process and preclude judicial review. Con-

gress, however, intended that regulations prescribed

late some matter (X) where most other matters from A to Z

are subject to federal regulation. See Transcontinental Gas

Pipe Line Corp. v. State Oil & Gas Board, 474 U.S. 409, 422

(1986) (preemption of state regulation of sale of natural gas

to an interstate pipeline in context of comprehensive federal

statutory regulation of natural gas). “Inaction” may con-

stitute an act of preemption if there is a comprehensive

federal regulatory scheme and a federal agency intentionally

leaves a gap in the regulated field.

In this case, there is no gap in the Coast Guard’s regula-

tion of propeller guards from which a preemptive inference

can be drawn. Brunswick’s inaction argument would have

force if, for example, the Coast Guard announced in a

notice of proposed rulemaking its intention to require pro-

peller guards on motor boats ten to thirty feet long and

then published a final rule requiring propeller guards on

motor boats ten to twenty-five feet long. A preemptive infer-

ence could be drawn from the agency’s inaction with respect

to motor boats twenty-five to thirty feet in length. The

inaction cases noted above would support the inference

that the Coast Guard did not intend to require propeller

guards on this limited group of large motor boats and that

state laws and regulations requiring propeller guards on

motor boats twenty-five to thirty feet in length were pre-

empted. Nonetheless, as Justice Frankfurter cautioned, courts

she ld be reluctant to draw an inference of preemption from

unexercised federal power: “Since Congress can, if it chooses,

entirely displace the States to the full extent of the far-

reaching Commerce Clause, Congress needs no help from

generous judicial implications to achieve the supersession of

State authority.” Bethlehem Steel Co. v. New York State

Labor Relations Bd., 330 U.S. 767, 780 (1947) (Frankfurter,

J., dissenting) .

21

under section 4302 of the FBSA be subject to judi-

cial review. See Senate Report, 1971 U.S. C. C. A. N.

at 1340. If, as Brunswick contends, a decision not

to regulate is not subject to the APA’s notice and

comment procedures, then it would likewise not be

subject to judicial review, in contravention of Con-

2 intent. See Anthony, 41 Duke L. J. at 1317-18

The Coast Guard can, of course, have a policy of

“tak[ing] no regulatory action to require acest

guards” without observing the APA’s notice and

comment procedures. If, however, the Coast Guard

intends that its position have the binding force and

effect of law 80 as to preempt the rights and obliga-

tions of individuals created by state law, then the

agency must comply with the legislative rulemaking

procedures prescribed by Congress.

C. The Coast Guard Did Not Comp!

y With the Rule-

making Procedures Imposed by Congress in the

Federal Boat Safety Act for Prescribing Regula-

tions That Preempt State Law

Congress specifically intended that the

observe the notice and comment — — *

APA in prescribing regulations under the FBSA. See

Senate Report, 1971 U.S.C.C.A.N. at 1340. Congress

also imposed an additional procedural requirement

on the Coast Guard: consultation with the National

Boating Safety Advisory Council (NBSAC).* The

Coast Guard, in promulgating regulations, has recog-

* Congress can add procedural requirements to the noti

and comment procedures prescribed in the APA, and —

statutes impose the additional requirement of consultation

with an advisory council. Davis & Pierce § 7.7; Bernard

Schwartz, Administrative Law § 4.10, at 189-90 (1991).

22

nized that consultation with the NBSAC is an addi-

tion to, and not an alternative to, compliance with

the APA. For example, when the Coast Guard pro-

posed a rule on start-in gear protection devices, it

published in the Federal Register a notice of proposed

rulemaking. 45 Fed. Reg. 18987 (1980). This notice

reported that the Coast Guard had consulted with

the NBSAC and that both the transcript of the

NBSAC’s discussion of the proposed rule and the

minutes of the NBSAC meeting were available for

examination. Jd. The Coast Guard, in compliance

with the APA, invited “[i]nterested persons . to

participate in this proposed rulemaking.” Jd. More-

over, in promulgating its final rule, the Coast Guard

responded to significant comments, see 46 Fed. Reg.

at 3515 (1981), and its final rule was subject to judi-

cial review. See 5 U.S.C. $§ 704, 706.

In adopting its position on propeller guards, the

Coast Guard did not use the procedures that are

necessary to give its position the force and effect

of law. The agency did not initiate notice and com-

ment rulemaking under the APA, and its letter was

not subject to judicial review. The Coast Guard’s

position is obviously not the equivalent of a “regu-

lation prescribed under section 4302” of the FBSA.

