Ammex, Inc. v. Gordon Wenk

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0203p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
AMMEX, INC., ┐
Plaintiff-Appellant, │
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> No. 18-1677
v. │
│
│
GORDON WENK, in his capacity as Director of the │
Michigan Department of Agriculture & Rural │
Development, │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:18-cv-10751—Laurie J. Michelson, District Judge.
Argued: February 1, 2019
Decided and Filed: August 21, 2019
Before: GRIFFIN, WHITE, and BUSH, Circuit Judges.
_________________
COUNSEL
ARGUED: Robert M. Palumbos, DUANE MORRIS LLP, Philadelphia, Pennsylvania, for
Appellant. Elizabeth Morrisseau, OFFICE OF THE MICHIGAN ATTORNEY GENERAL,
Lansing, Michigan, for Appellee. ON BRIEF: Robert M. Palumbos, J. Manly Parks, Leah A.
Mintz, DUANE MORRIS LLP, Philadelphia, Pennsylvania, Amy E. McCracken, DUANE
MORRIS LLP, Chicago, Illinois, for Appellant. Elizabeth Morrisseau, Danielle Allison-Yokom,
OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellee.
WHITE, J., delivered the opinion of the court in which GRIFFIN, J., joined. BUSH, J.
(pp. 12–24), delivered a separate opinion concurring in the judgment.
No. 18-1677 Ammex, Inc. v. Wenk Page 2
_________________
OPINION
_________________
HELENE N. WHITE, Circuit Judge. Plaintiff-Appellant Ammex, Inc. (Ammex) appeals
the district court’s denial of its motion seeking to preliminarily enjoin the Michigan Department
of Agriculture and Rural Development (MDARD) from enforcing a gasoline-volatility standard
on the basis that the standard violates the Supremacy Clause and dormant Foreign Commerce
Clause of the United States Constitution. Because we conclude that the MDARD’s enforcement
of the standard is enforcement of federal law, we affirm the district court’s denial of Ammex’s
motion for preliminary injunction.
I. Background
A. Ozone Air Quality Standards Under the Clean Air Act
In 1970, Congress amended the Clean Air Act (CAA) to direct the Environmental
Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) for
certain air pollutants. See 42 U.S.C. § 7409. “Although the [NAAQS] are set federally, the
‘primary responsibility for assuring’ they are met lies with the States.” Sierra Club v. Korleski,
681 F.3d 342, 343 (6th Cir. 2012) (quoting 42 U.S.C. § 7407(a)). The CAA thus directs each
state to propose a state implementation plan (SIP) that “specif[ies] the manner in which national
. . . ambient air quality standards will be achieved and maintained” in that state. 42 U.S.C.
§ 7407(a). After providing “reasonable notice and public hearings,” the state is required to
submit the SIP to the EPA. Id. § 7410(a)(1). The EPA must then determine whether the
proposed SIP meets certain minimum criteria, and, if so, approve the SIP. Id. § 7410(k)(1)(B),
(3). The EPA must also “assemble and publish a comprehensive document for each State”
listing the requirements of the SIP, and “publish notice in the Federal Register of the availability
of such documents.” Id. § 7410(h)(1). The CAA provides that the EPA and citizens can enforce
violations of an EPA-approved SIP in federal court. See id. §§ 7413(a), 7604.
No. 18-1677 Ammex, Inc. v. Wenk Page 3
In 1990, Congress again amended the CAA to, among other things, set a national Reid
Vapor Pressure (RVP)1 standard for gasoline. See id. § 7545(h). Congress required the EPA to
“promulgate regulations making it unlawful for any person during the high ozone season (as
defined by the Administrator) to sell, offer for sale, dispense, supply, offer for supply, transport,
or introduce into commerce gasoline with a Reid Vapor Pressure in excess of 9.0 pounds per
square inch (psi).” Id. § 7545(h)(1). Congress prohibited states from setting a different RVP
standard, see id. § 7545(c)(4)(A)(ii), unless the EPA finds the deviation “necessary” to achieve a
NAAQS and approves the modified standard in the state’s SIP. See id. § 7545(c)(4)(C)(i);
71 Fed. Reg. at 46880 (explaining that “a State may prescribe and enforce a[] . . . low-RVP
requirement only if the EPA approves the control into the State’s SIP” and the EPA “find[s] that
the state control is necessary to achieve a NAAQS”); see also 42 U.S.C. § 7545(h)(1) (enabling
the EPA to “establish more stringent Reid Vapor Pressure standards in a nonattainment area as
the [EPA] finds necessary”).
B. Michigan’s Efforts to Meet Ozone Air Quality Standards
Michigan has had an EPA-approved SIP since 1972. 37 Fed. Reg. 10,842, 10,873 (May
31, 1972). In 2004, the EPA informed Michigan that eight counties in southeast Michigan,
including Wayne County, were “nonattainment” areas for the ozone NAAQS. 71 Fed. Reg. at
46880. In response, Michigan enacted House Bill 5508, which amended Mich. Comp. Laws
§ 290.650d (hereinafter the “Summer Fuel Law”) to limit the RVP for gasoline sold during the
summer months within those eight counties. The Summer Fuel Law provides that gasoline
stations in those counties must sell gasoline with a vapor pressure that does not exceed 7.0 psi
during the summer months: “Beginning June 1 through September 15 of 2007 and for that period
of time each subsequent year, the vapor pressure standard shall be 7.0 psi for dispensing facilities
in Wayne” and seven other counties in southeast Michigan. Mich. Comp. Laws § 290.650d.
1
RVP “is a measure of a gasoline’s volatility at a certain temperature and is a measurement of the
rate at which gasoline evaporates and emits [volatile organic compounds].” Approval and Promulgation
of Air Quality Implementation Plans; Michigan; Control of Gasoline Volatility, 71 Fed. Reg. 46879,
46880–81 (Aug. 15, 2006). “Lowering RVP in the summer months can offset the effect of high summer
temperatures upon the volatility of gasoline, which, in turn, lowers emissions of [volatile organic
compounds]” that contribute to the production of ground level ozone. Id. at 46881.
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The term “dispensing facility” is defined as “a site used for gasoline refueling.” Id.§ 290.642(m). The MDARD is responsible for enforcing the RVP standard. Id. § 290.647.
Michigan thereafter sought the EPA’s approval to revise its SIP to incorporate House Bill
5508. 71 Fed. Reg. at 46879. After concluding that the revised RVP standards were “necessary”
for attainment of the applicable ozone NAAQS, the EPA approved the incorporation of House
Bill 5508 into Michigan’s SIP. Approval and Promulgation of Air Quality Implementation
Plans; Michigan; Control of Gasoline Volatility, 72 Fed. Reg. 4432, 4434–35 (Jan. 31, 2007).
