public regulation and private lawsuits in the american separation of powers … · 2014-07-17 ·...

Public Regulation and Private Lawsuits in theAmerican Separation of Powers System

Sean Farhang University of California, Berkeley

This article investigates causes of the legislative choice to mobilize private litigants to enforce statutes. It specifies thestatutory mechanism, grounded in economic incentives, that Congress uses to do so, and presents a theoretical frameworkfor understanding how certain characteristics of separation of powers structures, particularly conflict between Congressand the president over control of the bureaucracy, drive legislative production of this mechanism. Using new and originalhistorical data, the article presents the first empirical model of the legislative choice to mobilize private litigants, coveringthe years 1887 to 2004. The findings provide robust support for the proposition that interbranch conflict between Congressand the president is a powerful cause of congressional enactment of incentives to mobilize private litigants. Higher risk ofelectoral losses by the majority party, Democratic control of Congress, and demand by issue-oriented interest groups are alsosignificant predictors of congressional enactment of such incentives.

The huge role of private litigation in federal statu-tory policy implementation in the United States,which has grown steeply over the past four

decades, is to an important degree the product of leg-islative choice over questions of statutory design (Burke2002; Kagan 2001; Melnick 1995, 2004). This article in-vestigates the causes of the legislative choice to proac-tively mobilize private litigants and their attorneys inpolicy implementation. It first frames the statutory mech-anism, fundamentally grounded in economic incentives,that is the central one used by Congress to mobilize pri-vate litigants to prosecute enforcement actions againstthe regulated population. It then presents a theoreticalframework for understanding how certain characteristicsof separation of powers structures, particularly conflictbetween Congress and the president over control of thebureaucracy, drive legislative production of the mecha-nism of litigant mobilization, and sets forth a series oftestable hypotheses concerning the relationship betweenseparation of powers structures and legislative mobiliza-tion of private litigants. The article also presents fouradditional causal accounts of the legislative choice tomobilize private litigants, which have long appeared inthe scholarly literature but have never been empiricallytested due to lack of appropriate data. Using original and

Sean Farhang is assistant professor of public policy, University of California, Berkeley, Richard & Rhoda Goldman School of Public Policy,2607 Hearst Avenue, Berkeley, CA 94720-7320 ([email protected]).

The author gratefully acknowledges the advice of Tom Burke, Charles Cameron, Robert Kagan, Ira Katznelson, Bert Kritzner, John Lapinski,Stephanie Lindquist, Robert Lieberman, Eric Schickler, Craig Volden, Greg Wawro, and the anonymous reviewers.

newly collected historical data, the article presents thefirst empirical model of the legislative choice to mobi-lize private litigants, covering the years 1887 to 2004. Inaddition to testing the separation of powers hypothesesdeveloped in this article, these new data allow system-atic evaluation of the four other longstanding but previ-ously untested hypotheses, confirming some and rejectingothers.

The empirical findings provide robust support forthe central argument that motivates this article: ide-ological conflict between Congress and the president,most simply measured as divided government, is astatistically significant, consistent, and substantively pow-erful predictor of congressional enactment of incen-tives to mobilize private litigants. These findings linklong-run historical patterns of divided government andlegislative-executive polarization, which increased in fre-quency and intensity starting in the late 1960s, with thecoincident growth of the role of litigation and courtsin the implementation and elaboration of federal statu-tory policy. Higher levels of risk of electoral losses bythe majority party, Democratic control of Congress, anddemand by issue-oriented interest groups are also sig-nificant predictors of congressional enactment of suchincentives.

American Journal of Political Science, Vol. 52, No. 4, October 2008, Pp. 821–839

C©2008, Midwest Political Science Association ISSN 0092-5853

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The Mechanism of LitigantMobilization: Private Enforcement

Regimes

Before turning to sources of the legislative choice to mo-bilize private litigants, it is necessary to specify the mecha-nism that Congress uses to do so. In order to systematicallyconceptualize the ways in which Congress mobilizes pri-vate litigants, this article draws theoretically on the modelof rational litigant behavior developed in the law and eco-nomics literature (e.g., Cooter and Ulen 2004, Chapter 10;Polinsky and Shavell 1998; Posner 2003, Chapter 21). Thismodel generally contemplates that a prospective plaintiffwill proceed with litigation when a case’s expected mone-tary value (EV) if tried is positive, where EV is a functionof the plaintiff’s estimate of the expected monetary bene-fit of the case if she prevails (EB), the probability that shewill prevail if the case goes to trial (p), and the expectedcosts of litigating the claim (EC). Thus, EV = EB (p) –EC, and the rational plaintiff will file suit if EV is positive.

In determining EB, Congress is free to enact rules ina statute capping economic damages well below the ac-tual harm suffered, or ensuring that they will far exceedit, such as with a triple damages provision (Galanter andLuban 1993; Polinsky and Shavell 1998). In determiningEC, Congress can either allow the default “American rule”to govern, in which case each side generally pays their ownattorney’s fees and costs of litigation, or it can lay down analternative rule, such as one providing that winning plain-tiffs can recover such expenses from defendants, with nosimilar recovery allowed for winning defendants (Kritzer2002; Zemans 1984). Congress can significantly influencep, for example, with statutory rules of proof, evidence,and liability (Cooter and Ulen 2004, 431–32). The criticalpoint is that when Congress drafts a regulatory statute, ifit is going to allow private enforcement litigation at all,it has wide latitude in selecting rules that substantiallydetermine EB, EC, and p. This system of rules constitutesa statute’s private enforcement regime, and it can haveprofound consequences for how much or little privatelitigation is filed to enforce it.

An example serves to illustrate the potentially po-tent effects of private enforcement regimes on incentivesto litigate, as well as the cumulative effects of differentattributes of private enforcement regimes. Consider a po-tential plaintiff who sustained $10,000 in actual damagesdue to an arguable violation of a statutory right, andassume that $10,000 is typical of damages caused by vi-olations of this particular statute. In hypothetical 1, as-sume that Congress has written the statute such that it hasprovided a private right of action, only actual monetary

damages are recoverable, the American rule applies to at-torney’s fees, and default burdens and standards of proofapply. The plaintiff and her attorney estimate her proba-bility of prevailing as .6 and estimate the costs of litigatingthrough to final judgment as $10,000. These facts yield anexpected value of negative $4,000 ((10,000∗.6)–10,000).The plaintiff will not file suit. Congress has elected toprovide a private right of action, but beyond simply al-lowing private litigants to enforce the statute, it has notparticularly sought to affirmatively mobilize them.

In hypothetical 2, Congress includes a treble dam-ages provision, so that EB is now increased from $10,000to $30,000, and EV is increased from negative $4,000 topositive $8,000 ((30,000∗.6)–10,000), rendering a positiveincentive for the plaintiff to file suit. In hypothetical 3, inaddition to the treble damages provision, Congress addsan explicit proplaintiff statutory burden of proof rule,which increases the plaintiff’s estimate of p from .6 to .8.This increase in the plaintiff’s probability of success raisesthe expected value of her case to $14,000 ((30,000∗.8)–10,000). Finally, in hypothetical 4, Congress also adds arule allowing plaintiffs to recover attorney’s fees and lit-igation costs, which has the effect of reducing EC from$10,000 to $2,000 (since the plaintiff will be able to recoverthose costs if she wins, an outcome to which she assignsa probability of .8). This increases the expected valueof the case commensurately, by $8,000, to $22,000. Go-ing from hypothetical 1 (a minimal private enforcementregime) to hypothetical 4 (a very robust one), the ex-pected value of the case, from the plaintiff’s point of view,increases from negative $4,000 to positive $22,000. Thefour hypotheticals represent four (among a vastly largernumber) configurations of rules within a private enforce-ment regime, each corresponding to a successively higherdegree of mobilization of private enforcers, and each theproduct of legislative choice. When constructing privateenforcement regimes, Congress is constructing marketsfor enforcement lawsuits.

It bears emphasizing where this mechanism of liti-gant mobilization stands in relation to a line of analysisin the oversight literature that develops a model in whichCongress endeavors to control the bureaucracy, as Mc-Nollgast (1987) put it, using “administrative proceduresas instruments of political control” (see also McCub-bins and Schwartz 1984; McNollgast 1989; Shipan 1997).Congress “stacks the deck” in favor of intended beneficia-ries of legislation by specifying statutory procedures suchas rules of standing, evidence, and proof that make it moreprobable that the intended beneficiaries will prevail inagency proceedings, and it thereby harnesses the energiesand resources of private actors to achieve the purpose ofcontrolling agency policymaking. This literature is about

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“how to regulate the regulators” and “not how to regulatesociety” (McCubbins and Schwartz 1984, 175, emphasisadded). In contrast, my subject is precisely the regulationof society through the use of direct enforcement againstthe regulated population by private litigants as an ad-junct to, or as an alternative to, bureaucratic power, notas a mechanism to monitor agencies.

