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Brad Henry
Brad Henry
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Tort liability and safety regulation are paired sentries standing guard over public safety. Despite expansions and contractions in the U.S. Supreme Court’s view of preemption over the past two hundred years, state tort law has traditionally served as a form of safety regulation complementary to the efforts of government agencies charged with regulating the safety of industries like transportation, public utilities, consumer products, automobiles and pharmaceuticals. See, e.g. Wyeth v. Levine, 555 U.S. 555, 574, 578-579 (2009); Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 451 (2005) (tort suits “serve as a catalyst” that aid in exposing new dangers, prompting industries and agencies to improve safety). That protection is strongest when both guards are independent, vigilant and unfettered. It is obviously weaker when one of the guards has been captured. And, it is weakest when the captured guard not only turns a blind eye to safety concerns, but turns on its fellow guardian.

“Regulatory capture” has been with us almost since agencies were created to regulate. The phenomenon, best examined by Nobel laureate economist George Stigler in 1971, is the process by which regulatory agencies inevitably come to be dominated by the very industries they were charged with regulating. It occurs when an agency, formed to act in the public’s interest, eventually acts in ways that benefit the regulated industry rather than the public. As explained by privacy advocate, Bruce Schneier, if an:

“agency exists only because of the industry, then it is in its self-preservation interest to keep that industry flourishing. And unless there’s some other career path, pretty much everyone with the expertise necessary to become a regulator will be either a former or future employee of the industry with the obvious implicit and explicit conflicts. As a result, there is a tendency for institutions delegated with regulating a particular industry to start advocating the commercial and special interests of that industry.” See, Schneier, B., Liars & Outliers: Enabling the Trust that Society Needs to Thrive (New York: John Wiley & Sons, Inc., 2012), p. 204.

The broader benefits and costs of tort litigation may be debated, but there is little question that litigation can serve as a powerful force in promoting public and consumer safety. This is especially true where proper regulation is effectively absent. See generally, Vernick, J.S., Role of Litigation in Preventing Product-related Injuries, 25 Epidemiologic Review, 90-98 (Oxford Univ. Press, 2003) (http://epirev.oxfordjournals.org/content/25/1/90.full). In fact, as Vernick reports, notwithstanding other strongly-held negative views about litigation, business leaders in nearly half the product manufacturers in a major study admitted that their companies improved product safety and warnings as a direct result of actual experience with liability. See, McGuire EP. The Impact of Product Liability, New York, NY: The Conference Board, 1988. So, whatever else one may say about tort litigation, it is difficult to challenge its important role in improving product safety. Moreover, as guardians of public safety, many tort lawyers consider it one of their solemn duties.

At times, however, the paired guardians of litigation and regulation come to blows. In a wrongful death case I recently handled against a large utility company, the regulating agency knew with certainty of the utility’s various, quite specific, acts of negligence that led directly to truly horrible injuries and death. However, at what was supposed to be a neutral inspection of materials involved in the tragedy, senior agency officials repeatedly holed-up with the utility and its experts, behind closed doors, while other interested parties waited outside. When the agency’s report finally and silently appeared – years after the death and on a Friday evening before a holiday weekend – not a word had been written about the utility’s misconduct. Not a fine. Not a censure. Not a word.

Ultimately, the truth came out through litigation, the family was compensated and significant safety improvements were initiated. But, as a result of that frustrating experience, I concluded that steps must sometimes be taken to try and rescue a captured regulatory agency from itself, often in the midst of litigation. On occasion, the brightest spotlight must be focused, not merely on the company allegedly responsible, but on the agency to help it resist inherent temptations to sneak off with the company it is supposed to be regulating. Efforts should be considered to help the agency resist abandoning its duty to guard the public interest. Here are some rescue efforts to consider:

– at the earliest chance, identify your client to the agency, in writing, as an “interested party;”
– in every contact with every agency official, document every word;
– use early, repeated public record requests to shine light on company/agency interaction;
– video everything, including departures for private meetings between company and agency;
– where appropriate, consider involving the media to review concerns over agency collusion;
– if possible, bring the Court into the discussion early to oversee inspections and inquests;
– challenge, in writing, every instance where the agency has overlooked or ignored facts;
– plan for depositions not only of company officials, but also of their agency counterparts;
– ask for phone records, from the company, from the agency, from those most involved;
– ask for email records, from the company, from the agency, from those most involved;
– resist the fear that an agency will find against you for any of this – it may well anyway;
– when the matter concludes, raise agency conduct with the governing political interests.

I believe that individual public servants who dedicate themselves to regulatory work usually try quite hard, as individuals, to act in what they feel is the public’s interest. However, the temptation within the agency as a whole to toe the “company line,” to “protect their industry,” rather than the public to whom their duty is actually owed, is just too great a force for many agency officials to overcome. So, sometimes, we must help them. Because, we are guardians, too.