Argued: November 28, 2007 -- Decided: February 20, 2008
Opinion Author: Breyer
Although a provision of the Federal Aviation Administration Authorization Act of 1994 forbids States to "enact or enforce a law ... related to a price, route, or service of any motor carrier," 49 U. S. C. sec.14501(c)(1), see also sec.41713(b)(4)(a), Maine adopted a law which, inter alia, (1) specifies that a state-licensed tobacco shipper must utilize a delivery company that provides a recipient-verification service that confirms the buyer is of legal age, and (2) adds, in prohibiting unlicensed tobacco shipments into the State, that a person is deemed to know that a package contains tobacco if it is marked as originating from a Maine-licensed tobacco retailer or if it is received from someone whose name appears on an official list of un-licensed tobacco retailers distributed to package-delivery companies. In respondent carrier associations' suit, the District Court and the First Circuit agreed with respondents that Maine's recipient-verification and deemed-to-know provisions were pre-empted by federal law.
Held: Federal law pre-empts the two state-law provisions at issue. Pp. 3-11.
(a) In interpreting the 1994 federal Act, the Court follows Morales v. Trans World Airlines, Inc., 504 U. S. 374 , in which it interpreted similar language in the pre-emption provision of the Airline Deregulation Act of 1978. Voiding state enforcement of consumer fraud statutes against deceptive airline-fare advertisements, Morales determined, inter alia, that the federal Act pre-empted state actions having a "connection with" carrier " ' rates, routes, or services,' " id., at 384; that pre-emption may occur even if a state law has only an indirect effect on rates, routes, or services, id., at 386; and that pre-emption occurs at least where state laws have a "significant impact" related to Congress' deregulatory and pre-emption-related objectives, id., at 390. The Court also emphasized that the airline Act's overarching goal of helping assure that transportation rates, routes, and services reflects maximum reliance on competitive market forces, id., at 378, and stated that federal law might not pre-empt state laws affecting fares only tenuously, remotely, or peripherally, but did not say where, or how, it would draw the line on "borderline" questions, id., at 390. Pp. 3-5.
(b) In light of Morales, the Maine laws at issue are pre-empted. In regulating delivery service procedures, the recipient-verification provision focuses on trucking and similar services, thereby creating a direct "connection with" motor carrier services. See 504 U. S., at 384. It also has a "significant" and adverse "impact" in respect to the federal Act's ability to achieve its pre-emption-related objectives, id., at 390, because it requires carriers to offer a system of services that the market does not now provide (and which the carriers would prefer not to offer). Even were that not so, the law would freeze into place services that carriers might prefer to discontinue in the future, thereby producing the very effect the federal law sought to avoid, i.e., a State's direct substitution of its own governmental commands for "competitive market forces" in determining (to a significant degree) the services that motor carriers will provide. Id., at 378. Maine's deemed-to-know provision applies yet more directly to motor carrier services by creating a conclusive presumption of carrier knowledge that a shipment contains tobacco in the specified circumstances. That presumption means that the law imposes civil liability upon the carrier, not simply for its knowing transport of (unlicensed) tobacco, but for the carrier's failure sufficiently to examine every package. The provision thus requires the carrier to check each shipment for certain markings and to compare it against the list of proscribed shippers, thereby directly regulating a significant aspect of the motor carrier's package pick-up and delivery service and creating the kind of state-mandated regulation that the federal Act pre-empts. Pp. 5-7.
(c) Maine's primary arguments for an exception from pre-emption--that its laws help prevent minors from obtaining cigarettes and thereby protect its citizens' public health--are unavailing. The federal law does not create a public health exception, but, to the contrary, explicitly lists a set of exceptions that do not include public health. See, e.g., sec.sec.14501(c)(2) to (c)(3). Nor does its legislative history mention specific state enforcement methods or suggest that Congress made a firm judgment about, or even focused upon, the issue here. Maine's inability to find significant support for such an exception is not surprising, given the number of States through which carriers travel, the number of products carried, the variety of potential adverse public health effects, the many different kinds of regulatory rules potentially available, and the difficulty of finding a legal criterion for separating permissible from impermissible public-health-oriented regulations. Although federal law does not generally pre-empt state public health regulation, the state laws at issue are not general, their impact on carrier rates, routes, or services is significant, and their connection with trucking is not tenuous, remote, or peripheral: They aim directly at the carriage of goods, a commercial field where carriage by commercial motor vehicles plays a major role. From the perspective of pre-emption, this case is no more "borderline" than was Morales. Maine's argument that to set aside its regulations will seriously harm its efforts to prevent minors from obtaining cigarettes is unpersuasive in light of other legislative alternatives available to the State. Regardless, given Morales' holding that federal law pre-empts state consumer-protection laws, federal law must also pre-empt Maine's efforts directly to regulate carrier services. Pp. 7-11.
