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

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In the Supreme Court of i United States

3 40 No. 06-45%: 553)

G. STEVEN ROWE, ATTORNEY GENERAL OF

THE STATE OF MAINE, PETITIONER

v.

NEW HAMPSHIRE MOTOR TRANSPORT

ASSOCIATION, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING RESPONDENTS

PAUL D. CLEMENT

Solicitor General

Counsel of Record

PETER D. KEISLER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

D.J. GIBBIN

General Counsel

PAUL M. GEIER

Assistant General Counsel

for Litigation DOUGLAS HALLWARD-DRIEMEIER

DALE C. ANDREWS Assistant to the Solicitor

Deputy Assistant General Generel

Counsel for Litigation MARK B. STERN

CHRISTINE N. KOHL

PAUL SAMUEL SMITH Attorneys

Senior Trial Attorney

Department of Transportation Department of Justice

Washington, DC 20590 Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

The Federal Aviation Administration Authorization Act of

1994 (FAAA Act) provides, with certain exceptions inapplica-

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

* * * 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 statutorily prescribed 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.

(I)

TABLE OF CONTENTS

Page

Interest of the United States ..............0 0 ccc cee ee eee 1

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EG, occ ccccsccccccccsecsccccesecevens 5

Argument:

I. The FAAA Act preempts state regulations that

would frustrate the ability of motor carriers to

provide uniform national services ............... 6

II. | Maine’s Tobacco Delivery Law operates in a direct

way on the handling and delivery of parcels,

core aspects of carriers’ services ............... 13

Be, BE BEE ccc ccccccccccscscccces 13

i IEE bdccwscbcccdcccscesecncecess 19

III. The public health purposes underlying Maine’s

Tobacco Delivery Law do not save it from preemp-

tion under the FAAA Act ..............-.-04-- 23

SIE bo svcd nvccdecoudstocenesenecsesecseceneaes 30

TABLE OF AUTHORITIES

Cases:

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

DR ccededineksndiehtneterivededushuses 4,8,9,17

Arkansas Tobacco Control Bd. v. Santa Fe Natural

Tobacco Co., 199 S.W.3d 656 (Ark. 2004) ............ 29

Brown & Williamson Tobacco Corp. v. Pataki,

320 F.3d 200 (2d Cir. 2008) ......... ccc ccce eee eeees 29

California Div. of Labor Standards Enforcement v.

Gillingham Constr., N.A..,519 U.S. 316

ha nindackadsnsedsesdueiencenae 11, 12, 15, 18

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

Inc., 586 U.S. 424 (2002) .. 0... cece c cece ccc ccccces 28

(111)

IV

Cases—Continued: Page

De Buono v. NYSA-ILA Med. & Clinical Servs.

Fund, 520 U.S. 806 (1997) ..................... 12, 14

District of Columbia v. Greater Wash. Bd. of Trade,

506 U.S. 125 (1992) .......: vetaeneieenaeednend 12

Egelhoff v. Egelhoff, 532 U.S. 141

DE Piciedseks tenes eokdheasanees 10, 11, 12, 13, 15, 19

Engine Mfrs. Ass’n v. South Coast Air Quality

Mgmt. Dist., 541 U.S. 246 (2004) ...............60.. 17

FMC Corp. v. Holliday, 498 U.S. 52 (1990) ............ 12

Federal Express Corp. v. California Pub. Utils.

Comm ’n, 936 F.2d 1075 (9th Cir. 1991), cert.

denied, 504 U.S. 979 (1992) ..................... 7, 25

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) ... 12

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

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

Dt Mattteadddnckenséebactaceneanauetedes ences 8,9

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) .... 28

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

486 U.S. 825 (1988) ...... p4b0eednndeeesectadsvace 11

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

i ict ee ee anaknhh bedetadesepsansendéas 8

Michael H. v. Gerald D., 491 U.S. 110 (1989) ........... 22

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

New York State Conf. of biwe Cross & Blue Shield

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

i useitas dinbbncesnedendhouenes 9, 10, 11, 12, 13, 14

Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) .... 10

Cases—Continued: Page

Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983) ........ 7

United States v. Johnson, 529 U.S. 53 (2000) ........... 26

Constitution, statutes and regulations:

U.S. Const. Art. I, § 8, Cl. 3 ( Commerce Clause) ....... 29

Act of Aug. 10, 2005, Pub. L. No. 109-59, Tit.

Pee ED, EEE co uevsconvadadssseenisedeoesens 15

§ 4142(a), 119 Stat. 1747 (to be codified at 49

U.S.C. 13102(12) (Supp. V 2005)) ........... 15

§ 4202(b), 119 Stat. 1751 (to be codified at 49

U.S.C. 13102 (14) (Supp. V 2005)) ........... 15

§ 7202, 119 Stat. 1911:

119 Stat. 1912 (to be codified at 21 U.S.C.

350e(b) (Supp. V 2005)) ...........-006. 30

119 Stat. 1912 (to be codified at 21 U.S.C.

350e(e) (Supp. V 2005)) ................ 30

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

§ 202, 106 Stat. 394 (42 U.S.C. 300x-26(a)(1) ......... 28

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

EE Sn ccvdusededsavssceseasnacnsakuken denen 1

) kd rere rr re 1

OO GN BO sc own deccusecseeueseneens 1, 24

Employee Retirement Income Security Act of 1974,

Ps SD «66 bendeeeesdsadueksangewsesenees 7

Federal Aviation Administration Authorization Act of

1994:

49 U.S.C. 14501(e)(1) ........ wenaieeel 1, 7, 10, 27

GUE. BED. 0.4 cvccccccctsveseccesunes 26

49 U.S.C. 14501(c)(2M(A) «2.2... eee ee eee 2, 27, 28

VI

Statutes and regulations—Continued: Page

SEED ccoccccccccccsescocence 2

49 U.S.C. 14501(c)2(C) wee eee ee eee 2,27

EE enn eco cenbecengeenenete 10

49 U.S.C. 41713(D) 4A) «2... 1, 7, 10, 27

49 U.S.C. 41713(DM4M(B) 2... ccc ccc eens 26

Se ED oc cccccccccccccccecss 2

49 U.S.C. 4171S(DM4N BMG) 2... cc cece eee. 2

27 U.S.C. 124(aX3) (Supp. V 2005) ....... 2... eee ee eee 18

EE ee 9

ee oaks duadedegeenencesecénte 30

ee pica dd aengenceennteneete 2

eit oe dd cue u sence ecsaneeses 2

oi nad ea cueeagenesoenaes 30

ee PGE ccccccccccccccececcccens 24

se ieee neesaeesenneteces 15

a 2

ee ii an nee cidanneeeeaseéee 2

a 15

eo ons ce necenedeeseeseceee 15

etd een cad enageenseesseseeeste 2

ie ieee nennedeeneenuseseess 30

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 .......... 2

Ark. Code Ann:

§ 26-57-203 (LexisNexis Supp. 2005) ............ 29

§ 26-57-215 (Michie 1997) ..................0e 29

Ga. Code Ann. § 18-4-22.1 (1982) ................0000- ll

Vil

Statutes and regulations—Continued: Page

Md. Code Ann. Bus. Reg:

td: 660s sececnepenesecsebencens 29

DIED co cccouccesccecconceseecas 29

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

Tit. 7 (2002):

DT SuGbEaGesadnceseesceocoeseset<ssnes 30

Tit. 22 (2004):

DEED. nddcedesccesesoccsseeoeesesene 15

DRED Kecccccccccccscccescosesecusee 29

DEL ccccnccccveccccsescseens 2

§ 1555-B(1) (Supp. 1997) ...... eeaneenewedinnn 2

§ 1555-B(2) (Supp. 2006) .............. 2, 29, 30

DEED scnduncencceccceesctasccnsneese 2

DE iestickbdetkeneceetcessveseshensnne 3

DD bineccuncssantccensasecuqueanas 3

De iccegsesesenbavcnensssontunndss 3

TD inccnccagnccevesentcnntacesien 3

DEE sceccncecencescsncsssauiuent 3

§ 1565-C(SMB) .............06.- 3, 4, 20, 21, 23

DEED Génccncconescoccseusss passim

DRED accceneceadeccacsesesenns 3, 16

BREED éccccncéoceucscencceseses 3, 16

i, eer 3

DED ccndesacecanedsaetceosens 3, 20, 29

DEED éccccncocccecesvesetacasecesnes 3

DD ké¢ dbnegeancnebeuanscousents passim

DED ccencéaudansedeceseuscaueens 4, 20

DRIED ccc ccccccccccccccccscsccoss 22

Vill

Statutes and regulations—Continued: Page

DTT cscucudsacdetesceédvcddones 22

DD chepdnds beudesetessnecéueennes 30

Tit. 28-A (2007):

i cceckcadueonuessonesssaeeuns 23

ED i ps heanendcendeeouaveneséucenenses 28

10-144 Code Me. R. Ch. 203, § 11 (2005) ............... 28

Miscellaneous:

Center for Food Safety and Applied Nutrition,

U.S.FDA, Procedures Governing the Cooperative

State-Public Health Service/Food and Drug

Administration Program of the National

Conference on Interstate Milk Shipments (rev.

