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Preemption, Explained · a16z AI Policy Brief

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  So I think there probably is no debate in AI policy that's more
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  important right now
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  than what the role is that states should play in AI governance
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  and what the role is
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  SPEAKER_01: of the federal government.
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  SPEAKER_01: We saw this play out in a really brilliant,
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  SPEAKER_01: bright way over the summer with the debates around the AI moratorium.
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  where Congress introduced a proposal to preempt some aspects of
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  state policy.
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  SPEAKER_01: And there were lots of questions about what was lawful and what wasn't.
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  So what is Congress permitted to do and where are the bounds on
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  congressional action?
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  SPEAKER_01: What are states permitted to do and what are the bounds on state action?
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  So we thought it would be really helpful to gather a panel of
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  esteemed lawyers to
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  provide us with some guidance on those questions and understand
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  more deeply what
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  SPEAKER_01: the legal bounds are for how we think about AI governance.
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  SPEAKER_01: we can kick it off,
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  SPEAKER_01: Alon,
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  SPEAKER_01: starting with you and talk a little bit about preemption,
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  SPEAKER_01: just to understand exactly what the term means.
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  And then what are the legal guardrails around what is
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  permissible for Congress to
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  SPEAKER_01: do when it's attempting to preempt state authority?
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  SPEAKER_02: Sure.
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  SPEAKER_02: So preemption is a legal principle that flows as a consequence of the
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  SPEAKER_02: Constitution's Supremacy Clause,
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  SPEAKER_02: which says that
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  SPEAKER_02: The Constitution and laws made under it,
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  SPEAKER_02: in other words,
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  SPEAKER_02: federal laws,
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  SPEAKER_02: are supreme,
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  SPEAKER_02: notwithstanding anything under state law.
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  And that means that when there's a conflict between federal law
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  and state law,
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  SPEAKER_02: federal law needs to prevail.
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  And there can be several different types of conflicts and thus
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  different types of preemption.
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  One pretty straightforward one is express preemption,
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  where Congress says,
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  SPEAKER_02: that states are prohibited from enacting certain types of laws,
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  or they say that federal law predominates over state law in a
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  particular area.
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  SPEAKER_02: There's also a form of preemption called conflict preemption,
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  where sometimes it's impossible for federal law and state law
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  to be complied with
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  SPEAKER_02: at the same time,
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  SPEAKER_02: in which case federal law again prevails.
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  SPEAKER_02: That could be an instance where,
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  SPEAKER_02: for instance,
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  federal law tells a regulated party to do something and state
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  law says that they
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  SPEAKER_02: shouldn't do it,
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  SPEAKER_02: or vice versa.
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  SPEAKER_02: There can also be a conflict
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  even at a sort of higher level of generality where federal law
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  embodies certain
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  SPEAKER_02: policies or values that state law directly conflicts with and undermines.
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  SPEAKER_02: And then the final area is something called field preemption,
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  which is usually where there is some subject that is regulated
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  by the federal
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  government in such a complete and pervasive way that it just
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  leaves no room for
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  SPEAKER_02: states to enact statutes in the same area.
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  SPEAKER_02: even if the state statutes aren't directly in conflict with federal law.
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  SPEAKER_02: So any one of those could lead to a finding of preemption,
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  SPEAKER_02: in which case federal law would prevail over state law.
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  One thing that would be really helpful for you to clarify is
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  whether it's necessary
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  SPEAKER_01: for Congress to take action in a specific area in order to preempt
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  SPEAKER_01: an equivalent area in state policy.
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  SPEAKER_01: We hear all the time things like,
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  in order to preempt state laws on transparency or state laws on
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  liability or state
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  SPEAKER_01: laws on national security issues related to AI,
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  SPEAKER_01: Congress needs to take action in the equivalent area.
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  So you need congressional action and transparency in order to
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  preempt state
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  SPEAKER_01: activity and transparency.
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  SPEAKER_01: Is that the case?
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  SPEAKER_02: Not necessarily.
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  SPEAKER_02: So you do need some affirmative source of federal law
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  SPEAKER_02: for there to be a conflict with state law,
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  SPEAKER_02: but it doesn't have to match the state law precisely.
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  SPEAKER_02: So it doesn't have to be the case,
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  SPEAKER_02: for instance,
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  that there's a federal transparency law and therefore states
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  can't enact laws in
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  SPEAKER_02: the same area of transparency.
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  It could be a federal law dealing with one subject in a very
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  general way that has
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  SPEAKER_02: sort of knock-on effects for state law.
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  SPEAKER_02: And so an example of that could be something like
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  SPEAKER_02: Section 230,
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  which was a law that Congress passed sort of at the dawn of the
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  mass Internet age
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  SPEAKER_02: that had all sorts of preemptive effects on state tort law,
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  SPEAKER_02: for instance,
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  SPEAKER_02: or in some instances on state contract law,
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  SPEAKER_02: even though Section 230 itself is not a tort law or a contract law.
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  SPEAKER_01: So I think some people have in their heads the idea that like,
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  SPEAKER_01: if Congress is going to act in preemption,
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  SPEAKER_01: we need to see this like a federal AI framework,
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  SPEAKER_01: we need to see a law that's titled like something,
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  something AI related has lots of provisions related to lots of
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  different AI related
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  SPEAKER_01: issues.
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  SPEAKER_01: It sounds like what you're suggesting is like,
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  SPEAKER_01: that's one vehicle,
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  but wouldn't be the only way at least legally to accomplish
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  preemption if that's
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  SPEAKER_01: what Congress was trying to accomplish.
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  SPEAKER_02: That's correct.
