Amicus Curiae Brief — Rowe v. New Hampshire Motor Transport Ass'n

s et 25.38

No. 06-457 OFFICE OF THE CLERK |

In the Supreme Court of the Gnited States

G. STEVEN ROWE, ATTORNEY GENERAL OF

THE STATE OF MAINE, PETITIONER

Vv.

NEW HAMPSHIRE MOTOR TRANSPORT ASSOCIATION,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

PAUL D. CLEMENT

Solicitor Generul

Counsel of Record

PETER D. KEISLER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

DOUGLAS HALLWARD-DRIEMEIER

Assistant to the Solicitor

General

MARK B. STERN

CHRISTINE N. KOHL

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

The Federal Aviation Administration Authorization Act

of 1994 (FAAA Act) provides, with certain exceptions inap-

plicable here, that “a State * * * may not enact or enforce

alaw * * * related to a price, route, or service of any

motor carrier * * * with respect to the transportation

of property.” 49 U.S.C. 14501(c)(1). See also 49 U.S.C.

41713(b)(4)(A). The questions presented in this case are:

1. Whether the FAAA Act preempts a state law that

requires a seller of tobacco products to use only delivery

services that will take certain statutorily specified actions to

ensure that the purchaser is not a minor.

2. Whether the FAAA Act preempts a state law that

effectively requires a delivery service to change its package-

processing procedures in order to avoid being deemed to have

knowledge that a package contains tobacco products.

(1)

TABLE OF CONTENTS

Page

Interest of the United States ... 0... ccccccccccccccccccs 1

I i a 1

EIGER Se Rae NS Ae ER Nine my TT CNRS 5

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TABLE OF AUTHORITIES

Cases:

Ace Auto Body & Towing, Ltd. v. City of N-Y.,

171 F.3d 765 (2d Cir.), cert. denied, 528 U.S.

ET Seam Geran is Fae ee gre aR 19, 20

American Airlines, Inc. v. Wolens, 513 U.S. 219

ee a a gl 4,14

Arkansas Tobacco Control Bd. v. Santa Fe Natural

Tobacco Co., 199 S.W. 3d 656 (Ark. 2004) ........... 18

Brown & Williamson Tobacco Corp. v. Pataki,

Ne rE 18

California v. Zook, 336 U.S. 725 (1949) ............... 14

California Div. of Labor Standards Enforcement v.

Dillingham Constr., N.A., 519 U.S. 316 (1997) .... 8,11

Californians for Safe & Competitive Dump Truck

Transp. v. Mendonca, 152 F.3d 1184 (9th Cir.

1998), cert. denied, 526 U.S. 1060 (1999) ......... 19, 20

City of Columbus v. Ours Garage & Wrecker Serv.,

Die PE IEE. snaddetchedsgeessiiccsnex 16

Granholm v. Heald, 544 U.S. 460 (2005) .............. 18

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133

CN cs peeks eee beech ee ieee Sb ee i deeee 7

(III)

IV

Cases—Continued: Page

Mackey v. Lanier Collection Agency & Serv., Inc.,

EE i ean k,l Uncen e veip es 9

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S.

DEY NaGiucl a ctieudaded widdnds cine cbsees evs 7

Morales v. TWA, 504 U.S. 374 (1992) ............ passim

PhRMA v. Walsh, 538 U.S. 644 (2003) ............6065 16

Shaw v. Delta Air Lines, Inc., 463 U.S. 85

ets tee he oe See ee, che upes beeen 6,7

United States v. Johnson, 529 U.S. 53 (2000)........... 15

Constitution, statutes and regulation:

U.S. Const. Art. I, § 8, Cl. 3 (Commerce Clause) ....... 18

ADAMHA Reorganization Act, Pub. L. No. 102-321,

§ 202, 106 Stat. 394 (42 U.S.C. 300x-26) ............ 16

Airline Deregulation Act of 1978, Pub. L. No. 95-504,

eed teed a ceed hn dha nhs bby uous’ 1

ED ee ca dcembude chesbasaéaes 1,6

Employee Retirement Income Security Act of 1974,

I 6 lees i ec cia taveseasues 6

Federal! Aviation Administration Authorization Act of

1994, Pub. L. No. 103-305, 108 Stat. 1569 (49 U.S.C.

13501 et seq.):

49 U.S.C. 11501(h)(1) (1994) (§ 601(c), 108 Stat.

ie tee ed ds oe. esate cau b 2

49 U.S.C. 11501 note (1994):

§ 601(a), 108 Stat. 1605.22.00... 2.0.0... 20s. 10

PEs a UD ccc ccccccctscccccns 1

SP IED Si céAn wh dvaevcns vec 2, 6, 14, 16

Se ED io 00666 N50ecescencnduans 14

V

Statutes and regulation—Continued: Page

49 U.S.C. 14501(CM2MA) ......... eee eee eee 2,16

49 U.S.C. 14GOM(CMEMB) 2... ccc ccccscccccccccecs 2

es SED bcc b vvccevcvcsesoneenestue 6

49 U.S.C. 41713(b)(4)(A) «2... eee eee 1, 2, 6,14

40 USB.C. ERTIBIBMENB) 20. cc cccccccccccccseces 14

GD UBC. GETIB occ ccseccscccccceccce 2

SD UBL. SEGA oc vec cvetcenseccveves 2

ICC Termination Act of 1995, Pub. L. No. 104-88,

Bk SEE baWedscdebandduickWascdueuducees 2

Motor Carrier Safety Reauthorization Act of 2005,

Pub. L. No. 109-59, Tit. IV, 119 Stat. 1714:

§ 4142(a), 119 Stat. 1747 (to be codified at

49 U.S.C. 13102(14) (Supp. V 2005)) ...........

§ 4202(b), 119 Stat. 1751 (to be codified at

49 U.S.C. 13102(14) (Supp. V 2005)) ...........

BE TEN nice cncivncenéccasoesvssccnas

GEE a: b60 co csucns bs0v ives éseedaeeeneane

GED sic cccvcceseedeusécccvketspecwonn

SEE nv nv.ndes saudicevestsbeecevotmuene

TT ED. 6 655 ov ecceceukesssonecheueeies

GE ND coc ccaciccudeevescsccccdupesm

49 U.S.C. 31138 (2000 & Supp. IV 2004) ..............

SE . vi dn esntentdectaseesaanseaseennee

GO NEO ov bdduncidiccckiankbtd isa verre

An Act to Regulate the Delivery and Sales of Tobacco

Products and to Prevent the Sale of Tobacco

Products to Minors, 2003 Me. Laws ch. 444 ..........

