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None of Congress's business?

By Walter Olson

In launching what’s intended as a regular monthly feature at Point of Law, I had in mind adapting a format perfected over at Slate, often under the heading “Breakfast Table”. It allows a couple of writers to bat things back and forth in an informal way over the course of three or four days, reacting in turn to each other’s posts, the way Walter Dellinger and Dahlia Lithwick do here (discussing the Supreme Court’s latest decisions) or David Brooks and Susan Estrich here, or Anthony Lewis and Stuart Taylor Jr. here. As someone who’s working to build up a new website, I can appreciate the way this format stimulates traffic (once readers get drawn in, they may want to check back often to see whether a new response is up). And the exchanges at Slate have managed to elicit an almost eerily high level of civility from the participants, even from those who seldom show the best of manners in their writing elsewhere.

I doubt that civility will be a problem for the two of us here, if only because the topics we can expect to contest, important though they may be, are gently lapped on all sides by a sea of agreement. To begin with, we agree in decrying the ongoing legal assault on gun makers; if anything, you’ve been more outspoken than I have about it. In your articles with Cato's Robert Levy, you’ve called the gun-suit campaign "a parody of tort law" and written that "most lawsuits against firearms manufacturers for anything other than manufacturing defects are barely disguised extortion attempts." (Your language reflects the fact that in relatively rare instances, a gun blows up in its owner’s face or otherwise behaves as no sane user could have intended. Such cases are a different kettle of fish legally from the newer suits against the maker of a lawfully sold gun which works exactly as expected mechanically but was used later in a crime. Some anti-gun activists and press outlets have claimed that the federal pre-emption bill would give gunmakers a complete free pass from being sued under any and all theories, which is baldly untrue.)

So far so good. But while we agree in condemning the campaign to make gunmakers pay for criminal misuse of their products, we disagree on what can be properly done about it. I think it’s entirely appropriate for Congress to step in and put an end to the campaign, as it nearly did this year (such a bill passed the House and was sponsored by a substantial majority of Senators, but failed on the floor there when opponents attached “poison pills”). You and Bob Levy of Cato have argued, on the other hand, that a nationwide pre-emption bill “offends basic tenets of federalism” and that “tort law is an issue for the states to resolve”. In March, when the bill failed (for this year) in the Senate, you and Bob cheered, calling the outcome a “win for the Constitution” and “good news for federalism”.

And that just baffles me. Because if there’s anything the gun-control-through-litigation campaign is not intended to do, it’s safeguard each of the fifty states’ power to hew to its own gun policy (assuming that’s a worthwhile goal or one consistent with the Second Amendment). The 30+ big-city suits, as well as the almost as carefully orchestrated private suits, have been filed disproportionately in court districts where gun ownership is politically unpopular, and a major part of activists’ strategy is to keep trying different courts and theories until they break through somewhere -- most likely, in a state that is significantly less friendly toward Second Amendment values than the average state. The result (or so the activists hope) will be some combination of liability verdicts, court decrees and coerced settlements which will significantly curtail access to guns not just in the state or court district where the lawyers broke through, but across the nation. In other words, the aim is to use the courts of one or a few states to obtain controls which will shut down or constrict gun availability in other states which were never consulted on the matter -- all without the need to win any sort of up-or-down vote in Congress.

This can’t possibly be the sort of thing the Framers envisioned as appropriate when they devised the Constitution. But if not, under which enumerated powers can Congress act? I expect we’ll be exploring that question in the days ahead. You’ve criticized the use of the Commerce Clause as a possible source of authority, but -- as you acknowledge -- that clause is only one of several Constitutional provisions that may bestow relevant powers on the federal government. For now, I’ll just note that from the start -- not just since the New Deal revolution, but since the Constitution’s adoption -- the feds have been knee-deep in overseeing important aspects of the operation of the state courts. The most salient common thread in these interventions has been the need to watch the state courts when they start trying to project their power to persons, policies and pocketbooks in other states -- exactly what the gun controllers are trying to get them to do here. That’s the best explanation of why the Constitution asserts national authority over controversies arising in “diversity” between citizens of different states, over bankruptcy, over admiralty and maritime law, and over numerous other sorts of cases. Virtually every significant anti-gunmaker suit, it should be noted, is either aimed at an out-of-state entity, or seeks to assign liability to out-of-state conduct, or both.

But before I turn the floor over to you, I have a question. I noticed what I thought was a small but significant difference between your longer Cato paper (PDF), which I assume was drafted first, and the shorter National Review Online knock-off. In the longer paper, your rejection of federal pre-emption is couched in something closer to absolute language: it’s unconstitutional, and that’s that. In NRO, on the other hand, you instead call it “premature”, and acknowledge that “things might one day get out of hand. If a state, or the District of Columbia, eventually does endanger Americans' Second Amendment rights through bogus damage awards against gun makers, those excesses will indeed justify federal intervention under the 14th Amendment. But we’re not there yet.”

I was delighted to see what seemed to be a movement toward my own position, but perhaps I should first ask: have your views indeed evolved, or am I reading too much into this? And if it’s now a question of timing -- federal intervention is not yet constitutional but will ripen into constitutionality once things reach crisis stage -- my next question is: how will we know when things have gotten out of hand? The first time the plaintiffs score a favorable appellate court ruling? (That’s happened.) The first gunmaker bankruptcy occasioned by the cost of litigation? (There have already been a couple.) The first settlement by a gun supplier under duress? (That’s happened already, too.) The first check written to plaintiffs? Does it have to be a big check? How big? How much damage to innocent businesses, to the right to bear arms, and to the rule of law, must be endured before we can intervene? Or would it be okay to legislate beforehand to forestall at least some of these evils before they occur?

