Rule‐Intermediaries in Action: How State and Business Stakeholders Influence the Meaning of Consumer Rights in Regulatory Governance Arrangements

The boundaries between public and private actors are increasingly blurred via regulatory governance arrangements and the contracting out of rights enforcement to private organizations. Regulation and governance scholars have not gained enough empirical leverage on how state actors, private organizations, and civil society groups influence the meaning of legal rules in regulatory governance arrangements that they participate in. Drawing from participant observation at consumer law conferences and interviews with stakeholders, my empirical data suggest that consumer rights and, in fact, consumer law, mean different things to different stakeholders tasked with adjudicating consumer rights. Rights afforded consumers who purchase warranties are now largely contingent on first using alternative dispute resolution structures, some created and operated by private organizations with soft state oversight and others run by stakeholders but with greater state oversight and involvement. Using new institutional sociology and regulatory governance theories, I find that stakeholders involved in overseeing and administering these dispute resolution systems filter the meaning of consumer rights through competing business and consumer logics. Because consumer laws mean different things to stakeholders tasked with adjudicating consumer rights, two different rights regimes simultaneously exist in this field. I conclude that how rule‐intermediaries administering private and state‐run dispute resolution systems conceptualize what consumer laws mean in action may have implications for regulatory governance and more broadly, consumers' access to justice.     

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.     

The devil is in the details: How arbitration system design and training facilitate and inhibit repeat-player advantages in private and state-run arbitration hearings

This article demonstrates that arbitration system design and the training that arbitrators receive shape the extent to which repeat players gain advantages in arbitration hearings. While prior arbitration research does suggest that arbitrator training matters, this is the first article to show how it matters, as we observe actual arbitration hearings in private and state-run arbitration systems in two states. Our comparative analysis links three literatures interested in how seemingly interest-neutral institutions, like disputing forums, serve in practice to reinforce dominant norms, values, and hierarchies: (1) sociolegal studies of repeat-player advantages in disputing, (2) studies of occupational socialization in educational settings, and (3) neoinstitutional organizational sociology studies of how managerial values influence the way in which organizations construct law. We bridge these literatures by showing how arbitrator system design and the occupational socialization that arbitrators receive in private arbitration are primary mechanisms through which managerial values influence the arbitration process, ultimately providing a pathway for repeat-player advantages in hearings. Because our analysis compares two distinct arbitration systems, we identify variation in these processes and offer preliminary but tangible policy recommendations for the design and implementation of arbitration systems that best protect civil and consumer rights within arbitral forums that the Supreme Court continually upholds.     

Legal Intermediaries: How Insurance Companies Construct the Meaning of Compliance with Antidiscrimination Laws

Existing empirical research suggests that human resource officials, managers, and in‐house counsel influence the meaning of antidiscrimination law by communicating an altered ideology of what civil rights laws mean that is colored with managerial values. This article explores how insurance companies play a critical and, as yet, unrecognized role in mediating the meaning of antidiscrimination law through Employment Practice Liability Insurance (EPLI). My analysis draws from, links, and contributes to two literatures that examine organizational behavior in different ways: new institutional organizational sociology studies of how organizations respond to legal regulation and sociolegal insurance scholars' research on how institutions govern through risk. Through participant observation at EPLI conferences, interviews, and content analysis of insurance loss prevention manuals, my study bridges these two literatures and highlights how the insurance field uses a risk‐based logic to construct the threat of employment law and influence the form of compliance from employers. Faced with uncertain legal risk concerning potential discrimination violations, insurance institutions elevate the risk and threat in the legal environment and offer EPLI and a series of risk‐management services that build discretion into legal rules and mediate the nature of civil rights compliance. My data suggest that insurance risk‐management services may sometimes be compatible with civil rights goals of improving equality, due process, and fair governance in workplace settings, but at other times may simply make discrimination claims against employers more defensible.     

Data Breach,Privacy, and Cyber Insurance: How Insurance Companies Act as “Compliance Managers” for Businesses

While data theft and cyber risk are major threats facing organizations, existing research suggests that most organizations do not have sufficient protection to prevent data breaches, deal with notification responsibilities, and comply with privacy laws. This article explores how insurance companies play a critical, yet unrecognized, role in assisting organizations in complying with privacy laws and dealing with cyber theft. My analysis draws from and contributes to two literatures on organizational compliance: new institutional organizational sociology studies of how organizations respond to legal regulation and sociolegal insurance scholars' research on how institutions govern through risk. Through participant observation at conferences, interviews, and content analysis of insurer manuals and risk management services, my study highlights how insurers act as compliance managers for organizations dealing with cyber security threats. Well beyond pooling and transferring risk, insurance companies offer cyber insurance and unique risk management services that influence the ways organizations comply with privacy laws.     

How Dispute Resolution System Design Matters: An Organizational Analysis of Dispute Resolution Structures and Consumer Lemon Laws

This study demonstrates how the structure of dispute resolution shapes the extent to which managerial and business values influence the meaning and implementation of consumer protection law, and consequently, the extent to which repeat players are advantaged. My analysis draws from, links, and contributes to two literatures that examine the relationship between organizational governance structures and law: neo‐institutional studies of law and organizations and socio‐legal studies of repeat players' advantages in disputing. Specifically, I compare an instance where powerful state consumer protection laws are resolved in private dispute resolution forums funded by automobile manufacturers but operated by independent third‐party organizations (California) with one where consumer disputes are resolved in public alternative dispute resolution processes run and administered by the state (Vermont). Through in‐depth interviews and participant observation in the training programs that dispute resolution arbitrators undergo in each state, I show how different dispute resolution structures operating in California and Vermont give different meanings to substantially similar lemon laws. Although my data do not allow me to establish a causal relationship, they strongly suggest that the form of the dispute resolution structure, and how business and state actors construct the meaning of lemon laws through these structures, have critical implications for the effectiveness of consumer protection laws for consumers.     

Institutional and Political Sources of Legislative Change: Explaining How Private Organizations Influence the Form and Content of Consumer Protection Legislation

This article explores how private organizations influence the content and meaning of consumer protection legislation. I examine why California forced consumers to use a private dispute resolution system that affords consumers fewer rights, while Vermont adopted a state‐run disputing structure that affords consumers greater rights. Drawing from historical and new institutional theories, I analyze twenty‐five years of legislative history, as well as interviews with drafters of the California and Vermont laws, to show how automobile manufacturers weakened the impact of a powerful California consumer warranty law by creating dispute resolution venues. As these structures became institutionalized in the lemon law field, manufacturers reshaped the meaning of legislation. Unlike California, the political alliances in Vermont and a different developmental path led to a state‐run dispute resolution structure. I conclude that how social reform laws are designed and how businesses influence social reform legislation can increase or decrease the achievement of a statute's social reform goals.