The American regulatory system is unique in that it expressly relies on a diffuse set of regulators, including private parties, rather than on a centralized bureaucracy for the effectuation of its substantive aims. In contrast with more traditional conceptions of private enforcement as an ad hoc supplement to public law, this Article argues that private regulation through litigation is integral to the structure of the modern administrative state. Private litigation and the mechanisms that enable it are not merely add-ons to our regulatory regime, much less are they fundamentally at odds with it.
Yet, mechanisms of enforcement attendant to private suits are being restricted in numerous ways, and on numerous fronts, in the form of prohibitions on the use of the class action device, the recalibration of procedural mechanisms through private contract to discourage suit, the heightening of pleading standards, and the preemption of state law causes of action, just to name a few. Although in some instances these restrictions may provide necessary correctives to the system of private litigation in particular and to the functioning of overall regulatory schemes more generally, in their broad-sweeping forms, they threaten to systematically undermine substantive regulatory law. Yet the larger regulatory consequences of these efforts receive inadequate attention.
This Article thus offers a more systemic view of these private enforcement mechanisms by providing elements of a conceptual framework for tailoring mechanisms of private enforcement to the contours of particular regulatory regimes. This framework seeks to effectuate and extend the systemic interests in aligning private enforcement mechanisms with the regulatory goals of particular areas of substantive law. At the same time, it seeks to balance the value of such mechanisms with concerns that they will, in some substantive regimes, generate undesired regulatory consequences. Indeed, this framework highlights the need, in some instances, for limitations on the use of private enforcement mechanisms, as well as the need, in other circumstances, for the creation of new mechanisms that are more carefully calibrated to address potential pathologies. This framework is therefore preferable to one-size-fits-all, abstract approaches to a number of seemingly disparate debates regarding restrictions on private enforcement mechanisms across our legal landscape. By offering sounder analysis of, and adding conceptual clarity to, various debates about these mechanisms, this framework offers the hope of eventual resolution of these seemingly intractable disputes. This framework also seeks to provide guidance to judges, agencies, and legislatures in the task of tailoring mechanisms of private enforcement to achieve public regulatory objectives.
TABLE OF CONTENTS INTRODUCTION I. THE AMERICAN SYSTEM OF DIFFUSE REGULATION: PRIVATE LITIGANTS AS REGULATORS A. A Brief History of the Role of Private Enforcement in the American Regulatory State B. The Functional Role of Private Enforcement in the American Regulatory State 1. Private Litigants as Primary Regulators 2. Private Litigants as Supplementary Regulators II. EFFORTS TO CURTAIL MECHANISMS OF PRIVATE ENFORCEMENT A. Tort Reform Efforts B. Restrictions on the Class Action Device C. Procedural Private Ordering to Discourage Suit D. Heightened Pleading Standards E. Preemption of State Law Claims III. A CONCEPTUAL FRAMEWORK FOR INTEGRATING PRIVATE MECHANISMS OF ENFORCEMENT INTO REGULATORY REGIMES A. Allocating Enforcement Mechanisms to the Regulator with Superior Information B. Tailoring Private Enforcement Mechanisms to Remedial Gaps and Remedial Overkill C. Preserving Private Claims When Needed to Address Harm that Tends Not to Be Prevented by Ex Ante Regulation D. Providing Private Enforcement Mechanisms in the Face of Public Regulatory Failure CONCLUSION INTRODUCTION
Americans have a love-hate relationship with private enforcement of their laws. On the one hand, our system often relies heavily and explicitly on enforcement by private parties to achieve public regulatory objectives. Whereas European nations regulate the conduct of their citizens largely using ex ante regulations promulgated by a centralized bureaucracy, (1) we frequently rely on ex post law enforcement, much of which results from private suits rather than from governmental actions. (2)
At the same time, Americans have a great distrust of private regulation in general and of private litigation in particular. Various scholars and practitioners criticize its excesses and inefficiencies. (3) Courts, Congress, private parties, and administrative agencies seek to limit private enforcement's role and prevent its abuses. (4) Especially in the current political environment, measures to curtail the mechanisms for pursuing existing private rights of action are widespread, sweep broadly, and emanate from a number of fronts. These include, for instance, legislative and judicial reform of the mechanisms for vindicating state tort law claims, limitations on the use of the class action device, the robust enforcement of contractual provisions through which defendants eliminate or discourage private lawsuits, the imposition of a heightened pleading standard for all cases brought in federal court, and increased federal preemption of state law claims. (5)
