Fire & Smoke: Government, Lawsuits, and the Rule of Law

By Michael I. Krauss

The state of Mississippi’s lawsuit against tobacco companies in 1994 was quickly emulated by more than a dozen other states and then the federal government. Not to be outdone, more than a dozen cities and the federal government have followed the City of New Orleans’s lead and sued gun manufacturers. Do these lawsuits signal new directions for more effective public policy or a new and dangerous trend whereby governments use tort law to achieve public policy objectives they were unable to accomplish legislatively?

In this new policy report, so-called government “recoupment” lawsuits are carefully examined and found to be flagrant abuses of the constitutional separation of powers, seriously undermining over two hundred years of common-law torts adjudication.

Author Michael Krauss, a leading legal scholar on the relationship between tort law and personal freedoms, systematically dissects the tobacco and firearm recoupment lawsuits. He shows how such lawsuits betray every criterion of sound, effective, and just tort law. The lawsuits against gun manufacturers can show no damages, no proximate causation, and no wrongdoing. Similarly, governments have no direct damages to claim against tobacco manufacturers and cannot legally stand in the place of individual smokers or their families.

Fire & Smoke concludes that recoupment lawsuits are incompatible with civil freedoms, representative democracy, and the rule of law upon which institutions of a free society depend.

• Language: English
• Publisher: Independent Institute
• Release date: Jun 1, 2000
• ISBN: 9781598132564

Michael I. Krauss

Michael I. Krauss is a professor of law at George Mason University, where he teaches torts, product liability, legal ethics, and legal philosophy. In addition to his teaching and research functions, he is president of the Virginia Association of Scholars and a member of the Board of Governors of the Education Section of the Virginia State Bar. He obtained his B.A. cum laude from Carleton University in Ottawa and his law degree from Quebec’s Universite de Sherbrook. He obtained his LL.M. from Yale Law School and completed his doctoral residency as the law and economics fellow at Columbia Law School. He lives in Arlington, Virginia.

Book preview

FIRE & SMOKE

GOVERNMENT, LAWSUITS AND THE RULE OF LAW

Michael I. Krauss

Copyright © 2000 by The Independent Institute

The Independent Institute

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All rights reserved. No part of this book may be reproduced or transmitted in any form by electronic or mechanical means now known or to be invented, including photocopying, recording, or information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review.

ISBN: 0-945999-82-8

Published by The Independent Institute, a nonprofit, nonpartisan, scholarly research and educational organization that sponsors comprehensive studies on the political economy of critical social and economic issues. Nothing herein should be construed as necessarily reflecting the views of the Institute or as an attempt to aid or hinder the passage of any bill before Congress.

1. Introduction

Private Ordering v. Public Ordering: A Primer

2. The Firearms Lawsuits

Basis for the Suits

The Legal Flaws of the Firearms Suits

Postscript on Gun-Related Violence

Should Gun Makers Be Worried?

3. The Tobacco Lawsuits

The Illusory Underpinnings of the State and Federal Lawsuits

The Illegality of the State Tobacco Suits

The Outrage of the Federal Tobacco Suit

4. Conclusion

Public Ordering Alternatives

Collateral Damage

Conclusion

Notes

Bibliography

About the Author

Government lawyers suing corporations in tort, as a solution to perceived social problems, are subverting our legal institutions and the rule of law.

For many readers, the previous sentence may seem a contradiction in terms. One might think that government creates all law—so how can government suits violate the rule of law? Isn't one of government's jobs to root out and repress maleficent behavior? Don't the recent lawsuits against tobacco companies, firearm makers, paint manufacturers and the like serve that very purpose? And courts will dismiss the lawsuits if they are ill-founded, won't they? So what harm can their filing cause?

As this Independent Policy Report will show, government behavior can indeed be inimical to the rule of law. The recent so-called recoupment suits, involving government demands for reimbursement of social outlays allegedly brought about by negligent manufacturers, are not merely destructive of the tort law they profess to apply: they are injurious to our entire legal structure.

From the Civil War to the Civil Rights revolution, American society has weathered several crises of constitutional law. Attorney General Reno and her state and municipal counterparts, however, have provoked what may be our first crisis in tort law. They have attempted to transmute tort law, a fundamental common-law bastion of our liberties. Our legal system's rejection of this mutation is vital to the preservation of these liberties.

To understand the gravity of this unprecedented attack on tort law, it's important to grasp how tort law fits in the legal order of a society of free and responsible individuals. To see this, in turn, it's vital to understand the differences between the two basic types of legal rules in a free society: rules of private ordering and of public ordering. This Policy Report will briefly describe these differences, then situate tort law as an intrinsic component of private ordering.

The Report will then examine government recoupment litigation. It will focus on the municipal (and forthcoming federal) firearm litigation, and on the state and federal tobacco lawsuits.¹ It will examine the basis for the recoupment suits and will show why they denature tort law. It will canvass the effect of this abuse on our legal structure. In closing, the Report will suggest what we can and should do to revive tort and the rule of law.

Private Ordering v. Public Ordering: A Primer

Public law, involving relationships between citizens and the state, is all the rage. Constitutional litigation makes headlines, as it should. And criminal trials are often appropriate front-page fodder. It is curious, though, that in a free society like ours private law issues are not more widely recognized as vital. For private law (roughly, rules regulating the allocation of rights and obligations by citizens) and private ordering (the possibility for people to self-determine through private law without direct state involvement) are what distinguishes free societies from totalitarian ones. All countries have public law institutions. But only in free countries does private law govern the acquisition and exchange of rights. It does this by allowing citizens to transfer risks, voluntarily through contract law and involuntarily for two reasons: when one wrongfully causes harm to another (tort law) and because one has family obligations.²

Tort law, which assigns private obligations to wrongdoers