The EPA has since “incorporat[ed] by reference” House Bill 5508 into the federal regulation
setting forth Michigan’s SIP. 40 C.F.R. § 52.1170.
C. Michigan’s Enforcement Against Ammex
Ammex operates a duty-free store near the Ambassador Bridge, which connects Detroit,
Michigan, to Windsor, Canada. Ammex’s facility is located in Wayne County, Michigan,
beyond the exit point established by United States Customs and Border Protection, i.e., the point
at which a person approaching the United States’ border with Canada has “no practical
alternative” but to exit the United States. 19 C.F.R. § 19.35(d). Ammex sells a variety of goods,
including duty-free gasoline. Ammex began selling gasoline in the late 1990s, and sells about
400,000 gallons each month. Ammex has historically purchased gasoline from a supplier in a
free-trade zone in Toledo, Ohio.
In the summer of 2012, the MDARD tested Ammex’s gasoline and found that it had an
RVP that exceeded the Summer Fuel Law’s 7.0 psi requirement. The MDARD issued a stop-
sale order preventing Ammex from selling the non-compliant gasoline. The MDARD filed an
action against Ammex in state court, and the parties eventually reached a settlement that
(1) required Ammex to sell gasoline that complied with the 7.0 RVP standard between June 1
and September 15 of each year and (2) provided that the state court retained jurisdiction to
enforce the settlement agreement for three years. Ammex sold gasoline that complied with the
Summer Fuel Law during the summers of 2013, 2014, 2015, 2016, and 2017.
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D. Ammex’s Suit
In the months leading up to the summer of 2018, Ammex believed that it would be
unable to secure gasoline that complied with both federal-customs regulations regarding duty-
free sales2 and the Summer Fuel Law. Ammex was unable to purchase gasoline meeting the
7.0 psi requirement because one of the tanks that Ammex leased from a tank farm to hold the
bonded gasoline was undergoing repairs and maintenance. Ammex’s attempts to find another
supplier of gasoline that met both the duty-free and gasoline-volatility requirements were
unsuccessful.
As a result, Ammex filed this action for a declaratory judgment against Gordon Wenk
(Wenk), in his official capacity as Director of the MDARD. The complaint asserts that Wenk’s
enforcement of the Summer Fuel Law against Ammex is unconstitutional under the dormant
Foreign Commerce Clause and that the Summer Fuel Law, as applied to Ammex, is preempted
by federal-customs law.
Ammex filed a motion for a preliminary injunction, asking that the district court enjoin
Wenk from enforcing the Summer Fuel Law against it during the pendency of the litigation. The
district court denied the motion for preliminary injunction.
The district court first considered Wenk’s argument that House Bill 5508, or at least the
Summer Fuel Law, is federal law, and therefore did not violate the dormant Foreign Commerce
Clause3 or the Supremacy Clause.4 The district court noted that Wenk appeared to be correct,
observing that the EPA approved the Summer Fuel Law and incorporated it into the Code of
2Federal laws and customs regulations require that Ammex purchase gasoline from a foreign source (or
from a U.S. supplier in a Foreign Trade Zone) or pay a duty.
3The Commerce Clause grants Congress the exclusive authority to “regulate Commerce with foreign
Nations, and among the several states.” U.S. Const. art. I, § 8, cl. 3. “[T]he [Commerce] Clause has long been
recognized as a self-executing limitation on the power of the States to enact laws imposing substantial burdens on
[interstate and foreign] commerce.” S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 87 (1984). This self-
executing aspect of the Commerce Clause is known as the “dormant” or “negative” Commerce Clause. See
Barclays Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 310 n.9 (1994).
4“[T]he Supremacy Clause invalidates state laws that ‘interfere with, or are contrary to,’ federal law.”
Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 712 (1985) (quoting Gibbons v. Ogden, 9 Wheat.
1, 211, 6 L.Ed. 23 (1824)) (citation omitted).
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Federal Regulations; the EPA could enforce the law; and the EPA prompted the revised standard
and found it necessary to meet the ozone NAAQS.
The district court opted not to decide the issue, however, and instead proceeded to
analyze whether, if the Summer Fuel Law is state law, it violates either the Supremacy Clause or
the dormant Foreign Commerce Clause. The district court concluded that the Summer Fuel Law
does not violate either clause, and therefore Ammex had not shown a likelihood of success on
the merits to warrant a preliminary injunction.
II. Discussion
“A district court must balance four factors when considering a motion for a preliminary
injunction: (1) whether the movant has a strong likelihood of success on the merits; (2) whether
the movant would suffer irreparable injury absent the injunction; (3) whether the injunction
would cause substantial harm to others; and (4) whether the public interest would be served by
the issuance of an injunction.” Bays v. City of Fairborn, 668 F.3d 814, 818–19 (6th Cir. 2012).
“When a party seeks a preliminary injunction on the basis of a potential constitutional
violation, ‘the likelihood of success on the merits often will be the determinative factor.’”
Obama for Am. v. Husted, 697 F.3d 423, 436 (6th Cir. 2012) (quoting Jones v. Caruso, 569 F.3d
258, 265 (6th Cir. 2009)). “Whether the movant is likely to succeed on the merits is a question
of law we review de novo.” City of Pontiac Retired Emps. Ass’n v. Schimmel, 751 F.3d 427, 430
(6th Cir. 2014) (en banc) (per curiam). “We review for abuse of discretion, however, the district
court’s ultimate determination as to whether the four preliminary injunction factors weigh in
favor of granting or denying preliminary injunctive relief.” Id. (internal quotation marks
omitted). “This standard is deferential, but the court may reverse the district court if it
improperly applied the governing law, used an erroneous legal standard, or relied upon clearly
erroneous findings of fact.” Id.The threshold issue is whether the Summer Fuel Law is fairly characterized as federal
law. We conclude that it is, and therefore the MDARD’s enforcement of the law against Ammex
does not violate the dormant Foreign Commerce Clause or the Supremacy Clause.
No. 18-1677 Ammex, Inc. v. Wenk Page 7
The Summer Fuel Law has several characteristics indicative of a federal law. First, the
history of the law suggests it is federal law. The EPA designated certain counties as non-
attainment areas, forcing Michigan to respond by adjusting the RVP standard. After Michigan
developed the new standard and submitted it to the EPA, the EPA approved the more stringent
RVP standard and incorporated it into the Code of Federal Regulations.
The scheme for enforcing the law likewise suggests that the law is federal. Although the
CAA places primary enforcement responsibility with the states, it vests ultimate enforcement
power in the EPA. The EPA may enforce the law against non-compliant retailers: if the EPA
determines that a retailer is not complying with the Summer Fuel Law, the EPA can order the
retailer to comply, issue an administrative penalty order, or commence an action against the
retailer in court to enforce the requirement. 42 U.S.C. § 7413(a)(1). In addition to its direct
enforcement powers, the EPA also holds the power to sanction Michigan for failing to enforce
the SIP. Id. § 7509(a).
