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Legislating in the courtroom.

Article Excerpt
REGULATION BY LITIGATION

By Andrew Morriss, Bruce Yandle, and

Andrew Dorchak

282 pages; Yale University Press, 2008

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From time immemorial to the 20th century, litigation was about settling a dispute between two parties. A sued B to make him pay for damage, to perform a contract, or to stop B from doing something harmful to A. In the last few decades, however, litigation has turned into a tool of social policy, used by government agencies or private activists in an effort to get courts to rule in some way that doesn't merely settle a dispute, but makes new law. Activists love this new tool. Sometimes it's effective when legislative bodies or administrative agencies seem to move too slowly. Activists need only come up with a sufficient budget for the legal expenses and find a friendly judge. This approach can also be very lucrative.

The authors of Regulation by Litigation, however, take a dim view of this new tool. Andrew Morriss, Bruce Yandle, and Andrew Dorchak (who are, respectively at the University of Illinois, Clemson, and Case Western Reserve) write:

What is the public cost-benefit balance for regulation-by-litigation? From the public's perspective, there are no benefits to regulation-by-litigation compared with regulation-by-rulemaking or regulation-by-negotiation, and there are substantial costs.

The book defends that claim, built around three case analyses.

Before launching into the analyses, the authors provide the reader with a useful overview of our regulatory processes, and they present five theories about regulation. This is crucial information for understanding the book's arguments. Congress and state legislatures have chosen to dele gate most regulatory power to administrative agencies. The agencies can engage in rulemaking, which is characterized by notice to the public of the agency's intent to take action on some issue, followed by a period for public comment on the proposed rule, a requirement that the agency respond to at least some of the comments,...

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