New York Law Review

Tag: Federal Preemption

  • Matter of Power Authority v. Flacke, 60 N.Y.2d 302 (1983): State’s Role in Federal Hydroelectric Licensing

    Matter of Power Authority v. Flacke, 60 N.Y.2d 302 (1983)

    When considering an application for state water quality certification under Section 401 of the Federal Clean Water Act, the Commissioner of Environmental Conservation is limited to determining whether applicable water quality standards will be met and cannot base the decision on a balancing of the need for the project against its adverse environmental impact.

    Summary

    The Power Authority of the State of New York (PASNY) sought to build a pumped storage power facility. Because federal law required state certification that the project would comply with water quality standards, PASNY applied to the NYS Department of Environmental Conservation (DEC) for this certification. The Commissioner of Environmental Conservation denied the application, citing failure to demonstrate that water quality standards would be met, without balancing other factors. The Appellate Division reversed, mandating consideration of state energy policy. The Court of Appeals reversed again, holding that the commissioner’s review is limited to water quality standards, as dictated by federal law.

    Facts

    PASNY planned to construct a pumped storage power facility (Prattsville Project) in the Catskill Mountains. The project involved pumping water from the Schoharie Reservoir to a higher reservoir, storing it, and then releasing it to generate power. Because the project required a federal license and involved a “discharge into navigable waters,” PASNY needed certification from the State of New York that the facility would comply with state water quality standards.

    Procedural History

    PASNY applied to the Federal Energy Regulatory Commission (FERC) for a license and to the State DEC for Section 401 certification. The DEC hearings were postponed until after the FERC hearings. After FERC hearings, the Commissioner of Environmental Conservation denied PASNY’s application based on noncompliance with water quality standards. PASNY then initiated a CPLR Article 78 proceeding challenging the commissioner’s denial. The Appellate Division annulled the commissioner’s determination, remitting the matter for further proceedings, requiring a balancing of the need for the project against its environmental impact. Intervenors appealed to the Court of Appeals.

    Issue(s)

    Whether, in acting on an application for state Section 401 water quality certification of a hydroelectric project, the Commissioner of Environmental Conservation is limited to determining whether applicable water quality standards will be met, or is empowered to base the decision on a balancing of the need for the project against its adverse environmental impact.

    Holding

    No, because the Commissioner of Environmental Conservation is limited to determining whether applicable water quality standards will be met and is not empowered to base his decision on a balancing of need for the project against adverse environmental impact.

    Court’s Reasoning

    The court relied heavily on its prior decision in Matter of de Rham v Diamond, 32 NY2d 34, which addressed the scope of the commissioner’s inquiry in Section 401 water quality certification. The court quoted Chief Judge Fuld in de Rham: “Congress, by the Federal Power Act (U.S. Code, tit. 16, § 792 et seq.), has vested the Federal Power Commission with broad responsibility for the development of national policies in the area of electric power, granting it sweeping powers and a specific planning responsibility with respect to the regulation and licensing of hydroelectric facilities affecting the navigable waters of the United States.” The court emphasized that Section 401 of the Federal Water Pollution Control Act “authorizes States to determine and certify only the narrow question whether there is ‘reasonable assurance’ that the construction and operation of a proposed project ‘will not violate applicable water quality standards’ of the State.”

    PASNY argued that the State Energy Law required the commissioner to consider the State’s energy needs, but the court rejected this, stating it “runs counter to the acknowledgment of Federal pre-emption” and “disregards the very limited nature of the activity left by FWPCA to State action in section 401 certification.” The court clarified that Section 401 certification is simply a determination of compliance with Section 303 of the federal statute (US Code, tit 33, § 1313), concerning water quality standards. Extending the process to include consideration of “countervailing energy and environmental interests” would be a failure by the commissioner to perform the function reserved to him and an intrusion into the federal agency’s area of responsibility.

