Friday, November 18, 2005

"Back door" tort reform?

What it can't get through Congress, this administration is sneaking in through the regulatory process. This recent Lawyer's Weekly article describes a little-discussed process that has become increasingly familiar to attorneys in my field (yes, I am one of the dread plaintiff's attorneys you've all been told to fear and revile), and that is the process by which federal regulators take away the rights of ordinary Americans to seek redress for their injuries by promulgating regulations that insulate whole categories of businesses from liability for their actions.

Though the article focuses on recent regulations passed by the National Highway Transportation Safety Administration that will have the effect of protecting auto manufacturers from liability for defects in seatbelt design and placement, as well as for the consequences of bad roof designs, it also recognizes that the NHTSA regulations are part of an overall trend in federal regulation which I can confirm. Airlines, railroads, interstate motor carriers, and other businesses that are heavily regulated by the federal government have all been the beneficiaries of regulations intended to protect them from the consequences of negligent conduct -- and their attorneys routinely argue aggressively for the position that the fact they are regulated by the federal government at all should exempt them from any kind of accountability under state law. The term for the legal rule that allows this process to occur is "preemption," and here its extensive power is not being used for good.

Proponents of this form of regulation argue that it provides business with consistent standards. However, it also deprives the states of the power to determine what standards of conduct are appropriate for the protection of their citizens, instead providing "one size fits all" rules that, more often than not, are dictated by the regulated industries themselves and amount to a kind of lowest common denominator approach to any kind of accountability for their conduct. Moreover, by mandating that compliance with these "lowest common denominator" minimum federal standards constitutes an absolute defense to any allegation that a business or manufacturer caused harm to a consumer, federal agencies are displacing any number of well-established legal rules -- all without any form of public debate, and certainly without any clear indication of majority support for such radical changes in the law.

There may well be instances in which consistent federal standards may make sense. Where a consistent standard makes sense, the standard should be adopted in a forum that takes full account of the interests of all involved, especially the consumers, and gives maximum transparency to the process. In my experience, this just ain't happening.


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