In late 2008, an alliance of consumer advocates appealed to then president-elect Obama to direct agencies to “refrain from making statements in their rulemaking claiming that rules, regulations, or standards preempt state-law liability of regulated entities.” Last week, the President heeded the call and issued a policy memo directing federal agencies and departments to not only refrain from such statements in future regulations, but to also seek and destroy any preemption language in regulations issued over the past decade. Regulations with preambles or codified provisions intended to preempt State law that are not justified by a “sufficient legal basis” are up for the chopping block and may be amended. Over the past 10 years, more than 50 federal regulations that included language to limit state lawsuits were either proposed or adopted.
While most agency heads are busy parsing through regs, the folks over at the Consumer Protection Bureau at the FTC should have little to do. For the most part the FTC has opted not to preempt state and local regulation of advertising and marketing claims. Indeed, even when the agency adopted its current environmental claims guides in the 1990s in response to concerns that in the absence of federal regulation states were adopting conflicting standards, the agency opted to provide guidelines but not preempt state regulation. For the most part the system of dual regulation has worked reasonably well, aided in part by the fact that in many states the courts are instructed either expressly or implicitly to look to the FTC for guidance in interpreting their own state consumer protection laws, although there are a few instances, such as California's Made in USA statute where it may be difficult to reconcile state law with Section 5.