State Right to Regulate (Banks) Upheld by U.S. Supreme Court

Today the U.S. Supreme Court held its final session.  Traditionally the tougher cases on its docket are decided the last few days of the court term and today was no exception.  In a close 5-4 decision, the Supreme Court upheld the rights of the states to enforce state laws against discrimination in mortgage lending against national banks and rejected attempts by the federal government and big banks to preempt the state attorneys general from enforceing laws against national banks.  The case Cuomo v. The Clearing House Ass’n, L.L.C. (08-453) can be found at this linked opinion.   This represents a strong win for state powers who have seen their enforcement powers curbed in several cases in recent terms.

What does this mean for alcohol regulation? As always, it depends.  One of the 5 votes is now officially retired (Souter) so this may be a temporary win for state rights to regulate.  Moreover, this case had a most interesting breakdown of Justice Scalia voting with the more liberal wing of the court.  Would that breakdown replicate in an alcohol related matter?   How would a new Justice vote?

Nevertheless it is a important break for the states, specifically state attorneys general, seeking to enforce state laws against national corporate players.  Hiding behind federal regulations to preempt state laws so companies can avoid dealing with state laws they deem “bothersome” may not be so easy next time.

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