Amicus Curiae Brief — Maxwell-Jolly v. Independent Living Center of Southern California, Inc.

Nos. 09-958, -1158, and 10-283

In the Supreme Court of the Gnited States

TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT

OF HEALTH CARE SERVICES, Petitioner,

v

INDEPENDENT LIVING CENTER OF SOUTHERN

CALIFORNIA, INC., Respondent.

TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT

OF HEALTH CARE SERVICES, ET AL., Petitioners,

V.

CALIFORNIA PHARMACISTS ASSOCIATION, ET AL.,

Respondents.

TOBY DOUGLAS, DIRECTOR, CALIFORNIA DEPARTMENT

OF HEALTH CARE SERVICES, Petitioner,

Vv.

SANTA ROSA MEMORIAL HOSPITAL, ET AL.,

Respondents.

On Writs of Certiorari to the United

States Courts of Appeals for the Ninth Circuit

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE IN SUPPORT OF

RESPONDENTS

ROBIN S. CONRAD ALAN UNTEREINER

KATE COMERFORD TODD Counsel of Record

SHELDON GILBERT MARK T. STANCIL

National Chamber ALEX POTAPOV

Litigation Center, Inc. Robbins, Russell, Englert, Orseck,

1615 H Street, N.W. Untereiner & Sauber LLP

Washington, D.C. 20062 1801 K Street, NW, Suite 411

(202) 463-5337 Washington, D.C. 20006

(202) 775-4500

auntereiner@robbinsrussell.com

———— EEE

Library of Congress

~ Law Library

TABLE OF CONTENTS

Page

pp BA tg yk gt reer iv

INTEREST OF THE AMICUS CURIAE. ..................... 1

I oss icsced ec cikas secu sxedccaes dcenbncs tab aduckienmaisonecucein 3

CU FRAI TS COU AIRF obs scscscsccccscdscncsscdsccsecsccess 4

EY shinssi pass cissncecegsicnisebainieus oc sbernodnmceiciaaitaanaes 7

[. THIS COURT SHOULD UNAMBIGUOUSLY

HOLD THAT A CAUSE OF ACTION EXISTS

UNDER THE SUPREMACY CLAUSE FOR

INJUNCTIVE RELIEF AGAINST PRE-

ea Oe chess sanascccnontcenitiesisncaeieniases 9

A. This Court’s Decisions And Longstanding

Practice Already Establish This Cause Of

PIER... > mimes ccmoieevanenansauavns aac cigmanscgunsiecsicunetes g

B. The Court Should Reject Petitioners’ Efforts

To Sow Doubt About, And To Limit, This

Important Cause Of Action Based On

Inapposite Case Law Involving Either

Section 1983 Or Implied Rights Of Action

pee I Ro ok, coukasnenentnowscaees 13

ul

TABLE OF CONTENTS—Continued

Page

il. THIS COURTS ESTABLISHED APPROACH

FINDS SUPPORT IN THE HISTORY OF THE

SUPREMACY CLAUSE AND IS NECESSARY

TO EFFECTUATE ITS PURPOSE AND TO

BRING ABOUT THE SIGNIFICANT

BENEFITS OF THE PREEMPTION

Sasi ccnasbincacecssesucasiscganccasuselonsvsuneitnesntanses 17

A. The Framers Assigned The Principal

Responsibility To Enforce Federal

Supremacy To The Courts Rather Than To

NINN Sic cktcicncsavins uel cents cionecdeareaace musataus veaeous 17

B. Petitioners’ Rule Would Harm Businesses

And Consumers And Undermine The

Significant Benefits Flowing From The

ID NINN icon censanvciccescanageibengaasaseses 24

IIL.PETITIONERS’ ATTEMPTS TO NARROW

THE CAUSE OF ACTION UNDER THE

SUPREMACY CLAUSE TO EXCLUDE THIS

CASE IMPROPERLY IMPORT CONCERNS

THAT ARE NOT GROUNDED IN THE

SURPREMACY CLAUSE, AND ARE

APPROPRIATELY ADDRESSED BY

STANDING RULES AND THE

SUBSTANTIVE LAW OF PREEMPTION ........... 30

A. The Supremacy Clause Does Not Support

Petitioners’ Proposed Limitation, And

Standing Rules Ensure That Preemption

Lawsuits Are Brought, As Here, Only By

gy | __n 30

lu

TABLE OF CONTENTS—Continued

Page

B. Whether Spending Clause Legislation

Should Be Treated Differently Is A

Question Of Preemption Doctrine .............. =...

II oc ieciccnstn aso Svevidvaeseseincucehivsandsswsvaviudsesas 36

1V

TABLE OF AUTHORITIES

Page(s)

Cases

American Nat'l Red Cross v. S.G.,

SOG U7. DSy Chee vcesitensscsessce eee SE aie Fe 2 16

Arkansas Dep't. of Health & Human Services

v. Ahlborn,

BOT UF. BOD CODD occ cccisvccsinerscesebicstnee ose ll

Arkansas Electric Coop. Corp. v. Arkansas

Public Service Comm'n,

461 U.S. BTS CIGBS) on ccc cscs ccennccccsccccciccsseunetensieeee 28

Bethlehem Steel Co. v. New York State Labor

Relations Board.

BBO UB. FOF CLOST) oo ccnsiccccccvesvecsesccssetsisaneeeeeeee 28

Blum v. Bacon,

467 U.S. LGB CRBC oceicicccccsvececccnscscsscssvessseaeeeeeee 34

Carleson v. Remillard,

406 U.S. GOD CAGED .<cvcececacesccosscosccstansitesscueee 34, 35

Chamber of Commerce of the United States v.

Brown,

GES U.B. OO COBGGD ...00csssevecccccancrcseuduucnseasseeeee 2

Chamber of Commerce of the United States v.

Whiting,

192 &. Ce. 1008 COBRA) .. ccccccccccossacucsscheyceucasenneeeee 2

City of Los Angeles v. Lyons,

461 U.S. OG CEGBG) . .ocicccsveccccccsescusecsesssntsccueeeeeeeee 32

v

TABLE OF AUTHORITIES—Continued

Page(s)

Cort v. Ash,

ee as ON C907S)..............-...-...-....-.0. 14, 6, 24

Crosby v. National Foreign Trade Council,

ns. cocvenecccvecsesncteucesacceses 2,14

Davis v. Passman,

coc ccoccssacaducticsoscastccscocanscscscsess 24

Ex parte Young,

a cc ddecockanasetesceseccscsseoes 10

Farricielli v. Holbrook,

EE 12

Foster v. Love,

en .. s ccanbuwenveresiecnssececcsscvececacs 14

Gade v. Nat? Solid Wastes Mgmt. Ass'n,

EE ne 2,14

Geter v. American Honda Motor Co.,

Ne ss is ssnpunseccersoorescccseses 7

Golden State Transit Corp. v. City of Los

Angeles,

cs napicéubdonsnenceeceonss 13, 32

Gonzaga Univ. v. Doe,

I IE os ccccowccnccsccecccveseceoscces 14, 16, 24

Green v. Mansour,

no. caneccucencscecesseces 5, 12, 13, 14

vi

TABLE OF AUTHORITIES— Continued

Guar. Nat Ins. Co. v. Gates,

916 F.2d 508 (Sth Cir. 1990)......................

Hughes v. Oklahoma,

ee ern

Indep. Living Ctr. of S. California, Inc. v.

Shewry,

543 F.3d 1050 (9th Cir. 2008)...

Lorillard Tobacco Co. v. Reilly,

Sy, MD UID s oceccsarcesescccstnacexcustcscouc:

Morales v. Trans World Airlines,

Re ri Wee IIE bekcs devsccmnce seccah ees eeeenavncee

NLRB v. Nash-Finch Co..,

Re ee OE iit vciesrdctcecastucracdecesessones

Osborn v. Bank of the United States,

22 U.S. (9 Wheat.) 738 (1824)...........0........

Pharm. Research & Mfrs. of Am. v.

