Consumer Law

Obama goes pro-civil justice, hit's "undo" on preemption

By Kia Franklin

This is, in a word, amazing. In an official memo released today, the Obama administration rolled back the effect of abusive implied federal preemption tactics like preemption by preamble, which is basically just a way to sneak lawsuit immunityfor big business into important regulations that are supposed to protect us.

The President didn't quite like the fact that preemption eviscerates important consumer protection mechanisms, so he hit "do-over" on that one. From the official memo:

...Throughout our history, State and local governments have frequently protected health, safety, and the environment more aggressively than has the national Government... The purpose of this memorandum is to state the general policy of my Administration that preemption 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... As Justice Brandeis explained more than 70 years ago, "[i]t is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

The President's action gets rid of preemption by preamble and in codified regulations unless it complies with Executive Order 13132. And it requires heads of departments to review regulations from the last 10 years, identify preemption rules, and determine if these rules comply with the proper legal standards. If not, they get tossed out.

Shouldn't everybody be jumping up and down with happiness about this pro-civil justice policy? Well, yes, but of course some industry mouthpieces are instead jumping up and down in a screaming fit about lawsuits. A representative from the Chamber told the WSJ:

"One thing we know is you can't sue your way into an economic recovery," said Bryan Quigley of the U.S. Chamber of Commerce. "Allowing for more lawsuits will not create more jobs, except maybe for plaintiffs lawyers."

That's the best they could do? Really? As if, as a colleague of mine noted, enabling people to exercise their right to legal recourse was intended to be a stimulus measure. Aren't safety and fairness worthy objectives, regardless of whether it creates more jobs?

But looking at this in the context of the economic downturn, this is actually a great way to protect consumers. At a time when every dollar matters, it makes no sense to spend our money on defective, even highly dangerous products, and then have no right to seek compensation for such bad business and the harm it produces. The Center for Progressive Reform further explains:

Since federal health and safety laws are primarily prescriptive, they generally do not provide compensation for those injured by regulated entities. Preemption therefore deprives injured consumers and patients of their right to recover for harms wrongfully perpetrated against them. Moreover, taxpayers will end up picking up medical and other expenses of increasing numbers of injured persons because they will be unable to obtain tort compensation and will not be able to pay for the resulting medical expenses out of their pockets.

You can read more about the dangers of misused preemption in our Pro Civil Justice Presidential Platform Report.

Full post as published by TortDeform.com on May 21, 2009 (boomark / email).