The American Law Institute was formed in 1923 by such legal luminaries as Chief Justice and former President William Howard Taft, future Chief Justice Charles Evans Hughes, and former Secretary of State Elihu Root. Its early leaders included Judges Benjamin N. Cardozo and Learned Hand. The founders’ objective was to address what they perceived as two defects in American law: its uncertainty and its complexity. By promulgating Restatements of the Law, ALI would synthesize the current state of the law, and thereby inform judges and lawyers what the law was. Today, ALI’s members are judges, professors, and practicing lawyers.
Just four years short of 100 years after its founding, ALI has published dozens of Restatements, in four series. In more recent years, ALI has expanded its output to a new type of analysis – documents it calls Principles of the Law. In the Principles, ALI articulates what its contributors think the law ought to be, in an effort to persuade lawmakers or judges to steer it in that direction.
In Investors Business Daily’s “Is the American Law Institute About to Jump the Shark?,” Lisa Rickard convincingly writes that ALI’s “Restatements of the Law of Consumer Contracts” isn’t a Restatement at all – i.e., a statement of what the law is – but rather a statement of what ALI would like the law to be. It seeks to create, wholly independent of precedent, a body of law for business-consumer relations.
ALI calling this document a Restatement is troubling for two reasons. First, rather than stating what the law is, it creates a new standard no court has ever used. Given that “judges turn to Restatements the way a layperson would turn to an encyclopedia,” this is not only irresponsible, but also a betrayal of the reputation ALI built over decades of straightforward analysis of what the law is. ALI’s creation of a new standard for consumer contracts also ignores the Federal Arbitration Act and numerous Supreme Court decisions involving that statute.
Second, this purported Restatement provides a fresh incentive for an already troubling practice - consumers signing documents they have not read. Endorsing a self-fulfilling prophecy of sorts, ALI uses the assumption that consumers don’t actually read contracts as grounds to assert that they should not be held responsible for knowing the terms of the contracts into which they enter.
In prior years, several projects ALI began as Principles have become Restatements. If it wishes to retain any of the credibility it built up over nearly a century of work, ALI must acknowledge that its document on the Law of Consumer Contacts is not a Restatement of what the law is, but rather a statement of Principles, that is, what ALI wishes the law were.
In an episode of the television series Happy Days, popular character Fonzi was waterskiing. Viewers were able to suspend their disbelief about whether Fonzi was really waterskiing until he jumped over a shark. That was the moment they understood the entire waterskiing scene had been fabricated. If ALI publishes its Law of Consumer Contracts as a Restatement, lawyers and judges and law professors will be wise to reconsider the value of previous “Restatements” as well.