To characterize the legislative mechanism of litigantmobilization as centrally economic is not conventionalwisdom among political scientists, who have paid rela-tively little attention to ordinary statutory enforcementactions filed against the regulated population by privateplaintiffs represented by private counsel. While politicalscientists have shown a fairly keen interest, and rightlyso, in litigation filed or orchestrated by interest groups,and suits filed against government agencies seeking to en-join or revise the policy decisions of administrators, suchsuits comprise only about 2% and 5%, respectively, ofpublished federal Court of Appeals cases between 1960and 2004.1 Such litigation is aimed at shaping nationalpolicy, and while in some circumstances there may beeconomic motivations for the policies sought by orga-nized interests, economic recovery in the suit itself is typ-ically not a central issue. However, the vast bulk of privatelitigation enforcing federal statutes (well over 90%) isprosecuted by a radically decentralized army of privateplaintiffs and their private attorneys pursuing their pri-vate interests, though, no doubt, with large public con-sequences. Such ordinary litigation, by and large, willproceed only on the threshold judgment that the suit willnot result in a net economic loss (Galanter and Luban1993; Johnson 1980; Kritzer 2002), even if there frequentlymay be other important noneconomic motivations forproceeding.

Congressional Choice of PrivateEnforcement Regimes under

Separation of Powers

When Congress enacts a law to regulate some facet of eco-nomic or social life where compliance is mandatory (asopposed to incentive-based regulation), it faces a choicebetween enforcement through bureaucratic machinery

1These figures come from a random sample of 1,125 publishedfederal Court of Appeals cases. Given that interest group litigationand challenges to agency policymaking are more likely to be highpolicy salience cases, and high policy salience cases are more likelyto be published, these figures very likely significantly overstate thepresence in aggregate federal filings of suits orchestrated by interestgroups and suits challenging agency policymaking.

and the use of lawsuits, or some combination of the twoin a mixed approach (e.g., Bardach and Kagan 2002; Burke2002; Eskridge, Frickey, and Garrett 2001, 1099; Fiorina1982). This choice must be situated within the institu-tional context of separation of powers. In his founda-tional work on adversarial legalism, Robert Kagan (2001,15) has argued that the large role of adversarial legal pro-cess in American public policy is rooted partly in the“weak” and “fragmented” character of American statestructures, which are characterized by crosscutting in-stitutional checks and the dispersion of authority acrossexecutive, legislative, and judicial branches. Adversariallegalism, according to Kagan, is driven significantly bythe mismatch between public demand for an activist stateon the one hand, and a weak and fragmented admin-istrative state on the other, which drives much policy-making into the courts. Thomas Burke (2002) providesan important development of Kagan’s work, emphasizingthe extent to which the same “weak state” characteristicsprovide incentives for interest groups and policymakersto purposefully structure laws so as to encourage litiga-tion as a policy instrument over implementation throughbureaucratic means.

The delegation literature in general, and the work ofTerry Moe (1989, 1990, 1994 [with Caldwell]) on con-gressional choice of bureaucratic structure in particular,provide a useful analytical frame for specifying the institu-tional dynamics through which the American separationof powers system produces high levels of private litiga-tion to enforce public policy, and for generating testablehypotheses about the relationship between separation ofpowers structures and enactment of laws that utilize lit-igation and courts for implementation (see Burke 2002,173–74; Smith 2005). A central theme of Moe’s work isthat when creating agencies, rational legislators in theUnited States make choices about agency structure andprocedure meant to guard and insulate their preferencesfrom political opponents who would subvert them in boththe short and long run. Two potential sources of subver-sion are of particular importance here: (1) subversion bythe president, who has distinct institutional interests, andpotentially divergent ideological preferences, and (2) sub-version by future legislative coalitions should the enact-ing coalition’s power be diminished in future elections.These same institutional dynamics create incentives forCongress to enact private enforcement regimes.

Conflict between Congress and the President. Moeargues that, even aside from ideological differences be-tween Congress and the president, there are fundamentalinstitutional divisions which will give the two branchesdifferent preferences regarding the exercise of bureau-cratic authority. As compared to presidents, legislators are

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influenced more by particularistic than national interestsand are more subject to interest group pressure, differ-ences which can lead to divergent preferences over regu-latory implementation (Moe 1989, 1990). Further, whilelegislators certainly have significant continuing powerover agency actions (e.g., Weingast and Moran 1983),presidents possess considerable capacity to unilaterallyinfluence agency structure and behavior (Moe 1982, 1990;Moe and Caldwell 1994). Thus, legislators and the interestgroups that influence them strive to create agency struc-tures calculated to implement their policy preferenceswhile tightly constraining bureaucratic discretion so asto insulate it, to the degree possible, from presidentialsubversion.

To the extent that these structural dynamics are driv-ing Congress’ construction of the character and capaci-ties of the American administrative state, the relationshipshould be intensified with increasing ideological conflictbetween Congress and the president. The more congres-sional and presidential ideological preferences diverge,the more likely the president will be to use his significantinstitutional resources to subvert implementation of con-gressional policy choices, and the more likely Congresswill be to constrain and limit delegations of power tothe bureaucracy. Empirical research strongly bears outthis prediction. Epstein and O’Halloran (1999) find thatunder conditions of divided party government Congressenacts more detailed laws, thus limiting agency discre-tion in implementation, and places more structural con-straints on the exercise of bureaucratic implementationauthority. Similarly, at the state level Huber and Shipan(2002) find that divided party government between theexecutive and legislative branches leads legislators to en-act more detailed laws and thus to delegate less discretionto bureaucrats.

This institutional logic for delegating less author-ity to the bureaucracy, and structurally constraining itsexercise of the powers delegated, simultaneously moti-vates Congress to enact private enforcement regimes. Tothe extent that Congress has concerns about whether thepresident will undertake enforcement at a level consis-tent with congressional policy preferences, due to thedistinct institutional and electoral imperatives of thepresidency, Congress has reason to fashion private en-forcement regimes calculated to mobilize private litigantsand lawyers to do so. To the extent that this structuralcause for enactment of private enforcement regimes isin fact at play, it will be intensified under conditionsof ideological conflict between Congress and the presi-dent. This is the flip side of the delegation literature justdiscussed. Under conditions in which that literature hasfound legislators delegating less implementation power to

the bureaucracy—ideological conflict between the legisla-tive and executive branches—legislators do not abandonimplementation. Rather, under those conditions legisla-tors marshal other resources to achieve their policy goals,including private litigants and lawyers.2 The operation ofeconomic incentives on private litigants and lawyers instatutorily constructed enforcement markets creates anenforcement apparatus with an autopilot character, sub-stantially beyond the reach of presidential influence (thepossibility of gradual and indirect presidential influencevia judicial appointments will be discussed below). Thissuggests:

SOP H1: The more ideologically distant Congress is fromthe president, the more likely it will be to enactprivate enforcement regimes.

It bears emphasis that this article does not claim thatCongress will only enact private enforcement regimes un-der conditions of ideological conflict, but rather that it willbe more likely to do so. The institutionally rooted differ-ence between the preferences of legislators and presidentsin the separation of powers system can make private en-forcement regimes appealing to Congress even when thepresident is an ideological ally, but their appeal will mul-tiply when he is an enemy.

If private enforcement regimes give power to lawyers,litigants, and courts that might alternatively be given tothe executive branch, one might be tempted to ask whya president would facilitate her own disempowerment bysigning laws containing them which advance the regula-tory goals of ideologically distant Congresses. Among nu-merous possible reasons, two are particularly important.First, and most fundamentally, presidents simply do notget everything they want. While a president who dislikessome aspect of a legislative proposal can engage in “vetobargaining” in an effort to shape its content, the presi-dent’s preferences will typically only be partially fulfilled,with multiple other factors, most importantly legisla-tive preferences, also shaping the law’s content (Cameron2000). Second, it is not, in fact, at all clear that presidentsalways facilitate their own disempowerment by signingregulatory laws with private enforcement regimes passed

2Epstein and O’Halloran find that during divided government,while Congress is less likely to delegate to executive agencies, it ismore likely to make “nonexecutive” delegations of authority, whichare measured by an amalgamation of delegations of authority tostate agencies, local authorities, and the courts (1999, 156–57).However, no separate analysis of delegation to the courts is pro-vided, nor do they discuss in detail what they count as delegation tocourts, and thus while their findings are suggestive, it is not possibleto conclude from them whether or not Congress delegated morepower to courts during periods of divided government.


by ideologically distant Congresses. It may be that legisla-tive resistance to bureaucratic state building is such thatthe president’s choice is between a regulatory law with aprivate enforcement regime and no law at all. As an em-pirical matter, it is hardly a new notion that executives dosign laws passed by ideologically distant legislatures thatgive them less power than differently drafted laws couldgive them. As already discussed, the empirical literatureon legislative delegation to the bureaucracy has providedsystematic evidence that under conditions of divided gov-ernment, executives sign laws that contain greater limitsand constraints on executive discretion than under con-ditions of unified government (Epstein and O’Halloran1999; Huber and Shipan 2002).