    The court noted, however, that broader public interests are implicated in the classification of State waters and the fixing of standards of purity, in accordance with ECL 17-0301(2) and 17-0101.

  • Barclay’s Ice Cream Co. v. Local No. 757, 41 N.Y.2d 270 (1977): State Court Authority Over Union Actions Restraining Interstate Trade

    Barclay’s Ice Cream Co. v. Local No. 757, 41 N.Y.2d 270 (1977)

    A state court is not preempted by federal labor law from enjoining a union’s coercive activity that aims to establish an embargo on the flow of out-of-state goods into the state when the union’s actions lack a legitimate labor objective and unlawfully restrain trade.

    Summary

    Barclay’s, a New Jersey corporation, distributed ice cream manufactured in Pennsylvania and Ohio in New York. Local 757, representing ice cream manufacturing employees in New York City, unsuccessfully attempted to persuade Barclay’s to buy ice cream exclusively from designated New York manufacturers. Subsequently, Local 757 initiated a consumer boycott by picketing retail stores selling Barclay’s ice cream and distributing literature urging consumers to avoid Barclay’s products, falsely claiming substandard labor conditions. The Appellate Division restrained the union’s actions, and the Court of Appeals addressed whether this was permissible under the doctrine of federal preemption. The court held that the state court had the power to issue the injunction because the union’s actions constituted an unlawful restraint on trade lacking a legitimate labor objective and thus fell outside the scope of exclusive federal jurisdiction.

    Facts

    Barclay’s Ice Cream Co., a New Jersey corporation, distributes ice cream manufactured in Pennsylvania and Ohio to customers in New York and New Jersey.
    Local 757 represents employees engaged in ice cream manufacture in the New York City area.
    Local 757 unsuccessfully tried to persuade Barclay’s to purchase all its ice cream from certain designated manufacturers within New York.
    Local 757 initiated a consumer boycott, picketing retail stores selling Barclay’s ice cream and distributing literature urging consumers not to buy Barclay’s products, which were described as having been manufactured outside New York “under sub-standard labor conditions.” This description was found by the Appellate Division to be without basis in the record.
    The sole objective of Local 757’s action was “to protect our members’ jobs”—i.e., by compelling Barclay’s to purchase locally produced ice cream rather than that manufactured in Pennsylvania and Ohio.

    Procedural History

    Barclay’s moved for a preliminary injunction, which was initially denied by the Special Term.
    The Appellate Division reversed the Special Term’s order and restrained the defendants from picketing and distributing written material.
    The case was removed to the United States District Court for the Southern District of New York but was remanded to state court.
    The Court of Appeals granted leave to appeal from the Appellate Division’s nonfinal order, certifying the question of whether the order was properly made.

    Issue(s)

    Whether the National Labor Relations Act preempts a state court from enjoining a union’s activities that restrain trade and lack a legitimate labor objective.

    Holding

    No, because the union’s consumer boycott to force Barclay’s to abandon out-of-state suppliers constitutes an unlawful restraint of trade and falls outside the scope of the National Labor Relations Board’s exclusive jurisdiction.

    Court’s Reasoning

    The court reasoned that the critical question is whether the activity of the local is “arguably” subject to the provisions of the Labor Management Relations Act. It is not enough that Local 757 itself asserts that its conduct comes within the National Labor Relations Board ambit. The court stated, “If the activity is ‘a merely peripheral concern of the Labor Management Relations Act’ the jurisdiction of the State to regulate the activity in furtherance of local feeling and responsibility remains undiminished.” The court concluded that the consumer boycott planned by Local 757 falls outside the scope of the exclusive jurisdiction of the National Labor Relations Board because no legitimate objective of labor union activity is involved. The sole objective and consequence of the intended consumer boycott is to force Barclay’s to abandon its out-of-State suppliers and turn exclusively to local sources. This imposition is an unlawful purpose contrary to the public policy of the state, which the courts have the power to enjoin. The court emphasized, “We reject the proposition that under the doctrine of pre-emption our State courts must defer in this case to the exclusive competence of the National Labor Relations Board and thus are powerless to protect against the unlawful coercive activity designed by this union to erect an embargo on the flow of out-of-State goods into New York.”

