January 18, 2017

ALI: Impartial Expositor of the Law or Lobbying Group?

The American Law Institute (“ALI”) is not well-known to the general public.  But it has had tremendous influence on lawyers, judges, and law students—and on the development of the law in the United States.  Composed of distinguished academics, judges, and practitioners, the ALI publishes “Restatements” of the law—treatises that, in the ALI’s words, provide “clear formulations of common law . . . as it presently stands or might appropriately be stated by a court.”  Judges have relied on Restatement descriptions of the law in tens of thousands of cases, and lawyers often base their arguments on a Restatement’s explanation of the governing legal principles.

In recent years, however, questions have arisen about whether the ALI’s Restatements fairly describe existing law, or instead are attempts to change the law in ways preferred by the Restatement authors or ALI members. The late Justice Antonin Scalia explained in 2015 that “[o]ver time, the Restatements’ authors have abandoned the mission of describing the law, and have chosen instead to set forth their aspirations for what the law ought to be.” Therefore, “it cannot safely be assumed, without further inquiry, that a Restatement provision describes rather than revises current law.”

A Restatement project now underway at ALI presents the organization with a critical choice: preserve its reputation as an impartial expositor of the law, or confirm its transformation into just another group lobbying for its preferred view of what the law should be.

That project, begun in 2012, would create a new “Restatement of the Law of Consumer Contracts.”  But there is no such area of law—the “Restatement” would invent it, and do so by cherry-picking court decisions and state statutes, mixing them together, and devising new entirely legal principles governing the validity of contracts between companies and consumers.  The authors of this “Restatement” expressly acknowledge that this is their plan, stating that “consumer contract” law is an area of “emerging new law” and that their intended approach is to draw upon statutes and regulations to promote “a greater conceptual unity across . . . two bodies of law.”

But the ALI has said that the prestigious “Restatement” label is reserved for the law “as it presently stands,” because an “unelected body like The American Law Institute has limited competence and no special authority to make major innovations in matters of public policy.”  To the extent an ALI project recommends what the law “should be,” it must be labeled as statement of “Principles of Law,” and not as a “Restatement.”

Why is the consumer contracts project being called a Restatement?  Because that label will mislead judges to believe that it states the law “as it presently stands,” which makes it much more likely that the document’s contents will find their way into legal opinions. But that is just as misleading as the false representations to consumers that the draft Restatement attacks. 

The U.S. Chamber Institute for Legal Reform (“ILR”) this week sent a letter to the ALI urging it to reframe the “consumer contracts” project as a statement of “Principles of Law.”   As ILR explained, the reason for ILR’s letter was the issuance on December 20 of a new draft of this proposed Restatement.

ILR urges the ALI to reclassify this effort as a Principles project, as required by the ALI’s own guidelines.  And ILR explains that the substantive provisions of the most recent draft are not only entirely inconsistent with current law, but also would threaten to invalidate a large majority of contracts currently recognized by courts as entirely lawful—creating uncertainty and waves of litigation that would impose increased costs on consumers. 

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