Faculty Working Papers

See also the RSS News feed of working papers as they are released.

Bound print copies of George Mason School of Law’s working paper series on law and economics are available in the Law Library. The bound set often includes initial drafts of papers. Search Mason’s Classic Catalog to locate a working paper.

Recent Working Papers:

Living Originalism: The Magical Mystery Tour

By: Nelson Lund

Date Posted: 2015

No.: 15-07

Full text (most current version) on SSRN

Abstract:

In a brilliant theoretical maneuver, Professor Jack Balkin has proposed to marry originalism and living constitutionalism. His move resembles President Jefferson’s appeal to Americans, in his First Inaugural Address, to accept that “we are all Republicans, we are all Federalists.” If Balkin’s goal is to send originalism to the same fate as the Federalist Party, he has already made substantial progress.

This short essay begins with a summary of the core features of Balkin’s theory. It then turns to the recent work of Professor Steven G. Calabresi. A founder of the Federalist Society who clerked for Judge Robert Bork and Justice Antonin Scalia, Calabresi was also a special assistant to Attorney General Meese and a speechwriter for Vice President Quayle. He went on to become one of the most frequently cited academic originalists of his generation, but he has now fully converted to Balkin’s “living originalism.”

Calabresi’s conversion suggests that wedding bells are ringing pretty loudly for Balkin’s union of two theories that were once thought to be irreconcilable. This essay argues that the marriage will leave originalism in much the same position as the legal death that married women experienced under the old rules of coverture.

On Engineering Urban Densification

Abstract:

City planning in America began as a Progressive Era exercise, intended to pre-serve property values and implicitly incorporate the social norms of officials and planners. Over time, rigid zoning was replaced by flexibility, accompanied by opaque bargaining between localities and developers. Still, even in vibrant large cities, homeowner preferences for low density largely prevailed over attempts to enhance agglomeration through increasing density. The effect is to reduce economic opportunity for individuals, and cities less prosperous.

One method of increasing agglomeration is the imposition of densification, utilizing the assembly of transient coalitions that could impose grand bargains between alderman and strong mayors. Expert planners would devise detailed quotas for desirable and undesirable uses in different parts of the city, and recipients of favorable zoning would receive regulatory property that is locked in place by procedural and constitutional requirements. Roderick Hills and David Schleicher advocate this approach in City Replanning.

This Article reviews the history of idealistic, and later pragmatic, comprehensive planning and zoning. It then analyzes the case for agglomeration, and how it might be obtained through density mandates. The Article subsequently reviews undesirable consequences of such mandates. It asserts that grand bargains attenuate democratic decisionmaking, significantly reinforce the perceived evils of the current system, and are apt to be ineffective.

Preemption in the Rehnquist and Roberts Courts: An Empirical Analysis

By: Michael GreveJonathan KlickMichael PetrinoJ.P. Sevilla

Date Posted: 2015

No.: 15-05

Full text (most current version) on SSRN

Abstract:

This article presents an empirical analysis of the Rehnquist Court’s and the Roberts Court’s decisions on the federal (statutory) preemption of state law. In addition to raw outcomes for or against preemption, we examine cases by subject-matter, level of judicial consensus, tort versus regulatory preemption, party constellation, and origin in state or federal court. We present additional data and analysis on the role of state amici and of the U.S. Solicitor General in preemption cases, and we examine individual justices’ voting records. Among our findings, one stands out: over time and especially under the Roberts Court, lawyerly preemption questions have assumed a distinctly ideological flavor. Preemption cases are much more likely to be contested than they were in earlier decades; and in those cases, once-rare judicial bloc voting has become common.

The Mainstreaming of Libertarian Constitutionalism

Abstract:

Libertarian constitutional thought is a distinctly minority position among scholars and jurists, one that at first glance has little connection with either modern Supreme Court jurisprudence or the liberalism that remains dominant in the legal academy. However, libertarian ideas have more in common with mainstream constitutional thought than at first meets the eye. They have also had greater influence on it.

