New Hampshire Motor Transport Ass'n v. Rowe
| Decision Date | 19 May 2006 |
| Docket Number | No. 05-2136.,05-2136. |
| Citation | 448 F.3d 66 |
| Parties | NEW HAMPSHIRE MOTOR TRANSPORT ASSOCIATION; Massachusetts Motor Transportation Association, Inc.; Vermont Truck & Bus Association, Inc., Plaintiffs, Appellees, v. G. Steven ROWE, in his official capacity as Attorney General for the State of Maine, Defendant, Appellant. |
| Court | U.S. Court of Appeals — First Circuit |
Paul Stern, Deputy Attorney General, with whom G. Steven Rowe, Attorney General, Melissa Reynolds O'Dea, Peter B. LaFond, and Christopher C. Taub, Assistant Attorneys General, Office of the Attorney General, were on brief, for appellant.
Ruth N. Borenstein, with whom Paul T. Friedman, Lawrence R. Katzin, Morrison & Foerster LLP, Michael A. Nelson and Jensen Baird Gardner & Henry, were on brief, for appellees.
Before BOUDIN, Chief Judge, STAHL, Senior Circuit Judge, and HOWARD, Circuit Judge.
In 2003, Maine enacted a law to restrict and regulate the sale and delivery of tobacco products purchased via the internet or other electronic means. Several trade associations, representing air and motor carriers of property, brought this action against the Maine Attorney General alleging that certain provisions of this law are preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The district court granted summary judgment for the associations and enjoined Maine's Attorney General from enforcing the law. We affirm in all respects but one.1
There are two FAAAA preemption provisions at issue in this case. See Pub.L. No. 103-305, § 601; 108 Stat. 1569. The first provides that a "State ... may not enact or enforce a law ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property." 49 U.S.C. § 14501(c)(1). The second states that a "State may not enact or enforce a law . . . related to a price, route, or service of an air carrier or carrier affiliated with a direct air carrier through common controlling ownership when such carrier is transporting property by aircraft or by motor vehicle ...." 49 U.S.C. § 41713(b)(4)(A).
These provisions combine to bar states (subject to certain exceptions discussed later) from enacting laws related to prices, routes, or services of air or motor carriers of property. They are "intended to function in the exact same manner with respect to [their] preemptive effects." H.R. Conf. Rep. 103-677 at 85, reprinted in 1994 U.S.C.C.A.N. at 1757.
In 2003, the Maine Legislature adopted "An Act to Regulate the Sale of Tobacco Products and to Prevent the Sale of Cigarettes to Minors." See L.D. 1236 (121st Maine Leg.) (codified at 22 M.R.S.A. §§ 1551, 1555-C & 1555-D) (Tobacco Delivery Law). The Tobacco Delivery Law was prompted by the recent increase in internet tobacco sales which are consummated by direct delivery to consumers through the mail or by commercial carriers. See Testimony of Representative Glen Cummings Before the Joint Standing Committee on Health & Human Services (Apr. 29, 2003). This phenomenon has complicated Maine's efforts to regulate "the sale of tobacco products to minors" and caused it to lose "tremendous tax revenues as a result of tax free sales by unlicensed companies." Id. The associations persuaded the district court that §§ 1555-C(3)(C) & 1555-D are preempted by the FAAAA.
Maine's Tobacco Delivery Law permits a licensed tobacco retailer to sell tobacco products2 directly to consumers via the internet or other electronic means so long as the retailer takes specified steps to ensure that sales are not made to minors. See id. §§ 1555-C(2) & (3). One such step requires the retailer to use a carrier that will ensure that: (1) the purchaser of the tobacco products is the same person as the addressee of the package; (2) the addressee is of legal age to purchase tobacco products and sign for the package; and (3) if the addressee is under 27 years of age, that she show a valid government-issued identification verifying that she is old enough to purchase tobacco products. Id. § 1555-C(3)(C). Penalties are imposed only against the retailer for violations of this provision. See id. §§ 1555-C(3)(E) & (F).