2005) <http://www.cfsan.fda.gov/~ear/imsproc.

ER pcetie Kiet caueuseeenenenseceueve 30

BF ee HEED cccvecccccccecesccccvesccess 28

H.R. Conf. Rep. No. 1779, 95th Cong., 2d Sess. (1978) ... 24

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

SE cdc cevecceccesenceseesseoscecessesces passim

H.R. Rep. No. 1211, 95th Cong., 2d Sess. (1978) ......... 1

Http://www.dhl-usa.com/USSves/ValueAdd

Srve. asp?nav + USServices/DDeliveryServices/

Http://www.fedex.com/us/services/options/signatureo

SEED occccccccevcccccoscceseccceseeceseues 19

IX

Miscellaneous—Continued: Page

Legislation to Preempt State Motor Carrier

Regulations Pertaining to Rates, Routes, and

Services: Hearing Before the Subcomm. on

Surface Transportation of the House Comm. on

Public Works and Transportation, 103d Cong., 2d

tcc endactd&eckeedeeeenseetieseeoesse

Model Direct Wine Shipment Bill (visited Oct. 10,

2007) <http://www.wineinstitute.org/programs/

shipwine/Model_Direct_Shipping Bill.pdf> ........

S. Rep. No. 631, 95th Cong., 2d Sess. (1978) ...........

INTEREST OF THE UNITED STATES

This case concerns whether the preemption provisions of

the Federal Aviation Administration Authorization Act of

1994 preempt a Maine law regulating the delivery of tobacco

products. The United States shares Maine’s goal of reducing

youth tobacco use, but also has an interest in the fulfillment

of the FAAA Act’s purpose to eliminate the burdens of state

regulation of motor carrier services.

STATEMENT

1. In the Airline Deregulation Act of 1978 (ADA), Pub. L.

No. 95-504, 92 Stat. 1705, Congress deregulated the airline

industry, adopting instead a policy of “maximum reliance on

competitive market forces.” ADA § 3(a), 92 Stat. 1706. “To

ensure that the States would not undo federal deregulation

with regulation of their own,” Morales v. TWA, 504 U.S. 374,

378 (1992), as well as to “prevent conflicts and inconsistent

regulation{],” H.R. Rep. No. 1211, 95th Cong., 2d Sess. 15

(1978), the ADA also preempted any state laws “relating to

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

Stat. 1708 (49 U.S.C. 41713(b)(1)). In Morales, this Court

recognized that the ADA’s preemption language was “con-

spicuous for its breadth.” 504 U.S. at 384.

In 1994, Congress extended to motor carriers “the identical

intrastate preemption of prices, routes and services as that

originally contained in” the ADA for airlines. H.R. Conf. Rep.

No. 677, 103d Cong., 2d Sess. 82, 83 (1994) (H. Rep. 677). The

FAAA Act contains two preemption provisions modeled on

the ADA—one for air carriers and affiliated motor carriers,

and the other for unaffiliated motor carriers. Each provides

that “a State * * * may not enact or enforce a law * * * related

to a price, route, or service” of a carrier respecting property

transportation. 49 U.S.C. 14501(c)(1), 41713(b)(4)(A).

The “{g]eneral rule” of preemption applies “(e]xcept as

provided” in specified provisions. 49 U.S.C. 14501(c)(1),

41713(b)(4)(A). Among the “(mJatters not covered” by the

(1)

2

preemption provision are a State’s “safety regulatory author-

ity * * * with respect to motor vehicles”; 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 certain motor carrier insurance requirements. 49

U.S.C. 14501(¢)(2)(A), 41713(b)(4)(B)(i). The transportation

of household goods and certain tow-truck regulations are also

excluded. 49 U.S.C. 14501(c)(2)(B) and (C), 41713(b)(4)(B)(ii).

Although States are permitted to regulate in those areas,

other provisions of federal law limit such state regulation.

For example, whereas Sections 14501(c)(2)(A) and

41713(b)(4)(B)(i) permit States to adopt motor vehicle safety

regulations, another section provides that “[a] State may not

enforce a State law or regulation on commercial motor vehicle

safety that the Secretary of Transportation decides under this

Section may not be enforced.” 49 U.S.C. 31141(a).’

2. The State of Maine has, for some time, made it unlawful

for “[a] person” to “sell, furnish or give away a tobacco prod-

uct to any person under 18 years of age.” 22 Me. Rev. Stat.

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

(Supp. 1996). A person who violates that provision is subject

to civil fines. 22 Me. Stat. § 1555-B(8). Prior to 2003, the

State permitted the retail sale of tobacco products “only in a

direct, face-to-face exchange in which the purchaser may be

clearly identified and through the mail under procedures ap-

proved by the [State] to provide reliable verification that the

purchaser is not a minor.” /d. § 1555-B(1) (Supp. 1997). In

2003, Maine enacted 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 (Tobacco Delivery

' See also 49 U.S.C. 5112(aX2) and (b)(1) (States authorized to designate

hazardous material routes pursuant to “regulation standards” prescribed by

the Secretary); 49 U.S.C. 31111(b) (prohibiting States from setting motor

vehicle length limitations below federal floor); 49 U.S.C. 31113(a)(1) (prohibit-

ing States from “impos|ing) a vehicle width limitation of more or less than 102

inches on a commercial motor vehicle”).

3

Law). That law permits a licensed tobacco retailer to make

“delivery sales” of tobacco products directly to consumers

pursuant to orders by telephone or the internet, provided that

the retailer takes certain measures to ensure that such sales

are not to minors. See 22 Me. Stat. § 1555-C(1), (2) and (3).

Section 1555-C sets out the “requirements [that] apply to

delivery sales of tobacco products within the State.” The re-

tailer must provide the delivery service with the age of the

purchaser, and clearly mark the outside of the package with

the retailer’s name and license number and indicate that it

contains tobacco. 22 Me. Stat. § 1555-C(3)(A) and (B). The

statute further requires that the tobacco retailer “utilize a

delivery service that imposes 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). The statute also requires the retailer to

provide “delivery instructions” informing the delivery service

of the subsection’s requirements and that “state law requires

compliance with the requirements.” Jd.'§ 1555-C(3)(D). The

statute provides for fines, injunctions, and forfeiture in the

case of violations. Jd. § 1555-C(3)(E), (F), (7) and (8).

Section 1555-D addresses the “[iJllegal delivery of tobacco

products.” Its first sentence provides that “[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 deliv-

ery is to a licensed tobacco distributor or retailer. 22 Me.

Stat. § 1555-D. The second sentence provides that “{a] person

is deemed to know that a package contains a tobacco product

4

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.” Jbid. (emphasis added). The statute

requires the Attorney General to provide confidential “lists of

licensed tobacco retailers and known unlicensed tobacco re-

tailers” to delivery services. Jd. § 1555-D(1).

3. Respondents, non-profit trade associations of motor

carriers, brought suit against petitioner, seeking to enjoin

enforcement of several provisions of the State’s Tobacco De-

livery Law. The district court held both Section 1555-C(3)(C)

and the second sentence of Section 1555-D preempted under

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

4. The First Circuit affirmed. It rejected petitioner’s con-

tention that the FAAA Act preempts only state laws that im-

pose traditional economic regulation on carriers, such as en-

try controls and tariff filing requirements, not laws that pro-

tect public health and welfare pursuant to a state’s traditional

police power. The court concluded that—given the broad

statutory text, the Act’s structure, the overall legislative his-

tory, and the focus of this Court’s decisions in Morales and

American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), on the

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

not so limited. Pet. App. 14-21.