Ball’s in your court. Thanks for agreeing to take part in this.

Smoking Guns and Federalism

By Michael Krauss

First, Wally, I'm delighted to join you in breaking the ice. This format is new for me, and I hope I master the e-intricacies involved in embedding links, etc. My apologies to readers for any technical screw-ups I make.

Let me reiterate first where I think we agree 100%:

1. The city-county-state suits against firearm manufacturers, for damages these governments suffered when they had to pay money (police overtime, cleanup of blood from streets, payments to hospitals for uninsured gunshot victims) when a bad guy used a gun to shoot someone, are totally bogus. They have nothing at all to do with the Common Law of Torts in any of the 50 states.

2. Why are they bogus? I detail the answer in my monograph, Fire and Smoke: Government Lawsuits and the Rule of Law (Independent Institute). In brief, they are bogus because they make a mockery of Proximate Causation doctrine (the manufacture and marketing of the gun was not the proximate cause of the injury; the bad guy's free choice to misuse the product was the Proximate Cause) and because Governments do not suffer direct damages, but only indirect costs which they themselves choose to bear. For each and both of these reasons, the suits must fail -- and, mostly, they have indeed failed.

3. But of course, like sharky plaintiffs lawyers, these suits were not meant to win -- they were in large part meant to bleed the product manufacturers so dry in lawyers' costs that they would "settle," as tobacco manufacturers have done. Bogus suits filed to induce settlements are the best argument in the world for a "loser pays rule" -- wanna talk about that in future installments of this conversation?

Since we agree, I think, on 1-3, why do I oppose federal intervention based on the Commerce Clause? The short answer is the same one I give to my law students when they ask me why "bad" laws are not ipso facto unconstitutional. The Constitution is not a mandate for the courts to "perfect" society. Nor is it a mandate for the federal legislative branch to repair all bad laws in the states.

Thus, a state can and should and does, in my opinion, have the right to adopt legislation (or to create state case law) that is stupid, that is inefficient, that is even immoral, so long as the state internalizes the costs of its behavior. My state, for instance, should have the right to force everyone to work a maximum of 30 hours per week, as those contemptuous folks in France do. The state would lose tax revenue, its citizens would see their real estate values drop, and presumably there would be political pressure on my state to change its labor laws. I'm not one of those (like my good friends at the Institute for Justice, for example) who believe the Constitution has set up the libertarian state, and that federal courts and the federal government have the right and the duty to impose laissez-faire on the states. Analogously, the federal government does not have the right to impose tort sanity on the states, unless those states violate the federal constitution by their insanity. Tort sanity simply doesn't justify destroying the dual sovereignty that underlies our republican system of government.

So, for instance, the states can hold gun-makers liable for the cost of crimes committed with their guns, if they are willing to destroy the foundations of their tort law, and to open a Pandora's box that will swallow most all of products liability. If, however, a state holds liable a gun-maker that does not even market in that state (the District of Columbia has adopted legislation to this effect, though it has wisely refrained from trying to enforce it so far...), then of course such legislation would be an effort to externalize costs onto others, and this legislation could be properly repressed by federal law under what is known (sorry for the legalese) as the "dormant" part of the Commerce Clause. In addition, if a state's distortions of the Common law go so far as to deprive citizens of their Constitutional right to bear arms, then federal intervention is fully merited under the Fourteenth amendment, which empowers Washington to prevent states from violating our fundamental rights.

But the state gun suits, in most part, don't go this far yet at all. State courts have taken care of business, for the most part, by throwing out these ridiculous suits. Apart from DC (and again, the District has not yet tried to enforce its law), no state has tried to hold liable a manufacturer that does not do business there. And no states' suits have, thus far, so affected the availability of firearms as to create a Second Amendment problem. State sovereignty must not be tampered with lightly, and there is as of yet no clear and present danger of constitutional breach. There is merely a little evidence of state stupidity, and states have the constitutional right to be stupid.

Finally, a note about joint publishing efforts. As I'm sure many readers know, joint writing inevitably requires compromise. My views here are unencumbered by any compromise -- I think it is clearly the case that if a state's liability rules produced shortages of firearms for sale in that state, federal intervention would be authorized under the Fourteenth Amendment. This would not be the case for tort-induced availability issues in, say, obstetrical services, for the simple reason that there is a constitutional right to keep and bear arms, but no constitutional right to hire an obstetrician.

As a teaser, let me close by saying that I think federal choice of law legislation, which WOULD be constitutional, would go far to making sure states did not externalize their havoc.

Ball back in your camp, Wally.


The states' commerce claws

By Walter Olson

I share your frustration with the difficulties in ascertaining the exact scope of the Commerce Clause: it’s the kind of constitutional provision that can give accordions a bad name (though I’m not one to share the usual musical prejudice against that fine instrument). At the high point of New Deal expansion, the clause was thought to empower Washington to regulate a farmer’s growing of grain to feed his own animals. At the other extreme, some libertarians seem to envision a Skinny Minnie sort of Commerce Clause that would amount to little more than a sort of domestic GATT arrangement, empowering Congress to step in if Maryland erects a tariff against Delaware or that sort of thing.

As we all know, in recent years the U.S. Supreme Court has let a bit of air out of the hyper-extended New Deal view of the clause. But the Rehnquist Court is still a lot closer to the “covers nearly everything” interpretation of the clause than to its “covers hardly anything” opposite. True, the present Court may call foul when Congress tries to federalize, say, domestic violence law on little more than an assertion that crime of that sort has an impact on commerce. But when the nexus with actual commerce is not so strained, today’s Court nearly always concedes Congress’ authority to regulate. And there simply is no doubt based on the record -- even diehard foes of tort reform would scarcely bother to dispute it -- that product liability has a direct and substantial effect on interstate commerce, and on the gun trade in particular.

