Fire & Smoke: Government, Lawsuits, and the Rule of Law
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Fire & Smoke - Michael I. Krauss
FIRE & SMOKE
GOVERNMENT, LAWSUITS AND THE RULE OF LAW
Michael I. Krauss
Copyright © 2000 by The Independent Institute
The Independent Institute
100 Swan Way, Oakland, CA 94621-1428
Telephone: 510-632-1366 • Fax 510-568-6040
E-mail: info@independent.org
Website: http://www.independent.org
All rights reserved. No part of this book may be reproduced or transmitted in any form by electronic or mechanical means now known or to be invented, including photocopying, recording, or information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review.
ISBN: 0-945999-82-8
Published by The Independent Institute, a nonprofit, nonpartisan, scholarly research and educational organization that sponsors comprehensive studies on the political economy of critical social and economic issues. Nothing herein should be construed as necessarily reflecting the views of the Institute or as an attempt to aid or hinder the passage of any bill before Congress.
1. Introduction
Private Ordering v. Public Ordering: A Primer
2. The Firearms Lawsuits
Basis for the Suits
The Legal Flaws of the Firearms Suits
Postscript on Gun-Related Violence
Should Gun Makers Be Worried?
3. The Tobacco Lawsuits
The Illusory Underpinnings of the State and Federal Lawsuits
The Illegality of the State Tobacco Suits
The Outrage of the Federal Tobacco Suit
4. Conclusion
Public Ordering Alternatives
Collateral Damage
Conclusion
Notes
Bibliography
About the Author
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.¹ 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.²
Tort law, which assigns private obligations to wrongdoers