This Director’s Letter was originally published in the Winter 2019 Edition of The ALI Reporter.
The ALI has been keeping tabs on judicial citations to Restatements of the Law since the early days. At the 1937 Annual Meeting, for instance, Herbert Goodrich reported that as of that time, “there were 459 citations by the Federal Courts, [and] 3023 by the state courts, making a total of 3482 court citations.”<fn>Herbert F. Goodrich, Annual Report of the Adviser on Professional Relations, 14 A.L.I. PROC. 58, 60 (1937).</fn>
Today, our Institute staff carefully tracks and categorizes each judicial citation to a Restatement. The numbers are impressive—as of July 2019, there were more than 210,000 judicial citations to the Restatements. Judge Goodrich, I am sure, would be proud.
We focus on judicial citations because Restatements are primarily addressed to courts and are drafted from the perspective of a common-law judge. Information about judicial references to Restatements helps us to gauge the value of our work to judges, as well as its influence on the continuing development of American common law. Citations are an easy way to mark the influence or use of our work product; we also know that the Restatements and other projects are frequently used by judges and their law clerks to further understanding even when there is no occasion to cite specific language or Sections.
But other institutions, particularly legislatures and administrative agencies, find value in our Restatements as well. A survey of some examples underscores the wide-ranging and less-well-understood impact of the ALI’s work.
Perhaps most importantly, there are instances in which legislatures have codified a Restatement rule directly into a statute. Congress notably did so when it passed the National Childhood Vaccine Injury Act of 1986, which contains a section modeled on Comment k to § 402A of the Restatement Second, Torts.<fn>See 42 U.S.C. § 300aa-22(b).</fn> This Comment states that a seller should not be held strictly liable for harm caused by “unavoidably unsafe products,” such as certain vaccines, and the Act’s legislative history makes clear that the statute was crafted to “set forth the principle contained in Comment k.<fn>H.R. REP. NO. 99-908, pt. 1, at 25 (1986).</fn>
At the state level, I previously have written about the influence of the Restatement Third, Trusts, on state codification of the “prudent investor rule.”<fn>https://www.ali.org/news/articles/how-ali-empowered-fiduciaries-have-better-investment-strategies/.</fn> The ALI’s publication of this Restatement in 1992 ushered in a wave of state legislative change, and by 2006 every state had enacted law that aligned with the position of the Restatement. In some of these states, this significant shift in the legal regime was accomplished through passage of the Uniform Prudent Investor Act, which itself had been influenced by the Restatement. Similarly, the Uniform Powers of Appointment Act, which has been enacted by nine states, “draws heavily” on the Restatement Third, Property (Wills and Other Donative Transfers).<fn>Powers of Appointment Act, UNIF. LAW COMM’N, https://www.uniformlaws.org/committees/community-home?CommunityKey=70faefab-5c3d-4146-a51b-9b0a5b1f490d (last visited Nov. 13, 2019).</fn>
In other cases, Restatements have influenced the legislative text. For example, the House Report accompanying the Foreign Sovereign Immunities Act of 1976 indicates which provisions are consistent with the Restatement Second, Foreign Relations Law of the United States.<fn>H.R. REP. NO. 94-1487, at 19, 23 (1976).</fn> Restatements have played similar roles at the state level. For example, this year Nevada enacted legislation strengthening its requirements for certain professionals to report suspected child abuse or neglect. One subsection of the law pertains to the duties of attorneys; in crafting this provision, the Nevada legislature considered the Nevada Rules of Professional Conduct, which generally prohibit an attorney from revealing confidential client information, except “to the extent the attorney reasonably believes necessary to prevent a criminal act that is likely to result in reasonably certain death or substantial bodily harm.”<fn>2019 Nevada Laws Ch. 316 (A.B. 151), Legislative Counsel’s Digest (paraphrasing Nevada Rule of Professional Conduct 1.6(d)).</fn> The legislative history shows that in interpreting “substantial bodily harm,” lawmakers found useful the discussion in Comment c to § 66 of the Restatement Third, The Law Governing Lawyers, which explains that “serious bodily harm” includes the consequences of child sex abuse. Drawing on this Comment for support, Nevada law now provides that attorneys are required to report suspected abuse or neglect “[t]o the extent the attorney reasonably believes necessary to prevent the further sex trafficking or sexual abuse of the child.”<fn> Id. § 12.5(2)(a).</fn>