  • People v. Transamerican Freight Lines, Inc., 24 N.Y.2d 727 (1969): State Regulation of Hazardous Materials Transportation

    People v. Transamerican Freight Lines, Inc., 24 N.Y.2d 727 (1969)

    When state and federal regulations share the same purpose and are harmonious, the state retains jurisdiction even if the United States has acted in the same area.

    Summary

    Transamerican Freight Lines was convicted under a New York statute for failing to mark a truck carrying a dangerous article. The truck contained ethylene oxide, a flammable liquid. The defendants argued that federal law preempted the state statute. The Court of Appeals upheld the conviction, finding that the state and federal regulations were harmonious and shared the same objectives of safety. The court reasoned that the state statute was not invalidated because the federal government also regulated the interstate shipment of dangerous materials.

    Facts

    On September 8, 1966, a Transamerican Freight Lines truck was stopped at the Holland Tunnel. The bill of lading indicated the truck carried 15 drums of ethylene oxide. The drums had red labels with safety directions and tags stating “Ethylene Oxide, 99% pure” and “Danger: Extremely flammable.” No warning of the cargo’s contents appeared on the outside of the truck. Ethylene oxide has a flash point of minus four degrees Fahrenheit.

    Procedural History

    The defendants were prosecuted under Section 380 of the New York Vehicle and Traffic Law for failing to mark the truck as carrying a dangerous article. The trial court convicted the defendants. The defendants appealed, arguing federal preemption. The New York Court of Appeals affirmed the conviction.

    Issue(s)

    1. Whether the prosecution established a prima facie case that the truck was carrying a dangerous article as defined by the New York statute.

    2. Whether federal law preempts subdivision 3 of Section 380 of the New York Vehicle and Traffic Law regarding the regulation of interstate shipment of dangerous materials.

    Holding

    1. Yes, because the bill of lading, the markings on the drums, and the expert testimony established that the truck was carrying ethylene oxide, a dangerous article under the statute.

    2. No, because the state and federal laws are harmonious and share the same objective of safety, and thus the state statute is not preempted.

    Court’s Reasoning

    The court found that the prosecution presented a prima facie case based on circumstantial evidence. The bill of lading, drum markings, and expert testimony established that the truck carried ethylene oxide, a dangerous article as defined by the state statute. The court then addressed the preemption argument, noting that both federal and state laws aimed to regulate dangerous substances in transit. The court emphasized that specifics were left to the regulations of the Interstate Commerce Commission, which closely mirrored the New York statute. The court distinguished this case from cases like Castle v. Hayes Frgt. Lines, where state regulations directly interfered with federally authorized activities. Here, the court stated:

    “When State and Federal regulatory statutes have the same purpose and are harmonious, as the statutes regulating dangerous substances in transit certainly are, the State is not ousted of jurisdiction because the United States has also acted (California v. Zook, 336 U. S. 725).”

    The court further explained that state and federal regulations in such situations could “have their separate spheres of operation” (Union Brokerage Co. v. Jensen, 322 U. S. 202, 208). The state’s regulation was a valid exercise of its power to provide for safety on its highways, consistent with federal interstate regulations.

  • Phalen v. Theatrical Protective Union No. 1, 22 N.Y.2d 34 (1968): Union’s Duty to Fairly Consider Membership Applications

    Phalen v. Theatrical Protective Union No. 1, 22 N.Y.2d 34 (1968)

    A labor union, acting as the exclusive bargaining agent for a group of employees, has a duty to consider membership applications based on fair standards, fairly applied, and may be compelled by a court to admit members if it acts arbitrarily or in bad faith.