Concannon,

249 F.3d 66 (ist Cir. 2001) ...................006

Pharm. Research & Mfrs. of Am. v. Walsh,

oo ee

Planned Parenthood of Houston and

Southeast Tex. v. Sanchez,

403 F.3d 324 (5th Cir. 2005)......................

Ray v. Atlantic Richfield Co.,

ED SAE, ORS COE ited slincsnciacesccsinsomeinine

Page(s)

...2, 12, 36

vii

TABLE OF AUTHORITIES—Continued

Page(s)

Rowe v. New Hampshire Motor Transp. Ass'n,

2 cisareseenenenay p@ssim

Shaw v. Delta Airlines, Inc.,

ee I a daha snbedueanincenkonnuans 9,10

St. Thomas-St. John Hotel & Tourism Ass'n,

Inc. v. Gov't of U.S. Virgin Islands,

ee Se I I, I Sidvedchncsccencccatccsctcnsadccebes 12

Steel Co. v. Citizens for a Better Envt,

I is I ai aaa nad ceaeaiinndaaiaeaimensenais 31

Transamerica Mortg. Advisors, Inc. v. Lewis,

er . iiicn bi chatnadhbi sd sacacccenduiiceabioeadsecnasnas 15

Verizon Maryland Inc. v. Pub. Serv. Comm'n

of Maryland,

a s nepumiensioidaiuaniontaans 10

Watters v. Wachovia Bank, N.A.,

I a eau d 2. ti

Wilder v. Virginia Hosp. Ass'n,

I as amamaiieeense 3

Constitutional Provision and Statutes

1m Cet eet WE Oo 3, 9, 18, 22

Oi ro ceclseicambdle 27

I IN a 25

PE en Ree Tee Oo Sy PET TI ML EERE 10

TABLE OF AUTHORITIES—Continued

Page(s)

a 0 a i es, 4,7

fi 7 a SRS ene WEoss Re BE 13, 23

re Be i 27

Oe Cee en 25

rr Oe ick ccratnierdtndencaibccivatioadadebaail 27

ae ears Me ie iinnsiiseiicieknerittin nities eased eins 27

TA, Wi I nies seca. se 27

EES ESS Siete IE SARE OES 29

Other Authorities

Samuel Bagenstos, Spending Clause

Litigation in the Roberts Court,

ee ani Me I etiicscsesevcdesiesssrsarensossccovssases 34

Michele Bradley, The States’ Role in

Regulating Food Labeling and Advertising:

The Effect of the Nutrition Labeling and

Education Act of 1990,

49 Foop & DRUG L.J. 649 (1994) ..0000 ee. 26, 27

Bradford Clark, Separation of Powers as a

Safeguard of Federalism,

oe Se | Reem 19

Bradford Clark, Unitary Judicial Review,

72 GEO. WASH. L. REV. 319 (2003) .............. 19, 20, 21

ix

TABLE OF AUTHORITIES—Continued

Page(s)

Viet Dinh, Reassessing the Law of

Preemption, °

I in i id ceicae bein 20

R. FALLON, JR., J. MANNING, D. MELTZER, & D.

SHAPIRO, HART AND WECHSLER’S THE

FEDERAL COURTS AND THE FEDERAL SYSTEM

I a 11. 28:19

James Madison,

Vices of the Political System of the United

States (Apr. 1787),

in 9 PAPERS OF JAMES MADISON 345

(R. Rutland & W. Rachal eds. 1975)..............0........ 18

James Madison, Notes on the Constitutional

Convention (May 29, 1787),

in 1 THE RECORDS OF THE FEDERAL

CONVENTION OF 1787 (Max Farrand,

SR TI cccidlas hcstereeiceaecamnidipeidbalcetehdateists eile tee cede 19, 20, 21

Michael McConnell, A Choice-of-Law Approach to

Products-Liability Reform,

in NEW DIRECTIONS IN LIABILITY LAW 90

Sn Gere NOL. TIE... csceesecsinescdedeeooosasas 26, 27

Michael McConnell, Federalism: Evaluating the

Founders’ Design,

es Sh ys reese rrr eaen 26

Caleb Nelson, Preemption,

2 SR Sf Re 18, 22, 23

x

TABLE OF AUTHORITIES—Continued

Page(s)

David Sloss, Constitutional Remedies for

Statutory Violations,

89 IOWA L. REV. 355 cg, NS ee Pry ae 15, 16

hha a 21

13D C. WRIGHT & A. MILLER,

FEDERAL PRACTICE & PROCEDURE (3d ed.

2008)

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE IN SUPPORT OF

RESPONDENTS

INTEREST OF THE AMICUS CURIAE' _

The Chamber of Commerce of the United States

of America (the Chamber) is the world’s largest

business federation. The Chamber represents

300,000 direct members and indirectly represents the

interests of more than three million companies and

professional organizations of every size, in every

industry, and from every region of the country. An

important function of the Chamber is to represent the

interests of its members in matters before Congress,

the Executive Branch, and the courts. To that end,

the Chamber regularly files amicus curiae briefs in—

or itself initiates—cases that raise issues of vital

concern to the Nation’s business community.

This is such a case. The Chamber’s members de-

pend on the robust enforcement of conflict pre-

emption principles as protection against state and

local mandates that interfere or conflict with

requirements imposed by federal law. The

Supremacy Clause of the Constitution, which is the

fountainhead of the doctrine of conflict preemption,

‘ The parties’ letters of consent to the filing of this brief have

been filed with the Clerk. Under this Court's Rule 37.6, amicus

curtae states that no counsel for a party authored this brief in

whole or in part, and no counsel or party made a monetary

contribution intended to fund the preparation or submission of

this brief. No person or entity, other than the amicus curiae or

its counsel, has made a monetary contribution to this briefs

preparation or submission.

serves a vital structural role in our Nation’s

government and economy by (a) protecting all federal

laws and- programs against interference by

subordinate governments; and (b)_ eliminating

regulatory burdens placed on the formation and

operation of unified national markets for goods and

services. Those crucial societal benefits depend on

the availability of effective means for injured

businesses and other litigants to enforce the

Supremacy Clause in the courts—the primary

institutions to which the Framers assigned this

important responsibility. In this case, petitioners

seek to weaken or eliminate a significant, time-tested

method for such enforcement: the cause of action for

equitable relief under the Supremacy Clause.

The Chamber has relied on this cause of action in

seeking to vindicate the interests of its members.

See, e.g., Chamber of Commerce of the United States

v. Whiting, 131 S.Ct. 1968 (2011); Chamber of

Commerce of the United States v. Brown, 554 U.S. 60

(2008). When not acting as a party, the Chamber has

frequently supported such suits as an amicus curiae.

See, e.g., Rowe v. New Hampshire Motor Transp.

Assn, 552 U.S. 364 (2008); Watters v. Wachovia

Bank, N.A., 550 U.S. 1 (2007); Pharm. Research &

Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003); Crosby v.

National Foreign Trade Council, 530 U.S. 363 (2000);

Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88

(1992). Accordingly, the Chamber and its members

have a substantial interest in ensuring that this

Court correctly resolves the important issue

presented here.

STATEMENT

The Supremacy Clause provides that “[t]his

Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and al]

Treaties made, or which shall be made, undew the

Authority of the United States, shall be the supreme

Law of the Land; and the Judges in every State shall

be bound thereby, any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.’

U.S. CONST., art. VI, cl. 2. The question presented by

this case is whether the Supremacy Clause furnishes

a cause of action for injunctive relief against state

enactments that are preempted by federal law.

The federal statute involved here is the Federal!

Medicaid Act, which sets out “a cooperative federal-

state program through which the Federal Govern-

ment provides financial assistance to States so that

they may furnish medical care to needy individuals.”

Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498. 502

(1990). States that choose to accept federal funding

must comply with certain requirements set out in the

statute, as well as in regulations promulgated by the

Secretary of Health and Human Services. California

has accepted funding and is therefore bound by those

requirements in administering the State’s Medicaid

program (known as “Medi-Cal!”).

In a series of lawsuits, various entities and

individuals—including hospitals, pharmacies, phar-

macists, adult day health centers, and individual

Medicaid recipients—challenged several California

statutes, each of which reduced Medicaid payment

rates. The plaintiffs (respondents here) argued that,

by ordering further’ successive reductions’ in

California payment rates that were already the lowest

in the Nation on an average per-enrollee basis, the

California statutes violated Section 30(A) of the

Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A). Section

30(A) provides, in relevant part, that States must

take certain steps to “assure that payments” are not

only “consistent with efficiency, economy, and quality

of care” but also “sufficient to enlist enough providers

so that care and services are available under the plan

at least to the extent that such care and services are

available to the general population in the geographic

area.” In each of the cases, the district court

ultimately entered a preliminary injunction against

the challenged rate reduction, and the Ninth Circuit

affirmed.

The two basic questions facing the Ninth Circuit

were (1) whether the Supremacy Clause provided a

cause of action for the respondents—Medicaid pro-

viders and recipients who face injury from the rate

reductions—to seek injunctive relief on preemption

grounds; and (2) whether the challenged California

statutes imposing the rate reductions were in conflict

with, and thus preempted by, the Medicaid Act. The

Ninth Circuit answered both questions in the

affirmative. This Court granted certiorari with

respect to only the first question. As this case comes

to the Court, then, it is undisputed that the

challenged California statutes violate or directly

conflict with Section 30(A) of the Medicaid Act.

SUMMARY OF ARGUMENT

The question presented is whether this Court

should foreclose (or at least sharply curtail) an

avenue of relief that has long been available: namely,

a cause of action for equitable relief against

preempted state laws. The Court should adhere to its

historical practice and continue to recognize the

preemption cause of action. Furthermore, it should

hold explicitly that this cause of action arises under

the Supremacy Clause.

I. This conclusion is dictated by this Ceurt’s

longstanding and consistent practice over almost 200

years. The Court has specifically held that there is

federal jurisdiction over preemption’. claims.

Moreover, the Court has routinely proceeded directly

to the merits of such claims, frequently granting

relief to plaintiffs requesting injunctive relief against

preempted state or local laws without doubting that

there was a valid cause of action. These decisions

firmly establish the general availability of a private

cause of action for prospective relief on preemption

grounds.

Multiple lower courts and commentators have

correctly recognized that this cause of action is rooted

in the Supremacy Clause. This Court has also

recognized the nexus, explaining that “the. availa-

bility of prospective relief ... gives life to the

Supremacy Clause.” Green v. Mansour, 474 U.S. 64,

68 (1985).

Petitioners mistakenly seek to impair that vitality

by confining this cause of action to the parameters of

the Court’s Section 1983 and implied-cause-of-action

jurisprudence. They cannot account, however. for the

Court’s different approach to preemption cases.

Instead of applying the analytical frameworks it has

developed in the Section 1983 and implied-cause-of-

action contexts, the Court in preemption cases pro-

ceeds directly to the merits. This longstanding and

consistent approach is justified, as the preemption

cause of action is different from these points of

comparison in several crucial respects.

II. The history of the Supremacy Clause

demonstrates that the Framers entrusted enforce-

ment of federal supremacy to the courts, and that

they regarded the Supremacy Clause as the effective

means of accomplishing that objective. The

Supremacy Clause was adopted to prevent States

from flouting federal law. It was chosen over two

alternatives—one that would have placed _ the

responsibility for ensuring federal supremacy on the

Executive Branch (by authorizing the Union to coerce

noncompliant States with military force), and another

that would have relied on affirmative action by

Congress (by giving it a “negative” over state law).

The Supremacy Clause was ultimately chosen

because it was viewed as an adequate substitute for

the Congressional negative; in other words, it was a

potent, affirmative guarantee of federal supremacy,

to be implemented by the courts. In recognizing the

preemption cause of action, this Court is ensuring

that the judiciary will continue to perform the role

assigned to it by the Supremacy Clause.

Furthermore, this cause of action remains vitally

important as a safeguard against widespread flouting

of federal law by state and local governments. If

credited, the petitioners’ position would undermine

the effectiveness of federal preemption. That, in

turn, would harm businesses and consumers by

undercutting the crucial systemic benefits of

preemption, which include the promotion of

regulatory uniformity, the flourishing of a unified

national marketplace, and the enablement of national

deregulatory policies.

III. Petitioners say that a cause of action should

not be available in this case because the challenged

California statutes do not directly regulate the

respondents’ conduct. Such a requirement would add

little, however, because standing rules already ensure

that only appropriate plaintiffs may bring preemftion

actions. Moreover, this limitation makes no sense

because it would require courts to treat direct and

indirect regulations differently even if they have the

identical effect on the plaintiffs and are equally

preempted. See Geier v. American Honda Motor Co.,

529 U.S. 861, 873 (2000) (rejecting analysis that

would “further complicat[e] well-established pre-

emption principles that already are difficult to

apply’).

Finally, the petitioners argue that the Supremacy

Clause cause of action should be unavailable with

respect to Spending Clause statutes, because such

statutes resemble contracts more than ordinary

legislation. That is squarely at odds with the Court's

cases, which treat Spending Clause statutes as

having fully preemptive force. Moreover, that

contention is simply a preemption argument on the

merits, rather than an argument concerning the

existence of a cause of action. As such, it is irrelevant

in this case.

ARGUMENT

The central issue in this case is whether this

Court should decline to recognize an equitable right

of action under the Supremacy Clause to enjoin

California officials from implementing and enforcing

state laws that violate or directly conflict with a

provision of the Federal Medicaid Act, 42 U.S.C.

§ 1396a(a)(30)(A). Petitioners and their amici

correctly acknowledge that this Courts cases

recognize a federal equitable cause of action to enjoin

state laws preempted under the Supremacy Clause,

at least in certain circumstances. See Brief of

National Governors Ass'n et al., at 23-24 (recognizing

“a right in equity to assert an anticipatory defense

against the enforcement of a pre-empted State law’)

(“NGA Br.”); Pet. Br. 43-44 & n.15 (same; recognizing

as well that “the federal government may sue to

enjoin state law that purportedly is preempted by

federal law”); U.S. Br. 21 & n.7. For its part, the

United States further acknowledges that this cause of

action has “considerable historical grounding,” is

“well established,” and “serves an important purpose

in vindicating the supremacy of federal law.” U.S.

Br. 21 n.7.

Despite these concessions, petitioners and their

amici repeatedly seek to cast doubt upon a line of this

Court’s cases that, as respondents demonstrate.

extends back almost 200 years. See Brief of

Respondents Santa Rosa Memorial Hospital et al., at

18-26 (“Santa Rosa Resp. Br.”); Brief of Intervenor

Respondents in No. 09-958 and _ California

Pharmacists Respondents in No. 09-1158, at 20-31

(“California Pharmacists and Intervenor Resp. Br.”):

Brief for Dominguez Respondents in Case No. 09-

1158, at 7-11 & App. la-lla (listing 61 decisions of

this Court) (“Dominguez Resp. Br.”). Petitioners’

principal contention is that this cause of action

should not be available when the preemption arises

from a statute enacted under the federal Spending

Clause.

This Court should reject that departure from

longstanding practice. Proper resolution of this

question turns on the nature of the Supremacy

Clause, not the particular statute at issue. The

Supremacy Clause was intended as an affirmative

guarantee that national law will be effective in

displacing inconsistent state and local regulation.

And it is undisputed that responsibility for enforcing

that guarantee was vested in the judiciary; indeed,

petitioners and their amici acknowledge that the

Framers rejected alternative proposals that would

have required Congress to serve as the arbiter of

federal supremacy. Pet. Br. 38; NGA Br. 4, 14-16.

And yet that is precisely what petitioners and their

amici now urge in claiming that there is no cause of

action under the Supremacy Clause (in this statutory

context, at least)—if Congress does not affirmatively

supply a statutory right of action, they say, then the

constitutional guarantee of federal supremacy is

merely hypothetical. But the Supremacy Clause

flatly declares that federal law “shail be the supreme

Law of the Land,” U.S. CONST., art. VI, cl. 2

(emphasis added), not that it “ought” to be supreme if

Congress so provides.

