Posted in on January 2, 2009

Federal Preemption – Corporate America’s Loophole to Putting Profit Over Consumer Safety

Federal preemption is the loophole Corporate America uses to defend themselves against defective and dangerous product lawsuits by allowing these corporations to “preempt” or trump state or local regulations which are typically stricter than standards set at the federal level. By relaxing the authority of these regulations, the Bush Administration is putting profit over safety, granting these large corporations “complete immunity”.

According to AAJ President Les Weisbrod, the Bush Administration has a long history of diluting regulations that protect American consumers.

“The Bush administration has weakened consumer safety protections and put corporate profits ahead of consumer safety. We have seen it in everything from medical device rules, seatbelt and school bus safety requirements, railroad security, and prescription drug labels,” says Weisbrod.

On December 16, Keith Oberman from MSNBC featured The AAJ story on his Hit List Countdown with an interesting consumer focused look at how preemption can affect our everyday lives. You don’t have to be in a car wreck with defective tires or take an unsafe drug to be effected. What if a train carrying deadly toxins derails near your home? Accidents happen you say, but what if, the train manufacturer knew there were unsafe features that made the train more vulnerable to derailments. Or what if it wasn’t an accident and the train derailed due to negligence of a railroad employee? Do you deserve to have your family’s medical bills paid by the railroad company’s insurance? The Bush Administration doesn’t think so.

It’s interesting how consumer safety is addressed in foreign countries. Typically regulations are much stricter in other countries and oddly enough, there are fewer lawsuits. While the popular belief in the United States is there are too many “frivolous lawsuits”, the truth is, these lawsuits serve as a checks and balance system to keep Corporate America from putting profits before safety.

I had an interesting conversation a few weeks ago with a guy who purchased a brand new home several years ago from a national builder. After about a year, they discovered extensive, long term water damage in the basement that extended to the foundation due to inadequate drainage. The homeowner was pleasantly surprised that the homebuilder was willing to fix the damage so quickly and without question. Interestingly, the homeowner overheard a conversation that that he was obviously not meant to hear, that due to mold claims, the homebuilder found it more expeditious to fix any water problems than risk the possibility of a mold problem. I’d like to believe that this homebuilder would have done the right thing without the specter of a lawsuit hanging over their heads, but sadly, history indicates otherwise.

Federal preemption, it’s a great move for Corporate America, but devastating for consumer protection.

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