Electoral Uncertainty and the Stickiness of theStatus Quo. Moe identifies a second potential source ofsubversion of Congress’ policy preferences that will mo-tivate it to insulate its policy decisions through strategicchoice of bureaucratic structure. Members of Congressare eminently mindful of the prospects of electoral defeat,and they and their constituents recognize the possibilitythat rival political forces may gain control of Congressin the future and seek to undo the good works of theenacting Congress (Moe 1990; Moe and Caldwell 1994).Congress thus does not rely only upon its own ability tomonitor agency behavior in the course of implementa-tion, but rather also enacts formal rules and structurescalculated to limit bureaucratic discretion and therebysecure implementation of the enacting Congress’ pref-erences into the future, possibly in the absence of theenacting Congress and under the oversight of legislatorswith different and distant policy inclinations. Whereasnew majorities in parliamentary systems have little trou-ble undoing the acts of past governments, this strategyof insulation can be effective in the American separationof powers system because the many impediments thatthe system famously presents to enacting laws (particu-larly its many veto points) apply with equal or greaterforce to repealing an existing one, around which vestedinterests may already have formed. As Moe puts it, inthe American separation of powers system “[w]hatever isformalized will tend to endure” (1990, 240).

This institutional logic for constraining bureaucraticpower simultaneously constitutes a potent incentive forlegislators and their constituents to opt for private en-forcement regimes. Indeed, once formalized, privateenforcement regimes provide better insulation on the en-forcement front than rule-governed agency powers, whichfuture Congresses will have more continuing control over.Most significantly, future Congresses could shift agencyenforcement efforts under a regulatory law through over-sight hearings and investigations, and by exercising con-

trol over the agency’s purse strings, even if they lack thepolitical capacity or will to alter the agency’s enforcementauthority by formal legal enactment (Eskridge, Frickey,and Garrett 2001, 1129–73). On the other hand, if anenacting Congress utilizes a private enforcement regime,there is little if anything that future Congresses can do toinfluence private enforcement levels short of repealing oramending the law, which may be difficult or impossible.For the same reason that private enforcers will be largelybeyond the reach of the president—due to the autopi-lot character of private litigants and lawyers respondingto statutorily constructed economic incentives—they willbe beyond the reach of future legislative majorities as well,short of a new legal enactment. Thus, while private en-forcement regimes will always have some appeal in a sep-aration of powers system due to their ability make policychoices stick even when the opposition comes to power,greater concern about electoral losses will make an enact-ing Congress more likely to utilize private enforcementregimes. This suggests:

SOP H2: As the risk of electoral losses increases for themajority party, it will be more likely to enactprivate enforcement regimes.

Judicial Ideology. Though the delegation literaturedoes not consider it, if Congress is concerned about thepossibility of subversion by the president, and the possi-bility of subversion by future legislative majorities, thenit seems reasonable to expect that it will also be con-cerned about subversion by the judiciary, whose ideo-logical complexion is, of course, importantly influencedby presidential preferences. It is in the nature of statutoryinterpretation that the interpreter, whether judicial or ad-ministrative, will frequently be called upon to make pol-icy (see, e.g., Mashaw 1997; Melnick 1994; Posner 1987),and thus when Congress makes courts central to imple-mentation of a statute, as former political scientist andnow United States Court of Appeals Judge Robert Katz-mann put, it makes courts “an integral component ofthe legislative process” (Katzmann 1995, 2346; emphasisadded). Systematic empirical evidence demonstrates thatjudges’ partisan and ideological preferences influence theway they exercise this policymaking power through theirvoting patterns in statutory enforcement actions acrossthe waterfront of policy domains (see, e.g., Farhang andWawro 2004; Merritt and Brudney 2001; Revesz 1997).The literature on congressional overrides of statutory in-terpretation by courts also makes abundantly clear thatCongress is well aware of the prospect of judicial subver-sion of congressional preferences through statutory inter-pretation, and that at times Congress crafts statutes withthe specific purpose of defeating statutory interpretations

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advanced by ideologically distant courts (Barnes 2004;Eskridge 1991; Hausegger and Baum 1998).

The ideological position of the federal judiciary, fromCongress’ point of view, has two components. The first issimply the judiciary’s ideological distance from Congress.The second is the direction in which the judiciary ismoving with new appointments. In spatial terms, whenCongress and the president are on the same side of thejudiciary in ideological space, the appointment of newjudges will have the effect of drawing the judiciary closerto Congress, whereas when Congress and the president areon opposite sides of the judiciary, judicial appointmentswill draw the judiciary away from Congress.3

At first blush, intuition suggests that Congress wouldbe less likely to enact private enforcement regimes due tofear of judicial subversion the further away ideologicallycourts move from Congress. If courts will elaborate thesubstantive meaning of statutes in a manner objection-able to Congress the more distant they are ideologically,this naturally should militate against congressional en-actment of private enforcement regimes. Further, as thedistance between Congress and the judiciary increases it isreasonable to expect judicial ideology to move a plaintiff’sprobability of prevailing (p) in a direction objectionableto Congress, making the judiciary a less hospitable en-forcement venue from Congress’ point of view. Theseconsiderations suggest:

SOP H3: As the judiciary becomes more ideologicallydistant from Congress, Congress will becomeless likely to enact private enforcement regimes.

However, contrary to initial intuition, there are alsotheoretical reasons to expect countervailing forces to in-cline Congress toward increasing incentives for privatelitigation as courts move ideologically further away fromCongress. As discussed earlier, with private enforcementregimes Congress is partly endeavoring to control ex-pected value in the equation EV = EB (p) – EC, and withit the level of enforcement activity. If, as just suggested,with increasing distance between courts and Congress,courts will move plaintiffs’ probability of prevailing (p)in a direction objectionable to Congress, Congress cancounteract this by increasing EB or EC. Thus, it is evi-dent that in some circumstances Congress may rationallyrespond to an increasingly ideologically distant court byenacting ever more robust private enforcement regimes.This suggests:

3I owe recognition of this dimension of the judiciary’s position toGary Cox.

SOP H4: As the judiciary becomes more ideologically dis-tant from Congress, Congress will become morelikely to enact private enforcement regimes.

Because there are countervailing forces that cause in-creases in the judiciary’s distance from Congress to createincentives to enact private enforcement regimes, and notto enact them, theory does not generate firm expectationsabout which causal force will predominate, if either does.

Whatever the effect of the judiciary’s ideological po-sition, there is reason to expect that it will be weighed sig-nificantly less by Congress than that of the executive. Bu-reaucratic implementation typically gives agencies bothpowers of rule articulation (the elaboration of the mean-ing of a statute) and rule enforcement (the monitoring,investigation, and prosecution of violators). In contrast,private enforcement regimes divide the two powers be-tween courts (rule articulation) and private plaintiffs andtheir attorneys (rule enforcement), who will execute ruleenforcement functions guided by, and insulated from sub-version by, economic incentives. Whereas in the bureau-cratic case the president and her officers could subvertcongressional preferences with respect to both rule en-forcement and rule articulation, in the case of privateenforcement regimes the rule enforcement functions arelargely self-executing and insulated. This logic suggeststhat while Congress may be influenced by the judiciary’sideological distance from it, the magnitude of this effectwill be substantially weaker than the president’s ideolog-ical distance.

Other Causes of Private EnforcementRegimes

There are an additional four potential causes of legislativeenactment of private enforcement regimes that appearrepeatedly in the scholarly literature. They must be con-trolled for in the empirical model below in order to iso-late the effects, if any, of separation of powers structures.Moreover, they are of considerable interest in themselvesbecause, although they have appeared in the scholarly lit-erature for some time, none have been empirically testeddue to lack of appropriate data.

Rent-Seeking Lawyer Hypothesis. Two main argu-ments causally link interest group activity to enactmentof private enforcement regimes. In the first, rent-seekinglawyer interest groups, such as the Association of TrialLawyers of America, securities class action lawyers, la-bor and employment lawyers, or the American Bar As-sociation lobby to create and maintain opportunities for


remunerative litigation so as to enrich themselves (Frymer2007; Heymann and Liebman 1988, 309; Rau, Sherman,and Peppet 2006, 56; White 1992, 394–95). It is a com-monplace that professional associations seek to advanceand protect the economic interests of their members,and lawyers associations are no different. Under the swayof lawyer interest groups, “legislators frequently bene-fit lawyers by passing . . . legislation known popularly as‘lawyers’ relief acts,’ ” which make fee-generating litiga-tion central to implementation (White 1992, 394). Ac-cording to the rent-seeking lawyer hypothesis, greaterlobbying influence by lawyers associations will be asso-ciated with increased enactment of private enforcementregimes.