This article explores the connections between mainstream and libertarian constitutional thought in recent decades. On a number of important issues, modern Supreme Court doctrine and liberal constitutional thought has been significantly influenced by pre-New Deal libertarian ideas, even if the influence is often unconscious or unacknowledged. This is particularly true on issues of equal protection doctrine and modern “substantive” due process as it pertains to “noneconomic” rights. Here, both the Supreme Court and much of the mainstream academic left have repudiated early twentieth century Progressivism, which advocated across-the-board judicial deference to legislatures. They have also rejected efforts to eliminate common law and free market “baselines” for constitutional rights.

The gap between libertarian and mainstream constitutional thought is much greater on issues of federalism and property rights. Here too, however, recent decades have seen significant convergence. Over the last thirty years, the Supreme Court has begun to take federalism and property rights more seriously, and the idea that they should get strong judicial protection has attained greater intellectual respectability. Moreover, much of libertarian constitutional thought merely seeks to apply to federalism, property rights, and economic liberties, the same principles that mainstream jurists and legal scholars have applied in other areas, most notably “noneconomic” constitutional rights and separation of powers.

Giving It Away at The Strand: A Short Story of Rights and Relationships in Intellectual Property

By: Ross Davies

Date Posted: 2015

No.: 15-03

Full text (most current version) on SSRN

Abstract:

In early 1916, Arthur Conan Doyle (the versatile and productive Victorian/Edwardian-era writer remembered nowadays mostly for his Sherlock Holmes stories), sent a letter and a package to Herbert Greenhough Smith, his longtime editor at The Strand Magazine. Could it be that Conan Doyle was having a little fun, making a slightly grim legal joke about his demand that the Strand return his old manuscripts? He may well have known enough about intellectual property law, or about the history of publishing, to be aware that some of the most important ownership-of-manuscript lawsuits had involved letters and diaries. And in “The Adventure of the Golden Pince-Nez” (the story in the package Conan Doyle had sent) the killing of an innocent person – a character who might have been based on Herbert Greenhough Smith – happens during a righteous attempt by another person to recover wrongfully withheld letters and a diary.

The Law and Economics of Proportionality in Discovery

By: Jonah Gelbach Bruce Kobayashi

Date Posted: 2015

No.: 15-02

Full text (most current version) on SSRN

Abstract:

This paper analyzes the proportionality standard in discovery. Many believe the Advisory Committee's renewed emphasis on this standard has the potential to infuse litigation practice with considerably more attention to questions related to the costs and benefits of discovery. We discuss the history and rationale of proportionality's inclusion in Rule 26, adopting an analytical framework that focuses on how costs and benefits can diverge in litigation generally, and discovery in particular. Finally, we use this framework to understand the mechanics and challenges involved in deploying the six factors included in the proportionality standard. Throughout, we emphasize that the proportionality standard requires both difficult-to-answer positive questions and unavoidably normative judgments.

Like Uber, But for Local Governmental Policy: The Future of Local Regulation of the “Sharing Economy”

By: Daniel Rauch David Schleicher

Date Posted: 2015

No.: 15-01

Full text (most current version) on SSRN

Abstract:

In the past five years, “sharing economy” firms like Uber, ZipCar, AirBnB and TaskRabbit have generated both huge market valuations and fierce regulatory contests in America’s cities. Incumbent firms in the taxi, hotel and other industries, as well consumer protection, labor and neighborhood activists, have pushed for regulations stifling or banning new sharing economy entrants. Sharing firms have fought back, using their popularity with consumers and novel political strategies, lobbying for freedom to operate as broadly as possible without government interference. But to date, both participants and observers of these “sharing wars” have relied on an unstated assumption: if the sharing firms win these fights, their future will be largely free from government regulation. Local governments will either shut sharing down, or they will leave it alone.

But this assumption is almost surely wrong. If sharing firms prevail in the current fights over the right to operate (and indications suggest they will), it is unlikely that cities and states ignore them. Instead, as sharing economy firms move from being upstarts to important and permanent players in key urban industries like transportation, hospitality and dining, local and state governments are likely to adopt the type of mixed regulatory strategies they apply to types of firms with whom sharing firms share important traits, from property developers to incumbent taxi operators. Using tools of agglomeration economics and public choice, this Article sketches the future of such policy regimes.