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

under the FAAA Act for two reasons. First, it “expressly

references a carrier’s service of providing the timely delivery

of packages.” Pet. App. 23. Second, “(t]he statute prescribes

the method by which a carrier operating in Maine must de-

liver packages containing tobacco products in a way that

would affect the ability of the carrier to meet package-deliv-

ery deadlines.” /bid. In response to petitioner’s contention

that Section 1555-C(3)(C) regulates tobacco retailers rather

than carriers, the court explained that that argument “would

lead to the untenable result of permitting states to regulate

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

5

The court of appeals held that the FAAA Act does not pre-

empt the first sentence of Section 1555-D, which prohibits any

person from knowingly delivering tobacco products from a

retailer not licensed by the State because that part of Section

1555-D does not require carriers to “modify their delivery

methods other than by declining to transport a product that

Maine has legitimately banned” Pet. App. 26. However, the

second sentence of Section 1555-D, which imputes knowledge

of a package’s tobacco contents to a carrier in certain circum-

stances, “has the effect of forcing [carriers] to change [their]

uniform package-processing procedures” and “prescrib[es]

how carriers must operate.” /d. at 28. Thus, the court held

that part of Section 1555-D to be preempted. /bid.

SUMMARY OF ARGUMENT

The FAAA Act implements Congress’s policy to deregulate

the transportation industry, and its determination that the

States should not fill the void. By using the same broad lan-

guage in the FAAA Act as the ADA, Congress endorsed this

Court’s recognition in Morales of the ADA’s sweeping pre-

emptive effect. Petitioner relies on subsequent decisions in-

terpreting similar language in the preemption provision of the

Employee Retirement Income Security Act (ERISA), but

those decisions do not undermine Morales. There are signifi-

cant differences between ERISA, in which a pervasive federal

regulatory scheme preempts the field, and the FAAA Act,

which reflects Congress’s policy to deregulate motor carriers.

In any event, recent ERISA decisions continue to recognize

that state regulations that have a direct, significant effect on

central aspects of ERISA plans are preempted, while laws of

general applicability with only a tenuous connection are not.

Maine’s Tobacco Delivery Law has a significant, direct

effect on a central feature of motor carriers’ services—their

ability efficiently to deliver millions of packages each day

using uniform national procedures. Maine dictates particular

methods, unique to Maine, for delivering packages containing

6

tobacco products. Most significantly, Maine requires a deliv-

ery service to obtain the signature of the package’s addressee,

rather than another adult at the delivery address. The differ-

ence is critical; waiting for an addressee to come to the mail

room (or to learn that he will not come) can delay hundreds of

other packages. Moreover, by imputing to carriers knowledge

of a package’s tobacco contents whenever the shipper’s name

appears on a confidential list or the package is marked, Maine

forces carriers to alter their otherwise uniform modes of oper-

ation to ensure that they do identify such packages. Although

it may be efficient from Maine’s perspective for it to impose

the burden of detecting unlicensed tobacco sales on carriers,

the FAAA Act does not permit it. If Maine can adopt its own

method for tobacco deliveries, so too can other States, and for

other products also. Such a patchwork of state regulation,

preventing carriers from utilizing uniform, market-driven

procedures, is precisely what the FAAA Act prohibits.

The FAAA Act does not preempt only economic regulation,

nor does it contain a broad exception for state regulations

motivated by public health and safety policies. Congress re-

jected a bill that would have had that limitation. Moreover,

Congress enacted specific exceptions to the preemptive reach

of the FAAA Act, but there is no general exception for health

and safety rules. To engraft such a broad exception would

dramatically undermine Congress’s purposes. Whereas the

federal goverament retains authority to protect uniformity

with respect to the specified exceptions, there is no similar

authority over state health and safety regulations generally.

ARGUMENT

I. THE FAAA ACT PREEMPTS STATE REGULATIONS THAT

WOULD FRUSTRATE THE ABILITY OF MOTOR CARRI-

ERS TO PROVIDE UNIFORM NATIONAL SERVICES

1. The FAAA Act marks an extension of Congress’s policy

of deregulation begun in the ADA with respect to the airline

industry. Although there was a “movement toward deregula-

7

tion [of motor carriers] by some individual states,” there re-

mained a “patchwork of regulation” that “cause[d] significant

inefficiencies, increased costs, reduction of competition, inhi-

bition of innovation and technology and curtail{ed] the expan-

sion of markets.” H. Rep. 677, at 87. The “sheer diversity” of

state regulation was “a huge problem for national and re-

gional carriers attempting to conduct a standard way of doing

business.” /bid. Congress intended instead that “[s]Jervice

options * * * be dictated by the marketplace[,] and not by an

artificial regulatory structure.” /d. at 88.

Those problems were highlighted by a Ninth Circuit ruling

that Federal Express was entitled to the benefit of the ADA’s

preemption provision because it qualified as an air carrier for

purposes of that statute. Federal Express Corp. v. California

Pub. Utils. Comm’n, 936 F.2d 1075, 1077-1079 (1991), cert.

denied, 504 U.S. 979 (1992). Federal Express’s competitors,

such as United Parcel Service, that did not qualify as air car-

riers remained subject to state regulation, “putting [them] at

a competitive disadvantage.” H. Rep. 677, at 87. The FAAA

Act “levelfed] the playing field” by “extend[ing] to all affected

carriers * * * the identical intrastate preemption of prices,

routes and services as that originally contained” in the ADA.

Id. at 82-83; see 49 U.S.C. 14501(c)(1), 41713(b)(4)(A).

Congress’s use of the ADA’s language reflects its agree-

ment with “the broad preemption interpretation adopted by

the United States Supreme Court in Morales.” H. Rep. 677,

at 83. In Morales, the Court explained that “the key phrase

* * * ‘relating to’ * * * express|es] a broad pre-emptive pur-

pose.” 504 U.S. at 383. The Court noted that, in construing

the words “relate to” in ERISA, 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 refer-

ence to such a plan.’” Morales, 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 enforcement

8

actions having a connection with or reference to airline ‘rates,

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

2. Morales rejected the argument that only state laws that

actually prescribe rates, routes, or services are preempted.

As the Court explained, such an interpretation would effec-

tively rewrite the statute by substituting the word “regulate”

for the phrase “relating to.” 504 U.S. at 385. The Court also

found unconvincing the argument that “only state laws specif-

ically addressed to the airline industry are pre-empted.” /d.

at 386. Such an interpretation would “creat{e] an utterly irra-

tional loophole.” /bid. The Court noted 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

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990));

see also ibid. (citing Metropolitan Life Ins. Co. v. Massachu-

setts, 471 U.S. 724, 739 (1985) (state law mandating benefits

in group insurance policies “relates to” an ERISA plan that

purchases such policies)). Applying those principles, the

Court held in Morales that guidelines issued by state attor-

neys general regarding airline fare advertising, which pur-

ported to enforce generally applicable consumer protection

laws, 504 U.S. at 379, were preempted because the guidelines

contained an “express reference” to airline fares, and because

it was “clear as an economic matter” that the guidelines had

“the forbidden significant effect” on airline fares, id. at 388.

Three years later, in American Airlines, Inc. v. Wolens,

513 U.S. 219 (1995), the Court held, applying Morales, that

the ADA precludes States from applying consumer fraud stat-

utes to airline frequent flyer programs. The Court held that

the States’ use of those statutes “to guide and police the mar-

keting practices of the airlines,” conflicted with “the ADA’s

purpose to leave largely to the airlines themselves, and not at

all to States, the selection and design of marketing mecha-

nisms appropriate to the furnishing of air transportation ser-

vices.” Jd. at 228. The Court distinguished such claims from

9

breach-of-contract actions for violating an airline’s own fre-

quent flyer program. /d. at 228-233. The latter merely holds

an airline to its “self-imposed undertakings,” “privately or-

dered obligations” that reflect the airline’s own “business

judgments * * * about its rates and services.” /d. at 228-229.

3. Petitioner urges the Court not to “rely on the expansive

character of [the ADA’s] literal language,” which the Court

applied in Morales and Wolens, and the Conference Report

endorsed. Pet. Br. 29. Petitioner urges the Court instead to

apply the assertedly narrower standard of preemption that

the Court has developed in subsequent ERISA decisions,

which eschew the broad literal meaning of “related to” in fa-

vor of looking to “the objectives of the ERISA statute as a

guide to the scope of the state law that Congress understood

would survive.” Jd. at 23 (quoting New York State Conf. of

Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514

U.S. 645, 656 (1995) (Travelers)). But the later ERISA cases

should not be read as having narrowed the broad reading that

the Court gave to the ADA in Morales and Wolens. The

Court’s reliance on ERISA precedents in Morales is not a

sufficient basis for interpreting the two statutes in lock step

in light of differences in statutory text and regulatory context.

a. Because there are significant distinctions between

ERISA and the ADA and FAAA Act, it is not clear that the

Court’s more recent ERISA decisions are easily transferred

to the FAAA Act. Apart from the “related to” language,

ERISA’s preemption provision, 29 U.S.C. 1144(a), is phrased

differently from the ADA or FAAA Act. Section 1144(a) pro-

vides that ERISA “shall supersede any and all State laws

insofar as they * * * relate to any employee benefit plan de-

scribed in” ERISA. Jbid. The statute’s reference to federal

law “supersed[ing]” state law reflects Congress's intent “to

ensure that plans and plan sponsors would be subject to a

uniform body of benefits law,” ie., federal ERISA law.

