A bit of a rant today.
We’ve just read Gibson v. American Cyanamid Co., ___ F.3d ___, 2014 WL 3643353 (7th Cir. July 24, 2014), and we have to say that it’s one of the most constitutionally arrogant decisions we’ve ever read. Stripped to its essentials, Gibson is the judicial branch thumbing its nose at the supposedly co-equal legislative branch and saying “we can do it but you can’t.”
Gibson involves one of these seemingly one-way legal doctrines that only protects plaintiffs, but for some reason never defendants, the concept of so-called “vested rights.” Here’s the back-story.
Thirty years ago, the Wisconsin Supreme Court, in a judicial exercise of social policymaking, decided to adopt a peculiar form of an already peculiar doctrine – market share liability. See Collins v. Eli Lilly Co., 342 N.W.2d 37 (1984). The court breached a hitherto (mostly) sacrosanct defense – product identification − that a defendant can’t be liable unless the plaintiff first proves that s/he actually used the defendant’s product. The reason was … well, the usual fuzzy-headed logic that the common law can change and we think it’s better that the plaintiff wins. Id. at 45 (we can change the common law), 49 (we’re gonna change the law and let the plaintiffs win because of “interests of justice and fundamental fairness”). Despite the fact that the product was off the market and plaintiffs had taken it many years earlier, the court in Collinshad no compunction in extending this new theory of liability retroactively to defendants whose conduct had previously been protected by the product identification defense.
Collins, as most of our readers probably already know, was a DES case. DES was, for all intents and purposes, the world’s first generic drug. Its patent had expired, so anybody who wanted to go to the time and effort to do so (this was the pre-1962 FDA, before NDA requirements were made a lot tougher) could set up shop and make the drug. Scores of companies did, and “DES” became the reference of choice for most doctors and pharmacists. Given the peculiarly long latency period for the peculiar injury – suffered in utero − in DES cases, product identification was a mess. Collins decided to let the plaintiffs win anyway by shifting the burden of proof, contrary to decades (at least) of precedent.
At least in Collins there was a real product identification problem. In the next case (the one ultimately at issue in Gibson), a bunch of class action lawyers decided to gin up a product identification problem. They wanted to sue on behalf of everybody theoretically injured by lead paint, which had been off the market for a quite a while by the time suit was brought. Since causation was an individualized issue that could defeat aggregated litigation, they created an impossible ID problem by skipping over the manufacturers of lead paint (some of whom might have been identifiable in building maintenance records) and sued only the bulk suppliers of lead paint pigment.
In Thomas v. Mallett, 701 N.W.2d 523 (Wis. 2005), the Wisconsin Supreme Court blessed this dodge, pushing the envelope of its so-called “risk-contribution” market-share theory retroactively to extend liability even further back in time. Unlike DES, where exposure necessarily happened, if at all, during a 9-month gestation period, any given building could have been painted with lead paint who-knows-how-many times over many decades. Also unlike DES, lead paint pigments weren’t really generic. There were several different types, with differing amounts of lead in their chemical compositions, leading to differing degrees of toxicity. Finally, unlike the poor DES plaintiffs, these plaintiffs weren’t as poor – they could still sue their landlords.
Full disclosure: Bexis was involved in Thomas, and he’s still hacked off about it.
“No problem,” said the court in Thomas, these poor plaintiffs (or more specifically their case aggregating lawyers) need to win anyway. Once again, out came the usual excuses. Somebody needs to pay for lead paint injuries and removal, and punching an even bigger hole in the product identification defense will provide a “pool of defendants” that can be held liable. 701 N.W.2d at 551. Because plaintiffs would lose under existing law, a court can “fashion an adequate remedy when one did not exist.” Id. at 552. The “remedy” clause in the state constitution is a one-way street, which can expand liability but not contract it. Id. at 554. We don’t care about chemical identity either. The plaintiffs were “innocent” and the defendants shouldn’t have sold their product in the first place – even if they had stopped decades earlier. Id. at 562. They could be used for the same purpose, so close enough. Id. It’s like fast food, same [you know what], different bun:
[D]efendants can insure themselves against liability, absorb the damage award, or pass the cost along to the consuming public as a cost of doing business.