VI

Statutes and regulation—Continued: Page

Prevailing Wage Rate Law, Cal. Labor Code §§ 1770

et seq. (West 2008) ......scccccccees ed ates 19, 20

Ark. Code Ann.:

§ 26-57-203 (LexisNexis Supp. 2005) ............... 18

EE 18

Ga. Code Ann. § 18-4-22.1 (1982) ...............2-.005. i)

Md. Code Ann., Bus. Reg.:

a icc leccesevccdevasveccecs 18

ER TL 18

Me. Rev. Stat. Ann. (West):

Tit. 22 (2004):

ERE ee 3, 9

ss cucu uendie 2

ED ccs ccccévcsseceseeeeees 2

§ 1555-B(2) (Supp. 2006) .................. 2,11,17

§ 1555-B(4) (Supp. 2006) ...:...........eeee ones 17

$ 1565-B(6) (Supp. 2006) ................c cee eee 17

§ 1555-B(10) (Supp. 2006) ................-ceeee 1]

I erie ods bid deb eveeveceececseees 3

ER 3

i ee a in sess eeu ee 3

es ec eneecansseiees 3

EE RE a 3

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TT chk aeenetedviesscseseceecs passim

i ie oo ns hedasencseve eds 12

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Vil

Statutes and regulation—Continued: Page

PEED “KUA5abSs cer tandodecncceoesusundsds 12

DE JineW i sid seees deveseutadeadeke passim

DEE cdebe dactddabducetesdedvacicceeees 13

Tit. 28-A (2007):

EE dcbd sé cbbivn idekensedenenicovens 18

DEE Diccoscsinensnsen duce dbabeadeneedban 18

DEE Sociucasiccedeendciosbendacetaned (18

ED duce odeccceedwadadaseeechounne’ 17

Miscellaneous:

Center for Substance Abuse Prevention, State Synar

Non-Compliance Rate Table, FFY 1997-F FY 2005

(visited May 24, 2007) <http://prevention.samhsa.

‘ gov/tobacco/synartable_print.htm.> ............... 17

H.R. Conf. Rep. No. 677, 103d Cong., 2d Sess.

GE Nadcddcateccaneseiecdavences 2, 8, 10, 11, 14, 16

Model Direct Wine Shipment Bill (visited May 24,

2007) <www.wineinstitute.org/programs/

shipwine/Model_Direct Shipping Bill.pdf> ........ 19

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

INTEREST OF THE UNITED STATES

This brief is submitted in response to the order of this Court

inviting the Solicitor General to express the views of the United

States. In the United States’ view, the preemption holding of the

court of appeals is correct and does not merit this Court’s review.

STATEMENT

1. The Airline Deregulation Act of 1978 (ADA), Pub. L. No.

95-504, 92 Stat. 1705, largely deregulated the domestic airline

industry. “To ensure that the States would not undo federal

deregulation with regulation of their own,” Morales v. TWA, 504

. US. 374, 378 (1992), the ADA preempted state laws “relating to

rates, routes, or services of any air carrier.” ADA § 4(a), 92 Stat.

1708. As interpreted in Morales, that provision preempts state

laws that “have a connection with, or reference to, airline ‘rates,

routes, or services.’” 504 U.S. at 384.

Two decades later, finding that state regulation of the trans-

portation of property had “imposed an unreasonable burden on

interstate commerce,” “impeded the free flow of trade,” and

“placed an unreasonable cost” on American consumers, Congress

passed the Federal Aviation Administration Authorization Act of

1994 (FAAA Act), Pub. L. No. 103-305, § 601(a)(1), 108 Stat. 1605.

The FAAA Act further deregulated the transportation of prop-

erty by both air and motor carriers by adding two sections mod-

eled on the ADA’s preemption provision. One of those provisions

sets forth the following “General rule”:

Except as provided in subparagraph (B), a State * * * may

not enact or enforce alaw * * * related toa price, route, or

service of an air carrier or carrier affiliated with a direct air

carrier * * * when such carrier is transporting property by

aircraft or by motor vehicle.

49 U.S.C. 41713(b)(4)(A). The other provision similarly states:

(1)

2

Except as provided in paragraphs (2) and (3), a State * * *

may not enact or enforce a law * * * related to a price, route,

or service of any motor carrier (other than a carrier affiliated

with a direct air carrier covered by section 41713(b)(4)) * * *

with respect to the transportation of property.

49 U.S.C. 14501(c)(1).' This legislation was intended to extend to

motor carriers the same rule of preemption of state laws related

to prices, routes, and services that is embodied in the ADA as

broadly interpreted in Morales. H.R. Conf. Rep. No. 677, 103d

Cong., 2d Sess. 82, 83 (1994) (H. Rep. 677).

As indicated above, the FAAA Act preempts state law “[e]x-

cept as provided” in specified provisions that identify “[mJatters

not covered.” 49 U.S.C. 14501(c)(1) and (2)(A), 41713(b)(4)(A)

and (B)(1). The matters “[e]xcept{ed]” from preemption are a

State’s “safety regulatory authority” with respect to motor vehi-

cles; authority “to impose highway route controls or limitations

based on the size or weight of the motor vehicle or the hazardous

nature of the cargo”; and authority to regulate certain motor

carrier insurance requirements. /bid. The transportation of

household goods is also excluded. 49 U.S.C. 14501(c)(2)(B),

- 41713(b)(4)(B)(ii).

2. a. The State of Maine has, for some time, prohibited any

person from selling, furnishing, or giving away tobacco products

to any person under 18 years of age. See 22 Me. Rev. Stat. Ann.

§ 1555-B(2) (West Supp. 2006) (22 Me. Stat.); id. § 1555 (Supp.

1996). Prior to 2003, the State permitted the retail sale of to-

bacco products “only in a direct, face-to-face exchange in which

the purchaser may be clearly identified and through the mail

under procedures approved by the [State] to provide reliable

verification that the purchaser is not a minor.” Jd. § 1555-B(1)

' Section 14501(¢)(1) was originally codified at 49 U.S.C. 11501(h)\(1) (1994).

See FAAA Act § 601(c), 108 Stat. 1606. It was amended and recodified in 1995.

See ICC Termination Act of 1995, Pub. L. No. 104-88, § 103, 109 Stat. 899.

3

(Supp. 1997). In 2003, Maine enacted a law to regulate “delivery

sales of tobacco products within the State.” An Act to Regulate

the Delivery and Sales of Tobacco Products and to Prevent the

Sale of Tobacco Products to Minors, 2003 Me. Laws ch. 444 (To-

baeco Delivery Law); 22 Me. Stat. § 1555-C (2004). That law

permits a tobacco retailer licensed by the State to sell tobacco

products directly to consumers in response to phone, internet, or

mail orders, provided that the retailer takes certain measures to

ensure that such sales are not to minors. See id. § 1555-C(1), (2)

and (3).

As pertinent here, the State requires a retailer that engages

in delivery sales to “utilize a delivery service,” 22 Me. Stat.

§ 1555-C(3)(C), which the statute defines as “a person, including

the United States Postal Service, who is engaged in the commer-

cial delivery of letters, packages or other containers,” id.

§ 1551(1-C). Before shipping, the licensed tobacco retailer must

provide the delivery service with the age of the purchaser, and it

must clearly mark the outside of the package with the retailer’s

name and state retailer’s license number, as well as indicate that

the contents are tobacco products. /d. § 1555-C(3)(A) and (B).

The statute further provides:

The tobacco retailer shall utilize a delivery service that im-

poses the following requirements:

(1) The purchaser must be the addressee;

(2) The addressee must be of legal age to purchase tobacco

products and must sign for the package; and

(3) If the addressee is under 27 years of age, the addressee

must show valid government-issued identification that con-

tains a photograph of the addressee and indicates that the

addressee is of legal age to purchase tobacco products.

Id. § 1555-C(3)(C).

4

b. In addition, “{a] person may not knowingly transport or

cause to be delivered to a person in [Maine] a tobacco product

purchased from a person who is not licensed as a tobacco retailer

in [Maine],” unless the delivery is to a licensed tobacco distribu-

tor or retailer. 22 Me. Stat. § 1555-D. The second sentence of

Section 1555-D provides that “{a] person is deemed to know that

a package contains a tobacco product if the package is marked in

accordance with the requirements of [Section 1555-C(3)(B)] or if

the person receives the package from a person listed as an

unlicensed tobacco retailer by the Attorney General.” /bid.

3. Respondents are non-profit trade associations whose mem-

bers provide transportation service. Respondents brought suit

in 2003 against petitioner in his official capacity as Attorney Gen-

eral of Maine, seeking to enjoin enforcement of certain provisions

of the State’s Tobacco Delivery Law. The district court held both

Sections 1555-C(3)(C) and 1555-D invalid under the preemption

provisions of the FAAA Act. Pet. App. 54-66.

4. Petitioner appealed to the Court of Appeals for the First

Circuit. The court of appeals rejected petitioner’s contention

that the FAAA Act preempts only a State’s laws that impose

traditional economic regulation on carriers, such as entry con-

trols and tariff filing requirements, not laws that protect public

health and welfare pursuant to the State’s traditional police

power. The court reasoned that “[a]n exclusion from preemption

for police-power enactments would surely ‘swallow the rule of

preemption,’ as most state laws are enacted pursuant to this au-

thority.” Pet. App. 18. While the court found some support in

the legislative history for petitioner’s argument that the FAAA

Act preempts only state economic regulation, it concluded

that—given the broad statutory text, the Act’s structure, other

legislative history, and the focus of this Court’s decisions in Mo-

rales and American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995),

on the effect that a state law has on carrier operations—the Act

was not so limited. Pet. App. i4-21.

5

The court of appeals next held that Section 1555-C(3)(C) is

preempted under the FAAA Act because it “expressly references

a carrier’s service of providing the timely delivery of packages.”

Pet. App. 23. That section “prescribes the method by which a

carrier operating in Maine must deliver packages containing

tobacco products in a way that would affect the ability of the

carrier to meet package-delivery deadlines.” Jbid. In response

to petitioner’s contention that Section 1555-C(3)(C) regulates

tobacco retailers rather than carriers, the court ruled that such

an argument “reads the broad phrase ‘related to’ out of the stat-

ute and replaces it with the narrower term ‘regulates.’” Jbid.

Moreover, the court of appeals explained, petitioner’s argument

“would lead to the untenable result of permitting states to regu-

late carrier services indirectly by regulating shippers.” /d. at 24.

The court of appeals held that the first sentence of Section

1555-D, which generally bars any person from knowingly deliver-

ing contraband tobacco products, is not preempted by the FAAA

Act. Because that part of Section 1555-D does not require carri-

ers to “modify their delivery methods other than by declining to

transport a product that Maine has legitimately banned,” the

court found that its effect on carrier services is “‘too tenuous’ to

warrant preemption.” Pet. App. 26. But the court held that the

second sentence of Section 1555-D, which imputes knowledge of

a package’s tobacco contents to a carrier in certain circumstances

(such as when the shipper is on the Attorney General’s list of

unlicensed retailers) “has the effect of forcing [carriers] to

change [their] uniform package-processing procedures” and

“prescrib[es] how carriers must operate.” /d. at 28. The court of

appeals thus held that part of Section 1555-D preempted under

the FAAA Act. /bid.

DISCUSSION

The court of appeals correctly ruled that the FAAA Act pre-

empts Section 1555-C(3)(C) and the imputed knowledge portion

6

of Section 1555-D in Maine’s Tobacco Delivery Law. The court’s

holding leaves open other means by which the State can effectu-

ate its important policy—which the Federal Government shares

—of preventing tobacco sales to minors. Indeed, the court of

appeals left standing generally applicable provisions of Maine

law that, by their own force, prevent carriers from delivering

tobacco to minors. The court of appeals’ ruling does not conflict

with any decision of this Court or any other court of appeals.

Review by this Court is therefore not warranted.

A. 1. The FAAA Act expressly preempts, with certain excep-

tions, any state law that is “related to a price, route, or service”

of a motor carrier (including one affiliated with an air carrier)

engaged in the transportation of property. 49 U.S.C. 14501(¢e)(1),

41713(b)(4)(A). Congress modeled the FAAA Act’s preemption

provisions on the similarly worded provision in the ADA that

preempts state laws “relating to rates, routes, or services of any

air carrier.” ADA § 4(a), 92 Stat. 1708.° In Morales, this Court

explained that “the key phrase * * * ‘relating to’ * * * ex-

press[es] a broad pre-emptive purpose.” 504 U.S. at 383. The

Court noted that in construing the identical words “relating to”

in the Employee Retirement Income Security Act of 1974 (ERI-

SA), 29 U.S.C. 1144(a), it had held that “a state law ‘relates to’ an

employee benefit plan, and is pre-empted by ERISA, ‘if it has a

connection with or reference to such a plan.’” 504 U.S. at 384

(quoting Shaw v. Delta Air Lines, Inc., 463 U:S. 85, 97 (1983)).

The Court adopted the same standard for the ADA: “State en-

forcement actions having a connection with or reference to air-

line ‘rates, routes, or services’ are pre-empted.” /bid.

Morales rejected the argument that only state laws that actu-

ally prescribe rates, routes, or services are preempted. As the

Court explained, such an interpretation would effectively rewrite

* As amended, the ADA provides that “a State * * * may not enact or

enforce alaw * * * related toa price, route, or service of an air carrier.” 49

U.S.C. 417130b)01).

7

the statute by substituting the word “regulate” for the phrase

“relating to.” 504 U.S. at 385. The Court also found unconvinc-

ing the argument that “only state laws specifically addressed to

the airline industry are pre-empted.” /d. at 386. Such an inter-

pretation “ignores the sweep of the ‘relating to’ language” and

would “creat{e] an utterly irrational loophole.” /bid. The Court

noted in this regard that under ERISA, a state law “may ‘relate

to’ a benefit plan, and thereby be pre-empted, even if the law is

not specifically designed to affect such plans, or the effect is only

indirect.” /bid. (quoting /ngersoll-Rand Co. v. McClendon, 498

U.S. 133, 139 (1990)); see also ibid. (citing Metropolitan Life Ins.

Co. v. Massachusetts, 471 U.S. 724, 739 (1985) (state law mandat-

ing benefits in group policies sold by insurance companies “re-

lates to” an ERISA plan that purchases such policies)).

Applying the foregoing principles, the Court in Morales found

that guidelines issued by state attorneys general regarding air-

line fare advertising, which purported to enforce generally appli-

cable state consumer protection laws, 504 U.S. at 379, were pre-

empted because the guidelines contained an “express reference”

to airline fares and also because it was clear as an economic mat-

ter that the guidelines had a “forbidden significant effect” upon

fares, id. at 388. The Court stressed, however, that, in so hold-

ing, it was not “set{ting] out on a road that leads to pre-emption

of state laws against gambling and prostitution as applied to air-

lines.” /d. at 390. Nor, the Court continued, did it need to ad-

dress whether regulation of the nonprice aspects of fare advertis-

ing (for example, state laws preventing obscene depictions)

would similarly “relate to” rates, because “the connection would

obviously be far more tenuous.” /bid. Adapting to Morales a

limiting principle of ERISA preemption, the Court explained

that “[s]ome state actions may affect [airline fares] in too tenu-

ous, remote, or peripheral a manner’ to have pre-emptive effect.”

Ibid. (quoting Shaw, 463 U.S. at 100 n.21).

8

2. The FAAA Act was enacted two years after the decision in

Morales. The Conference Report on the FAAA Act expresses

the intent that the Court’s “broad preemption interpretation” in

Morales apply as well to the FAAA Act’s comparably worded

preemption provisions. H. Rep. 677, at 83. Subsequently, the

Court held in Wolens that the ADA did not preempt state law

_ breach-of-contract actions against an airline by participants in

the airline’s frequent flyer program. 513 U.S. at 228-233. The

Court concluded that, although the ADA preempts States’ impo-

sition of obligations on airlines, as in Morales, it does not bar

suits based on the airline’s “own, self-imposed undertakings.” /d.

at 228. Such suits, the Court reasoned, simply hold an airline to

its agreements—in Wolens itself, “to business judgments an

airline made public about its rates and services.” /d. at 229.

B. The question whether the provisions of Maine law at issue

here are preempted by the FAAA Act must be considered in

, light of Morales and Wolens, as well as the Court’s decisions

construing the “relating to” language in ERISA’s preemption

clause, on which the Court extensively relied in Morales. Apply-

ing those principles, the court of appeals correctly held that the

relevant provisions of Maine law are preempted.

1. The court of appeals concluded that Section 1555-C(3)(C),

but not Section 1555-D, was preempted under the “reference to”

' prong of Morales. Pet. App. 23, 28. Although Section 1555-

C(3)(C) does refer to use of a “delivery service,” that fact alone

does not require the provision to be set aside under the “refer-

ence to” test. Because the “reference to” test results in preemp-

tion without regard to the impact of the state law on the subject

of federal regulation, this Court has given it a relatively narrow

construction. The Court explained in California Division of

Labor Standards Enforcement v. Dillingham Construction,

N.A., 519 U.S. 316 (1997), with respect to ERISA’s preemption

provision, that a state law is invalid under the “reference to” test

if it “acts immediately and exclusively upon ERISA plans,” or

9

“where the existence of ERISA plans is essential to the law’s

operation.” /d. at 325. Dillingham gave as an example of a stat-

ute that acts “exclusively upon ERISA plans” the statute in

Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S.

