Many businesses are subject to regulation on more than one level. A business may be subject to federal regulation, state regulation, and local regulation. A common challenge to the enforcement of a state or local regulation is the argument that the regulation is preempted by the law of a higher level government.
A recent Court of Appeal decision, Prime Gas, Inc. v. City of Sacramento, provides an example of this argument. In Prime Gas, a City ordinance required that sellers of tobacco obtain a City license to do so. The ordinance permitted the City to suspend or revoke the license for various reasons, including the sale of tobacco to minors. A store owned by Prime Gas was cited for violating the ordinance as the result of a “sting” in which a minor was sent into the store to buy cigarettes. The store sold the minor cigarettes without asking the minor’s age or checking identification. The City then brought an administrative proceeding and suspended the store’s City license to sell tobacco. The store filed an appeal, arguing that the City ordinance was preempted by state law.
The Court of Appeal explained that a local law would be preempted (and thus unenforceable) if it duplicated or contradicted state law, or if state law was intended to fully occupy the law on the subject matter. The Prime Gas court noted that state law provided for criminal penalties for selling tobacco to minors and that revocation of a local license was neither contradictory or duplicative of the criminal law. The court further noted that California had a state licensing law, but that the state law expressly stated that it was not intended to preempt any local law. Thus, the court concluded that the City ordinance was not preempted by state law and rejected the store’s challenge to the ordinance.