Minnesota Law Review

Note, Federal Preemption and the Rating Agencies: Eliminating State Law Liability to Promote Quality Ratings

The credit rating agencies remain under intense scrutiny amidst the current financial crisis. Congress is currently considering multiple proposals to alter the federal regime for regulating rating agencies. Meanwhile, large-scale investors such as the California Public Employees Retirement Services (CalPERS) have commenced major litigation to recover losses allegedly suffered because of rating-agency failures related to subprime mortgage-backed securities. None of the proposals currently before Congress addresses the role that private litigation based on state law should or should not play in the regime for regulating rating agencies. This Note argues that existing federal law directed at rating-agency regulation preempts state-based claims such as those asserted by CalPERS; however, the preemption provision itself and the lack of illuminating legislative history leave room for disagreement on the scope of preemption. Thus, this Note urges Congress to expressly consider whether state law claims against rating agencies would detract from the goal of improving rating accuracy. Concluding that state law claims against rating agency would work against improving rating accuracy, this Note argues that Congress should amend existing legislation to decisively preempt state law claims against rating agencies.

:: View PDF

News & Events

  • Follow MLR on Twitter!

    The Minnesota Law Review is proud to announce that we are now on Twitter. Follow us @MinnesotaLawRev for information and updates concerning the petition period and deadlines, the opening and closing of article submissions, our 2014 Symposium: Offenders in the Community, and all other news concerning our authors and publications. [...]

  • Vol. 97 Lead Piece Cited in Al Jazeera Opinion Piece

    A recent Al Jazeera opinion piece that criticizes the Supreme Court’s Daimler decision cites to Volume 97′s lead piece, How Business Fares in the Supreme Court. You can read the Al Jazeera piece here.

  • Masthead for Volume 99 Board

    The masthead for the Board of Volume 99 of the Minnesota Law Review is now available. You can view the masthead here.

  • Above the Law Post Highlights MLR‘s Jump in Journal Rankings

    A recent post on Above the Law highlights the fact that the Minnesota Law Review was ranked 11th in the most recent 2013 edition of the Washington & Lee Law Review Rankings. You can read the post here.

  • Vol. 97 Lead Piece Cited on Slate

    A recent Slate article on the Supreme Court’s decision not to hear the “Moldy Washing Machine” cases, or overturn class certification of those cases in some circuits, cites to the Volume 97 Lead Piece, How Business Fares in the Supreme Court. You can read the article here.

Newsletter

cforms contact form by delicious:days