Copyright 1999 Federal News Service, Inc.
Federal News Service
NOVEMBER 2, 1999, TUESDAY
SECTION: IN THE NEWS
LENGTH:
6270 words
HEADLINE: PREPARED TESTIMONY OF
VICTOR
E. SCHWARTZ, ESQ
ON BEHALF OF THE AMERICAN TORT REFORM
ASSOCIATION
BEFORE THE SENATE COMMITTEE ON THE JUDICIARY
SUBJECT - GOVERNMENT-SPONSORED LITIGATION
BODY:
SUMMARY
The new judicial trend of regulation and taxation
through litigation intrudes on the separation of powers, reflects unsound public
policy, and raises concerns that the bedrock principle of "equal justice under
the law" might be set aside when the defendant is unpopular.
Tort Law or
Outlaw?
In the recent state attorneys general tobacco cases, some courts
subverted 200 year-old legal principles and permitted government plaintiffs (in
partnership with private personal injury contingency fee lawyers) to crown
themselves "super plaintiffs" with greater legal rights to recover indirect
economic losses than any ordinary citizen would have that actually suffered a
direct physical injury. New cases filed by cities against gun manufacturers also
may create new principles of law that give those cities greater legal rights
than injured persons. There is little doubt that an engine behind these new
principles is the popularity of the defendants.
Liability law, however,
should be neutral. Its principles should apply in the same way to all
defendants. A key public policy question that Congress should consider is
whether our Nation should have neutral tort law or outlaw tort law.
Regulation and Taxation Through Litigation
Former Secretary of Labor
Robert Reich concisely characterized the new trend of governments bringing their
powerful resources to bear against lawful, private industries when he observed,
"The era of big government may be over, but the era of regulation through
litigation has just begun."1 The new judge-made path toward regulation and
taxation through litigation has been blazed by unpopular defendants -- tobacco,
guns, and lead paint. On the horizon, reports have suggested that targets could
include HMOs, manufacturers of latex products, automobiles, chemicals, alcoholic
beverages, and pharmaceuticals, the gaming industry, "Hollywood" and the
entertainment industry, internet providers, and even the dairy and fast food
industries.
The greatest argument of Robert Reich is that legislatures
simply will not act on things that he and those who share his values believe are
appropriate for legislative action. But, it touches upon a bedrock principle of
our Government to give up on the legislature because you cannot get your way. It
has been shown that legislatures are politically responsive to the wishes of the
general public. As Senator Everett Dirksen of Illinois once said, "When they
feel the heat. they will see the light." Legislators do act when the public
consistently wants them to do so. Moreover, if legislators are not responsive to
the public, voters have a direct remedy at the polls. The judiciary, on the
other hand, is the least politically accountable branch of government.
Retroactive Judicial Lawmaking Intrudes on the Separation of Powers And Is
Unsound Public Policy
Mr. Reich's vision of the world violates the bedrock
principle of separation of powers upon which our entire system of government is
based. Article I Section 1 of the United States Constitution provides that "All
legislative Powers herein granted shall be vested in a Congress of the United
States." Article III Section 2 provides that the job of courts is to decide
cases and controversies - to interpret the law, not make it.
The
Constitution provides a sound structure for balanced decisionmaking. When courts
"legislate" they upset this structure. Furthermore, courts lack the vital tools
that legislators use in formulating public policy.
First, judge-made law is
retroactive. If the Congress made law in the same way, it would be an
unconstitutional ex post facto law. Second, judges do not have the information
that legislatures gather through the hearing process. That process helps
legislative lawmakers appreciate the full public policy implications of their
decisions. While two lawyers before an appellate court presenting their points
of view are a source of good information, they are not a substitute for the
legislative or regulatory fact-gathering process. Third, lawyers in court argue
and focus on narrow rules of law, not major changes in public policy. If lawyers
were allowed to focus on public issues far beyond the instant case they are
arguing, courts would abandon the fundamental principle that judges must only
resolve actual cases and controversies. Consideration of issues that go beyond a
particular case or controversy is properly the job of legislatures.
Those
that have advocated that courts should make law where legislatures have refused
to do so ought to think about the full implications of their new approach.
Solutions
Legislation introduced by Senators McConnell and Hatch, S.
1269, the Litigation Fairness Act, preserves the principle that an injured
person's right to sue should be paramount over the government's rights when that
injury is at the heart of the government's claim. It restores equal justice
under law and neutrality within our tort system.
