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The U.S. Supreme Court on Feb. 20 issued the following opinions: • TRANSPORTATION The justices held unanimously that federal law pre-empts two provisions of a Maine tobacco transport law requiring special inspection of incoming tobacco packages to prevent purchases from unlicensed retailers that might sell to minors. Rowe v. New Hampshire Motor Transport Association, No. 06-457. The justices said that Maine cannot impose a regulatory scheme on transportation companies delivering tobacco products directly to consumers. The Federal Aviation Administration Authorization Act of 1994, which limits state regulation of interstate air and motor carriers, pre-empts the two Maine law provisions. Writing on behalf of the court, Justice Stephen G. Breyer said, “Despite the importance of the public health objective, we cannot agree” with Maine’s approach. Federal law bars states from regulating prices, routes or services of shipping companies. It “says nothing about a public health exception” enabling state regulation, Breyer said. Maine’s law requires delivery companies to intercept packages from unlicensed tobacco sellers and to verify the age of buyers, hitting delivery companies with huge additional costs, the industry says. Maine argued that federal law doesn’t pre-empt state regulation for public health and safety. The 1st Circuit disagreed, rejecting Maine’s argument that federal law trumps state law only when it comes to traditional economic regulation of carriers. • ADR The justices ruled, 8-1, that the Federal Arbitration Act pre-empts a California statute that requires administrative review before a contract dispute can proceed to arbitration. Preston v. Ferrer, No. 06-1463. The decision came in a lawsuit by Alex E. Ferrer, a former Florida state judge who decides minor civil disputes on his TV show, Judge Alex. Ferrer had refused to pay a management fee to Arnold Preston after the two men had signed a contract that called for arbitration of any disputes. Ferrer claimed that Preston is not a licensed talent agent as California law requires. Preston sought the money by starting a proceeding with the American Arbitration Association in Los Angeles. Ferrer filed a complaint with the California labor commissioner, seeking to invalidate the contract for the fees. Ferrer went to court when the labor commissioner said she lacked the power to block the arbitration. At issue was the reach of the Federal Arbitration Act. An intermediate California appellate court ruled in favor of Ferrer, saying the California labor commissioner must determine whether the attorney is required to have a license in order to recover the money to which he says he is entitled. The justices reversed. Writing on behalf of the court, Justice Ruth Bader Ginsburg said that “when parties agree to arbitrate all questions arising under a contract, state laws lodging primary jurisdiction in another forum, whether judicial or administrative, are superseded by the FAA.” Chief Justice John G. Roberts Jr., and justices John Paul Stevens, Antonin Scalia, Anthony M. Kennedy, David H. Souter, Breyer and Samuel A. Alito Jr. joined Ginsburg. Justice Clarence Thomas dissented. • PRODUCTS LIABILITY The justices held, 8-1, that the pre-emption clause in the federal Medical Device amendments of 1976 prevents a patient whose catheter ruptured during surgery from suing the manufacturer based on state common law claims. Riegel v. Medtronic Inc., No. 06-179. Charles Riegel’s family filed a lawsuit against Medtronic Inc. on multiple claims based on New York common law. The family alleged the catheter produced by Medtronic had a design defect and an inadequate warning label. Riegel survived the procedure to unclog an artery, though he had permanent disabilities. He died in 2004. The justices said the 1976 amendments pre-empt state law claims. At issue was whether Riegel’s estate could sue under state law over a device previously cleared for sale by federal regulators. Under federal law, a company must substantiate the safety and effectiveness of a medical device before the U.S. Food and Drug Administration will approve it. Riegel’s estate argued that a manufacturer can use FDA approval as a legal defense, but cannot use the law to block state lawsuits altogether. Writing on behalf of the court, Scalia said state lawsuits are barred to the extent they would impose requirements different from federal ones. Roberts, Stevens, Kennedy, Souter, Thomas, Breyer and Alito joined Scalia’s opinion. Ginsburg dissented. • EMPLOYMENT The justices held unanimously that the Employee Retirement Income Security Act allows an employee to sue for losses incurred when administrators of his retirement plan ignore his instructions on how to invest his retirement money. LaRue v. DeWolff, No. 06-856. James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments. At issue was whether ERISA permits an individual account holder to sue a plan administrator for breach of fiduciary duty. The language of the law refers to recovering money for the “plan” rather than for an individual. The 4th Circuit said LaRue’s suit was barred. The justices reversed. Writing on behalf of the court, Stevens said that such lawsuits are allowed. “Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive,” he said. The government said the appeals court ruling barring LaRue’s lawsuit would leave 401(k) participants without a meaningful remedy. • CRIMINAL PRACTICE The justices held, 7-2, that state courts are not bound by the same standard as federal courts in determining whether U.S. Supreme Court decisions apply retroactively to state court criminal cases. Danforth v. Minnesota, No. 06-8273. Stephen Danforth is serving a 26-year prison sentence in Minnesota for sexually abusing a 6-year-old boy. The jury at Danforth’s 1996 trial saw and heard a videotaped interview with the child. But the child did not testify at the trial, so Danforth never had a chance to cross-examine him. In 2004, the justices ruled in Crawford v. Washington, 541 U.S. 36, that the Constitution requires giving defendants the right to question their accusers. In 2007, however, the justices ruled in Whorton v. Bockting, 127 S. Ct. 1173, that federal courts could apply the 2004 decision to new and pending cases, but not to older ones. The Minnesota Supreme Court said its hands were tied. The justices reversed, saying that state courts are not bound by the same limits that apply to federal courts. A state “should be equally free to give its citizens the benefit of our rule in any fashion that does not offend federal law,” Stevens wrote for the court. Scalia, Souter, Thomas, Ginsburg, Breyer and Alito joined Stevens. Roberts and Kennedy dissented.

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