Section 1555-D makes it illegal for any person to knowingly deliver tobacco products to a Maine consumer if the products were purchased from an unlicensed retailer.3 The section also states that a person delivering a package "is deemed to know" that the package contains tobacco products if it (1) so indicates on any side other than the side directly opposite the label, see Code of Me. R. ch. 203, § 11, or (2) was shipped by a person listed by the Attorney General as an unlicensed tobacco retailer.4
As discussed in further detail below, one way for the associations to prove that the challenged provisions of the Tobacco Delivery Law are preempted by the FAAAA is to demonstrate that they have a forbidden significant effect on carrier services. See infra at 25. The associations have attempted to make this showing by highlighting the effect of the challenged provisions on UPS, a motor/air carrier of property operating in Maine.5
UPS, which delivers approximately 65,000 packages per day in Maine, offers door-to-door delivery service of packages and delivery of packages on an express basis. Its delivery operations function as an integrated system, requiring extensive planning and coordination among its operating facilities and ground and air fleet. Delays and disruptions in the sorting and delivery of packages can affect the timely delivery of thousands of packages within the UPS system.
Prior to the enactment of § 1555-C(3)(C), UPS did not require that its drivers deliver a package only to the addressee, and it did not require a signature from the recipient of the package unless the shipper paid a premium for this additional service. UPS determined that it would not be feasible to alter its delivery operations to provide these new services in Maine, so it stopped delivering all tobacco products to Maine consumers.
To make deliveries of tobacco products to licensed retailers and distributors in Maine as permitted by § 1555-D, UPS now has modified its uniform package delivery procedures to identify packages that contain tobacco products. UPS requires that its preloaders in Maine (the employees who place the packages on the trucks for delivery) specially examine each package to determine if it is marked as containing tobacco or if the name of the addressee or shipper indicates that the package likely contains tobacco.6 Packages identified as likely containing tobacco products are then segregated so that UPS employees can research whether the package is destined for a licensed tobacco retailer or distributor. If UPS determines that the addressee is not a licensed tobacco retailer or distributor, it arranges to return the package to the shipper or otherwise to dispose of the package.
Proceeding from the premise that the FAAAA preempts a state law if it "expressly references" a carrier's prices, routes, or services or has a "forbidden significant effect" on the same, the district court concluded that the challenged provisions of the Tobacco Delivery Law are preempted by the FAAAA. See N.H. Motor Transp. Ass'n v. Rowe, 377 F.Supp.2d 197, 210 (D.Me.2005) (citing United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 323, 334-35 (1st Cir.2003) (UPS I)). The court determined that, while § 1555-C(3)(C) did not expressly reference carrier services because that section is directed only at retailers of tobacco products, it has a forbidden significant effect on UPS because, for the carrier to accept packages containing tobacco for delivery in Maine, it would have to adopt procedures that would "alter [its] delivery practices" for these packages. Id. at 216.
The court also ruled that § 1555-D both expressly references and has a forbidden significant effect on carrier services. It concluded that the provision expressly references services because it prohibits carriers from delivering a certain class of tobacco products, i.e., tobacco products purchased by Maine consumers from unlicensed retailers. See id. at 211-12. It also concluded that the provision also has a forbidden significant effect because it forced UPS to depart from "its nationally uniform procedure" by inspecting each package to identify the contents. Id. at 212. The Attorney General timely appealed from this ruling.7
Before reaching the merits of the Attorney General's appeal, we consider two threshold jurisdictional issues. The Attorney General asserts that the associations lack standing and that the action is moot in light of events occurring subsequent to the noticing of the appeal.
The associations invoke the representational standing doctrine recognized by the Supreme Court in Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). Under this doctrine, "an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individualized members in the lawsuit." Id.
The Attorney General focuses his argument on the third Hunt factor. He contends that evidence concerning the effect that the challenged provisions of the Tobacco Delivery Law have on UPS suffices only to justify preemption of the challenged provisions as to UPS. Preemption against other carriers should occur only to the extent that the other carriers individually prove that the challenged provisions have a forbidden significant effect on...
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