Academic journal article Texas Law Review

A Tort by Any Other Name? in Search of the Distinction between Regulation through Litigation and Conventional Tort Law*

Academic journal article Texas Law Review

A Tort by Any Other Name? in Search of the Distinction between Regulation through Litigation and Conventional Tort Law*

Article excerpt

I. Introduction

Fueled by the successful government lawsuits against tobacco in the 1990s, a debate began to heat up among legal scholars over whether tort law is being used illegitimately to circumvent the legislative process and regulate various industries or activities. Robert Reich has been credited with coining a phrase to describe the phenomenon, "regulation through litigation."1 The debate over regulation through litigation is part of a larger dispute over the proper role of tort law and the civil justice system in American society.2

Critics of regulation through litigation decry its "potential to generate suits against entire industries, resulting in damages for unforeseeable events and massive loss liabilities."3 Due to the potentially huge losses, it is feared that in extreme cases, regulation through litigation could lead to market failure and compromise the insurability of certain industries.4 In addition to the disquieting economic threats purportedly raised by regulation through litigation, critics also contend that the lawsuits constitute "end runs around the democratic process."5 By avoiding traditional democratic processes, it is suggested that regulation through litigation provides a novel and subversive way of legislating-allowing decisions to be made in secret settlement negotiations, rather than through public congressional debate or the administrative comment process.6

The complaints leveled against regulation through litigation have met some resistance. In response to examples of economically inefficient regulation through litigation, it has been argued that "regulation by regulation" offers comparably inefficient outcomes.7 Further, rather than deriding the massive economic consequences of regulation through litigation, it has been argued that the economic threat of regulation through litigation offers the ability to reach compromise on intractable political problems by redefining the status quo to force an industry to negotiate with the government.8

Some commentators also take issue with the idea that regulation through litigation is a new, un-American, and undemocratic method of creating policy. Thomas Burke contends that "regulation by litigation has deep roots in the structure of American government and American political culture."9 In arguing that before the rise of the administrative state America relied primarily on courts to regulate the economy, Burke refers to Alexis de Tocqueville's statement that "[t]here is hardly a political question in the United States that does not sooner or later turn into a judicial one."10

The validity of the arguments regarding regulatory litigation are difficult to assess, despite the increasing attention it has received, because no precise definition of the phenomenon has been offered. While holding obvious rhetorical appeal when used among laypeople, the use of the term "regulation through litigation" to distinguish a special class of problematic tort lawsuits raises questions in the minds of some legal analysts. As Eric Posner writes, "This claim that there is a special class of troubling 'regulation by litigation' cases will strike lawyers as odd."11 Particularly in negligence actions, one of the principal justifications for the tort system is that it acts as an efficient deterrent to breaches of the duty of care.12 Whether imposing civil liability for unreasonably dangerous product design or for medical care below the standard of the applicable medical community, tort law acts as a significant regulatory device by filling the gap between criminal behavior and socially advantageous behavior. In this sense, all tort litigation can be considered "regulation through litigation."13

Notwithstanding the common acceptance of a regulatory aspect to all tort litigation, legal commentators addressing regulation through litigation understand it as a subclass of tort law or of civil litigation in general.14 Unfortunately, rather than providing a rigorous definition of the term, the commentators critical of regulation through litigation merely label lawsuits as such and then proceed to attack their regulatory nature. …

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