If I read your argument rightly, however, I don’t think you’re actually predicting that the presently constituted Supreme Court would find the gun pre-emption bill anything but a proper exercise of Commerce Clause power. (If I err on that, let me know, and I’ll go back to arguing the point.) Instead, I interpret your comments as proceeding from either a prudential sort of federalism -- the Court might not deem the pre-emption bill unconstitutional, but we still would be wise to refrain from passing it -- or perhaps a loyalty to what you perceive as earlier and more legitimate readings of the Commerce Clause.

In a draft paper available at his Federalism Project, Michael Greve of the American Enterprise Institute has offered what strikes me as a powerful riposte to both of those ideas. He argues that the tradition of a strong Commerce Clause, affording a wide-ranging charter for Congress to displace state law in areas relating to interstate commerce, has roots that go much deeper than the New Deal, extending back not only to the controversial Lochner era but indeed to the earliest years of the Republic and Chief Justice Marshall’s opinion in Gibbons v. Ogden (1824). The battles back then did not involve federal oversight of products liability, for the very good reason that that kind of liability scarcely existed at the time (besides which, most products were made locally). Since the 1950s, however, product liability has developed into a huge body of litigation which in the typical case invites a state to second-guess design or marketing decisions made in a faraway company headquarters. If liability is found, one of the state’s own voter/citizens will normally reap the financial benefits, while shareholders and others in distant states will pay the price. Do states respond to these incentives by tilting the playing field in favor of plaintiffs? You bet they do. You write that each state should be left to make laws in its own foolish way “so long as [it] internalizes the costs of its behavior”. But in products liability that doesn’t happen (PDF).

Let me return to my observation from the previous round about the Framers’ views and intentions. As the Constitution’s text shows, they were well aware of state governments’ tendency to engage in beggar-thy-neighbor games, nor were they the least bit shy about ousting state courts from wide sectors of commercial litigation that might tempt them into such game-playing. They chose to kick the state courts out of bankruptcy, maritime and (at Congress’s discretion) diversity-of-citizenship cases, even though the predictable result was to involve the federal courts from the start in hearing many disputes that are both very small and very local. If a séance were to be conducted to summon the opinion of the reincarnated Framers today, you may be quite right that they’d want to leave most of tort law on the “local” side of the line; car crashes, slip-falls and medical errors are usually primarily intrastate in their legal implications. But I’m equally confident that they’d assign today’s product liability to the “national/commercial” side of the line.

Okay, I’ve talked the Commerce Clause into the ground, which leaves little time this round to examine the other enumerated powers on which Congress might rely in intervening against the gun suits. You mention, for example, the Full Faith and Credit Clause and the authority it gives Congress to prescribe “choice-of-law” rules (and perhaps other decisional rules) to state courts. I’ll defer discussion of that one because I sense a lurking danger we’ll wind up agreeing, and you know how dull readers find it when that happens. The other is the Second Amendment itself, which you agree might be implicated (in conjunction with the Fourteenth Amendment’s Due Process clause) in extremity should gun rights become endangered. In fact the pre-emption bill in Congress does cite the Second Amendment as well as the Commerce Clause as a source of authority.

Before I turn over the mike, though, I want to take issue with the notion that the firearms litigation, because it’s proved so far to be mostly a dud with the courts, has not seriously threatened anyone’s rights. Yes, it’s true, judges have thrown out most of the municipal cases. But some have been allowed to go forward, and the antigun lawyers made it a conscious part of their strategy from day one to shoot off a large number of arrows knowing that most would fail of their target. They don’t have to land many: these are often “bet your company” cases. And in fact, as I note in my recent book The Rule of Lawyers (just out in paperback!), the lawsuit campaign even without a durable court victory has inflicted serious hardship on the gun-making and -selling trade nationwide. It’s interfered with the availability of credit and insurance for those in the trade. It’s led to the discontinuance of existing lawful product lines desired by consumers and to the abandonment of contemplated ones. It’s pushed family businesses to the wall. Most striking as a policy matter, it led directly to the abortive settlement that the Smith & Wesson company tried to enter into, its chief executive announcing at the time that he saw capitulation as the only alternative to being ruined by litigation costs. The S&W deal starkly revealed the lawsuits’ agenda: the company agreed to extensive controls on gun-selling by which the freedom of action of its buyers and dealers would have been significantly curtailed. As it happens, we got lucky: the deal collapsed. Must we count on getting lucky every time?

On Babies and Bathwater

By Michael Krauss

Dear Wally,

Well, this is getting interesting. Our conversation will illustrate, I think, how true allies in the global Tort war may nonetheless disagree strongly on their vision of the Constitution. As you requested, I'll try to highlight our disagreements – though I do hope that in subsequent installments areas of agreement do emerge.

You are right that I am not now predicting that the Supreme Court would overturn federal legislation nationalizing gun liability law in particular, or product liability law in general. I don't even think the current Supreme Court would overturn federal legislation nationalizing medical malpractice law (after all, to reprise the hackneyed phrase, folks do cross state lines to go see their doctors). But I very firmly believe that the law is not "whatever the Supremes say it is." Every branch of government has the duty to ensure that their activities do not cross the constitutional line, and therefore every branch of government must reflect upon where that line is.