I. THIS COURT SHOULD UNAMBIGUOUSLY

HOLD THAT A CAUSE OF ACTION EXISTS

UNDER THE SUPREMACY CLAUSE FOR

INJUNCTIVE RELIEF AGAINST PRE-

EMPTED STATE LAWS

A. This Court’s Decisions And Longstanding

Practice Already Establish This Cause Of

Action

Almost thirty years ago. in Shaw vy. Delta Air

Lines, Inc., 463 U.S. 85 (1983), this Court addressed

the question of federal jurisdiction over preemption

claims. The Court explained that “[a] plaintiff who

10

seeks injunctive relief from state regulation, on the

ground that such regulation is pre-empted by a

federal statute which, by virtue of the Supremacy

Clause of the Constitution, must prevail, thus

presents a federal question which the federal courts

have jurisdiction under 28 U.S.C. § 1331 to resolve.”

463 U.S. at 96 n.14. That conclusion, which was

emphatically reiterated in Verizon Maryland Inc. v.

Pub. Serv. Comm’n of Maryland, 535 U.S. 635, 642

(2002), is rooted in a long line of authority stretching

back at least to the seminal opinion in Ex parte

Young, 209 U.S. 123 (1908). As a leading treatise

observes: “The entire line of cases beginning with Ex

parte Young establishes that in many circumstances

a person confronted with efforts to apply state law

may invoke federal question jurisdiction to restrain

state officials on the ground of unconstitutionality of

a state enactment. The version of unconstitutionality

that arises from the preemptive effect the Supremacy

Clause gives to federal statutes would seem to be no

different.” 13D C. WRIGHT & A. MILLER, FEDERAL

PRACTICE & PROCEDURE § 3566, at 288 (3d ed. 2008)

(footnotes omitted) (“WRIGHT & A. MILLER”); see also

Shaw, 463 U.S. at 96 n.14 (citing Ex parte Young).

To be sure, the issue of subject matter jurisdiction

may be distinguished from the _ cause-of-action

inquiry. Verizon, 535 U.S. at 642-43. But it is

noteworthy that in Shaw, where a group of employers

claimed that two New York statutes were preempted

by federal law, the Court proceeded directly to the

merits, without ever questioning whether there was a

valid cause of action. Shaw, 463 U.S. at 95-96.

Indeed, the Court granted relief to the employers,

holding that one of the statutes was at least partially

preempted. Jd. at 108-09. In so doing, the Court

11

unmistakably indicated that the employers had a

valid cause of action.

Moreover, as respondents persuasively demon-

strate, Shaw is part of a long line of cases in which

the Court has allowed private parties to sgek

prospective relief against state officials on pre-

emption grounds. See Santa Rosa Resp. Br. 18-26;

California Pharmacists and Intervenor Resp. Br. 20-

31; Dominguez Resp. Br. 7-11 & App. 1la-1lla (listing

61 decisions of this Court). Even the United States,

in siding with petitioners, is constrained to admit

that this Court has “decided dozens of preemption

claims against state officials on their merits in cases

brought in federal court.” U.S. Br. 9 (emphasis

added). As respondents persuasively demonstrate,

this line of cases in fact stretches back almost 200

years, to the Court’s decision in Osborn v. Bank of the

United States, 22 U.S. (9 Wheat.) 738 (1824). See

Santa Rosa Resp. Br. 18-19 (discussing Osborn):

California Pharmacists and Intervenor Resp. Br. 20-

21 (same); Dominguez Resp. Br. 7-8 (discussing

Osborn and other early cases).?

In short, through its decisions and consistent

practice over almost 200 years, this Court has made

clear that there is a generally available cause of

action for parties who seek to enjoin state action on

the ground that it is preempted. See R. FALLON, JR..,

’

Recent examples include Rowe v. New Hampshire Motor

Transp. Ass'n, 552 U.S. 364 (2008) (Maine tobacco law), Watters

v. Wachovia Bank, N.A., 550 U.S. 1 (2007) (Michigan banking

regulations), and Arkansas Dep’t of Health & Human Services v.

Ahlborn, 547 U.S. 268 (2006) (Arkansas law governing liens

asserted against tort settlements by Medicaid recipients).

Earlier examples could be effortlessly multiplied. See

Dominguez Resp. Br. App. 1a-11a (collecting cases).

12

J. MANNING, D. MELTZER, & D. SHAPIRO, HART AND

WECHSLER’S THE FEDERAL COURTS AND THE FEDERAL

SYSTEM 807 (6th ed. 2009) (describing as “well-

established” the “rule” that a cause of action exists “to

enjoin state or local regulation that is preempted by a

federal statutory or constitutional provision—and

that such an action falls within the federal question

jurisdiction”) (“HART AND WECHSLER’).

Unsurprisingly, the lower courts have uniformly

followed suit and recognized such a cause of action.

See Indep. Living Ctr: of S. California, Inc. v. Shewry,

543 F.3d 1050, 1058-59 (9th Cir. 2008) (collecting

cases).

Although this Court has not explicitly identified

the precise source of this cause of action, many lower

courts and commentators have correctly concluded

that it arises under the Supremacy Clause. As the

Wright & Miller treatise notes, this is “[t]he best

explanation of Ex parte Young and its progeny.” 13D

WRIGHT & MILLER, supra, § 3566, at 292. At least five

circuits have adopted this view. See Planned

Parenthood of Houston and Southeast Tex. v.

Sanchez, 403 F.3d 324, 334 & n.47 (5th Cir. 2005);

Pharm. Research & Mfrs. of Am. v. Concannon, 249

F.3d 66, 73 (Ist Cir. 2001), affd sub nom. Pharm.

Research & Mfrs. of Am. v. Walsh, 538 U.S. 644

(2003); St. Thomas-St. John Hotel & Tourism Ass’n,

Inc. v. Gov't of U.S. Virgin Islands, 218 F.3d 232, 241

(3d Cir. 2000); Farricielli v. Holbrook, 215 F.3d 241,

245 (2d Cir. 2000); Guar. Nati Ins. Co. v. Gates, 916

F.2d 508, 511-512 (9th Cir. 1990).

That widespread understanding of the Court’s

case law and settled practice make perfect sense in

light of the Court’s observation, in Green, 474 U.S. at

13

68, that “the availability of prospective relief of the

sort awarded in Ex parte Young gives life to the

Supremacy Clause.” In Green, the Court went on to

explain that “[r]Jemedies designed to end a continuing

violation of federal law are necessary to vindicate the

federal interest in assuring the supremacy of that

law.” Jbid. (emphasis added). In other words, the

Supremacy Clause loses meaning if prospective relief

is unavailable to effectuate it. It therefore stands to

reason that the cause of action for prospective relief is

rooted in the Supremacy Clause itself.

B. The Court Should Reject Petitioners’

Efforts To Sow Doubt About, And To

Limit, This Important Cause Of Action

Based On Inapposite Case Law Involving

Either Section 1983 Or Implied Rights Of

Action Under Federal Statutes

In an effort to call into question a cause of action

that is “well-established” under this Court’s cases

(HART AND WECHSLER, supra, at 807), petitioners

advance various arguments. All are meritless.

First, petitioners seize on a single sentence from

Golden State Transit Corp. v. City of Los Angeles, 493

U.S. 103, 107 (1989), where the Court stated that the

Supremacy Clause “is not a source of any federal

rights” (internal quotation marks omitted). Pet. Br.

35. But that quotation—viewed in context—merely

clarifies that the Supremacy Clause does not create

federal rights under 42 U.S.C. § 1983. See Golden

State Transit Corp., 493 U.S. at 107 (agreeing with

the proposition that “the Supremacy Clause, of its

own force, does not create rights enforceable under §

198’ (footnote omitted, emphasis added)). In any

event, the quotation is beside the point. Even if the

14

Supremacy Clause does not create “rights,” it does

create a “federal interest in assuring the supremacy

of [federal] law.” Green, 474 U.S. at 68. That interest

can be effectively vindicated only through the sort of

prospective relief that the Court has consistently

made available in cases like this.4

Equally unavailing is petitioners’ argument that

no cause of action should be recognized in this case

because the Federal Medicaid Act itself neither

contains an implied cause of action nor gives rise to a

cause of action under Section 1983. Pet. Br. 22-26.

Contrary to petitioners’ submission, this Court’s

preemption decisions cannot be confined to the boun-

daries of the Court’s Section 1983 and implied-cause-

of-action jurisprudence.