Id. at 552. It’s a Johnny-one-note judiciary. That’s the same excuse for expanding liability that we’ve been seeing for at least fifty years.
The defendants raised constitutional issues – that they couldn’t be stuck with retroactive liability under some new theory for “conduct previously completed.” 701 N.W.2d at 565. Come back later, said the Thomas court:
First, they [defendants] argue it violates principles governing retroactive liability by attaching new, severe, and unanticipated legal consequences to conduct previously completed. Second, they argue it violates due process by establishing evidentiary presumptions that are irrational or do not provide a fair opportunity for rebuttal. Third, they argue that their due process right to a meaningful opportunity to present a defense is violated.
These constitutional issues are not ripe. As this case is before us on summary judgment, and as many material facts are in dispute, we remand this case for trial.
Id. (footnote omitted).
The Wisconsin Supreme Court never accepted that later case – no great surprise.
The identical issue arose in a federal district court, however, in Gibson v. American Cyanamid Co., 750 F. Supp.2d 998 (E.D. Wis. 2010). We pounced on Gibson when it was decided because, for once, defendants had received the same solicitude as plaintiffs when expansive new theories are created that retroactively do away with common law defenses We described Gibson in the trial court thusly:
Well, wonder of wonders! In Gibson the court discovered that defendants have due process rights, too – and the defendants’ rights under the federal constitution trump (dare we whisper, “preempt”) the weird universal right to recover that Thomas extracted from the poor, mistreated Wisconsin constitution.
In Gibson the court concluded that defendants are protected by Due Process from excessive retroactive tinkering with the law. . . .
* * * *
Gibson proceeds to sweep Thomas away. The expansion of market share liability was undoubtedly retroactive – imposing unprecedented liability for products that had been sold many decades earlier, with no maximum limit.
Actually, we said a lot more, but that’s enough for now. Anyone interested can read the earlier post.
Gibson wasn’t all that happened. Tort reform happened in 2011. One of the things that you can find in our earlier post is our assessment of the chances for tort reform: “not likely in Wisconsin.”
We were quite publicly wrong.
Sometimes we don’t mind being wrong. We didn’t that time, and we told our readers all about it, including:
Product identification – in most cases against manufacturers, plaintiffs must prove that the defendant actually manufactured the injury-causing product. This is intended to limit the effect of Thomas v. Mallett, 701 N.W. 2d 523 (Wis. 2005)
The legislature really didn’t like Thomas (or Collins either, since tiny legislative exception requires labeling that doesn't identify the product, which effectively exempts drugs). That branch of government didn’t think that the courts should ever have created such cockamamie theories to begin with, so it abolished them – retroactively – just as retroactively as courts had created them.
After the legislature did its thing, Gibson reached the Seventh Circuit. Now it was the plaintiffs – who had benefitted from the Wisconsin Supreme Court’s retroactive creation of novel liability – arguing that the legislature can’t take it away in the same retroactive fashion.
And the Seventh Circuit says they’re right. First, the minute any common-law court creates any new theory of liability, no matter how extreme, and isn’t reversed by another court, the plaintiffs get a Due Process “vested right” in the perpetuation of such liability that only another court, and not the legislature can take away. “[A] plaintiff's interest in a common-law claim is a protected vested interest.” Gibson, 2014 WL 3643353, at *5.
In other words, the legislature cannot retroactively abolish a legal theory. “Wisconsin Supreme Court precedent demands holding that §895.046 [abolishing Thomas-based liability] violates state due-process principles by trying to extinguish Gibson's vested right in his negligence and strict-liability causes of action.” Id.. So while courts can create liability retroactively by calling it “common law,” the supposedly co-equal legislative branch of government doesn’t have the same power to abolish what the courts have taken it upon themselves to create, because of “due process.”