Additionally, the EPA has the ultimate authority over any changes to the Summer Fuel
Law. Because the RVP standard is part of Michigan’s SIP, Michigan cannot amend the standard
without EPA approval. The CAA prohibits states from “adopt[ing] or enforc[ing] any emission
standard or limitation which is less stringent” than that contained in its SIP. Id. § 7416.
Michigan also cannot adopt a more stringent standard than its SIP without the EPA approving it.
See id. § 7545(c)(4)(A)(ii), (C)(i). Thus, the EPA has the ultimate authority over RVP standards.
Further, the scheme for regulating RVP in gasoline strongly supports that the MDARD’s
enforcement of the Summer Fuel Law is enforcement of federal law. In the 1990 Amendments
to the CAA, Congress set a national RVP standard that generally preempted states from setting a
different RVP standard.5 The CAA provides that a state can adopt and enforce a more stringent
5It is notable that at the time Congress considered the 1990 Amendments to the CAA, “[i]n contrast to
federally encouraged state control over stationary sources, regulation of motor vehicle emissions had been a
principally federal project.” Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir. 1996); see also Comm. for a
Better Arvin v. EPA, 786 F.3d 1169, 1175 (9th Cir. 2015) (“[T]he CAA makes the regulation of mobile source
emissions . . . a federal responsibility, [and] Congress has expressly preempted states from setting emissions
standards for mobile sources.” (internal quotation marks omitted)). The reasons for this disparate treatment are both
historical and practical. In contrast to the motor-vehicles emissions, Congress was legislating in 1990 against “a
history of detailed state regulation of stationary sources.” Engine Mfrs. Ass’n, 88 F.3d at 1079. Practically, it is
“difficult[]” to “subject[] motor vehicles, which readily move across state boundaries, to control by individual
No. 18-1677 Ammex, Inc. v. Wenk Page 8
RVP standard only if the EPA finds it “necessary” to meet the applicable NAAQS and approves
it in a SIP. There are two practical effects of this scheme. First, Michigan’s Summer Fuel Law
had no legal effect until the EPA approved it: if Michigan had passed and then attempted to
enforce the Summer Fuel Law without EPA approval, the law would likely have been
preempted. Second, the EPA could not approve the Summer Fuel Law without first finding that
it was necessary to meet the ozone NAAQS. Although the CAA generally empowers the EPA to
set national standards and allows states to figure out how to meet them, that is not the case here.
Instead, the EPA itself found the Summer Fuel Law necessary to meet the ozone
NAAQS. In reaching that conclusion, the EPA recognized that Michigan had no practical
measures to meet the NAAQS other than by lowering the RVP. 71 Fed. Reg. at 46882 (“EPA is
basing today’s action on the information available to us at this time, which indicates that
adequate reasonable and practicable non-fuel measures that would achieve these needed
emission reductions, and protect Michigan’s air quality in a timely manner are not available to
the State.”). Thus, when the EPA designated the Michigan counties non-attainment zones,
Michigan had only one practical option to meet the EPA standards—reduce the RVP for gasoline
sold in the non-attainment counties—and Michigan needed the EPA’s approval in order to
implement that option.
The result of the scheme described above is that: (1) the EPA required Michigan to lower
its ozone levels, (2) the only practical and feasible means of doing so was to enact a more
stringent RVP standard, (3) that standard could only be enacted if the EPA found it necessary
and approved it, (4) once the EPA approved it, Michigan could not change that standard again
without EPA approval, and (5) if Michigan fails to adequately enforce the standard, the EPA can
seek sanctions against it.6 Under these circumstances, we conclude that the Summer Fuel Law is
federal law.
states.” Id. Congress additionally feared “the possibility of 50 different state regulatory regimes [which] ‘raised the
spectre of an anarchic patchwork of federal and state regulatory programs, a prospect which threatened to create
nightmares for the manufacturers.’” Id. (quoting Motor & Equip. Mfrs. Ass’n, Inc. v. EPA, 627 F.2d 1095, 1109
(D.C. Cir. 1979)).
6Ammex does not claim in its complaint that the duty-free gasoline it sells is not within the intended scope
of the Summer Fuel Law, and that statutory-interpretation question is not before us in this appeal.
No. 18-1677 Ammex, Inc. v. Wenk Page 9
We also find support in the way courts have consistently treated SIPs. Although there is no
case addressing this question in this somewhat unusual context, federal courts in other contexts have
recognized the federal character of a state law incorporated into a SIP. This court has stated on occasion
in dicta that once a SIP is approved, it becomes federal law. See Sierra Club, 681 F.3d at 343 (“[I]f the
EPA approves a State’s proposal, then the SIP is added to the Code of Federal Regulations and becomes
federal law.”); Her Majesty the Queen In Right of the Province of Ontario v. City of Detroit, 874 F.2d
332, 335 (6th Cir. 1989) (“If a [SIP] is approved by the EPA, its requirements become federal law . . . .”).
Other circuits have also stated that after it is approved, a SIP is federal law. See, e.g., Grp. Against Smog
& Pollution, Inc. v. Shenango Inc., 810 F.3d 116, 120 (3d Cir. 2016) (“Once the EPA approves the SIP, it
becomes binding federal law.”); California Dump Truck Owners Ass’n v. Nichols, 784 F.3d 500, 505 n.6
(9th Cir. 2015) (noting that its precedent “consistently recognized that an approved SIP is federal law”);
Indiana v. EPA, 796 F.3d 803, 806 (7th Cir. 2015) (“Once it is approved by EPA, a state rule embodied in
a SIP becomes enforceable federal law.”); US Magnesium, LLC v. EPA, 690 F.3d 1157, 1159 (10th Cir.
2012) (“Approved SIPs are enforceable as federal law. . . .”); see also Ass’n of Am. R.Rs. v. S. Coast Air
Quality Mgmt. Dist., 622 F.3d 1094, 1098 (9th Cir. 2010) (holding that state rules that had not yet been
approved by the EPA were not federal law and therefore were preempted).
Ammex’s arguments otherwise are unavailing. Both Ammex and the concurrence
propose that House Bill 5508 (containing the Michigan Summer Fuel Law) and the EPA’s
incorporation of that bill by reference in the Code of Federal Regulations are at most parallel
provisions. According to Ammex and the concurrence, the state law remains state law and the
SIP contains an identical federal law. Ammex argues that it is merely seeking to enjoin the
MDARD from enforcing the Michigan statute setting out the RVP, and its challenge therefore
cannot implicate federal law.