This Court approaches preemption cases

differently from cases involving enforceable “rights”

under Section 1983 and implied rights of action under

federal statutes. As noted above, instead of applying

the frameworks it has developed for analyzing

implied statutory causes of action and Section 1983

claims, see Cort v. Ash, 422 U.S. 66, 78 (1975),

Gonzaga Univ. v. Doe, 536 U.S. 273, 282 (2002), the

Court simply proceeds to the merits in preemption

cases. See, e.g., Lorillard Tobacco Co. v. Reilly, 533

U.S. 525, 540 (2001); Crosby v. National Foreign

Trade Council, 530 U.S. 363, 372-73 (2000); Foster v.

Love, 522 U.S. 67, 70-72 (1997); Gade v. Nat Solid

Wastes Mgmt. Ass'n, 505 U.S. 88, 96 (1992).

Moreover, if the Court had applied those tests, in

8 While the Supremacy Clause is the most plausible source of

the preemption cause of action, other possibilities do exist. For

instance, the United States suggests that it may be rooted “in

the courts’ historical exercise of equitable powers.” U.S. Br. 20.

15

many preemption cases it would have found no cause

of action. See David Sloss, Constitutional Remedies

for Statutory Violations, 89 IOWA L. REV. 355, 391-98

(2004) (demonstrating that the federal statutes at

issue in Lorillard and Crosby did not create express,

implied, or Section 1983 causes of action).

Nevertheless, the Court routinely decides such cases

on the merits, making it clear that the Cort and

Gonzaga tests are simply inapposite.

This approach is_ entirely justified. The

preemption context is different in several crucial

respects from the Cort and Gonzaga contexts, making

different treatment not just rational but imperative.

For starters, the Cort and Gonzaga lines of cases

concern statutory causes of action (and, typically,

efforts to secure retrospective relief in the form of

compensatory or punitive damages). In that setting,

the Court was understandably deferential to

Congress in defining the precise contours of any

available remedy. See Transamerica Mortg.

Advisors, Inc. v. Lewis, 444 U.S. 11, 15 (1979) (noting

that “(t]he question whether a statute creates a cause

of action, either expressly or by implication, is

basically a matter of statutory construction”). By

contrast, the Supremacy Clause cause of action

vindicates the Constitutional interest in the

supremacy of federal law in the face of conflicting

state action; therefore, it is entirely appropriate for

the judiciary to take a more prominent role in

fashioning it. See also Santa Rosa Resp. Br. 22-26

(discussing the Court’s decisions recognizing claims

arising directly under various other provisions of the

Constitution without need of statutory

authorization).

16

Moreover, Section 1983 is targeted at a different

class of violations and provides a different set of

remedies. Unlike the Supremacy Clause cause of

action, which is limited to injunctive relief, Section

1983 allows for monetary damages. As a

consequence, the former is necessarily targeted at

ongoing or recurring violations, while the latter has

no such limitation. The two mechanisms, therefore,

have quite different functions: The Supremacy

Clause cause of action operates to prevent systemic

violations of federal law, while Section 1983 redresses

individual injuries in appropriate circumstances. See

Sloss, supra, at 413-15.

Finally, it should be noted that the Court’s

consistent concern with Congressional intent in the

statutory right of action context, see Cort, 422 U.S. at

78, Gonzaga, 536 U.S. at 280, actually militates in

favor of the Supremacy Clause cause of action.

Because the Court has consistently allowed private

parties to sue for injunctive relief against state

officers without a finding that the statute contains a

cause of action, Congress has had no reason to

provide for such lawsuits explicitly. See American

Nat? Red Cross v. S.G., 505 U.S. 247, 252, 260 (1992)

(Congress is presumptively aware of settled backdrop

of existing law). Far from effectuating congressional

intent, petitioners’ position would frustrate

Congress’s reliance on this well-established legal

regime.

17

Il. THIS COURTS ESTABLISHED APPROACH

FINDS SUPPORT IN THE HISTORY OF THE

SUPREMACY CLAUSE AND IS NECESSARY

TO EFFECTUATE ITS PURPOSE AND TO

BRING ABOUT THE SIGNIFICANT BENE-

FITS OF THE PREEMPTION DOCTRINE ~*

The Court’s recognition of a cause of action for

prospective relief under the Supremacy Clause is

entirely consistent with the Cliause’s original

meaning. A review of the history surrounding its

adoption reveals two crucial principles: (1) the

Framers entrusted the enforcement of federal

supremacy to the courts; and (2) they regarded the

Supremacy Clause as the means of effectively

accomplishing that objective. A state of affairs where

federal supremacy is flouted without recourse is

repugnant to the Supremacy Clause. The cause of

action for preemption actions is therefore essential.

A. The Framers Assigned The Principal

Responsibility To Enforce Federal

Supremacy To The Courts Rather Than

To Congress

The Supremacy Clause was intended to address

glaring shortcomings in the Articles of Confederation.

See Hughes v. Oklahoma, 441 U.S. 322, 325 (1979)

(the Framers believed that “to succeed, the new

Union would have to avoid the tendencies toward

economic Balkanization that had plagued relations

. among the States under the Articles of Con-

federation”). One legal scholar has aptly summarized

the shortcomings of the Articles of Confederation:

In the absence of something like the Supremacy

Clause, state courts might have sought to analo-

18

gize federal statutes to the laws of a foreign

sovereign, which they could ignore under prin-

ciples of international law.... [Moreover,] [t]he

Articles had not been ratified by conventions of

the people in each state; states had manifested

their assent merely by passing ordinary statutes

authorizing their delegates to sign the

Articles.... James Madison fretted that as a

result, “whenever a law of a State happens to be

repugnant to an act of Congress,” it “will be at

least questionable” which law should take priority

Caleb Nelson, Preemption, 86 VA. L. REV. 225, 247-48,

251 (2000) (quoting James Madison, Vices of the

Political System of the United States (Apr. 1787), in 9

PAPERS OF JAMES MADISON 345, 352 (R. Rutland & W.

Rachal eds. 1975)).

To address these structural deficiencies in the

Articles, the Framers included the Supremacy

Clause, which broadly provides that “the Laws of the

United States ... shall be the supreme Law of the

Land ... any Thing in the Constitution or Laws of

any State to the Contrary notwithstanding.” US.

CONST., art. VI, cl. 2 (emphasis added). By its terms,

the Supremacy Clause makes all federal laws

automatically preemptive of state and local laws to

the extent that the latter impose conflicting

obligations or requirements. It declares that federal

law “shall” be supreme, not that it “may” displace

inconsistent state and local regimes—that is, it states

an affirmative constitutional guarantee that federal

law will control; it is not a statement that federal law

has the mere potential to trump in case of conflict.

19

That affirmative guarantee reflects a deliberate

choice by the Framers. During the Constitutional

Convention, the Founders’ considered “three

mechanisms for resolving conflicts between federal

and state law.” Bradford Clark, Separation of Powers

asa Safeguard of Federalism, 79 TEx. L. REv. 1331,

1348 (2001). Compare NGA Br. 14-19 (discussing

only two of the three mechanisms). Significantly for

present purposes, each of the three proposed

mechanisms relied on different institutions of

government to enforce the principle of federal

supremacy, each with markedly different conse-

quences for what the Clause would accomplish in

practice.

First, the Virginia (or Large State) Plan proposed

“authorizing the Union to use military force to coerce

the states to comply with federal law.” Bradford

Clark, Unitary Judicial Review, 72 GEO. WASH. L.

REV. 319, 325 (2003). This plan would have placed

authority in the hands of the Executive Branch. But

“(tlhe delegates were immediately opposed to the use

of force” and “[t]he Convention tabled the proposal

and never seriously entertained this alternative.” Id.

at 325-26 & nn.44-47.

