Federal Preemption of State Power

Numerous activities and conditions are subject to both federal and state regulation. In many instances, dual regulation may be complementary rather than conflicting. Within the framework of dual sovereignty, case law establishes a preference for accommodation rather than preemption. Inquiry under the supremacy clause thus begins with a presumption that the state law is valid. This orientation is reflected in the Court’s analysis, in Pacific Gas and Electric Co. v. State Energy Resources Conservation and Development Commission (1983), of California’s imposed moratorium on certifying nuclear power plants. The reason for the moratorium was expressed in economic rather than safety terms. As the state of California explained it, the lack of effective technology eventually might force closure of nuclear power plants. This condition, if it were to arise, would have a profoundly negative impact upon the cost and availability of electricity.

The issue of preemption turned upon the Atomic Energy Act of 1954. Pursuant to this enactment, Congress created the Atomic Energy Commission (now the Nuclear Regulatory Commission) (NRC) and gave it authority over the safety of nuclear power plant construction and operation. The Commission’s charge included responsibility for licensing nuclear power plants and regulating the disposal of radioactive waste. Despite the argument that the moratorium violated the supremacy clause, the Court found no conflict between federal and state law.

Justice Byron White, speaking for the majority, drew a distinction between the federal concern with the safety of nuclear power plants and their economic viability. In this regard, he noted that the federal enactment did not take away from states their traditional authority to regulate the economics of the power industry. If a state determined that nuclear power did not make economic sense, moreover, the federal government could not force a contrary decision. Absent competing or conflicting impositions, therefore, the Court found no basis for preemption. A different result would have been achieved if the state had acted upon safety grounds.

Either way, the majority opinion effectively illuminates the key principles of preemption doctrine. Regardless of the case, review commences with a presumption that the state law is valid. Barring explicit congressional language announcing the intent to preempt state law, a court must assess whether there are indications to this effect. Within this context, three possibilities for preemption arise. First, an intent to preempt may be found when the “scheme of federal regulation [is] so pervasive as to make reasonable the inference that Congress left no room to supplement it.” Because responsibility for electric power generation was shared by federal and state government, a pervasive national interest could not be identified. A second possibility for preemption arises when “the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” Given the states’ power and interest with respect to the generation of electricity, the federal interest was not dominant to the point of precluding state regulatory action. Preemption also is appropriate when state law imposes requirements that are at odds with federal law. This third basis for preemption also was inapplicable. The federal law was based upon safety concerns and did not mandate the use of nuclear power. The moratorium thus did not impose any demands that competed with federal law.

Regardless of whether the majority or Justice Blackmun provides the better model of analysis, the decision reflects the importance that the Court assigns to the imperatives of federalism. This principle of accommodation is key to balancing individual state interests and actions within the framework of a national union. Viewed in this light, the Court’s decision connects closely with a premise that was central to the republic’s founding and critical to the maintenance of a system governed by dual sovereigns.

Justice WHITE delivered the opinion of the Court.

The Court of Appeals’ suggestion that legislation since 1974 has indicated a “change in congressional outlook” is unconvincing. The court observed that Congress reorganized the Atomic Energy Commission in 1974 dividing the promotional and safety responsibilities of the AEC, giving the former to the Energy Research and Development Administration (ERDA) and the latter to the NRC. Energy Reorganization Act of 1974. The evident desire of Congress to prevent safety from being compromised by promotional concerns does not translate into an abandonment of the objective of promoting nuclear power. The legislation was carefully drafted, in fact, to avoid any anti-nuclear sentiment. . . . It is true, of course, that Congress has sought to simultaneously promote the development of alternative energy sources, but we do not view these steps as an indication that Congress has retreated from its oft-expressed commitment to further development of nuclear power for electricity generation.

The Court of Appeals is right, however, that the promotion of nuclear power is not to be accomplished “at all costs.” The elaborate licensing and safety provisions and the continued preservation of state regulation in traditional areas belie that. Moreover, Congress has allowed the States to determine—as a matter of economics—whether a nuclear plant vis-a-vis a fossil fuel plant should be built. The decision of California to exercise that authority does not, in itself, constitute a basis for preemption. Therefore, while the argument of petitioners and the United States has considerable force, the legal reality remains that Congress has left sufficient authority in the states to allow the development of nuclear power to be slowed or even stopped for economic reasons. Given this statutory scheme, it is for Congress to rethink the division of regulatory authority in light of its possible exercise by the states to undercut a federal objective. The courts should not assume the role which our system assigns to Congress. . . .

Justice BLACKMUN, with whom Justice STEVENS joins, concurring in part and concurring in the judgment.

. . . I join the Court’s opinion, except to the extent it suggests that a State may not prohibit the construction of nuclear power plants if the State is motivated by concerns about the safety of such plants. Since the Court finds that California was not so motivated, this suggestion is unnecessary to the Court’s holding. More important, I believe the Court’s dictum is wrong in several respects.

In sum, Congress has not required States to “go nuclear,” in whole or in part. The Atomic Energy Act’s twin goals were to promote the development of a technology and to ensure the safety of that technology. Although that Act reserves to the NRC decisions about how to build and operate nuclear plants, the Court reads too much into the Act in suggesting that it also limits the States’ traditional power to decide what types of electric power to utilize. Congress simply has made the nuclear option available, and a State may decline that option for any reason. Rather than rest on the elusive test of legislative motive, therefore, I would conclude that the decision whether to build nuclear plants remains with the States. In my view, a ban on construction of nuclear power plants would be valid even if its authors were motivated by fear of a core meltdown or other nuclear catastrophe.

Bibliography

Hoke, S. Candice. “Preemption Pathologies and Civic Republican Virtues.” Boston University Law Review 71 (1991): 685.

Rotunda, Ronald D. “The Doctrine of the Inner Political Check, The Dormant Commerce Clause, and Federal Preemption.” Transportation Practitioners Journal 53 (1986): 263.