Specifically, local and state governments will adopt some combination of the following policies in addition to insisting on consumer/incumbent protections: (1) subsidizing sharing firms to encourage expansion of services that produce public goods, generate substantial consumer surplus and/or minimize the need for excessive regulation of the property market; (2) harnessing sharing firms as a tool for redistribution; and/or (3) contracting with sharing firms to provide traditional government services. The future of sharing economy regulation will be very different from its present, and the changes will pose profound legal, political and ethical questions for our cities.

Anglo-American Dissent From the European Law of War: A History with Contemporary Echoes

Abstract:

Additional Protocol I to the Geneva Conventions (1977) lays down the “basic rule” that attacks must not be directed at “civilian objects” any more than at “civilians.” Red Cross commentators and others assert that the law of war has embraced this “rule” for many centuries. In fact, the leading commentators in Britain and America disputed this rule in the Nineteenth Century and well into the Twentieth Century. They defended naval seizures of private property as a perfectly reasonable war measure, along with raids on private property of the sort exemplified by General Sherman’s Georgia campaign in the Civil War. Even European commentators, arguing for complete immunity of civilian objects in war, traced the doctrine not to remote tradition but to the mid-18th Century doctrines of Jean-Jacques Rousseau. In the hands of German interpreters, that doctrine was invoked to justify extreme brutality against “resistance” to invading armies. Even today, the “basic rule” does not serve the reasonable claims of humanity in all circumstances.

Opening Pandora’s Black Box: A Coasian 1937 View of Performance Rights Organizations in 2014

Abstract:

This article applies Ronald Coase’s analysis from his 1937 article on the Nature of the Firm to analyze the large music publishers’ recent decisions to withdraw “new media” digital rights to publicly perform musical compositions from the performing rights organizations ASCAP and BMI. The analysis examines how these publishers’ costs and benefits of using ASCAP and BMI have changed over time from technology and from the constraining effects of the 1941 antitrust decrees that govern ASCAP and BMI. Taking the effects of these changes into account, the music publishers’ decisions to use direct market transactions, despite substantial transactions costs savings associated with use of the performing rights organizations, is consistent with the broader comparative and dynamic analysis of the marginal costs and benefits of using these organizations contemplated by Coase in his 1937 paper.

Holmes, Coase & Blackmail

By: Ross Davies

Date Posted: 2014

No.: 14-66

Full text (most current version) on SSRN

Abstract:

From beginning to end, the Holmes-versus-Milverton story is peppered with law. At the start, for example, law determines when Watson can tell the story at all. And it is a legal document that Milverton – an infamous blackmailer – is reading moments before his timely end. The story also features a distinctive type of lawlessness – at least by modern standards – that runs through the “Canon” (the 60 Holmes stories with an Arthur Conan Doyle byline): a blackmailer is almost always confronted by, and is often killed by, a blackmail victim exerting deadly force. Holmes has no objection to victims (at least some of them) killing their blackmailers, as he explains when asked by Inspector Lestrade of Scotland Yard to help search for suspects in the Milverton killing: “Well, I am afraid I can’t help you, Lestrade,” said Holmes. “The fact is that I knew this fellow Milverton, that I considered him one of the most dangerous men in London, and that I think there are certain crimes which the law cannot touch, and which therefore, to some extent, justify private revenge. No, it’s no use arguing. I have made up my mind. My sympathies are with the criminals rather than with the victim, and I will not handle this case.” Holmes is endorsing vigilantism, a dubious stance for a sophisticated proponent of justice. Had he had access to the scholarship of economist-to-be Ronald Coase, and had he been more mindful of judicial opinion about blackmail in his own day, Holmes might have described the Milverton killing differently.

Rational Basis With Economic Bite

By: Steven Menashi Douglas Ginsburg

Date Posted: 2014

No.: 14-65

Full text (most current version) on SSRN

Abstract:

In The Classical Liberal Constitution, Richard Epstein argues that the normative theory of classical liberalism underlies the Constitution and gives life to its guarantees; many constitutional guarantees have been undermined, however, by unduly deferential judicial review that is satisfied if there is a “rational basis,” real or hypothetical, for a law. Yet even the rational basis standard asks whether a law serves a legitimate government purpose, which entails normative assumptions about the ends a government may permissibly pursue. Before the New Deal, the Supreme Court applied a form of rationality review that was deferential but not toothless because the Court had a stronger sense of the proper scope of the police power. The contemporary Court applies more searching “rational basis with bite” but only where it thinks impermissible purposes are at play, particularly where legislation appears to target a vulnerable group. Rational basis review, therefore, is variable depending upon the Court’s normative frame.

