On Wednesday, May 20, 2009, President Barak Obama issued a memorandum calling for the rollback of federal preemption of many state law claims. The memo says that federal agencies should only claim that the state law is preempted when there is a valid basis for doing so. While the memorandum did not name any specific industries to be affected by this rollback, many consumer products may be affected.

Preemption generally refers to the displacing effect that federal law will have on state law. This occurs because the Supremacy Clause of the Constitution states that federal law is the supreme law of the land. Therefore, when federal and state laws clash, federal law will take over. Preemption can occur through implied preemption, where it is impossible to comply with both state and federal law or if the state law impedes the achievement of federal objective. Preemption can also occur through express preemption, where agencies and statues will specifically state that they are preempting state law. It was this type of preemption that proliferated under Bush. During the Bush administration, many companies were complaining that they had 50 different state laws to deal with. The Bush administration then spearheaded the issue, encouraging federal agencies to declare rules that stated that state laws were preempted and to make one, uniform federal rule. Bush officials stated that having state consumer safety laws allowed for plaintiffs to get around prohibitions on product liability suits. During the 2008 election, the tort bar discussed with Obama its desire to push back Bush-era regulations.

Even before President Obama’s memo, the tide had already begun to turn on sweeping federal preemption of state law. In March, the U.S. Supreme Court stuck down preemption involving the FDA’s regulation of drugs. In Wyeth v. Levine, a drug manufacturer was sued under state law when one of the manufacturer’s drugs, phenergan, caused a person to develop gangrene. The manufacturer claimed that the FDA’s rule on drug labeling preempted state law. The Supreme Court disagreed. The Supreme Court stated that the FDA supplied the floor for drug labeling requirements and that the drug company would have to comply with all state law labeling requirements as well. Lawsuits against medical device manufacturers are still preempted by state law, but there have been proposals to push legislation that would allow those suits as well.

For more information, see the Wall Street Journal article at:
http://online.wsj.com/article/SB124285702885340713.html