Ingersoll-Rand, 498 U.S. at 142. Thus, Section 1144(a) repre-

sents a kind of express field preemption, in which ERISA’s

10

“scheme of federal regulation [is] so pervasive as to make

reasonable the inference that Congress left no room for the

States to supplement it.” Rice v. Santa Fe Elevator Corp.,

331 U.S. 218, 230 (1947). Indeed, four Members of this Court

have stated that ERISA pre-emption should be analyzed un-

der principles of “field pre-emption.” Egelhoffv. Egethoff, 532

U.S. 141, 153 (2001) (Scalia, J., joined by Ginsburg, J., concur-

ring); ibid. (Breyer, J., joined by Stevens, J., dissenting).

The ADA and FAAA Act’s preemption provisions differ

from ERISA’s in both their text and purpose. The ADA and

FAAA Act were adopted as part of the deregulation of trans-

portation industries, in order “[t]o ensure that the States

would not undo federal deregulation with regulation of their

own.” Morales, 504 U.S. at 378. Thus, the ADA and FAAA

Act do not state, as ERISA does, that some comprehensive

federal regulatory scheme “supersede[s]” state regulations

related to the object of that federal regulation. Rather, the

ADA and FAAA Act provide in clear and direct terms that “a

State * * * may not enact or enforce a law * * * related to a

price, route, or service” of a carrier. 49 U.S.C. 14501(¢)(1),

41713(b)(1), 41713(b)(4)(A). Because ERISA’s preemption of

state law corresponds to a field-occupying federal scheme, it

is appropriate to “look * * * to the objectives of the ERISA

statute as a guide to the scope of the state law that Congress

understood would survive.” Travelers, 514 U.S. at 656. Be-

cause the FAAA Act reflects Congress’s policy to deregulate

motor carriers so that “(sJervice options will be dictated by

the marketplace[,] and not by an artificial regulatory struc-

ture,” H. Rep. 677, at 88, the Court should continue to give

effect to the “broad pre-emptive purpose” that the Court rec-

ognized in Morales, 504 U.S. at 383.

b. To the extent the Court looks to ERISA cases in inter-

preting the ADA and FAAA Act’s preemption provisions, the

more recent ERISA cases do not erect as high a hurdle for

establishing preemption as petitioner maintains. Rather, the

Court continues to find state laws preempted if they affect, in

il

a way that is not tenuous, remote, or peripheral, ERISA

plans’ ability to operate nationally in a uniform manner.

State regulations may “relate to” ERISA, and thus be pre-

empted, in numerous ways. A state law that “acts immedi-

ately and exclusively upon ERISA plans * * * or where the

existence of ERISA plans is essential to the law’s operation|,|

* * * that ‘reference’ will result in pre-emption.” California

Div. of Labor Standards Enforcement v. Pillingham Constr.,

N.A., 519 U.S. 316, 325 (1997). Such a law is preempted with-

out regard to its impact. For example, in Mackey v. Lanier

Collection Agency & Service, Inc., 486 U.S. 825 (1988), the

Court held preempted a state law that barred garnishment of

“(fJunds or benefits of [an] * * * employee benefit plan or pro-

gram subject to” ERISA, even though the law gave greater

protection to ERISA benefits. /d. at 828 (quoting Ga. Code

Ann. § 18-4-22.1 (1982)). Alternatively, “[a] law that does not

refer to ERISA plans may yet be pre-empted if it has a ‘con-

nection with’ ERISA plans.” Dillingham, 519 U.S. at 325. To

determine whether such a “forbidden connection” exists, the

Court considers both “the objectives of the ERISA statute”

and “the nature of the effect of the state law on ERISA

plans.” Jbid. (citing Travelers, 514 U.S. at 656, 658-659).

In assessing the “nature of the effect of the state law,” the

Court has found preemption where a state statute interferes

with “a central matter of plan administration,” such as the

payment of benefits. Egelhoff, 532 U.S. at 148. In Egelhoff,

the Court held preempted as applied to ERISA benefits a

Washington statute that “provides that the designation of a

spouse as the beneficiary of a nonprobate asset is revoked

automatically upon divorce.” /d. at 143. The Court explained

that the statute “interferes with nationally uniform plan ad-

ministration,” which was “{o]ne of the principal goals of

ERISA.” /d. at 148. While the Court noted that “all state

laws create some potential for a lack of uniformity,” those,

like Washington’s, that “affect{] an ERISA plan’s ‘system for

processing claims and paying benefits’ impose ‘precisely the

12

burden that ERISA pre-emption was intended to avoid.’” /d.

at 150 (quoting Fort Halifax Packing Co. v. Coyne, 482 U.S.

1, 10 (1987)). See also FMC Corp. v. Holliday, 498 U.S. 52, 60

(1990) (holding Pennsylvania’s antisubrogation statute pre-

empted because “[t]o require plan providers to design their

programs in an environment of differing state regulations

would complicate the administration of nationwide plans”).

On the other hand, where the challenge is to “generally

applicable laws regulating ‘areas where ERISA has nothing

to say,’” the Court has upheld the laws “notwithstanding their

incidental effect on ERISA plans.” Egelhoff, 532 U.S. at 147-

148 (quoting Dillingham, 519 U.S. at 330). The cases princi-

pally relied upon by petitioner fall into that category. Travel-

ers, for example, upheld a surcharge to hospital patients cov-

ered by commercial insurance, but not those covered by Blue

Cross, even though the differential could “have an indirect

economic effect on choices made by insurance buyers, includ-

ing ERISA plans.” 514 U.S. at 659. The Court noted that

ERISA does not preempt “laws of general applicability” that

have “only a tenuous, remote, or peripheral connection with

covered plans.” /d. at 661 (quoting District of Columbia v.

Greater Wash. Bd. of Trade, 506 U.S. 125, 130 n.1 (1992)). See

Dillingham, 519 U.S. at 330, 332 (upholding California’s pre-

vailing wage law because it was “quite remote from the areas

with which ERISA is expressly concerned,” and its effect on

ERISA plans was only indirect, “provid{ing] some measure of

economic incentive to comport with the State’s requirements”

if they wanted to provide apprentices to public works pro-

jects); De Buono v. NYSA-ILA Med. & Clinical Servs. Fund,

520 U.S. 806, 816 (1997) (New York tax on hospitals not pre-

empted as applied to a hospital run by an ERISA plan be-

cause its effect would have been the same, albeit indirect, if

the plan had bought services from independent hospitals, and

the Court refused to read ERISA as preempting “[aJny state

tax, or other law, that increases the costs of providing bene-

fits to covered employees”).

13

II. MAINE’S TOBACCO DELIVERY LAW OPERATES IN A

DIRECT WAY ON THE HANDLING AND DELIVERY OF

PARCELS, CORE ASPECTS OF CARRIERS’ SERVICES

The court of appeals correctly held that the challenged

provisions of Maine’s Tobacco Delivery Law are preempted

under the foregoing principles. That law has a “significant

effect,” Morales, 504 U.S. at 388, on the manner in which par-

cels containing tobacco are delivered, a matter “central” to

the services a carrier provides. Egelhoff, 532 U.S. at 148.

That effect is not, as petitioner contends, “related to” a car-

rier’s service in some merely theoretical sense at “the fur-

thest stretch of [the phrase’s] indeterminacy.” Pet. Br. 23

(quoting Travelers, 514 U.S. at 655). Nor is it “tenuous, re-

mote or peripheral.” /d. at 28 (quoting Morales, 504 U.S. at

390). Rather, the challenged provisions “relate to” a carrier’s

service in a very direct way, specifying the manner in which

a carrier is to deliver packages containing tobacco and the

kind of receipt it must obtain, and imputing to carriers know!-

edge of a package’s contents. Disparate state laws specifying

distinct procedures for delivering packages on the basis of

their contents threaten precisely the kind of “patchwork of

regulation,” precluding national carriers from “conduct[{ing]}

a standard way of doing business,” that Congress sought to

preempt. H. Rep. 677, at 87; Egelhoff, 532 U.S. at 150.