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  SPEAKER_02: Although, you know, one feature of preemption is that
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  because there is a sort of default presumption that states are
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  independent
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  SPEAKER_02: sovereigns who get to enact their own laws.
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  It is usually advisable if Congress does want to preempt state
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  law for them to be a
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  SPEAKER_02: little bit explicit about it,
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  or at least to sort of make their wishes in the area known with
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  sufficient clarity,
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  because otherwise you run the risk that whatever they have in
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  mind is not going to
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  SPEAKER_02: get carried out.
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  SPEAKER_01: Willie, that's a good opportunity to segue to you.
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  Could you talk a little bit about what the limits of federal
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  authority would be if
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  SPEAKER_01: Congress decides that it wants to preempt some state activity?
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  SPEAKER_01: Is it able to do that however it wants,
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  or are there some limits to its authority to enact something
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  that preempts?
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  The main limits come from the Constitution,
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  and they can come from basically three things.
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  SPEAKER_00: One is the extent of Congress's power to regulate.
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  So,
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  for example,
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  Congress has granted power to regulate interstate commerce.
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  But there are some things that historically the Supreme Court
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  has considered to be
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  SPEAKER_00: too local and too non-commercial to fall within a commerce power.
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  Some are things that have to do with states themselves as
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  sovereigns under the
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  SPEAKER_00: sovereignty that states retain under the 10th Amendment.
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  SPEAKER_00: And some have to do with the structural liberty that,
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  SPEAKER_00: sorry,
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  with the individual liberty that the Bill of Rights and other
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  provisions of the
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  SPEAKER_00: Constitution guarantees.
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  So obviously Congress can't create a federal regulatory scheme
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  that violates one of the
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  SPEAKER_00: protections of the First Amendment or the Fifth Amendment, for example.
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  SPEAKER_00: But for a long time,
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  SPEAKER_00: Congress's power seemed to be basically unlimited,
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  SPEAKER_00: except where it stepped on one of those individual guarantees.
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  SPEAKER_00: In the mid-1990s,
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  the Supreme Court started putting more teeth back into the
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  limits of Congress's
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  SPEAKER_00: power under the enumerated powers doctrine,
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  the idea that our national government has only the powers that
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  the Constitution
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  SPEAKER_00: grants it and no more.
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  SPEAKER_00: But still,
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  SPEAKER_00: in the technology space,
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  SPEAKER_00: almost everything intersects with commerce,
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  SPEAKER_00: the channels of commerce,
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  SPEAKER_00: the way that people do business.
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  SPEAKER_00: The commerce power is still very,
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  SPEAKER_00: very broad,
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  even if there have been a handful of guardrails put around the
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  commerce power.
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  Can you talk a little bit about how those principles might map
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  on to something
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  SPEAKER_01: specific that we would see in AI?
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  SPEAKER_01: You could use the moratorium from the summer as one example,
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  SPEAKER_01: but that doesn't have to be the only one.
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  What are the kinds of things that federal lawmakers should
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  consider when they're
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  SPEAKER_01: thinking about,
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  SPEAKER_01: is this legislation going to run into 10th Amendment concerns?
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  SPEAKER_00: Well,
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  one thing that Congress often does is it puts something
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  jurisdictionally connected
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  SPEAKER_00: into its regulatory statutes.
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  SPEAKER_00: So even things that don't sound like commerce,
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  SPEAKER_00: like should there be guns near schools,
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  SPEAKER_00: Congress can put something into a statute that says,
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  in or around a program that is funded with federal dollars or
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  things like that.
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  SPEAKER_00: So in the context of the moratorium, for example,
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  might think about what are the areas that are traditionally the
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  states to regulate
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  that a blanket moratorium might step on and that might wind up
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  being a subject of
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  SPEAKER_00: challenge.
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  SPEAKER_00: So, for example, states usually regulate the practice of medicine.
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  SPEAKER_00: And so I could see some argument that a
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  very broad but nonspecific federal law shouldn't reach the
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  actual sort of standards
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  SPEAKER_00: for medical malpractice,
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  SPEAKER_00: including whether doctors should or should not use AI for diagnosis.
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  SPEAKER_01: And what about commandeering principles?
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  SPEAKER_01: So like if you're saying no state shall,
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  SPEAKER_01: is that essentially a dictate,
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  like the Congress dictating to state lawmakers that they're not
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  able to act?
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  SPEAKER_00: So there's a difference between sort of the positive and the negative.
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  So in other words,
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  Congress can stop states from doing things that violate federal
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  law.
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  SPEAKER_00: Federal law is supreme, state law is supported in that sense.
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  SPEAKER_00: But what Congress can't do is enlist the states basically as...
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  SPEAKER_00: It's sort of cat's paws.
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  SPEAKER_00: So you can't say in a federal law,
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  SPEAKER_00: the states shall pass their own laws that do X.
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  SPEAKER_00: So you can say no state laws that look like X,
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  SPEAKER_00: but you can't say the states shall pass laws that do X,
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  SPEAKER_00: nor can you enlist state officials,
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  SPEAKER_00: which could include everything from,
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  SPEAKER_00: you know,
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  SPEAKER_00: sheriffs to boards of education to boards of regents in the
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  doing the hard work of enforcing federal regulation if they
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  don't want to be.
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  SPEAKER_00: And this has come up in the immigration context quite a bit recently,
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  SPEAKER_00: where states and localities have said,
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  SPEAKER_00: our cops will not enforce federal immigration law.
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  SPEAKER_00: The federal government doesn't like that.
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  SPEAKER_00: And there's been pushback about that.
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  But the basic principle is what you alluded to,
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  Matt,
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  the idea that you can't
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  Federal government can't commandeer the states into doing the
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  national government's work.
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  SPEAKER_00: It has to do that itself.