Second, the Virginia Plan alternatively

recommended “that the National Legislature ought to

be impowered ... to negative all laws passed by the

several States, contravening in the opinion of the

National Legislature the articles of Union.” Madison,

Notes on the Constitutional Convention (May 29,

1787), in 1 THE RECORDS OF THE FEDERAL

CONVENTION OF 1787, at 21 (Max Farrand, ed. 1911)

(“FARRAND’S RECORDS”). Under this “congressional!

negative” as originally proposed, Congress alone

20

would have had the power to “negative” all state laws

that, in Congress's judgment, violated the federal

Constitution. Importantly, the delegates apparently

envisioned the congressional negative (by analogy to

the Crown’s prerogative to approve Colonial laws) as

operating to prevent state laws from going into effect

until Congress acted (except in special

circumstances). Indeed, James Madison argued that

anything other than this powerful congressional

negative would be ineffective because it would allow

the States to “pass laws which will accomplish their

injurious objects before they can be repealed” by

Congress or invalidated by the federal courts. 2

FARRAND’S RECORDS 27.

Third, the New Jersey Plan included a resolution

that “was in substance and concept, if not in form,

similar to the current language of the Supremacy

Clause.” Viet Dinh, Reassessing the Law of

Preemption, 88 GEO. L.J. 2085, 2089 (2000). It

“would have required state courts (subject to federal

appellate review) to enforce the Laws of the United

States ... as ‘the supreme law of the respective

States.” Clark, supra, 72 GEO. WASH. L. REV. at 327

(quoting 1 FARRAND’S RECORDS 245).

The Convention initially approved the “con-

gressional negative” in its original form. Id. at 326.

But Charles Pinckney “moved to expand the

negative” by giving Congress the power to negate any

state law that Congress regarded as “improper”

(rather than merely contrary to the federal Constitu-

tion). At that point, the small-State delegates

strongly objected, and the Convention not only

rejected Pinckney’s proposal but also “subsequently

reconsidered and_ rejected even the _ original

21

congressional negative.” Jbid. The congressional!

negative was unacceptable to a majority of States

because it “would have allowed Congress to determine

for itself the scope of its powers vis-a-vis the states.”

Ibid. (emphasis added). ms

“(T]he Convention subsequently adopted the

Clause immediately after rejecting the congressiona!

negative.” Jd. at 327. In so doing, the Convention

rejected the arguments of James Madison (who had

been the primary drafter of the Virginia Plan) that

adoption of the congressional negative was “essential

to the efficacy & security of the Genl. Govt.” 2

FARRAND’S RECORDS 27. Disagreeing with Madison,

Gouverneur Morris explained that any “law that

ought to be negatived will be set aside in the

Judiciary departmt. and if that security should fail:

may be repealed by a Nationl. law.” Id. at 28

(emphasis added). Similarly, Roger Sherman argued

that the congressional negative was “unnecessary”

because the state courts “would not consider as valid

any law contravening the Authority of the Union, and

which the legislature would wish to be negatived.”

Id. at 27.

All of this makes clear that the Convention

delegates who opposed the congressional negative did

so because, among other things, they viewed it as

unnecessary once the Supremacy Clause had been

included in the Constitution. In other words, the

Supremacy Clause was viewed as an adequaie means

of addressing the problem the congressional negative

was meant to solve—namely, the possibility that

States would flout federal law. See The Federalist

No. 15 (Hamilton) (noting that “in practice [the

resolutions of the Continental Congress] are mere

22

recommendations which the States observe or

disregard at their option” (emphasis added)). The

Supremacy Clause was not understood as a mere

aspiration, but rather as an affirmative guarantee

that would accomplish this defining objective of the

constitutional scheme.

Furthermore, the Supremacy Clause assigned to

the courts in the first instance the duty to ensure that

state laws that were inconsistent with federal laws

would be accorded no effect (and thus preempted).

Indeed, the specific language of the Supremacy

Clause confirms the Framers’ intent that it be

enforced by the Judiciary. See U.S. CONST., art. VI,

cl. 2 (“This Constitution, and the Laws of the United

States ... and all Treaties ... shall be the supreme

Law of the Land; and the Judges in every State shall

be bound thereby; any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.”).

The first clause establishes a hierarchy of federal law

and authority; the second is expressly directed at

“Judges.”

As for the third clause—“any Thing in the

Constitution or Laws of any State to the Contrary

notwithstanding’—scholarship has established that

its form would have been understood by the Framers

(and late-Eighteenth-Century judges) as a so-called

“non obstante” clause. Such clauses were specifically

directed at courts and understood as a directive

concerning the rules of interpretation to apply to

federal statutes alleged to conflict with state law.

See Nelson, supra, 86 VA. L. REV. at 232, 235-44, 291-

303. The non obstante form of the Supremacy Clause,

then, confirms the Framers’ plan _ to vest

responsibility for interpreting and enforcing the

23

Supremacy Clause in the judiciary. /d. at 232, 245-

64.

In short, the Framers expected the Supremacy

Clause to prevent widespread defiance of federal law,

and they expected the courts to have primery

institutional responsibility for effectuating that

result. As respondents demonstrate, this expectation

was amply justified by the contemporary practice of

suits in equity to restrain officials from unauthorized

actions. Dominguez Resp. Br. 11-17. In allowing a

cause of action for prospective relief on the grounds of

preemption, this Court is simply facilitating and

performing the role assigned to the judiciary by the

Supremacy Clause—namely, preventing sys#ematic

violations of federal law by state officials.

While petitioners and their amici acknowledge

that the Framers vested this responsibility in the

judiciary—and specifically rejected the congressional!

negative proposal—they fail to apprehend the

perverse consequence that rejecting a cause of action

for preemption would have. In the absence of such a

cause of action, asserting federal supremacy would

require congressional action. As illustrated by this

case (and the numerous examples detailed above),

there are numerous instances in which federal law

conflicts with state law but does not provide a

statutory cause of action or an individual “right”

within the ambit of 42 U.S.C. § 1983. Petitioners

would require Congress to take affirmative action to

supply a means to assert federal supremacy, by

creating (or, in the case of § 1983, triggering) a cause

of action. Petitioners would, in short, require action

by the very institution (Congress) that the Framers

passed over before the courts could discharge their

24

assigned duties under the Supremacy Clause. That

is exactly backward.‘

Indeed, many statutes do not expressly provide for

a private cause of action, and this Court has been

appropriately cautious in finding implied causes of

action and allowing statutory claims to be brought

under Section 1983. See Cort, 422 U.S. at 78;

Gonzaga Univ., 536 U.S. at 282. As noted above,

these statutory causes of action are necessarily

circumscribed by congressional intent. See Davis v.

Passman, 442 U.S. 228, 240-41 (1979) (noting that “it

is entirely appropriate” for Congress to determine

who may enforce statutes, and drawing a contrast

with the Constitution, where “the judiciary is clearly

discernible as the primary means” of enforcement).

This makes the statutory causes of action poorly

suited, however, to vindicate the Constitutional

interest in federal supremacy.

B. Petitioners’ Rule Would Harm Businesses

And Consumers And Undermine The

Significant Benefits Flowing From The

Preemption Doctrine

Preemption is a pervasive and highly beneficial

feature of our system of government. By virtue of the

Supremacy Clause and the doctrine of preemption

that flows directly from it, state and local

governments may not impose requirements that

conflict with federal law. Both Congress and

regulatory agencies also rely on preemption as a

* Relying on the Executive Branch to enforce the Supremacy

Clause (see Pet. Br. 44 n.15) similarly ignores the history of the

Supremacy Clause and the institutional choices made by the

Framers.

25

crucial tool in reducing or eliminating the burdens

that flow from multifarious (and even conflicting)

legal and regulatory requirements imposed by 50

States and thousands of municipal and _ local

governments. In significantly limiting the

effectiveness of federal preemption, petitiorfers’

position would undermine three crucial benefits that

flow from an effective preemption regime: (1)

promotion of regulatory uniformity; (2) promotion of a

unified national marketplace for goods and services;

and (3) enablement of national deregulatory policies.

These benefits reach far beyond the statutory scheme

at issue here.

1. Regulatory uniformity. Without the protection

of preemptive federal laws, companies may be subject

to inconsistent and indeed incompatible regulation by

thousands of state, municipal, and local entities. Not

surprisingly, Congress has repeatedly invoked the

benefits of regulatory “uniformity” in enacting

preemption provisions in a variety of settings—

especially with regard to nationally distributed

products. See, e.g., Federal Railroad Safety Act, 49

U.S.C. § 20106(a)(1) (““Laws, regulations, and orders

related to railroad safety ... shall be nationally

uniform to the extent practicable.”).