Administrative agencies likewise rely on Restatements for a wide variety of purposes. One of these is to draw on ALI definitions of key terms. A prominent example is the definition of “trade secret” from the first Restatement of Torts, which appears in Comment b to § 757. This definition has been adopted in rules promulgated by several federal agencies, including the Occupational Safety and Health Administration,<fn>Hazard Communication; Definition of Trade Secret and Disclosure of Trade Secrets to Employees, Designated Representatives and Nurses, 51 Fed. Reg. 34,590, 34,591–93 (Sept. 30, 1986).</fn> the Environmental Protection Agency,<fn>Trade Secrecy Claims for Emergency Planning and Community Right-to-Know Information; and Trade Secret Disclosures to Health Professionals, 53 Fed. Reg. 28,772, 28,774–75, 28,785–86, 28,801–02 (July 29, 1988).</fn> and the Mine Safety and Health Administration.<fn>Hazard Communication (HazCom), 65 Fed. Reg. 59,048, 59,088 (Oct. 3, 2000).</fn> Regulations in four states— Arkansas, Ohio, Texas, and Washington—similarly incorporate or reference Comment b’s definition of “trade secret,” for purposes generally relating to chemical safety disclosure requirements.<fn>ARK. ADMIN. CODE 010.06.10-3 & app. E; OHIO ADMIN. CODE 3745-100-09(F); 16 TEX. ADMIN. CODE § 3.29(a)(26); WASH. ADMIN. CODE 296-901-14006 & 296-901-14030, app. E. In the Texas example, The Railroad Commission of Texas referred to the Restatement because its definition of “trade secret” already had been adopted by the Supreme Court of Texas in a 1958 decision.</fn> In another instance of definitional borrowing, the U.S. Department of Housing and Urban Development has derived a definition of the term “waste” from the Restatement Third, Property (Mortgages), for use on standardized closing forms and documents for certain Federal Housing Administration programs.<fn>HUD Multifamily Rental Project and Health Care Facility Closing Documents: Revisions and Updates and Notice of Information Collection, 69 Fed. Reg. 46,214, 46,216 (Aug. 2, 2004).</fn> And, the Securities and Exchange Commission relies on the Restatement Third, The Law Governing Lawyers, in defining terms relevant to standards of professional conduct for attorneys who practice before the Commission.<fn>Implementation of Standards of Professional Conduct for Attorneys, 67 Fed. Reg. 71,670, 71,675 (Dec. 2, 2002) (proposed rule, explaining reliance on Restatement); see also Implementation of Standards of Professional Conduct for Attorneys, 68 Fed. Reg. 6296 (Feb. 6, 2003) (final rule).</fn>At the state level, the Indiana Natural Resources Commission in 1993 borrowed the definition of “lake,” set forth in § 842 of the Restatement Second, Torts, in determining in an administrative adjudication whether a particular body of water was a “lake” for purposes of the state’s Lakes Preservation Act.<fn> Dep’t Nat. Res. v. Fulton Cty., 6 Caddnar 123, ¶ 11 (1993), available at https://www.in.gov/nrc/decision/92-459w.v6.html.</fn> Two years later, the Commission “adopted the essence of the Restatement ‘lake’ definition by rule.”<fn>Indiana Register, Natural Resources Commission, Information Bulletin No. 41 (Second Amendment), The Public Trust Doctrine on Navigable Waters and Public Freshwater Lakes and the Lake Management Work Groups, at 8 n.45 (Oct. 1, 2011) (citing 312 IND. ADMIN. CODE 1-1-21), available at http://iac.iga.in.gov/iac/20111012-IR-312110582NRA.xml.pdf.</fn> And in 2008, the Indiana legislature actually codified the definition by statute.<fn>Id. at 8 & n.46 (citing Indiana Public Law 6-2008, codified at IND. CODE 14-26-2-1.5).</fn>
Aside from borrowing definitions, agencies routinely rely on a Restatement for a basic expression of a rule of law relevant to the agency’s rulemaking. For example, in a rule promulgated by HUD’s Office of Federal Housing Enterprise Oversight, relating to minimum capital requirements for Fannie Mae and Freddie Mac, the agency cited § 204 of the Restatement Second, Contracts, for the point that, “agreements may be legally binding even when there is a lack of specificity on all terms.”<fn>Office of Federal Housing Enterprise Oversight; Minimum Capital, 61 Fed. Reg. 35,607, 35,610 (July 8, 1996).</fn> The agency relied on this principle to justify its decision, in connection with the purchase or securitization of mortgages, not to restrict the term “commitment” with references to specifics such as price, volume, and fees. In a different regulatory context, the Bureau of Indian Affairs cited the Restatement Second, Conflict of Laws, to support the proposition that a child of unwed parents generally has the same domicile as the custodial parent for purposes of the Indian Child Welfare Act.<fn>Indian Child Welfare Act Proceedings, 81 Fed. Reg. 38,778, 38,793 (June 14, 2016).</fn>
In a non-rulemaking context, the International Trade Administration in 2000 issued Safe Harbor Privacy Principles, which were meant to be evaluated by the European Commission for “adequacy” under European law.<fn>Issuance of Safe Harbor Principles and Transmission to European Commission, 65 Fed. Reg. 45,666, 45,666 (July 24, 2000).</fn> Once deemed adequate, the Principles then could “serve as authoritative guidance to U.S. companies and other organizations receiving personal data from the European Union.”<fn> Id.</fn> In response to a request by the European Commission for clarification on some questions of American privacy law, the International Trade Administration set forth a detailed exposition of the law, relying heavily on the Restatement Second, Torts, which, with respect to issues of invasion of privacy in particular, the agency described as providing “an authoritative overview of the law in this area.”<fn>Id. at 45,679.</fn>
State regulations also sometimes invoke our Restatements. In Missouri, for example, the Attorney General administers and enforces the state’s Merchandising Practices Act, and has issued rules to define the meanings of certain key enforcement terms and to provide notice of their application. In several of these rules, the Attorney General cites Sections of the Restatement Second, Contracts, for support.<fn>15 MO. CODE STATE REGS. 60-8.020, 60-8.040, 60-8.050, 60-8.080, 60-9.070, 60-9.100.</fn> In one example, the regulation establishes that it is an unfair trade practice to violate the duty of good faith, citing § 205 of the Restatement, which sets forth a black-letter statement of the duty of good faith and fair dealing. And in another instance, the Attorney General cites Restatement § 208 to support the regulation’s definition of the term “unconscionable.”
