CRE Paper on Regulation Through Private Litigation
CRE is releasing its position paper on Regulation Through Private Litigation, a new escalation in the trend whereby private interest groups use the judicial system to achieve regulatory results they could not obtain through normal legislative or regulatory processes. Regulation Through Private Litigation occurs when private parties (i.e., without government sponsorship) use the court system as a backdoor way to regulate entire industries.
Off-Register Regulation refers to the government issuing regulations without going through the publication of a Federal Register notice and providing the opportunities that the notice and comment process allows for public participation, compliance with all good government authorities including the Paperwork Reduction Act, the Regulatory Flexibility Act, the Unfunded Mandates Reform Act, and the Executive Order on Regulatory Planning and Review, as well as Congressional oversight. The three types of Off-Register Regulation identified by the CRE are:
Regulation by Litigation
Regardless of what form it takes, Regulation by Litigation represents a potentially fundamental change in how industry is regulated.
To encourage a public debate on Regulation by Litigation, the CRE has prepared:
These examples were chosen for several reasons:
Each of these examples has an Interactive Public Docket to provide a structured forum for a public debate.
The CRE is also preparing a discussion of suggested remedies, general and specific, for Regulation by Litigation. The remedies section also has an Interactive Public Docket. Included in this section is discussion of a possible CRE symposium on Regulation by Litigation which would bring together stakeholders including representatives of affected industries and government officials.
Milton Friedman is quoted as describing the effort by a number of high technology firms to lobby for federal intervention in the computer industry as a "suicidal impulse". The potential for such drastic and unforeseen changes in crucial American industries lead the CRE to undertake a major effort to analyze and report on these efforts to regulate by litigation on an ongoing basis.
The Washington Post explained the significance of Regulation by Litigation, in an editorial on one of the examples, by stating:
[I]t nonetheless seems wrong for an agency of the federal government to organize other plaintiffs to put pressure on an industry -- even a distasteful industry -- to achieve policy results the administration has not been able to achieve through normal legislation or regulation. It is an abuse of a valuable system, one that could make it less valuable as people come to view the legal system as nothing more than an arm of policymakers.
Although the Post's editorial was on only one of the discussed issues, the principles they annunciate apply to all instances of Regulation by Litigation.
CRE invites you to read the following papers and provide us with your comments:
Proposed Executive Order on Regulation by Litigation
CRE has long been concerned regarding Executive Branch efforts to bypass the legislature and to impose regulatory policy objectives through the use of litigation against industries in the private sector. The new Administration could address this problem, at least at the federal level, by issuing an Executive Order on that topic. To stimulate discussion, CRE has drafted a proposed Executive Order which would:
Proposed Executive Order to Prohibit Regulation Through Litigation