Corporate Accountability and Tort Reform
Protecting Health, Safety and the Environment from Irresponsible Corporate Activity
One of many fundamental philosophical differences dividing today’s conservatives from progressives is the extent to which they believe the marketplace can be relied upon to prevent dangerous or polluting products and practices. Some conservatives argue that markets are self-correcting, and that manufacturers who produce shoddy products quickly lose customers and go out of business. Similarly, some conservatives maintain that companies that pollute the environment fall into disfavor with consumers. The threat of losing money is sufficient, these voices maintain, to dissuade unsafe or unhealthy products and practices. Therefore, they argue, current laws and regulations that establish minimum health, safety and environmental requirements are either excessive or downright unnecessary and should be rolled back so as to allow the market to correct itself.
Progressives observe that such arguments fly in the face of decades of reality. Manufacturers routinely pollute without paying a price at the cash register, and stories of unsafe products made and sold by longstanding businesses are an almost daily occurrence, current laws and regulations notwithstanding. In the absence of legal safeguards to compel manufacturers to recall unsafe products or to respect certain environmental standards, market forces would be a poor guarantor of health and safety. These progressives, CPR Member Scholars among them, argue that current federal regulations are sometimes too lax, and that they are frequently under-enforced.
Nevertheless, the effort to “protect” corporations from “burdensome regulations” and from “unnecessary” health, safety and environmental laws has been a recurring theme in American politics for a quarter of a century or more.
In recent years, the effort to protect industry from accountability in court has taken a new turn, as various industries have lined up before state legislatures and Congress seeking legislation granting broad immunity from litigation resulting from their tortious behavior. In 2012, for example, the federal “Domestic Fuels Act” (DFA) sought to grant immunity to purveyors of ethanol and other fuel additives. Such bills are the next wave of the attack on corporate accountability. CPR Member Scholars Thomas O. McGarity and Sidney Shapiro, with CPR Policy Analyst Nicholas Vidargas, explored the phenomenon in their March 2013 white paper, Sweeping Corporate Immunity for the Fuel Industry: The Next Front in the "Corporate Accountability" Wars (CPR White Paper 1303).
Two arenas in which this effort has played out in recent years are attempts by regulated industries and their allies to impose severe restrictions on citizens right to sue for damages when industry’s excesses do them harm, and a corresponding effort by the Bush administration to “preempt” or trump state laws with weaker federal regulations.