At the state level, the
American Legislative Exchange Council (ALEC). a group of over 3,000 state
legislators, has developed a proposal to address the potential problems that can
develop from "backroom deals" involving contingency fee contracts in "Big
Government" lawsuits. ALECs model bill, "The Private Attorney Retention Sunshine
Act," was recently enacted in Texas and North Dakota. The Act would require such
contracts to be made public and open for competitive bidding so that the public
know it is getting the best legal representation at the best price.
American
Tort Reform Association
The American Tort
Reform Association ("ATRA"), founded in 1986 and based in Washington,
D.C., is a broad-based coalition of more than 300 businesses, corporations,
municipalities, associations, and professional firms who have pooled their
resources to promote reform of the civil justice system with the goal of
ensuring fairness, balance, and predictability in civil litigation.
********************
REGULATION AND TAXATION THROUGH LITIGATION: A NEW
AND UNSOUND PUBLIC POLICY TREND
THE NEW TREND OF REGULATION AND TAXATION
THROUGH LITIGATION: WHY IT REPRESENTS UNSOUND PUBLIC POLICY
Mr. Chairman,
thank you for your kind invitation to allow me to share some thoughts before the
Committee about the new judicial trend of regulation and taxation through
litigation. This trend intrudes on the separation of powers, reflects unsound
public policy,, and-raises concerns that the bedrock principle of "equal justice
under the law" might be set aside when the defendant is unpopular.
I
am testifying today on behalf of the American Tort Reform
Association ("ATRA"). ATRA is a broad-based coalition of more than 300
businesses, corporations, municipalities, associations, and professional firms
who have pooled their resources to promote reform of the civil justice system
with the goal of ensuring fairness, balance, and predictability in civil
litigation. ATRA was founded in 1986: it is based in Washington, D.C.
Regulation and Taxation Through Litigation
Former Secretary of Labor
Robert Reich concisely characterized the new trend of governments bringing their
powerful resources to bear against lawful, private industries when he observed,
"The era of big government may be over, but the era of regulation through
litigation has just begun."1 The new judge-made path toward regulation and
taxation through litigation has been blazed by unpopular defendants - the people
who tobacco, guns, or lead paint. On the horizon, reports have suggested that
the next round of targets could include HMOs, manufacturers of latex products,
automobiles, chemicals, alcoholic beverages, and pharmaceuticals, the gaming
industry, "Hollywood" and the entertainment industry, internet providers, and
even the dairy and fast food industries.
Public officials and personal
injury lawyers who have brought these lawsuits, and judges who support them,
argue that since the Congress and state legislatures have not acted, judges must
do so. Some regulation through litigation advocates suggest that executive
branch regulators are captured by industry and will not act in the public
interest, and that the only way to achieve certain public policy goals is
through litigation.
Litigation may provide the opportunity for some to
achieve their personal agenda of reform, because some judges who see themselves
as public policymakers are willing to bend the law. Although the judiciary
should be, in the words of the late Alexander Bickel, the "least dangerous
branch," a few judges see it as the most activist branch. There are problems
with this perspective.
One of the problems is that many judges are
unelected: this is certainly true with respect to the entire federal judiciary.
And, even in those states where judges are elected, judges face little public
light or scrutiny. Therefore, judges who embrace "regulation through litigation"
are not subject to the checks and balances of the more open arenas of public
policy that you face as Members of Congress.
I will briefly share with you
how Robert Reich's observation has played out so far and where it may go in the
future. I suggest that this new. uncharted path poses serious dangers for our
society. When the cheers fade for the state attorneys general tobacco victories,
the public may realize that a new form of government has been unleashed and has
the real potential to regulate them and tax them in ways that they neither
require nor want.
Tort Law Or Outlaw?
Tort law principles should apply
in the same way to all defendants. This does not always occur in practice.
Sometimes courts have bent tort law rules to ensure findings of liability
against unpopular defendants.
For example, in a 1982 case called Beshada v.
Johns-Manville Products Corp.,2 the Supreme Court of New Jersey overturned more
than two centuries of tort law and imposed absolute liability on a manufacturer
of an asbestos-containing product. The court broadly stated that manufacturers
of products that caused serious harm should not be able to defend themselves on
the ground that they neither knew nor could have known about the risks that
might be caused by their products.
