Working Papers

Abstract:

In his excellent book Democracy and Knowledge: Innovation and Learning in Classical Athens Josiah Ober argues that ancient Athenian democracy surmounted the dangers of political ignorance and made effective use of dispersed citizen knowledge to forge good public policy.  He effectively demonstrates that Athenian democracy was more successful than the oligarchic and tyrannical governments of rival Greek city-states. He also shows how Athenian institutions worked to reduce the dangers of political ignorance.

On the other hand, Ober is less successful in showing that the relatively impressive performance of Athenian democracy should lead us to be optimistic about today's democratic states. Indeed, his account suggests that Athens' success in overcoming political ignorance was in large part the result of two important ways in which it differed from modern democracies: the small size of its electorate and the very narrow range of functions performed by its government.

Abstract:

Two important opinions in the past decade, both written by Justice Antonin Scalia, have sought to apply originalist jurisprudence to constitutional issues raised by technologies that were unknown at the time of the founding. In Kyllo v. United States, the Court held that using sense-enhancing technology to obtain information about the interior of a home, even without a physical intrusion, constitutes a Fourth Amendment search, at least if the technology is not "in general public use." This rule appropriately preserves the privacy that could only have been violated by a trespass in 1791. In District of Columbia v. Heller, the Court endorsed a superficially similar rule under which weapons are protected by the Second Amendment only if they are "in common use" today. This dictum disserves the purpose of the constitutional right to arms, for it allows the government to create Second Amendment exceptions almost at will, by preventing disfavored types of weaponry from remaining or coming into "common use."

Heller's dictum threatens to frustrate the right of civilians to possess new types of nonlethal weapons that may be superior to firearms for the constitutionally protected purpose of self defense. We propose that the Court repudiate this dictum, and adopt a different rule that is consistent with Kyllo's sound approach to emerging technologies: Just as Kyllo adopted a presumption that the police may employ surveillance technologies that are in widespread use by civilians, so the courts should adopt a presumption that civilians may employ self-defense technologies that are in widespread use by the police.

Abstract:

The American bankruptcy system is a hybrid of state law and federal bankruptcy law.  Under the Butner principle, federal bankruptcy courts preserve non-bankruptcy law substantive entitlements in bankruptcy unless bankruptcy policies compel a contrary result.

This hybrid system, however, gives rise to the threat of forum-shopping if parties attempt to invoke bankruptcy jurisdiction for improper purposes, namely to rearrange non-bankruptcy entitlements to advance no coherent bankruptcy policy.  Modern developments in bankruptcy law, as exemplified in the case of Marshall v. Marshall raise a novel threat of bankruptcy forum-shopping.  Marshall involved the bankruptcy of tabloid starlet Anna Nicole Smith and her efforts to recover from the estate of deceased billionaire oilman J. Howard Marshall.  Rather than deferring to the processes of the Texas probate court, Smith raced into bankruptcy court in California to capture a large share of Marshall's estate.  The technical issue in the case concerns whether the dispute constituted a "core" matter under federal bankruptcy law and thus the timing of the entry of a final judgment by the bankruptcy court.  If the Marshall Bankruptcy Court's decision is allowed to stand, it could set a precedent for rampant forum-shopping by dissatisfied parties seeking a more favorable resolution of claims in federal bankruptcy court than that to which they would be entitled under state law.

Abstract:

As promised, the Green Bag is gearing up for the FantasyLaw preseason. (See "Let the Preseason Begin", 12 Green Bag 2d 235, 243 (2009).) For those lucky volunteers who have been accepted as preseason Commissioners (you know who you are), the League & Team Registration Form is on pages 363-367 below. For everyone else, please feel free to observe - here in the pages of the Congressional Record, FantasyLaw Edition, and on our website at www.fantasylaw.org - and kibitz. Completed registration forms must be received by the Green Bag no later than 12 o'clock noon on Opening Day: Monday, July 6, 2009, when Senators and Members of the House return from their Independence Day State/District Work Period. The preseason will end at the end of the first session of the 111th Congress, probably sometime in early October. To recap: The basic idea behind FantasyLaw generally is to enable law fans to treat lawmakers roughly the same way sports fans treat big-time athletes. The basic idea behind the preseason in particular is to work out the kinks in this project over the summer and early autumn, so that when we open FantasyLaw to the public in late 2009 (for drafts and League registration for the 2010 season), it will work well for everyone. What follows are the rules and the scoring regime that we will be testing during the July-through-October 2009 preseason.

