In today's Washington Post, Tomoeh Tse has a report on yesterday's oral arguments in the Watters v. Wachovia predatory lending preemption case. A snippet:
[Chief Justice] Roberts said it seemed that banks wanted to be viewed as federally governed on regulation issues but state-based to shelter themselves from liability issues. "You are really trying to have your cake and eat it too," he said.
Justice John Paul Stevens questioned whether the OCC had the manpower to handle the increased responsibility it took when it preempted state law in 2001. He asked specifically how many additional investigators the OCC had hired when it took over this responsibility.
"Well, I don't have an empirical answer to that question," said Sri Srinivasan, assistant to the solicitor general of the Justice Department.
James Rosen, reporting for the McClatchy newspapers, boils the whole thing down this way:
Justices Anthony Kennedy, David Souter and Stephen Breyer seemed most receptive to Wachovia's arguments, while Justices Roberts, John Paul Stevens and Ruth Bader Ginsburg appeared to lean toward Michigan's claims. Justice Antonin Scalia grilled both sides relentlessly. Justice Clarence Thomas had recused himself from the case and didn't participate.
While justices' questions don't always predict their eventual rulings, several appeared to tip their hands in the Wachovia case.
"This is just a standard (federal) pre-emption case," Kennedy said in apparent agreement with the bank.
The Wall Street Journal, in an article titled "The Power to Destroy," suggests that the question in the case goes all the way back to McCulloch v. Maryland. The Bank Lawyer's Blog tries to read the tea leaves based on yesterday's argument. Ideoblog discusses the possible implications of Watters for securities law.
Via C-SPAN, you can a watch a video of the American Enterprise Institute panel on the case. The panel featured George Mason University law professor Todd Zywicki, a member of a group of economists, scholars, and law professors who filed an amicus brief; Columbia law professor Thomas W. Merrill, who represents the Center for State Enforcement of Antitrust and Consumer Protection Laws as amicus in this case; attorney Amy Quester, who represents the Center for Responsible Lending as amicus in this case; and O’Melveny & Myers LLP partner Brian Brooks, an attorney who represents banks in class action defenses in court. Ted Frank, director of AEI’s Liability Project, moderated.
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