448 F. 3d 66, affirmed.
Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Kennedy, Souter, Thomas, Ginsburg, and Alito, JJ., joined, and in which Scalia, J., joined in part. Ginsburg, J., filed a concurring opinion. Scalia, J.,filed an opinion concurring in part.
Argued: January 14, 2008 -- Decided: February 20, 2008
Opinion Author: Ginsburg
A contract between respondent Ferrer, who appears on television as "Judge Alex," and petitioner Preston, an entertainment industry attorney, requires arbitration of "any dispute ... relating to the [contract's] terms ... or the breach, validity, or legality thereof ... in accordance with [American Arbitration Association (AAA)] rules." Preston invoked this provision to gain fees allegedly due under the contract. Ferrer thereupon petitioned the California Labor Commissioner (Labor Commissioner) for a determination that the contract was invalid and unenforceable under California's Talent Agencies Act (TAA) because Preston had acted as a talent agent without the required license. After the Labor Commissioner's hearing officer denied Ferrer's motion to stay the arbitration, Ferrer filed suit in state court seeking to enjoin arbitration, and Preston moved to compel arbitration. The court denied Preston's motion and enjoined him from proceeding before the arbitrator unless and until the Labor Commissioner determined she lacked jurisdiction over the dispute. While Preston's appeal was pending, this Court held, in Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440 , that challenges to the validity of a contract requiring arbitration of disputes ordinarily "should ... be considered by an arbitrator, not a court." Affirming the judgment below, the California Court of Appeal held that the TAA vested the Labor Commissioner with exclusive original jurisdiction over the dispute, and that Buckeye was inapposite because it did not involve an administrative agency with exclusive jurisdiction over a disputed issue.
Held: When parties agree to arbitrate all questions arising under a contract, the Federal Arbitration Act (FAA), 9 U. S. C. sec.1 et seq., supersedes state laws lodging primary jurisdiction in another forum, whether judicial or administrative. Pp. 4-16.
(a) The issue is not whether the FAA preempts the TAA wholesale. Instead, the question is simply who decides--the arbitrator or the Labor Commissioner--whether Preston acted as an unlicensed talent agent in violation of the TAA, as Ferrer claims, or as a personal manager not governed by the TAA, as Preston contends. P. 4.
(b) FAA sec.2 "declare[s] a national policy favoring arbitration" when the parties contract for that mode of dispute resolution. Southland Corp. v. Keating, 465 U. S. 1 , 10. That national policy "appli[es] in state as well as federal courts" and "foreclose[s] state legislative attempts to undercut the enforceability of arbitration agreements." Id., at 16. The FAA's displacement of conflicting state law has been repeatedly reaffirmed. See, e.g., Buckeye, 546 U. S., at 445-446; Allied-Bruce Terminix Cos. v. Dobson, 513 U. S. 265 . A recurring question under sec.2 is who should decide whether "grounds ... exist at law or in equity" to invalidate an arbitration agreement. In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395 , which originated in federal court, this Court held that attacks on an entire contract's validity, as distinct from attacks on the arbitration clause alone, are within the arbitrator's ken. Buckeye held that the same rule applies in state court. See 546 U. S., at 446.
Buckeye largely, if not entirely, resolves the present dispute. The contract at issue clearly "evidenc[ed] a transaction involving commerce" under sec.2, and Ferrer has never disputed that the contract's written arbitration provision falls within sec.2's purview. Ferrer sought invalidation of the contract as a whole. He made no discrete challenge to the validity of the arbitration clause, and thus sought to override that clause on a ground Buckeye requires the arbitrator to decide in the first instance. Pp. 5-6.
(c) Ferrer attempts to distinguish Buckeye, urging that the TAA merely requires exhaustion of administrative remedies before the parties proceed to arbitration. This argument is unconvincing. Pp. 6-12.
