Corporate & Securities Law

By Jim Hamilton

President Obama Issues Memorandum on Federal Preemption of State Laws

President Barak Obama sent the heads of all executive departments and agencies a memorandum on May 20, 2009 advising them that it is his Administration's general policy "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." The memo includes three directives to department and agency heads:

1. Regulatory preambles should not include statements that the department or agency intends to preempt State law unless preemption provisions are included in the codified regulations;

2. Codified regulations should not include preemption provisions unless justified under legal principles governing preemption, including the principles outlined in Executive Order 13132 (Aug. 4, 1999), a link to a PDF of which also appears below; and

3. Regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended to preempt State law should be reviewed to decide whether such statements or provisions are justified under applicable legal principles, and, if not justified, the department or agency head should initiate appropriate action, including amendment of the relevant regulations.

NOTE: This memo may potentially affect any regulations promulgated by the SEC or other federal departments or agencies preempting state Blue Sky laws.

For additional information, please see

http://edocket.access.gpo.gov/2009/pdf/E9-12250.pdf

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1999_register&docid=fr10au99-133.pdf

Full post as published by Jim Hamilton's World of Securities Regulation on June 10, 2009 (boomark / email).