Who says conflict preemption is dead? On Friday, the Third Circuit -- in an excellent opinion by Judge Anthony Scirica -- held that the Federal Communication Commission's regulations preempt claims that sales of cell phones that emit radio frequency radiation are violations of state consumer protection statutes. The decision comes in a litigation that has ping-ponged back and forth between federal and state courts for nearly ten years.
In Farina v. Nokia Inc., No. 08-4034, Slip op. (3d Cir. Oct. 22, 2010), plaintiff sued in Pennsylvania state court on behalf of Pennsylvania purchasers and lessees of cell phones who have not been diagnosed with a physical injury resulting from cell phone usage. Plaintiff alleged that, because they emit RF radiation, cell phones are unsafe for use without headsets. Accordingly, the sales of such cell phones without headsets amount to civil conspiracy, breach of implied and express warranties, violation of the Magnuson-Moss Warranty Act, and violation of Pennsylvania's Unfair Trade Practices Act.
This case initially was filed in state court in 2001. It subsequently was removed to federal court and then transferred to an MDL transferee in Baltimore. The MDL transferee had denied a motion to remand and then granted a Rule 12 dismissal of the litigaiton. But the Fourth Circuit subsequently reversed, finding that there was no federal question jurisdiction because the issue of preemption did not arise on the face of a well-pleaded complaint. See Slip op. at 22. The Farina case was remanded to Pennsylvania state court, and in 2005, plaintiff filed a Second Amended Complaint, naming new parties. One of the new defendants removed the complaint to federal court, asserting federal jurisdiction under the newly passed Class Action Fairness Act. On renewed motions, the trial court found that it had federal jurisdiction under CAFA, and subsequently dismissed the case based on the preemptive effect of the FCC's regulations.
The Third Circuit has just affirmed in a thoughtful opinion. First, the court concluded that it properly had jurisdiction under CAFA because the filing of a new complaint adding new defendants commenced a new action, making CAFA -- which applied to actions commenced after its enactment -- applicable. Slip op at 33-34.
As for preemption, the court first confronted the defendant's argument that the so-called "presumption against preemption" should not apply to this case because the regulation of the airwaves has historically been a federal -- not state -- function. The court rejected this argument, explaining that states have historically acted to protect health and welfare. Slip op. at 42. But although the court applied the "presumption against preemption," it noted that such a presumption is "'overcome where a Congressional purpose to preempt or the existence of a conflict is "clear and manifest."'" Id. (citation omitted).
Next, the court considered and rejected the defendants' argument that plaintiff's complaint is preempted by the statute's express preemption provision:
No State or local government or instrumentality thereof may regulate the placement, construction, and modification of personal wireless service facilities on the basis of the environmental effects of radio frequency emissions to the extent that such facilities comply with the Commission's regulations concerning such emissions.
Id. at 46 (citation omitted). Defendants argued that each mobile phone is a wireless service "facility." The court -- reading the rest of the statute in context -- rejected this approach, holding that, instead, it means the physical infrastructure of the wireless network, not individual mobile phones. Id. at 48. Accordingly, there was no express preemption.
Next, the court considered the argument that Congress preempted the field of RF emission regulation, i.e., whether the federal interest is "so dominant that the federal system will be assumed to precclude enforcement of state laws on the same subject." Id. at 54. The court rejected this argument as well, noting that the relevant statutes contain a savings provision and thus Congress envisioned some role for state law in this field.
Finally, the court considered whether conflict preemption applied to plaintiff's claims. The court explained that conflict preemption exists where it is impossible for a party to comply with both federal and state regulation and the state law is an obstacle to the accomplishment of the federal law's objectives. Id. at 55.