(1) Procedural prescriptions of the TAA conflict with the FAA's dispute resolution regime in two basic respects: (1) One TAA provision grants the Labor Commissioner exclusive jurisdiction to decide an issue that the parties agreed to arbitrate, see Buckeye, 546 U. S., at 446; (2) another imposes prerequisites to enforcement of an arbitration agreement that are not applicable to contracts generally, see Doctor's Associates, Inc. v. Casarotto, 517 U. S. 681 . Pp. 7-8.
(2) Ferrer contends that the TAA is compatible with the FAA because the TAA provision vesting exclusive jurisdiction in the Labor Commissioner merely postpones arbitration. That position is contrary to the one Ferrer took in the California courts and does not withstand examination. Arbitration, if it ever occurred following the Labor Commissioner's decision, would likely be long delayed, in contravention of Congress' intent "to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible." Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1 . Pp. 8-10.
(3) Ferrer contends that the conflict between the arbitration clause and the TAA should be overlooked because Labor Commissioner proceedings are administrative rather than judicial. The Court rejected a similar argument in Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20 . Pp. 10-12.
(d) Ferrer's reliance on Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468 , is misplaced for two reasons. First, arbitration was stayed in Volt to accommodate litigation involving third parties who were strangers to the arbitration agreement. Because the contract at issue in Volt did not address the order of proceedings and included a choice-of-law clause adopting California law, the Volt Court recognized as the gap filler a California statute authorizing the state court to stay either third-party court proceedings or arbitration proceedings to avoid the possibility of conflicting rulings on a common issue. Here, in contrast, the arbitration clause speaks to the matter in controversy; both parties are bound by the arbitration agreement; the question of Preston's status as a talent agent relates to the validity or legality of the contract; there is no risk that related litigation will yield conflicting rulings on common issues; and there is no other procedural void for the choice-of-law clause to fill. Second, the Court is guided by its decision in Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U. S. 52 . Although the Volt contract provided for arbitration in accordance with AAA rules, 489 U. S., at 470, n. 1, Volt never argued that incorporation of those rules by reference trumped the contract's choice-of-law clause, so this Court never addressed the import of such incorporation. In Mastrobuono, the Court reached that open question, declaring that the "best way to harmonize" a New York choice-of-law clause and a clause providing for arbitration in accordance with privately promulgated arbitration rules was to read the choice-of-law clause "to encompass substantive principles that New York courts would apply, but not to include [New York's] special rules limiting [arbitrators'] authority." 514 U. S., at 63-64. Similarly here, the "best way to harmonize" the Ferrer-Preston contract's adoption of the AAA rules and its selection of California law is to read the latter to encompass prescriptions governing the parties' substantive rights and obligations, but not the State's "special rules limiting [arbitrators'] authority." Ibid. Pp. 12-15.
145 Cal. App. 4th 440, 51 Cal. Rptr. 3d 628, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Scalia, Kennedy, Souter, Breyer, and Alito, JJ., joined. Thomas, J., filed a dissenting opinion.
Argued: December 4, 2007 -- Decided: February 20, 2008
Opinion Author: Scalia
The Medical Device Amendments of 1976 (MDA) created a scheme of federal safety oversight for medical devices while sweeping back state oversight schemes. The statute provides that a State shall not "establish or continue in effect with respect to a device intended for human use any requirement--... (1) which is different from, or in addition to, any requirement applicable under [federal law] to the device, and ... (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under" relevant federal law. 21 U. S. C. sec.360k(a). The MDA calls for federal oversight of medical devices that varies with the type of device at issue. The most extensive oversight is reserved for Class III devices that undergo the premarket approval process. These devices may enter the market only if the FDA reviews their design, labeling, and manufacturing specifications and determines that those specifications provide a reasonable assurance of safety and effectiveness. Manufacturers may not make changes to such devices that would affect safety or effectiveness unless they first seek and obtain permission from the FDA.
Charles Riegel and his wife, petitioner Donna Riegel, brought suit against respondent Medtronic after a Medtronic catheter ruptured in Charles Riegel's coronary artery during heart surgery. The catheter is a Class III device that received FDA premarket approval. The Riegels alleged that the device was designed, labeled, and manufactured in a manner that violated New York common law. The District Court held that the MDA pre-empted the Riegels' claims of strict liability; breach of implied warranty; and negligence in the design, testing, inspection, distribution, labeling, marketing, and sale of the catheter, and their claim of negligent manufacturing insofar as the claim was not premised on the theory that Medtronic had violated federal law. The Second Circuit affirmed.