The principal advantages flowing from regulatory

uniformity are economic efficiencies in the manufac-

turing and distribution processes. As one commen-

tator has explained in describing the origins of the

preemption clause of the Nutrition Labeling and

Education Act of 1990, 21 U.S.C. § 343-1, “[p]reparing

different labeling, advertising, and food formulations

for different states is costly” and “[i]nconsistent

labeling laws can slow food manufacturing and

26

distribution, raise prices, and confuse consumers

confronted with different information and warnings.”

Michele Bradley, The States’ Role in Regulating Food

Labeling and Advertising: The Effect of the Nutrition

Labeling and Education Act of 1990, 49 FooD & DRUG

L.J. 649, 653 (1994). Modern manufacturing pro-

cesses and distribution networks must be altered,

and invariably are made less efficient, to account for

regulatory variations in the markets for which the

products are bound. This is further complicated

where the products themselves are mobile and apt to

be used in multiple jurisdictions. As a general

matter, then, regulatory uniformity has the effect of

decreasing the costs of production, distribution, and

regulatory compliance, and thus has the potential to

lower the price of goods and services for consumers.

2. Promotion of a unified national market. In

certain cases the costs of complying with a welter of

diverse or inconsistent regulatory requirements

become so large that manufacturers may elect either

not to serve particular markets at all or to “conform”

their products “with the most restrictive applicable

law.” Bradley, 49 Foop & DRUG L.J. at 654.5 In the

5 Commentators have recognized the possibility of this occurring

as a result of modern product liability litigation. Thus, as

Professor Michael McConnell has explained: “{S]tate-by-state

determination of the law of products liability seems to have

created a liability monster. This is because each state can

benefit in-state plaintiffs by more generous liability rules, the

costs being exported to largely out-of-state defendants; while no

state can do much to protect its in-state manufacturers from

suits by plaintiffs in the other states. Thus, competition among

the states in this arena leads to one-sidedly pro-plaintiff rules of

law.” Michael] McConnell, Federalism: Evaluating the Founders’

Design, 54 U. CuI. L. REV. 1484, 1499 (1987); see also Michael

McConnell, A Choice-of-Law Approach to Products-Liability

latter scenario, the net result is that “[s]tate

enforcement activities” in several or even in a single

jurisdiction can have the extraterritorial effect of

“regulat[ing] . .. manufacturers nationally.” Ibid.

In enacting many preemption clauses, Congsess

appears to have acted out of a concern over the

potential burdens imposed on the national market—

and on interstate commerce—by divergent state and

local regulations. Thus, Congress has allowed for

limited waivers or exemptions from’ express

preemption schemes where state or local laws that do

“not unreasonably burden interstate commerce.”

Federal Railroad Safety Act, 49 U.S.C.

§ 20106(a)(2)(C); see also Hazardous Materials

Transportation Act, 49 U.S.C. § 5125(e)(2); Consumer

Product Safety Act, 15 U.S.C. § 2075(c)(2). The desire

to protect interstate commerce against disparate

state rules also undergirds various preemption

clauses enacted by Congress to regulate the channels

and instrumentalities of interstate commerce (such

as trains, airplanes, trucks, boats, and cars). See,

e.g., Safety Appliance Acts, 49 U.S.C. §§ 20301-20306;

Locomotive Inspection Act, 49 U.S.C. §§ 20701-20703.

Preemption of divergent and _ potentially

conflicting state and local requirements thus plays an

important role in ensuring and protecting the

development of a unified national marketplace for

goods and services. Indeed, only through preemption

by the federal government may the problem of

Reform, in NEW DIRECTIONS IN LIABILITY LAW 90, 92 (Walter

Olson ed., 1988) (discussing the reasons why “the cost of a given

state's liability laws, as they apply to mass-marketed products,

is borne by consumers nationwide”).

28

incompatible state and local commands be effectively

addressed and remedied.

3. Deregulation. Whenever the federal

government wishes to pursue aie deregulatory

approach to some area of the economy, the federal

power to legislate preemptively is critically important.

Without such authority, a nationwide program of

deregulation will fall flat (except in the unlikely event

that there is nationwide unanimity). Accordingly,

this Court has recognized 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 Electric Coop. Corp. v. Arkansas Public

Service Comm’n, 461 U.S. 375, 384 (1983). This

Court has applied that principle in various settings.

See, e.g., Ray v. Atlantic Richfield Co., 435 U.S. 151,

178 (1978) (holding preempted Washington state ban

on large oil tankers in Puget Sound).

Moreover, Congress has repeatedly decreed this

type of preemption under the federal labor laws. See

NLRB v. Nash-Finch Co., 404 U.S. 138, 144 (1971)

(“For a state to impinge on the area of labor combat

designed to be free is quite as much an obstruction of

federal policy as if the state were to declare picketing

free for purposes or by methods which the federal Act

prohibits.”) (internal quotation marks omitted);

Bethlehem Steel Co. v. New York State Labor

Relations Board, 330 U.S. 767, 774 (1947)

(preemption occurs “where failure of the federal

officials affirmatively to exercise their full authority

takes on the character of a ruling that no such

29

regulation is appropriate or approved pursuant to the

policy of the (federal labor] statute”).

Congress has also relied on this rationale in

enacting preemption provisions that target certain

modes of transportation. For example, the apély-

named Airline Deregulation Act of 1978 (ADA), which

regulates air carriers (49 U.S.C. § 41713(b)),

preempts state laws that regulate “price[s], route[s],

or service.” See Morales v. Trans World Airlines, 504

U.S. 374 (1992). In enacting that statute, “Congress’

overarching goal” was to “help{] assure trans-

portation rates, routes and services that reflect

‘maximum reliance on competitive market forces,’

thereby stimulating ‘efficiency, innovation, and low

prices,’ as well as ‘variety’ and ‘quality.” Rowe, 552

U.S. at 371 (quoting Morales, 504 U.S. at 378).

Congress has taken similar steps in deregulating the

trucking industry. See id. at 367-68.

In sum, a well-functioning preemption regime is

crucially important to businesses and consumers. By

preventing widespread disregard of federal law by

state officials, the Supremacy Clause cause of action

vindicates the Constitutional interest in federal

supremacy while also securing the considerable

benefits of uniform regulation, integrated markets,

and effective deregulation.

30

Iil. PETITIONERS’ ATTEMPTS TO NARROW

THE CAUSE OF ACTION UNDER THE

SUPREMACY CLAUSE TO EXCLUDE THIS

CASE IMPROPERLY IMPORT CONCERNS

THAT ARE NOT GROUNDED IN THE

SUPREMACY CLAUSE, AND ARE APPRO-

PRIATELY ADDRESSED BY STANDING

RULES AND THE SUBSTANTIVE LAW OF

PREEMPTION

A. The Supremacy Clause Does Not Support

Petitioners’ Proposed Limitation, And

Standing Rules Ensure That Preemption

Lawsuits Are Brought, As Here, Only By

Appropriate Plaintiffs

Faced with the reality that this Court routinely

entertains preemption challenges by private parties,

petitioners and the United States struggle to limit

this line of authority in a way that would exclude the

present case. In addition to relying on inapposite

lines of cases involving Section 1983 and statutory

rights of action (see pages 13-16, supra), they contend

that, if the pertinent federal statute does not

specifically confer “rights” on private parties, then a

cause of action should be allowed only when

preemption is used “solely as a defense to state

regulation of a defendant’s (or putative defendant’s)

conduct.” Pet. Br. 44; see also U.S. Br. 22 (arguing

that the challenged regulations “do not regulate

respondents’ primary conduct”). This restriction is

not grounded in the Supremacy Clause, and, in any

event, it is both unnecessary and inconsistent with

the Court’s approach to preemption cases.

For starters, petitioners and the United States

provide virtually no support for this “primary

31

conduct” test, presumably because neither the text

nor the purpose of the Supremacy Clause admits of

such a limitation. By its terms, the Supremacy

Clause makes all federal law supreme—there is no

suggestion that only “federal affirmative gights” or

“federal defenses” have such force. The absence of

such a textual distinction is fully consistent with the

clause’s purpose, which was to guarantee the priority

of federal law across the board. See supra pp. 17-23.