My own reflection is that private ordering, juridical relations among citizens, is the quintessence of state rule in these United States. I have written about private ordering extensively (Krauss, Tort Law and Private Ordering, [1992] 35 St. Louis University Law Journal 623, here downloadable as a pdf file) and will be brief here. Juridical relations among citizens (embodied by contract, tort, property and family law), as distinguished from relations between citizens and the state (criminal law, administrative law, etc.) are of a particular nature and have always belonged to the states. [State and federal government properly compete in the public law sphere.] Washington could federalize contract law (after all, contract is the essence of commerce, isn't it, Wally?). It could federalize family law (those pesky inter-state divorces and separations make different legal regimes so annoying…). It could in essence cause the states to wither away on the grounds that we are now one big commercial e-market whose state lines are nothing but transaction costs. For all sorts of sound reasons it should not do this, whether or not a Supreme Court would connive to accept it. It should leave tort law to the states. Michael Greve is a great guy, and a true friend of mine, but he is not a jurist and I fear he does not have a complete sense of the constitutional structure of the country. Robert Levy and I expand on this in our 2004 essay, Can Tort Law and Federalism Coexist?, and I shall therefore now cease and desist on that subject.

Now, I agree with you wholeheartedly that current product liability law is often a beggar-thy-neighbor event. "Let's bring money into the state" is the shark plaintiff's battle cry – a cry the shark could not have uttered 100 years ago, when most products used in a state were actually made in that same state. Today the market for products is an interstate market, as you rightly note. But let me point out that the 19th Century also had its version of this beggar-thy-neighbor plaintiffs' tort behavior – tort suits against railroads. As every student of tort law knows, much of our current tort doctrine emerged from legal rulings in suits against railroads. Why? Because railroads always lost tort suits if they got their case before a jury ("let's bring money into the state, and soak those "cosmopolitan" "bankers,""etc.), so they desperately petitioned courts to find failings of law that would allow the judge to refuse to submit the plaintiff's case to a jury. Federal courts heard these cases (because of "diversity" rules), though these courts were of course obliged to apply state tort law. Congress did not create a federal tort law for railroads – similarly, they have no reason to create a federal tort law for guns or other products, unless (see my earlier posting) a federal constitutional right (such as that of the Second Amendment) is in clear and present danger.

So, hint #1: proper use of diversity jurisdiction, preserving federal courts for out-of-state products defendants, is one tool in reconciling federalism and private ordering. Currently, federal courts decline to exercise jurisdiction unless there is "complete" diversity, which means plaintiffs' lawyers can join a local defendant to an out-of-state manufacturer and thereby ensure the jurisdiction of the in-state court. There is no constitutional requirement for the complete diversity rule, as I'm sure you would agree, Wally. Congress can and should modify that rule forthwith – this would in no way diminish state sovereignty when it comes to private ordering, but would go a long way to eliminating procedural bias.

Hint #2: product liability need never be a beggar-thy-neighbor area of law. It would be quite easy to preserve state tort law while forcing states to internalize the costs of their product liability decisions. In a nutshell, this can be done by allowing companies to price-discriminate – to charge a different price for their widgets in State 1 than in State 2, to reflect different liability expectations. Currently, price discrimination is not possible, because state choice-of-law rules (which are followed by federal courts in diversity cases) allow a consumer to buy a product in State 1, then avail himself of the (hypothetically more plaintiff-biased) tort law of State 2. Imposition of federal choice-of-law rules (requiring, for example, that the state products liability law of the place of retail purchase of a widget be the applicable law to that widget) is both feasible and constitutional, and preserves entire state sovereignty over products liability while allowing price discrimination and eliminating the beggar-thy-neighbor issue. I show exactly how this could be done in a recent Brigham Young Law Journal article; here is a link to a pdf version of it.

To recap – Tort law is currently, in many cases, dirty bathwater. Our constitutional structure is a beautiful baby. We can clean up the one without sacrificing the other!


"Home cooking" off the menu?

By Walter Olson

I’ve held off from agreeing the way a bel canto singer holds off from taking a new breath, but I can stand it no longer. I agree that a strong loser-pays rule would be desirable in itself and would have tended to forestall the gun litigation (or at least forced its sponsors, such as the Brady Center, to write a big check to their vindicated opponents, a sight it would warm my heart to see). I agree that the Constitution is not a mandate for the courts or Congress to “perfect” society or correct every bad state law so long as the erring states are not exerting a redistributive or otherwise coercive effect on residents of other states. I agree that the improvement you propose in federal diversity jurisdiction, which would give out-of-state defendants a more robust right to have their cases heard in federal rather than state court, would be worthwhile in itself and would also have discouraged the gun suits. And finally, I agree that federal choice of law legislation would be clearly constitutional under both your and my criteria and, as you say, “would go far to making sure states did not externalize their havoc”.

There, I feel better. Let me expand a bit on this last question of choice of law, a topic that has fascinated me ever since my colleague Peter Huber called my attention to its importance long ago. (I gave it a chapter of its own in The Litigation Explosion.) The scope for abuse afforded by modern choice-of-law developments can be seen in the gun cases. Let’s say activists organize a suit seeking to force gun makers to pay for the costs of gun crimes in New York City, a place where few guns are sold (because gun control laws are so strict) but plenty of bad guys commit shootings. The guns were originally sold by dealers in states like Virginia and after changing hands (often many times) arrived illegally on Gotham streets. The suits contend that it was legally wrongful for the manufacturers to ship the Virginia dealers all the guns they asked for. And in determining the merits of this claim, the suits will probably ask New York to apply not Virginia’s relatively business-protective law, but New York’s relatively pro-plaintiff law.