Held: The MDA's pre-emption clause bars common-law claims challenging the safety or effectiveness of a medical device marketed in a form that received premarket approval from the FDA. Pp. 8-17.
(a) The Federal Government has established "requirement[s] applicable ... to" Medtronic's catheter within sec.360k(a)(1)'s meaning. In Medtronic, Inc. v. Lohr, 518 U. S. 470 , the Court interpreted the MDA's pre-emption provision in a manner "substantially informed" by an FDA regulation, 21 CFR sec.808.1(d), which says that state requirements are pre-empted only when the FDA "has established specific counterpart regulations or there are other specific requirements applicable to a particular device" under federal law. Premarket approval imposes "specific requirements applicable to a particular device." The FDA requires that a device that has received premarket approval be marketed without significant deviations from the specifications in the device's approval application, for the reason that the FDA has determined that those specifications provide a reasonable assurance of safety and effectiveness. Pp. 8-10.
(b) Petitioner's common-law claims are pre-empted because they are based upon New York "requirement[s]" with respect to Medtronic's catheter that are "different from, or in addition to" the federal ones, and that relate to safety and effectiveness, sec.360k(a). Pp. 10-17.
(i) Common-law negligence and strict-liability claims impose "requirement[s]" under the ordinary meaning of that term, see, e.g., Lohr, supra, at 503-505, 512, Cipollone v. Liggett Group, Inc., 505 U. S. 504 . There is nothing in the MDA that contradicts this normal meaning. Pp. 10-12.
(ii) The Court rejects petitioner's contention that the duties underlying her state-law tort claims are not pre-empted because general common-law duties are not requirements maintained "with respect to devices." Petitioner's suit depends upon New York's "continu[ing] in effect" general tort duties "with respect to" Medtronic's catheter. Title 21 CFR sec.808.1(d)(1)--which states that MDA pre-emption does not extend to "[s]tate or local requirements of general applicability [whose] purpose ... relates either to other products in addition to devices ... or to unfair trade practices in which the requirements are not limited to devices"--does not alter the Court's interpretation. Pp. 14-17.
(c) The Court declines to address in the first instance petitioner's argument that this lawsuit raises "parallel" claims that are not pre-empted by sec.360k under Lohr, supra, at 495, 513. P. 17.
451 F. 3d 104, affirmed.
Scalia, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Souter, Thomas, Breyer, and Alito, JJ., joined, and in which Stevens, J., joined except for Parts III-A and III-B. Stevens, J., filed an opinion concurring in part and concurring in the judgment. Ginsburg, J., filed a dissenting opinion.
Argued: October 31, 2007 -- Decided: February 20, 2008
Opinion Author: Stevens
After this Court announced a "new rule" for evaluating the reliability of testimonial statements in criminal cases, see Crawford v. Washington, 541 U. S. 36 , petitioner sought state postconviction relief, arguing that he was entitled to a new trial because admitting the victim's taped interview at his trial violated Crawford's rule. The Minnesota trial and appeals courts concluded that Crawford did not apply retroactively under Teague v. Lane, 489 U. S. 288 . The State Supreme Court agreed, and also concluded that state courts are not free to give a decision of this Court announcing a new constitutional rule of criminal procedure broader retroactive application than that given by this Court.
Held: Teague does not constrain the authority of state courts to give broader effect to new rules of criminal procedure than is required by that opinion. Pp. 4-27.
(a) Crawford announced a "new rule"--as defined by Teague--because its result "was not dictated by precedent existing at the time the defendant's conviction became final," Teague, 489 U. S., at 301 (plurality opinion). It was not, however, a rule "of [this Court's] own devising" or the product of its own views about sound policy, Crawford, 541 U. S., at 67. Pp. 4-6.
(b) The Court first adopted a "retroactivity" standard in Linkletter v. Walker, 381 U. S. 618 , but later rejected that standard for cases pending on direct review, Griffith v. Kentucky, 479 U. S. 314 , and on federal habeas review, Teague v. Lane, 489 U. S. 288 . Under Teague, new constitutional rules of criminal procedure may not be applied retroactively to cases on federal habeas review unless they place certain primary individual conduct beyond the States' power to proscribe or are "watershed" rules of criminal procedure. Id., at 310 (plurality opinion). Pp. 6-11.
