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

3n The

Supreme Court of the Anited

G. STEVEN ROWE, IN HIS OFFICIAL CAPACITY AS

ATTORNEY GENERAL OF THE STATE OF MAINE,

Petitioner,

Vv.

NEW HAMPSHIRE MOTOR TRANSPORT

ASSOCIATION, MASSACHUSETTS MOTOR

TRANSPORTATION ASSOCIATION, INC. and

VERMONT TRUCK & BUS ASSOCIATION, INC.,

Respondents.

e

On Writ Of Certiorari To The United States

Court Of Appeals For The First Circuit

.

BRIEF OF CALIFORNIA, ALABAMA, ALASKA, ARIZONA,

ARKANSAS, CONNECTICUT, DELAWARE, DISTRICT

OF COLUMBIA, FLORIDA, HAWAII, IDAHO, ILLINOIS,

INDIANA, IOWA, KENTUCKY, MARYLAND,

MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI,

MONTANA, MISSOURI, NEVADA, NEW MEXICO, NEW

YORK, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON,

PENNSYLVANIA, PUERTO RICO, RHODE ISLAND,

SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, UTAH,

VERMONT, WEST VIRGINIA, WISCONSIN, AND WYOMING

AS AMICUS CURIAE SUPPORTING PETITIONER

¢

EDMUND G. BROWN JR.

Attorney General of the State of California

THOMAS J. GREENE

Chief Assistant Attorney General

MANUEL MEDERIOS

Solicitor General

DENNIS ECKHART

Senior Assistant Attorney General

LAURA KAPLAN

Deputy Attorney General

Counsel of Record

1300 I Street

P.O. Box 944255

Sacramento, CA 94244-2550

Telephone: (916) 323-3822

Fax: (916) 323-0813

Counsel for Amicus Curiae

[Additional Counsel Listed On Inside Cover}

= SSSESESES>SESESESESSEEEESSSS"—="—

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342 2831

TROY KING LINDA SINGER

Attorney General Attorney General

State of Alabama District of Columbia

11 South Union Street One Judiciary Square

Montgomery, AL 36130 441 4th Street, N.W.

Suite 600 South

TALIS J. COLBERG

Attorney General Washington, DC 20001

State of Alaska BILL MCCOLLUM

P.O. Box 110300 Attorney General

Juneau, AK 99811 State of Florida

TeRRY GODDARD bi Capitol, PL-01

05 E. Walnut Street

Attorney General Tallah FL 32399-1050

State of Arizona en, ’

1275 West Washington MARK J. BENNETT

Phoenix, AZ 85007 Attorney General

State of Hawaii

DUSTIN MCDANIEL

Attorney General ag od 3

State of Arkansas ey

323 Center Street, Suite 200 LAWRENCE WASDEN

Little Rock, AR 72201 Attorney General

RICHARD BLUMENTHAL ye Idaho

.O. Box 83720

Attorney General Boise. ID 83720-0010

State of Connecticut nee

55 Elm Street LISA MADIGAN

Hartford, CT 06106 Attorney General

State of Illinois

CARL C. DANBERG

Attorney General a Street,

State of Delaware Chi IL 60601

820 N. French Street mee ate

6th Floor STEVE CARTER

Wilmington, DE 19801 Attorney General

State of Indiana

Indiana Government Center

South — Fifth Floor

302 W. Washington Street

Indianapolis, IN 46204

THOMAS J. MILLER

Attorney General of

State of Iowa

Hoover State Office Bldg.

Des Moines, LA 50319

MICHAEL PLUMLEY

Assistant Attorney General

State of Kentucky

700 Capitol Avenue, Suite 118

Frankfort, KY 40601

MARTHA COAKLEY

Attorney General

State of Massachusetts

McCormack Building

One Ashburton Place

Boston, MA 02108

DOUGLAS F. GANSLER

Attorney General

State of Maryland

200 St. Paul Place

Baltimore, MD 21202

MICHAEL A. Cox

Attorney General

State of Michigan

P.O. Box 30212

Lansing, MI 48909

Lori SWANSON

Attorney General

State of Minnesota

102 State Capitol

75 Rev. Dr. Martin Luther

King, Jr. Blvd.

St. Paul, MN 55155-1609

Jim Hoop

Attorney General

State of Mississippi

P.O. Box 220

Jackson, MS 37205-0220

JEREMIAH W. (JAY) NIXON

Attorney General

State of Missoun

Supreme Court Building

207 W. High Street

Jefferson City, MO 65102

MIKE MCGRATH

Attorney General

State of Montana

P.O. Box 201401

Helena, MT 59620-1401

CATHERINE CORTEZ MASTO

Attorney General

State of Nevada

100 North Carson Street

Carson City, NV 89701

GARY K. KING

Attorney General

State of New Mexico

P.O. Drawer 1508

Santa Fe, NM 87504

ANDREW M. CUOMO

Attorney General

State of New York

120 Broadway, 25th Floor

New York, NY 10271

WAYNE STENEHJEM

Attorney General

State of North Dakota

600 E. Boulevard Avenue

Bismarck, ND 58505-0040

Marc DANN

Attorney General

State of Ohio

30 East Broad Street,

17th Floor

Columbus, OH 43215

W.A. DREW EDMONDSON

Attorney General

State of Oklahoma

313 N.E. 21st Street

Oklahoma City, OK

73105-4894

HARRY MYERS

Attorney General

State of Oregon

1162 Court Street NE

Salem, OR 97301

THOMAS W. CORBETT, JR.

Attorney General

State of Pennsylvania

16th Floor, Strawberry

Square

Harrisburg, PA 17120

ROBERTO J. SANCHEZ-RAMOS

Secretary of Justice

Commonwealth of

Puerto Rico

GPO Box 902192

San Juan, PR 00902-0192

PATRICK C. LYNCH

Attorney General

State of Rhode Island

150 South Main Street

Providence, RI 02903

HreNRY MCMASTER

Attorney General

State of South Carolina

P.O. Box 11549

Columbia, SC 29211

LAWRENCE E. LONG

Attorney General

State of South Dakota

1302 E Highway 14, Suite 1

Pierre, SD 57501-8501

ROBERT E. COOPER, JR.

Attorney General and

Reporter of Tennessee

P.O. Box 20207

Nashville, TN 37202-0207

MARK L. SHURTLEFF

Attorney General

State of Utah

Utah State Capitol Complex

East Office Bldg., Suite 320

Salt Lake City, UT

84114-2320

WILLIAM H. SORRELL

Attorney General

State of Vermont

109 State Street

Montpelier, VT 05609-1001

DARRELL V. MCGRAW, JR.

Attorney General

State of West Virginia

State Capitol Building 1,

Room 26-E

Charleston, WV 25305

J.B. VAN HOLLEN

Attorney General

State of Wisconsin

Wisconsin Department of

Justice

P.O. Box 7857

Madison, W! 53707-7857

KRISTIE LANGLEY

Assistant Attorney General

Wyoming Attorney

General's Office

123 Capitol Avenue

Cheyenne, WY 82002

QUESTIONS PRESENTED

1. Whether the Federal Aviation Administration

Authorization Act of 1994 (FAAAA), 49 U.S.C. §§ 14501/c)1)

and 41713(b\(4)\A) (2000), preempts states from exercising

their historic public health police powers to regulate

carriers that deliver contraband such as tobacco and other

dangerous substances to children; and

2. Whether the FAAAA preempts states from exercis-

ing their historic public health police powers to require

shippers of contraband such as tobacco and other danger-

ous substances to utilize a carrier that provides age

verification and signature services to ensure that such

substances are not delivered to children.

il

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..........::cssscsseseseeereneneenenenes i