The FCC has determined that the evidence for human harm from the levels of RF emissions inherent in mobile phone use is "ambiguous," "unproven," and "unknown," and it has stated that "any cell phone legally sold in the United States is a 'safe' phone." Id. at 14-15. Indeed, the FCC's regulations reflect "a 'consensus view of the federal agencies responsible for matters relating to the public safety and health.'" Id. at 18-19. They set maximum exposure levels, and the FCC is committed to monitoring the science to ensure human safety in the use of mobile phones. Id.
The court recognized that plaintiff's lawsuit is a fundamental conflict with the FCC's regulations:
But although he disavows any challenge to the FCC's RF standards, that is the essence of his complaint. The representations in the advertising and instructional literature that Farina has identified as false or misleading are warranties that the phones are 'safe to operate without the use of a headset and that they were and would be free from defects.' In order for Farina to succeed, he necessarily must establish that cell phones abiding by the FCC's SAR guidelines are unsafe to operate without a headset. In other words, Farina must show that these standards are inadequate--that they are insufficiently protective of public health and safety. Whether or not Farina intends to expressly challenge the FCC standards at trial, the inescapable effect of his complaint is to do so.
Id. at 57-58.
The court explained the reasoning behind conflict preemption:
The reason why state law conflicts with federal law in these balancing situations is plain. When Congress charges an agency with balancing competing objectives, it intends the agency to use its reasoned judgment to weigh the relevant considerations and determine how best to prioritize between these objectives. Allowing state law to impose a different standard permits a re-balancing of those considerations. A state law standard that is more protective of one objective may result in a standard that is less protective of others.
Id. at 59.
After describing how the FCC has engaged in a balancing of policy objectives with respect to RF emissions, it then analyzed how plaintiff's claims would impact the choices the FCC made as a result of that balancing:
Allowing juries to impose liability on cell phone companies for claims like Farina's would conflict ith the FCC's regulations. A jury determination that cell phones in compliance with the FCC's SAR guidelines were still unreasonably dangerous would, in essence, permit a jury to second guess the FCC's conclusion on how to balance its objectives. Were the FCC's standards to constitute only a regulatory floor upon which state law can build, juries could rebalance the FCC's statutory objectives and inhibit the provision of quality nationwide service. Because the intensity of RF emission levels and the strength and range of cell phone signals are positively correlated, allowing additional state law restrictions on these levels could impair the efficiency of the wireless market. . . . As an agency engaged in rulemaking, the FCC is well positioned to solicit expert opinions and marshal the scientific data to ensure its standards both protect the public and provide for an efficient wireless network. Allowing juries to perform their own risk-utility analysis and second-guess the FCC's conclusion would disrupt the expert balancing underlying the federal scheme.
Id. at 64-65. The court also noted that allowing standards to vary state to state would eradicate the uniformity necessary to regulate a nationwide wireless network. And it gave deference to the FCC's stated position in its rulemaking that its regulations preempt state law.
The court rejected plaintiff's argument that the US Supreme Court's decision in Wyeth v. Levine requires a different result. First, it noted that there was no evidence that Congress viewed state regulation of RF emissions as a complement to federal regulation, unlike in Wyeth, where state liability laws were seen as complementing federal regulation. Slip op. at 74. Moreover:
We do not read Wyeth's reference to Congress's decision not to enact an express preemption provision . . . as standing for the proposition that conflict preemption should not be found absent an express preemption provision. Such a reading would come too close to subsuming conflict preemption into express preemption analysis, and is inconsistent with the axiom that an express preemption provision does not 'bar the ordinary working of conflict preemption principles.'
Id. at 75.
Finally -- and perhaps most important -- Wyeth was not a balancing case where the agency was charged with advancing public policy by balancing conflicting objectives. Id. at 76. As the court noted:
The inexorable effect of allowing suits like Farina's to continue is to permit juries to second-guess the FCC's balance of its competing objectives. The FCC is in a better position to monitor and assess the science behind RF radiation than juries in individual cases.
Id. at 84.
Judge Scirica's opinion in Farina is a strong argument for why conflict preemption still exists, even in situations where there are express preemption provisions and statutory savings clauses.