Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 19

FACTS The 1989 version of Federal Motor Vehicle Safety Standard 208 (FMVSS 208) requires, among other things, that auto manufacturers install seatbelts on the rear seats of passenger vehicles. They must install lap-and-shoulder belts on seats next to a vehicle's doors or frames. But they have a choice about what to install on rear inner seats (middle seats or those next to a minivan's aisle). There they can install either (1) simple lap belts or (2) lap-andshoulder belts.
In 2002, the Williamson family, riding in their 1993 Mazda minivan, was struck head on by another vehicle. Thanh Williamson was sitting in a rear aisle seat, wearing a lap belt; she died in the accident. Delbert and Alexa Williamson were wearing lap-and-shoulder belts; they survived. They, along with Thanh's estate, brought this California tort suit against Mazda. They claimed that Mazda should have installed lap-andshoulder belts on rear aisle seats, and that Thanh died because Mazda equipped her seat with a lap belt instead.
The California trial court dismissed this tort claim on the basis of the pleadings. The California Court of Appeal affirmed, relying on a U.S. Supreme Court decision, Geier v. American Honda Motor Co. That case held that a different portion of an older version of FMVSS 208-which required installation of passive restraint devices-preempted a state tort suit that sought to hold an auto manufacturer liable for failure to install a particular kind of passive restraint, namely, airbags. The Williamsons sought certiorari, which was granted.
DECISION The judgment of the California Court of Appeal is reversed.
OPINION Breyer, J. Under ordinary conflict preemption principles a state law that ''stands as an obstacle to the accomplishment and execution of the full purposes and objectives'' of a federal law is pre-empted. [Citations.] In Geier we found that the state law stood as an '''obstacle' to the accomplishment'' of a significant federal regulatory objective, namely, the maintenance of manufacturer choice. [Citation.] We must decide whether the same is true here.
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Like the regulation in Geier, the regulation here leaves the manufacturer with a choice. And, like the tort suit in Geier, the tort suit here would restrict that choice. But unlike Geier, we do not believe here that choice is a significant regulatory objective.
*** In 1984, DOT [Department of Transportation] rejected a regulation that would have required the use of lap-and-shoulder belts in rear seats [Citation.] Nonetheless, by 1989 when DOT promulgated the present regulation, it had ''concluded that several factors had changed.'' [Citation.]
DOT then required manufacturers to install a particular kind of belt, namely, lap-and-shoulder belts, for rear outer seats. In respect to rear inner seats, it retained manufacturer choice as to which kind of belt to install. *** DOT here was not concerned about consumer acceptance; it was convinced that lap-and-shoulder belts would increase safety; it did not fear additional safety risks arising from use of those belts; it had no interest in assuring a mix of devices; and, though it was concerned about additional costs, that concern was diminishing.
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*** Nor did DOT seek to use its regulation to spur the development of alternative kinds of rear aisle or middle seat safety devices. [Citation.]
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The more important reason why DOT did not require lap-and-shoulder belts for rear inner seats was that it thought that this requirement would not be cost-effective. The agency explained that it would be significantly more expensive for manufacturers to install lap-andshoulder belts in rear middle and aisle seats than in seats next to the car doors. [Citation.]. But that fact-the fact that DOT made a negative judgment about cost effectiveness-cannot by itself show that DOT sought to forbid common-law tort suits in which a judge or jury might reach a different conclusion.
For one thing, DOT did not believe that costs would remain frozen. Rather it pointed out that costs were falling as manufacturers were ''voluntarily equipping more and more of their vehicles with rear seat lap/shoulder belts.'' [Citation.]. For another thing, many, perhaps most, federal safety regulations embody some kind of cost-effectiveness judgment. While an agency could base a decision to pre-empt on its costeffectiveness judgment, we are satisfied that the rulemaking record at issue here discloses no such preemptive intent. And to infer from the mere existence of such a cost-effectiveness judgment that the federal agency intends to bar States from imposing stricter standards would treat all such federal standards as if they were maximum standards, eliminating the possibility that the federal agency seeks only to set forth a minimum standard potentially supplemented through state tort law. We cannot reconcile this consequence with a statutory saving clause that foresees the likelihood of a continued meaningful role for state tort law. [Citation.]
Finally, the Solicitor General tells us that DOT's regulation does not pre-empt this tort suit. As in Geier, ''the agency's own views should make a difference.'' [Citation.]
Congress has delegated to DOT authority to implement the statute; the subject matter is technical; and the relevant history and background are complex and extensive. The agency is likely to have a thorough understanding of its own regulation and its objectives and is ''uniquely qualified'' to comprehend the likely impact of state requirements. [Citation.]
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Neither has DOT expressed inconsistent views on this subject. In Geier, the Solicitor General pointed out that ''state tort law does not conflict with a federal 'minimum standard' merely because state law imposes a more stringent requirement.'' [Citation.] And the Solicitor General explained that a standard giving manufacturers ''multiple options for the design of'' a device would not pre-empt a suit claiming that a manufacturer should have chosen one particular option, where ''the Secretary did not determine that the availability of options was necessary to promote safety.'' [Citation.] This last statement describes the present case.
ntemporaneous explanation, and its consistently held interpretive views indicated that the regulation sought to maintain manufacturer choice in order to further significant regulatory objectives. Here, these same considerations indicate the contrary. We consequently conclude that, even though the state tort suit may restrict the manufacturer's choice, it does not ''stan[d] as an obstacle to the accomplishment … of the full purposes and objectives'' of federal law. [Citation.] Thus, the regulation does not pre-empt this tort action.
INTERPRETATION Providing manufacturers with a choice of belts for rear inner seats is not a significant objective of the federal regulation, and thus the regulation does not preempt the state tort suit.
CRITICAL THINKING QUESTION How does this decision affect the extent to which manufacturers can rely on federal safety regulations? Explain.