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Valuing the Deep State Part VIII: The Private Right of Action

Valuing the Deep State Part VIII: The Private Right of Action

Despite GOP claims of out-of-control bureaucracy in the U.S., the real culprit is private litigation, where citizens make use of the courts to shift regulatory goalposts. Francis Fukuyama's latest.

Francis Fukuyama

The full compilation of Francis Fukuyama's Valuing the Deep State series can be accessed here.

As I noted in my last Deep State post, the conservative narrative concerning the relentless expansion of government regulation by an out-of-control bureaucracy has been a reality in certain cases. But it is a mistake to think that this expansion is simply the product of executive branch bureaucrats seeking to maximize their power. Much of the expansion of state regulation has been the byproduct of private litigation, where citizens make use of the courts to shift regulatory goalposts.

The United States is unique among developed liberal democracies in its use of something called the private right of action (PRA). In most of Europe and democratic East Asia, the state makes rules which are enforced by the state itself—that is, executive branches are empowered to fine, sanction, and in some cases bring criminal charges against rule-breaking individuals. Not so in the United States: many of our laws are enforced by private citizens bringing lawsuits against other citizens or organizations that they deem to be out of compliance with an existing law. An outstanding example of private enforcement is the law that I’ve written about earlier, the California Environmental Quality Act, or CEQA. CEQA does not empower the State of California to enforce its own environmental laws; rather, it gives standing to all forty million residents of California to file lawsuits, anonymously, against any party they deem to be in violation of an environmental statute.___STEADY_PAYWALL___

There is a substantial academic literature at this point on the private right of action, and why it exists in the United States and not in other democracies. There are several possible explanations. The first has to do with America’s racial history. Back in the 1950s and 60s, democratically-elected legislatures could not be relied upon to repeal laws legalizing segregation. The Civil Rights movement was kicked off by the 1954 Brown v. Board of Education Supreme Court ruling under which a private nonprofit group, the NAACP, sued the Topeka, Kansas Board of Education for segregating its public schools. The Supreme Court’s decision invalidated legal segregation in a single stroke, setting the precedent for later civil rights cases regarding interracial marriage (Loving v. Virginia), abortion (Roe v. Wade), and gay marriage (Obergefell v. Hodges). Where legislatures would not act, the courts could.

While these changes in social policy were driven by private litigants, they do not explain the marked preference for private enforcement exhibited by Congress from the early 1970s on. Various explanations have been put forth. First, private enforcement shifts the cost burden away from executive branches, which in the United States have been classically weak and underfunded. Second, private litigation is more comprehensive, since it potentially creates millions of citizen attorney-generals who can be more vigilant that government agencies. Third, private enforcement may be driven by the economic self-interest of citizens, who can expect large settlements if they win their cases, or by the self-interest of organized groups like trial lawyers.

None of this, of course, explains why private enforcement is so strong in the United States when compared to other democracies. Americans are not culturally more litigious than citizens of other democracies; rather, they have been deliberately empowered by decisions made by Congress. Here, political scientists have pointed to American presidentialism and the separation of powers. In a parliamentary democracy, the executive is a creature of parliament which rules by virtue of its majority coalition. In the American system, the president and Congress can be of different parties—indeed, they can be suspicious of one another even when they are controlled by the same party.

Congressional distrust of the executive’s willingness to enforce the laws it passes has two consequences. The first is the incentive for Congress to reduce executive discretion by issuing detailed ex ante rules, like the Federal Acquisition Regulation or the detailed rules governing personnel hiring and promotion. But the second consequence of distrust is the use of private enforcement, where matters are taken out of the executive branch’s hands entirely.

Private right of action was historically associated with the Left and the Democratic Party, due to its historical origins. However, it has now become part of the arsenal of both parties. The Texas anti-abortion law passed a couple of years before the Supreme Court's invalidation of Roe v. Wade gave standing to all residents of Texas to sue abortion clinics. By passing enforcement off to private actors, conservatives in Texas thought they had found a clever way of getting around the Roe decision.

There are many reasons why private right of action is a strange and counterproductive way of running a government. It is not clear that the societal costs of private enforcement are overall less than state enforcement. Private litigation consumes huge amounts of court time, time and attention on the part of bureaucrats, and pads the incomes of countless lawyers.

Private enforcement makes the law much less predictable. This can be seen in the expansion of CEQA litigation over the years. The “environmental damage” cited in the original statute is not clearly defined, and there is hardly any infrastructure project that does not cause certain harms that could be construed as environmental. CEQA litigants have thus constantly sought to expand understanding of its scope. For example, the 1972 Friends of Mammoth decision by the California State Supreme Court expanded CEQA's scope from public projects to all private projects across the state. A more recent case involves the University of California at Berkeley’s plan to expand the number of students it served. The school was sued under CEQA on the grounds that the extra students would damage the local environment.

Under laws like CEQA, the scope of state regulation has steadily expanded as private litigants continually push the boundaries of enforcement and are supported by the courts. Under stare decisis, the goalposts are continuously moved in a way that escapes any centralized control by the legislature. Efforts to rein in permitting time like those contained in the Energy Independence and Security Act of 2022 would almost certainly be invalidated by the courts based on prior judicial precedents.

The relentless expansion of regulation and state authority is thus not being driven by ambitious bureaucrats seeking to maximize their power. Rather, it is being driven by private litigants reinterpreting the law, with the help of (often) state level courts. This process shows the limitation of common law to solve important social dilemmas. Private litigants and courts do not have the capacity to make complex public policy tradeoffs. Admitting more students to Berkeley may empower more low-income and minority entrants into that institution, and may well be worth some deterioration in the quality of life in the high-toned neighborhoods surrounding the campus. This is a political decision that should be made by elected officials.

Many future conflicts in the environmental area will involve green v. green tradeoffs. Building new power transmission lines and electric vehicle charging stations will have environmental costs, but will have the benefit of lowering carbon emissions overall. Will that be worth it? Other conflicts will involve budget tradeoffs between competing environmental priorities. The courts that hear private lawsuits are singularly ill-equipped to make these essentially political decisions.

The solution to this problem of ever-expanding government is, ironically, the dismantling of private right of action and the return of enforcement authority away from courts to executive branch bureaucracies, as well as expansion of the latter’s capability to assess complex policy tradeoffs. Agencies should have the resources and manpower to actually enforce the government’s rules. Legislatures need to be very careful and precise in delineating the mandates of these agencies, delegating appropriate authority while retaining checks on agency power. Under these circumstances, the democratic control we have lost to private enforcement may finally be restored.

Francis Fukuyama is chairman of the editorial board of American Purpose and Olivier Nomellini Senior Fellow and director of the Ford Dorsey Master’s in International Policy program at Stanford University’s Freeman Spogli Institute for International Studies.

Fukuyama thanks Stanford colleague Mike Bennon for many of the insights contained in this post. The full compilation of Francis Fukuyama's Valuing the Deep State series can be accessed here.

Image: Chess board. (Unsplash: Maarten van den Heuvel)

DemocracyUnited StatesPolitical PhilosophyFrankly Fukuyama