INTEREST OF THE AMICL .........cccccccorrrsrrorrcccrsesceevenees 1

SUMMARY OF THE ARGUMENT. ...........:::ccceeeeeeeeeeeens 4

ABOUMENT oc ccccccvcesesevescccccsccscsecescccenesessovsssencsssnsssocsnenes 6

1. FAAAA’S PREEMPTION PROVISION MUST

BE INTERPRETED IN LIGHT OF THE PRE-

SUMPTION AGAINST PREEMPTION OF

STATE POLICE POWERS AND THE STRUC-

A. Because Maine’s Tobacco Delivery Law Is

Crucial to Curb Rampant Illegal Tobacco

Sales to Minors, the Presumption Applies

with Fall Pores ....ccsccsscsvesssoscvcsccsesssssssovcsssess 8

B. Congress Intended the FAAAA to Preempt

States’ Economic Authority Over Motor

Carriers, Not State Police Powers............... 13

C. If Respondent's View of FAAAA Preemp-

tion Were to Become the Law of the Land,

State Health and Safety Laws Touching on

the Transportation or Delivery of Myriad

Dangerous Products Across the Country

Would Be at Risk of Preemption ..............05 17

Il. THE DECISION BELOW CREATES A

SUBSTANTIAL UNCERTAINTY REGARD-

ING STATES’ ABILITY TO PROSECUTE

VIOLATORS OF LAWS REGULATING THE

TRANSPORT AND DELIVERY OF TOBACCO

PRODUCTS ........0cccrcrossossseorsvvorccressvecescesesscsoserecs 19

ill

TABLE OF CONTENTS - Continued

Page

lll. RATHER THAN THE BROAD PREEMPTION

STANDARD APPLIED BY THE FIRST CIR-

CUIT IN RELIANCE ON MORALES, THE AP-

PROPRIATE STANDARD IS THAT ADOPTED

BY THIS COURT IN THE ERISA CASES .......... 22

CONCLUSION...........cc::csesssessescserereeeerenseeeeessnsetenssaesaeees 29

1V

TABLE OF AUTHORITIES

Page

CASES

Austin v. Tennessee, 179 U.S. 343 (1900)................ccceeeeeee es q

California Div. of Labor Standards Enforcement v.

Dillingham Construction, Inc., 519 U.S. 316

(FIG Poccccssenenconsctsesecassectsenasssesssacatumubesansuesntnenananeanans passim

City of Columbus v. Ours Garage & Wrecker Ser-

vice, Inc., 536 U.S. 424 (2002)..........ccccscccccrrereseesseeesenees 17

FDA v. Brown & Williamson Tobacco Corp., 529

CE Fe re cersenintnsnctupenangtiiatemnpenintinnnnignmanmmnineisiness 9

Federal Express Corp. v. California Public Utilities

Commission, 936 F.2d 1075 (9th Cir. 1991)...........cc000 14

Medtronic, Inc. v. Lohr, 518 U.S. 4706 (1996) .........cccceees 6

Morales v. Trans’ World Airline, 504 U.S. 374 (1992) .... passim

New Hampshire Motor Transport Ass'n v. Rowe, 448

Pe Oe Ce ecereccnecvnscennsnennasesscesnenscossiensnesciinenniniotan 20, 21

New York State Conference of Blue Cross & Blue

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

t BGP ccoceccccccecccsccocccscscccescusosensosoccsoocesesmnssuncnssesonsens passim

STATUTES

ZO U.S.C. § 1344 a) (QOOO)...................ecccrrcorsscssereecccssesesees 22

4D U.S.C. § LABOREN)...ccrcrsccccccccrsccccccccrssecsescccesoorossees 14,17

49 U.S.C. § 41 TIDOM4EMA) ....ccccccerccccscrscccccscsccssssecceeeees 13,14

72 Pa. StaT. ANN. § 231-A (West Supp. 2007).............. 12, 26

720 ILL. Comp. Stat. ANN. 678/5 (West Supp.

SIE Piscncsinnenacisssnimniniicninenitienaiiaitinanicuninibainindadaniets 12, 27, 28

TABLE OF AUTHORITIES - Continued

Page

ALA. CODE § 13A-12-3.5 (Lexis Nexis Supp. 2006)......12, 27

ALA. CODE § 9-12-50 (Lexis Nexis 2001)...........::ccecceeeeeenes 18

AK. STAT. § 43.50. 105 (2006) .........ccccccsccsrseeeereeserees 12, 27, 28

Aniz. Rev. STAT. ANN. § 13-3502 (2001) ..............cceeeeeeeeeees 18

Ariz. Rev. STAT. ANN. § 17-372 (2006) .......2..cccccceneeseeeeeeees 16

Aniz. Rev. Star. ANN. §§ 42-3222 (2006 & Supp.

TTI... cnisnnamameesnsiipelinandatinnindiiinnninticiiiniandtiinnsanettislaiututiaiait 12

Ariz. Rev. Stat. ANN. §§ 42-3222 (2006 & Supp.

2006), 42-3225 (2O0G)..................0ccscsecesereeseeerenes 12, 26, 27

ArK. CODE ANN. §§ 26-57-203 (1997 & Supp. 2005),

26-57-215 (1997), 26-57-230 (1997).........cccececeeeeneeeneneees 13

CAL. Bus. & Pror. CODE § 22963 (West Supp. 2007) ....... 12

CAL. Foop & AGRIC. CODE § 6461 (West 2001)..............0 18

Ca. Rev. & Tax. CODE § 30101.7 (West 2004)............ 12, 27

CoL. Rev. STAT. ANN. §§ 9-6-102 (West 2003).............0068 18

Conn. GEN. Star. ANN. § 12-285c¢ (West Supp. 2007) ...13, 27

Conn. Gen. Stat. ANN. § 22-319 (West 2001 &

Supp. 2007 )........ccccceesecerseeceteesersaceeeecenresssersenenenenenaecsasens 18

DEL. CODE. ANN. tit. 30, §§ 5362, 5365 (Supp.

TE __. . ssctnsntineimemmeieedicaneeiamenunimananiatte 12, 26, 27

Fia. STAT. ANN. § 372.16 (West 2006)............::ceececeeeeenneee 16

Haw. Rev. STAT. ANN. § 245-16 (2006) ......... ccc ceeeeeeeeees 12, 27

Ip. CODE $§ 39-5714, 39-5715, 39-5717 (Supp. 2007)..12, 27

IND. CODE ANN. § 24-3-5-5 (West 2006) ................. 12, 26, 27

1A. COVE ANN. § 4534.45 (West 2006)...........:ceceeeeeeeeeeees 12

KAN. Stat. ANN. § 79-3333 ‘Supp. 2006) .........-....0. 12. 27

vi

TABLE OF AUTHORITIES — Continued

Page

La. Rev. Stat. ANN. § 47:874 (2006) .............:20.2e0e 12, 26, 27

Mass. GEN. Laws ANN. ch. 64C, § 6 (West 2001 &

Supp. 2007)..........cccsccssssrsssersonessnssenssnssnessranssssssnsensssnes 12

Mp. CoDE ANN., Bus. REG. §§ 16-222 (2004), 16-223

an ase 13, 27

Me. REV. Stat. ANN. tit. 12, § 7534 (repealed 2004)......... 16

ME. REV. Stat. ANN. tit. 22, § 1555 C-D (2004)......... 8,9, 12

MicH. Comp. Laws ANN. § 205.431 (West Supp.

| a ae 12, 27

MINN. Stat. ANN. § 325F.781 (West Supp. 2007) ....12, 26, 27

MINN. STAT. ANN. §§ 297F.11 (West 1999), § 325F.781

(West Supp. 2007) ..........ccccceccseseteeeetsenenseeesecereserennenes 12

Miss. CODE ANN. § 97-32-5 (West 1999) ............:ccsssereeeeees 12

Mo. ANN. Star. §§ 149.045 (West 2006), § 407.926

(West Supp. 2007) ...........:ccccsssesesseeeeereseeeteresereesanensennnes 12

Mont. Cope ANN. §§ 16-11-104, 16-11-128, 16-11-

131 (2005 & Supp. 2006) ...........cccecccerneesteeseeeneeeennnnees 12

N.C. GEN. STAT. § 105-113.31 (2003)..........-cccceeeeeeeeneeeeeeees 12

N.J. STAT. ANN. § 4:6-15 (West 1998) ..........::ccecseeeeeeeeeeeres 16

NJ. STAT. ANN. § 54:40A-32 (West 2002) ...........:::ceeeeeeeees 12

N.Y. Acric. & Mkts. Law § 96-z-11 (McKinney

III ..... ccuesvccccessrscscenssnnniedssensssesenenesieenessstsiicenseesereeetsenes 18

N.Y. Pus. HEALTH LAw § 1399-1] (McKinney 2002) .......... 27

NEV. REV. STAT. § 202.24935 (2005).........ccceceeceeeneeereereeens 27

Nev. Rev. Stat. ANN. §§ 370.325, 370.329 ‘Lexis

OS aa 12, 26, 27

vu

TABLE OF AUTHORITIES -— Continued

Page

Ou. REV. CODE ANN. § 2927.023 (Lexis Nexis 2006).....13, 27

OKLA. Stat. ANN. tit. 68 § 317.4 (West Supp. 2007) ....12, 27

OKLA. STAT. ANN. tit. 68 §§ 304 (West 2001 & Supp.

