The state of Mississippi’s lawsuit against tobacco companies in 1994 was quickly emulated by more than a dozen other states and then the federal government. Not to be outdone, more than a dozen cities and the federal government have followed the City of New Orleans’s lead and sued gun manufacturers. Do these lawsuits signal new directions for more effective public policy or a new and dangerous trend whereby governments use tort law to achieve public policy objectives they were unable to accomplish legislatively?
In this new policy report, so-called government “recoupment” lawsuits are carefully examined and found to be flagrant abuses of the constitutional separation of powers, seriously undermining over two hundred years of common-law torts adjudication.
Author Michael Krauss, a leading legal scholar on the relationship between tort law and personal freedoms, systematically dissects the tobacco and firearm recoupment lawsuits. He shows how such lawsuits betray every criterion of sound, effective, and just tort law. The lawsuits against gun manufacturers can show no damages, no proximate causation, and no wrongdoing. Similarly, governments have no direct damages to claim against tobacco manufacturers and cannot legally stand in the place of individual smokers or their families.
Fire & Smoke concludes that recoupment lawsuits are incompatible with civil freedoms, representative democracy, and the rule of law upon which institutions of a free society depend.
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Michael I. Krauss is a professor of law at George Mason University, where he teaches torts, product liability, legal ethics, and legal philosophy. In addition to his teaching and research functions, he is president of the Virginia Association of Scholars and a member of the Board of Governors of the Education Section of the Virginia State Bar. He obtained his B.A. cum laude from Carleton University in Ottawa and his law degree from Quebec’s Universite de Sherbrook. He obtained his LL.M. from Yale Law School and completed his doctoral residency as the law and economics fellow at Columbia Law School. He lives in Arlington, Virginia.
1. Introduction,
2. The Firearms Lawsuits,
3. The Tobacco Lawsuits,
4. Conclusion,
Notes,
Bibliography,
About the Author,
Introduction
Government lawyers suing corporations in tort, as a solution to perceived "social problems," are subverting our legal institutions and the rule of law.
For many readers, the previous sentence may seem a contradiction in terms. One might think that government creates all law — so how can government suits violate the rule of law? Isn't one of government's jobs to root out and repress maleficent behavior? Don't the recent lawsuits against tobacco companies, firearm makers, paint manufacturers and the like serve that very purpose? And courts will dismiss the lawsuits if they are ill-founded, won't they? So what harm can their filing cause?
As this Independent Policy Report will show, government behavior can indeed be inimical to the rule of law. The recent so-called "recoupment" suits, involving government demands for "reimbursement" of social outlays allegedly brought about by negligent manufacturers, are not merely destructive of the tort law they profess to apply: they are injurious to our entire legal structure.
From the Civil War to the Civil Rights revolution, American society has weathered several crises of constitutional law. Attorney General Reno and her state and municipal counterparts, however, have provoked what may be our first crisis in tort law. They have attempted to transmute tort law, a fundamental common-law bastion of our liberties. Our legal system's rejection of this mutation is vital to the preservation of these liberties.
To understand the gravity of this unprecedented attack on tort law, it's important to grasp how tort law "fits" in the legal order of a society of free and responsible individuals. To see this, in turn, it's vital to understand the differences between the two basic types of legal rules in a free society: rules of private ordering and of public ordering. This Policy Report will briefly describe these differences, then situate tort law as an intrinsic component of private ordering.
The Report will then examine government recoupment litigation. It will focus on the municipal (and forthcoming federal) firearm litigation, and on the state and federal tobacco lawsuits. It will examine the basis for the recoupment suits and will show why they denature tort law. It will canvass the effect of this abuse on our legal structure. In closing, the Report will suggest what we can and should do to revive tort and the rule of law.
Private Ordering v. Public Ordering: A Primer
Public law, involving relationships between citizens and the state, is all the rage. Constitutional litigation makes headlines, as it should. And criminal trials are often appropriate front-page fodder. It is curious, though, that in a free society like ours private law issues are not more widely recognized as vital. For private law (roughly, rules regulating the allocation of rights and obligations by citizens) and private ordering (the possibility for people to self-determine through private law without direct state involvement) are what distinguishes free societies from totalitarian ones. All countries have public law institutions. But only in free countries does private law govern the acquisition and exchange of rights. It does this by allowing citizens to transfer risks, voluntarily through contract law and involuntarily for two reasons: when one wrongfully causes harm to another (tort law) and because one has family obligations.
Tort law, which assigns private obligations to wrongdoers who cause harm, is an essential complement to contract law as a basis for private ordering. What is the essence of tort law? This important question is perhaps best answered by sketching what tort is not:
• Tort is not essentially about insurance. Tort law does not exist in order to provide insurance against risks. Free societies have a very "thick" (competitive) contractual market for insurance policies that do just that.
• Tort is not essentially about the compensation of innocent victims. Many innocent people suffer losses for which there is no tort recovery. Indeed, the vast majority of good people to whom bad things happen have no recourse in tort. The woman struck by lightning, the man who loses everything he owns to a more efficient business competitor, the baby born with a birth defect, the congenitally unintelligent or unattractive, find no solace in tort law.
Tort's essence is not the compensation of innocent victims as such, although of course tort does compensate certain innocent victims in certain circumstances. The essence of tort law is to reallocate risks when one person has wrongfully and without consent caused harm to another (Weinrib, 1990). The "consent" requirement implies that tort is properly subjugated to the contractual transfer of risks. If I assume a risk voluntarily, I cannot sue my contract partner in tort if the risk materializes. If I purchase a home in a one-industry town, then blame my seller ten years later because the factory has shut down and my house has lost value, I will have no claim in tort. Nor will I have a contract claim unless my seller has committed some wrong that vitiates the contract. Taking a seat as a passenger in a car that one knows is being driven by a drunk driver is a good example of a different kind of implied contractual assumption of risk. When a victim expressly or implicitly assumes a risk of loss, tort law declines to shift the risk elsewhere.
It is important to repeat that tort regulates interaction through private ordering. Tort suits are adjustments of risks between private parties. They are very different from public legislation, criminal and regulatory, in several important ways.
• Significantly, tort law happens without state intervention. Government is not a party to a tort suit — unless of course the government (through one of its employees, say) has committed a tort, or has suffered wrongful damage in its private capacity (as when a motorist negligently runs into government property).
• Tort suits are about private adjustments of risks — they are not a mechanism to express public outrage. Vindication of public offense is the province of criminal law, a principal component of public ordering. Crimes don't even need victims, by the way; torts do: there are crimes like attempted murder, or treason, for example, with no individualized, harmed victims.
• Tort law is not about punishment. Criminal adjudication punishes the culprit: common law torts require compensation only.
• Common law tort suits are not properly concerned with the enactment of "public policy," which is of course a quintessential output of public ordering. Any concerned citizen has the right to intervene in the legislative process that "produces" public policy, but only the parties to a tort suit can intercede in those proceedings. It is our legislative process, which guarantees all sides the right to voice their views, that is the only constitutional forum for policy- making.
• Finally and crucially, tort suits were not designed as, and are totally inappropriate vehicles for, state-coerced redistribution of money...
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