This argument fails for a number of reasons. As an initial matter, the Michigan statute
and the federal regulation are not independent of each other. The two are interconnected because
the EPA regulation incorporates by reference the state bill containing the statute setting the
summer RVP standard, and the interpretation of one necessarily affects the interpretation of the
other. Treating them as parallel provisions could create the irrational result of interpreting the
same statute differently depending on the context of the challenge. Moreover, the
interconnectedness of the state statute and federal regulation is reinforced by the CAA’s
No. 18-1677 Ammex, Inc. v. Wenk Page 10
enforcement scheme, allowing for enforcement of the same standard by both the EPA and the
state and providing the state with the primary enforcement responsibility. Barring the
MDARD’s enforcement of the Summer Fuel Law against Ammex necessarily impacts the
enforcement regime created by the CAA.7 In light of the regulatory and enforcement scheme
underlying the RVP standard, we cannot accept Ammex’s argument that it merely seeks to bar
the MDARD’s enforcement of the state law and that the state law and federal regulation are at
most parallel provisions.8
Finally, Ammex argues that the EPA has itself indicated that the Summer Fuel Law is
only state law. Ammex relies on a scattering of EPA statements that could be read to support its
position. However, Wenk identifies other statements from the EPA that suggest the opposite.
Given that the EPA has not directly addressed this issue, the potentially conflicting statements
from the EPA identified by both parties are of little value here.
In sum, the MDARD’s enforcement of the Summer Fuel Law is enforcement of federal
law,9 and therefore Ammex did not have a likelihood of success on the merits of its claims that
the MDARD’s enforcement of the law violates the dormant Foreign Commerce Clause or the
7This is not meant to suggest that Ammex is seeking to effectively nullify or invalidate any EPA action, a
circumstance that could call into question our jurisdiction. See United States v. Ford Motor Co., 814 F.2d 1099,
1103 (6th Cir. 1987) (“[I]nvalidation of an EPA-approved SIP may only occur in the federal appellate courts on
direct appeal from the Administrator’s decision under [42 U.S.C.] § 7607(b)(1).”).
8Contrary to the concurrence’s suggestion, our holding does not mean that the Summer Fuel Law loses its
status as state law. The only question we answer is whether the Summer Fuel Law is federal law.
9The concurrence claims that our holding creates a constitutional question whether Congress has
impermissibly delegated executive power to state officials. Neither the parties nor the district court raised or
addressed that issue, and we see no reason to address or decide it here. We note only that although the concurrence
claims that treating the Summer Fuel Law as state law alone avoids the constitutional questions it raises, the sole
authority the concurrence cites for that proposition actually rejects that suggestion. See Ronald J. Krotoszynski, Jr.,
Cooperative Federalism, the New Formalism, and the Separation of Powers Revisited: Free Enterprise Fund and the
Problem of Presidential Oversight of State-Government Officers Enforcing Federal Law, 61 Duke L.J. 1599, 1659–
63 (2012) (rejecting the position that “states participating in cooperative-federalism programs are merely enforcing
state law” as “a colorable argument” and concluding that the “better argument” is that “when states act as agents of
the federal government, they are administering federal law”).
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Supremacy Clause.10 Therefore, the district court properly denied Ammex’s request for a
preliminary injunction. See Obama for Am., 697 F.3d at 436.
III. Conclusion
For the reasons stated above, we AFFIRM the district court’s denial of Ammex’s motion
for preliminary injunction.
10Because we conclude the Summer Fuel Law is federal law, we do not address whether, if the Summer
Fuel Law were only state law, the MDARD’s enforcement of it against Ammex would violate the dormant Foreign
Commerce Clause or the Supremacy Clause.
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_______________________________________
CONCURRING IN THE JUDGMENT
_______________________________________
JOHN K. BUSH, Circuit Judge, concurring in the judgment. Although the Majority
Opinion correctly concludes that Michigan’s Summer Fuel Law, Michigan Compiled Law
§ 290.650d, is constitutional, I question its reasoning that this state statute has been transformed
into federal law that the Michigan Department of Agriculture & Rural Development
(“MDARD”) now is charged to enforce. See Majority Op. at 10. This rationale raises more
constitutional problems than it resolves. If Michigan’s Summer Fuel Law is now federal law that
state officials must enforce, then the Majority would seem to tacitly hold that the Federal
Government may delegate Article II authority to the States to enforce federal law in cooperative-
federalism programs—a proposition that is highly debatable given Supreme Court precedent.
A safer ground on which to rest our decision is to conclude that once state law, Michigan’s
Summer Fuel Law remains state law for purposes of enforcement by state officials. For reasons
discussed below, this state law neither offends the dormant foreign commerce clause nor is
preempted by federal law. I therefore concur in the judgment only.
I.
“The federal Clean Air Act is a model of cooperative federalism.” Ellis v. Gallatin Steel
Co., 390 F.3d 461, 467 (6th Cir. 2004). As the Majority explains, Congress set a national Reid
Vapor Pressure (“RVP”) standard and prohibited States from setting a different standard unless
EPA determines that the deviation was “‘necessary’ to achieve a [National Ambient Air Quality
Standards (“NAAQS”)] and approves the modified standard” in the State’s state implementation
plan (“SIP”). Majority Op. at 3 (citations omitted). If EPA approves a State’s SIP, then EPA
requires the State to enforce the SIP and may sanction the State for failing to do so. 42 U.S.C.
§ 7509(a). Although the Majority elegantly disposes of Ammex’s constitutional challenges by
holding that the MDARD now is enforcing “federal law” when it enforces Michigan’s SIP, see
Majority Op. at 10, this conclusion warrants a closer inspection because it implicates larger
constitutional concerns in the context of cooperative-federalism programs established by
Congress. See, e.g., Ronald J. Krotoszynski, Jr., Cooperative Federalism, the New Formalism,
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and the Separation of Powers Revisited: Free Enterprise Fund and the Problem of Presidential
Oversight of State-Government Officers Enforcing Federal Law, 61 Duke L.J. 1599, 1659–69
(2012).
Article II, of course, vests the President of the United States with “[t]he executive
Power,” U.S. Const. art. II, § 1, and provides that the President “shall take Care that the Laws be
faithfully executed,” id. § 3. See also Myers v. United States, 272 U.S. 52, 164 (1926). As the
Supreme Court explained, “the Presidency concentrates executive authority ‘in a single head in
whose choice the whole Nation has a part, making him the focus of public hopes and
expectations. In drama, magnitude and finality his decisions so far overshadow any others that
almost alone he fills the public eye and ear.’” Clinton v. Jones, 520 U.S. 681, 698 (1997)
(quoting Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 653 (1952) (Jackson, J.,
concurring)). In recognition that the execution of federal law is vested with the President and
those people under her or his control, the Supreme Court has invalidated attempts by Congress to
delegate the executive power to non-Article II actors. See e.g., Printz v. United States, 521 U.S.
