3rd September 2026
How settling litigation is being (wrongly) used for broader political goals
There have been two interesting examples of litigation settlements in the United States being used for wider political goals.
In respect of one example, the liberal minded may go Boo!
In respect of the other example, the liberal minded may go Hurrah!
This post sets out why one should go Boo! to both.
*
The first example is President Trump’s supposed settlement of his claim against his own government. You may recall that one proposed term of this settlement was the creation of a huge slush fund for his political supporters.
Boo!
Of course, such a move was illiberal and misconceived. It is not the proper purpose of a settlement agreement to set up arrangements by which over a billion dollars of public money can be distributed to those who broke the law in their political support for Trump.
This is instead the sort of thing for which legislation should be used – or not used.
Using what is, in essence, a private agreement to set up such a scheme is far more than a compromise between parties settling a law suit.
And the fund seems to have got little traction and looks like it has been abandoned.
It was an ingenious ploy – and quite, quite wrong.
*
The second example is the settlement by which various states in the United States have forced Meta to make widespread changes to its platforms in respect of child protection.
Hurrah!
Meta has thereby been obliged to make changes which it has long resisted and in respect of which it has lobbied politicians to oppose.
The state governments nonetheless worked out a means be which they could get their way.
As part of the agreement to end the litigation, Meta undertook to make wide changes in its commercial and technical practices.
But again, a settlement agreement is not the appropriate means to effect such wider changes.
One may clap and cheer at the result – a mighty corporation tamed – but we should also tut at how it was achieved.
Litigation is not an exact science and cases can and do go against expectations. The dynamics of a case change over time, and developments in the course of litigation can swing in various directions and at a range of speeds.
In this case, it so happened that Meta saw an advantage in settling on such terms. But that may well not have happened. And any settlement could have been on far less attractive terms to the government.
And public policy should not really be set by one lot of litigation lawyers in a contest with another lot of litigation lawyers.
Forcing such changes on a corporation like Meta is instead the job of laws and law-makers, governors and decision-makers.
That Meta and other corporations are so effective in stymying such rule making and decision making does not change this basic constitutional point.
In this case, yes – there was a good outcome for those who wish corporations to be more responsible.
But it would be better if such wider changes were done by those actually elected to make and implement public policy: by politicians after deliberation, and not by opposing litigation lawyers in a deal.
Over at Prospect I have developed this argument further.
*
Just like setting up public inquiries are often an admission of the failure of accountability of institutions that should have dealt with matters in real time and at the time, looking to litigation settlements to push through wide changes is also an admission of the failure of institutions to deal with matters as they should.
Settlements of litigation cases should have the narrow purpose of, well, settling a dispute between parties.
Settlements of litigation cases should not be used to settle wider political and policy issues.
Thank you for this interesting (as usual) post. They really are appreciated.
I’m not sure I agree though (less usual), as I’m not sure that there is an issue with politicians, after deliberation, effecting policy change using litigation and settlement as an instrument. It’s not so different than secondary legislation or government guidance (and perhaps better, given there is a need for it to be agreed by those affected).
Are the opposing counsel, instructed by the company, really so different from the lobbyists they would instruct to counter legislative or regulatory measures of similar intention?
Are the litigators and those involved with drafting a settlement really so different from those tasked with drafting law and policy?
You might challenge that this means accepting the Trump-IRS settlement – but i think I would argue that perhaps this perspective helps clarify that the main problem in that case was the lack of opposing parties.
I agree that making policy through litigation is not the best way.
But, the mere existence of a dispute and settlement, if publicised effectively, may at least draw attention to the underlying issues in ways that cut through the noise that often gets in the way. It may (re)invigorate or even start the conversation.
Litigation does not solve society’s problems. It can, however, point towards a solution. In particular, a case resolved – even to an unsatisfactory extent – against some ‘bad actor’ can greatly clarify the issues which should be taken up by legislation, and also, often, help to reduce resistance to such legislation. The progress in control of tobacco advertising and marketing provides a useful road to follow in this respect.
I suppose we could say, generously, that:
a) It was the states that were parties to this litigation, and so the fact that it was brought at all meant that there was some democratic oversight. The governors and legislators are accountable to the electorates for the deal that was struck.
b) A deal could only be struck because Meta thought that they would fall foul of existing laws. The settlement happened because of a framework of laws that already exist (albeit, perhaps, too complex for anyone to enforce with certainty).
However, your point in this blog and the Prospect piece is hair-raising: the potential for litigation to be used for improper ends. The Trump slush fund was a crude and obvious device, but one can well imagine some states or the federal government of the FCC seeking to pressure media companies into certain behaviours by means of a settlement, which could entrench behaviours that would otherwise be unconstitutional.
A particular concern of the Meta case is that it, without scrutiny, sets a layer of regulation that may well act as a ‘moat’ preventing new entrants to the market.
A proper legislative approach would not necassarily have avoided this, but would at least have allowed representations by those with interest in good markets.