The Privatization of Public Legal Rights: How Manufacturers Construct the Meaning of Consumer Law

This article demonstrates how the content and meaning of California's consumer protection laws were shaped by automobile manufacturers, the very group these laws were designed to regulate. My analysis draws on and links two literatures that examine the relationship between law and organizations but often overlook one another: political science studies of how businesses influence public legal institutions, and neo-institutional sociology studies of how organizations shape law within their organizational field. By integrating these literatures, I develop an "institutional-political" theory that demonstrates how organizations' construction of law and compliance within an organizational field shapes the meaning of law among legislators and judges. This study examines case law and more than 35 years of California legislative history concerning its consumer warranty laws. Using institutional and political analysis, I show how auto manufacturers, who were initially subject to powerful consumer protection laws, weakened the impact of these laws by creating dispute resolution venues. The legislature and courts subsequently incorporated private dispute resolution venues into statutes and court decisions and made consumer rights and remedies largely contingent on consumers first using manufacturer-sponsored venues. Organizational venue creation resulted in public legal rights being redefined and controlled by private organizations. This article demonstrates how the content and meaning of California's consumer protection laws were shaped by automobile manufacturers, the very group these laws were designed to regulate. My analysis draws on and links two literatures that examine the relationship between law and organizations but often overlook one another: political science studies of how organizations influence public legal institutions, and neo-institutional sociology studies of how organizations shape law within their organizational field. The political science literature on interest group politics suggests that business interests often co-opt the legislative and regulatory process through tactics such as lobbying, agenda setting, and venue shopping (Kamieniecka 2006; Leech et al. 2002; Baumgartner & Jones 1993; Ayres & Braithwaite 1991; Kingdon 1984; Quirk 1981; Stigler 1971; Bernstein 1955). Political scientists, therefore, have made great strides in explaining the mechanisms by which organizations actively influence law among public legal institutions tasked with enacting, implementing, and enforcing legal rules. Organizational sociologists applying neo-institutional analysis focus more on the relationship of law and private organizations. A central contribution has been to explain the impact of law on "organizational fields," the community of organizations that coexist and interact in some area of institutional life and share common systems of meaning, values, and norms (Dobbin et al. 1993; Sutton et al. 1994; Edelman 1990, 1992). More recently, neo-institutional scholars of law and organizations turn the tables, by showing how, at least in the civil rights context, courts defer to institutionalized organizational structures and practices. Judicial deference to organizational practices renders law "endogenous," i.e., the content and meaning of law is determined by the social arena that it is designed to regulate (Edelman et al. 1999; Edelman 2002, 2005, 2007; Edelman & Suchman 2007). My analysis builds on both these literatures on law and organizations by examining how private entities influence the meaning of legislation through both political and institutional mechanisms. Specifically, the research question I examine is: How and under what conditions can business organizations shape the meaning of legislation, once it is enacted? I focus in particular on the capacity of private business to influence how and where disputes over public legal rights are resolved. Amidst the proliferation of public-private partnerships and "responsive regulation" sanctioned and approved by legislatures and administrative agencies, business organizations across a wide variety of industries are increasingly engaged in "public" decisionmaking in private settings (Ayres 8c Braithwaite 1992; Lobel 2004). …