Recently, three circuit courts applying rational basis review have held licensing laws that restrict entry into a field of economic activity are unconstitutional. These circuits have concluded that a state’s purpose to protect an interest group from economic competition is illegitimate — and have struck down licensing regulations that served no other purpose. This application of “rational basis with bite” to protect economic rights suggests another normative shift, one involving public disapproval of rent-seeking and special-interest legislation. In the nearly 60 years since the Court adopted its stance of extreme deference to economic legislation in Lee Optical, a deregulation movement has focused attention on the costs of excessive regulation and public choice theory has undermined the confidence expressed by the Court in Carolene Products that democratic political processes will protect the public from undesirable legislation. The occupational licensing laws invalidated in the circuit cases are precisely the sort of special-interest legislation that the political process is unlikely to screen out. Thus, even the modern concern with “clearing the channels of political change” suggests that heightened judicial scrutiny is warranted. Epstein connects that concern with the Madisonian focus on the problem of faction. His discussion suggests other types of economic legislation should be subject to judicial review using the “rational basis with bite” standard.

Same-Sex Marriage and the “Reconceiving” of Children

Abstract:

Historically, the U.S. Supreme Court has consistently highlighted the importance of procreation in its consideration of marriage in constitutional cases. Recently, however, litigants seeking same-sex marriage and judicial decisions sympathetic to their arguments have ignored the language and holdings of this long-standing body of law. Instead, they have focused nearly entirely upon adults’ interests in state marriage recognition. To the extent children are mentioned, it is for the purpose of speculating that children living within same-sex marriage households might indirectly benefit from recognition of adults’ rights to same-sex marriage.

This Article discusses the importance of states’ interests in procreation and child rearing and the Supreme Court’s constant recognition of those interests. Ultimately, this Article argues that judicial decisions recognizing same-sex marriage have marginalized, or “reconceived,” the role of children in marriage, in several important ways, all to the marked disadvantage of children.

Hayek’s Jurisprudence: And Ratnapala’s Hayek

Abstract:

Suri Ratnapala is one of the keenest and most insightful analysts of the thought of the great economist and social thinker F. A. Hayek. Hayek was the leading exemplar of the historical, or evolutionary, theory of law in the latter half of the 20th century, but his jurisprudential thought has been largely neglected by legal scholars. In two articles, Ratnapala outlined the core ideas of Hayek’s legal philosophy and developed their place within Hayek’s larger theory of economics, social thought, and epistemology. This article reviews Ratnapala’s analysis of Hayek’s legal theory and offers a few elaborations thereon.

Actavis and Multiple ANDA Entrants: Beyond the Temporary Duopoly

Abstract:

This paper examines the economics of litigation and settlement of patent disputes arising from Paragraph IV ANDA filings under the Drug Price Competition and Patent Term Restoration Act (“Hatch-Waxman Act”) within the framework set out in FTC v. Actavis. Recent economic analyses of reverse payment settlements are based upon a monopoly-to-duopoly model that assumes a single generic entrant. These analyses have been used to support antitrust rules that would enjoin reverse payments that exceed the cost of litigation. We demonstrate that the simple monopoly-to-duopoly models providing the analytical basis for the litigation cost benchmark for analyzing reverse payment settlements is incomplete. Our key institutional insight is the fact that entry by multiple firms follows the invalidation of a patent. Accounting for this critical institutional detail in a more generalized monopoly-to-duopoly model results in important and different implications for patent settlements, welfare, and application of the rule of reason pursuant to Actavis. The result is a broader settlement range than under the monopoly-to-duopoly model that yields robust incentives for the brand and generic entrant to settle the case. This broad settlement range makes attempts to regulate the size of patent settlements ineffective at achieving consumer welfare increasing settlements, or inducing the invalidation of “bad” patents through higher litigation rates. Incorporating multiple serial entrants also decouples the litigation-adjusted expected value of the patent and the consumer welfare standard, and further weakens the relationship between patent strength and the size of the settlement which has motivated numerous calls to deem presumptively unlawful all payments greater than anticipated litigation costs.