898, 922 (1997) (holding provisions of Brady Act unconstitutional for transferring enforcement
of federal law to “thousands . . . in the 50 States,” who “are left to implement the program
without meaningful Presidential control”); Bowsher v. Synar, 478 U.S. 714, 726 (1986) (holding
that Congress cannot reserve unto itself “control over the execution of the laws” because “[t]he
structure of the Constitution does not permit Congress to execute the laws”).
The Court also has stressed that the President’s removal authority over agents who wield
federal executive power cannot be unduly restricted, see Free Enterprise Fund v. Public Co.
Accounting Oversight Board, 561 U.S. 477, 496–97 (2010), for without the appropriate removal
authority, the President “can neither ensure that the laws are faithfully executed, nor be held
responsible for” an executive agent’s actions, as “the President ‘cannot delegate ultimate
responsibility or the active obligation to supervise that goes with it.’” Id. at 496 (quoting
Clinton, 520 U.S. at 713 (Breyer, J., concurring in the judgment)). Further still, the Court has
been mindful that Congress cannot confer Article III standing upon a party who is not authorized
to wield federal executive power for the purpose of “[v]indicating the public interest” and
carrying out the enforcement of federal law. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 576
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(1992) (“To permit Congress to convert the undifferentiated public interest in executive officers’
compliance with the law into an ‘individual right’ vindicable in the court is to permit Congress to
transfer from the President to the courts the Chief Executive’s most important constitutional
duty, to ‘take Care that the Laws be faithfully executed.’” (quoting U.S. Const. art. II, § 3)).
Members of the Supreme Court have noted that substantial constitutional issues arise
from certain arguable delegations of federal executive power to non-Article II actors. See
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 197 (2000)
(Kennedy, J., concurring) (“Difficult and fundamental questions are raised when we ask whether
exactions of public fines by private litigants, and the delegation of Executive power which might
be inferable from the authorization, are permissible in view of the responsibilities committed to
the Executive by Article II of the Constitution of the United States.”); see also id. at 209–10
(Scalia, J., dissenting) (observing the same). Not only have several justices highlighted
constitutional concerns posed by certain arguable delegations of federal executive power to
private parties, but a majority of justices have, in the context of qui tam suits, explicitly reserved
judgment on the issue until the appropriate time. See Vt. Agency of Nat. Res. v. United States ex
rel. Stevens, 529 U.S. 765, 778 n.8 (2000) (“[W]e express no view on the question whether qui
tam suits violate Article II, in particular the Appointments Clause of § 2 and the ‘take Care’
Clause of § 3.”). It would seem that the difficult and fundamental questions involving delegation
of Article II power to private parties are only augmented by federalism concerns in a case where
state actors have been arguably delegated federal law enforcement authority in cooperative-
federalism programs. See Printz, 521 U.S. at 922.
It is therefore problematic to rest our decision, when it is not necessary, on reasoning that
would seem to allow Congress to delegate Article II power to state officials.1 Under the
1The Majority is correct that the parties did not argue and the district court did not address the
constitutional ramifications described above. But the district court did “ultimately decline[] to find that [the
Summer Fuel Law] is a federal regulation,” R. 34, PageID 906, for good reasons. To support its decision to avoid
calling the state statute as enforced by state officials a federal law, the district court observed that EPA referred to
the Summer Fuel Law as a “state law” in the regulation. The district court also observed that our court’s dicta in
Sierra Club v. Korleski, 681 F.3d 342 (6th Cir. 2012) and Her Majesty the Queen in Right of the Province of Ontario
v. City of Detroit, 874 F.2d 332 (6th Cir. 1989), suggesting that “state law ‘becomes’ federal law[,] may have been
imprecisely worded.” Id. at PageID 907. And the district court recognized that treating the Summer Fuel Law as
state law would allow the district court to avoid having to resolve Ammex’s separate challenge to the Summer Fuel
No. 18-1677 Ammex, Inc. v. Wenk Page 15
Majority’s approach, Michigan is charged with the enforcement of federal emissions standards
for gasoline under federal law. Although Michigan’s enforcement would be limited to its
territorial boundaries, it nonetheless arguably exercises federal executive power when it enforces
the SIP if this statute is deemed to be federal law to be enforced by state officials. Under such an
arrangement that views the SIP as federal law, the President would not have the power of
removal of any of the state officials charged with such federal-law enforcement. It is also
arguable that the President would not have sufficient control over how the policy of this
“federal” law is enforced. Although EPA has the statutory authority to sanction a State for
failing to enforce its SIP, EPA appears to have no power to direct a State in how to carry out the
enforcement of its SIP once the enforcement proceedings have commenced. In other words, this
statutory scheme, as understood by the Majority, would arguably constitute an impermissible
interference with the President’s Article II powers and duties.
Thus, to avoid these constitutional concerns altogether, the better course is not to hold
that the Michigan’s Summer Fuel Law as enforced by MDARD “is federal law.”2 Instead, when
EPA “incorporate[ed] by reference,” 40 C.F.R. § 52.1170 (2019), Michigan’s Summer Fuel law,
that federal agency at most adopted a parallel federal regulation and thereby incorporated the
requirements of the SIP into federal law. Michigan officials’ enforcement of SIP itself, however,
remains the enforcement of state law, though it is identical to a federal provision. We would
thereby avoid all looming Article II and federalism concerns arising from the state law to being
deemed transformed into federal law that MDARD must enforce. See generally Krotoszynski,
Law, which would arise only if the state law were deemed to be “federal” law. As to the latter point, if the Summer
Fuel Law as enforced by MDARD is deemed to be federal law, the district court may need to address Ammex’s
argument that the SIP does not apply to the gas it exports because the EPA has expressly disclaimed that fuel subject
to regulation under the Clean Air Act is limited to “fuel that is ‘introduced into commerce,’ not at fuel for export.”
R. 33, PageID 884 (footnote omitted). Also, the Majority does not adequately explain why it deems the SIP to be
federal law for purposes of state enforcement even though the very federal regulation approving the SIP refers to it
as state law. See 72 Fed. Reg. 4432, 4434 (Jan. 31, 2007) (“This Action merely approves state law as meeting
Federal requirements and imposes no additional requirements beyond those imposed by state law.” (emphasis
added)).
2To be sure, this conclusion does not imply that the federal government is prohibited from adopting a
State’s policy as federal law by copying identical provisions of the state law. The analytical problem here is to
suggest that state law can be transformed into a federal law subject to enforcement by state officials.
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Jr., supra, at 1659 (“[T]he entire problem could be avoided if the Supreme Court were to hold
that when states participate in cooperative-federalism programs, they enforce only state law.”).3
This conclusion also is consistent with this court’s prior statement that “[i]f a [SIP] is
approved by the EPA, its requirements become federal law.” Her Majesty the Queen in Right of
the Province of Ont. v. City of Detroit, 874 F.2d 332, 335 (6th Cir. 1989); see also Sierra Club v.