(c) Neither Linkletter nor Teague explicitly or implicitly constrained the States' authority to provide remedies for a broader range of constitutional violations than are redressable on federal habeas. And Teague makes clear that its rule was tailored to the federal habeas context and thus had no bearing on whether States could provide broader relief in their own postconviction proceedings. Nothing in Justice O'Connor's general nonretroactivity rule discussion in Teague asserts or even intimates that her definition of the class eligible for relief under a new rule should inhibit the authority of a state agency or state court to extend a new rule's benefit to a broader class than she defined. Her opinion also clearly indicates that Teague'sgeneral nonretroactivity rule was an exercise of this Court's power to interpret the federal habeas statute. Since Teague is based on statutory authority that extends only to federal courts applying a federal statute, it cannot be read as imposing a binding obligation on state courts. The opinion's text and reasoning also illustrate that the rule was meant to apply only to federal courts considering habeas petitions challenging state-court criminal convictions. The federal interest in uniformity in the application of federal law does not outweigh the general principle that States are independent sovereigns with plenary authority to make and enforce their own laws as long as they do not infringe on federal constitutional guarantees. The Teague rule was intended to limit federal courts' authority to overturn state convictions not to limit a state court's authority to grant relief for violations of new constitutional law rules when reviewing its own State's convictions. Subsequent cases confirm this view. See, e.g., Beard v. Banks, 542 U. S. 406 . Pp. 11-18.
(d) Neither Michigan v. Payne, 412 U. S. 47 , nor American Trucking Assns., Inc. v. Smith, 496 U. S. 167 , cast doubt on the state courts' authority to provide broader remedies for federal constitutional violations than mandated by Teague. Pp. 18-24.
(e) No federal rule, either implicitly announced in Teague, or in some other source of federal law, prohibits States from giving broader retroactive effect to new rules of criminal procedure. Pp. 24-26.
718 N. W. 2d 451, reversed and remanded.
Stevens, J., delivered the opinion of the Court, in which Scalia, Souter, Thomas, Ginsburg, Breyer, and Alito, JJ., joined. Roberts, C. J., filed a dissenting opinion in which Kennedy, J., joined.
Argued: November 26, 2007 -- Decided: February 20, 2008
Opinion Author: Stevens
Petitioner, a participant in a defined contribution pension plan, alleged that the plan administrator's failure to follow petitioner's investment directions "depleted" his interest in the plan by approximately $150,000 and amounted to a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). The District Court granted respondents judgment on the pleadings, and the Fourth Circuit affirmed. Relying on Massachusetts Mutual Life Ins. Co. v. Russell, 473 U. S. 134 , the Circuit held that ERISA sec.502(a)(2) provides remedies only for entire plans, not for individuals.
Held: Although sec.502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries, it does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account. Section 502(a)(2) provides for suits to enforce the liability-creating provisions of sec.409, concerning breaches of fiduciary duties that harm plans. The principal statutory duties imposed by sec.409 relate to the proper management, administration, and investment of plan assets, with an eye toward ensuring that the benefits authorized by the plan are ultimately paid to plan participants. The misconduct that petitioner alleges falls squarely within that category, unlike the misconduct in Russell. There, the plaintiff received all of the benefits to which she was contractually entitled, but sought consequential damages arising from a delay in the processing of her claim. Russell's emphasis on protecting the "entire plan" reflects the fact that the disability plan in Russell, as well as the typical pension plan at that time, promised participants a fixed benefit. Misconduct by such a plan's administrators will not affect an individual's entitlement to a defined benefit unless it creates or enhances the risk of default by the entire plan. For defined contribution plans, however, fiduciary misconduct need not threaten the entire plan's solvency to reduce benefits below the amount that participants would otherwise receive. Whether a fiduciary breach diminishes plan assets payable to all participants or only to particular individuals, it creates the kind of harms that concerned sec.409's draftsmen. Thus, Russell's "entire plan" references, which accurately reflect sec.409's operation in the defined benefit context, are beside the point in the defined contribution context. Pp. 4-8.
450 F. 3d 570, vacated and remanded.
Stevens, J., delivered the opinion of the Court, in which Souter, Ginsburg, Breyer, and Alito, JJ., joined. Roberts, C. J., filed an opinion concurring in part and concurring in the judgment, in which Kennedy, J., joined. Thomas, J., filed an opinion concurring in the judgment, in which Scalia, J., joined.