A. Section 1555-C(3)(C)

1. The court of appeals held that the FAAA Act preempts

Section 1555-C(3)(C) of the Tobacco Delivery Law, which re-

quires a tobacco retailer to use a “delivery service” that, in

turn, “imposes” several “requirements.” The delivery service

must require that the addressee be the purchaser, must re-

quire that the addressee sign for the package and be of legal

age to purchase tobacco, and, if the addressee is under age 27,

must verify, by obtaining government-issued photo identifica-

tion, that the addressee is of legal age. 22 Me. Stat. § 1555-

C(3)(C). The “requirements” of Section 1555-C(3)(C)—in

14

particular, that the carrier obtain the addressee’s (7.e., the

purchaser’s) signature—have a “forbidden significant effect”

on motor carrier operations. Morales, 504 U.S. at 388.”

As the court of appeals observed, “(dJelays in searching for

the purchaser, making multiple delivery attempts if the pur-

chaser cannot be located, obtaining the purchaser’s signature,

and verifying the purchaser's age,” as a consequence of Sec-

tion 1555-C(3)(C), “all could affect timely deliveries.” Pet.

App. 23. When a carrier contracts to deliver a package at a

workplace, the named addressee “and the delivery area will

[sometimes] be located in different buildings, or on different

floors of the same building,” or “might otherwise be unavail-

able to come to the delivery area.” J.A. 57. “In some in-

stances, it could take several minutes just to determine that

the [addressee] is not even available to sign, in which case the

process would have to be repeated the next day.” Jbid. Some

types of workers “rarely (if ever) would be available to sign

for such a package at a fixed address,” and the carrier.“might

have to make repeated, futile attempts to deliver.” /bid. The

purchaser could not solve the problem by having the package

shipped to a home address, because another adult who was at

home could not sign for it, nor could the purchaser designate

another adult as the addressee, because that too would violate

the statute. Moreover, the statute’s impact is not limited to

tobacco packages; it affects all the other packages that are

? Petitioner contends (Br. 43-44 & nn.47, 48) that De Buono adopted a new

“acute * * * economic effects” standard for ERISA preemption. That is not so.

The Court has only twice used the “acute * * * economic effects” phrase, De

Buono, 520 U.S. at 816 n.16; Travelers, 514 U.S. at 668, and in each instance it

was noting that even a law of general applicability that only indirectly impacts

ERISA plans by increasing costs to the plan could be preempted if the law’s

effects were “so acute ‘as to force an ERISA plan to adopt a certain scheme of

substantive coverage or effectively restrict its choice of insurers.” De Buono,

520 U.S. at 816 n.16 (quoting Travelers, 514 U.S. at 668). The Court did not

suggest that an “acute” effect is a prerequisite to preemption where, as here,

a law’s effect on carriers is more direct.

15

delayed while a driver waits to see if the addressee is able to

sign in person. J.A. 58.

The identified impacts of Section 1555-C(3)(C) on the time-

liness of delivery and manner of receipt constitute a “signifi-

cant effect,” Morales, 504 U.S. at 388, that relates to “a cen-

tral matter of” a carrier’s services, Egelhoff, 532 U.S. at 148.

Indeed, federal law lists “receipt,” “delivery,” and “handling”

among the “services” included within the definition of “trans-

portation” for purposes of the Department of Transporta-

tion’s statutes. 49 U.S.C. 13102(23)(B). United Parcel Service

(UPS), for example, “guarantees delivery at a time and date

certain after a package has been picked up, and if a package

is not timely delivered, UPS will * * * provide a full refund or

credit of the shipping charges.” J.A. 48.°

2. Although Section 1555-C(3)(C) is directed in the first

instance at tobacco retailers, mandating that they “utilize a

delivery service that imposes the [specified] requirements,”

preemption under the FAAA Act is not limited to statutes

that “actually prescrib|e} rates, routes, or services.” Morales,

504 U.S. at 385. Rather, a state law may be preempted as

“related to” motor carrier prices, routes, or services even if

the effect thereon is “only indirect.” Jd. at 386. Thus, as the

court of appeals ruled, the Act may preempt laws that “limit

* Although Section 1555-C(3)(C) uses the term “delivery service,” that does

not result in preemption under the “reference to” test because it applies to

some delivery services that are not covered by the FAAA Act. See Dillingham,

519 U.S. at 325. The Tobacco Delivery Law defines “delivery service” as “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 transportation services not covered

by the FAAA Act, such as local couriers using small vans or bicycles. See Pub.

L. No. 109-59, Tit. IV, §§ 4142(a), 4202(b), 119 Stat. 1747, 1751 (49 U.S.C.

13102(12) and (14) (Supp. V 2005)); 49 U.S.C. 31132(1)(A) and (B).

While the fact that the Tobacco Delivery Law can, in theory, apply without

reference to motor carrier services means that it is not preempted under the

per se rule, that does not mean that it is saved from preemption under the

“connection with” test. Morales rejected the notion that “only state laws

specifically addressed to the airline industry are preempted.” 504 U.S. at 386.

16

retailers to hiring only those carriers that comply with the

state-imposed mandates.” Pet. App. 24.

Moreover, it is not at all clear that the Tobacco Delivery

Law does not directly regulate carriers in addition to retail-

ers. Section 1555-C(3)(D) requires the retailer to provide

“delivery instructions” that inform the delivery service of the

subsection’s requirements and that “state law requires com-

pliance with the requirements.” 22 Me. Stat. § 1555-C(3)(D).

Thus, it appears that Maine “requires compliance” by the

delivery service itself with the statute’s requirements regard-

ing addressee signature and age verification. The broad lan-

guage of Section 1555-C(3)(E), which subjects to penalty “[a]

person who violates this subsection,” also suggests that the

subsection applies to persons other than retailers.‘

Tellingly, the brief of the amici States supporting peti-

tioner characterize the Tobacco Delivery Law as “requiring

carriers to comply with simple delivery and age-verification

requirements when a package is labeled as ‘tobacco.’” Cal. Br.

1 (emphasis added). Those States contend that direct regula-

tion of the carriers’ delivery methods is “the most effective

method” because unscrupulous on-line retailers “do not en-

force age restrictions.” /bid. While it may be true that regu-

lating a relatively few, law-abiding carriers is more effective

than pursuing the wrongdoers themselves, that is no basis for

disregarding the FAAA Act’s preemption provisions. Indeed,

the perceived efficiencies of regulating carriers rather than

‘ The placement of the knowledge-imputation provision in the second

sentence of Section 1555-D suggests that it is of relevance to the prohibition set

forth in the first sentence of that Section, which refers only to the State’s

tobacco licensing requirements, not the provisions that prohibit furnishing

tobacco to minors. The State contends, however, that the imputed-knowledge

provision “furthers public health objectives, and has nothing to do with the

economic regulation of carriers.” Pet. Br. 47. That suggests that the imputed-

knowledge provision is intended to facilitate enforcement against delivery

services of the provisions in Section 1555-C(3)(C). If so, that is further evidence

that the requirements of Section 1555-C(3)(C) are made directly applicable to

delivery services by Section 1555-C(3)\(D).

17

certain classes of difficult-to-regulate shippers may be pre-

cisely why Congress deemed tne preemption provision neces-

sary to protect Congress’s chosen policy of deregulation.

But, even if the addressee-signature requirements cannot

be enforced directly against the carrier, a State cannot avoid

the preemptive effect of the FAAA Act simply by directing

retailers “to hir[e} only those carriers that comply with the

state-imposed mandates. Either way, the state is employing

its coercive power to police the method by which carriers pro-

vide services in the state.” Pet. App. 24. The States could

not, for example, avoid the holding in Morales by prohibiting

airline ticket purchasers from buying tickets from airlines

that failed to follow the Attorney Generals’ guidelines regard-

ing marketing. See, e.g., Engine Mfrs. Ass’n v. South Coast

Air Quality Mgmt. Dist. , 541 U.S. 246, 255 (2004).

3. That is not to say that the FAAA Act would preempt a

state law requiring shippers to utilize a particular service that

is already widely offered by carriers, such as UPS’s “Delivery

Confirmation Adult Signature Required” (DCASR) service.