2007), 309 (West 2001), 317.4 (West Supp. 2007)......... 26

Or. REV. STAT. § 323.718 (2005).........cceceeeeeeeeeeeeees 12, 26, 27

R.1. GEN. LAWS § 44-20.1-5 (2005)...........:0ceeeeeeeeeees 12, 26, 27

S.D. Copiriep Laws §§ 10-50-93, 10-50-96 (Supp.

IIE) ...ncocceneccececsensessoessonenencncsebensenensusssocnsssesocoenses 12, 26, 27

TENN. CODE ANN. § 67-4-1029 (2006)...........:02eeeeee 12, 26, 27

Tex. HEALTH & SAFETY CODE ANN. § 161.455

(Vernon Supp. 2006)..........:::cceccseseereeesererenseessenes 12, 26, 27

TEx. TAX CODE ANN. § 154.207 (Vernon 2002).............:26 12

Ur. CoDE ANN. § 76-10-105.1 (Supp. 2007)...........:.000 12, 26

Va. CODE ANN. § 4.1-209.1 (Supp. 2007).........cceceeeeeeeerrees 19

Va. CODE ANN. § 18.2-246.10 (2004) .........0eeceeeeeeees 12, 26. 27

Vr. STAT. ANN. tit. 10, § 5102 (2006)............ceecceeeseeeeeeeen ees 16

W. Va. CODE ANN. § 16-9E-4 (Lexis Nexis 2006)...12, 26, 27

WASH. REV. CODE ANN. § 70.155.105 (West Supp.

DIA ) .......nccecccccccecseveseesconsuscnssscosoossonnenesessevensesosegenscsoess 26, 27

Wis. STAT. ANN. § 125.68 (West 2001 & Supp. 2006)........ 16

Wis. Star. ANN. § 139.345 (West Supp. 2006) ................+. 12

Wyo. STAT. ANN. § 39-18-106 (2007) .......ccccceeeeseeeeeee nee eneees 12

vill

TABLE OF AUTHORITIES - Continued

OTHER AUTHORITIES

Kurt M. Ribisl, Annice E. Kim, Rebecca S. Wil-

liams, Sales and Marketing of Cigarettes on the

Internet: Emerging Threats to Tobacco Control

and Promising Policy Solutions in Reducing To-

bacco Use: Strategies, Barriers, and Conse-

quences. Washington, D.C.: National Academy

Pi nictenteisviuniasindnactndiniianiucnnniniudiaiiinenitiionminiiinnnianines

State Motor Carrier Laws: Hearing on S. 1491

Before the Subcomm. on Surface Transp. of the H.

Comm. on Pub. Works & Transp., 103rd Cong.

(1994) (statement of James A. Rogers, Vice Presi-

dent, Gov't Affairs United Parcel Service), 1994

Ne BNI CTT ieiicisccncteniedeenebalitisieteiiaiinbinesdumeusenagen

Rebecca S. Williams, Youth Access to Cigarettes

Online: Advertised and Actual Sales Practices of

Internet Cigarette Vendors |Dissertation]. Chapel

Hill: Health Behavior and Health Education,

University of North Carolina School of Public

By GE ieeconcnvcnssenscnseisénetnntidnonepivedensetanmanednnene

Jennifer A. Jensen, Norval J. Hickman III, Hope

Landrine, & Elizabeth A. Klonoff, Availability of

Tobacco to Youth Via the Internet, JAMA, 291(15),

BEG Ca vcccsscccceccesesnsstnosansesscosnonmveevesesensesanesoenennee

Page

INTEREST OF THE AMICI

It is beyond dispute that the states have «strong

interest in ensuring that tobacco products purchased over

the Internet are not delivered to children. For that reason,

at least 40 states prohibit or severely restrict the direct

delivery of tobacco products to consumers purchased from

Internet vendors. The First Circuit struck down a Maine

statute that is designed to curb tobacco sales to children

by requiring carriers to comply with modest delivery and

labeling restrictions. Unless the Court rejects respondent's

limitless view of preemption, the most effective and

practical tool that states employ to restrict illegal sales of

tobacco to children over the Internet will be undermined,

and will allow carriers to be utilized as conduits for illegal

tobacco sales.

Internet tobacco sites have increased more than eight-

fold in recent years. Unfortunately, a majority of online

tobacco retailers have no safeguards or controls to prevent

illegal sales to children. Virtually all online sellers simply

do not enforce age restrictions. States have been working

together on aggressive law enforcement strategies to quell

this insidious problem. Several! have sued Internet tobacco

retailers who flout state laws prohibiting or severely

restricting the transport and delivery of tobacco products

directly to consumers.

The most effective method to prevent illegal sales to

children via the Internet and other non-face-to-face

means, however, is to regulate the carriers that transport

and deliver the products. Statutes such as Maine’s Tobacco

Delivery Law thwart minors attempting to purchase

cigarettes and other tobacco products over the Internet

by requiring carriers to comply with simple delivery and

age-verification requirements when a package is labeled

as “tobacco.” Most states that restrict online tobacco sales

are similar to Maine’s law. They typically require that

tobacco retailers be licensed by the state and that contain.

ers be labeled as containing cigarettes or tobacco products.

They usually also impose an obligation to ensure compli-

ance with states’ age-verification requirements on the

retailer or directly on the carrier.

The carriers’ claim that they are significantly bur-

dened by the requirements imposed by Maine’s statute

does not ring true. They are already implementing a

number of the requirements pursuant to an agreement

with the State of New York to stop shipping cigarettes to

individual consumers in all 50 states. For example, UPS

has entered into an Assurance of Discontinuance with

New York in which UPS agreed to adopt a formal policy

expressly prohibiting the shipment of cigarettes to indi-

vidual consumers in the United States and accepting

shipments of cigarettes only to recipients who are licensed

to receive such shipments.’ (Other carriers have entered

into similar agreements. )’

Pursuant to its agreement, UPS has amended its

Terms and Conditions of Service and its General Tariff

Containing the Classifications, Rules and Practices for the

Transportation of Property (“the UPS tariff”) to include its

' Assurance of Discontinuance between United Parcel Service, Inc.

and the Attorney General of the State of New York, October 25, 2005.

Assurance found at <http:/Avww.oag state. ny.us/press/2005/oct/9uupsaodfinal.

oct.pdf> ‘visited August 19, 2007).

* FedEx and DHL agreements can be found at: <http:/Awww.oag. state.

nv us/press 2006 fed/F edEx? 20-% 20Executed™ 20AOC.pdf> visited August 19,

2007), and <http/Avww.oag. state ny us/press/20054jul/dhlaogfinal.pdf> (visited

August 19. 2007)

cigarette policy. UPS does not offer a contractual service

for the delivery of cigarettes to consumers. Additionally,

UPS (1) accepts packages containing tobacco or tobacco

products, as those terms are variously defined under

applicable state law, only from shippers who are licensed

and authorized to ship tobacco and tobacco products

pursuant to applicable laws, (2) maintains a database that

includes information regarding cigarette retailers, and (3)

instructs its drivers, sorters and pre-loaders to actively

look for indications that a package contains cigarettes

being shipped to an individual consumer, alerting UPS

management of such packages and attempting to intercept

such packages.*

If respondents’ expansive view of preemption were to

become the law of the land, tobacco laws in Maine and 39

other states would be undercut, and state restrictions on

the delivery of myriad other dangerous products that have

been traditionally regulated under states’ police powers,

including explosives, liquor, drugs, poisonous reptiles, and

wild animals would be threatened. It makes no sense to

say that states can enact laws to ensure that tobacco

products are not delivered to children, while taking away

the most effective means of enforcing those laws. Reversal

of the First Circuit’s decision will ensure that states are not

precluded from using the most effective tool they have to

restrict illegal tobacco sales to children over the Internet.

S

’ Report Regarding UPS's Compliance with the Assurance of

Discontinuance, Dec. 20, 2005. Report reproduced in the addendum to

the Attorney Genera!’s Reply Brief before the First Cireuit. at A-21 - A-

26

“Id ata

4

SUMMARY OF THE ARGUMENT

The question presented here is not whether the

FAAAA’s preemption provisions are broadly worded. They

are. The question, rather, is whether Congress intended to

preempt state laws restricting the delivery of dangerous or

age-restricted products - such as tobacco — where a com-

mon carrier, such as United Parcel Service (UPS), is used

as a conduit for the illegal transactions. It did not.