Korleski, 681 F.3d 342, 343 (6th Cir. 2012) (“[I]f the EPA approves a State’s proposal, then the
SIP is added to the Code of Federal Regulations and becomes federal law.”). Before today our
court has never suggested that a state official may be required to enforce federal law if a state
law is adopted by EPA. Instead, our reasoning acknowledged that, once adopted by EPA, the
requirements of the State’s SIP become part of federal law but the SIP itself still remains part of
the state law that state officials enforce. Indeed, it would be a novel principle in our nation’s
jurisprudence if a state enforcement agency charged by state law to enforce state law can, by
edict of a federal agency, also be deputized an agent of federal law enforcement simply because
that agency adopts text in a federal regulation identical to the wording of a state law.
The Majority concludes that treating the Summer Fuel Law and the Regulation “as
parallel provisions could create the irrational result of interpreting the same statute differently
depending on the context of the challenge.” Majority Op. at 9. But there is nothing irrational
about shifting the analysis depending on the sovereign’s law that is under review for purposes of
the law’s constitutionality. Making the constitutional analysis dependent upon the sovereign
involved is the natural by-product of our dual-sovereign system, see, e.g., Arizona v. United
States, 567 U.S. 387, 395–96, 400–02 (2012)—a method of governance lauded for its protection
of individual rights, see Murphy v. National Collegiate Athletic Ass’n, 138 S. Ct. 1461, 1475–77
(2018). See also Gamble v. United States, 139 S. Ct. 1960, 1968 (2019); New York v. United
3See also Krotoszynski, Jr., supra, at 1669 (“Article II’s Vesting and Take Care Clauses create an
imperative for meaningful presidential oversight over the implementation of federal law, yet whether cooperative-
federalism structures provide sufficient presidential oversight to overcome potential separation-of-powers objections
very much remains an open question. If Free Enterprise Fund means what it expressly says, however, cooperative-
federalism programs violate the separation-of-powers doctrine by unconstitutionally exporting the execution of
federal law to state-government officers.”). Although the Majority is correct that Krotoszynski argues that when
“states act as agents of the federal government, they are administering federal law,” Majority Op. at 10 n.9 (quoting
Krotoszynski, Jr., supra, at 1663), Krotoszynski also acknowledges that the reasoning of the Supreme Court in Free
Enterprise Fund could be read to call into question the constitutionality of that scenario (i.e., state officials acting as
agents of the federal government in administering federal law). See Krotoszynski, Jr., supra, at 1669.
No. 18-1677 Ammex, Inc. v. Wenk Page 17
States, 505 U.S. 144, 181 (1992) (“[T]he Constitution divides authority between federal and state
governments for the protection of individuals.”).
Moreover, the Summer Fuel Law does not lose its character as a state law or otherwise
transform into federal law because the parallel provisions could be interpreted differently.
Should the Michigan courts interpret the state law differently than the federal law is interpreted,
the federal law’s interpretation presumably would have a preemptive effect if compliance with
the state law would be in conflict with the requirements of federal law. See State Farm Bank v.
Reardon, 539 F.3d 336, 342 (6th Cir. 2008). Parallel enforcement of state and federal law occurs
frequently “because the powers of the Federal Government and the States often overlap,” and
“allowing both to regulate often results in two layers of regulation.” Gamble, 139 S. Ct. at1968–69. And yet despite this frequent occurrence, at no time are state actors deemed to be
transformed into enforcers of federal law. Instead state officials enforce the law they were
elected or appointed by their State to enforce—state law.
I also believe the Majority’s concerns that treating state and federal law as parallel
provisions would “nessarily impact[] the enforcement regime created by the CAA” are
overblown. Majority Op. at 10. EPA, acting through its Administrator, of course may sue a
regulated entity to enforce the SIP. 42 U.S.C. § 7413(a)(1). Thus, there is no reason to be
concerned that Michigan’s Summer Fuel Law, as state law, would necessarily impact of the
federal law.4
In sum, Michigan’s Summer Fuel Law, as enforced by MDARD, is and has always been
a state law. Therefore, I do not believe we may dismiss the constitutional challenges to the
statute with the Majority’s broad brush stroke of declaring that state officials now are enforcing
4Moreover, if the Majority concludes that the SIP’s enforcement would be necessarily impacted by this
challenge, then consistent with California Dump Truck Owners Ass’n v. Nichols, 784 F.3d 500, 507, 513 (9th Cir.
2015), there would be a colorable argument that this court should dismiss the action for lack of subject-matter
jurisdiction, as did the Ninth Circuit in California Dump Truck Owners Ass’n. Applying the Ninth Circuit’s
reasoning in California Dump Truck Owners Ass’n, 784 F.3d at 507–10, the effect of Ammex’s “suit is to challenge
both the EPA and the SIP” and in doing so, Ammex’s suit impermissibly circumvents the requirements of the CAA
that “invalidation of an EPA-approved SIP may only occur in the federal appellate courts on direct appeal from the
Administrator’s decision,” United States v. Ford Motor Co., 814 F.2d 1099, 1103 (6th Cir. 1987). See also
42 U.S.C. § 7607(b)(1). However, if Ammex’s challenge is limited to Wenk’s enforcement of the Summer Fuel
Law as a state law, then there is no argument that we lack jurisdiction to reach the merits of Ammex’s challenge.
No. 18-1677 Ammex, Inc. v. Wenk Page 18
federal law. Instead, we must paint with pointillism the reasons why the statute as part of state
law neither violates the dormant foreign commerce clause nor is preempted by federal law. This
task I undertake below.
II.
A. Dormant Foreign Commerce Clause
One of the well-known and often-used enumerated powers of Congress is its power to
“regulate Commerce with foreign Nations, and among the several States, and with the Indian
Tribes.” U.S. Const. art. I, § 8, cl. 3. As interpreted by the Supreme Court, “the [Commerce]
Clause has long been recognized as a self-executing limitation on the power of the States to enact
laws imposing substantial burdens on [interstate and foreign] commerce.” S.-Cent. Timber Dev.,
Inc. v. Wunnicke, 467 U.S. 82, 87 (1984). “In ‘the unique context of foreign commerce,’ a
State’s power is further constrained because of ‘the special need for uniformity.’” Barclays
Bank PLC v. Franchise Tax Bd. of Cal., 512 U.S. 298, 311 (1994) (quoting Wardair Can., Inc. v.
Fla. Dep’t of Revenue, 477 U.S. 1, 8 (1986)). Indeed, the Court has stressed that in matters of
foreign affairs and foreign trade, it is important that “the people of the United States act through
a single government with unified and adequate national power.” Japan Line, Ltd. v. County of
Los Angeles, 441 U.S. 434, 448 (1979) (quotation omitted). In other words, it is paramount that
the federal government speak with “one voice” in its regulations of foreign commerce and in its
relations with foreign governments. Id. at 449.