825 (1988), which barred the garnishment of “(f]unds or benefits

of [an] * * * employee benefit plan or program subject to

* * * (ERISAI.” /d. at 828 (quoting Ga. Code Ann. § 18-4-22.1

(1982) (repealed 1990)).

Section 1555-C(3)(C) is not invalid under Dillingham’s “refer-

ence to” standard. By its terms, Maine’s statute applies to deliv-

ery services that are not covered by the FAAA Act. Maine de-

fines “delivery service” to include “a person, including the

United States Postal Service, who is engaged in the commercial

delivery of letters, packages or other containers” 22 Me. Stat.

§ 1551(1-C). That definition encompasses carrier or delivery

services (including USPS) that are not covered by the definition

of “motor carrier” in the FAAA Act. For purposes of the FAAA

Act, “motor carrier” is defined as “a person providing commer-

cial motor vehicle * * * transportation for compensation,” and

“commercial motor vehicle” is in turn defined as a “self-propelled

or towed vehicle used on the highways in interstate commerce”

that meets particular minimum requirements, such as having a

gross weight or rating of 10,001 pounds or being used to trans-

port more than eight passengers for compensation. Pub. L. No.

109-59, Tit. IV, $$ 4142(a), 4202(b), 119 Stat. 1747, 1751 (to be

codified at 49 U.S.C. 13102(14) (Supp. V 2005)); 49 U.S.C.

31132(1)(A) and (B). Maine's law, on the other hand, would apply

to small delivery vans and even commercial bicycle delivery ser-

vices.

2. Although Maine’s statutes are not preempted based on an

impermissible “reference to” motor carriers, the court of appeals

correctly concluded that Section 1555-C(3)(C) and the second

sentence of Section 1555-D have a “forbidden significant effect,”

Morales, 504 U.S. at 388, on carrier services.

10

a. Although the direct objects of regulation in Section 1555-

C(3\(C) are retailers, the FAAA Act is not limited to statutes that

“actually prescribie] rates, routes, or services.” Morales, 504

U.S. at 385. Rather, as the court of appeals recognized, it may

also preempt laws that “limit retailers to hiring only those carri-

ers that comply with the state-imposed mandates.” Pet. App. 24.

The requirements of Section 1555-C(8)(C)—in particular that the

carrier obtain the signature of the purchaser, who also must be

the addressee—would have a dramatic effect on the operations

of motor carriers. As the court of appeals observed, “[dJelays in

searching for the purchaser, making multiple delivery attempts

if the purchaser cannot be located, obtaining the purchaser’s

signature, and verifying the purchaser’s age,” as a consequence

of the requirements imposed by Section 1555-C(3)(C), “all could

affect timely deliveries.” Pet. App. 23.

Congress’s explicit purpose in enacting the FAAA Act’s pre-

emption provisions was to alleviate the burdens that state regula-

tion had imposed on interstate commerce and the free flow of

traffic. FAAA Act § 601(a), 108 Stat. 1605. The Act thus sought

to eliminate the inefficiencies in carrier operations attributable

to the then-existing patchwork of state regulation. See H. Rep.

677, at 87 (“The sheer diversity of these regulatory schemes is a

huge problem for national and regional carriers attempting to

conduct a standard way of doing business.”). The challenged

provisions in Section 1555-C(3)(C) effectively require carriers to

alter their uniform distribution and delivery operations in Maine

in order for them to transport tobacco products in the State. If

many States did the same, the resulting multiplicity of state laws

would create the very patchwork of regulation that Congress

sought to prevent when it deregulated the transportation indus-

try.

Contrary to petitioner's contentions, the fact that some carri-

ers offer services that resemble those specified by Maine in cer-

tain respects does not save the statute from preemption. Peti-

11

tioner notes (Pet. 23) that United Parcel Service (UPS), the car-

rier whose practices formed the basis of the record below, al-

ready “offers a type of delivery confirmation, adult-signature-

required service.” In petitioner’s view, Maine’s statute “merely

requires that a retailer use a service that is provided by carri-

ers,” and therefore does not relate to carriers. [bid. Where a

particular service is generally offered by carriers, a court might

well conclude that a state law that requires retailers to utilize

that commercially available service in a particular class of sales

—and that does so not as a “guise” to regulate motor carrier

services as such (see H. Rep. 677, at 84), but in order to further

health, safety, or similar purposes independent of the transporta-

tion industry—does not have a “forbidden significant effect” on

carrier services, and therefore is not preempted. Morales, 504

U.S. at 388. The fact that carriers had made an independent

commercial decision to offer a service would be strong evidence

that, as Congress intended, the carriers’ “{sJervice options [were]

dictated by the marketplace; and not by an artificial regulatory

structure." H. Rep. 677, at 88. While such a state law might have

some effect on the relative volumes of different carrier services,

it would require no modification in carrier services or package-

delivery procedures. And, while the increase in market demand

for such a service might “alter[] the incentives” of carriers that

had not competed for that segment of the market before, it would

“not dictate the choices” of those carriers. Dillingham, 519 U.S.

at 334.

Carriers may also be subject to generally applicable laws that

prohibit furnishing tobacco products to minors. Indeed, Maine

has such a provision, 22 Me. Stat. § 1555-B(2) (Supp. 2006), which

respondents did not challenge. Maine also has a generall¥ appli-

cable statute that provides a safe harbor to one who furnishes

tobacco to a person under 18 in reliance on a fraudulent identifi-

cation. /d. § 1555-B(10). The FAAA Act does not preclude a

State from regulating such primary conduct any more than it

12

precludes “state laws against gambling and prostitution as ap-

plied to airlines.” Morales, 504 U.S. at 390. It may be that Maine

could also apply to motor carriers a generally applicable require-

ment that any person to whom tobacco products are being fur-

nished as part of a commercial transaction must show

government-issued identification containing a photograph and

indicating that the person is of legal age to purchase tobacco

products.