The FAAAA was enacted in 1994 for the purpose of

limiting the economic authority of states over motor

carriers and creating a level playing field with air carriers

who were not subject to such regulation after enactment of

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

92 Stat. 1705 (ADA). Before the FAAAA, states subjected

motor carriers to a great deal of economic regulation such

as price controls, tariff filings and the like. Notwithstand-

ing respondent’s claim to the contrary, neither the plain

language of the statute nor the legislative history indi-

cates in any way that Congress intended to preempt states

from enacting legislation, such as Maine’s Tobacco Deliv-

ery Law, to protect the public health of their citizens,

especially children, from the pernicious effects of tobacco

use.

Two provisions of Maine's law are at issue here. One

requires tobacco retailers to use carriers who will comply

with Maine’s age-verification laws when delivering tobacco

products to consumers. The other imputes knowledge to

the carrier — that the package contains tobacco products —

if the package is marked as containing tobacco or the

shipper appears on the Attorney General's unlicenced

retailer list - The First Circuit relied on the broad inter-

pretation of ADA preemption in Morales v. Trans’ World

5

Airlines, 504 U.S. 374 (1992) in preempting those provi-

sions of Maine's Tobacco Delivery Law. That expansive

view was rejected by this Court in favor of a narrower

preemption standard in cases decided since Morales,

including California Div. of Labor Standards Enforcement

v. Dillingham Construction, Inc., 519 U.S. 316 (1997) and

New York State Conference of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., 514 U.S. 645 (1995).

Unless the Court reaffirms the narrower Dillingham

and Travelers’ standard in this case, the laws of 40 states

that prohibit or severely restrict the transport and deliv-

ery of tobacco products to their citizens will be at risk of

preemption. Moreover, if this Court were to accept Re-

spondent’s view of preemption, which is even more exten-

sive than Morales, the result would be disastrous for the

states. In that instance, myriad other state laws that

“expressly reference” or merely mention the transportation

or delivery of any number of dangerous or contraband

products would be at risk, as well.

Respondent claims the provision of the Maine statute

imposing on the retailer the obligation to ensure that

tobacco products are not delivered to children, “expressly

references” carrier services even though it does not do se

directly. But according to the Dillingham standard, the

law must act iramediately and exclusively on carrier

services. Maine’s Jaw does neither. Respondent also con-

tends that both provisions of Maine’s Tobacco Delivery

Law have a “forbidden significant effect” on carrier ser-

vices by interfering with the uniform delivery practices of

the carriers. This claim is also baseless. Respondent never

provided evidence that any of Maine's requirements

‘including age-verification, reading labels on tobacco pack-

ages or reviewing a list of unlicenced tobacco retailers!

Pa

6

imposes a significant economic burden on the carriers, as

required for preemption under the FAAAA. Under the

Dillingham and Travelers’ test for a forbidden connection,

any “burdens” imposed by Maine’s law are indirect, pe-

ripheral and tenuous, and, consequently, are not subject to

FAAAA preemption.

In Dillingham and Travelers, this Court declined to

preempt state police power statutes that serve an impor-

tant state interest and whose impact is too indirect,

remote and tenuous to the purpose of ERISA. This Court

should confirm that the narrowed preemption test set

forth in Dillingham and Travelers is the appropriate

standard under the FAAAA, as well. Maine’s Tobacco

Delivery Law and similar tobacco laws in other states that

serve a critical public health purpose in ensuring that

tobacco products are not delivered to children, at most,

affect carrier services indirectly and should not be pre-

empted.

e

ARGUMENT

I. FAAAA’S PREEMPTION PROVISION MUST BE

INTERPRETED IN LIGHT OF THE PRESUMP-

TION AGAINST PREEMPTION OF STATE PO-

LICE POWERS AND THE STRUCTURE AND

PURPOSE OF THE FAAAA AS A WHOLE

Where, as here, a federal statute, contains an express

preemption provision, the task of the reviewing court is “to

identify the domain expressly preempted by that lan-

guage.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 484 (1996)

‘(internal quotation marks omitted). As the Court has

explained, “lallthough ... analysis of the scope of the

preemption statute must begin with its text, ... interpre-

tation of that language does not occur in a contextual

vacuum. Rather, that interpretation is informed by two

presumptions about the nature of pre-emption.” Jd. at 484-

85. Both presumptions highlight the importance of con-

gressional purpose in determining whether a federal

statute preempts state law. First, “[iJn all preemption

cases, and particularly in those in which Congress has

legislated ... in a field which the states have traditionally

occupied we start [this analysis) with the assumption that

the historic police powers of the States were not to be

superseded by the Federal Act unless that was the clear

and manifest purpose of Congress.” Jd. at 485-86 (internal

citation and quotation marks omitted). Second, “analysis

of the scope of the statute’s preemption is guided by the

oft-repeated comment ... that the purpose of Congress is

the ultimate touchstone in every preemption case. As a

result, any understanding of the scope of a preemption

statute must rest primarily on a fair understanding of

congressional purpose.” Id. at 485-86 (internal citations

and quotation marks omitted). Congress’s purpose regard-

ing a statute’s preemptive scope is discerned “primarily . . .

from the language of the preemption statute and the

statutory framework surrounding it. Also relevant, how-

ever, is the structure and purpose of the statute as a

whole, as revealed not only in the text, but through the

reviewing court’s reasoned understanding of the way in

which Congress intended the statute and its surrounding

regulatory scheme to affect business, consumers, and the

law.” Id. at 486 (internal citation and quotation marks

omitted).

A. Because Maine’s Tobacco Delivery Law Is

Crucial to Curb Rampant Illegal Tobacco

Sales to Minors, the Presumption Against

Preemption Applies with Full Force

The provisions of Maine’s Tobacco Delivery Law at

issue here require that a person who engages in delivery

sales of tobacco products take a number of steps to ensure

that those products are not delivered to children. Before

shipping, the licensed tobacco retailer must provide the

delivery service with the age of the purchaser; it must

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

name and state-retailer license number; and it must

indicate that the contents are tobacco products. Jd. § 1555-

C(3)(A)-(B). ME.. REV. STAT. ANN. tit. 22 (2004). The retailer

must also utilize a delivery service that requires the pur-

chaser to be the addressee; to be of legal age to purchase

tobacco products and sign for the package; and, if under 27

years of age, to produce a valid government-issued photo

identification that shows the addressee to be of legal age to

purchase tobacco products. Jd. § 1555-C(3)(C).

“

Under Maine's statute, a carrier is defined as “a

person, including the United States Postal Service, who is

engaged in the commercial delivery of letters, packages

or other containers,” Jd. § 1551(1-C). The requirements

imposed on the carrier by Maine's statute are: “(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

distributor or retailer. ME. Rev. STaT. ANN. tit. 22, § 1555-

D (2004). Additionally, “(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

ti.

9

1555-C(3)(B)] or if the person receives the package from a

person listed as an unlicenced tobacco retailer by the

Attorney General.” /d.

The presumption against preemption of Maine's

Tobacco Delivery Law and similar laws in other states is

particularly important in this case. Since at least the

beginning of the last century, when this Court decided

Austin v. Tennessee, 179 U.S. 343 (1900), it has been

recognized that States are empowered to ameliorate

cigarettes’ “deleterious effects, particularly upon young

people.” Jd. at 348. The Court has recognized that “tobacco

use, particularly among children and adolescents, poses

perhaps the single most significant threat to public health

in the United States.” FDA v. Brown & Williamson To-

bacco Corp., 529 U.S. 120, 161 (2000). This problem has

become substantially more difficult to solve due to the

recent boom in sales of tobacco products over the Internet.

Illegal Internet tobacco sales have reached epidemic

proportions. The number of Internet cigarette vendors has

risen from 88 in January 2000, to 772 in January 2006."