Issue Group Hypothesis. A second line of explana-tion is that beginning in the mid- to late 1960s, issue-oriented citizens groups, such as environmental, civilrights, and consumer protection organizations, burst onthe American policy scene, proliferated in their numberand lobbying intensity and effectiveness, and successfullydemanded court-based implementation (Burke 2002;Kagan 2001, 38–39, 47; Melnick 1995, 2004; O’Connerand Epstein 1985; Vogel 1981). This view links, at leastimplicitly, the interest group “explosion” of the late 1960sand early 1970s (Baumgartner and Leech 2001, 1191) tothe storied “explosion” of at least some kinds of litigation.As contrasted with the personal economic motivations ofthe rent-seeking lawyer groups, these issue groups areguided by policy preferences. Their preference for pri-vate enforcement regimes is motivated by a distrust ofbureaucracy, which they regard as timid, establishmentoriented, prone to capture, and likely to suffer from lackof resources (Burke 2002; Melnick 2004, 93; Vogel 1981,170). Also beginning in the mid-1960s, there was a partic-ularly strong growth of such groups specifically dedicatedto reform through litigation, and these “public interestlaw” groups were especially focused on lobbying Congressfor private enforcement regimes with sufficient economicrewards to bankroll their continued operation (McCann1986; O’Conner and Epstein 1985). According to the is-sue group hypothesis, greater lobbying influence by issuegroups will be associated with increased enactment ofprivate enforcement regimes.

Budget Constraint Hypothesis. A number of schol-ars have argued, quite plausibly, that lack of adequatetax revenue encourages Congress to achieve public policygoals through private adversarial legal process because itshifts the costs of regulation away from the state and toprivate parties (Burke 2002; Kagan 2001; O’Conner andEpstein 1985; see also McCubbins and Schwartz 1984).Whether for reasons of state structure (Steinmo 1993) orvoter ideology (Wilensky 1975), among the more eco-

nomically developed democracies the United States ex-tracts the least revenue from the polity as a proportion ofgross national product. This places obvious limits on statebuilding of a bureaucratic form. According to the budgetconstraint hypothesis, when resources are tight Congresswill be relatively more likely to enact private enforcementregimes.

Party Alignment Hypothesis. Arguments that inter-est groups—whether of the rent-seeking lawyer or issue-oriented variety—are key causes of adversarial legalism inthe United States have been closely tied to political party.These arguments link the plaintiffs’ bar to the Democraticparty, and link business opponents of civil legal liabilityto the Republican party. While the connections of theplaintiffs’ personal injury bar to the Democratic partyhave received the most extensive attention, scholars havepointed to apparent influence by plaintiffs’ lawyers onDemocrats more broadly, fostering litigation across suchpolicy areas as civil rights, consumer protection, the en-vironment, securities and exchange, and health care (e.g.,Gordon and Assefa 2006; Romano 2005; Yeazell 2004),shaping rules of civil procedure, such as the class actiondevice, so as to strengthen plaintiffs’ position in litiga-tion (O’Neal 2005), and discouraging alternative disputeresolution mechanisms that would divert disputes awayfrom adversarial legal venues (Ware 1999). In an analysisof the parties’ respective positions on federal securitiesregulation, Romano observes that “Republicans’ generalsupport for and Democrats’ opposition to litigation re-form that restricted liability . . . paralleled the perspectiveof key party constituencies, the business community forRepublicans and the plaintiffs’ bar for the Democrats”(2005, 1561).

The party alignment hypothesis can be construedweakly or strongly. Construed weakly, it simply suggeststhat, other things being equal, Democratic-controlledCongresses will be more likely to enact private enforce-ment regimes than Republican ones. Construed strongly,it suggests that the construction of private enforcementregimes is a uniquely Democratic phenomenon, abhorredby Republicans and their constituents, and thus the in-fluence of other theorized causes of legislative enactmentof private enforcement regimes, such as divided govern-ment, electoral uncertainty, interest group mobilization,and budgetary conditions, may all be conditional uponDemocratic control of Congress.

Costs of Private Enforcement Regimes. It is tempt-ing to ask why a Congress enacting a regulatory prohi-bition would not always include a private enforcementregime given that it privatizes a huge majority of thecosts of enforcement and achieves the insulation goalsdiscussed earlier. However, private enforcement regimes

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are not really a free lunch. They clearly consume judicialresources, whether or not those expenditures can betraced by voters to legislators. Moreover, a flip side ofthe insulation phenomenon is that private litigants andlifetime tenured judges are less susceptible to ongoing su-pervision by the enacting Congress than are bureaucrats,who can be called into hearings and have their budgetsslashed. Finally, from a policy point of view, many reg-ulation scholars have suggested that, as compared to ad-ministrative regulation, private enforcement regimes (1)produce inconsistency and uncertainty (since policy em-anates from a multitude of litigants and judges); (2) mo-bilize less policy expertise; (3) are needlessly adversarial,subverting cooperation and voluntary compliance; (4) areextremely costly; and (5) are painfully slow and cumber-some (Bardach and Kagan 2002; Cross 1989, 67–69; Kagan2001; Stewart and Sunstein 1982, 1292–93). While debatesover the merits of private enforcement regimes are beyondthe scope of this article, suffice it to say that there are amplereasons that Congress does not simply include one in ev-ery regulatory law it enacts, which would moot the presentinquiry.

An Empirical Model of Enactmentof Private Enforcement Regimes

The Dependent Variable. An exhaustive measure of thelarger constellation of elements that comprise private en-forcement regimes, such as rules of evidence, proof, liabil-ity, damages, fee recovery, the scope of standing, statutesof limitations, and judge versus jury factfinding, is notfeasible. This may well be the reason that no effort haspreviously been made to collect data that would allowfor hypothesis testing regarding causes of the legisla-tive mobilization of private litigants. Moreover, as sug-gested in hypothetical 1, to simply allow lawsuits is notthe same thing as to proactively mobilize them, for thehigh costs of litigation and the modest actual economicdamages caused by violations in many federal regulatorycontexts will produce many negative net value claims un-less Congress elects to include rules aimed at bolsteringtheir expected value. What is needed are a few discreteand clear indicators of Congress’ efforts to proactivelymobilize private litigants. The best such indicators are (1)statutory provisions requiring that defendants pay suc-cessful plaintiffs’ attorney’s fees, and (2) statutory pro-visions providing that successful plaintiffs are entitled tomonetary damages that exceed the actual material harmsuffered. Data were collected on the full universe of suchprovisions enacted by Congress from 1887 to 2004. The

annual sum of the number of plaintiff’s fee shifts and dam-aged enhancements enacted is the dependent variable inthe models presented below.

Plaintiff’s Fee Shifts. The standard “American rule”is that each party pays its own attorney’s fees and othercosts of litigation, whereas the “English rule” (which pre-vails in Europe, and most of the rest of the world) providesthat the loser pays most of the winner’s fees and costs(Leubsdorf 1984; Pfenningstorf 1984). Congress some-times explicitly departs from the default American rulein regulatory legislation and proactively opts instead foran asymmetrical rule under which winning plaintiffs mayrecover the costs of enforcement, while similar recoveryof fees and costs is not granted to winning defendants.Plaintiff’s fee shifting provisions directly reduce EC inthe equation EV = EB (p) – EC, thereby increasing EV.Among the multiple potential arrangements for allocatingresponsibility for paying litigation expenses, the plaintiff’sshift creates the greatest incentives for plaintiffs to file en-forcement actions (Kritzer 2002; Shavell 1982; Zemans1984).

Damages Enhancements. The general baseline rulegoverning monetary damages available in Americancourts is that, in the absence of contrary legislative intent,successful plaintiffs are entitled to damages proportionalto the harm or loss they suffered, not more (Galanterand Luban 1993, 1404). Congress, however, sometimesenacts express statutory provisions that depart from thisdefault rule and confer monetary damages greater than aplaintiff’s actual material damages, such as double, triple,or punitive damages. Double or triple damages operateas multiples on the actual monetary damages sufferedby the plaintiff, and punitive damages can be awardedseparately in an amount that need not be tied to actualmonetary harm at all, and can far exceed it. Damagesenhancements directly increase EB, thereby increasingEV.

