Obama memo returns rights to states

President Barack Obama has issued a statement that limits the federal government’s ability to preempt state law – overturning a practice put in place by former President George W. Bush.

According to the memo no regulatory agency can issue rules that have the force of law over current state law. Instead, the agencies must go through Congress which can pass laws.

“The Bush administration allowed regulatory agency rules to have the force of law, over state law,” said John Sadwith, executive director of the Colorado Trial Lawyers Association. “This memo puts the laws back into the hands of the state, or it requires the agency to go through Congress.”

But not everyone is pleased with the new memo. The U.S. Chamber of Commerce says today’s global markets require one set of rules – not 50.

“Removing federal preemption forces employers to navigate a confusing, often contradictory patchwork quilt of 50 sets of laws and regulations,” said Lisa Rickard of the U.S. Chamber of Commerce. “The end effect is an economic system that ensnares employers into the costly morass of litigation at the hands of America’s plaintiffs’ lawyers.”

The memo’s rules:

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 preemption, including the principles outlined in Executive Order 13132.

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.