Unlike purchasing tobacco products in a brick-and-mortar

store, where the seller can look the person in the eye and

carefully examine the customer's government identification,

there is no evidence that online tobacco sellers utilize any

effective method of age-verification. The vast majority of

Internet cigarette vendors simply do not prevent youths from

purchasing cigarettes online. While 79.7% of vendors include

* Kurt M. Ribisl. Annice E. Kim, Rebecca S. Williams, Sales and

Marketing of Cigarettes on the Internet: Emerging Threats to Tobacco

Control and Promising Poliey Solutions in Reducing Tobacco Use

Strategres. Barriers, and Consequences. Washington, DC: National

Academy Press

10

minimum-age warnifigs on their home pages, only 26.7%

feature them at the top of the page where they can be

viewed without scrolling, the prevailing standard for Web

design.” Such warnings are no substitute for valid age-

verification procedures, and many of these warnings are

likely to be missed by users. Internet *.garette vendors

commonly use self-verification methods, asking users to

type in a birth date (used by 18.8% of vendors) or stating a

disclaimer that, by submitting an order, the customer is

certifying that he/she is of legal age to purchase cigarettes

(used by 31.5% of vendors). Only a handful of vendors use

minimally adequate age-verification methods, such as

requiring the submission of a photo ID (used by 7.7% of

vendors) or age-verification at delivery (used by 10.1% of

vendors). California conducted an investigation that

exposed the significant problem with Internet tobacco sales.

Children visited 234 web sites and were able to purchase a

carton of cigarettes from 129 sites. Only a few Internet

retailers did anything more than ask the prospective

purchaser to state that he or she was at least 18 years old.*

Respondent suggests that Maine could fulfill its public

health goal by simply enforcing those portions of its Tobacco

Delivery Law that apply only to tobacco retailers. Those

provi ‘ons include requiring retailers to be licensed and

verify age through a database of records or by obtaining a

* Rebecca S. Williams, Youth Access to Cigarettes Online: Adver-

issed and Actual Sales Practices of Internet Cigarette Vendors [Disserta-

tuuon|. Chapel Hill: Health Behavior and Health Education, University

of North Carolina School of Public Health (2005).

Id

* Jennifer A. Jensen, Norval J. Hickman III, Hope Landrine, &

Ehzabeth A. Klonoff, Availability of Tobacco to Youth Via the Internet,

JAMA, 291:15,). 1837 (2004).

1]

copy of a government ID from the purchaser. Respondent

also suggests that Maine, like California, could engage in

sting operations to determine if tobacco retailers are

complying with those regulations. Br. of Resp’t in Opp’n to

Pet for Writ of Cert. 16.

These suggestions would be helpful if the target of the

stings were brick-and-mortar sellers. In face-to-face sales

a tobacco retailer selling to a minor can be quickly identi-

fied and the statute can be effectively enforced. However,

when the target of the sting is an online tobacco seller, it is

extremely difficult to identify the seller, and hence, effec-

tively enforce the statute. Moreover, an Internet sting is,

for the most part, only helpful in identifying the web site

from which the minor purchased the tobacco products and

the carrier who delivered them. But simply identifying the

online tobacco web sites selling tobacco products to chil-

dren is insufficient to stop these illegal sales for a number

of reasons, including: (1) online tobacco sellers purposely

try to hide their identities by, for example, using third

party processors to front these transactions; (2) once the

online sellers are identified by law enforcement they move

to another web site; and (3) many of these sales come from

foreign countries or from Indian tribes making it difficult

to obtain jurisdiction over these individuals.” The only way

to effectively ensure that tobacco products are not deliv-

ered to children is by verifying in person that the ad-

dressee is the purchaser and is not a munor. Age

* In 2006, the States of California and Maryland attempted to

identify online tobacco retailers illegally peddling tobacco products over

the Internet. The states obtained address information from the web

sites, and sent hundreds of letters to these retailers. Most were

returned as undeliverable.

12

verification procedures such as those contained in Maine's

law are necessary to ensure that carriers will not be used

as a conduit for illegal activity.

At least 35 states, including Maine, severely restrict

Internet sales to consumers.” Although states differ in

the restrictions they impose, typically they provide that:

(1) Retailers at the time of the sale, and/or carriers upon

delivery, must verify that the purchaser is an adult; (2)

Retailers must be licensed by the state; and (3) Containers

”" Ata. CODE § 13A-12-3.5 (Lexis Nexis Supp. 2006); AK. STAT.

§ 43.50.105 (2006), Ariz. Rev. Stat. ANN. §§ 42-3222 (2006 & Supp.

2006), 42-3225 (2006), CaL. Bus. & Pror. Cope § 22963 (West Supp.

2007). CaL. Rev. & Tax. Cope § 30101.7 (West 2004), DEL. CODE. ANN.

tit. 30, §$ 5362, 5365 (Supp. 2006); Haw. Rev. Stat. ANN. § 245-16

:2006); Ip. CopE §§ 39-5714. 39-5715, 39-5717 (Supp. 2007); 720 ILL.

Comp. Stat. ANN. 678/5 (West Supp. 2007), IND. CODE ANN. § 24-3-5-5

(West 2006), IA. Cope ANN. § 4534.45 (West 2006), Kan. STAT. ANN.

§ 79-3333 (Supp. 2006), La. Rev. Stat. ANN. § 47:874 (2006); Me. REV.

Stat. ANN. tit. 22. § 1555 C-D (2004), Mass. Gen. Laws ANN. ch. 64C,

§ 6 (West 2001 & Supp. 2007). Mich. Comp. Laws ANN. § 205.431 (West

Supp. 2007), Minn. Stat. ANN. §§ 297F 11 (West 1999), § 325F.781 (West

Supp. 2007, Mo. ANN. Stat. §§ 149.045 (West 2006), § 407.926 (West

Supp 2007): Miss. CoDE ANN. § 97-32-5 (West 1999), Mont. CODE ANN.

§§ 16-11-104, 16-11-128, 16-11-131 (2005 & Supp. 2006), Nev. REv.

STAT. ANN. §§$ 370.325, 370.329 ‘Lexis Nexis 2007), N.J. STAT. ANN.

§ 54-40A-32 West 2002), N.C. Gen. Stat. § 105-113.31 (2003), OKLA.

Stat. ANN. tit. 68 §§ 304 ‘West 2001 & Supp. 2007), 309 ‘West 2001).

317.4 (West Supp. 2007); OR Rev Stat § 323.718 (2005). 72 Pa. STAT.

ANN. § 231-A ‘West Supp. 2007), R.I. Gen. Laws § 44-20.1-5 (2005), S.D

CopiFIED Laws §§ 10-30-93, 10-50-96 ‘Supp. 2007), TENN. CODE ANN.

§ 67-4-1029 2006). TEx. HeaLTH & SareTy Cove ANN. § 161.455

‘Vernon Supp 2006), TEX. TAX CODE ANN. § 154.207 (Vernon 2002), UT.

Cope ANN. § 76-10-105.1 (Supp. 2007; Va. Cope ANN. §§ 18.2-246.10

2004), WasH Rev. CoDE ANN. § 70.155.105 ‘West Supp. 2007), W. VA.

Cope ANN. § 16-9E-4 (Lexis Nexis 2006), Wis. STAT. ANN § 139.345

(West Supp. 2006", Wyo. STAT. ANN. § 39-15-106 (2007)

13

must be labeled as containing cigarettes or tobacco

products.

Five states, Connecticut, New York, Maryland, Ohio

and Arkansas, have banned outright the shipment and

delivery of cigarettes to individual consumers.

If this Court accepts respondent’s expansive interpre-

tation of FAAAA preemption, states’ tobacco laws will be

undercut. Consequently, states may lose their most effec-

tive means of preventing children from purchasing tobacco

products over the Internet.

B. Congress Intended the FAAAA to Preempt

States’ Economic Authority Over Motor Car-

riers, Not State Police Powers

The FAAAA has two preemption provisions. One of

these provisions sets forth the following “general rule”:

Except as provided in subparagraph ‘B), a State

... May not enact or enforce a law ... related to

a price, route, or services of an air carrier or car-

rier affiliated with a direct air carrier ... when

such carrier is transporting property by aircraft

or by movor veliicile.

49 U.S.C. § 41713(b 4A).

* Conn. Gen. Stat. ANN. § 12-285c ‘West Supp. 2007), N.Y. PUB.

HEALTH Law § 1399-1] (McKinney 2002. Mp. Cope ANN., Bus. REG.

$$ 16-222 2004), 16-223 (2006), OH. Rev Cope ANN. § 2927 023 (Lens

Nexis 2006, ARK CODE ANN. §$§ 26-57-203 11997 & Supp. 2005), 26-57-

215 1997 . 26-57-230 11997)

14

The other provision states:

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

State ... may not enact or enforce a law ... re-

lated to a price, route, or service of any motor

carrier (other than a carrier affiliated with a di-

rect air carrier covered by section 41713(b)(4))

... With respect to the transportation of property.