Plaintiff’s fee shifts and damages enhancements mea-sure Congress’ propensity to depart from default rulesand proactively stimulate private enforcement litigation,and this is well understood by lawmakers and courts.The Supreme Court has referred to plaintiff’s fee shifts as“congressional utilization of the private-attorney-generalconcept,” while noting that “under some, if not most,of the statutes providing for the allowance of reasonablefees, Congress has opted to rely heavily on private enforce-ment to implement public policy and to allow counsel feesso as to encourage private litigation.”4 Courts have like-wise recognized that statutory damages enhancements

4Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 263(1975).


“are justified as a ‘bounty’ that encourages private law-suits seeking to assert legal rights,”5 serving to “rewardindividuals who serve as ‘private attorneys general’ inbringing wrongdoers to account,”6 and providing an “in-centive to litigate” that is “designed to fill prosecutorialgaps”7 (see also Luban 1998). Both fee shifts and dam-ages enhancements have been self-consciously utilizedby members of Congress over the full time span of thisstudy.8

I collected data on the full universe of plaintiff’s feeshifts and damages enhancements enacted into federallaw from 1887 to 2004.9 The search yielded 275 plain-tiffs’ fee shifts and 104 damages enhancements, for a to-tal of 379 litigation incentives. Each such provision wascoded for when it was enacted and the year it ceasedto be operative if the statute was repealed by Congress(8%), expired of its own terms (3%), or was struck by theSupreme Court (2%). Of plaintiff’s fee shifts and dam-ages enhancements enacted since 1887, 87% remain ineffect. This is consistent with the theoretical expectation,discussed above, that formal legal enactments will tend toendure in the American separation of powers system, andthat private enforcement regimes, once enacted, will likely

5Smith v. Wade, 461 U.S. 30, 58 (1983); see also United States v.Snepp, 595 F.2d 926, 941 (4th Cir. 1978); TVT Records v. Island DefJam Music Group, 2003 U.S. Dist. LEXIS 15271 (S.D.N.Y. 2003).

6Jackson v. Johns-Manville Sales Corp., 781 F.2d 394, 403 (5th Cir.1986).

7Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 493 (1985).

8The use of damages multiples has ancient roots and has beenutilized by American legislators since the colonial period (Blakeyand Cessar 1987, 531 n.17). The Force Act of 1870, aimed at securingthe voting rights of freed slaves, created a private right of actionand provided the first plaintiffs’ fee shift in a federal statute. TheInterstate Commerce Act of 1887 contained the second, where floordebates on the issue made clear that legislators departed from theAmerican rule on fees for the express purpose of mobilizing privatelitigants in the regulatory struggle to bring railroads under control.See floor debates on the ICA of 1887, reprinted in Sloan (1976),remarks of Senator Spooner of Wisconsin, Representative Crisp ofGeorgia, and Representative Hopkins of Illinois (vol. 3, 280–81,466, 471–72).

9Only provisions that applied to de novo court actions by privateplaintiffs, and explicitly provided for recovery of attorney’s fees,or multiple or punitive damages, were included in the dataset. Inaddition to provisions providing for an award of fees to a prevailingplaintiff, provisions providing for fees to a prevailing party werealso included since such provisions, according to courts and com-mentators alike, have been consistently intended by Congress, andhave accordingly been consistently applied by courts, to asymmet-rically favor plaintiffs, conferring upon them the right to fees as amatter of course, and conferring upon defendants the right to feesonly in rare instances in which litigation is deemed frivolous andintentionally vexatious and abusive (Berger 1987, 77–82; Conte2004, vol. 1, 667–701; Florio 2000, 722–32; Larson 1981, 85–97;Newberg 1986, 178–85).

persist through the reign of future governing coalitions.Of the 13% to exit the United States Code, in all instancesthe exit occurred because the statute or some substantiveportion of it was repealed, expired, or was struck, and inno instance was the fee shift or damages enhancementitself specifically cut out. Thus, while it would be sensi-ble to deduct from annual counts proactive decisions byCongress to eliminate fee shifts and damages enhance-ments while leaving the underlying right intact, no suchevents occurred.10

The data reveal that the enactment of private en-forcement regimes is not predominantly driven by somefew policy domains, but rather has occurred across thewaterfront of federal regulation. The fee shifts and dam-ages enhancements are distributed across areas of federalregulation as follows: Antitrust (4% of enhancements),Banking (6%), Bankruptcy (2%), Civil Rights (9%),Communications (2%), Consumer (9%), Elections (2%),Environmental (6%), Housing (5%), Interstate Com-merce (6%), Labor (9%), Property (predominantly in-tellectual property; 12%), Public Health and Safety (8%),Securities and Commodities Exchange (6%), Other (14%;other contains all policy areas with less than 2% ofenactments).

Private enforcement regimes are also not the uniqueprovince of any particular ideological or partisan pro-gram, nor have they then been exclusively deployed toserve any specific type of constituency. Consistent withconventional expectations that Democratic legislatorsand their issue group constituents favor private enforce-ment regimes, Democratic-controlled Congresses haveenacted private enforcement regimes directed at busi-ness regulation, for example, serving constituencies oflow-wage workers under the Fair Labor Standards Actof 1938,11 minority groups under the Civil Rights Actof 1964,12 and consumers under the Telemarketing andConsumer Fraud and Abuse Prevention Act of 1994.13

10In a handful of instances Congress provided in a statute thatprevailing plaintiff-enforcers of the statute would not be entitled topunitive damages (no analogous provisions occurred concerningattorney’s fees). I did not subtract these from the annual countbecause such provisions only occurred in laws in which Congressdid create a private right of action and some economic damages,giving rise to Congress’ desire to make explicit that it did not intendsuch damages to include punitive damages. It would be erroneousto count such litigation fostering laws as antilitigation laws. Inorder to evaluate the robustness of the findings presented belowto this choice, I examined an alternative specification in which Isubtracted these provisions from the annual count, and the findingswere statistically and substantively unaffected.

11Public Law No. 75-718.



830 SEAN FARHANG

FIGURE 1 Private Enforcement Regimes, 1887–2004, and PrivateStatutory Litigation Rate, 1942–2004

However, much less consistent with conventional expecta-tions, Republican-controlled Congresses have also foundprivate enforcement regimes to be a useful regulatorystrategy to serve their constituents as well. For example,in the Taft-Hartley Act of 1947 they gave companies aprivate right of action with economic damages againstunions engaged in labor actions proscribed by the Act;14

in the Cuban Liberty and Democratic Solidarity (Liber-tad) Act of 1996, they gave United States nationals whoseproperty was confiscated by the Cuban government dur-ing or following the Cuban revolution a private rightof action, with attorney’s fees for successful plaintiffs,against “traffickers in such property;15 and in the so-calledPartial-Birth Abortion Ban Act of 2003 they created a pri-vate right of action with treble damages, and damages foremotional pain and suffering, for fathers (if married tothe woman on whom the procedure is performed), andfor “maternal grandparents of the fetus” if the woman is

14Public Law No. 80-101. These provisions in Taft-Hartley are notcontained in the dependent variable because, while allowing re-covery of economic damages for injury to a business and the costsof suit, 29 U.S.C.A. § 187, it did not contain a punitive damagesprovision or allow recovery of attorney’s fees.


a minor, against a doctor who performs an abortion inviolation of the act.16 While these examples of Repub-lican enactments seem to cut against the strong versionof the party alignment hypothesis, both the strong andweak versions will have to be tested in the empirical modelpresented.

The solid line in Figure 1 represents the cumulativenumber of plaintiffs’ fee shifts and damages enhance-ments in effect annually (accounting for provisions thatexit the Unites States Code), reflecting the structural en-vironment of private enforcement regimes in existenceannually. The dashed line in Figure 1 is the annual rate,per 100,000 population, of private federal statutory en-forcement litigation (it is only possible to distinguish pri-vately from governmentally filed actions beginning in1942).17 The strikingly close association between thesetwo variables, and particularly the coincident sharp up-ward shift in both at the end of the 1960s, reinforces the


17The private statutory litigation figures reflect cases classifiedby the Administrative Office of the United States Courts as pri-vate/federal question/statutory cases, excluding prisoner petitionsand deportation cases.


plausibility of plaintiffs’ fee shifts and damages enhance-ments as measures of the broader phenomena of pri-vate enforcement regimes, and of the efficacy of privateenforcement regimes in mobilizing private litigants. Thefigure also illustrates a ratchet effect on statutory liti-gation in the federal system produced by the combina-tion of enactments over time and their durability throughtime.