See J.A. 51-53. Where such a service is widely available, a

state law requiring retailers to utilize that already commer-

cially available service in a particular class of sales—and that

did so, not as a “guise” t regulate motor carrier services as

such (see H. Rep. 677, at 84), but in an effort to further

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

portation industry—would not have a “forbidden significant

effect” on carrier services. Morales, 504 U.S. at 388; ef.

Wolens, 513 U.S. at 228-230, 233 (ADA does not preempt

state-law breach-of-contract action to enforce agreement the

airline voluntarily undertook). The fact that carriers had

made an independent commercial decision to offer the partic-

ular service would show that, as Congress intended, the carri-

ers’ “[sJervice options [were] dictated by the marketplace[,]

and not by an artificial regulatory structure.” H. Rep. 677, at

18

88.° Moreover, such a law would not frustrate Congress’s goal

of allowing “national and regional carriers” to develop “a stan-

dard way of doing business” without navigating a “patchwork

of regulation” at the State level. /d. at 87.°

The particular service that Maine has prescribed by statute

differs in significant respects from the adult-signature-re-

quired services that are available in the marketplace. See

Pet. App. 22-23, 64-65. As noted, the requirement that the

package be signed for by the addressee has dramatically dif-

ferent effects on how a carrier conducts its business. See id.

at 22-23; J.A. 53-59. Indeed, faced with the choice of develop-

® 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, the state law would “not dictate the

choices” of those carriers, Dillingham, 519 U.S. at 334; the market would.

® At least one federal law makes reference to an adult-signature-required

service. In response to greater restrictions on air travel, Congress passed a

law specifically allowing interstate shipment of wine if, among other things, the

container “is marked to require an adult’s signature upon delivery.” 27 U.S.C.

124(aX3) (Supp. V 2005). This Court likewise referred to such a service in

Granholm v. Heald, 544 U.S. 460 (2005). There, the Court struck down state

statutes that prevented out-of-state wineries from shipping directly to

consumers. The Court noted that there were other steps States could take to

prevent minors from obtaining wine by mail: “For example, the Model Direct

Shipping Bill developed by the National Conference of State Legislatures re-

quires an adult signature on delivery and a label so instructing on each pack-

age.” /d. at 491. Section 3(c) of that model bill states: “All Wine Direct Ship-

per Licensees shall * * * [e}nsure that all containers of wine shipped directly

to a resident in this state are conspicuously labeled with the words ‘CON-

TAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER RE-

QUIRED FOR DELIVERY.’” Model Direct Wine Shipment Bill (visited Oct.

10, 2007) <http://www.wineinstitute.org/programs/shipwine/Model_Direct_

Shipping _Bill.pdf >. Unlike Section 1555-C(3)(C), neither the federal statute

nor the model bill requires that the addressee sign for the package.

19

ing a service that complied with the Maine statute and ceasing

delivery of tobacco products, UPS chose the latter. J.A. 61.’

Petitioner argues (Br. 45) that the effect of Maine’s statute

should be measured by the difference in cost between provid-

ing a Section 1555-C(3)(C)-compliant service and the adult-

signature service that is already commercially available. But

that argument miscomprehends the nature of Congress's in-

terest in preempting state laws relating to carrier services.

It is not the fact (if true) that Maine’s tobacco-specific deliv-

ery procedures could be complied with for an additional 25

cents, and New York’s for 20 cents, and California’s for 35

cents. Rather, it is the fact that each State’s tobacco-delivery

requirements could be different. And, if petitioner were cor-

rect, each State could impose a different set of requirements

for each of any number of commodities that the State decides

to regulate in the interest of public health and safety. Thus,

rather than a handful of different services that a carrier pro-

vides to all shippers across the nation, carriers would have to

provide multiple item-specific services for each of the fifty

States. A bill of lading that sought to list all of the distinct

services might run many pages. The “‘tailoring of [services]

to the peculiarities of the law of each jurisdiction’ is exactly

the burden [the preemption provision] seeks to eliminate.”

Egelhoff, 532 U.S. at 151. And even a relatively unburden-

some patchwork of differing state regulations is a far cry from

the national deregulatory policy favored by Congress and

implemented through the preemption provision.

B. Section 1555-D

1. The first sentence of Section 1555-D provides that a

“person” may not “knowingly transport” or cause to be deliv-

ered to a person in Maine a tobacco product purchased from

* Federal Express and DHL also appear to offer services like DCASR, but

not like the one envisioned by Maine. See http://www.fedex.com/us/services/

options/signatureoptions.html; http//www.dhl-usa.com/USSves/ValueAddSrve.

asp?nav + USServices/DDeliveryServices/SpecialServices.

20

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

unless the delivery is to a licensed tobacco distributor or re-

tailer. Thus, it is a violation of that provision to transport

tobacco products from an unlicensed retailer to an individual

purchaser, irrespective of his or her age. 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 (cit-

ing 22 Me. Stat. § 1555-C(7)), and, like the laws prohibiting

prostitution and gambling referred to in Morales, laws bar-

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

illegal drugs) regulate primary conduct and have only a “ten-

uous, remote, or peripheral” relation to carrier services. Pet.

App. 25-26 (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 know-

ing accomplices in the illegal sale of tobacco products. “It

does not, however, require that carriers modify their delivery

methods other than by declining to transport a product that

Maine has legitimately banned.” Jd. at 26. Respondents have

not challenged that holding.

2. The second sentence of Section 1555-D, however, goes

further, and the court of appeals correctly found it pre-

empted. That provision imputes to a person knowledge that

a package contains tobacco 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 a list maintained by the Maine Attorney General.

22 Me. Stat. § 1555-D. The Attorney General must provide to

“delivery service[s]” separate “lists of licensed tobacco retail-

ers and known unlicensed tobacco retailers.” Jd. § 1555-D(1).

In order to avoid imputed knowledge of package contents,

carriers are, in effect, forced to change package-processing

procedures that are otherwise uniform across the nation. For

“every package destined for delivery in Maine,” the carrier

“must specially inspect” the package to determine whether it

21

“is marked as containing tobacco or if the seller’s name ap-

pears on the Attorney General’s list” of unlicensed retailers.

Pet. App. 27 (emphasis added). If any packages are so

marked, or the shipper is on the list of unlicensed tobacco

retailers, the carrier “must segregate the packages * * * and

research whether the addressee is a Maine-licensed retailer

or distributor who can [lawfully] receive the package.” /d. at

27-28 (emphasis added). A carrier is obliged to ascertain cer-

tain information about both the shipper and the recipient of

the package—information for which the carrier would ordi-

narily have no need for purposes of providing delivery service.

As the court of appeals correctly concluded, the “imputation”

mandated by Section 1555-D therefore “amount(s] to pre-

seribing how carriers must operate.” /d. at 28.

Moreover, unlike the first sentence of Section 1555-D,

which applies generally to any person who “knowingly trans-

port(s]” tobacco from an unlicensed retailer (other than to a

licensed distributor or retailer), the second sentence of Sec-

tion 1555-D appears to apply only to delivery services, be-

cause it imputes knowledge based on the way a package is

marked under the “delivery service” provisions in Section

1555-C(3)(B) or on information contained in confidential lists

that the Attorney General provides only to delivery services.

See 22 Me. Stat. § 1555-D. Even though, as noted above, see

note 3, supra, the phrase “delivery service” is broader than

“motor carriers” and thus the statute is not preempted under

the per se “reference to” test, it is certainly relevant to the

determination whether a law operates “in connection with” a

carrier’s service that it directly regulates a class that is only

slightly broader than the class protected by federal law.

3. Petitioner argues that, even if carriers are required to

modify their package handling procedures in response to Sec-

tion 1555-D, the effect is “de minimis” because those steps

would be “similar to what UPS appears to be doing to comply

with its settlement with New York,” in which UPS (as well as

Federal Express and DHL) agreed not to ship cigarettes to

22

individual customers in the United States at all, and not to

accept shipments of tobacco products unless the recipient is

licensed by applicable law. See Pet. Br. 15-16, 49. But a con-

sent decree is not a unilaterally imposed state law. Agreeing

not to ship cigarettes knowingly to unlicensed recipients, id.

at 15, is similar to the rule of general applicability in the first

sentence of Section 1555-D, which the court of appeals upheld.

That is quite different from being forced, under threat that

knowledge will be imputed to the carrier by operation of law,

to undertake affirmative steps to identify packages from

unlicenced shippers who are attempting to evade detection (a

requirement that would entail review of every package des-

tined for delivery in Maine).

