President Obama took a major step in restoring the right of states to protect their citizens from dangerous products yesterday.Â In a Presidential directive to all heads of executive agencies, President Obama reversed the Bush administration policy of federal preemption of lawsuits filed under state law.Â
There were obviosly two points of view–that of major corporations and that of consumers and their lawyers.Â The Wall Street Journal reported:
“In a sweeping order Wednesday, President Barack Obama called for a rollback of Bush administration regulations designed to protect companies from product-liability lawsuits in state courts.
The memo didn’t name specific industries but it could affect a wide range of consumer products subject to both federal and state regulation.
Companies have long complained about having to deal with 50 different state rulebooks, and the Bush administration aggressively took up the issue. It encouraged federal agencies to issue rules pre-empting state laws and declared that a single federal standard held sway.
In a two-page memo, President Obama reversed that stance. He said federal agencies and departments should claim that state law is pre-empted by federal law only when there is a well-defined legal basis. He ordered agencies to review regulations from the past 10 years to see if the government had improperly asserted federal pre-emption.”
The pro-consumer point-of-view is expressed in a press release from the American Association for Justice, which said:
“From now on, the regulatory preemption of state common law will be strictly limited. Even regulations issued within the past 10 years will have to be reviewed and in some cases amended.
Today, President Obama issued a Directive to the Heads of all Executive Branch Departments and Agencies stating it is the policy of his Administration that â€œpreemption of State law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption.â€ Preemption of state common law will no longer be presumed or asserted by regulatory agencies absent â€œexplicit preemption by Congress or an otherwise sufficient basis under applicable legal principles.â€
In order to ensure that executive departments and agencies include statements of preemption in regulations only when such statements have a sufficient legal basis, the Presidentâ€™s directive provides that:
“1. 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.
2. Heads of departments and agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemptionâ€¦
3. 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.â€
This is an enormous victory. It reflects what we believe the law in reality has always been and how it should always have been applied. This corrects a decade of abuse of the regulatory process and signifies a triumph both for statesâ€™ rights and for the legal rights of all Americans and their families.”
In my opinion, this Presidential directive goes a long way toward reversing one of the worst policies of the Bush administration.