By Brent I. Clark, Meagan Newman, and Craig B. Simonsen

The Second Circuit Court of Appeals has analyzed the effect of “dual impact” regulations, and found that an exception will save city regulations from preemption if they are of general applicability. Steel Institute of New York v. City of New York, __ F.3d __, No. 12-276 (2nd Cir. 2013).

At issue in this case were city statutes and regulations which provide a comprehensive framework to regulate the design, construction, and operation of cranes, derricks, and other hoisting equipment in the city.  The plaintiff argued that the city’s crane regulations were preempted by the OSH Act and OSHA regulations because they imposed occupational health and safety standards in an area where federal standards already existed.

The city responded that its regulations were not preempted by way of the Supreme Court’s analysis in Gade v. National Solid Wastes Management Ass’n, 505 U.S. 88 (1992). Further, that, even if they were preempted, they were saved by the exception afforded by Gade for laws of general applicability. The Court found that the city had exercised its fundamental police power to protect public safety. However in doing so it was regulating an area where federal occupational standards existed — so Gade controlled.

In Gade, the Supreme Court recognized an exception for state and local regulations that were of “general applicability.” It held that because the state statutes were primarily “directed at workplace safety,” they were not laws of general applicability and therefore succumbed to preemption. Unlike in this case where the city regulations at issue were “unquestionably ‘dual impact’ regulations.” In fact, the city regulations were “intended to protect public safety and welfare.”

The Court, citing Gade, found that even a law that “directly and substantially protects workers ‘cannot fairly be characterized as [an] ‘occupational’ standard[]’ if it ‘regulate[s] workers simply as members of the general public’.”  The Gade exception saved the city regulations from preemption because they were of general applicability. They were not directed at the workplace. They regulated workers as members of the general public, and were therefore saved from preemption.