The Supreme Court of Louisiana reached
the same conclusion in a case called Halphen v. Johns-Manville Sales Corp.3 The
court determined that asbestos products were unreasonably dangerous per se, in
effect, of no social benefit. The court chose to ignore the fact that regardless
of the risks asbestos may have created. it was the only insulation material
available during World War II to ensure that Allied ships could stay warm
inside. And, it was fireproof- an important fact when you are a thousand miles
out at sea.
While principles in those cases were broadly stated, the New
Jersey and Louisiana supreme court decisions were based on the judges' views
that manufacturers of asbestos-containing products had engaged in heinous
conduct. The companies had produced a product that had caused serious injuries
and, in some cases, death. According to the plaintiffs' allegations, the
manufacturers knew about the risks, but did not warn the public.
While the
plaintiffs had made the central allegation that the defendants had known about
the health risks associated with asbestos, the New Jersey and Louisiana courts
eliminated the requirement that the plaintiffs prove that fact. By eliminating
the need to prove that the defendants knew or should have known about the health
risks of their products, the Supreme Courts of New Jersey and Louisiana
anticipated that asbestos manufacturers would settle their cases and not
litigate. When the Beshada principle of law arose again, however, in a case
against the manufacturer of a pharmaceutical product, the Supreme Court of New
Jersey stated that absolute liability would not apply because the product at
issue was a medical product.4 The court opined that the nature of the product
justified a different result.
The distinction drawn by the New Jersey
Supreme Court between asbestos and a medical product was not based on neutral
principles of law, but on how, the justices on that court felt about the
particular defendants -- people who made products that contained asbestos were
tort law "outlaws"; people who manufactured pharmaceuticals were not.
A
similar process occurred in Louisiana. Once the principle of absolute liability
set forth in Halphen was unleashed in Louisiana, lower courts applied it to
non-outlaw defendants. One example: escalator manufacturers. As a consequence,
escalators in the state were shut down. When the case involving escalators
reached the Supreme Court of Louisiana, the court confined the Halphen principle
to manufacturers of asbestos-containing products.5 The court believed that
society could proceed without asbestos, but not without escalators.
In
effect, these courts said that manufacturers of' asbestos- containing products
were outlaws and were not entitled to the same legal principles that applied to
others.6 A key public policy question that Congress should consider is whether
our Nation should have neutral tort law or outlaw tort law.
Tobacco Law -
Good-bye Subrogation, Hello "Quasi-Sovereign" Doctrine
The "tort law or
outlaw" issue arose with respect to the state attorneys general tobacco cases.
Will the principles established by a few courts against those who make tobacco
products be confined to tobacco or spread to other manufacturers? Some
background concerning long-standing tort principles sheds light on the answer to
that question.
A fundamental principle of tort law is that an injured
person's claim is greater than or at least equal to any claims by others for
indirect economic harms that may flow from that injury. For example, if a worker
is injured in the workplace as a result of a defective tool, his claim is the
primary claim. No one else has a greater right to sue for the worker's injuries
than the worker himself. If the worker's employer suffers economic losses as a
result of the employee's injury (e.g., the employer has to pay workers
compensation and medical expenses on the employee's behalf, suffers loss of
profits while the employee is out of work, or has to hire a substitute worker),
the employer's claim is secondary to that of the injured party. Through a legal
process called subrogation, the employer can join in the employee's tort claim
against the manufacturer of the tool or put a lien on the employee's recovery,
but the employer does not have a separate, independent claim or a greater claim
than that of the injured worker. Apart from the process of subrogation, the same
result is reached through a traditional tort principle called the "remoteness
doctrine." The remoteness doctrine prohibits people who may incur an indirect
economic loss from bringing a claim against a person who may have caused a
physical injury. For example, if a negligent driver injures a person and the
accident ties up a highway, the injured person may have a claim, but those who
suffer lost economic opportunities because of traffic delays do not. The
remoteness doctrine is based on twin public policies of avoiding duplicate
recoveries and preventing an avalanche of claims.
;
Despite these
fundamental aspects of tort law that have been respected for more than 200
years, a few lower state courts in the state attorneys general tobacco cases
held that a state government could have greater legal rights than those of the
individual smokers. In effect, the state could recover the cost and injuries
allegedly sustained by a smoker, even though the smoker's case would fail. A
smoker's case could fail, for example, because the person was clearly aware of
the risk of smoking and made a conscious choice to smoke. Or a smoker's case
might fail because the person did not establish that his or her particular
illness was caused by smoking. Under established tort principles, the smoker
could not prove this causal connection by statistics alone.