    Summary

    Non-union stagehands sued their union, the exclusive bargaining agent for their profession, seeking a court order compelling the union to admit them as members. They alleged discriminatory practices hindered their employment. The New York Court of Appeals held that while mandamus was not the appropriate remedy, the plaintiffs stated a valid claim for equitable relief. The court determined that state courts had jurisdiction, despite potential federal preemption, to address the union’s duty of fair representation. The case was remanded to allow the plaintiffs to pursue an action for injunctive relief.

    Facts

    Petitioners were employed as stagehands in theaters within the respondent union’s jurisdiction but were not union members. They claimed their non-membership caused difficulty in obtaining employment and led to dismissals at the union’s behest, replaced by union members. Two petitioners alleged reduced pension eligibility due to lost earnings from the union’s actions. They also alleged they were required to pay 4% of their earnings to a union fund benefitting only union members. They asserted they had repeatedly applied for union membership, but were denied due to a requirement for sponsorship by existing members, typically favoring relatives of existing members.

    Procedural History

    The petitioners filed an Article 78 proceeding in the Supreme Court, Bronx County, seeking a mandamus order to compel the union to admit them as members. The union cross-moved to dismiss the petition. The Supreme Court denied the union’s motion and granted the petitioners’ motion, ordering the union to admit them unless an answer was filed. The union appealed, and the Appellate Division reversed, dismissing the petition, finding no statutory duty violation and suggesting federal preemption. The petitioners appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether state courts have jurisdiction over a claim that a labor union breached its duty of fair representation, despite potential federal preemption under the National Labor Relations Act?

    2. Whether mandamus is the appropriate remedy to compel a labor union to admit non-members to its membership?

    3. Whether a labor union can be compelled to accept non-members into its membership if the non-members can prove discriminatory denial of membership?

    Holding

    1. Yes, because the U.S. Supreme Court in Vaca v. Sipes clarified that state courts retain jurisdiction over fair representation claims, even if the conduct arguably constitutes an unfair labor practice under federal law.

    2. No, because mandamus is not the appropriate remedy as an action in equity seeking a mandatory injunction can provide the same relief, and unincorporated labor unions are not the type of bodies against whom mandamus traditionally lies.

    3. Yes, because a labor union may be compelled to accept non-members into its membership if the non-members can prove discriminatory denial of membership and if that is the only way to assure nondiscriminatory representation.

    Court’s Reasoning

    The Court of Appeals reasoned that recent Supreme Court decisions, particularly Vaca v. Sipes, limited the scope of federal preemption, allowing state courts to address breaches of a union’s duty to fairly represent all members of a bargaining unit. The court emphasized that unions have a federal statutory obligation to serve the interests of all members without hostility or discrimination. While acknowledging the unprecedented nature of compelling union membership, the court stated it would be prepared to do so if it was the only means to ensure non-discriminatory representation, but found that the petitioners had not yet made such a showing.

    The court found mandamus inappropriate because an ordinary action in equity for a mandatory injunction could achieve the same result. The court noted the gravamen of the petition was economic injury resulting from discriminatory acts by the union, which could be remedied by an injunction and incidental damages. Compelling membership was viewed as a drastic remedy, especially in light of New York’s policy favoring full freedom of association for labor organizations. The court acknowledged that persistent disregard for non-members’ rights might warrant compelling membership, but that no such showing was made here.

    Chief Judge Fuld, in concurrence, argued that unions have a quasi-public character and should not arbitrarily exclude qualified individuals from membership. He emphasized that union membership critically affects a person’s ability to earn a living. Fuld also noted that the NLRB lacks the power to order a union to admit a worker to membership. Quoting Machinists v. Gonzales, he asserted that precluding state court jurisdiction “would in many cases leave an unjustly ousted member without remedy for the restoration of his important union rights.” Fuld would have reinstated the Special Term’s order denying the motion to dismiss the petition.