49 U.S.C. § 14501(c1). The language was patterned after

the preemption provision of the Airline Deregulation Act of

1978 (ADA). See H.R. Conf. Rep. 103-677 at 85, reprinted

in 1994 U.S.C.C.A.N. 1715, 1759. Nothing in this language

indicates a congressional intent to preempt state police

power enactments. To the contrary, the legislative history

shows that the FAAAA was intended to preempt states

from asserting economic control over carriers in order (1)

to eliminate non-uniform “|s]tate economic regulation of

motor carrier operations |that] causes significant ineffi-

ciencies, increased costs, reduction of competition, inhibi-

tion of innovation and technology and curtails the

expansion of markets”; and (2) to “level the playing field”

between air carriers and motor carriers. H.R. Conf.

Rep. No. 103-677, at 85-88 (1994), reprinted in 1994

U.S.C.C.A.N. 1715, 1758-60.

That the objectives of FAAAA are consistent with the

carners goals can be discerned from the testimony of

James A. Rogers, Vice President, Government Affairs,

United Parcel Service. State Motor Carrier Laws: Hearing

on S. 1491 Before the Subcomm. on Surface Transp. of the

H. Comm. on Pub. Works & Transp., 103rd Cong. (1994)

‘statement of James A. Rogers, Vice President, Gov't

Affairs United Parcel Service). He testified that he was

supporting this legislation because of the decision of the

Ninth Circuit Court of Appeals in Federal Express Corp. v.

15

California Public Utilities Commission, 936 F.2d 1075 (9th

Cir. 1991). That case held that the Federal Aviation Act,

Pub. L. No. 95-504, 92 Stat. 1705, completely preempted

the California Public Utilities Commission from any

jurisdiction over the activities of Federal Express. As a

result, UPS would have to cunform to the economic regula-

tions of the state commissions while its direct competitor

would not. Mr. Rogers also listed regulations that created

substantial economic burdens for UPS including: (1) by

requiring carriers to file rate changes with all 38 state

commissions; and (2) by making UPS suffer lengthy and

costly delays in order to obtain state approval to change a

service offering. State Motor Carrier Laws: Hearing on S.

1491 Before the Subcomm. on Surface Transp. of the H.

Comm. on Pub. Works & Transp., 103rd Cong. (1994)

(statement of James A. Rogers, Vice President, Gov't

Affairs United Parcel Service); 1994 WL 377959. It was

these substantial economic burdens that caused the

carriers to clamor for enactment of the FAAAA. Never did

the carriers suggest at the hearings on the FAAAA that

they needed protection from state laws restricting the

transportation and delivery of dangerous or contraband

products like tobacco.

Moreover, the legislative history shows that the

conferees, in their 1994 Report to Congress on the FAAAA,

determined that nine states did not have the problematic

statutes that the FAAAA was intended to preempt because

they did not regulate intrastate prices, routes and services

of motor carriers. H.R. Conf. Rep. No. 103-677 at 86,

reprinted in 1994 U.S.C.C.A.N. at 1758. Notably, a number

of those pre-1994 statutes had provisions restricting the

transportation and delivery of a variety of different prod-’

ucts in ways that are very similar to Maine’s Tobacco

16

Delivery Law. Examples of some of those states and their

statutes include Arizona (restricting when a common

carrier may ship wildlife),” Florida (prohibiting a common

carrier from knowingly transporting any domestic game

unless it is accompanied with the appropriate permit and

markings on the package), Maine (requiring common

carriers transporting any wild animal or bird to check the

hunter’s license, affix tags and identification, and make

returns to the commissioner), New Jersey (prohibiting

common carriers from accepting various beekeeping

colonies and supplies without proof of inspection),” Ver-

mont (prohibiting common carriers from transporting fish

or game protected by law unless accompanied by the

required tags), and Wisconsin (prohibiting common

carriers from shipping alcohol into the state unless recipi-

ent has a proper permit).’’ Under respondent's expansive

view of preemption, even these statutes in states that

Congress deemed to be in compliance with the FAAAA

would be preempted. The conferees implicitly made it

clear, using these states as examples, that just because

state statutes touch on the transportation and delivery by

carriers, or cause carriers to change their uniform prac-

tices, does not mean that the statutes are automatically

preempted. These statutes pass constitutiona: muster for

the same reason that Maine’s tobacco law does — they do

not impose the type of significant economic burdens on

' Ariz. REV. Stat. ANN. § 17-372 (2006).

' Pia. Stat. ANN. § 372.16 (West 2006).

* Me. REV. STAT. ANN. tit. 12, § 7534 ‘repealed 2004).

* NJ. Stat. ANN. § 4°6-15 (West 1998).

Vr Stat. ANN. tt. 10, § 5102 (2006).

' Wis. STaT ANN. § 125 68+ West 2001 & Supp. 2006).

17

carrier services that congress intended to prevent when it

enacted the FAAAA.

This Court also confirmed Congress’s intent not to

preempt traditional police-power enactments in a case

holding that the FAAAA does not bar a state from delegat-

ing to municipalities the state’s authority to establish

safety regulations governing motor carriers of property.

“Congress’ clear purpose in § 14501(c)(2A) is to ensure

that its preemption of States’ economic authority over

motor carriers of property, § 14501(c)(1), ‘not restrict’ the

preexisting and traditional state police power over

safety... .” City of Columbus v. Ours Garage & Wrecker

Service, Inc., 536 U.S. 424, 439 (2002).

C. If Respondent’s View of FAAAA Preemption

Were to Become the Law of the Land, State

Health and Safety Laws Touching on the

Transportation or Delivery of Myriad Dan-

gerous Products Across the Country Would

Be at Risk of Preemption

Under respondent's expansive view of FAAAA preemp-

tion, every law that mentions the transport and delivery of

products by carriers would be preempted. For example,

respondent contends that the challenged provisions of

Maine’s Tobacco Delivery Law are “replete with express

references to transportation and delivery services,” and

are therefore preempted by the FAAAA. According to

respondent, these “express references” include the provi-

sion in section 1555-D which defines and proscribes the

“Illegal Delivery of Tobacco Products” and makes it unlaw-

ful for a person to “knowingly transport or cause to

be delivered” certain shipments of tobacco products.

Resp’t’s Br. in Opp'n to Writ of Cert. at p. 10. Respondent

18

erroneously relies on California Div. of Labor Standards

Enforcement v. Dillingham Constr. N.A., Inc., 519 U.S.

316, 325 (1997) (a case interpreting a similarly broadly

worded provision in the Employee Retirement Income

Security Act of 1974 (ERISA), 88 Stat. 829, as amended 29

U.S.C. § 1001 et seq.) to support its mistaken proposition

that the provisions of Maine’s law “expressly reference”

meaning “mention” carrier services and are preempted.

Opp’n to Pet. 10. As discussed infra, respondent has

misconstrued the Court’s decision in that case. Dillingham

rejected a similarly expansive view of preemption in

holding that California’s prevailing wage law was not

preempted by ERISA. Dillingham, 519 U.S. at 334.

Respondent’s broad view of FAAAA preemption is

especially troubling because its reasoning is not limited to

tobacco. Under this theory, any state statute — and there

are many — that merely mentions carrier transportation

and delivery services would be preempted by the FAAAA.

Examples of state statutes mentioning such services range

from statutes prohibiting the transportation and delivery

of dangerous or contraband products outright such as

inedible meat,” obscene material,” plants infested with

listed pests,“ and explosives,” to statutes that regulate or

restrict the transportation and delivery of raw oysters or

° 22 . . . 23

shrimp,” swine unless certified as free of disease,” and

* N.Y Acric. & Mkts. Law § 96-z-11 (McKinney 2004).

* ARIZ. REV. STaT. ANN. § 13-3502 (2001).

= Cat. Foop & AGRIC. CODE § 6461 (West 2u01)

* Co. Rev. Stat. ANN. § 9-6-102 (West 2003).

* ALA. Cope § 9-12-50 (Lexis Nexis 2001).

* Conn. GEN. Stat. ANN. § 22-319 (West 2001 & Supp. 2007).

19

beer and wine.” As is clear from the legislative history,

Congress would not have intended the FAAAA to preempt

every state statute that mentions the transportation and

delivery of contraband or dangerous products. Such an

expansive interpretation of FAAAA preemption would

have an enormously adverse effect on the states’ health

and safety enforcement efforts. In fact, it has the potential

to change the entire landscape of regulation of the trans-

portation and delivery of such products by the states. The

same mistaken premises the court applied to preempt

Maine’s tobacco laws might also be applied to invalidate a

whole range of state laws essential to health and safety

merely because they touch upon transportation or delivery

by motor carriers.