In one state's
lawsuit against the tobacco companies, however, a trial court created a new
principle, the "quasi-sovereign" doctrine, which granted the state "super
plaintiff' status,s First, the "quasi- sovereign" doctrine, in effect,
eliminated applicable neutral defenses such as assumption of risk and
contributory negligence. Second, it allowed states to subvert traditional
principles of causation by allowing causation to be established through a
general statistical correlation between the activity of smoking and public
health care expenditures. Third, it bypassed established rules for allocating
liability by allowing the super-plaintiff State to provide liability by
generalized market share statistics. It did not have to show that a particular
citizen was injured because he or she smoked a particular defendant's product.
It remains to be seen whether the "quasi-sovereign super plaintiff' decision
represents neutral tort law or outlaw tort law. The implications of either
result will have profound effects on our society. If "super plaintiff' decisions
become neutral tort law and are applied to other defendants, many industries
could be at risk of new and unprecedented liability exposures.
For example,
a very prominent plaintiffs' lawyer friend has shared with me his view that
automobiles that go 90 miles per hour or more create a known risk that has no
social justification. He fully appreciates that a person who drove a car above
90 miles per hour and was hurt would have his claim barred because of his own
negligence or because he assumed the risk of injury. On the other hand, this
sage plaintiffs' attorney observed that a claim by the state to recover Medicaid
costs incurred in treating the driver's injuries might not be barred if the
"quasisovereign" doctrine applied. For example, the driver's fault could be
ignored. This plaintiffs' lawyer believes that state funds have incurred
substantial Medicaid costs because of people who drive at excessive speeds. He
believes that statistics (;an show that "speed kills." He also claims to have
evidence that automobiles sold in certain foreign countries have computer chips
which prevent the automobiles from going faster than the speed limit. He claims
that U.S.-made automobiles should have these computer chips.
If the
"quasi-sovereign" doctrine is limited in its application to unpopular defendants
such as the tobacco industry, however, this plaintiffs' lawyer's theory would
probably fail. The law would be different only because judges believe that we
need automobiles, not tobacco.
Mr. Chairman, the legislation you have
sponsored with Senator McConnell, S. 1269, the Litigation Fairness Act, would
address this issue and preserve the rights of individuals who may be injured. As
the Litigation Fairness Act makes clear, an injured person's right to sue should
be primary. Government should not have a greater right to sue than a citizen who
has been hurt when that injury is at the heart of the government's claim.
Gun Law - Changing Law, Once Again, Against An Unpopular Defendant
The
new cases filed by some cities against firearms manufacturers present the same
issue of neutral tort law or outlaw tort law. The cities have proceeded on at
least two rather novel theories. First, some of the city suits are predicated on
a theory called "negligent distribution." These suits allege that the gun
manufacturers knew or should have known that their products, lawfully sold in
one state, would find their way into other states, where they could be used in
criminal activity.
Recently, a Federal District Judge in the Eastern
District of New York ignored basic principles of tort law and allowed a jury to
consider this novel new theory of liability of negligent distribution." The
theory allows a jury to impose liability on various gun manufacturers. While the
state or city was not the plaintiff in that case, its core principle would be
helpful to governments that base their suits on negligent distribution claims.
Hello "Negligent" Distribution, Good-bye Cars and Beer
Fundamental tort
law principles create a duty on the part of a person not to entrust another with
a dangerous object. If I give my car to a drunk driver, and he causes an
accident, I am subject to liability. That is the law of negligent entrustment.
The same would be true if a gun seller knowingly sells a firearm to a "strawman"
fronting for a felon or a bartender sold a bottle of vodka, to a customer who
was clearly inebriated. For over 200 years, negligent entrustment has been based
on face-to- face contact. There has been no tort of "negligent distribution,"
where liability is asserted against a manufacturer that neither saw nor knew the
party that intentionally and wrongfully misused its product.
If negligent
distribution principles, such as the one embraced by the New York Federal
District Judge, were adopted and neutrally applied, a number of industries could
be substantially at risk. For example, manufacturers of alcoholic beverages
could face crushing and unfair liability exposure. To date, they have had no
duty to stand guard over where their products are going or decide whether their
products should be used in areas where they might be over-consumed by the local
populace. The precedent that may be established in the gun cases, however, could
create such a duty. Similarly, automobile manufacturers could have a duty to
determine whether any dealer or car rental agency sold or leased vehicles to any
person who might drive while intoxicated. Gasoline companies and matchmakers do
not currently have a duty to determine whether the purchasers of their products
might be arsonists.
