In a decision that could be useful to defendants in highly-regulated industries that face class action claims predicated on violations of federal law, a recent Sixth Circuit opinion confirmed that implied preemption applies to state-law claims predicated on violations of the EPA’s vehicle fuel economy and emissions regulations. This decision confirms the expansion of the implied preemption defense to a new industry, and may signal further expansions in the future.
Background: What is Preemption?
Preemption is the idea that state law cannot interfere or conflict with federal law. It stems from the Supremacy Clause of the U.S. Constitution, which establishes that “the Laws of the United States . . . shall be the supreme Law of the Land.” U.S. Const. art. VI, cl. 2.
Preemption has traditionally been used as an affirmative defense to support dismissal of state-law claims that plainly interfere with federal laws or regulations. Preemption may occur if a federal law contains an express preemption provision. Preemption may also occur even in the absence of an express preemption provision, if a court concludes that a federal law implicitly preempts contrary state laws.
Implied preemption comes in two flavors: 1) field preemption, where federal law so occupies the field that Congress intended for no other laws to apply; and 2) conflict preemption, where a particular state law conflicts with federal law so that it is either impossible to fully comply with both, or, if not impossible, compliance with the state law would impose a significant obstacle to the purposes behind the federal law.
In recent years, defendants have sought to take advantage of one type of implied conflict preemption known as Buckman preemption, under which state-law claims that rest on an assumption that fraud was committed against a federal agency are preempted. In Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001), plaintiffs alleged injuries from defective bone screws that had been approved by the Food and Drug Administration (FDA). The Supreme Court found the state law claims preempted because they would “inevitably conflict with the FDA’s responsibility to police fraud consistently with the Administration’s judgment and objectives.” Id. at 350.
In re Ford Motor Co.
It is into the world of Buckman preemption that the Sixth Circuit stepped. In re Ford Motor Co. F-150 & Ranger Truck Fuel Economy Marketing & Sales Practices Litigation, 2023 WL 3029837 (6th Cir. Apr. 21, 2023), involves a putative class of consumers who claimed they were harmed by Ford’s allegedly false fuel economy and emissions testing figures for certain vehicles. Ford submitted these figures to the Environmental Protection Agency (EPA), and the EPA certified and published the results. The consumers claimed that, in essence, Ford committed fraud on the EPA, which in turn harmed them. They said that because the published fuel economy estimates were false, they were deceived into purchasing the vehicles, in violation of several state laws.
The Sixth Circuit determined that by claiming that Ford had committed fraud on the EPA in submitting false testing results, the consumers were necessarily alleging a violation of federal regulations. Yes, the claimants also asserted that Ford’s alleged misconduct violated state consumer protection laws, but the alleged violation of state law could not exist without the underlying claim of fraud on the EPA—in other words, the consumers’ claims that they were defrauded rest upon the assumption that the EPA was defrauded first. The consumers’ state-law claims therefore “essentially challenge the EPA’s figures,” and in doing so implicitly challenge the EPA’s process for reviewing, accepting, and publishing fuel economy results. The consumers’ claims thus “inevitably conflict” with the EPA’s regulatory regime, and the claims were preempted.
In the wake of Buckman, prior cases had already found that state-law claims resting upon fraud-on-a-federal-agency premises are impliedly preempted. See, e.g., Garcia v. Wyeth-Ayerst Laboratories, 385 F.3d 961 (6th Cir. 2004) (fraud on the FDA in the context of drug approval); Farina v. Nokia, Inc., 625 F.3d 97 (3d Cir. 2010) (fraud on the FCC); Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199 (9th Cir. 2002) (fraud on the EPA in the context of pesticides). In re Ford continues the expansion of Buckman preemption to encompass alleged fraud on the EPA in the context of vehicle fuel economy and emissions regulations.
In re Ford confirms that Buckman preemption remains a powerful defense to claims that defendants’ violation of federal laws amount to a violation of state laws. But state claims that are parallel to—but do not wholly depend upon—the existence of fraud on a federal agency may be able to dodge Buckman preemption.