Should a state action prevent the federal government from speaking with one voice in
matters of foreign commerce, that action offends the dormant foreign commerce clause. Id. at
453–54. However, where Congress acquiesces to the state action, the dormant foreign commerce
clause is no longer offended. See Barclays Bank PLC, 512 U.S. at 323. In describing the level
of acquiescence that is required, the Court held: “Congress may more passively indicate that
certain state practices do not ‘impair federal uniformity in an area where federal uniformity is
essential’; it need not convey its intent with the unmistakable clarity required to permit state
regulation that discriminates against interstate commerce . . . .” Id. (quoting Japan Line,
No. 18-1677 Ammex, Inc. v. Wenk Page 19
441 U.S. at 448) (citations omitted).5 Congress met this standard for acquiescence to the
Michigan law for at least two reasons.
First, when Congress passed the CAA, it did so with the knowledge that even though “the
[NAAQS] are set federally, the ‘primary responsibility for assuring’ they are met lies with the
States.” Sierra Club, 681 F.3d at 343 (quoting 42 U.S.C. § 7407(a)). Thus, from the outset,
Congress expressly knew that States would have a hand in the enforcement of the national
standards. Congress also contemplated that the States would, in certain circumstances, be
allowed to regulate emissions in a manner different from its RVP express statutory limits when
Congress authorized EPA to review any SIPs from the States requesting deviations from the
national RVP standard that were “necessary” to achieve the applicable NAAQS standards in that
State. 42 U.S.C. § 7545(h)(1).
Second, Congress has been aware of Michigan’s Summer Fuel Law since 2007, when
EPA noted in the Federal Register that “EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller
General of the United States prior to the publication of the rule in the Federal Register.” 72 Fed.
Reg. 4432, 4435 (Jan. 31, 2007) (to be codified at 40 C.F.R. pt. 52).
Given its statutory scheme allowing States to deviate from the national RVP standard
after EPA approval and its knowledge of Michigan’s Summer Fuel Law, Congress has passively
indicated that this statute does not impair an area of law where federal uniformity is essential to
matters of foreign affairs and commerce. Cf. Barclays Bank PLC, 512 U.S. at 324–26. Thus,
Michigan’s Summer Fuel Law does not violate the one-voice doctrine.
Nor does the law fall into another category of state action that the Supreme Court has
recognized violates the dormant commerce clause—namely, actions that regulate extraterritorial
commerce. See Am. Beverage Ass’n v. Snyder, 735 F.3d 362, 373 (6th Cir. 2013) (quoting Int’l
5By contrast, under a dormant commerce clause analysis, “state statutes [are exempt] from the implied
limitations of the [c]lause only when the congressional direction to do so has been ‘unmistakably clear.’” Maine v.
Taylor, 477 U.S. 131, 139 (1986) (holding there was “no unambiguous statement of any congressional intent
whatsoever ‘to alter the limits of state power otherwise imposed by the Commerce Clause,’” to cure constitutional
defect of a state statute (quoting United States v. Pub. Utils. Comm’n of Cal., 345 U.S. 295, 304 (1953)).
No. 18-1677 Ammex, Inc. v. Wenk Page 20
Dairy Foods Ass’n v. Boggs, 622 F.3d 628, 645 (6th Cir. 2010)). The extraterritoriality doctrine,
though a “relic of the old world with no useful role to play in the new,” id. at 378 (Sutton, J.,
concurring), prohibits States from “directly control[ling] commerce occurring wholly outside the
boundaries of a State” and thereby “exceed[ing] the inherent limits of the enacting State’s
authority,” Healy v. Beer Institute, 491 U.S. 324, 336 (1989). To determine whether a statute is
extraterritorial, the Court has held that the relevant inquiry is whether the “practical effect of the
regulation is to control conduct beyond the boundaries of the State.” Healy, 491 U.S. at 336.
Ammex contends that Michigan is regulating beyond its borders because “as a matter of
U.S. customs law, the goods sold at the Ammex facility, including gasoline, never enter the
stream of domestic commerce.” Appellant Br. at 26. As the district court recognized, it might
be technically true that “the gasoline Ammex purchases from a foreign country or foreign trade
zone, is stored beyond [U.S. Customs and Border Protection’s] ‘exit point’ from the United
States, and is taken to Canada immediately after purchase.” R. 34, PageID 921. Nonetheless,
Ammex remains geographically situated in Michigan, where all the sales to consumers occur,
and as a result, Michigan is regulating conduct within its borders. Furthermore, Michigan’s
Summer Fuel Law does not prevent Canada or any of Michigan’s sister States from setting RVP
standards of their own. Thus, it cannot be said that the practical effect of Michigan’s law is to
control conduct beyond its own boundaries, and by extension this leads to the conclusion that the
statute does not violate the extraterritoriality doctrine (assuming the doctrine remains relevant
today).
Ammex also argues that Michigan’s Summer Fuel Law is unconstitutional under the
“traditional” dormant commerce clause analysis because the dormant foreign commerce clause
analysis is the same. In support, Ammex relies on Antilles Cement Corp. v. Acevado Vilá, 408
F.3d 41, 46 (1st Cir. 2005). But this proposition is dubious for at least two reasons.
First, the statements Ammex relies upon from Antilles are dicta. The First Circuit did not
expressly hold that the analysis of the two doctrines was “essentially the same.” The Antilles
court made this conclusion in an effort to determine whether the case presented a novel issue of
constitutional law that should be avoided—namely, whether the market participant exception to
the dormant commerce clause analysis applied to the foreign dormant commerce clause. See id.No. 18-1677 Ammex, Inc. v. Wenk Page 21
at 46–48. Concluding that there was a novel and complex issue of constitutional law at hand, the
First Circuit reversed the district court for further proceedings to “develop the record regarding
previously overlooked issues, to examine their factual foundations, and to explore their legal
ramifications.” Id. at 51. Its conclusion that the dormant interstate and foreign commerce clause
are “essentially the same” was not fundamental to its ultimate holding and is therefore dicta. See
United States v. Turner, 602 F.3d 778, 786 (6th Cir. 2010); see also Dedham Water Co. v.
Cumberland Farms Dairy, Inc., 972 F.2d 453, 459 (1st Cir. 1992).