In short, once a new duty regarding manufacturer's
negligent distribution is created, and one is held responsible for the criminal
acts of a person that one never knew nor saw in person, liability implications
are limitless, unless judges decide forever that "we only meant guns, because we
do not like guns: no one else need be concerned."
Defectless Products -
Let's Invent A Perfect Kitchen Knife
A second theory used in gun cases is
that firearms are "defective" because they do not feature adequate safety
devices to protect third parties against criminal misuse of the product. Product
liability principles since their inception have focused on protecting the
product user. These principles also may protect bystanders if the product fails
to perform in a safe manner -- for example, if a wheel falls off a car and
injures the driver and a pedestrian.
The concept of "defect" does not
support the idea, pushed in the cities' firearms cases, that a protective device
must be included to protect third parties from the intentional wrongful acts of
the person who uses the product. If the legal definition of "defect" were to be
extended to that point, there could be far-reaching implications for
manufacturers of products that are intended to serve a legitimate purpose, but
could cause significant harm if intentionally misused -- for example, matches,
kerosene, or even knives.The manufacturers of kitchen knives - especially long,
sharp and potentially dangerous ones like those that have been used in
well-publicized criminal cases could have a potential duty to ensure that those
knives are kept locked up and used only for their lawfully intended purpose
(i.e., cutting food, not people). Again, we will have to see whether courts will
adopt this radical new definition of "defect." Will we have neutral tort law or
outlaw justice? We are fortunate that, to date, at least some courts have
respected existing principles of law and have not twisted them in order to
regulate the firearms industry.10
Government Should Not Be "Pushing The
Envelope" On Tort Law
Governments should not be part of the push to extend
tort law far beyond its 200-year-old moorings. Governments also should stand for
principles of equal justice under law and not try to create or extend existing
legal principles for the purpose of attacking unpopular defendants. Government
officials should appreciate that the legal theories created to fight unpopular
industries could soon be applied to more popular industries.
That is
occurring now.
The latest extension is in Rhode Island with respect to the
manufacturers of lead paint. At least one attorney general has suggested
considering suits against manufacturers of latex. Publicly, however, most state
officials have followed the example of the Attorney General of the United
States. When Senator McConnell asked Attorney General Reno about the Federal
Government's lawsuit against the tobacco companies to recover Medicare costs and
whether she would consider suing producers of high fat foods, alcohol, firearms
or automobiles in the future, she stated that she was "not aware of any other
industry" with the characteristics of tobacco. It has been stated by many
attorneys general that tobacco is the only product that causes disease when it
is used as intended.
But, as people who suffer from heart disease can
attest, high fat foods used as intended can contribute to serious illness,
including arteriosclerosis. This is particularly true with young males. Medical
data show that at least 25 percent already have incipient arteriosclerosis, a
disease that seriously reduces the probability of a long and healthy life. If a
court were to stretch existing legal principles in order to allow the Federal
Government to sue tobacco companies for alleged Medicare costs, there is nothing
to prevent future attorneys general from deciding to extend this new principle
to manufacturers of' products other than tobacco.
Separation Of Personal
Injury Lawyers And State
Apart from and, to some extent, linked with the
creation of "outlaw tort law" against unpopular defendants is the new and
unprecedented partnership between governments and private contingency fee
personal injury lawyers. Personal injury lawyers are enterprising professionals
and have helped many seriously injured people. Nevertheless, this attorney
general-personal injury lawyer linkage creates at least four fundamental public
policy problems.
First, government and private contingency fee personal
injury lawyers are guided by different goals and principles. Attorneys general
take oaths to the Constitution of the United States; that document is their
guiding light and their interest is the public interest. The guiding light of
private contingency fee personal injury lawyers, by contrast, is profit. To
quote the old Seinfeld show, "not that there's anything wrong with that," but it
is clear that the goals of contingency fee personal injury lawyers and the goals
of government are not the same. If personal injury lawyers run the show, the
result may not be in the public interest.
Second, as has been amply
demonstrated in the Texas tobacco lawsuit, there is a strong potential for fraud
and abuse when public officials make private fee arrangements with contingency
fee personal injury lawyers. In almost every other context, government contracts
are made in the public light and are priced through a competitive bidding
process.