It thus does not preempt state law because the agency

did not “conform with [the] procedural requirements

imposed by Congress.” Chrysler v. Brown, 441 U.S.

at 303; see also Louisiana Pub. Serv. Comm'n v.

FCC, 476 U.S. 355, 374 (1986) (“a federal agency

may pre-empt state law only when and if it is acting

within the scope of its congressionally delegated au-

thority“).

23

D. The Coast Guard Letter Adopting the National

Boating Safety Advisory Council’s Recommendation

Does Not Preempt State Law Because It Does Not

Have the Binding Force and Effect of Law

The Coast Guard did not comply with the notice and

comment procedures imposed by Congress in the APA

and in the FBSA: its position on propeller guards

is not a valid rule under the APA, and it is not a

“regulation prescribed under section 4302” of the

FBSA. In consequence, the Coast Guard letter adopt-

ing the recommendation of the NBSAC does not have

the “force and effect of law” because it does not con-

form with [the] procedural requirements imposed by

Congress.” Chrysler v. Brown, 441 U.S. at 302-03.

Unlike other courts of appeals, the court below

failed to recognize that the Coast Guard letter cannot

preempt state law because it does not have the force

and effect of law. See Wabash Valley Power Ass’n,

Inc. v. Rural Electrification Admin., 903 F.2d 445,

453-54 (7th Cir. 1990) (an agency official’s letter

does not have the force and effect of law because it

was not adopted after notice and comment). See also

Thomas v. New York, 802 F.2d 1443, 1446-48 (D.C.

Cir. 1986) (Scalia, J.) (an administrator’s letter is

not binding because it was not issued after notice and

comment and was not published in the Federal Reg-

ister), cert. denied, 482 U.S. 919 (1987). Cf. Bar-

clays Bank PLC v. Franchise Tax Board of Cali-

fornia, 512 U.S. 298, 329-80 (1994) (“Executive

Branch communications that express federal policy

but lach. the force of law” cannot preempt state law).

Judge Easterbrook observed in 1990 that no “case

hold Is] that a federal agency may preempt state law

without either rulemaking or adjudication.” Wabash

Valley Power, 903 F.2d at 454.

24

Brunswick suggests that the “extensive fact-finding

activities” of the Propeller Guard Subcommittee and

the decisions of the NBSAC and the Coast Guard to

accept the subcommittee’s recommendations are the

equivalent of rulemaking under the APA. Opp. 4-7,

16. Consultation with the advisory council, however,

is an additional procedural requirement for rulemak-

ing imposed by Congress in the FBSA; it is not a

substitute for the APA’s notice and comment proce-

dures. More important, this Court has already re-

statutory procedural minimum found in that Act.”

Chrysler v. Brown, 441 U.S. at 313. Courts cannot

excuse the “lack of strict compliance with the APA,”

id. at 312, because this Act “is a formula upon which

opposing social and political forces have come to rest.”

Id. at 313. The courts “are charged with maintaining

[that] balance [by] ensuring that agencies comply

with the ‘outline of minimum essential rights and

procedures’ set out in the APA.” Id. (citations

omitted).

This Court has repeatedly held that the historic

police powers of the States are not preempted “unless

that was the clear and manifest purpose of Congress.”

See, e.g., Travelers, 514 U.S. at 645 (quoting Rice v.

Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) ).

Where Congress has granted federal agencies the

weighty power to preempt state law, it is essential that

agencies be required to exercise this power in a polit-

ically accountable manner. See Davis & Pierce § 6.7,

at 262 (notice and comment rulemaking enables public

to express concerns to President and members of Con-

25

gress, who, in turn, can “express to the agency their

views concerning the proposed policy decision and,

through the process of Executive and congressional

oversight, . . . affect agency resolutions of policy dis-

putes”). The Court should reaffirm the fundamental

rule of law that a federal agency cannot preempt state

law unless it complies with the notice and comment

rulemaking procedures of the APA.

CONCLUSION

The judgment of the court of appeals should be

reversed.

Respectfully submitted,

D. BRUCE LA PIERRE RICHARD RUDA *

WASHINGTON UNIVERSITY Chief Counsel

SCHOOL oF LAW JAMEs I. CROWLEY

One Brookings Drive STATE AND LOCAL LEGAL CENTER

St. Louis, Missouri 63130 444 North Capitol Street, N.W.

(314) 935-6477 Washington, D.C. 20001

(202) 434-4850

* Counsel of Record for the

December 24, 1997 Amici Curiae