Cuomo v Clearing House: Clearing the Way for State Action Against Banks
State Lawsuits Alleging Bank Misconduct are Not Preempted by Federal Law
The Supreme Court yesterday addressed a second attempt by the Bush Administration to thwart state lawsuits against big corporations through the preemption doctrine. Since ruling against preemption in Wyeth v. Levine, a landmark case allowing state lawsuits to move forward against large pharmaceutical manufacturers, yesterday’s ruling opens the way to lawsuits against large international banks whose lending practices hurt consumers. This ruling marks the second defeat of the Republican administration to create a shield for corporations. With Barrack Obama at the helm, the new administration has made it clear that agency rules and promulgated regulations will not be used to create preemption where Congress has not chosen to do so. The Supreme Court, though dominated by conservatives, clearly chose to honor states’ rights and the right of Congress to be the author of any preemptive intent in passing legislation or creating agencies to.