Il. THE DECISION BELOW CREATES A SUBSTAN-

TIAL UNCERTAINTY REGARDING STATES’

ABILITY TO PROSECUTE VIOLATORS OF

LAWS REGULATING THE TRANSPORT AND

DELIVERY OF TOBACCO PRODUCTS

This Court should reject the flawed analysis proposed

by respondent concerning the provision of Maine's law

imputing knowledge to carriers that they were delivering

contraband tobz~co products from the markings or labels

on the package. The First Circuit held that Maine's ban on

the knowing delivery of contraband tobacco is not pre-

empted by the FAAAA, even though it pertains to carrier

services, because the provision only requires that the

carriers do not act as knowing accomplices in the illegal

sale of tobacco products; it does not require carriers to

“ Va Cope ANN § 4.1-209.1 (Supp. 2007).

20

modify their delivery methods other than by declining to

transport products that Maine legitimately bans. New

Hampshire Motor Transport Ass'n v. Rowe, 448 F.3d 66, 80

(2006). However, respondent contends that the First

Circuit’s determination that the provision imputing

knowledge of illegal activity to the carrier is preempted

because that provision would impact the operations of the

carrier by requiring reading and comprehending the labels

and markings is correct.

If this Court were to decide this case as respondent

suggests, such a decision would create uncertainty about

the states’ Internet tobacco-sales laws, and leaves states in

a quandary about which laws will pass constitutional

muster and which will not. Such uncertainty puts at risk

the states’ ability to successfully prosecute sellers of

contraband tobacco over the Internet. For example, Calli-

fornia has two laws regulating non-face-to-face tobacco

sales — California Business & Professions Code § 22963

and California Revenue & Taxation Code § 30101.7.

Although section 22963 primarily regulates the conduct of

retailers, the statute does provide for an enforcement

mechanism against carriers, if they deliver tobacco prod-

ucts with reason to know the package’s contents.” Section

* Section 229631d) states:

For the purposes of enforcement of this section pursuant to

Section 22958, the acts of the United States Postal Service

or other common carrier when engaged in the business of

transporting and delivering packages for others ... who

transports or delivers a package for another person utthout

any reason tu know of the package's contents, are not unlaw-

ful and are not subject to civil penalties. Section 22963,

subd 'd), italics added)

21

30101.7 requires the retailer to, among other things, label

the package as containing cigarettes.

To enforce a ban on the knowing delivery of cigarettes,

the state must put into evidence the package delivered by

the carrier labeled “cigarettes,” so that the fact finder can

determine if the carrier had reason to know the package

contained cigarettes. According to respondent, however,

even if the state could impute such knowledge to the

carrier this fact could not be introduced into evidence. As a

result, the carrier would be immunized from the conse-

quences of its illegal act. It is unthinkable that states can

enact laws to protect the public health of their citizens but

are deprived of the most effective tools to enforce those

statutes.

Respondent's analysis is also flawed as to laws that

ban the transport or delivery of contraband products

outright. The court held that the knowing delivery of

contraband tobacco products is not preempted by the

FAAAA, because carriers need not modify their delivery

methods other than by declining to transport a product the

state has legitimately banned. (Rowe, 448 F.3d 66, 80.) As

a practical matter, as with the California statute and five

statutes hanning the direct delivery of cigarettes or to

bacco products to consumers, the way to prove a knowing

delivery of contraband tobacco products by the carrier is

also to impute knowledge if the package was labeled

“cigarettes” or “tobacco” and by the fact that the cigarettes

were delivered to a consumer as opposed to one of the

excepted persons — e.g. a state-licensed tobacco distributor

or retailer set forth in the statute.

This Court should reject respondent's contention that

violation of Maine's statute cannot be imputed to a carmier.

22

To hold otherwise would effectively leave states that ban

outright the delivery of tobacco products no way to enforce

their statutes in practical terms. Simply put, under

respondent's analysis even statutes banning the knowing

delivery of contraband tobacco may be unenforceable in

application, unless the basis of the knowing violation is

that the carrier was specifically told the package contained

tobacco products and despite that knowledge, delivered

them anyway - an unlikely scenario.

III. RATHER THAN THE BROAD PREEMPTION

STANDARD APPLIED BY THE FIRST CIRCUIT

IN RELIANCE ON MORALES, THE APPRO-

PRIATE STANDARD IS THAT ADOPTED BY

THIS COURT IN THE ERISA CASES

This Court should apply a narrow view of preemption

in this case as it has done in cases decided since Morales v.

Trans’ World Airlines Inc., including New York State

Conference of Blue Cross & Blue Shield Plans v. Travelers

Ins. Co., 514 U.S. 645 (1995) and California Div. of Labor

Standards Enforcement v. Dillingham Construction, Inc.,

519 U.S. 316 (1997). In those cases this Court was grap-

pling with the problem of where to draw the line in a

similar seemingly limitless preemption provision in the

Employee Retirement Income Security Act of 1974 (ER-

ISA) which preempts state laws “insofar as they... relate

to any employee benefit plan....” 29 U.S.C. § 1144/a)

(2000).

In Travelers, this Court rejected the opportunity to

extend a broad preemption analysis to ERISA. There

commercial insurers challenged a New York statute requir-

ing hospitals to collect surcharges from patients covered by

a

23

a commercial insurance carrier but not from patients

insured by a Blue Cross/Blue Shield Plan, and imposing

certain surcharges that vary with the number of Medicaid

recipients they enroll. The issue was whether ERISA

preempted the state surcharge provisions on bills of

patients whose commercial insurance is purchased by

employee health care plans governed by ERISA and

Health Maintenance Organizations whose membership

fees are paid by an ERISA plan. Petitioners claimed that

the statute “related to” employee benefit plans within the

meaning of ERISA and was preempted. Finding the broad

language of ERISA unhelpful in determining whether the

state statute was preempted, the Court said:

. one might be excused for wondering at first

blush, whether the words of limitation (“insofar

as they . .. relate”) do much limiting. If “relate to”

were taken to extend to the furthest stretch of its

indeterminacy, then for all practical purposes pre-

emption would never run its course...

Travelers at 655.

A unanimous Court in Travelers read the Morales

ruling narrowly, and rejected the claim because the sur-

charges are not imposed exclusively on ERISA plans, but

are imposed regardless of whether commercial coverage, or

membership is secured by an ERISA plan, private pur-

chase or otherwise. Jd. at 655. Traditional state regulation

having no more than an indirect effect on ERISA plans is

not “related to” such plans within the meaning of ERISA’s

preemption clause. See id. at 661-62.

In determining whether the surcharge laws have a

“connection with” ERISA plans this Court said it was

necessary to go beyond the unhelpful text and look instead

24

to “the objectives of the ERISA statute as a guide to the

scope of the state law that Congress understood would

survive” Jd. at 656. Unlike the First Circuit below, this

Court “fhas] never assumed lightly that Congress has

derogated state regulation, but instead have addressed

claims of pre-emption starting with the presumption that

Congress does not intend to supplant state law” Jd. at 654

Although the ERISA preemption provision is broad,

“nothing in the language of the Act or the context of its

passage indicates that Congress chose to displace general

health care regulation, which historically has been a

matter of local concern.” Jd. at 661. This Court found that

neither the purpose of the statute nor the effect on ERISA

plans justify preemption.

Similarly, in Dillingham, this Court held that Califor-

nia’s prevailing wage law (CPWL) did not “relate to”

employee benefit plans and was not preempted by ERISA.

California’s law required contractors on public works

projects to pay workers the prevailing wage in the

worker’s locale, except that a lower wage could be paid for

workers in apprenticeship programs. Dillingham says that

since ERISA’s enactment, the Court has endeavored with

some regularity to interpret and apply the “unhelpful text”

of ERISA’s pre-emption provision. It has also long ac-

knowledged that ERISA’s preemption provision is “clearly

expansive,” has a “broad scope,” and is “conspicuous for its

breadth.” Dillingham, 519 U.S. at 324. The Court's efforts

in Dillingham at applying the provision has yielded a two-

part inquiry: a “law ‘relate|s) to’ a covered employee

benefit plan for purposes of [ERISA] ‘if it |1] has a connec-

tion with or [2] reference to such a plan.’” (cites omitted)

Id. “Where a State’s law acts immediately and exclusively

upon ERISA plans, ... or where the existence of ERISA

25

plans is essential to the law’s operation, .. . that ‘reference’

will result in pre-emption.” Jd. at 325.

