REGULATION BY LITIGATION
The era of big government may be over, but the era of regulation through litigation has just begun.
--Robert B. Reich
USA Today, February 11, 1999

Regulation of industry used to take place through two complementary political processes:

1. Congressional enactment of legislation; and

2. Executive Branch implementation and enforcement of the law.

To encourage a public debate on Regulation by Litigation, the CRE has prepared:

• Three papers discussing differing examples of Regulation by litigation:

  • Indirect Regulation by Litigation. The work by HUD to initiate litigation against the firearms manufacturing industry.

  • Direct Regulation by Litigation. The DOJ antitrust suit against Microsoft.

  • State/Municipal Regulation by Litigation. The lawsuit by Rhode Island against lead paint and pigment manufacturers and their trade association.

• Two papers discussing industries facing the prospect of Regulation by Litigation:

  • Agricultural Biotechnology.

  • HMOs.

These examples were chosen for several reasons:

1. Each active example is a precedent-setting instance of Regulation by Litigation which could have an impact beyond the companies initially involved; and

2. They represent different types of Regulation by Litigation which are currently in play and/or are likely.

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:

• The HUD Gun Suit

• Microsoft Litigation

• The Lead Paint Litigation

• Agricultural Biotechnology

• HMOs

• Remedies