Plaintiff’s lawyers love this sort of ploy because it lets them shop around for favorable laws, but it’s grossly unfair both to the company getting sued and to Virginia itself, which stands to lose its right to establish the legal rules governing its own commerce. As you point out, Article IV, Section 1 of the Constitution gives Congress a sweeping grant of power to remedy matters, in the second sentence that follows: “Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.” In other words, Congress may instruct courts in New York’s position to give effect to Virginia law regarding manufacturer liability for sales. It has often occurred to me that the final clause, empowering Congress to specify the “effect” one state’s laws must be given in other states, could be the basis for not just the drawing up of a federal choice of law scheme on product liability (as you propose) but also for various other helpful interventions, such as a federal law prescribing that states refrain from imposing global punitive damages against a nationwide course of conduct by a defendant that would not have been subjected to equally severe punishment under the laws of other states.

Enthusiastic as I am about reform of jurisdiction and choice-of-law, I still have doubts as to whether a combination of those two kinds of reform will fully suffice to end state courts’ motive and opportunity to siphon wealth from distant shareholders and corporate treasuries. In some of the notorious courts of Alabama, Mississippi and Gulf Coast Texas, they don’t call the solicitude for local claimants and lawyers “cost externalization”, they call it “home cooking”. Think about the wildest cases from the Jackpot Belt -- you wrote a great article about the $500 million Loewen verdict in Mississippi -- and I think you’ll agree that not all of them arose from ambitious assertions of jurisdiction or applications of an inappropriate state’s law.

On another note, I’m not sure I agree with the contrast you draw between the supposedly ravaging effects of a gun pre-emption bill -- “destroying the dual sovereignty that underlies our republican system of government”, as you somewhat hyperbolically put it -- and the putatively respectful and kid-glove handling of state sovereignty embodied in your own preferred reform proposals. By expanding federal diversity jurisdiction, you’re proposing to grab many or most of the salient cases entirely away from the state courts; and by fixing mandatory choice of law rules, you’re telling them that they also can’t get their law applied. I guess the message to the state courts is that we’re taking the crust and we’re taking the filling, but you can still have the pie. It seems to me that the pre-emption bill in certain respects represents a less drastic entrenchment on the state courts: it leaves them hearing the cases, even (too indulgently!) leaves them applying their own law to other states’ transactions, but merely instructs them not to put into effect wholly novel decisional rules that if adopted would have an immediate and grossly unwelcome effect on a large number of citizens of other states.

You know what? We still haven’t talked much about the Second Amendment, although we both regard it as a crucial element in our respective analyses. I promise to get to that in my next (and final) round.

Vindication! And the start of the home stretch.

By Michael Krauss

Wally, thanks for your agreement with about 90% of what I advocated in my earlier postings. In an effort to keep this dialogue interesting for readers, I won't go over those areas any more, and except for one important detail I will focus on two issues in this posting: 1) the rather narrow questions that still come between us; and 2) an introduction of that elephant in the room, the Second Amendment.

First the important detail. We agree on the constitutionality and appropriateness of federal choice of law rules for product liability (and in fact I'm pleased to note that I met with a member of the House of Representatives last week on this very subject, so the proposal may soon get some "traction", as we say inside the nefarious Beltway). But Congress is not the only route here. I believe that if the plaintiffs' bar forestalls such a development, the Supreme Court itself has the constitutional authority to impose choice of law rules unilaterally, under proper notions of judicial restraint, precisely in obeisance to the Full Faith and Credit Clause as well as other Constitutional provisions. Doug Laycock of the University of Texas has defended this proposition in an erudite piece, Equal Citizens of Equal and Territorial States: The Constitutional Foundations of Choice of Law [92 Columbia L. Rev. 249 (1992)]. As has been pointed out by Laycock, three fundamental principles demand Court action (in the absence of Congressional action) while circumscribing the exercise of legitimate federal authority over choice of law:

1. The principle of equal American citizens. Each state must, as a general matter, treat citizens of sister states on an equal basis with its own citizens. This implies that states may not adopt or exploit choice-of-law rules in order to favor local citizens over citizens of sister states. Yet in practice many states' choice of law rules have contributed to violations of this principle.

2. The principle that states are territorial. The allocation of sovereignty among states is territorial. This fundamental principle is essentially assumed by the Constitution. State constitutions and acts of admission to the Union do make the territorial basis for state sovereignty explicit. The implication of the territoriality principle is that a state’s claim to regulate behavior or to govern a dispute must be based on issues related to its territory. A state’s “interest” in extending the territorial reach of its own law to the entire country, for the purpose of subsidizing its citizens by consumers throughout the nation, is not sufficient to legitimize a state rule under this principle. Federal choice-of-law rules must take the territorial principle into account, refusing to select laws on grounds unrelated to the basis of state sovereignty.

3. The principle of republicanism. Choice-of-law rules should, ideally, encourage (or, at the very least, not discourage) civic participation in determination of policy. Confining the major effects of a state’s rules within its boundaries strongly encourages citizens to modify rules they find unsuitable and to defend those of which they approve. Republicanism also implies relatively convenient access to knowledge of laws and to lawmakers. If the costs of a New York law are borne by all Virginians (who have neither easy access to New York law nor political standing to modify it), the republican principle would not be satisfied.

I note in closing on this point that the Supremes have, this past term, prevented states from adjudging punitive damages in tort based on behavior in other states [Campbell v State Farm Insurance]. Your posting earlier today recommended Congressional action to enshrine this, and I'm not opposed – but just as the absence of legislation did not preclude Court intervention to preserve tort from excessive state punitives, so the Court can preserve tort from excessive state choice-of-law.

