Transporters of hazardous materials are accustomed to dealing with bureaucracy and red tape on both the state and federal level. But while this is a field that warrants regulation, too much regulation can impede the necessary transportation of such materials. This is exactly what happens when hazardous materials transporters are required to pay certain state licensure fees. The federal government has authority over interstate transportation of goods, including hazardous materials. This federal authority trumps or “preempts” the authority of state governments to regulate such transportation. Under the Federal Aviation Administration Authorization Act of 1994 (“Act”), states are specifically prohibited from enacting a law or regulation that affects the price, route, or service of a motor carrier. See 49 USC 14501 et seq. Any state law or regulation that attempts to regulate these matters can be challenged in court. If the court finds that the state law or regulation is preempted, it will be overturned. One of the goals of the Act was to eliminate the inefficiencies and unnecessary costs of interstate transportation that were caused by non-uniform state regulations. Allowing states to impose purely economic licensure fees on hazardous materials transporters undermines this goal. There is thus a strong case to be made that federal law preempts state regulations that require motor carriers to pay a licensure fee in order to engage in the interstate transportation of hazardous materials.

The exact wording of the Act determines what regulations states are forbidden from enacting. Pursuant to the Act, states may not enforce any law or regulation that is “related to a price, route, or service” of a motor carrier. This is almost the exact language used in the Airline Deregulation Act (“ADA”), which the Supreme Court held to have a conspicuously broad preemptive sweep. The Supreme Court interpreted “related to” as meaning any “connection with” or “reference to” the subject matter of the federal law. This means that states are prohibited from enacting any law or regulation that affects the price, route, or service of a motor carrier. If a state enacts any such law or regulation, it can be overturned in court. However, there is an exception to this general rule. States may enforce laws and regulations that affect such matters if they are based on the state’s safety regulatory authority with respect to motor vehicles, including the hazardous nature of the cargo. The question then becomes whether a state licensure fees constitutes a public safety regulation.

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