That is a proper way to resolve public contracting opportunities.
Public contracting should achieve the very best values for taxpayers. That goal
is achieved by conducting the bidding process in the open. When public officials
make agreements in private about contingency fees, however, potential abuses can
include a wink and a nod about political contributions, or a wink and a nod
about future employment at a private contingency fee law firm.Third, assuming
such agreements are negotiated on the "up and up." private multi-million or
billion dollar agreements between contingency fee personal injury lawyers and
attorneys general may not result in the selection of the best person at the best
cost. Contingency fees do not have to be automatically 33 percent or 25 percent
of the total recovery. It is in the public interest to have the amount of the
fee based on neutral criteria. For example, the probability of a successful
outcome, whether work already has been performed by others to achieve the goals
of the litigation, and the amount of time actually spent on the case.
Marketplace open bargaining should be the norm - not backroom deals in the dark.
Fourth, governments and contingency fee personal injury lawyers have shown
the strong potential for fee disputes that can result from "backroom deals."
Such disputes have occurred in a number of states. The potential for such fee
disputes would be reduced if the agreements were made in public.
The
American Legislative Exchange Council (ALEC), a group of over 3,000 state
legislators, has developed a proposal to address these problems. ALEC's model
bill, "The Private Attorney Retention Sunshine Act." was recently enacted in
Texas and North Dakota. The Act would clarify how and under what terms state
governments may enter into contingency fee contracts with private lawyers. Here
is what the ALEC model bill would do.
First, the filing of a contingency fee
contract would have to be approved by a Legislative Budget Board if the state's
anticipated recovery was likely to be more than $100,000 and adequate funds had
not been budgeted to prosecute the case.Second, the contracting attorney or law
firm would have to keep complete time and expense records. Expenses would have
to be reasonable, proper, necessary, and actually incurred. In most cases, the
time and expense records would be subject to public disclosure. Third, hourly
rates would be capped at $1,000 an hour. Attorney fees could not exceed 35
percent of the total recovery, and the "risk" and "difficulty" multipliers could
not exceed four times the base rate without prior approval by the legislature.
All litigation and settlement funds recovered by the state would become the
property of the state. Fourth, the payment of fees and expenses would have to be
specifically approved by a governing body. Finally, no state or local officer
could waive the requirements imposed by the legislature.
For over ten years,
I had the privilege to represent plaintiffs and it was a very satisfying portion
of my professional life. But, I know from that experience and the experience of
others that a plaintiffs counsel has a goal and, in part, an instinct to both
push tort law principles as far as they will go, and to create new principles
when the old ones do not reach far enough to permit a recovery. That is a
legitimate private goal, not a public goal.
A few years ago, legal experts
stated almost universally that plaintiffs' lawyers would never sue the firearms
industry because gun manufacturers do not have "deep pockets" like those of the
tobacco industry. Experience has shown otherwise. This is true, in part because
the balance between the plaintiffs' lawyer and the defense changes when the
government is the contingency lawyer's sponsor and partner. For that reason, the
pursuit and extension of new changes in law have no end. The contingency fee
lawyer would not wish to confine the principles to one or two industries; he or
she wants liberal tort law rules applied to everyone from whom a monetary
recovery is possible. The future will demonstrate the truth of this statement.
For example, the lead paint industry already is now exposed to new style
lawsuits. As has been suggested, at least one attorney general has strongly
suggested that the latex industry be next on the list for the state official
contingency fee personal injury partnership.
Intrusion On The Separation Of
Powers Principle
When Robert Reich wrote that "the era of big government may
be over. but the era of regulation through litigation has just begun." his
examples of this new trend were state suits against unpopular defendants --
tobacco and guns. Robert Reich said that the public policy goals of these and
future lawsuits could not be achieved through the normal political process of
enactment of legislation or through well-considered regulatory proposals. He
analogized the new effort to the United States Supreme Court's civil rights
decisions under the Constitution of the United States.
Mr. Reich's
perception of a new and major trend in tort law is perceptive and valid, but his
analogy to the civil rights movement is misplaced. Equal protection under the
law were words that were guideposts for the Supreme Court in civil rights cases.
Tobacco, gun, and other new-style lawsuits, by contrast, operate in an almost
completely open-ended, uncharted world. The words of the Constitution of the
United States do not frame the picture as they did for civil rights. There is
virtually no limit to what courts can do in creating new tort law and now they
are demonstrating that fact. When courts create totally new causes of action and
nullify long- established precedent they go beyond their appropriate
governmental role and act as legislators. Apart from the fact that such
lawmaking initiative trespasses on the vital separation of powers between the
judicial and legislative branches of government, bad public policy can result.