OK, now let me defend myself against the two remaining criticisms you have, Wally.

1. Diversity and choice-of-law changes are not panaceas, True enough. But they do go a long way. In the Loewen case (thanks for the praise for my article), for example, diversity changes would have allowed the defendant to have his case heard in federal court, sans the elected Jackson state judge and his incredible evidentiary rulings.

2. I'm taking the crust and the filling from the states, but leaving them the pie. Here I respectfully but forcefully demur. Removal for reasons of diversity is optional, not mandatory. If a state's legal process is fair, parties will agree to state proceedings – they can often be much cheaper and faster than federal cases. And state tort law is preserved under my proposal. If New Jersey citizens are more risk-averse than, say, their Virginia brethren (and there is no reason to believe that risk preferences are identical across the country), they will approve of and be willing to pay the price for their legal policies, which will be faithfully applied to New Jersey products by state and federal courts alike. No emasculation of states' rights here at all – rather, respect for the three constitutional foundations of states' rights enumerated above.

Last but not least, a few words on gun ownership and gunshot injuries. This as a way of introducing the Second Amendment discussion, which I hope will take place in our last go-round tomorrow.

As a general rule, the making and the selling of guns are neither moral nor legal causes of crime. In truth, the general use of firearms does not contribute to harm at all. If causality is sought, firearm ownership is linked to security, not to death. Guns are used defensively (merely brandished to prevent assault, rape or robbery) approximately 2.5 million times per year -- far greater than the number of firearms crimes. Robust empirical data indicate that laws permitting the carrying of concealed handguns reduce murder by about 8.5 percent and rape by about 5 percent. [Lott, John & Mustard, David (1997), Crime, Deterrence, and Right-to-Carry Concealed Handguns, Journal of Legal Studies 26:1] Those benefits are real and substantial.

Gun ownership facilitates self-defense by allowing physically weak persons to confront stronger aggressors. The “equalizer effect” has historically been associated with increased security and liberty, and was explicitly recognized as doing so by defenders of constitutionalism in both England and the United States. Ownership of a firearm, in and of itself, is best seen as insurance against lawless aggression by individuals [Wheeler, Samuel (1999) Arms as Insurance, Public Affairs Quarterly 13(2): 111], or (in the Founding Founders’ eyes, and in the eyes of the 2nd Amendment to our Constitution) by government. [Malcolm, Joyce, (1994) To Keep and Bear Arms: The Origins of an Anglo-American Right, Cambridge, Harvard U. Press]

Guns are not primarily owned by criminals. Firearm ownership, for example, is most common between the ages of forty-five and sixty-five, while arrest rates for violent crime peak between the ages of fifteen and twenty and decline rapidly after age twenty-five. [On firearm ownership see National Health Interview Survey, 1994 Supplementary Series on firearm usage and on arrest rates by age see the Statistical Abstract of the United States, 1997.] This is yet another nail in the coffin of the cities’ proximate causation tort argument.

Although 80 million American families own about 240 milllion guns, only about 40 children die each year from accidental discharge of guns. That’s right, 40 per year. In 1998, the last year for which we have hard data, the number was 47: of which only 17 were killed by a handgun. The others were killed with their dad’s rifle, or some other long gun. President Clinton once reported a much higher number of minors killed by guns, but it turned out that that number included an overwhelming majority of 15-19 year olds killed in gang wars – not the accidental killing of “children”. There are on average FOUR cases per year where a child shoots another child accidentally. That compares, for example, to 150 children who die each year from fires started with cigarette lighters.

The Centers for Disease Control reported in April 2002 that, for the 11th year in a row, fewer Americans are being killed or injured in gun-related accidents. The death rate declined 26 percent between 1993 and 1998, and is now at its lowest point since 1965, despite a huge increase in the number of firearms owned by Americans since then.

Notwithstanding all this data, the press gave extraordinary publicity to a 1993 article by one Arthur Kellerman in the New England Journal of Medicine. Kellerman's "study" concluded that the presence of a gun in one’s home dramatically increased one’s chances of being killed by gunfire. As has since been widely noted, though, the study had stupendous methodological flaws that would surely have precluded its publication, were the NEJM not blinded by its fear and loathing of guns.

The study consisted of going to homes where a homicide occurred, and asking whether there was a gun in the house. Such a study by design and definition excluded successful uses of the gun (i.e., where the attacker is scared off and no one is killed). Even if the homicide victim was someone who did not live in the house, and who was stabbed to death, the answer “yes” to the question, “Was there a gun in the house?”, would increase the correlation between guns and homicide.

Moreover, the fear of being killed by a stalker or a gang might well contribute to one’s decision to purchase a firearm. If the fear is well-founded, then we would expect gun purchasers to be more likely victims of murder than others. But that does not establish that the firearm ownership caused the crime. Analogously to Kellerman’s dishonest methodology, I could “prove” that visiting a hospital correlates with dying. This does not show that the hospital visit caused the fatal illness.

Gun ownership is on a steady increase. Crime is on a steady decrease. It turns out, over time, that there is no link between the extent of gun ownership and the extent of violent crime. None at all. Violent crime is much more likely to be associated with demographic factors (for example, the size of the 15-25 male age cohort) and socio-cultural factors (for example, the presence of conscription as an outlet for male aggression, the severity and certainty of punishment for violent crime) than with gun ownership patterns.


What's good enough for the Times...