Separation of Powers Conflicts. In order to test hy-potheses regarding the relationship between interbranchconflict and the use of private enforcement regimes, thisarticle uses two alternative sets of measures of political ac-tors’ ideological preferences and the extent of congruenceor conflict between them, one based on partisan iden-tification and the other on NOMINATE scores. On thepartisan side, model 1 starts with a simple DIVIDED Gov-ernment variable coded 0 when the president’s party con-trols both chambers of Congress, and coded 1 otherwise.As a more sensitive alternative to measuring interbranchpartisan conflict, model 2 substitutes an OPPOSITIONSeat Share variable, which is defined as the proportionof seats held by the party opposite the president minusthe proportion held by the president’s party, averagedacross both chambers (Epstein and O’Halloran 1999,129). The variable will be positive when the party op-posed to the president controls Congress, negative whenthe president’s party controls Congress, and of increasingmagnitude the larger the margin of control. It is coded0 when the House and Senate are controlled by differentparties.

As an alternative approach to measuring ideologicalpreferences and interbranch conflict, Poole and Rosen-thal’s first dimension common space NOMINATE scoresare employed, which are only available beginning in 1937(Poole 1998; Poole and Rosenthal 1997). While the modelutilizing this measure has the limitation of only coveringthe period 1937 to 2004, providing a relatively small sam-ple size, it allows testing the robustness of the legislative-executive conflict findings using an alternative to partyvariables, and it offers the advantage of allowing one totest separation of powers hypotheses concerning the posi-tion of the judiciary, as explained below. The NOMINATEprocedure is based upon a Downsian spatial theory of vot-ing and creates estimates of the ideological positions oflegislators on an interval scale based upon their patternof roll-call voting behavior. The common space ideologyscale is standardized so as to render the scores comparableacross chambers and over time. To model presidential ide-ology, McCarty’s (2003) presidential NOMINATE scoresare employed, which are based upon public positionstaken by the president on roll-call votes. Using this set ofroll calls for each president, the president is then treated

as a legislator for purposes of estimating his ideologicalposition.18

The federal Court of Appeals is used to measure ju-dicial ideology. The Court of Appeals level is modeledrather than the trial court or Supreme Court level be-cause each litigant is entitled to have any trial court de-cision reviewed by the Court of Appeals as a matter ofright, whereas the overwhelming majority of cases haveno meaningful prospect of obtaining Supreme Court re-view. Further, because of the Supreme Court’s limitedopportunity to extensively flesh out the meaning of par-ticular statutes, and the trial court’s lack of authority toissue decisions that bind in future cases, a huge majorityof binding statutory interpretation comes from the Courtof Appeals.

A combination of appointing presidents’ and sena-tors’ NOMINATE scores are used in order to capture theeffects of senatorial courtesy on appointments. Each judgeis assigned the value of the president’s NOMINATE scorewhen an appointment is in a state in which neither senatoris from the president’s party, and each judge is assigned thevalue of the senator’s (or the average of the two senators’)NOMINATE score(s) when an appointment is in a state inwhich one or both senators belong to the president’s party.Giles, Hettinger, and Pepper (n.d.) demonstrate that in-corporating senatorial courtesy in this fashion producesa better predictor of Court of Appeals judges’ voting be-havior than imputing only the president’s NOMINATEscore or party to a judge. The judiciary’s ideological po-sition is then measured with the average score of federalCourt of Appeals judges. Relative to the party variables,common space NOMINATE scores have the advantage ofallowing one to locate the ideological position of the ju-diciary relative to the president and Congress in the samemetric, allowing measurement of the judiciary’s distancefrom Congress and whether it is moving toward or awayfrom it.

PRESIDENTIAL Distance is the absolute value of thedistance between the presidential NOMINATE score andthe average of the House and Senate median NOMINATEscores. JUDICIAL Distance is the absolute value of the dis-tance between the average Court of Appeals NOMINATEscore and the average of the House and Senate medianNOMINATE scores. Alternative measures of PRESIDEN-TIAL Distance and JUDICIAL Distance, operationalizing

18McCarty’s (2003) presidential scores are calculated using the DW-NOMINATE procedure on presidential positions taken on roll callsin the House. In order to make these scores comparable to the Houseand Senate common space scores, I regressed House common spacescores on House DW scores and obtained the transformation equa-tion, which I then applied to the presidential DW scores to movethem into the common space. Presidential common space scorescalculated by Poole and Rosenthal do not exist prior to Eisenhower.

832 SEAN FARHANG

Congress’ ideological position differently, yielded nearlyidentical results.19 JUDICIAL Direction is coded 0 whenthe president and Congress are on the same side of the ju-diciary in ideological space, such that the appointmentof additional judges will draw the judiciary closer toCongress, and coded 1 when Congress and the presi-dent are on opposite sides of the judiciary, such that ap-pointment of judges will draw the judiciary away fromCongress.

Risk of Electoral Losses. Testing the hypothesis thatmajority coalitions in Congress will be more likely to useprivate enforcement regimes when faced with increasesin the risk of electoral losses poses an empirical challenge.It would be ideal to have a measure of legislators’ con-temporaneous beliefs about electoral risk, but no dataexist to construct such a variable going back as manydecades as the present study calls for. Researchers studyingnineteenth-century Congresses have dealt with this prob-lem by projecting backward based upon actual electoraloutcomes (Binder 1997, 73). Theoretically, the expecta-

19Rather than seeing the floor medians as critical, some theoriesemphasize the importance of the majority party (e.g., Cox and Mc-Cubbins 2004). Thus, in an alternative specification, congressionalideology was measured as the distance from the president to themedians of the majority party in both chambers, averaged acrossthem. Other theories emphasize the importance of veto players, andthus in two additional alternative specifications congressional ide-ology was measured as the distance from the president to the floormedian, and as the distance from the president to the majority partymedian, in the chamber furthest away from the president, opera-tionalizing the notion that the most distant chamber’s preferencesare decisive because if they are not satisfied, that chamber couldexercise its veto powers. In these three alternative specificationsthe statistically and substantively significant variables remainedsuch, and likewise the insignificant variables remained insignifi-cant. More complex veto pivot models, such as Keith Krehbiel’s(1998), do not yield predictions about whether Congress would in-clude private enforcement regimes in regulatory legislation, and donot point to operationalizable strategies for identifying legislatorspivotal to that decision for purposes of measuring their distanceto the president. The literature focusing on the size of the gridlockinterval is concerned with legislative productivity (ascertaining therange of possible movement away from the policy status quo, orthe range of opportunity for new legislation). The goal of this ar-ticle is quite different. Given movement in the status quo throughthe enactment of new regulatory legislation, this article seeks toexplain a particular aspect of the content of the law—whether aspecific implementation strategy is adopted. Further, while Kre-hbiel’s gridlock interval measures when it is possible to move thestatus quo and adopt a new policy, within the set of policies outsidethe gridlock interval that can be adopted, in order to know whichpivotal players in Krehbiel’s game (filibuster, floor median, vetooverride, or president) will be most important in deciding whichof the feasible policies is adopted, one has to know where the sta-tus quo is relative to those players (Krehbiel 1998, 35). In the vastmajority of empirical settings, including the present one, it is notpossible to identify the position of the status quo (no law) withinthe ideological space of Krehbiel’s game, and thus it is not possibleto identify the legislator most powerful in shaping the law’s contentfor purposes of measuring distance to the president.

tion that the risk of electoral losses will influence policydesign is predicated on the assumption that current ma-jorities are able to gauge, to some meaningful extent, thedegree of risk they face in an upcoming election. ELEC-TORAL Risk reflects seat gains or losses as a proportionof total seats in the next election by majority parties, av-eraged across the two chambers. The variable has positivevalues when the majority party loses seats in the next elec-tion, and negative values when it gains seats, and it willindicate whether congressional majorities heading intoelectoral losses are more likely to utilize private enforce-ment regimes for regulatory implementation.

Partisan Control of Congress. PARTISAN Seat Shareis positive when Democrats control Congress and reflectstheir margin of total seats over Republicans and is nega-tive when Republicans control Congress and reflects theirmargin of total seats over Democrats. It is important tobe clear about what this variable is isolating. As discussedbelow, the models will contain controls for how muchand what type of regulatory legislation Congress is enact-ing. Thus, for example, if more Democratic Congressesenact more economic regulation than more Republicanones, and as a function of this they enact more private en-forcement regimes, this will be picked up by the controlsfor the extent and type of regulatory legislation Congressis enacting. The PARTISAN Seat Share variable thereforeisolates whether, given some level and kind of regulatoryintervention, partisan control influences the selection ofprivate enforcement regimes as an instrument of imple-mentation.

