Obama opens the door to more state regulation of business

Under a policy of "preemption," the Bush administration sharply curtailed the rights of states to enforce stricter laws involving environment, health, mortgages, public safety and other issues. President Obama made clear this week he intends to reverse that policy, ordering federal agency heads to review existing regulations and change most of those that preempt state laws. He told the agencies that federal regulation should be used to preempt state law "only with full consideration of the legitimate prerogatives of the states and with a sufficient legal basis for preemption."

The Supreme Court made it clear the court did not agree with Bush's position on state's rights in Wyeth v. Levine. In a six to three vote, the court ruled in favor of a woman who lost her arm after an improper injection of an anti-nausea medication. The court said drugmakers could not rely solely on federal regulation to shield them from lawsuits brought under state consumer-protection laws.