Overlawyered: Chronicling The High Cost Of Our Legal System

Is litigation the answer to the CPSIA problem?

As anyone reading Walter Olson’s posts and Forbes coverage knows, CPSIA is a bad law, with disastrous effects on retailers and small manufacturers.

It certainly seems unfair that Congress can wipe out thousands of businesses with the stroke of pen. It’s certainly bad public policy: as I have written elsewhere, when legislatures act to retroactively disrupt settled expectations, the effects redound far beyond the targeted industries to create uncertainty throughout the economy.

It’s a jump, however, from “bad public policy” to “unconstitutional,” and I am concerned that I see many lay blogs asserting otherwise. Starting in the 1930s, the Supreme Court has given free rein to Congress and legislatures to engage in economic regulation, even when that regulation has dramatic effects on individuals. In cases such as Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 202 (2002), and Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470 (1987), the Supreme Court signed off on the constitutionality of far-reaching regulations, despite the large economic effect on property owners affected by the laws. While conservative justices and scholars have argued that such “regulatory takings” without compensation violate the Fifth Amendment, their respect for the rule of law and the actual text of the Constitution are pooh-poohed by Democrats as following an esoteric (and fictional) “Constitution in Exile” movement. There are, at most, four justices on today’s Supreme Court that would recognize the doctrine of regulatory takings; that number is not going to grow under President Obama (who has explicitly disclaimed any need to appoint judges who merely “follow the law”) and a Democratic Senate.

There exist public-interest law firms like the Institute for Justice that engage in litigation over economic constitutional rights–and, while they take donations, they do so without charging their clients money. I think litigation would be fruitless with the makeup of the current judiciary, but I acknowledge that IJ does do a good job of putting forward its principles, and often leveraging its litigation into political success.

But it concerns me even more to see a website recruiting victims of CPSIA to send money to a lawyer to bring a lawsuit. The attorney, involved, Michael Kushner, is a run-of-the-mill plaintiffs’ attorney without any demonstrated expertise in Fifth Amendment law, but has offered to take the case for a $25,000 retainer–which is certainly not enough to fully litigate this to the Supreme Court. There is questionable ethics, if not outright fraud, in asking parties to what is most appropriately filed as a Rule 23(b)(2) class action to “file forms” and send money to join–the whole point of a class action is that a representative of a class is named who will act on behalf of parties that haven’t signed up. Moreover, the Equal Access to Justice Act permits attorneys who have won constitutional litigation when the government’s position was not “substantially justified” to collect attorney’s fees. And note that at no point in Kushner’s website or the related blog recruiting members does he spell out a theory of legal victory.

Sending money to a lawyer to litigate the CPSIA is throwing good money after bad. That a law is unsound does not make it unconstitutional and vice versa. The road to solving the problem of the CPSIA is through Congress, either by making Democratic legislators see common sense, or electing legislators who aren’t so willing to sign off on bills constructed by trial lawyers to benefit themselves at the expense of society at large. Spending resources on doomed litigation diverts from the pressure needed to get Congress to change its mind.

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CPSIA: N.Y. Times runs three letters

[Title of post revised to reflect the paper’s printing of two more letters in its online (but not physical) edition on Monday.]

When I blasted the New York Times for its wretched editorial on CPSIA Wednesday, Patrick (SSFC/Popehat) made the following prediction:

Those tempted to write the Times to inform its readers about where this editorial gets it wrong will find that, no matter how many letters in opposition are received, the Times will print exactly one. The Times will also print one letter of thanks, from Greg Packer or someone affiliated with PIRG.

It is too early to say whether Patrick’s prediction will come true [see below for update]; the Times did print one short letter today from Nancy Nord of the CPSC, which fits the scheme, but there’s no way of knowing whether it will return to the subject in days to come with a letter supporting its editorial view or additional letters from critics. Before according the Times’ editors any credit for running this one, remember that having called for the removal of a named federal official, they really had to publish a letter from her in response; today’s letter as one would expect is mostly devoted to defending her record while also containing exactly one sentence disputing the Times’ ludicrous and much-derided assertion that fears of harm to small businesses are “needless”.

For the ordinary Times reader who knows little about this issue and is glad to skip to the next item, it will be easy to dismiss a short letter from a Bush appointee seeking to defend her managerial record. What else would you expect a Bush appointee to do? It would be a different matter — something to pause at, maybe ask questions — if a challenge to the Times’ assertions were to appear from wooden toymakers in New England, from apparel crafters in New York City’s garment district, from people who manage thrift and consignment stores, or from someone who deals in used children’s books. But — so far, at least — Times readers have been spared the danger of hearing any such discordant voices.