Petitioner contends that the imputed-knowledge provision

of Section 1555-D “simply identifies [the] evidence” on which

the State would rely in enforcing its restrictions on the deliv-

ery of tobaceo products. Pet. Br. 46. But as we have shown,

the provision does much more; it effectively requires carriers

to alter their package processing and distribution procedures.

In addition, imputing knowledge on the basis of certain fac-

tors establishes an irrebuttable presumption of knowledge in

the specified circumstances. Such a presumption is a substan-

tive rule of liability, not merely a rule of evidence. See Mi-

chael H. v. Gerald D., 491 U.S. 110, 119-121 (1989). Thus, the

State has legislated a standard of conduct to which carriers

must conform in order to avoid liability: for every package to

be delivered in Maine, motor carriers must scrutinize the

package for a “Tobacco Products” label and cross-check the

shipper against the Attorney General’s lists. Indeed, because

an individual delivery person is subject to penalty under Sec-

tion 1555-D(2)(A), independent of the employer’s liability un-

der Section 1555-D(2)(B), it would seem that each delivery

23

person must personally inspect each package and cross-check

the shipper against the list, or risk individual liability.”

Finally, petitioner’s suggestion that the Tobacco Delivery

Law cannot be enforced effectively without the imputed-

knowledge provision is unpersuasive. Petitioner has identi-

fied numerous other provisions of State law that restrict con-

traband, see, e.g., 28-A Me. Stat. § 2081(1)(A) (prohibiting

“knowingly” delivering liquor to a minor), yet none contains

an imputed-knowledge provision like that in Section 1555-D.

There is no reason to believe that the State’s enforcement

efforts respecting tobacco will be any less effective in the

absence of Section 1555-D’s imputed-knowledge provision.

Ill. THE PUBLIC HEALTH PURPOSES UNDERLYING

MAINE’S TOBACCO DELIVERY LAW DO NOT SAVE IT

FROM PREEMPTION UNDER THE FAAA ACT

Petitioner contends (Br. 32) that the FAAA Act’s objective

was limited to preempting “economic laws” and that the To-

bacco Delivery Law should be upheld as falling instead into a

category of non-preempted “public health laws.” Petitioner

is incorrect on both counts. The FAAA Act’s omission of any

“economic” limitation, and its inclusion of carrier “services”

among the areas protected by the statute, demonstrate that

Congress’s concern was broader than “economic laws.” In

any event, Maine’s law dictating the manner of delivery and

form of receipt required for certain delivery sales constitute

“economic” regulation. Petitioner’s argument for an excep-

tion for state laws motivated by non-economic police-power

concerns would introduce in unadministrable and atextual

element to the preemption inquiry, and is inconsistent with

* Petitioner relies (Br. 9) on a Maine regulation under which a carrier is

deemed not to know of a package’s tobacco centents if it was marked only on

the side opposite the address. See Pet. App. 56 n. 67 (discussing 10-144 Code

Me. R. Ch. 203, § 11 (2005)). That provision does not, however, relieve the

carrier of the practical need to search each of the other five sides of every

package to ensure that knowledge of any tobacco contents will not be imputed

to it pursuant to Sections 1555-D and 1555-C(3)(B). See Resp. C.A. App. II, 98.

24

the FAAA Act’s sweeping preemptive language, its carve-out

of specified areas of state regulation that remain subject to

federal supervision, and the legislative history’s endorsement

of the “broad preemption interpretation” of the related ADA

provision in Morales. See H. Rep. 677, at 83.

A. Petitioner’s effort to limit FAAA Act preemption to

“states’ economic regulation of motor carriers,” Pet. Br. 31,

seeks to supplant the statute’s broad text with more limited

language that Congress considered and rejected. As the

Court observed in Morales, 504 U.S. at 385 n.2, when Con-

gress considered the ADA, the Senate bill provided that “(nJo

State shall enact any law, establish any standard determining

routes, schedules, or rates, fares, or charges in tariffs of, or

otherwise promulgate economic regulations for, any air car-

rier.” S. Rep. No. 631, 95th Cong., 2d Sess. 171 (1978) (em-

phasis added). In place of that language, the conferees

adopted the House’s version, H.R. Conf. Rep. 1779, 95th

Cong., 2d Sess. 94-95 (1978) (Conf. Rep. 1779), which pre-

empted States from “enact[ing] or enforc[ing] any law, rule,

regulation, standard or other provision having the force and

effect of law relating to rates, routes, or services of any air

carrier.” ADA § 4(a), 92 Stat. 1708 (emphasis added).

The two ADA bills differed in at least three respects, each

of which undermines petitioner’s argument. First, Congress

rejected the Senate’s limited focus on state laws “determin-

ing” routes and rates in favor of the broader “relating to”

language. See Morales, 504 U.S. at 385 n. 2. In addition, the

House version preempted laws relating to carrier “services,”

while omitting the Senate’s limiting, but hardly self-defining,

descriptor “economic.” Conf. Rep. 1779, at 4, 94-95. The lat-

ter two differences are related. Many carrier “services” are

not “economic,” at least in the narrow sense used by peti-

tioner. Indeed, the breadth of the term “services” is reflected

in the definition of “transportation,” which encompasses “ser-

vices” related to the movement of property, “including re-

ceipt, delivery, * * * {and} handling” of property. 49 U.S.C.

25

10102(28)(b) (1994). Plainly, petitioner cannot dispute that

Maine’s Tobacco Delivery Law “relates to * * * services” such

as “receipt,” “delivery” or “handling,” of property. Equally

clearly, the courts are not free to read into the statute an

“economic” limitation if the effect would be to read out of the

statute many of the kinds of “services” that are expressly

included and protected under the plain text. Cf. Morales, 504

U.S. at 385 (rejecting argument that ADA “only pre-empts

the States from actually prescribing rates, routes, or ser-

vices” because it “simply reads the words ‘relating to’ out of

the statute” (emphasis added)).

Neither do references in the FAAA Act’s legislative history

to “{s]tate economic regulation of motor carrier operations”

as the Conferees’ principal focus, H. Rep. 677, at 87, advance

petitioner’s argument. The legislative history makes clear, if

the text’s reference to “services” did not, that Congress was

concerned about state regulations related to delivery. See,

e.g., Legislation to Preempt State Motor Carrier Regulations

Pertaining to Rates, Routes, and Services: Hearing Before

the House Subcomm. on Surface Transp. of the House Comm.

on Public Works and Transp., 103d Cong., 2d Sess. 123 (1994)

(noting, among “services” offered, “next-day air, three-day

select,” and a paperless information system that allowed ship-

pers to “get information on their delivery within minutes of

delivery”). Petitioner also cites (Br. 29-30) the Ninth Circuit's

pre-FAAA Act decision in Federal Express as allowing States

“to act in an area of non-economic regulation.” 936 F.2d at

1078. Significantly, however, the Ninth Circuit made that

statement with respect to “general traffic laws” and “safety

requirements for trucks on its highways.” /bid. Of more rele-

vance here, the court recognized that a carrier’s “terms of

service” included such matters as “rules on claims,” “bills of

lading” and “freight bills,” and that, while “not patently eco-

nomic,” those subjects were “as much protected from state

intrusion as are the air carrier’s rates.” /bid.

26

B. Petitioner's argument (Br. 24-25, 32-35) for a broad,

nontextual exception to preemption for any state regulation

related to “public health,” id. at 32, would upset the statutory

scheme by permitting States to adopt an inconsistent patch-

work of regulations related to delivery services, as long as

those regulations were motivated by health and safety con-

cerns. But health-motivated regulation is no less likely than

regulation motivated by other concerns to frustrate the policy

to permit “national and regional carriers” to “conduct a stan-

dard way of doing business” that is “dictated by the market-

place[,} and not by an artificial regulatory structure.” H. Rep.

677, at 87-88. Here, while Section 1555-C(3) may be motivated

by the State’s public health concern to curb youth smoking, it

has chosen the regulation of carriers’ delivery services to fur-

ther that goal. The underlying purpose no more saves the

Tobacco Delivery Law from preemption than would a similar

purpose that motivated a State to mandate an increase in car-

riers’ rates for tobacco deliveries, though such a law might

also deter youth purchases.

The FAAA Act’s explicit delineation of specific exceptions

also precludes the general police powers exception 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 speci-

fied purposes, insurance requirements, and the transportation

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.

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). Moreover, the mat-

ters excluded are addressed in specific and readily-adminis-

trable terms. While Congress surely could have further ex-

27

empted a broad class of health-motivated or non-economic

regulations, such a Congress presumably would have offered

courts some more concrete guidance in delimiting the pre-

emption scope. Petitioner’s proposed atext.al exception, by

contrast, asks courts to embark on a vague purpose-bound

inquiry without any textual guidance.

Relying on the caption given to the exceptions and a state-

ment in the legislative history, petitioner contends that the

list of “[m]atters not covered” by the preemption provisions

was “not intended to be all inclusive, but merely to specify

some of the matters which are not ‘prices, rates or services’

and which are therefore not preempted.” Pet. Br. 35 (quoting

H. Rep. 677, at 84). But that statement in the Conference

Report cannot be credited. It makes no sense to say, for ex-

ample, that a law “impos[ing] highway route controls,” 49

U.S.C. 14501(e)(2)(A), is not “related to a * * * route,” or that

a law “relating to the price of * * * motor vehicle transporta-

tion by a tow truck,” 49 U.S.C. 14501(c)(2)(C), is not “related

to a price,” and would come within the general rule of pre-

emption but for the respective exceptions. Moreover, treating

the specified categories as merely examples of a general rule

excluding all noneconomic regulation cannot be squared with

the statutory text, which states that “/e/xcept as provided in”

specified provisions, state regulations “related to a price,

route, or service” of a carrier are preempted. 49 U.S.C.

14501(c)(1), 41713(b)(4)(A) (emphasis added).

Moreover, the areas in which Congress specified that

States may undertake regulation for safety and related pur-

poses are ones in which other Acts of Congress explicitly or

impliedly allow for state regulation, but also generally im-

posed limits on the States’ authority. See p. 2 & note 1, su-

pra. Petitioner urges the Court to engraft a broader, non-

textual exception for all state regulations that are motivated

by health or safety concerns, but with no corresponding au-

thority on the part of the Secretary of Transportation to pre-

28

empt such laws. That would dramatically alter the state-fed-

eral balance that Congress established.”

C. Petitioner erroneously suggests (Br. 25) that the To-

bacco Delivery Law is saved because it shares a “common

purpose|]” with federal law. /bid. (quoting PhRMA v. Walsh,

538 U.S. 644, 666 (2003)). Petitioner relies (Br. 3-4, 24-25, 37-

39) on the “Synar Amendment” to the ADAMHA Reorganiza-

tion Act, Pub. L. No. 102-321, § 202, 106 Stat. 394, which pro-

vides that the Secretary of Health and Human Services

(HHS) “may” award a grant to any State that “has in effect a

law providing that it is unlawful for any manufacturer, re-

tailer, or distributor of tobacco products to sell or distribute

any such product to any individual under the age of 18.” 42

U.S.C. 300x-26(a)(1); see Lorillard Tobacco Co. v. Reilly, 533

U.S. 525, 552 (2001). Nothing in the Synar Amendment autho-

rizes States to enact laws otherwise preempted by the FAAA

Act in furtherance of that goal. The Amendment does not

mandate any state laws related to the transportation of to-

bacco products.” Rather, HHS’s regulation implementing the

Synar Amendment focuses on restricting over-the-counter

and vending machine sales. See 45 C.F.R. 96.130."' The court

* Petitioner's reliance (Br. 31-32) on City of Columbus v. Ours Garage &

Wrecker Service, Inc., 536 U.S. 424 (2002), is misplaced. That case concerned

whether the authority expressly preserved to States in 49 U.S.C. 14501(¢)(2)(A)

could be de.egated to municipalities. 536 U.S. at 428, 440. Nothing in Ours

Garage suggests that the FAAA Act also contains an unwritten broad

exemption for all state safety regulation.

° Contrary to petitioner's suggestion (Br. 38-39), the Synar Amendment's

phrase “distributor of tobacco products” refers to a wholesaler, not a carrier

transporting packages. That is also how Maine’s Tobacco Delivery Law uses

the term. See, e.g., 22 Me. Stat. § 1555-D (distinguishing between “delivery

service” and “distributor,” the latter of which must be licensed).

"' As petitioner notes (Br. 40 n.45), HHS has allowed the States “flexibility

to determine which strategies are most appropriate for meeting the compliance

target and enforcement requirements” of the Synar Amendment. 61 Fed. Reg.

1495 (1996). That statement affords flexibility to pursue lawful options; it does

not override the FAAA Act’s specific preemption provisions.

29

of appeals correctly concluded that the FAAA Act and Synar

Amendment “can exist harmoniously because the states may

pass laws to curb underage smoking without passing laws ‘re-

lated to’ carrier prices, routes, or services.” Pet. App. 21 n.12.

Moreover, the court of appeals’ decision leaves in place

another provision, which respondents did not even challenge,

that prohibits all persons (including carriers) from providing

tobacco products to minors. See 22 Me. Stat. § 1555-B(2)

(Supp. 2006) (“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”); id. § 1551(2-A) (defining

“{p]Jerson” as “an individual, corporation, partnership or unin-

corporated association”). Alternatively, Maine could ban out-

right all non-face-to-face sales of tobacco. Cal. Br. 13; see,

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

(Supp. 2006); Ark. Code Ann. §§ 26-57-203 (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) (upholding, against Commerce Clause chalienge,

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 of general applicability, which do not

dictate methods of delivery, do not have a “forbidden signifi-

cant effect” on carrier services. See pp. 19- 20, supra.

D. Petitioner also argues (Br. 23-24, 34, 37) that Sections

1555-C(3)(C) and the second sentence of Section 1555-D

should be upheld by analogy to statutes that prohibit the

transportation of contraband. The court of appeals did uphold

the first sentence of Section 1555-D by analogy to prohibitions

on transporting contraband. See Pet. App. 25-26. But that

rule cannot be extended to the other challenged provisions of

the Tobacco Delivery Law. Those provisions define tobacco

to be contraband not by reference to licensing laws, but by

whether its is delivered consistent with Maine’s delivery re-

quirements. See 22 Me. Stat. 1555-C(7) (“[aJny tobacco prod-

uct sold * * * in a delivery sale that does not meet the re-

30

quirements of this section is deemed to be contraband”); id.

§ 1555-D(6) (same). Petitioner cannot bootstrap rules that

impermissibly relate to carrier services by the simple ipse

dixit of declaring sales in contravention of the delivery rules

to be contraband.”

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

Petitioner and his State amici identify a number of statutes that ban or

regulate the transportation of various items, including tobacco, alcohol,

animals, and hazardous materials. Pet. Br. 23-24 nn.36 & 37; Cal. Br. 12-13, 16,

18-19. Those statutes would, of course, have to be reviewed on their own terms.

Some prohibit “knowing{]}” delivery of alcohol or tobacco to a minor or trans-

portation of unlicensed contraband, but do not prescribe particular delivery

procedures, and would not be preempted for the same reasons that similar

prohibitions in 22 Me. Stat. § 1555-B(2) and the first sentence of Section 1555-D

are not. Other cited statutes require shippers to utilize an adult-signature-

required delivery service like those commercially available and would not be

preempted. See pp. 17-18 & note 6, supra. Yet others would have to he ana-

lyzed to determine whether a more specific federal statutory scheme that

focuses directly on the safety of the product being transported expressly con-

templates a role for state transportation regulations, as some do. See, e.g., Pub.

L. No. 109-59, § 7202, 119 Stat. 1911, 1912 (21 U.S.C. 350e(b) and (e) (Supp. V

2005)) (directing Secretary of HHS to issue regulations prescribing sanitary

transportation practices for food and preempting state laws that conflict with

such regulations); 49 U.S.C. 5125(b)(2) (authorizing States to adopt regulations

regarding the transportation of hazardous materials that are “substantively the

same as” regulations adopted by the Department of Transportation); see also

Procedures Governing the Cooperative State-Public Health Service/Food and

Drug Administration Program of the National Conference on Interstate Milk

Shipments <http///www.cfsan.fda.gov/~ear/imsproc.html#memor > (establish-

ing joint federal-state cooperative program under 42 U.S.C. 243(b) for regula-

tion of milk safety, including transportation). Other state regulations may

merely duplicate applicable federal standards, as 7 Me. Stat. § 3981 does 49

U.S.C. 80502 (standards for the humane transport of animals). Finally, some

of the statutes may well suffer from the same or similar defects as Maine’s and

would be preempted, for the reasons set forth above.

31

D.J. GIBBIN

General Counsel

PAUL M. GEIER

Assistant General Counsel

for Litigation

DALE C. ANDREWS

Deputy Assistant General

Counsel for Litigation

PAUL SAMUEL SMITH

Senior Trial Attorney

Department of Transportation

OCTOBER 2007

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