Preemption

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The New York Bankers Association filed a complaint Tuesday seeking to invalidate “Local Law 38,” which calls for the creation of a Community Investment Advisory Board (the “CAIB”) to gather information about banks that take deposits from the City and to establish “best practices” for those banks regarding various initiatives, including (for example) offering financial services most needed by low and moderate income individuals. The New York Bankers Association brought a similar challenge last year, but Judge Failla dismissed the case without prejudice, largely because then-Mayor Bloomberg did not enforce it.  The renewed complaint argues that the CAIB is up and running and that its regulation is preempted by state and federal banking laws:
Continue Reading Bankers Association Renews Challenge to City Regulation of Banks as Preempted by State and Federal Law

In an opinion yesterday, Judge Román denied a motion to dismiss a class action accusing the makers of “Earth’s Best” branded foods of falsely labeling certain products as “organic.”  The defendants argued the claims were preempted by the Organic Food Production Act (or, OFPA), which defines what foods can be labeled “organic,” and prohibits the sale of products labeled “organic” unless approved by a “certifying agent.” In an earlier case, the Eighth Circuit found similar claims preempted because (among other reasons) state law claims challenging “organic” labels would create the risk of “conflicting interpretations” and would “directly conflict[] with the role of the certifying agent.” Judge Román disagreed, finding that the risk of “divergent” views not enough to result in preemption:
Continue Reading Judge Román, Disagreeing With Eighth Circuit, Rules Suit Over “Organic” Label Not Preempted

In an opinion Tuesday, Judge Forrest dismissed various class action suits accusing stock exchanges of improperly allowing high-frequency traders to pay to obtain and trade on market data faster than other investors.  The plaintiffs subscribed to market data via subscriber contracts that, in turn, incorporated the terms of standardized market data dissemination “plans.”  Those plans, which the SEC approved, stated the data would be provided on “fair and reasonable terms” that are “not discriminatory” (or used similar language). Judge Forrest ruled that the claims were preempted by the detailed federal statutory and regulatory regime governing stock exchanges:
Continue Reading Judge Forrest: “Flash Boys” Suit Against Exchanges is Preempted by Federal Law