Earlier this week Gordon posted from the ALI meeting that the institute is considering several new law reform projects including:
- Corporate criminal liability;
- Copyright law;
- Financial regulation;
- Update of the Principles of Corporate Governance;
- Transmission of wealth;
- Tax; and
- International consumer protection.
Both Gordon and one commentator (Brett McDonnell, our frequent guest) noted that many of these topics would move ALI away from its traditional law reform role in common law towards more regulatory and statutory subjects. Of course, the ALI (together with the National Conference of Commissioners on Uniform State Laws) has played a role in drafting model statutes such as the U.C.C. and the Model Penal Code. But both of those projects largely involve state law. There are some big challenges with ALI venturing deeper into statutory and regulatory territory, particularly in federal matters. The first is maintaining relevance. Dodd-Frank already left the station without any systematic involvement from groups of legal academics (some would say to the detriment of the statute). Barring a fresh crisis, how likely is it that Congress will revisit financial reform in a wholesale manner any time soon? Would Congress leave any role for ALI in tax reform? How much timely influence would ALI projects with their long gestation periods have given the rapid spinning of Congress’s issue attention cycle?
I do see a value in introducing more deliberation into the legislative process. Even so, ALI is more likely to add value by linking into the regulatory process. But there is usually a shot clock to notice-and-comment rulemaking.
ALI should strongly consider taking a much different tack with respect to issues with a strong regulatory component. Instead of the slow cooking approach, ALI should assemble a pool of experts on given regulatory issues who either alone or in groups could quickly respond to proposed rulemakings.
There is a massive demand for this, particularly right now in the financial realm. Dodd-Frank still has dozens of rules in various stages in the sausage-making assembly line. Personally, I have been frustrated. There have been any number of proposed rules on which I would like to comment, but I have not had the time. Academics are also, unfortunately, not professionally rewarded for contributing to policymaking in this manner to a sufficient extent. But, participation in the ALI, on the other hand, remains a feather in an academic's cap.
This leaves a void and a serious imbalance in rulemaking. Wall Street can afford to hire law firms to comment extensively on each rule and outgun almost any other interest group. Even if you have doubt that such a thing as “the public interest” exists, this should give you pause. If you have a free market streak, aren’t you concerned that Wall Street will use its clout to defend implicit subsidies and restrict competition?
This points to a second challenge for ALI as it dives deeper into statutory and regulatory issues: getting entangled in intractable political issues. But is this anything new under the sun? Going back over 60 years, a number of legal realists questioned whether various ALI law reform projects were burying political questions and at times favoring commercial interests over other groups (even as many other legal realists participated in these projects). To some extent, this criticism may be leveled even today: when the U.C.C. defines concepts like “good faith” and “ordinary care”, it often tends to look to standards by businesses or banks and not from the perspective of consumers. (In the social realm, many faith-based groups have protested when states have adopted the Model Penal Code because, it did not outlaw sodomy, among other things.)
Rather than attempt to paper over politics, a “pool of experts” would allow academics and jurists in the pool to generate either a consensus comment to a rule or individual comments. A multitude of comments might have less force than a consensus comment, but it also might present agencies with a broader spectrum of positions. Sometimes dissenting voices prove the most valuable.
TrackBack URL for this entry:
Links to weblogs that reference A role for the American Law Institute in rulemaking?: