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Obama Memo Overturns Lawsuit Preemption Regulations

May 21, 2009 | Parker Waichman LLP

A Bush Administration policy that curbed personal injury lawsuits in state courts has been overturned by President Barack Obama.   In a memo to government department heads, Obama said that preemption of state law should be undertaken only with full consideration of the legitimate prerogatives of the states.

During the Bush Administration, federal agencies often announced that their regulations preempted state law, including state common law, without explicit direction by the Congress or an otherwise sufficient basis under applicable legal principles, the memo states.  According to the Associated Press, more than 50 federal regulations were proposed or adopted during that time  that included language to limit state lawsuits.  Usually, such provisions were  written into regulations without the public having any opportunity to comment on them.  

Basically, this left consumers injured by defective products unable to file personal injury lawsuits against companies.  

The new directives hold that:

  • Heads of departments and agencies should not include in regulatory preambles statements that the department or agency intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation.
  • Heads of departments and agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemption.
  • Heads of departments and agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the department or agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.
The new directives are being hailed by consumer advocates as a victory for the public.  "It reflects what we believe the law in reality has always been and how it should always have been applied." Les Weisbrod, President of the American Association for Justice (AAJ), said in a statement.  "This corrects a decade of abuse of the regulatory process and signifies a triumph both for states’ rights and for the legal rights of all Americans and their families."

According to the AAJ statement, the new directives will require that  many regulations issued within the past 10 years  be reviewed and in some cases amended.

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