Here, however, the service that Maine has prescribed by stat-

ute is one that, as far as the record reflects, no carrier offers in

the marketplace. Maine does not merely require that an adult

sign for the package (a service that petitioner contends is gener-

ally available (Pet. 23)). It very specifically mandates that “the

addressee * * * must sign for the package” and that the carrier

must check the photo identification “of the addressee.” 22 Me.

Stat. § 1555-C(3)(C)(2) and (3) (2004) (emphases added). As the

district court held (Pet. App. 64-65), and the court of appeals

affirmed (id. at 22-23), such a requirement is very different from

the service UPS offers, which permits a delivery person to leave

a package with “whoever answers the door or with a neighbor or

in the office mailroom.” Jd. at 64. See Br. in Opp. 3, 19-20.

b. The first sentence of Section 1555-D provides that a “per-

son” may not knowingly transport or cause to be delivered to a

person in the State a tobacco product purchased from a person

who is not licensed as a tobacco retailer in the State, unless the

delivery is to a licensed tobacco distributor or retailer. The court

of appeals held that that prohibition is not preempted by the

FAAA Act. It reasoned that tobacco products purchased by a

consumer from an unlicensed retailer are contraband, Pet. App.

25 (citing 22 Me. Stat. § 1555-C(7)), and that, like the laws pro-

hibiting prostitution and gambling referred to in Morales, laws

barring transportation or delivery of contraband (including, e.g.,

illegal drugs) regulate primary conduct and have only a “tenuous,

remote, or peripheral” relation to carrier services. Pet. App. 25-

13

26 (quoting Morales, 504 U.S. at 390). As the court of appeals

noted, the first sentence of Section 1555-D requires that carriers

and other persons in the State not act as knowing accomplices in

the illegal sale of tobacco products. “It does not, however, re-

quire that carriers modify their delivery methods other than by

declining to transport a product that Maine has legitimately

banned.” Jd. at 26. Respondents do not challenge that holding.

The second sentence of Section 1555-D goes further, however,

and the court of appeals correctly held it preempted. That provi-

sion imputes to a person knowledge that a package contains to-

bacco products “if the package is marked in accordance with the

requirements of (Section 1555-C(3)(B)]” or if the seller is “listed

as an unlicensed tobacco retailer” on the Attorney General’s list.

22 Me. Stat. § 1555-D. That list is provided only to “delivery

service{s]},” which are required to “maintain [its] confidentiality.”

Id. § 1555-D(1).

In order to avoid imputed knowledge, carriers are, in effect,

forced to change package-processing procedures that are other-

wise uniform across the nation. For “every package destined for

delivery in Maine,” the carrier “must specially inspect” the pack-

age to determine whether it “is marked as containing tobacco or

if the seller’s name appears on the Attorney General's list.” Pet.

App. 27 (emphasis added). If the package is so marked, or the

shipper is on the list, the carrier “must segregate the packages

* * * and research whether the addressee is a Maine-licensed

retailer or distributor who can receive the package.” Jd. at 27-28.

The State is, in other words, trying to “dictate * * * acarrier’s

delivery procedures.” /d. at 28.

C. Petitioner’s arguments that the court of appeals erred in

various respects are unpersuasive.

1. Petitioner contends (Pet. 17) that the FAAA Act “does not

preempt a state’s exercise of its traditional police powers in

noneconomic areas.” While preemption under the FAAA Act is

subject to the limitations identified in Morales and Wolens and

14

discussed above (see pp. 11-12, supra), petitioner’s argument for

a categorical police-powers exception is inconsistent with the

language employed in the FAAA Act and the legislative history’s

endorsement of the Court’s “broad preemption interpretation”

of similar language in Morales. See H. Rep. 677, at 83. Notably,

the state laws held to be preempted in Morales, 504 U.S. at 379-

380, as well as in Wolens, 513 U.S. at 226-228, were consumer

fraud laws enacted pursuant to traditional state police power.

See California v. Zook, 336 U.S. 725, 734 (1949) (protecting con-

sumers from fraud is a well-established police power).

The FAAA Act’s explicit delineation of exceptions to the pre-

emption provisions precludes the categorical police powers ex-

ception envisioned by petitioner. Congress clearly considered

traditional areas in which the States might exercise regulatory

authority over carriers and specified which of those areas were

not subject to preemption (motor vehicle safety, route controls

for specified purposes, insurance requirements, and the trans-

portation of household goods). 49 U.S.C. 14501(c)(2),

41713(b)(4)(B); see H. Rep. 677, at 84, 85. Petitioner does not

contend that the Tobacco Delivery Law fits within any of those

exceptions. Rather, relying on a statement in the legislative

history that the list of “[mJatters not covered” by the preemption

provisions was “not intended to be all inclusive,” petitioner con-

tends that the listed exceptions are merely illustrative of a gen-

eral rule that the statute does not preempt noneconomic regula-

tion. Pet. 22 (quoting H. Rep. 677, at 84). That argument is mis-

conceived.

The text of the preemption provisions states that “/e/xrcept as

provided in” specified provisions, a State “may not enact or en-

force a law, regulation, or other provision having the force and

effect of law related to a price, route, or service” of a carrier. 49

U.S.C. 14501(¢)(1), 41713(b)(4)(A). It would make no sense for

Congress to preempt state law “except as provided in” specified

provisions that narrowly define areas in which States were to

15

retain authority if Congress had meant to incorporate a categori-

cal exception for al] noneconomic State regulation. For example,

it is telling that, whereas Congress specified that States may

regulate the transportation of one particular commodity—

household goods—it did not include an exception for other items

or for tobacco in particular. When Congress creates exceptions

in a statute, courts have no authority to create others; rather,

“(t]he proper inference * * * is that Congress considered the

issue of exceptions and, in the end, limited the statute to the ones

set forth.” United States v. Johnson, 529 U.S. 53, 58 (2000).

