On May 20, 2009, President Barack Obama issued a memorandum addressing the limitations of federal preemption of state laws. The memorandum ordered federal departments and agencies to review regulations preempting state laws to determine whether such preemption is based on an explicit Congressional mandate or an otherwise sufficient legal basis.

In the memorandum, President Obama stated that executive departments and agencies should not include: (1) statements of preemption in regulatory preambles unless such statements are also included in the codified regulation; and (2) preemption provisions in codified regulations unless such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132. The memorandum also directed the heads of departments and agencies to review regulatory preambles or codified regulations containing a preemption statement issued within the last 10 years to determine whether such preemption provisions are justified under applicable preemption legal principles. If the head of a department or agency determines that the preemption provision is not justified, then the department or agency should initiate appropriate action.

The Obama Administration’s position reverses the Bush Administration’s promotion of federal preemption. The Bush Administration actively encouraged federal agency issuance of regulatory preambles and codified regulations preempting state laws in an effort to establish one federal standard in contrast to 50 different state standards. Bush officials at federal agencies, including the Food and Drug Administration and the Department of Transportation, inserted preemption statements into regulations on products such as prescription drugs, cars, mattresses, motorcycle brakes and railroad cars.

Although the effect of President Obama’s memorandum is uncertain, it reflects a marked policy shift that could have significant long-term consequences for consumers, businesses, state regulators and court dockets.

Please click here for a full copy of President Obama’s memorandum.