February 23, 2011

The Supreme Court issued one decision, described below, of interest to the business community.

• Federal Preemption of State-Law Claims—The National Traffic and Motor Vehicle Safety Act

Federal Preemption of State-Law Claims—The National Traffic and Motor Vehicle Safety Act

Williamson v. Mazda Motor of Am., Inc., No. 08-1314 (previously discussed in the May 24, 2010 Docket Report)

Pursuant to the National Traffic and Motor Vehicle Safety Act (Safety Act), the Department of Transportation issued Federal Motor Vehicle Safety Standard (FMVSS) 208, which, as amended in 1989, gave automobile manufacturers the choice of installing either lap-only or lap/shoulder seatbelts in certain rear seats. Today the Supreme Court held in Williamson v. Mazda Motor of America, Inc., No. 08-1314, that allowing manufacturers this choice was not a significant regulatory objective, and that FMVSS 208 therefore did not impliedly preempt a state-law tort claim premised on a manufacturer’s failure to install a lap/shoulder seatbelt. 
Because the relevant safety standard has since been amended, the precise question presented in Williamson has diminishing prospective importance. The decision is nevertheless potentially important inasmuch as it offers guidance on when federal regulations will impliedly preempt state-law tort claims.

The petitioners in Williamson sued Mazda in California state court, alleging that a passenger wearing a lap-only belt was killed in an accident involving their 1993 Mazda minivan. Petitioners asserted that Mazda should have installed a lap/shoulder belt in the passenger’s seat. The trial court ruled that this claim was preempted, and the California Court of Appeal affirmed. Today the Supreme Court unanimously reversed.

The opinion of the Court, written by Justice Breyer, reaffirmed Geier v. American Honda Motor Co., 529 U.S. 861 (2000), but distinguished that decision on the facts. In Geier, the Court held that a state-law tort claim premised on a manufacturer’s failure to install airbags was impliedly preempted by a different provision of FMVSS 208 because the Department of Transportation had deliberately given manufacturers a choice between installing airbags and other types of passive restraints in order to accomplish specific regulatory goals. Geier held that allowing a state-law tort claim premised on the failure to install airbags would have conflicted with, and was therefore impliedly preempted by, the agency’s goal-oriented decision.

In Williamson, by contrast, the Court found that the agency’s decision to allow manufacturers a choice over the type of seatbelt they would install was not intended to achieve a significant regulatory objective, but was instead motivated by a cost-benefit analysis. Because allowing choice was not a regulatory objective in itself, the Court held that a state-law tort claim premised on the failure to install a lap/shoulder belt did not conflict with, and therefore was not impliedly preempted by, the relevant provision of FMVSS 208. The Court noted that if an agency’s cost-benefit judgments necessarily had preemptive effect under all circumstances, it would automatically transform federal standards into regulatory ceilings and thus hamper agencies’ ability to set minimum standards that could be supplemented through state tort law.

Justice Sotomayor joined the majority opinion, but also wrote a separate concurrence emphasizing her view that federal regulations allowing regulated entities a choice between modes of compliance do not preempt state-law claims unless the existence of that choice is crucial to the agency’s regulatory objectives.

Justice Thomas concurred only in the judgment. According to Justice Thomas, and contrary to Geier, the Safety Act’s savings clause disposed of the matter by expressly allowing tort claims to proceed. Moreover, in Justice Thomas’s view, preemption cannot rest on judicial interpretation of an agency’s objectives, but must instead rest, if at all, on statutory or regulatory text.

Justice Kagan was recused, having participated in the case as Solicitor General.

Mayer Brown LLP was co-counsel to Mazda

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