Update Monday a.m.: the Times online edition, though not the physical paper, runs two more letters today, and in doing so slightly (but only slightly) falsifies Patrick’s cynical prediction. The letter favorable to its own position, and ascribing no fault to the law other than its lack of tougher enforcement, comes not from PIRG but from David Pittle of Consumers Union (better prestige that way). And the Times also prints a mildly critical letter from the Toy Manufacturers of America, a group that 1) endorsed the law as a matter of general principle; 2) is often described in press coverage as closely aligned with giant toymakers who can live with its terms; 3) is cautious if not bland in its objections (“unrealistic”, “unwarranted”, etc.); 4) from its name and niche, reinforces the misimpression that “toys” are mostly what are at stake here, rather than a far wider range of children’s products ranging from books to apparel to minibikes. For all readers can discern from this TMA letter (and we do not, of course, know what the Times chose to condense or cut) the main economic costs of CPSIA might take the form of a quarter of down profits at Mattel or Hasbro. I have more to say in this earlier post about the tendency of CPSIA advocates to designate large and politically cautious industrial concerns as “the other” side for the press to consult, even though their interests and viewpoints may diverge widely from those of the smaller and family firms that dominate much of the children’s product trade. As of Monday, persons whose sole news source is the New York Times (especially the paper version) still have no idea that the law imposes any unusual burdens on this latter group.

Public domain image courtesy Grandma’s Graphics, Anne Anderson.

writelettersallyouplease

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David Liss vs. my NYTBR review

It may be recalled that in a recent review for the Sunday NYT I didn’t much care for David Liss’s new historical thriller about the Alexander Hamilton era, The Whiskey Rebels. This morning author Liss makes clear in a letter in the Times that he didn’t much care for my review. He corrects me on one instance of badly misplaced snark, in which I took one of his characters’ references to “Macaulay” as an anachronistic reference to the Victorian Macaulay, when his intended reference was to the histories of Catherine Sawbridge Macaulay, which were popular among colonial American readers. I should have checked and caught that, which is my fault. More broadly, he thinks I couldn’t have approached his novel with an open mind because the politics he wears on his sleeve differs sharply from mine. The thing is, I have no problem recommending works whose politics I find wrongheaded when they offer up plausible dialogue, satisfying plot turns, witty observation and narrative, and so forth. It’s when they don’t that the buzz of political axe-grinding begins to obtrude.

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CPSIA chronicles, February 21

digdeeper

  • For the Handmade Toy Alliance, Jill Chuckas responds to the NYT’s ever-so-clueless CPSIA editorial. The Alliance also recently published a Myth vs. Fact sheet. Among the points addressed: “Myth: Violations of the CPSIA this year will not result in penalties.” “Myth: Further clarification is all that is needed.” and “Myth: Products Tested to European Union Standards will Satisfy New US Standards”. And did you know it’s now unlawful to donate to a charity (let alone sell) a children’s item with paint on it, even if you painted it yourself using lead-free paint, if you haven’t put it out for third-party testing?
  • It’s my impression that beyond the precincts of the “consumer”/Litigation Lobby groups, the bill’s original sponsors on Capitol Hill, and of course the New York Times, it’s getting harder to find all-out boosters of the law who still maintain there’s nothing wrong with it. On Tuesday, however, the Houston Chronicle did publish a perfectly inane editorial taking this view, the refutation of which is left as an exercise to the reader.
  • Deputy Headmistress at Common Room has taken the lead in blogging many angles of the law and her latest must-read examines the legislative history of CPSIA’s enactment, including the roles of Public Citizen, the Consumer Federation of America, PIRG, and Sen. Mark Pryor (D-Ark.), as well as business groups like NAM, the latter of which warned against some of the law’s more extreme provisions as placing various advantages into the hands of plaintiff’s lawyers. This makes a good jumping-off point for further research on whether the ongoing CPSIA calamity should truly be regarded as a case of “unintended consequences” and, if so, unintended by whom. One tidbit among many: she says that Travis Plunkett, testifying for the Consumer Federation of America, spoke in favor of rules (not adopted) under which “all product sellers [would] be required to post bonds sufficient to cover the costs of a recall in advance of any ‘potential’ recalls.” Typical New York Times coverage of the day, by the reliably pro-regulation Stephen Labaton, can be found here.
  • Tom Pearson, Punditry by the Pint:

    I’ve written before how law and regulation can be an insurmountable impediment for the weakest, poorest and most powerless in our society. In this case at least we will partly realize what we’re missing when the great independent thrift and book shops start going under and fewer people make handcrafted clothing and toys for children. Still, we’ll never see what could have been in this small niche of our largely self-created social order. This is how the American dream of hope and opportunity dies, one well-intentioned, but misguided rule at a time.

    Life is a messy and wonderful experience. If you try to hermetically seal life, even children’s lives, from risk, you will kill all that messiness and creativity that makes life worth living. Yes, risk can be damaging, painful and even fatal, but, in this case, the cure is worse than the disease.

    Another libertarian view from J.D. Tuccille in the Examiner: “In the name of the children, we cut the kids off from their own history.”

  • Yesterday (Friday) the Consumer Product Safety Commission published a bundle of letters it received pro and con on proposed exemptions from the lead rules. Plenty of raw material here for CPSIA-watchers (long PDF file);
  • Since many people these days visit Overlawyered for the ongoing coverage on this topic, I’ve added a new display on the rightmost sidebar (under the red teddy-bear-as-St.-Sebastian icon) with sub-category tag links for libraries, apparel and needle trades, toys, and so forth. I’ve populated these categories with old posts somewhat in haste, so if you see omitted posts that aren’t tagged with relevant labels, give me a shout.

Public domain image: Grandma’s Graphics, Ruth Mary Hallock.

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