This is why.
First, judge-made law is retroactive. If the Congress made law
in the same way, it would be an unconstitutional ex post facto law. Second,
judges do not have the information that legislatures gather through the hearing
process. That process helps legislative lawmakers appreciate the full public
policy implications of their decisions.
While two lawyers before an
appellate court presenting their points of view are a source of good
information, they are not a substitute for the legislative or regulatory
fact-gathering process. Third, lawyers in court argue and focus on narrow rules
of law, not major changes in public policy. If lawyers were allowed to focus on
public issues far beyond the instant case they are arguing, courts would abandon
the fundamental principle that judges must only resolve actual cases and
controversies. Consideration of issues that go beyond a particular case or
controversy is properly the job of legislatures.
Those that have advocated
that courts should make law where legislatures have refused to do so ought to
think about the full implications of their new approach. If the courts become
the forum in which to remedy failures in the legislative arena, what would
happen if tort reformers who are unable to persuade legislatures take their case
before judges who are empathetic to reform efforts'? Would it be appropriate to
have judges place caps on punitive damages? Would it be appropriate to have
judges create statutes of repose and limit the liability of a manufacturer to a
fixed number of years? I do not think so. Those are decisions for legislatures,
not courts.
Conclusion
The greatest argument of Robert Reich is that
legislatures simply will not act on things that he and those who share his
values believe are appropriate for legislative action. But it touches upon a
bedrock principle of our Government to give up on the legislature because you
cannot get your way. It has been shown that legislatures are politically
responsive to the wishes of the general public. As Senator Everett Dirksen of
Illinois once said, "When they feel the heat, they will see the light."
Legislators do act when the public consistently wants them to do so. Moreover,
if legislators are not responsive to the public, voters have a direct remedy at
the polls. The judiciary, on the other hand, is the least politically
accountable branch of government.
As state or the federal government tries
to regulate or tax unpopular defendants through litigation, Members of this
Committee should ask themselves whether we will have neutral tort law or outlaw
tort law justice. If new and unprecedented judicial lawmaking is applied only
against unpopular defendants, the principle of "equal justice under law" that is
set forth on the top of an august building near here, the Supreme Court of the
United States, will be nullified. We will have an outlaw tort law system. On the
other hand, if courts adopt and broadly apply these new principles of tort law,
judges could begin to regulate the marketplace and tax the public, deciding what
products and services are to be available, how they are to be marketed, and at
what price. No doubt, the implications of these lawsuits for our society are
frightening: they undercut the very basic principles of our democratic form of
government.
FOOTNOTES:
1 Robert B. Reich, Regulation is out, Litigation
is in, USA Today, Feb. 11, 1999, at A15.
2 447 A.2d 539 (N.J. 1982).
3
484 So. 2d 110(La. 1986).
4 See Feldman v. Lederle Labs, 479 A.2d 374 (N.J.
1984).
5 See Brown v. Sears, Roebuck and Co., 514 So. 2d 439 (La. 1987).
6 Halphen and Beshada were overruled by legislation so as to require proof
of defect. See N.J. Rev. Star. Section 2A:58C-3(3) (1987); La. Rev. Stat. Ann.
Section 9:2800.56(1) (1991). Another case, Kelley v. R.G. Indus., Inc., 497 A.2d
1143 (Md. 1985) (holding handgun manufacturer strictly liable for injury
resulting from properly functioning "Saturday Night Special"), was subsequently
overruled by legislation. See Md. Ann. Code art. 27, Section 36-I(h) (West Supp.
1990).
7 See Victor E. Schwartz, The Remoteness Doctrine: A Rational Limit
on Tort Law, -- Cornell J. Law & Public Pol'y - (forthcoming Fall 1999)
(providing history and public policy behind the remoteness doctrine).
8
Texas v. American Tobacco Co., 14 F. Supp. 2d 965 (E.D. Tex. 1997).
9
Hamilton v. Accu-Tek, 1999 WL 557261 (E.D.N.Y. June 3, 1999). 10 See City of
Cincinnati v. Beretta U.S.A. Corp., No. A9902369 (Ct. Cm. P1. Oct. 27, 1999).
END
LOAD-DATE: November 4, 1999
