Schneidewind v. ANR Pipeline Co.

485 U. S. 293

March 22, 1988

A natural gas company wanted to sell securities, but the State of Michigan said that its regulatory commission would have to approve this first. The natural gas company protested that federal regulation of the industry was so comprehensive that any regulation by a state was preempted. Michigan responded that federal regulation did not cover the issue of securities, and that companies could certainly comply with both sets of regulations.

The Supreme Court unanimously found preemption (Kennedy did not participate). Blackmun left open the question of whether states could regulate natural gas securities in the absence of federal legislation, but then showed how elaborate and comprehensive the federal regime of regulation was. Although the federal scheme did not specifically mention securities, both state and federal regulation was indeed aimed at controlling the rates and facilities of natural gas companies. Because the end goal was the same, the Michigan law would need to be preempted. Furthermore, while it wouldn’t always happen, on occasion a company would find complying with both sets of regulation an impossibility. Blackmun also was unimpressed that Congress had voted against direct regulation of natural gas securities, since Congressional inaction had historically not mattered in preemption cases. Ultimately a very simple case; moving along.

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