Nothing in the Supremacy Clause itself suggests that

federal law only “sometimes” trumps inconsistent

state and local regimes.

Underlying petitioners’ proposed restriction is the

notion that such a test would somehow serve to

restrict the cause of action to an appropriate set of

plaintiffs. This function, however, is already

performed by standing doctrine. See Indep. Living

Ctr. of S. California, Inc., 543 F.3d at 1057 (noting

that a similar argument made by the district court

appeared simply to “reflect traditional standing

doctrine”). The three “irreducible constitutional

minimum” elements of standing—injury in fact,

causation, and _ redressability—already enforce

appropriate limits on those who may assert a

constitutional interest in a preemption action. Steel

Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-103

(1998) (internal quotation marks omitted).

In preemption cases, the injury-in-fact and

causation requirements ensure that suit can be

brought only by plaintiffs who have suffered a

concrete injury (such as the reductions in payments

suffered by respondents in these cases) that is fairly

traceable to the defendants’ enforcement of allegedly

preempted laws (such as petitioners’ enforcement of

32

California’s rate reductions). Importantly, because

the Supremacy Clause cause of action is for

prospective relief (mot retrospective relief such as

damages), plaintiffs can demonstrate redressability

only if their injury is either ongoing or likely to recur.

See City of Los Angeles v. Lyons, 461 U.S. 95, 105

(1983). This also tends to restrict preemption

lawsuits to cases like this one, where the plaintiffs

are (or, in the absence of injunctive relief, will be)

repeatedly and systematically injured by government

action they claim is in violation of federal law.

There is simply no indication that the Court

intended to restrict the class of potential preemption

plaintiffs any further than this. For example, there is

no reason to believe that when Shaw speaks of

“plaintiff[s] who seek[] injunctive relief from state

regulation,” it means to import a “primary conduct”

restriction that would exclude the respondents here,

who will suffer enormous financial losses and may

ultimately be forced to limit the availability of crucial

health services to beneficiaries. See Golden State

Transit Corp., 493 U.S. at 114 (Kennedy, J.,

dissenting) (explaining that an “injured party does

not need § 1983 to vest in him a right to assert that

an attempted exercise of jurisdiction or control

violates the proper distribution of powers within the

federal system” (emphasis added)).

This Court's recent decision in Rowe is a

particularly vivid illustration of the illogic of

petitioners’ position. The plaintiffs there were

transport carrier associations. They argued that two

provisions of Maine tobacco law were invalidated by

the Federal Aviation Administration Authorization

Act of 1994, which preempted state trucking

33

regulations. 552 U.S. at 367-68. One of these

provisions regulated carmers directly, by restricting

transport of tobacco into Maine. Id. at 369, 372. The

Court held that it was preempted. Z/d. at 373. The

second provision, however, did not directly regulate

trucking; instead, it directed the state’s toBacco

retailers to employ only those delivery services that

followed certain provisions. Jd. at 372. The Court

took note of this distinction: “We concede that the

regulation here is less ‘direct’ than it might be, for it

tells shippers what to choose rather than carriers

what to do.” Jbid. The Court went on, however, to

explain the distinction was without a difference:

“Nonetheless, the effect of the regulation is that

carriers will have to offer tobacco delivery services

that differ significantly from those that, in the

absence of the regulation, the market might dictate.

And that being so, treating sales restrictions and

purchase restrictions differently for pre-emption

purposes would make no sense.” Ibid. (emphasis

added, internal quotation marks omitted).

In other words, the direct and indirect regulations

were identical for preemption purposes, and there

was no reason to treat them differently. But

according to the petitioners, courts must treat them

differently for purposes of defining the preemption

cause of action. In petitioners’ world, the truckers in

Rowe would have had a cause of action with respect

to one provision but not the other. equally preempted

provision. That makes no sense: Indirect regulation

can be just as injurious to affected parties and just as

inimical to federal supremacy as direct regulation.

Accordingly, there is no justification for exempting

indirect regulation from preemption lawsuits.

34

B. Whether Spending Clause Legislation

Should Be Treated Differently Is A

Question Of Preemption Doctrine

Petitioners’ final effort at restricting the scope of

the Supremacy Clause cause of action is their

contention that the cause of action disappears in the

Spending Clause context. See Pet. Br. 46. In

particular, petitioners maintain that, because

Spending Clause legislation resembles a contract, any

remedy for noncompliance must be supplied by the

“terms of the ... contract.” Id. at 47. This argument

is confused conceptually and groundless doctrinally.

Its most basic defect, however, is that it is totally out

of place: It goes to whether there is preemption, not

to the existence of a cause of action to enforce the

Supremacy Clause.

Conceptually, the contract argument has little to

recommend it. “Conditional spending statutes are no

less ‘law’ than any other kind of federal legislation.”

Samuel Bagenstos, Spending Clause Litigation in the

Roberts Court, 58 DUKE L.J. 345, 391 (2008). The

Supremacy Clause itself certainly contains no

exception for laws enacted under the Spending

Clause. Even though Spending Clause statutes

impose obligations only on States that accept the

conditional offer of funds, “that fact does not make

their obligations any less binding (or any less a

product of ‘law’) than the obligations imposed by any

other federal statute.” Ibid. This Court's

jurisprudence has been entirely consistent with this

principle. In particular, this Court has repeatedly

held that Spending Clause statutes preempt

inconsistent state legislation. See, eg., Blum v.

Bacon, 457 U.S. 132, 138 (1982): Carleson v.

Remillard, 406 U.S. 598, 604 (1972). That is

precisely what petitioners claim cannot happen. Pet

Br. 47-48.

Moreover, while petitioners style this argument as

a question of whether the preemption cause of gction

is available with respect to Spending Clause statutes,

really their argument is that Spending Clause

statutes are not preemptive. Indeed, petitioners give

the game away right off the bat by arguing that

“[p]Jrinciples of supremacy, and of preemption

generally, have no application to allegations that a

state has failed to satisfy a federal funding

condition.” Pet. Br. 46 (emphasis added); see also

U.S. Br. 21 (claiming that respondents use the term

preemption “in a rather special sense” (internal

quotation marks omitted)). Whether or not

preemption principles suggest that Spending Clause

statutes should be treated differently is simply a

question of the substantive law of preemption, to be

resolved on the merits. In other words, petitioners’

argument goes to the existence and extent of an

actual conflict between federal and state law

sufficient to trigger preemption. But the Supremacy

Clause cause of action does not leap in and out of

existence depending on whether the preemption

claim is ultimately successful—the existence of a

cause of action is logically antecedent to and

conceptually distinct from the merits. Nor does the

cause of action switch on and off depending on the

Constitutional provision under which the relevant

federal statute was enacted. If a statute is not

preemptive, the courts can and will make that

determination (by contrast, in this case, courts have

definitively ruled that the relevant state and federal

laws do stand in conflict). There is no reason to

36

anticipate that scenario by creating carve-outs in the

Supremacy Clause cause of action.

Notably, this was precisely the approach taken by

seven Members of the Court in Pharm. Research &

Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003). Although

seven Justices split 4-3 over the question of whether

the Medicaid Act preempted Maine’s rebate program,

id. at 661-668, 669-74, 682-90, all seven recognized

that this was properly a preemption issue—none

questioned the availability of the private cause of

action. There is no reason for the Court to adopt any

other approach to this case.

CONCLUSION

The judgment of the Ninth Circuit should be

affirmed.

Respectfully submitted.

ROBIN S. CONRAD ALAN UNTEREINER

KATE COMERFORD TODD Counsel of Record

SHELDON GILBERT MARK T. STANCIL

National Chamber ALEX POTAPOV

Litigation Center, Inc. Robbins, Russell, Englert, Orseck,

1615 H Street, N.W. Untereiner & Sauber LLP

Washington, D.C. 20062 1801 K Street, NW, Suite 411

(202) 463-5337 Washington, D.C. 20006

(202) 775-4500

auntereiner@robbinsrussell.com

August 5, 2011