Nanopierce Technologies, Inc. v. Depository Trust and Clearing Corp., 168 P.3d 73, 78-82 (Nev. 2007):
The preemption doctrine, which provides that federal law supersedes conflicting state law, arises from the Supremacy Clause of the United States Constitution. The Supremacy Clause, found in Article VI, requires that “the Laws of the United States . . . shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Thus, when a conflict exists between federal and state law, valid federal law overrides, i.e., preempts, an otherwise valid state law. Whether a federal enactment preempts state law is fundamentally a question of congressional intent—did Congress expressly or impliedly intend to preempt state law? Even when implied, Congress’s intent to preempt state law, in light of a strong presumption that areas historically regulated by the states generally are not superseded by a subsequent federal law, must be “`clear and manifest.'”
Congress expressly preempts state law when it explicitly states that intent in a statute’s language. Thus, when determining whether Congress has expressly preempted state law, a court must examine statutory language—any explicit preemption language generally governs the extent of preemption.
When Congress does not include statutory language expressly preempting state law, Congress’s intent to preempt state law nonetheless may be implied in two circumstances known as field preemption and conflict preemption. First, under field preemption, preemption is implied when congressional enactments so thoroughly occupy a legislative field, or touch a field in which the federal interest is so dominant, that Congress effectively leaves no room for states to regulate conduct in that field. To determine whether Congress has preempted a field of law, the entire regulatory scheme must be examined to determine whether, based on its level of comprehensiveness or the nature of the field regulated, Congress intended to preclude states from also imposing requirements on that field. If, based on that examination, it can be inferred that Congress intended to occupy that legislative field, state requirements are preempted regardless of any specific law’s conflict.
Second, even when Congress’s enactments do not pervade a legislative field or regulate an area of uniquely federal interest, Congress’s intent to preempt state law is implied to the extent that federal law actually conflicts with any state law. Conflict preemption analysis examines the federal statute as a whole to determine whether a party’s compliance with both federal and state requirements is impossible or whether, in light of the federal statute’s purpose and intended effects, state law poses an obstacle to the accomplishment of Congress’s objectives.
As an initial matter, we note that, although the parties do not address whether appellants’ claims are expressly preempted by any explicit statutory language, no provision within the Securities Exchange Act of 1934, or Congress’s amendments thereto, reveals congressional intent to do so. On appeal, appellants essentially contend that the district court erred in applying a field preemption analysis to their claims and concluding in light of that analysis that, because Congress’s enactments so thoroughly occupy the legislative field of clearing and settling securities transactions, Congress intended to preclude state law claims like appellants’ from imposing any additional requirements on that field. Implicit in appellants’ argument is that conflict preemption is the appropriate analytical framework with respect to determining whether federal law governing clearing and settling securities transactions conflicts with and thus preempts their state law claims. According to appellants, their state law claims do not actually conflict with Congress’s statutory framework.
With regard to whether Congress intended to occupy the entire field of securities regulation, or more narrowly, the field of clearing and settling securities transactions, provisions within the statutory framework, analyzed in light of states’ historical domination over the field of securities regulation, indicate that Congress did not intend to occupy those fields to the exclusion of state law. Although the statutory scheme indicates Congress’s intent to occupy much of the securities regulation area, including the clearing and settling of securities transactions, an examination of Congress’s statutory scheme with respect to securities transactions does not reveal the comprehensiveness necessary to infer that Congress intended to wholly occupy that legislative field.
Specifically, when enacting the Securities Exchange Act of 1934, Congress included a provision recognizing that the Securities Exchange Act did not impact any non-conflicting state securities laws:
[T]he rights and remedies provided by [the Securities Exchange Act of 1934] shall be in addition to any and all other rights and remedies that may exist at law or in equity. . . . [N]othing in this [Act] shall affect the jurisdiction of the securities commission . . . of any State over any security or any person insofar as it does not conflict with the provisions of this [Act] or the rules and regulations thereunder.
This provision does not indicate congressional intent to occupy the entire field of securities regulation, but rather, to occupy that field only inasmuch as state laws “conflict with the provisions of [the Act] or the rules and regulations thereunder.”
Likewise, with respect to the narrower field of a uniform nationalized system for clearing and settling securities transactions, as mentioned, Congress authorized the Commission to regulate this area in 1975 when it amended the Securities Exchange Act of 1934 to add section 17A. Although no court opinion appears to address Congress’s preemptive intent with respect to section 17A, a provision within section 17A and a subsequent amendment indicate an intent to not wholly occupy that legislative field.
For instance, Congress included a provision in section 17A stating that section 17A shall not “be construed to impair the authority of any State banking authority or other State . . . regulatory authority having jurisdiction over a person registered as a clearing agency . . . to make and enforce rules . . . which are not inconsistent with” section 17A and any rules and regulations promulgated based on section 17A. That provision unambiguously signifies that Congress did not intend to occupy the entire field of national clearance and settlement of securities transactions, since Congress explicitly left room for state banking and regulatory authorities to supplement that legislative field’s regulation, so long as any state regulation is not inconsistent with section 17A.
A subsequent amendment likewise reveals congressional intent not to comprehensively regulate the entire national securities clearance and settlement field. Congress amended section 17A, in 1990, to add the following provisions allowing the Commission to adopt rules inconsistent with state law, but permitting, within two years’ time, the states to then enact laws that contradict the Commission’s rules:
Notwithstanding any provision of State law, . . . [after making certain findings,] the [Securities Exchange] Commission may adopt rules concerning . . . the transfer of certificated or uncertificated securities . . . or limited interests (including security interests) therein; and . . . [the] rights and obligations of purchasers, sellers, owners, lenders, borrowers, and financial intermediaries (including . . . clearing agencies) involved in or affected by such transfers, and the rights of third parties whose interests in such securities devolve from such transfers.
Any State may, prior to the expiration of 2 years after the [Securities Exchange] Commission adopts a rule under this subsection, enact a statute that specifically refers to this subsection and the specific rule thereunder and establishes, prospectively from the date of enactment of the State statute, a provision that differs from that applicable under the [Securities Exchange] Commission’s rule.
In light of these two provisions, Congress explicitly left room for state laws to supplement the federal regulatory scheme and thus did not reveal a “`clear and manifest'” intent to occupy the field of regulating clearing agencies. Accordingly, no field preemption exists.
Because Congress did not expressly preempt appellants’ claims by explicitly stating that intent within the provisions of the Securities Exchange Act, or its amendments thereto, and no field preemption exists, conflict preemption analysis is the appropriate analytical framework in this matter. As noted, conflict preemption analysis generally requires measuring state law claims against the federal statutory framework, and the federal statute’s effects and purpose as revealed by that framework, to determine whether a party’s compliance with both state and federal law requirements is impossible, or whether the act’s purpose would be frustrated if state law were to apply. Here, then, we must determine whether imposing the requirements implicated by appellants’ state law claims on respondents is inconsistent with section 17A’s purpose of allowing the Commission to regulate and control a national system for clearing and settling securities transactions.