The Wall Street Journal-20080201-Politics - Economics- State- Federal Powers Collide- Democrats to Challenge Bush Administration On Pre-emptive Rulings

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Politics & Economics: State, Federal Powers Collide; Democrats to Challenge Bush Administration On Pre-emptive Rulings

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The Bush administration and congressional Democrats are heading for a clash over a question with major business and policy implications: When do federal rules trump state laws?

Moves in the past several months from agencies including the Food and Drug Administration, the Federal Railroad Administration and the Environmental Protection Agency could bolster the federal government's power at the expense of state statutes. The new initiatives, largely applauded by business interests, affect products including drugs, autos and passenger railcars.

One of the most high-profile of the clashes came last month, when the EPA said it would block California from becoming the first state to regulate cars' carbon-dioxide emissions.

In rejecting California's plan, the EPA effectively stopped more than a dozen states that have passed similar laws or signaled an intention to do so.

The spate of new efforts that could pre-empt states' laws, which comes after several similar moves over the past few years, is revving up opponents. They include Democratic lawmakers, who hope to slow or stall the initiatives.

"We will continue to press this administration to respect the efforts of state authorities to protect its citizens," said Sen. Patrick Leahy (D., Vt.), chairman of the Senate Judiciary Committee, which held a hearing on the regulatory issues in September titled, "Regulatory Preemption: Are Federal Agencies Usurping Congressional and State Authority?" Mr. Leahy is considering broad legislation to limit regulatory agencies from pre-empting state laws.

Democratic lawmakers criticized the recent EPA decision to stop the California rule. Last week, a group of prominent Democrats including Rep. Henry Waxman of California and Sen. Edward Kennedy of Massachusetts wrote to the FDA, objecting to a recent proposal they said "comes at the expense of consumers and violates the mission" of the agency.

Separately, the Senate Commerce Committee, irked by the Consumer Product Safety Commission's stance that its rule on mattress flammability outweighs state laws, included a provision in a broader CPSC bill that would limit the agency's ability to pre-empt state statutes. "While this is not rocket science, I did find the need to clarify that the CPSC should not be pre-empting state laws through regulation, as it has tried to do in the past," said Sen. Mark Pryor, an Arkansas Democrat who chairs the subcommittee that oversees the CPSC.

Officials from federal agencies say their moves have been made for good policy reasons. The White House's Office of Management and Budget, which reviews federal rules per administration policy, said there is no top-down effort. "The authority for pre-emption is constitutionally derived," said Jane Lee, an OMB spokeswoman. "These decisions are made on a case-by-case basis by the agencies."

Companies usually prefer a single federal standard to what they often call a "patchwork" of state statutes that, particularly when deregulatory-minded Republicans are in power in Washington, may be harsher than the national guideline. In addition, business groups see federal pre-emption as an important boost to their defenses against court cases brought by plaintiffs claiming injury from their products. The reason: The defendant can argue that, because it met a federal regulatory standard, it can't be held liable under a state law for failing to take actions that go beyond the national requirement.

"You really need to have consistent standards across the board in a lot of these arenas," said Lisa Rickard, president of the U.S. Chamber of Commerce's Institute for Legal Reform. "It's better to let the federal agencies make the decision."

On the other side, some state officials are concerned by efforts that "are constraining them and pre-empting their authority," says Carl Tubbesing, an official with the National Conference of State Legislatures.

Plaintiffs attorneys are fiercely fighting the proposals. "These companies have pretty much a shield for liability based on these federal agencies' rules," says Gerie Voss, regulatory counsel at the American Association for Justice, a plaintiffs-attorney group.

Groups on both sides of the debate say that, particularly in the drug area, the regulatory moves may be trumped by the Supreme Court, which is set to rule on a series of cases related to pre-emption.

The move to block California's emissions plan, EPA Administrator Stephen L. Johnson said at a contentious Senate hearing last week, "was solely my decision." In an interview, Mr. Johnson said California doesn't have "compelling and extraordinary" conditions to justify its own rules, since greenhouse-gas emissions' impact isn't unique to the state.

The FDA's new effort isn't directly related to the federal-state issues, but lawyers say it has important implications. On Jan. 16, the agency proposed a new rule that laid out relatively narrow conditions under which a drug company can make changes to a medication's label without the FDA's explicit approval. Plaintiffs and pharmaceutical- industry lawyers say the move would bolster drug-company defenses claiming the agency's label decisions pre-empt further obligations that might be imposed by states.

Randall Lutter, a deputy FDA commissioner, said the agency's proposal was simply "a housekeeping rule intended to help clarify" the FDA's longstanding views on when drug makers should change their labels. The FDA aims to avoid "in-essence willy-nilly changes to labels that are not based on newly-acquired scientific information," and affecting pre-emption legal defenses "wasn't a goal," he said.

In the transportation area, the National Highway Traffic Safety Administration has increasingly emphasized that its rules trump state laws in regulations covering everything from roof strength to electric cars.

The Federal Railroad Administration has proposed a rule that would strengthen safety standards for commuter trains that includes language saying it would pre-empt efforts by states. Advocates in California have pressed for a state law that would go beyond the FRA's proposal. Democratic Reps. Jim Oberstar of Minnesota and Bennie Thompson of Mississippi, the respective chairmen of the House transportation and homeland security committees, have objected to the FRA's pre-emption language.

An NHTSA spokesman declined to comment. An FRA spokesman suggested that California might be able achieve its ends through other means, such as withholding state funds from commuter rail agencies that don't comply with stricter requirements.