§895.046 was enacted to serve the public interest in permitting businesses to operate in Wisconsin without fear of products-liability litigation in the indefinite future based on risk-contribution theory. And, of course, §895.046 serves this purpose by extinguishing risk-contribution theory altogether. But the competing private interest is significant. . . . Without risk-contribution theory, [plaintiff] (and similarly situated plaintiffs) cannot prove causation-in-fact as to a particular manufacturer and thus will likely recover nothing. . . . Here, [plaintiff] would likely have no remedy at all. As interpreted by the Wisconsin Supreme Court, the state constitution’s due-process guarantee prohibits retroactive application of §895.046.
Id. at 6.
We want to break that down a bit. This risk-contribution theory was created retroactively. It deprived the defendants of their product identification defenses that had been part of the common law since time immemorial. Do defendants have a “vested right” in their defenses? The Wisconsin Supreme Court dodged the question in Thomas, and said “come back later.”
Now we have the Seventh Circuit, sitting in diversity jurisdiction, so they are predicting Wisconsin law – essentially standing in the shoes of the Wisconsin Supreme Court. Now the shoe is on the other foot. Plaintiffs are complaining that their supposed “right” to recovery, created retroactively by a court, cannot be equally retroactively taken away by the legislature.
Gibson’s take on Wisconsin state Due Process law is, in a word, “no.” The legislature is subordinated to the judiciary. The legislature cannot undo what the courts do to the extent that courts can. At most legislation can clean up a judicially inspired liability mess non-retroactively, but everybody who is already taking advantage of the retroactively created mess gets a free pass to keep going.
That’s the imperial judiciary at work. Presumably a court could say “we think what we did is a bad idea” and abolish a cause of action retroactively, just like they abolished these defendants’ defenses retroactively.
In practice that rarely happens, since the applicable rule of law for plaintiffs is “what’s mine is mine; what’s yours is negotiable.” But some obscure causes of action, such as alienation of affections, have been judicially abolished. Ordinarily, common-law decisions retroactively apply to matters then pending either on appeal or in the trial courts, unless the judge doing the abolishing decides, in the exercise of discretion, to specify prospective application only.
But Gibson refuses to give the legislative branch the same freedom of action that courts routinely give themselves. Judges look out for other judges, after all.
So let’s go on to the second part of Seventh Circuit’s Gibsondecision, which is to pass upon the District Court’s 2010 decision that defendants have Due Process rights against retroactive liability.
Having, in the first half of Gibson, decided that plaintiffs have a “vested right” against retroactive reduction of liability, one would expect that defendants have the same right – all that imagery of the “scales of justice” and all – right?
Our imperial judges are also imperially pro-plaintiff – and result-oriented, to boot. Defendants don’t get Due Process protection against liability due to retroactive abolition of their defenses.
[W]e start with the proposition that the federal Constitution gives a wide berth to state (and local) laws, allowing state legislatures to enact laws unless a specific constitutional bar prevents it.
Gibson, 2014 WL 3643353, at *12.
What? “Legislation?” But didn’t you just hold…? Maybe some differenceexists between “state” Due Process and “federal” Due Process. If so, the opinion doesn’t say that explicitly.
That being said, after the extensive discussion of the “public health problem” that the “policy” of Thomas was addressing, id.at *8-11, the analogy to “legislation” – that is judicial legislation – is actually fairly apt – or would have been if Gibson hadn’t just declared real “legislation” unconstitutional for reasons of retroactivity.
The next eight pages or so of Gibson (*11-18) are spent deconstructing the fractured United States Supreme Court decision that was the primary basis of the district court’s opinion that defendants as well as plaintiffs could assert Due Process against retroactive takings. We’re not all that interested because, after all that, “we are back to where we started,” id. at *18, that is, do defendants have the same Due Process rights against the imposition of retroactive liability as do plaintiffs against its retroactive abolition?
No − because while plaintiffs have “vested rights,” defendants have only “economic” interests. Judicial “economic legislation” gets the same constitutional deference (“arbitrary and irrational” standard) as does economic legislation actually passed by a legislature. Id. at *18.