Things Aren’t Going That Well Over There Either: Party Polarization and Election Law in Comparative Perspective

Abstract:

One of, if not the, most important change in American political life over the last 30 or so years has been the rise of extreme party polarization. Our two major parties are increasingly ideological distinct and distant from one another, and increasingly willing to abandon long-standing institutional norms and short-term policy compromise in the name of achieving long-run party goals. Efforts to understand why the parties have changed largely have been parochial, largely looking for explanations in American politics, history, media and institutional arrangements.  This focus has a logic to it. Politics in most other advanced democracies does not feature the same type of polarization between parties, and therefore the answers for why American politics has gone in this direction seem to lie inward rather than abroad.   

But it is still a mistake. This short essay argues that a common shift in voter preferences towards more radical and fundamentalist opinion among even a small slice of the electorate can explain polarization in the United States and changes in politics abroad. In many European countries with proportional representation (PR), we have seen the rise of parties so radical that established parties refuse to form coalitions with them. In “Westminster” systems, which due to their use of first-past-the-post vote counting and single-member districts are supposed to tend towards having two parties, we have seen the rise in third-and fourth party voting. Notably, in most Westminster systems, there is little intra-party democracy, leading groups of voters with more radical opinions without the ability to influence mainstream parties, which makes those with radical opinions more willing to waste votes. A plausible story about American political development is that the same voters and interest groups who would form radical parties in PR systems and support spoilers in Westminster systems use intraparty democracy to influence our two-party system and create polarization. Election laws and institutional design shape the way radicalism influences politics. 

If this is right, several lessons follow. Any effort to understand why American parties have changed must look at factors that are common across many western democracies. Further, the rise of radical parties in PR systems and spoilers in Westminster systems have created governance problems that are of a type with the problems created by our extreme polarization. We should thus be skeptical that there are institutional design reforms that can make American governance work easily in the face of polarization. 

Libertarianism and Originalism in The Classical Liberal Constitution

By: Ilya Somin

Date Posted: 2014

No.: 14-60

Full text (most current version) on SSRN

Abstract:

Richard Epstein’s The Classical Liberal Constitution is an impressive synthesis of between libertarian political theory and constitutional interpretation.

Part I of this brief essay summarizes Epstein’s important contribution to constitutional scholarship, particularly his sophisticated effort to integrate originalism and libertarianism. In Part II, I consider a possible tension in his theory: Epstein’s desire to leave room for government regulation that cures market failures could potentially be used to justify a wide range of nonlibertarian forms of government intervention that might undermine the very constitutional rights that he seeks to protect.

Part III suggests that the tension in Epstein’s theory can be partially mitigated by greater reliance on originalism with fewer policy-driven exceptions for market failures. Given real-world judges and political actors, this might result in greater economic efficiency as well as stronger protection for individual freedom than Epstein’s approach. In the process of considering these issues, I focus on judicial interpretation of the Bill of Rights. It may be helpful to look at the original meaning not just in 1791, when the Bill of Rights was first enacted, but also in 1868, when, as a result of the Fourteenth Amendment it became incorporated against state governments. The case of the Public Use Clause of the Fifth Amendment, which Epstein and I have both written about extensively, exemplifies each of these points.

Bork’s “Legislative Intent” and the Courts

Abstract:

Robert H. Bork’s influence upon modern antitrust law is difficult to overstate. One of his lasting legacies is his analysis of the legislative history, text, and structure of the Sherman Act, which led him to conclude the intent of the Congress passing it was to maximize consumer welfare and economic efficiency. That conclusion was adopted by the Supreme Court in 1979 and has formed the foundation for antitrust policy and enforcement ever since. This article explains the rationale for Bork’s “consumer welfare” thesis, recounts the history of its rise and the objections it engendered from other academics, and summarizes its salutary effect upon antitrust law and business practices.