By Walter Olson

My approach to the Second Amendment differs from yours. I don’t try to keep up with the literature on how changes in gun availability may affect crime and accident rates, although I’m aware that it’s quite contentious and I gather that relatively few empirical assertions are accepted by both sides. On the other hand, I’m keenly interested in the historically held view of private gun ownership as providing, in your words, “insurance against lawless aggression. ... by government.” This topic gripped the American patriots of the Revolutionary Era, and English patriots for centuries before that, because they believed that public liberty would not remain secure indefinitely if the authorities had guns and the people did not. If they were right to hold that view, then trends in the safety of firearms as a consumer product may be beside the point. (Indeed, as I understand it, the right to bear arms was enshrined in the Bill of Rights at a time when guns often blew up in their owners’ faces.)

The other thing about the Second Amendment that fascinates me is the way our courts have decided that they are not under the slightest obligation to enforce it, and have instead declined to intervene as various localities in the U.S. have more or less completely suppressed their citizens’ right to gun ownership. It’s hard to read the first two entries in the Bill of Rights without wondering what life would be like if some mysterious potion in the courthouse water fountain compelled courts to give roughly the same force to the word “infringed” in the Second Amendment as they do to “abridged” in the First (on press freedom), as common usage would suggest. Either they’d have to gut the protections they now accord to press liberty (and it would become impossible to obtain a printing-press permit in many cities without having a friend at City Hall, just as it’s now impossible to get a gun permit), or else they’d have to start taking the Second Amendment seriously.

As we know, state court actions carried out in the name of common law can come into conflict with vital Constitutional liberties. Here’s a high-profile example -- you’ll probably have no trouble guessing which case I’m describing. A big company is in the business of manufacturing and distributing a product to a nationwide market, though it sells more of the product to consumers near its headquarters. Although this enterprise is respected and admired in many quarters of American society, and although the manufacture, sale and distribution of its product is specifically protected by the Bill of Rights, it is bitterly disliked in some other sectors of society. It gets sued on common-law tort theories in a distant and ideologically hostile jurisdiction, where public opinion is soon whipped up against it. The incensed jury slaps it with a painful judgment, and after failing to prevail on appeal the big company asks the federal government to step in to overturn the result and (as its critics would say) save it from having to pay its victim. The feds agree and proceed to bail the company out, imposing a new decision rule on the state courts to replace the earlier common-law rule which (they explain) had too chilling an effect on the availability of the company’s Constitutionally protected product. The ruling meets with tolerably widespread approval, but a few vehement naysayers -- the editorial board of the New York Times, for instance -- complain that federal pre-emption chips away the legitimate sovereignty of the state courts and insulates corporate malfeasance from accountability.

Just kidding about that last bit. Because of course the case I’m describing is New York Times v. Sullivan (1964), in which the Supreme Court sharply curtailed (though it did not eliminate) publications’ exposure to traditional state libel law, citing the tendency of that law to chill free speech. And naturally the New York Times editorial board, which today inveighs vehemently against every scheme to limit anyone else’s liability, offers no apologies for the success of its own sweeping version of tort reform, the one to which its own name is attached.

I bring all this up not just to tweak the Times (though that is fun) and not because I necessarily disagree with the outcome of Times v. Sullivan. Indeed, it seems to me entirely plausible that the threat of unbounded defamation liability will chill some responsible and truthful criticism of public officials, just as the threat of unbounded liability in medicine chills a lot of socially beneficial work by medical professionals, and just as the threat of unbounded product liability chills the legitimate firearms trade. Commendably sensitive to free speech values, the high court was not afraid to tread fairly hard on the toes of state sovereignty.

But here’s a thought-experiment: suppose it had been Congress that had perceived the clash between libel law and the First Amendment and acted to curtail the state courts’ authority? Suppose the parties in the Sullivan case had for whatever reason not chosen to pursue their controversy to the high court, but that instead supporters of press freedom had prevailed on federal lawmakers to enact a statute exactly embodying the distinctions we now associate with the Times v. Sullivan decision (“public figure”, “actual malice”, etc.), pre-empting state courts from adopting tort theories more favorable to libel plaintiffs. Would this hypothetical law have been somehow illegitimate or constitutionally infirm? It’s hard for me to see why: Congress is sworn to uphold the Bill of Rights and it's supposed to wield the powers necessary and proper to do so. Nor would it have been obliged to wait until a First Amendment train wreck had manifested itself and Northern newspapers had started closing down under the impact of Deep South liability verdicts. By analogy, if it could pre-empt certain suits against newspapers on a First Amendment rationale, it should be able to pre-empt certain suits against gunmakers on a Second Amendment rationale.

Well, the hour grows late, so I’m not going to get a chance to develop some of the other points I’d been working up (such as: if private law has been properly left to the states from the beginning, how do we explain the old federal common law that used to apply in diversity cases, which the New Deal Court extinguished in Erie v. Tompkins?). I’ll just say that I have greatly enjoyed the cordiality of our exchange and the spur it has provided to further thinking on my part. For readers who've liked what they’ve read, I have good news: Michael is soon going to add his voice to the multiparticipant weblog on the front page of Point Of Law, and you can already find me there (as well as at Overlawyered).

Again, many thanks.

The Grateful Last Word

By Michael Krauss

First, Wally, I want to make clear what a wonderful "host" you have been throughout this dialogue. Those of us in legal academe are all too familiar with the viciousness and intellectual dishonesty that lurks around most every bend. Point Of Law has established itself in my mind as a beacon of respectful yet engaged discussion – and that is why I am so pleased to join its board of "official bloggers." Many thanks to the Manhattan Institute for providing this forum.

