USA Today
Among the hottest regulatory issues today are these: How to prevent kids from smoking cigarettes? What to do about the flood of handguns? How to end sweatshop labor in the apparel industry? How to cope with new kinds of market power in high-technology industries?
In the old days, state legislatures or Congress would enact laws, which would be administered by regulatory agencies. But now the era of big government is over. "Regulation" is a bad word. So how are these regulatory issues being handled? Through lawsuits.
Consider tobacco. Last spring, Congress punted. It gave up on a bill to jack up the price of cigarettes. But that didn't mean tobacco companies were off the hook. The state attorneys general, who had sued the tobacco companies, settled for $246 billion.
Tobacco targeted
In his State of the Union Address, President Clinton announced he wanted the Justice Department to sue tobacco companies as well, in order to collect billions of dollars that Medicare spends caring for people with smoking-related illnesses.
Many legal experts doubt the federal government has the authority to launch such a lawsuit. But that's irrelevant. The lawsuit would be a bargaining chip for settling the case. The administration wants cigarette makers to agree to a 55-cents-a-pack tax -- high enough to cause people to smoke a lot less.
Or consider handguns. Don't expect new legislation on this front. The Brady Bill, which imposed some controls on who can buy them, barely passed Congress. But now several big cities -- among them Los Angeles, Chicago, Miami and New Orleans -- are suing gun manufacturers and dealers. They aim to recoup hundreds of millions of dollars in medical and police costs that, they say, could have been avoided if the manufacturers had equipped their guns with effective safety devices, and if the dealers hadn't flooded their cities with guns.
"All of us should consider filing lawsuits," Mayor Alex Penelas of Miami-Dade County said recently. Other cities are ready to join the fray. The likely result is a settlement as well, which will cost the gun industry a bundle and also get them to take some preventive steps on their own.
Congress won't touch the subject of sweatshops.
Even a White House task force is having trouble getting the apparel industry to take "voluntary" steps to clean up its act.
So how is America dealing with sweatshops? By hitting the courts. A coalition of consumer, labor and religious groups is now suing major companies to force them to take more responsibility for preventing garments from being made in sweatshops.
Finally, consider market power in high technology. The old competitive rules don't always apply. If a company becomes large enough to set an industry standard, it can use its power to dominate all sorts of gadgets that depend on that standard. But how big is too big? And what sort of standards are most important? Rather than hash out these questions through regulation, the U.S. is suing Microsoft Corp. Whatever emerges from this suit will set a powerful precedent. In effect, we'll have a new set of rules governing how the computer, semiconductor and telecommunications industries are organized.
Lawsuits not the most efficient path
Regulating U.S. industry through lawsuits isn'tthe most efficient way of doing the job. Judges don't have large expert staffs for research and analyses, which regulatory agencies possess. And when plaintiffs and defendants settle their cases, we can't always be sure the public interest is being served. But perhaps regulating through lawsuits is better than not regulating at all.
Years ago, the courts championed the cause of civil rights. That's because legislatures, which decide things by majority rule, couldn't be counted on to protect the rights of minorities. Now, the courts are determining the regulatory responsibilities of U.S. industry. Maybe that's because politicians -- more dependent than ever on industry for campaign contributions -- can't be trusted to protect the rest of us from big business.
The era of big government may be over, but the era of regulation through litigation has just begun.
