The Empower Eliot Spitzer Bill

The Empower Eliot Spitzer Bill

March 13, 2008

Eliot Spitzer announced his resignation
yesterday because of his alleged involvement in a prostitution ring. But this
is far from his real scandal. And regardless of what happens in this case,
Spitzer has long acted as of he were above the law -- or rather as if he were
the law.

During his tenure as New York Attorney General, Spitzer stretched state law to
make national policy, tried his targets in the media with improper leaks, and
used the machinery of his office to go after his political enemies. As TAS's
Philip Klein wrote

And one of the worst of his legacies is inspiring scores of mini-Spitzers among
state attorneys general. From tobacco to guns to global warming, a wave of
state AGs are twisting their states' laws to go after media-anointed villains
in the trendy national cause of the day. As my CEI colleague Hans Bader writes,
many state AGs are guilty of "meddling in the affairs of other
states,...encouragement of judicial activism and frivolous lawsuits, favoritism
towards campaign contributors, [and] ethical breaches."

In fact, in his list last year of "The Nation's Top Ten Worst State
Attorneys General," Bader actually ranked two AGs as worse than Spitzer
under these criteria. (To see who they are and the rest of the list, go here.)

To top it off, the U.S. Senate has just passed a bill that would greatly
increase the power of state attorneys general by deputizing them to regulate on
behalf of the federal government. Prompted by concerns about safety of toys
imported from China,
the ostensible purpose of the bill is to toughen the Consumer Product Safety
Commission (CPSC), the federal agency created in 1972 to oversee the safety of
toys and other products.

But to accomplish this purpose, the CPSC Reform Act of 2008 (S. 2663),
sponsored by Sen. Mark Pryor (D-Ark.), launches a strange new experiment that
turns federalism on its head. It gives state attorneys general explicit powers
to enforce and interpret federal law!

Section 26A of the act gives the AGs massive new powers to bring suit in
federal court "whenever the attorney general of a State has reason to
believe that the interests of the residents of that State have been, or are
being, threatened or adversely affected by a violation of any consumer product
safety rule, regulation, standard, certification or labeling requirement, or
order prescribed under this Act or any other Act enforced by the
Commission."

NOTE WHAT THE BILL is not. It does not devolve regulatory power from the
federal government to the states. Whether the feds or the states and/or the
private sector should regulate toy safety is a legitimate subject of debate
among proponents of limited government. (As is the existence of the 35-year-old
federal safety agency, which has been found
by one study to have no beneficial impact on product safety. Some of the CPSC's
mandates, such as those for childproof caps on medicine, have had
counterproductive effects and actually increased injuries and fatalities.)

But Pryor's "reform" act does not limit the federal government's
power at all nor give any more jurisdiction to state legislatures. It simply
extends the federal government's scope and adds on state AGs as adjuncts to
federal regulatory power. They would, in effect, become the federal
government's super-regulators. As Pryor himself puts
it
, these provisions allow state AGs to "act as real cops on the beat,
looking out for consumers and restoring confidence in the marketplace by
enforcing the provisions of the entire Consumer Product Safety Act."

Yet, given the history of Spitzer and other AGs, it's questionable how often
these new federal "cops" would act in the best interests of the
residents of their state. With the slightest pretense of a safety risk, they
would have license to go after products and companies they deem politically
incorrect. They could, for instance, go after toy guns and other war toys that
have long been crusaded against as being too militaristic. They could also
conceivably use these new powers to implement a type of backdoor Kyoto treaty by going
after products they claim contribute to global warming.

There could also be more parochial reasons for the products they would go
after. Some cases could be pursued with the intent of emptying a company's
"deep pockets" into state revenue coffers. As Andrew Grossman points
out in a study
for the Heritage Foundation, "companies are likely to seek settlements
with state attorneys general, including payments to the state and other
concessions, in order to avoid the risk and uncertainty of litigation."

There's also the matter of the state AGs' friends in the trial bar. Spitzer was
noted for subpoenaing a mountain of documents that provided grist for lawsuits
once the state was through with them. Although the Senate bill limits the trial
lawyers' access to documents in state AG actions, state AGs could still smooth
the way for private lawsuits by bringing a government action. As Grossman puts
it: "Violations of CPSC regulations and standards are considered per se
violations of tort law in suits by individuals who have been harmed by faulty
products. State lawsuits that establish a violation, then, even if it is a very
minor one that the CPSC, acting on its own, would not have addressed, give
trial lawyers the opportunity to bring follow-on tort lawsuits in which they
need not prove the presence of a product defect."

Right now, Pryor's bill is awaiting conference with a more moderate House bill
that doesn't give state AGs nearly as much power. The Bush administration has
expressed concerns about the Senate bill, but has not issued a veto threat. It
would be tragically ironic if after one of the most powerful former AGs was
brought down by an alleged prostitution ring, the federal government were to
enact a state AG extortion ring.
earlier
this week, "Spitzer himself does not deserve an ounce of sympathy for the
public humiliation he is set to endure, because he built his career on the
public humiliation of others."