This Article argues that this intense focus on the pathologies of private enforcement mechanisms in isolation tends to discount across the board the structural role these mechanisms play within regulatory regimes in the American system. (6) Regulation of wrongdoing by private parties is not merely an ad hoc, "private law" supplement to public enforcement by regulators. (7) It is often an institutional feature of our public law (8)--one whose contours need to be better understood and rationalized, and one whose enabling mechanisms ought to be appropriately tailored to the achievement of public regulatory objectives. The goal of this Article is to analyze as a conceptual matter the structural role that private parties, as litigant regulators through various mechanisms of enforcement, play across a number of substantive areas, and to examine the implications of that role both for particular issues before the courts and for the regulatory state more generally. (9)
Legal scholars have observed that private litigation serves as a complement--often a crucial one--to public enforcement of various laws, (10) and that restrictions of the mechanisms that make such litigation possible may, as a general matter, lead to undesirable consequences for the vindication of substantive rights or the deterrence of socially undesirable conduct. (11) Indeed, our system of regulation is only as good as the enforcement mechanisms underlying it. (12) A systematic effort to rationalize the role of private enforcement mechanisms and to present a conceptual framework for tailoring such mechanisms to the needs of particular regulatory regimes is needed. This Article takes initial steps in this direction by offering a more systematic account of private regulation's role in the American regulatory system and by presenting elements of a conceptual framework for evaluating the extent to which the preservation or modification of existing private enforcement mechanisms, or the design of new mechanisms, may or may not be needed within a specific regulatory scheme.
By offering a more unified view of the structural role of private enforcement mechanisms within our regulatory system, this Article reveals that a number of seemingly disparate doctrinal and scholarly debates regarding restrictions on the use of private enforcement mechanisms are in fact dimensions of a common problem: the degree to which carefully tailored mechanisms will better effectuate overall regulatory objectives and ensure meaningful regulation of conduct deemed wrongful by appropriate lawmaking bodies. (13) The tendency has been to evaluate these debates in isolation from one another and without attention to the structural role that these mechanisms play in a particular regulatory framework. The essential goal of tailoring private enforcement mechanisms to the specific exigencies of particular areas of law in order to enable private regulation to better serve the structural role it has been given in the American regulatory state is often lost from sight. (14)
This Article proceeds in three parts. Part I traces the historical origins of the United States' diffuse system of regulation and the role private-party litigants play as regulators in that system. It also explores the American regulatory system's functional dependence on private regulation and the mechanisms that enable it. As Part II explains, however, the country is flooded with efforts to curtail these mechanisms of enforcement. Although such efforts, in many circumstances, may provide necessary correctives to the litigation system, they may pose serious problems in other contexts when they threaten to undermine the achievement of regulatory objectives.
Two vital implications of private ex post enforcement mechanisms' role in our regulatory structure are, first, the need to identify the circumstances in which such mechanisms are more or less important to the functioning of a given regulatory scheme and, second, the need to design and calibrate appropriate mechanisms to facilitate that enforcement. Part III provides elements of a conceptual framework both for evaluating the importance of and for designing appropriate private enforcement mechanisms within a given regulatory scheme.
In particular, this Part provides four operational criteria that seek to better guide courts, legislatures, and administrative agencies in tailoring mechanisms of private enforcement to the particular exigencies of the regulatory scheme and the potential private-party regulator. First, all things being equal, enforcement mechanisms should be...