On Tuesday, Judge Brian M. Cogan of the Eastern District of New York issued an opinion that relieves the State of New York of defending the preemptive lawsuit Amazon.com filed to avoid sanction. The court ruled that though it had subject matter jurisdiction over the dispute, abstention principles required that it refuse to exercise that jurisdiction under Supreme Court precedent.
By way of background, Amazon commenced the action contending that the Attorney General’s (OAG) attempts to subject it to state regulation of certain activities was preempted by federal law. Amazon anticipated that the OAG would file a suit after an investigation it conducted into a Staten Island warehouse amidst the COVID-19 pandemic revealed health and safety violations.
The OAG did file its suit, which is now pending in state court, where recently, the OAG opposed Amazon’s motion for summary judgment.
In the present case, the court first addressed the OAG’s subject matter jurisdiction arguments. Ultimately, Judge Cogan found that because Amazon challenged preemption, not whether the OAG was acting in conformity with state law, jurisdiction obtained pursuant to Supreme Court precedent.
The bulk of the 11-page ruling was dedicated to the abstention analysis. The court identified the case’s circumstances as one where exercising jurisdiction would equate to federal court interference with state court proceedings per principles of federalism and comity.
In this case, Judge Cogan opined, there is a pending state action following an OAG investigation that is sufficiently akin to criminal prosecution in important ways, namely the enforcement of state laws aimed at protecting the health and safety of New York citizens. The court noted that ending Amazon’s case here did not cut off its avenue for injunctive relief as the company could assert a counterclaim in the state court proceeding.
Amazon is represented by Gibson, Dunn & Crutcher LLP.
