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Q&A with Prof. Stephen Burbank: "Procedure is Power"

July 18, 2011
Stephen Burbank
Stephen B. Burbank
David Berger Professor for the Administration of Justice

In July, Stephen Burbank, the David Berger Professor for the Administration of Justice at Penn Law, will be a featured speaker at the Fourteenth World Congress of the International Association of Procedural Law in Heidelberg, Germany, where he will present a paper on private enforcement of statutory and administrative law, co-authored with Sean Farhang of the University of California, Berkeley, and Herbert Kritzer of the University of Minnesota.

Burbank, who serves as a general reporter for one of the main sessions in Heidelberg, spoke with the Law School’s Office of Communications about his research, differences in the use of private enforcement in the U.S. and other countries, and how procedure is used by Congress and the Supreme Court to exercise power.

Penn Law (PL):  What is the focus of your paper, and how did it come about?

Stephen Burbank (SB):  I was asked to serve as a general reporter by the IAPL conference organizers. I decided that the subject was so complex, and so clearly amenable to interdisciplinary and empirical perspectives, that I needed co-authors. Both of my co-authors are political scientists and empiricists.  It is interesting that the IAPL, which is dominated by scholars from countries that traditionally have avoided private enforcement, would devote a major session to that topic. The organizers made it clear to me that their real interest is finding out more about private enforcement in the United States.

It took a while for me to figure out what they meant by private enforcement – there is considerable fuzziness and disagreement among legal systems as to what private enforcement is. What the organizers were referring to is the so-called private attorney general rationale. In most countries from the civil law tradition, which includes most of Europe, the whole notion of private enforcement is an oxymoron because they conceive a much more formal, strict divide between what is public and what is private, and what is suitable for public regulatory activity and what is suitable for private litigation. 

In America, we don’t have that strict view of the public-private dichotomy. In the beginning of our paper, we devote considerable attention to this question of definition.  We conclude that it probably suffices to think about private enforcement of statutory and administrative law as a phenomenon that results when a legislature determines that there is an unremedied, systemic problem, and that incentives should be provided for privately- initiated litigation in place of or in addition to litigation brought by the executive branch or administrative proceedings. 

PL:  Why is this question of definition so important from a comparative perspective?

SB:  If a legislature does not define private enforcement regimes broadly, chances are that it will end up with what one commentator rather vividly described as “beautiful cars without engines.” That was a description of countries, including Italy, that have turned to something like our class action but without dealing with the problem of cost shifting. In most of the rest of the world, the loser in litigation has to pay some or all of the winner’s attorneys’ fees – the so-called “English Rule.”  That is a fairly robust deterrent of frivolous litigation, but it is also a fairly robust deterrent of litigation by those who are risk averse, who do not have the capacity to pay the other side’s attorneys’ fees if they lose. Class actions will not get off the ground unless the English Rule is relaxed (or even more radical changes in litigation finance are instituted).  

A legislature that is sincerely interested in addressing unremedied systemic problems in whole or part through private enforcement needs to consider all of the rules that could affect the willingness and ability of private parties actually to enforce the law, including the remedies that are available.

Note the emphasis on institutional choice. One of my co-authors, Sean Farhang, has done important work on private enforcement at the federal level. Searching for good indicators of congressional interest in private enforcement, he focused, very creatively, on two types of provisions. First are statutory provisions that asymmetrically authorize the award of fees to a prevailing plaintiff.  The normal rule in this country is that each side bears its own attorneys’ fees.  We use the “American Rule” as opposed to the “English Rule” that I previously mentioned and that is used almost everywhere else. The American Rule can be changed by statute, however, and Farhang thought that such provisions would be one very good indication of congressional interest in private enforcement. Second are statutory provisions authorizing multiple damages - like the Sherman Antitrust Act, which provides for treble damages - or statutory damages, which are damages that a prevailing plaintiff can receive without proof of actual damages.

PL:  And what methodology was used?

SB:  Farhang looked at all federal statutes from 1887 to 2004 that have either or both of those two types of provisions, creating a database of private enforcement regimes. He was interested in testing empirically the hypothesis that, just as Congress may seek to mitigate administrative subversion of statutory norms by writing more specific statutes, so Congress - or a legislature more generally - may want to use private enforcement, either solely or in combination with public enforcement, as a hedge against subversion of legislative preferences by an administrative agency controlled by an ideologically distant executive.

His analyses support that hypothesis, indicating that resort to these techniques of statutory fee shifting and/or multiple damages is very strongly associated with periods of divided government where one party controls Congress and the other controls the executive branch.  In addition, he did some really interesting qualitative social science focusing on the Civil Rights Act of 1964 (and associated legislation in 1976 and 1991) that also supports the hypothesis.

PL:  How else did you and your co-authors approach this topic?

SB:  Having defined the phenomenon of interest, we look to the general legal landscape that may affect both a legislative choice to use or not use private enforcement and the efficacy of a private enforcement regime. This includes the general rules on procedural steps like pleading. Pleading rules determine how specific a plaintiff has to be in order to remain in court and have access to discovery. It so happens that the U.S. Supreme Court has very recently - without admitting that it was doing it - judicially amended the rules on pleading in a way I believe will make it much harder for some plaintiffs to survive a motion to dismiss their complaints -- to get to the discovery phase where they have the opportunity to secure the information necessary to establish the defendant’s liability. That should be of general concern; from the perspective of private enforcement, the Court’s decisions make it harder for people to do what Congress wanted them to be able to do.

The rules in question went into effect in 1938. It is reasonable to assume that after a certain point -- say 1957, when the U.S. Supreme Court resoundingly approved of the system of so-called notice pleading -- every Congress that included private enforcement incentives in a statute was relying on these rules. 