Enjoining Injunctions: The Case Against Antitrust Liability for Standard Essential Patent Holders Who Seek Injunctions

By: Douglas GinsburgTaylor M. Owings Joshua Wright

Date Posted: 2014

No.: 14-58

Full text (most current version) on SSRN

Abstract:

A standard essential patent (SEP) may give the patent holder market power in the market for an input that technology manufacturers need in order to make their products compatible with each other. Several commentators have argued that, when a patent becomes part of a standard pursuant to an agreement among competitors given in exchange for the patent holder’s promise to license the technology under fair, reasonable, and non-discriminatory (FRAND) terms, antitrust law should limit the holder’s right to seek an injunction to stop an infringing manufacturer from selling its standardized product. We disagree for two reasons: First, antitrust sanctions are not necessary, given the law of contracts and of injunctions, to avoid harm to consumers and, second, the application of antitrust law in this situation could, by undermining the ability of courts to tailor appropriate remedies, diminish the incentives for companies to innovate and for industries to adopt standards.

Introduction and Overview of Consumer Credit: Development, Uses, Kinds, and Policy Issues

By: Thomas A. DurkinGregory ElliehausenMichael E. Staten Todd Zywicki

Date Posted: 2014

No.: 14-57

Full text (most current version) on SSRN

Abstract:

The growth of the American economy in the post-War era has been characterized by a growth in the consumer economy as a fundamental driving force in the economy. In turn, this growth in the consumer economy has been driven by a growth in usage and spread of the use of consumer credit. Yet the relationship between consumer credit and the American economy remains little understood and little explored by economists.

This book explores the institutions, history, and economics of consumer credit, focusing especially on the causes and consequences of the growth of consumer credit in the post-War era. Focusing primarily on consumer, non-mortgage debt, we identify the reasons for growing use of consumer credit and public policy responses to it. Starting with the basic question of “Why do consumers borrow?” we consider the evolution of consumer credit institutions and the manner in which these evolutions have co-evolved with other elements of society and the economy and the ways in which these factors have transformed American society. We also discuss contrary hypotheses, such as the long-standing research efforts to study consumer behavior from the perspective of consumer psychology (recently taking the form of so-called Behavioral Economics) and the ways in which these views have been incorporated into the study of consumer credit. Most important, as the government stumbles through efforts to respond to the most recent financial crisis, we argue that a proper understanding of how consumers actually use consumer credit and the impact on the American economy is essential for sound policy-making.

We present here Chapter 1, the Introduction to Consumer Credit and the American Economy, which provides an overview of the book and frames the discussions to follow.

Administrative Law Without Congress: Of Rewrites, Shell Games, and Big Waivers

By: Michael GreveAshley Parrish

Date Posted: 2014

No.: 14-56

Full text (most current version) on SSRN

Abstract:

Administrative law has ceased to respond adequately to the challenges posed by modern-day executive government. We suggest that the discordance reflects a mismatch between the debilities of the Congress and an administrative regime built on legislative supremacy.

Administrative law—in its New Deal and its modern, post-Chevron forms—presuppose a Congress that is jealous of its legislative powers. However, the modern Congress has increasingly dis-empowered itself. It consistently fails to update old statutes even when they are manifestly outdated or, as actually administered, have assumed contours that neither the enacting nor the current Congress would countenance. When Congress does legislate, it tends to enact highly convoluted and often incoherent “hyper-legislation.”

We examine the effects first on agencies, and then on courts and their doctrines. Knowing that there is no turning (back) to Congress, agencies are tempted to improvise policies lacking legislative authority. In turn, administrative law doctrines that were developed under very different institutional conditions start to bend.

We describe three increasingly common forms of agency action: (1) agency “re-writes” of statutes; (2) procedural shell games and manipulation; and (3) broad regulatory waivers without or in excess of a statutory warrant. We provide illustrations in the “old statutes” and “hyper-legislation” settings. Our principal old-statute example is the Clean Air Act and the protracted litigation over the EPA’s regulation of greenhouse gases, culminating (for now) in the Supreme Court’s decision in Utility Air Regulatory Group v. EPA. Our principal examples of hyper-legislation are the Dodd-Frank Act and the Affordable Care Act, including the pending litigation over the scope of the act’s subsidy and mandate provisions.

We conclude with a plea for more institutional realism and less interpretive metaphysics in administrative law.