Advisory opinions issued by bar authorities likewise regularly draw on ALI work, in particular from the Restatement Third, The Law Governing Lawyers, which has proven a trustworthy guide for state and local ethics authorities since its publication in 2000. Examples include New York City’s early reliance on Comment c to § 203 in Proposed Final Draft No. 1 (subsequently renumbered § 123 in the official text), explaining why attorneys “of counsel” to one another should be deemed a single unit for purposes of determining conflicts of interest, in an opinion concluding that “affiliated” attorneys and firms must follow this same rule;<fn>NYC Eth. Op. 2000-4 (Oct. 26, 2000).</fn> Nebraska’s reliance on § 68, defining communications protected by the attorney–client privilege, in an opinion relating to a lawyer’s representation of undocumented immigrants before the Nebraska Workers’ Compensation Court;<fn>Nebraska Ethics Advisory Opinion for Lawyers No. 09-10 (Dec. 2009).</fn> Utah’s reliance on §§ 99 and 100 in analyzing whether an attorney may contact employees of an organization, when that organization is represented by counsel in litigation against the attorney’s client;<fn>UT Eth. Op. 15-02 (Feb. 10, 2015).</fn> and Oregon’s reliance on § 122, covering client consent to a conflict of interest, in discussing whether a lawyer may advise a married couple on estate-planning issues where one spouse would have an elective share claim against the other spouse’s separate property.<fn>OR Eth. Op. 2018-194 (Mar. 2018).</fn>
There is also a significant body of administrative adjudicatory material in which Restatements of the Law are referenced. As early as the 1930s and 1940s, decisionmakers at federal departments and agencies, including the Department of the Interior, the National Labor Relations Board, and the Securities and Exchange Commission, were citing volumes from the first Restatement series.<fn>See, e.g., Construction of the Warren Act Contracts, North Platte Project, Nebraska, 56 Interior Dec. 148, 162–163 (June 4, 1937) (citing Restatement First, Contracts); In re Phelps Dodge Corp., 19 NLRB 547, 565 n.21 (Jan. 16, 1940) (citing Restatement First, Torts); In re Allender Co., 9 S.E.C. 1043 (1941) (citing Restatement First, Agency).</fn> Today, citations to Restatements regularly appear in many different types of decisions, including by the Administrator of the Federal Aviation Administration,<fn>In re USAIR, Inc., FAA Order No. 92-70, 1992 WL 753206, at *1 (Dec. 17, 1992).</fn> DOJ administrative law judges deciding cases under the Immigration and Nationality Act,<fn>United States v. Cal. Mantel, Inc., OCAHO Case No. 12A00049, 2013 WL 1918852, at *7–8 (Feb. 8, 2013).</fn> and ALJs at the Commodity Futures Trading Commission.<fn>Pac. Trading Grp., Inc. v. Global Futures & Forex, Ltd., CFTC No. 03-R030, 2004 WL 2591468, at *5, *7 n.42 (Nov. 16, 2004).</fn> Similarly, at the state and municipal levels, Restatements frequently are cited by decisionmakers on public employment relations boards,<fn>SEIU, Local 1021 v. Cty. of Sonoma, 32 Pub. Emp. Reporter for Cal. ¶ 152, 2008 WL 8568930 (Oct. 10, 2008).</fn> public utilities commissions,<fn>In re The Application of Idaho Power Co. for Approval of a Special Contract with J.R. Simplot Co., 2014 WL 2112866, at *7–9 (Idaho Pub. Util. Comm’n May 19, 2014).</fn> and tax tribunals,<fn>In re RHM-88, LLC, 2007 WL 81856, at *9–11 (N.Y.C. Tax Trib. Jan. 4, 2007).</fn> to name just a few examples.
These varied examples of the influence of our Restatements serve as a striking and welcome reminder of how deeply the ALI’s work is woven into the fabric of American law, and how our Restatements can serve as resources in just about any legal context, whether legislative or administrative, at both federal- and state-government levels. The broad influence of our work underscores the value of the time and effort that our Members, Advisers, and Reporters, as well as our Institute staff, devote to each of our Restatement projects.