The areas in which Congress specified that States may under-

take regulation for safety and related purposes are ones in which

other Acts of Congress explicitly or impliedly allow for state

regulation. See 49 U.S.C. 5112 (highway routing of hazardous

materials); 49 U.S.C. 31111(f) (motor vehicle length limitations);

49 U.S.C. 31114(b) (commercial motor vehicle access to interstate

and federal aid highways); 49 U.S.C. 31138 (2000 & Supp. IV

2004) and 49 U.S.C. 31139 (minimum motor carrier financial re-

sponsibility). Significantly, whereas Congress expressly permit-

ted States to enact safety regulations with respect to motor vehi-

cles, it at the same time provided the Secretary of Transporta-

tion with authority to override those state laws. 49 U.S.C. 31141.

Petitioner urges the Court to engraft a broader, non-textual ex-

ception for all state safety regulations, but with no corresponding

authority in the Secretary of Transportation to preempt such

laws.

A general exception for state regulation of motor carriers on

safety grounds would make major inroads on the FAAA Act’s

general rule of preemption. Tellingly, petitioner’s position

quickly progresses to its logical endpoint: “So long as the state

law is not intended to regulate the economics of the carriers,

such as setting rates or establishing tariffs, there is no preemp-

tion under the FAAAA.” Pet. 23. That contention simply re-

phrases the argument rejected by this Court in Morales that the

16

ADA preempts only state laws “actually prescribing rates,

routes, or services.” 504 U.S. at 385.

Thus, although the legislative history identifies “[s}tate eco-

nomic regulation of motor carrier operations” as the principal

focus of the FAAA Act’s preemption provisions, H. Rep. 677, at

87, the “related to” terminology in the statute’s text belies the

notion that that was Congress’s only concern.’

2. Petitioner erroneously suggests (Pet. 18-19) that the Court

should infer an exception to state laws addressed to combating

tobacco use by minors because such laws share a “common pur-

pose[]” with federal law. Pet. 19 (quoting PhRMA v. Walsh, 538

U.S. 644, 666 (2003)). Although the Federal Government shares

the State’s interest in combating youth tobacco use, Congress

has not authorized States to enact laws within the scope of the

FAAA Act’s preemption provision in furtherance of that goal.

The “Synar Amendment” in the ADAMHA Reorganization

Act, Pub. L. No. 102-321, § 202, 106 Stat. 394, to which petitioner

refers (Pet. 18), provides that the Secretary of Health and Hu-

man Services (HHS) “may” award a grant to any State that “has

‘in effect a law providing that it is unlawful for any manufacturer,

_ retailer, or distributor of tobacco products to sell or distribute

* Petitioner’s reliance (Pet. 20-21) on City of Columbus v. Ours Garage &

Wrecker Services, Inc., 536 U.S. 424 (2002), is misplaced for similar reasons.

That case concerned whether the State’s regulatory authority over local tow-

truck operations, preserved in 49 U.S.C. 14501(c)(2)(A), could be delegated to

municipalities. 536 U.S. at 428. In that quite different context, the Court

observed that “[tlhe problem to which the congressional conferees attended

was ‘|s]tate economic regulation’; the exemption in question is for state safety

regulation.” /d. at 440-441 (quoting H. Rep. 677, at 87). Nothing in that brief

comment or elsewhere in Ours Garage suggests a retreat from the broad

interpretation of the preemption provision in Morales; in fact, the meaning of

“related to” in the general rule of preemption in 49 U.S.C. 14501(c)(1) was not

even at issue in Ours Garage. Nor did the Court suggest that Congress had

provided a broad exemption for all state safety regulation, beyond the listed

exceptions.

17

any such product to any individual under the age of 18.”

42 U.S.C. 300x-26(a)(1). By its terms, the Synar Amendment

does not mandate state laws related to motor carrier services

regarding tobacco products.’ And the focus of HHS’s regulation

that implements the Synar Amendment is on restricting over-

the-counter and vending machine sales. See 45 C.F.R. 96.130.

The court of appeals therefore correctly concluded that the

FAAA Act and Synar Amendment “can exist harmoniously be-

cause the states may pass laws to curb underage smoking with-

out passing laws ‘related to’ carrier prices, routes, or services.”

Pet. App. 21 n.12.°

Indeed, the court of appeals’ decision leaves in place other

provisions of the Tobacco Delivery Law (and leaves open the

possibility of other laws) that do prohibit all persons (including

carriers) from knowingly providing tobacco products to minors.

As discussed above, see p. 5, supra, the court of appeals ex-

pressly upheld the first sentence of Section 1555-D, which bars

any person from knowingly delivering contraband tobacco. Pet.

App. 25. The court of appeals’ decision also leaves in place (and

respondents did not even challenge) the State’s general prohibi-

tion that “[a] person may not sell, furnish, give away or offer to

sell, furnish or give away a tobacco product to any person under

18 years of age.” 22 Me. Stat. § 1555-B(2) (Supp. 2006). On its

* The Synar Amendment’s reference to a “distributor of tobacco products,”

construed in context and in accordance with the ordinary meaning of those

words, refers to a wholesaler of such products, rather than a carrier that trans-

ports the products. That interpretation is also consistent with the use of the

terms “distributed” and “distributor” in Maine’s Tobacco Delivery Law. See,

e.g., 22 Me. Stat. § 1555-B(4) and (6) (Supp. 2006); id. § 1555-D (2004).

* Notably, even before enactment of the statutory provisions here at issue

in 2008, Maine’s law generally prohibiting tobacco sales to minors qualified the

State fur a Synar Amendment grant, and the State easily satisfied HHS's

target rate of no more than 20% sales-to-minors violations. See Slate Synar

Non-Compliance Rate Table, FF Y 1997 - FF'Y 2005 (visited May 24, 2007)

<http://prevention. samhsa.gov/tobaceo/synartable_print.htm>.