Thus, it is a very broad subject because, properly viewed, it requires attention not just to the specific provisions in a statute that are indicators of the legislature’s interest in private enforcement, but to many other rules. As my comments indicate, these “other rules” include both those that are part of the general procedural landscape, like pleading, and those that are much harder to categorize, like cost shifting. Both types can determine whether private enforcement is effective. 

In the paper we provide these details about the American general landscape and some comparative information from England and Wales, Australia, and Canada. We also provide two case studies,  one dealing with federal anti-discrimination law, and the other with unfair and deceptive practices, which are largely governed by state law. Although we were not able to gain much comparative traction on private enforcement between the United States and, say, England and Wales, we do think that there are some very interesting possibilities with respect to the European Union. 

Stephen Burbank
Stephen Burbank in the classroom

PL:  In what respect?

SB:  Most countries in Europe have parliamentary systems that in theory at least are immune to the institutional dynamics that are associated with private enforcement in the United States - at least at the federal level. Yet, while doing the research for this paper, it became clear that in some areas like consumer protection, antitrust, and securities much of the push for private enforcement in Europe comes about either directly or indirectly as a result of initiatives by the European Union. As a lawmaking body the EU may find private enforcement very attractive because of concerns about defection by member states. In other words, the EU may replicate the separation of powers dynamic. The EU has some direct lawmaking capacity, and it has the power to influence developments even in areas where member states retain lawmaking capacity. If a member state was not particularly anxious to protect consumers, it could subvert an EU directive to do so. 

But if you provide for private enforcement by individual consumers, you can get around that sort of defection. Thus, there is a dynamic of dispersed power given the structure of the EU, both horizontally and vertically, that may be something like what we see in our federal government. And so the EU may provide an institutional explanation for some of the interest that we’re seeing in private enforcement.

In addition, let’s face it, private enforcement is perceived to be less expensive. For France, for example, to abide by an EU directive to better protect consumers the old-fashioned way would portend the expenditure of a lot of resources on central administrative enforcement. So, it becomes very attractive, at least in the short term and on a narrow definition of costs, to use private enforcement, particularly in countries that rely on costs paid by private parties to fund their courts.

Historically in the U.S., one reason why Republicans have been willing to go along with private enforcement is that it avoids the problem of big government. One of the sociological truths about Americans is that we don’t like bureaucratic authority and we don’t like taxes. If you sincerely want effective administrative enforcement of federal law, you will need bigger administrative agencies funded, presumably, by tax dollars.

PL:  What are some of the other key findings from the paper?

SB:  Farhang’s previous work noted the puzzle, from an institutional perspective, of the judiciary’s role in private enforcement. Providing incentives for privately-initiated enforcement could be deemed another way of avoiding subversion – but only if Congress is confident about the politics of the judiciary. For example, in the early 1970s, a Democratic member of Congress was likely pleased to have judges appointed by Democratic presidents presiding over Title VII litigation, rather than having it enforced by the Equal Employment Opportunity Commission (EEOC), which was under the thumb of President Nixon.

But what if the complexion of the judiciary changes, as of course it has in this country since the 1970s, becoming more conservative? The thought might be, well, at least you have some protection because, after all, this is not judicial enforcement. In the paper we argue those who have described the phenomenon as judicial enforcement are making a mistake, because the incentives are given to private parties and their lawyers.  It imparts to the system an autopilot type of quality that provides some protection against subversion by the judiciary. 

That said, in 1991 a Democratic Congress finally became so upset with the way in which the federal judiciary was interpreting Title VII and related legislation that they enacted provisions that overruled numerous U.S. Supreme Court decisions. Previously, private litigation under Title VII had declined, and complaints to the EEOC had declined. How did Congress deal with it? By increasing the amount of money that a plaintiff could recover. Prior to 1991, you could not recover compensatory, let alone punitive, damages if you were the victim of a Title VII violation; you could only recover back pay, maybe even some front pay. Congress changed that, and guess what? Complaints and lawsuits increased. Thus, there are a variety of ways you can promote private enforcement. You can use fee shifting or raise the ante in order to provide incentives to private lawyers.

This underscores the potential of the judiciary to subvert congressional preferences through other means. That is what I think is occurring in the Court’s recent pleading decisions. It is a subtle but effective way of regulating access to courts by a judiciary that is ideologically distant from the enacting Congress. It should not come as a surprise if these decisions have a disproportionately adverse impact on civil rights litigation, and in particular, employment discrimination Litigation.

Q: What should people take away from this? 

A: This research again confirms my view that procedure is power. People who have been selling the notion that procedure is technical, that it’s “adjective law,” have been doing it largely for the purpose of ensuring that they retain power.  And for a long time they were very effective at that.

Now, Congress is in on the dirty little secret that procedure is power, which is why so often in the last 20 years we have seen major reforms accomplished not through changes in the substantive law, but through changes in procedure. When Congress could not agree, for example, on what the mental state (scienter) required for securities fraud should be - whether knowledge or recklessness - it did not make any difference. In the Private Securities Litigation Reform Act they tightened up the pleading requirements. The statute requires greater factual specificity, and it requires that the pleading raise a strong inference of whatever mental state is required. Procedure provided Congress with a way to deal with the problem of the ambiguity that resulted from inability to compromise on the substantive standard.

But the Supreme Court has known the power of procedure for a long time. The Court knew, and the Chief Justice in particular knew, that there was little chance that the Federal Rules on pleading could be amended through the process that is supposed to be used. The Enabling Act process requires, ultimately, an opportunity for Congress to review the policy choices being made, and if appropriate, to block them from becoming effective through legislation. The Court has avoided that by pretending to interpret the Rules. One of the costs of the Court’s lawlessness, I believe, is the effectiveness of private enforcement in this country.