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Tort Lawyers Take Over the American Law Institute

Wall Street Journal, June 29, 2017

By: Tiger Joyce 

You’ve probably never heard of the American Law Institute, but since 1923 the Philadelphia-based organization has exercised more influence on judge-made common law than any other private institution. Now the ALI is changing its mission in ways that should trouble every business, consumer and taxpayer in America.

The ALI’s website explains that it was founded by a group of judges, lawyers and professors troubled by a “general dissatisfaction with the administration of justice” and an “uncertainty” that “stemmed in part from a lack of agreement on fundamental principles of the common law” across states. The institute sought “to promote the clarification and simplification of the law and its better adaptation to social needs, to secure the better administration of justice, and to encourage and carry on scholarly and scientific legal work.”

That’s certainly a worthy mission, and the ALI’s most influential work has come in the form of periodic publications known as Restatements of the Law. These descriptions of existing law were soon relied on and trusted by judges, lawyers, legal scholars and law students for thoughtfully objective analysis. The ALI earned a reputation for being above the partisan fray.

That changed in 2009, when the ALI published the first volume of “Restatement of the Law Third, Torts: Liability for Physical and Emotional Harm.” For the first time in the institute’s history, its restatement went beyond reviewing the law and recommended fundamental change: an unprecedented expansion of landowners’ duty of care to all visitors, including unwanted trespassers.

The following year, Trial Magazine, published by a trade group for plaintiffs lawyers, ran an article calling attention to the new “restatement.” Tellingly, one of the article’s co-authors had also drafted the ALI restatement and thus was expertly able to cite promising cases in Arizona and Iowa, and otherwise provide detailed guidance for plaintiffs lawyers looking to forge a lucrative new line of trespassers’ lawsuits against property and business owners.

This new coziness with the trial bar marked a decided turn away from the ALI’s largely objective past and toward a future of special-interest advocacy. Such advocacy was palpable at the ALI’s annual meeting late last month. Up for discussion were two draft restatements, concerning the law of liability insurance andconsumer contracts. These, respectively, could reshape fundamental aspects of the law and further clog civil court dockets with litigation at significant expense to businesses, customers and nearly everyone else.

Only an 11th-hour letter to ALI leadership from many corporate general counsel, expressing “strong concern about the recent direction” of the organization, managed to postpone the final adoption of the liability-insurance restatement at the annual meeting. The letter noted the draft text’s potential to undermine the “plain meaning” of contract terms, disproportionately increase penalties for alleged breach of duties, and subject insurers to broad extracontractual damages for alleged “bad faith.”

Even more troubling is the pending restatement on consumer-contract law. Leaving aside that there has never even been a recognized body of “consumer contract” law—there is only contract law—the three law professors charged with drafting this restatement are effectively ignoring the Supremacy Clause of the Constitution, much U.S. Supreme Court precedent, and the 92-year-old Federal Arbitration Act. They are trying to convince state courts that virtually all arbitration clauses in consumer contracts are “unconscionable” and therefore unenforceable, clearing the way for still more trial-lawyer-enriching class actions.

Meanwhile, the American Tort Reform Association and our state-based allies will do all we can to moot the unaccountable ALI’s radical flights of legal fancy. Since 2011 we’ve driven enactment of bipartisan legislation in 23 states that pre-empts any additional liability for trespassers’ injuries. We’ll launch comparable campaigns to contain future threats.

Although ALI has as much right as other interest groups to advocate for changes in the law, it is no longer due special deference from judges. Justice Antonin Scalia said as much in a 2015 opinion. The authors of ALI restatements, he observed, have “over time . . . abandoned the mission of describing the law, and have chosen instead to set forth their aspirations for what the law ought to be.”

Aspirations for American business leaders must include stopping the ALI’s liability-expanding agenda and returning the organization to the laudable scholarship and evenhandedness of its past. Business-friendly members of ALI must become more active and recruit more members like themselves. And unless ALI leaders wish to risk irrelevance should their organization be wholly captured by plaintiffs lawyers and reflexively antibusiness academics, they would be wise to invite and welcome broader participation in their underreported proceedings.

Mr. Joyce is president of the American Tort Reform Association.