Second, as mentioned previously, the Supreme Court expressly held that the standard for
Congressional acquiescence to state actions for the dormant foreign commerce clause analysis is
different from the dormant commerce clause analysis. See supra at 18. Thus, to suggest that the
analysis for each of the two doctrines is the same requires ignoring the Court’s holding that
“Congress may more passively indicate,” Barclays Bank PLC, 512 U.S. at 323, that state actions
do not offend the dormant foreign commerce clause. It is therefore doubtful that the analysis is
“essentially the same,” Antilles, 408 F.3d at 46, given that the Court has instructed us to find no
dormant foreign commerce clause violation when Congress passively indicates that its ability to
speak with one voice is not offended. Because Congress has acquiesced to Michigan’s Summer
Fuel Law, we need not accept Ammex’s invitation to determine whether Michigan’s law fails the
traditional dormant commerce clause.
For these reasons, Michigan’s Summer Fuel Law does not offend the dormant foreign
commerce clause.
B. Field and Conflict Preemption
Finally, Ammex argues that Michigan’s Summer Fuel Law is preempted by federal law
under a theory of field preemption and conflict preemption. Neither argument is persuasive.
1. Field Preemption
Under a theory of field preemption, “Congress’ intent to supersede state law in a given
area may nonetheless be implicit if a scheme of federal regulation is so pervasive as to make
reasonable the inference that Congress left no room for the States to supplement it, if the Act of
No. 18-1677 Ammex, Inc. v. Wenk Page 22
Congress . . . touch[es] a field in which the federal interest is so dominant that the federal system
will be assumed to preclude enforcement of state laws on the same subject.” Wis. Pub.
Intervenor v. Mortier, 501 U.S. 597, 605 (1991) (internal quotation omitted) (alteration in
original) (citations omitted). Ammex argues that “Congress has fully occupied the field
regarding the types of goods that can be sold duty free, and there is no room for Michigan to
require Ammex to adhere to its fuel standards.” Appellant Br. at 35. The Supreme Court’s
opinion in R.J. Reynolds Tobacco Co. v. Durham County, 479 U.S. 130, 149–50 (1986)
demonstrates otherwise.
In R.J. Reynolds, the Court assessed whether a State may impose a property tax on
imported goods stored under bond in a customs warehouse and held that the State was not
preempted from doing so. 479 U.S. at 152. The Court reasoned that the applicable statute and
regulations did not “occupy a field completely” to preclude enforcement of state law. Id. at 149.
Indeed, the Court observed “the current regulations, while detailed, appear to contemplate some
concurrent state regulation.” Id. (emphasis added); see also Itel Containers Int’l Corp. v.
Huddleston, 507 U.S. 60, 71 (1993) (recognizing this aspect of R.J. Reynolds’s holding).6 Thus,
Ammex’s field preemption argument fails because the Court has expressly declined to conclude
that Congress’s establishment of an extensive field of regulations relating to duty bond
warehouses operates to supplant all state regulation over bonded warehouses.
2. Conflict Preemption
Conflict preemption occurs “where compliance with both federal and state regulations is
a physical impossibility, or where state law stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.” State Farm Bank, 539 F.3d at 342(quoting Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 98 (1992)). Thus, “to survive
6Although Ammex relies upon the Court’s expansive language in Xerox Corp. v. County of Harris,
459 U.S. 145, 150 (1982) that “Congress established a comprehensive customs system,” the Court subsequently
limited those statements in R.J. Reynolds. See R.J. Reynolds, 479 U.S. at 143–44 (“[T]his court rather broadly stated
that ‘state property taxes on goods stored under bond in a customs warehouse are pre-empted by Congress’
comprehensive regulation of custom duties.’ . . . [H]owever, we accept Xerox’s holding and the quoted sentence as
limited to the factual situation presented in that case, that is, where the goods are intended to transshipment.”
(internal citation omitted)). Thus, Ammex’s reliance on Xerox for this proposition is misplaced, as this case does
not involve goods intended for transshipment.
No. 18-1677 Ammex, Inc. v. Wenk Page 23
preemption analysis State law must not ‘actually conflict’ with the means Congress chose to
effect its purpose.” Millsaps v. Thompson, 259 F.3d 535, 548 (6th Cir. 2001) (quoting Hines v.
Davidowitz, 312 U.S. 52, 67 (1941)). According to Ammex, Michigan’s Summer Fuel Law is
preempted in two ways: (1) Ammex could not simultaneously comply with federal law and state
law during the summer of 2018 because Ammex could not sell gasoline duty free that complied
with Michigan’s RVP standards, and (2) Michigan’s Summer Fuel Law “conflict[s] with
Congress’s goals for duty-free stores even when Ammex can source 7.0 psi RVP gasoline that
complies with customs law.” Appellant Br. at 37.
Simultaneous compliance with Michigan’s Summer Fuel Law and federal customs law is
not a physical impossibility. Indeed, Ammex acknowledged that it was able to comply with both
statutes from 2013 through 2017. Ammex contends that it now cannot comply with both state
and federal law because it does not have an available supplier. This is not a conflict caused by
Michigan’s Summer Fuel Law, but by a problem caused by a law of an entirely different sort—
the law of supply and demand.7 But it cannot be said that compliance with both state and federal
laws is a physical impossibility.
Further, Michigan’s Summer Fuel Law does not “actually conflict” with Congress’s goals
for bonded warehouses. Although Congress has praised duty-free sales and observed that they
“play a significant role in attracting international passengers to the United States,” and are an
“important source of revenue for the state, local and other governmental authorities,” Omnibus
Trade & Competitiveness Act of 1988, Pub. L. No. 100-418, § 1908(a), 102 Stat. 1107, 1315
(1988), it has never mandated that bonded warehouses sell gasoline duty free to carry out those
objectives. Instead, Congress has broadly authorized that any good may be stored in bonded
warehouses and made available for duty-free sale save “perishable articles and explosive
substances other than firecrackers.” 19 U.S.C. § 1557(a)(1). A merchant’s temporary loss of the
ability to sell one type of good is not inconsistent with Congress’s goal of making a variety of
types of goods available for sale. Indeed, as the district court rightly concluded, “the Summer-
7Ammex’s previous gas supplier is “now undergoing repairs and maintenance.” R. 29, PageID 851.
Presumably, Ammex’s source of gasoline that complies with both federal and state law will be available to it once
again after the repairs are complete.
No. 18-1677 Ammex, Inc. v. Wenk Page 24
Fuel Laws do not prohibit Ammex from selling any good” because “consistent with the purpose
of customs bonded warehouses generally, . . . they certainly do not prohibit Ammex from selling
any good duty free and tax free.” R. 34, PageID 929. Thus, Michigan’s Summer Fuel Law is
not preempted.
III.
Having concluded that Michigan’s Summer Fuel Law neither offends the dormant
foreign commerce clause nor is preempted by federal law, I agree with the Majority’s conclusion
to affirm the district court’s judgment. But the reasons why Michigan’s Summer Fuel Law is
constitutional do not rest on a premise that the law being enforced by MDARD is “federal law.”
Rather, the state officials continue to enforce state law, but that law nonetheless survives scrutiny
under the foreign commerce clause and is not preempted by federal law.