The Volokh Conspiracy
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Private Enforcement in the States, by Prof. Diego Zambrano (Stanford) et al.
Prof. Diego Zambrano (Stanford) and Stanford students Neel Guha, Austin Peters, & Jeffrey Xi have an extremely interesting article with this title, forthcoming in the University of Pennsylvania Law Review; and they were kind enough to pass along this guest-post summarizing their analysis:
One of the most interesting and unique features of the U.S. legal system is also puzzling: unlike most countries, the U.S. relies on private litigants to enforce our most important statutes. You'd be wrong to think we just do that in False Claims Act or qui tam litigation. Not at all. At the federal level, we do it across the board: civil rights, antitrust, environmental law, employment, and nearly every other area.
Not only do we adopt private rights of action, but we also partner them with fee shifting, treble damages, and, of course, class actions. This means that often, when the federal government wants to address a problem, it creates a private right of action alongside public enforcement. And private parties eagerly employ these rights, filing more than 90% of the claims in antitrust, employment, and environmental law (while government officials file the remaining 10%). Nowhere else in the world do we see this much reliance on private litigation. So why does the U.S. legal system rely on private claims?
To make progress on solving the puzzle of private enforcement, we turned to the sub-national level in our paper, "Private Enforcement in the States." Previous research on this question had focused exclusively on federal private rights of action. No work had looked at the states. What we found is a world of private rights of action even more sprawling than the federal system.
As we describe in the piece: "Even by very conservative estimates, there are more than 3,500 private rights of action provisions in state law, ranging from traditional areas like antitrust and employment, all the way to privacy violations, lawsuits against police, grave-digging, veterinary care, and waste disposal." Our upper bound estimate pegs the true number of private rights of action at around 10,000. For context, scholarship by Sean Farhang had identified around 300 such clauses at the federal level. Relative to that, our finding shows that state private enforcement is large, significant, and maybe even a bit chaotic.
To our surprise, the states leading the pack on growth of private enforcement provisions are Utah, New Hampshire, Connecticut, Nebraska, and Wisconsin. Private enforcement appears widespread across states with different political cultures, population sizes, and geography.
Some of these private enforcement provisions look similar to federal private rights of action in substance and structure. As we discuss in the paper, "nearly every state has a private right of action for antitrust claims, wages-and-hours, and a wealth of environmental violations."
Take, for instance, the New Jersey Environmental Rights Act (NJERA). This Act provides that "'any person' may sue to enforce an existing environmental statute, ordinance, or regulation" and sets forth a hybrid enforcement regime. Before commencing a private claim, a person seeking to sue must give 30-days' notice to public authorities. The legislative history suggests the private right of action was the product of thoughtful calculation about the importance of complementing public enforcement with private claims. The bill's sponsor emphasized the importance of enabling "citizens to have ready access to the courts to resolve environmental disputes." Further, the legislature noted that several other states had adopted statutes that allowed private enforcement with favorable results.
So if you focus just on NJERA and similar statutes, you may get the wrong impression that state private enforcement is similar to the federal system. That's not right. It turns out to be radically different in a variety of unexpected ways.
To begin, states use private claims in subject areas falling under the traditional purview of state lawmaking power, including intriguing private rights of action in veterinary care, pet services, and grave digging, just to name a few. But beyond that, states frequently eliminate private enforcement, tinker with private rights provisions, and even shoehorn private rights into already-existing legislation. While many federal private rights of action have endured in their original form, this apparently is not the case in the states.
Consider the history of a Mississippi provision allowing "[a]ny person whose confidential record" of driving under the influence to sue when the record "has been disclosed." In 2012, a Mississippi court decided a case unrelated to this private right of action. The private rights' validity was not questioned in the case. But shortly after the case, the Mississippi Legislature eliminated this provision, seemingly in response to the court decision. Our conclusion is that the private right vanished without much legislative debate and any press coverage. As far as we can tell, this type of abrogation—swift and silent—has never happened in federal legislation. And we find similar "'disappearances' of private enforcement across the states."
To develop this trove of descriptive insights, we had to overcome data access and methodological hurdles that likely explain the lack of focus on state private enforcement in existing scholarship. One issue was that comprehensive data on statutory codes was non-existent. Another challenge was that even if one could get access to all state statutes, limitations in data processing and modeling made it nearly impossible to sift through such large volumes of text and convert them into insightful measures.
In this study, we demonstrated a path to overcoming both challenges. To solve the data access challenge, we partnered with an up and coming legal technology company to gain access to a database of all state statutory codes from 2003-2020. Turning to the measurement obstacle, we relied on recent advancements in computer science and machine learning to comb through these statutory codes. In a nutshell, we trained a supervised machine learning model to guide our identification of these private rights of action. Between tuning the model and carefully reviewing the findings, this process took more than a year.
Not only did this data allow us to provide the first ever look into the world of private rights of action, it also allowed us to test whether prominent theories of private enforcement apply in the states. In particular, we focused our attention on the well-known "separation of powers" theory developed by Sean Farhang. This theory posits that Congress adopts private enforcement when the executive is controlled by another political party. Legislators do this in order to insulate enforcement power from an ideologically distant executive.
While this theory has robust explanatory power at the federal level, it does not appear to explain patterns of private enforcement in the states. Whether looking at the raw data or regression analyses, we find no correlation between divided government and private enforcement adoption.
Our empirical results suggest that the political economy of private enforcement in the states diverges radically from the federal government. But, more broadly, this project breaks new ground by opening up an entirely new area of research that has remained thus far unexplored. At the end of our paper, we sketch out some initial hypotheses as starting blocks for this new field of comparative research.
One potential theory concerns the role of model codes in state lawmaking. As we discovered, many model acts come with private enforcement provisions. The model Athlete-Agents Act–which arms student athletes with a private right to sue other athletes or students violating the act —has been adopted by more than 40 states. Another popular model act, the Securities Act, equips shareholders and investors the right to recover damages for fraud and other securities violations. There are many other examples, spanning controlled substances, animal welfare, and tele-health. This divergence in reliance on model codes, again, underlies how federal and state private enforcement co-exist within radically distinct institutional dynamics.
We also offer other hypotheses grounded in differences between the federal government and states in enforcement capacity, agency quality, and constitutional design. The thread connecting these explanations is our attempt to think through why the relative value of private enforcement might be higher for state lawmakers.
One obvious concern is constrained budgets. If there are fewer resources for public enforcements generally in the states, private enforcement might be a more attractive option.
Yet there are other reasons to think state lawmakers, when compared to their federal counterparts, may trust public enforcement less. On the whole, state agencies are less sophisticated than the federal administrative state. As others have pointed out, this may be because they enjoy a lower level of constitutional independence. Many state agencies also employ a workforce with less secure civil service protections.
A related concern is lack of citizen oversight. While there are countless watch dogs of various political persuasion engaging in "civil society oversight" of federal agencies, these grassroot sources of accountability are often lacking in the states.
At the end of the day, private enforcement is an even more crucial part of the American system than we thought. Our work draws attention to the "black box" of private enforcement in the fifty states. With the box now "open," we sketch a future comparative research agenda to study the federal-state divergence and the broader intricacies of state private rights. The discoveries we present in this paper alone reaffirm the need to place private enforcement front and center in procedural scholarship and teaching.