The Court in Dillingham found that the prevailing

wage statute, like the New York surcharge law has a

tenuous economic effect on ERISA plans. The Court went

on to say that while these laws alter the incentives, they

do not dictate the choices facing ERISA plans and “(ijn this

regard, it is no different from myriad state laws in areas

traditionally subject to local regulation, which Congress

could not possibly have intended to eliminate.” Dilling-

ham, 519 US. at 334.

Similarly, in this case, neither Maine, nor the 34

states restricting Internet tobacco sales to consumers, are

forcing carriers to deliver tobacco products. The states are

merely granting the power (or creating the incentive) to

the carriers to expand their delivery business to include

tobacco products, as long as they comply with Maine's

statutory requirements. Five states currently ban the

direct shipment of tobacco by retailers to consumers, and

Maine and the rest of the 34 states that restrict Internet

tobacco sales could do so as well. Given that states like

Maine that restrict Internet tobacco sales have the greater

power to ban the shipments altogether. it makes no sense

to say they do not have the lesser power to condition such

a shipment on a mode of delivery. Maine’s Tobacco Deliv-

ery Law is no different from myriad state laws regulating

the transportation and delivery of dangerous products

which Congress could not possibly have intended to

eliminate.

Moreover, neither Maine’s Tobacco Delivery Law nor

similar laws in other states have a connection with, or

reference to carrier services as interpreted by this Court in

26

Dillingham and Travelers. Under the Dillingham test,

neither section 1555-C(3C) nor other similar state

statutes imposing age-verification obligations on retailers,

“reference” carrier services fur two reasons: (1) by their

terms these laws apply to delivery services that are not

covered by the FAAAA, including the United States Postal

Service, so they do not act exclusively on carrier services,

and (2) the provisions obligate retailers, not carriers, so

they do not act immediately on carrier services. Seventeen

states” in addition to Maine do not impose age-verification

requirements directly on the carrier. Either they impose

obligations on the retailer or the statutes apply generally

“merely mentioning” carrier services. Under respondent's

limitless view, all these statutes “expressly reference”

carrier services and should be preempted. But Congress

could not have intended such a massive across-the-board

preemption of all those state statutes.

Likewise, neither Maine’s law nor other states’ laws

restricting delivery of tobacco and other dangerous prod-

ucts have a forbidden significant effect on carrier services.

* ariz. Rev. StaT. ANN. §§ 42-3222 (2006 & Supp. 2006), 42-3225

2006". DEL. CODE. ANN. tit. 30, §§ 5362, 5365 ‘Supp. 2006); IND. CODE

ANN. § 24-3-5-5 (West 2006). La. Rev. Stat. ANN. § 47:874 (2006). MINN.

Star. ANN. § 325F.781 (West Supp. 2007), Nev. Rev. Stat. ANN.

$$ 370.325, 370.329 (Lexis Nexis 2007); OKLA. STAT. ANN. tit. 68 § 317.4

‘West Supp. 2007), Or. REV. Stav. § 323.718 (2005), 72 Pa. StaT. ANN.

§ 231-A (West Supp. 2007); RJ. Gen. Laws § 44-20.1-5 (2005), S.D.

CopIFIED LAWS §§ 10-50-93, 10-50-96 Supp. 2007), TENN. CODE ANN.

§ 67-4-1029 :2006), TEX. HEALTH & SaFETY CODE ANN. § 161.455

‘Vernon Supp. 2006), Ut Cope ANN. § 76-10-105.1 (Supp. 2007); VA.

Cope ANN. § 18.2-246.10 (2004), WasH. Rev. Cope ANN. § 70.155.105

‘West Supp. 2007), W. VA. Cove ANN. § 16-9E-4 (Lexis Nexis 2006).

27

Twenty-six states, in addition to Maine, require tobacco

products to be labeled as such.” At least six states, in

addition to Maine, require delivery to a licensed entity.”

* Ava. Cove § 13A-12-3.5 (Lexis Nexis Supp. 2006).

CONN. GEN. STAT. ANN. § 12-285c (West Supp. 2007).

N.Y. Pus. HEALTH Law § 1399-1] (McKinney 2002).

AK. STAT. § 43.50.105 (2006).

Ariz. Rev. Stat. ANN. §§ 42-3222 (2006 & Supp. 2006), 42-3225 (2006).

Cau. Rev. & TAX. Cope § 30101.7 (West 2004).

DEL. CODE. ANN. tit. 30, §§ 5362, 5365 (Supp. 2006).

Haw. Rev. Stat. ANN. § 245-16 (2006).

Ip Cope §§ 39-5714, 39-5715, 39-5717 (Supp. 2007).

720 ILL. Comp. Stat. ANN. 678/5 (West Supp. 2007).

Inv. CODE ANN. § 24-3-5-5 (West 2006).

KAN. StaT. ANN. § 79-3333 (Supp. 2006).

La. REV. Stat. ANN. § 47:874 (2006).

Mick. Comp. Laws ANN. § 205.431 (West Supp. 2007).

MINN. Stat. ANN. § 325F.781 (West Supp. 2007).

NEV. Rev. StaT. § 202.24935 (2005).

Nev. Rev. Stat. ANN. §§ 370 325, 370 329 (Lexis Nexis 2007).

OKLA. StTaT. ANN. tit. 68 § 317.4 (West Supp. 2007).

Or. REV. Star. § 323.718 (2005).

K.1. GEN. Laws § 44-20.1-5 (2003).

SV. CODIFIED Laws §$ 10-50-93, 10-50-96 (Supp. 2007).

TENN. CODE ANN. § 67-4-1029 (2006).

Tex. HEALTH & Sarety CODE ANN. § 161.455 (Vernon Supp. 2006).

Va. CODE ANN. § 18 2-246.10 (2004).

Wask. Rev. Copt ANN. § 70.155.105 (West Supp. 2007).

W Va. COvE ANN. § 16-9E-4 (Lexis Nexis 2006).

* Mo. Cope ANN.. Bus. REG. § 16-222 (2004).

N Y. Pup. HEALTH Law § 1399-1] ‘(McKinney 2002).

Haw. Rev. Stat. ANN. § 245-16 (2006).

On. Rev Cove ANN. § 2927 023 1 Lexis Nens 2006).

‘Continued on following page)

28

Reading labels, reviewing a list of unlicenced tobacco

retailers and complying with age-verification require-

ments has a tenuous effect on carrier services. Clearly

such minor inconveniences are not the type of significant

economic effect Congress intended when it enacted the

FAAAA, and respondent has not introduced any evidence

to the contrary. If respondent’s limitless view of preemp-

tion is accepted by this Court, all of the state statutes are

at risk of preemption.

As noted above, UPS and other major carriers are

already doing what is basically required by Maine’s law

and the laws of a number of other states, at least with

regard to cigarettes, and since UPS already has a database

of tobacco retailers, finding out information about retailers

selling other tobacco products should not be too difficult.

The objective of Maine’s Tobacco Delivery Law, and laws

regulating tobacco and other dangerous products in other

states, is to ensure that (1) products such as tobacco are

not delivered to children and/or (2) the carrier is not the

illegal conduit for such activities. Congress’s in enacting

the FAAAA did not intend to preempt public health laws

having an indirect or remote impact on carrier services;

nor did Congress intend to create a loophole that would

immunize carriers from illegal activity.

In rejecting the narrow approach to preemption taken

by this Court in Dillingham and Travelers in favor of the

limitless view of preemption set forth in Morales, the First

Circuit said that “|I)f developments in pension law have

under-cut holdings in air transportation law, it is for the

Ak. Stat. § 43.50. 105 ' 2006).

720 ILL Comp. Stat. ANN. 678/5 (West Supp 2007).

29

Supreme Court itself to make the adjustments.” 448 F.3d

at 76. The amici states ask this court to do just that —

clarify that the narrow standard of preemption set forth in

Dillingham and Travelers is the appropriate test for

interpreting the FAAAA preemption provision and that

Maine’s Tobacco Delivery Law is not preempted by the

FAAAA.

CONCLUSION

The judgment of the court of appeals should be re-

versed.

Dated: August 23, 2007

Respectfully submitted,

EDMUND G. BROWN JR.

Attorney General of the State

of California

TOM GREENE

Chief Assistant Attorney General

MANUEL MEDERIOS

Solicitor General

DENNIS ECKHART

Senior Assistant Attorney General

LAURA KAPLAN

Deputy Attorney General

Counsel of Record

Counsel for Amicus Curiae