WASHINGTON, DC (February 20, 2008) – The Supreme Court handed Morrison & Foerster LLP a complete victory on behalf of three trade associations – the New Hampshire Motor Transport Association, the Massachusetts Motor Transportation Association, and the Vermont Truck & Bus Association – in a suit against the State of Maine over whether the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempts a Maine law that regulates the manner in which commercial carriers must deliver packages containing tobacco products.

The Supreme Court’s decision was the first ruling on the scope of the FAAAA’s preemption of state regulation of commercial carrier prices, routes, and services.  In an opinion authored by Justice Breyer for all nine Justices, the Court held that the FAAAA preempts any state regulation that directly or indirectly affects in a significant manner the prices, routes, or services of carriers.  The Court broadly held that state regulation, such as the Maine law, which affects a carrier’s delivery services interferes with the deregulation goal of Congress in enacting the FAAAA, and poses a real threat of creating a patchwork of inconsistent state regulation that would undermine the highly efficient and cost-effective transportation of goods throughout the nation.

The Court explained that Maine could not craft a public health exception to preemption under the FAAAA, because Congress would not have created such an exception “[g]iven the number of States through which carriers travel, the number of products, the variety of potential adverse public health effects, the many different kinds of regulatory rules potentially available, and the difficulty in finding a legal criterion for separating permissible from impermissible public-health-oriented regulations.”

This significant ruling applies to almost all of the nation’s motor vehicle and air cargo carriers in an industry that transports more than $6 trillion of goods in interstate commerce annually.  The ruling also should benefit the nation’s passenger airlines, which are governed by another federal statute with identical statutory language.

Justice Ginsburg filed a concurring opinion, and Justice Scalia filed an opinion concurring in part.

The case originated in 2003 when Morrison & Foerster filed a complaint on behalf of the trade associations challenging the Maine law in the District of Maine.  After presenting evidence showing the burdens that the Maine law placed on commercial carriers, Morrison & Foerster won summary judgment in the district court.  The Maine attorney general appealed the district court’s ruling to the First Circuit, which affirmed, holding that most of the key provisions of the Maine law are preempted.

The Maine attorney general successfully petitioned for a writ of certiorari from the Supreme Court.  Beth S. Brinkmann argued the case before the Supreme Court on November 28, 2007, Ruth N. Borenstein argued the case before the First Circuit, and Paul T. Friedman oversaw the litigation strategy.