On April 18, 2001, I delivered a talk on the Second Amendment and Tort law to the students at Cornell Law School. Unbeknownst to my hosts, the date of my talk was quite propitious. For on that same date in 1775, one Paul Revere instructed friends to hang two lanterns in the Old North Church in Boston. That was a signal to patriots in Charlestown that the British troops were coming by sea,to arrest Sam Adams and John Hancock in Lexington, and most importantly to seize the citizens’ arms in Concord. Revere succeeded in alerting the locals, and about 70 citizens (a.k.a. "the militia") gathered on Lexington Green to begin what was our country’s fight for independence. This fight would have been impossible, of course, had the people not had the right to keep and bear arms. As it happened, April 18, 2001, the date of my Cornell talk, was also the beginning of the Jewish holy day Yom Hashoah, commemorating the massacre of 6 million Jews by Germany's National Socialist party and its henchmen. The connection between the Nazi genocide and prior government disarming of civilians has by now been documented: here's a link to a nice summary piece by Dave Kopel on this issue. So yes, Wally, you are absolutely correct to stress that the Second Amendment has nothing to do with hunting or target shooting or household accidents, and everything to do with defense of liberty against evildoers (whether those evidoers are individuals or carry government credentials). [In violation of the British people’s fundamental rights, but without protection because of the institution of Parliamentary sovereignty, Great Britain has implemented a prohibition against owning handguns for self-defense. Today an Englishman is twice as likely to be mugged as is an American, and 150% as likely to be robbed. And 600% as likely to be robbed while at home.] Indeed, many founding fathers agreed with Thomas Jefferson (and a few modern-day towns in America -- long live decentralization!) that able-bodied citizens have a constitutional duty to keep and bear arms. [See, Letter by Jefferson to John Cartwright, 1824. (The Writings of Thomas Jefferson, Memorial Edition (ME), Lipscomb and Bergh, editors, 20 Vols., Washington, D.C., 1903-04, 16:45.]

Why then did I raise the issue of junk science exaggerating the contemporary dangers of firearms? Merely to underline the fact that many of the Second Amendment's opponents are not merely ignorant of constitutional history – they are also blinded, by their ideology, to sound empirical analysis.

[An embarrassed aside: I should point out here that my own personal history is very foreign to the gun issue. I was born in New York City to lower-middle class Jewish family that had no contact with firearms. While I was still a young child our family moved to Canada, where handguns are virtually banned (don't get me started on that...). I had never seen a firearm of any kind until I ventured into a gun store shortly after I moved to George Mason in 1987 – and I was frankly as terrified in that gun store as I would have been in, say, a pit of snakes. I've changed a lot since then, though...]

Back to tort law for my final comment. The New York Times v Sullivan case you cite is in fact quite instructive, but I do not believe that it gets you where you want to go (here's roughly where you wanted to go, if I understand you correctly: the Supremes replaced state defamation law with federal defamation law, and if they could do it legitimately then Congress could have, too; and if state defamation law can be suppressed when 1st Amendment rights are imperiled, then state tort law can be suppressed when 2nd Amendment rights are threatened) . The reason Sullivan won't get you where you need to go is that Sullivan was indeed an illegitimate decision. What the Supreme Court could and should have done in Sullivan was quash the Alabama decision (which had held the Times liable for a huge damage award following publication of an inaccurate political ad targeting a local elected official, despite the fact that virtually no one in Alabama read or was influenced by that issue of the Times) and send it back to Alabama courts for reconsideration in light of Alabama defamation law. State courts declare their Common Law (including the Common Law of defamation), but they may not declare a Common Law that conflicts with the greater Constitution.

An analogy to the issue at hand is useful here. Imagine that a state court decided that the manufacture of firearms was itself tortious, because firearms are "too dangerous." That decision (and, harkening back to my very first posting, I emphasize here that this is a pure hypothetical -- there has never been such a decision, from any state court ) would arguably imperil Second Amendment rights, and the Supreme Court would be authorized to remand it back to the state's high court for a re-determination not incompatible with the Constitution. The Supreme Court would not be authorized to create nationalized tort law from the bench (say, by "declaring" that 20-round magazines are tortious, but production of six-shot revolvers is not negligent). There was, in summary, no need for a federal appeals court to declare and implement a national libel law (as the Supreme Court essentially did in Sullivan and its progeny), and the same objection holds as regards a national tort law. Our federal Constitutional courts of revision have no mandate to violate the federal/state separation of powers. For a complete exposition of this argument, see the excellent piece by Richie Epstein, Was New York Times v Sullivan Wrong, 53 U. Chicago L. Rev. 782 (1986).

What a marvelous dialogue this has been for me, Wally. We have touched so many iceberg tips – from the nature of the judicial function, to the nature of the Common Law, to the grounding of the Second Amendment. This has been a scenic but whirlwind tour, and of course it bears mentioning that it leaves us united on the most fundamental view: that Tort law is in serious need of fixes in America today, and that Tort's malaise is threatening the very existence of the Rule of Law in our country.

This has been my pleasure, Wally.







Obamacare Decision: Reactions, July 2012
Law School Faculty Diversity, May-June 2012
Class Actions, May 2012
Constitutionality of Individual Mandate, March 2012
Human Rights and International Law, February-March 2012
The constitutionality of President Obama's recess appointments, January 2012
Do caps on medical malpractice damages hurt consumers?, December 2011
Trial Lawyers Inc.: State Attorneys General, October 2011
Wal-Mart v. Dukes, April 2011
Kagan Supreme Court nomination, May-June 2010
Election roundtable, November-December 2006
Who's the boss, September 2006
Medical judgement, July 2006
Lawyer Licensing, May 2006
Contingent claims, April 2006
Smoking guns, July 2004

Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.