Magnitude and Nature of Regulatory Productivity.Congress’ enactment of private enforcement regimes mayvary over time merely as a function of the ebb and flowof Congress’ production of regulatory legislation in gen-eral and of shifts in the nature of its regulatory agenda.The literature on regulation recognizes a basic distinc-tion between economic and social regulation (e.g., May2002; McGarity 1986; Schuck 2000). Economic regula-tion, which typically targets particular industries, is gen-erally aimed at promoting market stability, efficiency, andcompetition, and is “concerned with preventing undueeconomic concentration, regulating natural monopolies,eliminating economic windfalls, ensuring adequate dis-tribution of goods and services, and reducing fraud ineconomic transactions” (McGarity 1986, 254). Social reg-ulation, which typically cuts across all industries and sec-tors, is generally aimed at addressing problems of exter-nalities, inadequate information, and public goods, andit is concerned with promoting public health and safety,consumer protection, environmental protection, equalopportunity, and quality of life in general. During theProgressive and New Deal periods, economic regulation


was the main source of the growth in federal regulatorystatutes, whereas by the early 1970s social regulation be-came the main focus of regulatory legislation (McGarity1986, 255; Schuck 2000, 123; Vogel 1981). It is possiblethat Congress’ use of private enforcement regimes willvary across these domains.

In order to capture these factors, a random sampleof 20% of all public laws enacted from 1887 to 2004 wasdrawn, and within that sample regulatory laws were iden-tified (554 laws), and each was coded as economic regu-lation, social regulation, or other regulation, and furthercoded for its specific policy domain. For each classifi-cation, annual counts were generated of the number ofpages of regulatory legislation in the Statutes at Largefrom 1887 to 2004. Decomposing from economic, social,and other regulation into more specific policy classifica-tions (e.g., consumer, environmental, banking, antitrust)yielded no additional insights beyond those reflected inthe basic ECONOMIC Regulation, SOCIAL Regulation,and OTHER Regulation variables reported below, andweakened model fit, and thus for the sake of parsimonyonly these broad policy classification variables were in-cluded in the model.

Interest Groups. To the extent that interest groups areinfluencing the shape of regulatory legislation, a visiblevenue in which this occurs is committee hearings, wherecommittee members select representatives of groups tooffer their views on legislation. In order to measure inter-est group demand, with respect to the random sample of554 regulatory laws, all committee hearings held on thelaws were identified, witness lists for each hearing wereexamined, and each witness was coded for the type oforganization or interest she represented. Variables werethen generated defined as the annual count of witnessesappearing in support of issue-oriented citizens groups,such as Friends of the Earth, American Association ofRetired Persons, and National Council of La Raza (ISSUEWitnesses), and the number of witnesses appearing onbehalf of lawyers associations, such as the American BarAssociation, the Association of Trial Lawyers of Amer-ica, and the National Employment Lawyers Association(LAWYER Witnesses). Issue groups focused on law reformthrough litigation as a principle tactic, frequently referredto as “public interest law” groups, such as the NationalWomen’s Law Center, the National Housing Law Project,and the National Consumer Law Center, are includedin ISSUE Groups. When incorporated into the model as aseparate variable they are not independently significant.20

20This is not entirely surprising. Issue groups in general are a farlarger force than organizations focused upon litigation. There were1,017 issue organizations in the sample, not including litigation

A variable was also generated defined as the annual countof witnesses appearing on behalf of businesses or businessorganizations, such as the National Association of Manu-facturers, the Chamber of Commerce of the United States,and the Securities Industry Association (BUSINESS Wit-nesses). A number of scholars have suggested that businessinterests at times have mobilized against the use of privateenforcement regimes (Kagan 2001; Vogel 1981), and thusthis variable is necessary as a control with the expecta-tion that it will be negatively associated with enactmentof private enforcement regimes.

Budget Constraint. BUDGET Constraint is the size ofthe federal budget surplus or deficit relative to total expen-ditures (Mayhew 1991). Larger negative numbers indicaterelatively sizeable deficits, and larger positive numbersindicate substantial surpluses. All independent variablesdiscussed above are annual.

Estimation Method. The dependent variable—thesum of all fee shifts and damages enhancements enactedannually—is a series of annual counts. Because the dis-tribution of event counts is discrete, not continuous, andis limited to nonnegative values, it is best modeled as-suming that the errors follow a poisson rather than anormal distribution (Cameron and Trivedi 1998). Be-cause the count data are time series, in order to checkfor autocorrelation a plot of the autocorrelation functionof the residuals of each model was examined (Cameronand Trivedi 1998; Tobias and Campbell 1998), which re-vealed second-order autocorrelation. In order to accountfor autocorrelation in count data, Schwartz et al. (1996)and Katsouyanni et al. (1996) have developed an autore-gressive poisson model which includes a specification ofthe autocorrelation in the model, and which also allowsfor overdispersion (where the variance of the series doesnot equal the mean, which is an assumption of a standardpoisson model). This approach fits a log-linear model us-ing iterative weighted least squares. Starting values for theparameters are obtained by running a standard poissonregression, and the residuals are saved and incorporatedinto subsequent iterations of the model as explanatoryvariables for the number of lags specified (Tobias andCampbell 1998), in this case two. Plots of the autocor-relation function of the residuals in each model con-firmed that this method eliminated the autocorrelationproblem.

advocacy groups, and 66 litigation advocacy groups. Further, manyissue organizations that are not litigation advocacy groups clearlyare actively aware of and concerned with the role of courts inimplementation, as shown, for example, by the frequency withwhich issue groups file amicus briefs. Thus, the line between issuegroups and legal advocacy organizations, as it pertains to their likelyviews on private enforcement regimes, is not a bright one.

834 SEAN FARHANG

Applying the Dickey-Fuller and Augmented Dickey-Fuller unit root tests to the raw series reveals evidenceof nonstationarity in the dependent variable and severalof the independent variables (PARTISAN Seat Share andPRESIDENTIAL Distance). Statistical analysis of the rela-tionship between two nonstationary time series can yieldspurious results. All of the nonstationary series analyzedhere are integrated of order one (that is, they are renderedstationary by taking first differences). However, runningregressions on period to period changes in variables (firstdifferences), rather than levels of variables, changes thetheoretical meaning of the hypotheses being tested andleads to loss of information, particularly regarding thekind of long-run relationships that the present inquiry iscentrally concerned with (Kennedy 1994, 253–54).

The long-run relationship between levels of nonsta-tionary variables can only be estimated if they are in-tegrated of the same order (as they are here), and theseries are cointegrated. The core idea of cointegration isthat even if series are nonstationary, there may be a long-run comovement between the variables such that a linearcombination of them is stationary. The principle diagnos-tic technique for determining whether nonstationary se-ries are cointegrated was developed by Engel and Granger(1987) and entails assessing whether the model resid-uals are stationary using the Augmented Dickey-Fullertest, but evaluating the test statistic against critical val-ues computed by Engel and Granger. This test, known asthe Augmented Engel-Granger test, shows that all modelsreported in Table 1 are stationary (the test statistic is re-ported as “AEG”), such that t statistics are valid and spuri-ous regression results are avoided regarding the long-runeffects of PARTISAN Seat Share and PRESIDENTIAL Dis-tance (Gujarati 2003, 822).

Findings and Conclusions

In a poisson model, an x-unit increase in an indepen-dent variable translates into a change in the incidencerate of the dependent variable given by exp (xi� i). Withrespect to the most straightforward measure of inter-branch conflict, model 1 in Table 1 shows that dividedgovernment increases Congress’ enactment of private en-forcement regimes. The DIVIDED Government variable issignificant and positive, with a quite substantial substan-tive effect, supporting SOP hypothesis 1. A move fromunified to divided government nearly doubles the pre-dicted rate of enactments, increasing it by a factor of 1.93,or 93%. Model 2, Table 1, substitutes the OPPOSITIONSeat Share variable as the measure of legislative-executive

TABLE 1 Autoregressive Poisson Modelsof Enactments

1887–2004 1887–2004 1937–2004Variable Model 1 Model 2 Model 3

Divided Government .655∗∗ — —(.254) —

Opposition Seat Share — 1.63∗∗ —(.567)

Presidential Distance — — 2.86∗∗

— — (.954)Judicial Distance — — .876

— — (1.76)Judicial Direction — — .272

— — (.309)Electoral Risk 3.00∗∗ 2.70∗∗ 3.53∗

(.942) (.872) (1.44)Partisan Seat Share 1.44∗ 1.55∗ −.060

(.680) (.704) (1.04)Lawyer Witnesses −.024 −.014 −.107

(.096) (.092) (.101)Issue Witnesses .025∗∗ .024∗∗ .019∗

(.007) (.007) (.009)Business Witnesses −.003 −.003 .001

(.004) (.004) (.006)Budget Constraint .045 −.184 .280

(.630) (.609) (.960)Social Regulation −.001 −.001 −.001

(.001) (.001) (.001)Economic Regulation .005∗ .005∗ .003

(.002) (.002) (.003)Other Regulation .033∗ .029∗ .010

(.015) (.013) (.016)Constant .073 .479∗ −.627

(.250) (.189) (.697)Residuals Lag 1 .330∗∗ .364∗∗ .072

(.102) (.101) (.158)Residuals Lag 2 .309∗∗ .304∗∗ .207

(.111) (.108) (.159)R2 .60 .61 .57N 116 116 66AEG −6.51∗ −8.10∗ −5.32∗

∗∗p < .01, ∗p < .05.