Wait, that’s not right either. Here comes the next round of the imperial judiciary at work. Judicial legislation through the common law (even though it used to be said that courts aren’t supposed to “legislate”) should receive even more constitutional deference than the branch formally charged with legislative powers:
[W]hile we have been setting out the deferential standard for reviewing state legislation, even more deference is owed to judicial common-law developments, which by their nature must operate retroactively on the parties in the case. The development of state common law is a fundamental feature of our legal system. And, in turn, the foundation of the common law system” is “the incremental and reasoned development of precedent. . . .
Gibson, 2014 WL 3643353, at *18-19 (emphasis original) (citations and quotation marks omitted). And so on and so forth, blah, blah, blah.
You get the picture. These are judges deciding cases. They have just declared their superiority to legislators. Judicial "incremental and reasoned" decisions are better. And the bottom line: because judges decide how much “deference” to accord their own decisions, neither the legislature nor other judges (through "deference") an touch those decisions.
The Gibson decision can gussy it up all it swant with paeans to how great courts are, but at bottom, Gibson is the imperial judiciary at its most arrogant. Having for reasons of Due Process just denied the legislative branch the right to abolish liability retroactively, the judges confer this same power on their own branch. “[We] decline to apply to courts the same ex post facto standard applicable to legislatures.” Gibson, 2014 WL 3643353, at *19. The hubris of such statements is unmistakeable.
Gibson offers two excuses: (1) that “judicial interpretations” present “less danger” (tell that to defendants facing massive liability under “risk contribution” market share liability; tell that to the Actos defendants); and (2) “the need to allow for common-law developments.” Id. This second reason: based on courts’ “only” being able to “act in construing existing law in actual litigation,” is just arrogance repackaged – another way of saying the we, the judges, need cases in which to “act,” so we have determined that our “developments” deserve more deference than legislative ones.
What’s worse, Due Process works only in one direction – against the rights of defendants to keep their money and in favor of the rights of plaintiffs to try to take it away. While “most states for most types of claims continue to apply a strict causation-in-fact requirement,” the Wisconsin judiciary is free to limit or abolish common-law causation requirements as it sees fit because – well, it’s a court − and because it had done the same thing once before (in Collins), so it’s free to do it again:
[S]tates that have chosen to develop their common law to permit recovery on a theory of culpable contribution to the risk of injury have [not] made an irrational or arbitrary choice . . . . The Wisconsin Supreme Court’s decision was not an “unexpected and indefensible” break from Wisconsin's prior common law. . . . By the time that Thomas was decided, Collins had been part of the state's common law for twenty years.
Gibson, 2014 WL 3643353, at *21. That's called using stare decisis to justify departing from stare decisis.
Because the court in Thomas had ex cathedra declared that it was acting “reasonably,” id. at *22 (quoting Collins, 432 N.W.2d at 52), Gibson credited this statement. Id. (declaring, on the basis of Collins’ say-so) that the further expansion of “risk contribution” is necessarily “rational.” Id.
There are four take-aways from the judicial tour-de-farce in Gibson:
- Plaintiffs have “vested” Due Process rights in liability the instant a new common-law theory is created; defendants have no Due Process rights, “vested” or otherwise, in longstanding common-law defenses that prevent liability.
- Courts are free to create or destroy liability retroactively; legislatures have no such power.
- Courts have “substantial leeway . . . to develop the common law” through judicial legislation, 2014 WL 3643353, at *22; legislative legislation (what state and federal constitutions contemplated) get no such “leeway.”
- The imperial judiciary is more solicitous of the Due Process rights of plaintiffs than of the Due Process rights of defendants because the judiciary needs "cases" in which to "act" – more plaintiffs means more litigation, and more litigation provides the judiciary more opportunities to “act,” and thus to augment judicial power.
The last point may be the most important in the long run. It seems like nothing gets accomplished these days via either legislation or executive action, without some court having to bless it first. Geez, now we have the spectacle of the Speaker of the House jockeying to sue the President of the United Statees. More cases means ever more fodder to feed our imperial judiciary.
Finally, while we hope that the Supreme Court takes Gibson, given the decision's plain implications for the relationship between two branches of government that the constitution declares to be co-equal. However, given the inherent conflict of interest in asking judges (especially the most powerful judges in the land) to rein in the power of the imperial judiciary, we’re not holding our breath.