S&P moved to dismiss the case on several grounds, including an argument that state-law claims against S&P are pre-empted by federal regulation of the rating agencies. The agency’s most substantive defense was that the AG’s case was based on statements that are either opinions protected under the First Amendment or generalities that don’t amount to actionable representations.
Cook County Judge Mary Ann Mason, in a very clearly written decision, firmly rejected both of those arguments (as well as every other defense S&P raised). First of all, she said, the AG’s suit isn’t based on S&P’s actual ratings of publicly traded securities (which are generally considered to be protected opinions) but on S&P’s representations about its independence and objectivity. And those representations, she said, are not mere puffery…. Mason’s reasoning is certainly alluring, but I’m not convinced that it opens the floodgates for similar actions by other state AGs armed with state deceptive practices laws. Here’s why….
via Chicago judge okays AG suit vs S&P. Bad omen for rating agencies? — Thomson Reuters News & Insight