18

face, that provision would appear to apply to a carrier (just as to

any other “person”) who “furnish{es]” tobacco products to a mi-

nor. Other States have banned outright the direct shipment of

cigarettes to individual consumers. Cal. Amicus Br. 5; see, e.g.,

Md. Code Ann., Bus. Reg. § 16-222 (2004); id. § 16-223 (Supp.

2006); Ark. Code Ann. § 26-57-2038 (LexisNexis Supp. 2005); id.

§ 26-57-215 (Michie 1997). See Arkansas Tobacco Control Bd. v.

Santa Fe Natural Tobacco Co., 199 S.W.3d 656 (Ark. 2004) (up-

holding, against a dormant Commerce Clause challenge, a ban on

non face-to-face retail sales of cigarettes); Brown & Williamson

Tobacco Corp. v. Pataki, 320 F.3d 200 (2d Cir. 2003) (same).’

Such laws, which do not dictate how carriers must provide ser-

vice, do not have a “forbidden significant effect” so as to warrant

preemption. See also pp. 11-12, supra.

3. Petitioner’s reliance on Granholm v. Heald, 544 U.S. 460

(2005), Pet. 20, is misplaced. There, the Court struck down, as

unconstitutional under the Commerce Clause, state statutes that

prohibited or restricted out-of-state wineries from shipping wine

directly to in-state consumers. In concluding that the States had

failed to justify such discriminatory regulation, the Court noted

that there were other measures States could undertake to pre-

vent minors from obtaining wine by mail: “For example, the

Model Direct Shipping Bill developed by the National Confer-

ence of State Legislatures requires an adult signature on deliv-

-ery-and a label so instructing on each package.” 544 U.S. at 491.

* Maine’s liquor laws similarly prohibit the “knowing| |” delivery of liquor to

a minor; however, in contrast to the Tobacco Delivery Law, they do not

prescribe particular procedures with which carriers must comply or services

that they must offer in order for retailers to utilize their services. 28-A Me.

Rev. Stat. Ann. $§ 2073(3)(B), 2077(3), 2081(1)(A) (West 2007).

‘ In connection with litigation, the three major commercial carriers, UPS,

FedEx, and DHL, entered into settlement agreements with New York pur-

suant to which the carriers agreed not to ship cigarettes to individual cus-

tomers in the United States. See Pet. 12.

19

The Court’s passing statement in Granholm did not address

preemption under the FAAA Act. Moreover, that provision of

the Model Direct Wine Shipment Bill differs in significant re-

spects from the Tobacco Delivery Law provisions here at issue.

Unlike Section 1555-C(3)(C), it does not mandate that wine ship-

pers use only carriers that provide certain specified services that

would require carriers to alter their usual distribution and deliv-

ery procedures or offer an idiosyncratic service. Rather, the

Model Bill would impose on shippers an obligation to label con-

spicuously the package as containing alcohol and to select a deliv-

ery service that would require the signature of a person over 21

years of age.” To the extent such an adult-only-signature service

is commercially available, a state law requiring shippers to utilize

such a service would not, as we discuss above, see p. 11, supra, be

a law “related to” motor carriers.

D. The court of appeals’ decision does not, in any event, con-

flict with a decision of any other appellate court. Petitioner con-

tends that the court of appeals’ decision is inconsistent with the

Ninth Circuit’s decision in Californians for Safe & Competitive

Dump Truck Transp. v. Mendonca, 152 F.3d 1184, 1189 (1998),

cert. denied, 526 U.S. 1060 (1999) and the Second Circuit’s in Ace

Auto Body & Towing, Ltd. v. City of New York, 171 F.3d 765,

cert. denied, 528 U.S. 868 (1999). There is no conflict.

In Mendonca, the Ninth Cireuit held that California’s Prevail-

ing Wage Rate Law (CPWL)—a law of gencral applicability, not

specifically directed to employers in the transportation business

—has only an “indirect, remote, and tenuous” effect on motor

* Section 3(c) of the Model Direct Wine Shipment Bill (1997) states: “All

Wine Direct Shipper Licensees shall * * * [e}nsure that all containers of wine

shipped directly to a resident in this state are conspicuously labeled with the

words ‘CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR

OLDER REQUIRED FOR DELIVERY.” See Model Direct Wine Shipment

Bill (visited May 24, 2007) <www.wineinst itute.org/programs/shipwine/Model_

Direct_Shipping_Bill.pdf>.

ey

20

carrier prices, routes, and services, and, thus, is not preempted

by the FAAA Act. 152 F.3d at 1189. Although the Ninth Circuit

acknowledged that the CPWL would likely have some effect on

carrier prices and operations, such effect would be indirect and

would not “acutely interfer{e]” with the carriers’ discretion in

how they conduct their fundamental operations. Jbid. The To-

bacco Delivery Law, by contrast, specifies particular procedures

for carriers to follow. Notably, the First Circuit saw no inconsis-

tency between its decision and Mendonca, which the court cited

favorably six times, including as authority for upholding the first

sentence of Section 1555-D. See Pet. App. 25-26.

Ace Auto Body, on the other hand, is entirely inapposite. In

that case, the Second Circuit rejected New York City’s argument

that a city ordinance regulating the towing of disabled vehicles

was not within the general rule of preemption, 171 F.3d at 771,

and proceeded to the “principal question” whether the ordinance

was “saved from preemption by language in § 14501(c)(2)(A),

which preserves the ‘safety regulatory authority of a State with

respect to motor vehicles.’” /d. at 772. The court’s holding that

the phrase “safety * * * with respect to motor vehicles” encom-

passed the city’s scheme to tow abandoned and stolen cars and

to eliminate the practice of towers “chasing” accidents (id. at

774-775) has no relevance to the question presented here regard-

ing the preemptive scope of the FAAA Act’s general rule with

respect to the Tobacco Delivery Law.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

a

MAY 2007

21

PAUL D. CLEMENT

Solicitor General

PETER D. KEISLER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

DOUGLAS HALLWARD-DRIEMEIER

Assistant to the Solicitor

General

MARK B. STERN

CHRISTINE N. KOHL

Attorneys