conflict, and it is statistically and substantively signifi-cant as well. An increase in OPPOSITION Seat Share by15% is associated with an increase in enactments by afactor of 1.28. To put this in perspective, the increasein OPPOSITION Seat Share when Nixon took office,holding other variables constant, rendered an increase


in predicted enactments by a factor of 1.76. Model 3, Ta-ble 1, substitutes the PRESIDENTIAL Distance variableas the measure of legislative-executive conflict, and it isagain positive and statistically and substantively signifi-cant. Reinforcing the findings regarding divided govern-ment using party variables in models 1 and 2, as theideological distance between the president and Congressincreases, Congress becomes more prone to utilize pri-vate enforcement regimes. An increase of one standarddeviation (.206) translates into an increase in predictedenactments by a factor of 1.80. To put the magnitudein practical perspective, the increase in PRESIDENTIALDistance moving from Jimmy Carter to Ronald Reaganelevated predicted enactments by a factor of 1.99, whichis, sensibly enough, quite comparable to the substantiveeffects of the divided government dummy in model 1.

JUDICIAL Distance and JUDICIAL Direction are in-significant. Neither the direct measure of the judiciary’sdistance from Congress, nor whether the judiciary is mov-ing toward or away from Congress, explains the incidenceof private enforcement regimes. As discussed earlier, thereare theoretical grounds to expect increases in the judi-ciary’s distance from Congress to reduce enactment ofprivate enforcement regimes, and to increase enactmentof private enforcement regimes, generating conflictinghypotheses (SOP hypotheses 3 and 4). It may be thatthese conflicting forces are canceling one another out.What is clear is that, contrary to intuition, on balanceCongress is not more likely to enact private enforce-ment regimes in the presence of an ideologically friendlyjudiciary.

The ELECTORAL Risk variable is significant and hasthe expected sign in all three models, supporting SOP hy-pothesis 2, which predicted that the prospect of electorallosses increases Congress’ enactment of private enforce-ment regimes. A seat share loss of 12% for the majorityparty (about average in years that the majority lost seatshare in the next election, which was true of 72 of 118years) is associated with the current majority increasingits enactments by a factor of 1.43 in model 1, 1.38 inmodel 2, and 1.53 in model 3.

The issue group hypothesis is supported in all threemodels. ISSUE Witnesses is positive and significant, indi-cating that the presence of more witnesses representingissue-oriented citizens groups in hearings on regulatorylegislation is associated with increased utilization of pri-vate enforcement regimes. An increase in ISSUE Witnessesby one standard deviation (15.35) is associated with anincrease in predicted enactments by a factor of 1.47 inmodel 1, 1.44 in model 2, and 1.34 in model 3. LAWYERWitnesses is highly insignificant and, contrary to the rent-seeking lawyer hypothesis, has a negative sign in all three

models. BUSINESS Witnesses is also insignificant in allthree models.

The budget constraint hypothesis is not supportedby the data. The insignificance of BUDGET Constraint inall three models indicates that the relative size of bud-get deficits or surpluses is not significantly related tothe enactment of private enforcement regimes. Two ofthe controls for the extent and nature of regulatory leg-islation enacted (ECONOMIC Regulation and OTHERRegulation) are significant and positive in models 1 and2, but insignificant in model 3, while the third suchcontrol (SOCIAL Regulation) is insignificant in all threemodels.

The PARTISAN Seat Share variable is significant withthe expected sign in models 1 and 2, but insignificant inmodel 3, which has a substantially smaller sample size. Ifcongressional ideology is incorporated in model 3 withthe average of the House and Senate median NOMINATEscores, as an alternative to PARTISAN Seat Share, thatvariable too is insignificant. The significance of PARTI-SAN Seat Share in models 1 and 2 provides support for theweak version of the party alignment hypothesis, holdingthat, even controlling for the extent of regulatory leg-islation being enacted, Democratic majorities are morelikely to utilize private enforcement regimes than Repub-lican ones. An increase of 15% in Democrats’ margin ofcontrol is associated with an increase of predicted enact-ments by a factor of 1.24 in model 1, and 1.26 in model 2.The data provide no support for the strong version of theparty alignment hypothesis, which holds that creation ofprivate enforcement regimes is uniquely the province ofDemocrats, and accordingly that the effects of other inde-pendent variables will be conditional upon Democraticcontrol of Congress. Interactions between Democraticcontrol of Congress and each of the other independentvariables all proved insignificant.

The central hypothesis about the relationshipbetween legislative-executive conflict in the Americanseparation of powers system and enactment of privateenforcement regimes is strongly borne out by the data:conflict between the executive and legislative branchescauses Congress to rely more heavily upon the mobi-lization of private litigants for regulatory enforcement.These findings are robust across multiple operationaliza-tions of interbranch conflict, whether one uses a simpledivided government dummy, opposition seat share, ora party-neutral measure of the ideological distance be-tween Congress and the president. The hypothesis thatimpending electoral losses increase Congress’ enactmentof private enforcement regimes is also strongly borneout, showing that legislators understand that private en-forcement regimes can insulate not just from presidential

836 SEAN FARHANG

subversion, but also, given the stickiness of the status quoin the American separation of powers system, from sub-version by future legislative majorities.

The findings linking interbranch conflict and en-actment of private enforcement regimes have significantimplications for understanding patterns of developmentof some important forms of litigation or “litigiousness”in the United States. The rate of federal statutory litiga-tion filed by private parties increased sharply at the endof the 1960s, in tandem with the corresponding growthof Congress’ enactment of private enforcement regimes(Figure 1). This growth in private statutory enforcementlitigation far outstripped the growth in other types oflitigation in the federal system, such as tort and con-tract claims brought under diversity jurisdiction. Conse-quently, privately filed statutory claims have grown froma relatively minor share of the federal civil docket to thedominant one. In 1965 they accounted for only 18%, andover the past five years, averaging more than 163,000 peryear, they have accounted for an average of 63% of thefederal civil docket.21

The analysis and findings presented here link long-run historical patterns of divided government and po-larization between the legislative and executive branches,which markedly increased in frequency and intensity inthe late 1960s (see Cameron 2000, 11; Jacobson 2003),with the sharp increase in the rate of private statutoryenforcement litigation, and the corresponding increasein the role of private litigants, lawyers, and courts in fed-eral policy implementation and elaboration. As distinctfrom explanations for American litigiousness groundedin American political culture (Glendon 1991; Lipset 1996;Manning 1977), these findings highlight the importanceof the structure of American political institutions for ex-plaining levels of at least some kinds of litigation. As con-trasted with accounts of American litigiousness that decrythe undemocratic influence over public policy exercisedby the unholy alliance of an imperial judiciary and ir-responsible plaintiffs’ lawyers (Glazer 1975; Olson 1991;Sandler and Schoenbrod 2002), the evidence presentedhere traces the roots of the extensive role of private liti-gants, lawyers, and courts in the implementation of fed-eral regulatory laws to choices made in Congress, widelyregarded as our most democratic branch of government.

The new data collected to create the first empiricalmodel of legislative enactment of private enforcementregimes, in addition to testing the separation of powershypotheses developed in this article, also presented theopportunity to systematically evaluate four theories of

21Annual Report of the Administrative Office of the U.S. Courts,Table C-2 (1965, 2003 to 2007).

sources of private enforcement regimes that have longappeared in the scholarly literature but had never beentested. The model confirmed the issue group hypoth-esis and the weak version of the party alignment hy-pothesis. The number of issue-oriented interest groupactors seeking to influence legislation at the committeestage in Congress significantly predicts the enactmentof private enforcement regimes. Controlling for otherfactors, including the extent and nature of regulatorylegislation being enacted, Democratic party control ofCongress is also significantly associated with utilizing pri-vate enforcement regimes in implementation. The modelfails to support the rent-seeking lawyer hypothesis, thebudget constraint hypothesis, and the strong version ofthe party alignment hypothesis. While lawyers associa-tions do appear in committee hearings to offer viewson regulatory legislation, the frequency with which theydo so does not significantly predict enactment of pri-vate enforcement regimes. Likewise, contrary to plau-sible theoretical expectations, budget deficits are notsignificantly associated with enactment of private en-forcement regimes. Finally, while Democratic party con-trol of Congress has significant direct effects, none of theother significant independent variables are conditionalupon it.

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