Abstract:

This written testimony accompanied Professor J.W. Verret's oral testimony before the House Committee on Oversight and Government Reform.  This testimony outlines flaws in the Trust Agreement established by the Federal Reserve Bank of New York to manage the government's $180 Billion investment in AIG.  Also testifying during the hearing were Ed Liddy, the CEO of AIG, and the three trustees nominated by the Federal Reserve to manage the Trust.

Abstract:

The Supreme Court is frequently accused of declaring laws unconstitutional based on little more than the justices' ideological preferences.  In "The Modernizing Mission of Judicial Review", 76 U. Chi. L. Rev. (forthcoming 2009), Professor Strauss argues that the Supreme Court's decisions in these areas are efforts to "modernize" the law by facilitating and accommodating developments in popular opinion, rather than actions that merely entrench the justices' ideological viewpoints or personal whims.  No one can deny that the justices' beliefs regarding future popular opinion are factors in the Court's decisionmaking. Justices care about their legacies and future reputations; they would prefer to be remembered as a prescient jurist, such as the first Justice Harlan, rather than as Roger Taney.  And these forward-looking influences have undoubtedly produced some Supreme Court decisions that fit within the modernizing paradigm that Professor Strauss describes.  But it is hard to accept Professor Strauss's descriptive claim that modernization is the Court's "dominant" or "central" approach in its capital-punishment and modern substantive-due-process jurisprudence.  His analysis overstates the Supreme Court's willingness and ability to accommodate future public opinion at the expense of judicial preferences; the Supreme Court simply has not displayed the level of modesty, or the respect for popular opinion, that Professor Strauss seeks to attribute to it. Nor can the modernization framework reconcile the Court's capital-punishment and substantive-due-process cases with principles of democratic government.  On the normative side, there are reasons to object to modernization as a theory of judicial review in addition to those that Professor Strauss identifies.

Abstract:

This essay reviews Michael Carrier's analysis of antitrust and standard setting in his new book: Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law. While Innovation for the 21st Century offers a balanced and informative summary on patent holdup, we find that Carrier's treatment of antitrust and standard setting avoids too many of the critical policy questions. One critical and emerging issue in this area, and one Professor Carrier largely ignores, is the use of Section 5 of the FTC Act to govern the standard setting process, as in In re N-Data. We explore and highlight some of the critical legal and economic issues associated the use of Section 5 in the patent holdup context, the standard courts should apply to this conduct under Section 2 of the Sherman Act, and the fundamental issue of whether innovation and economic growth would be better served by relying on contract and patent law rather than antitrust. We conclude that it is highly unlikely that optimal regulation of standard setting activity includes the creation of perpetual contractual commitments backed by the threat of antitrust and state consumer protection remedies, without rigorous economic proof of substantial consumer injury that cannot be reasonably avoided. In our view, the current state of affairs described herein presents a critical threat to standard setting activity and innovation.

Abstract:

Why don't intelligence agencies share information with each other?  This article attempts to answer that perennially vexing question by consulting public choice theory as well as insights from other legal disciplines.  It begins by surveying arguments for and against expanded sharing, examples of sharing failures, and recent reforms intended to encourage sharing.  Next, the article considers why intelligence agencies see information sharing as a threat to the various values they maximize, such as influence over senior executive branch policymakers and autonomy to pursue agency priorities.  It then proposes a series of analytical frameworks that enrich our understanding of why agencies resist sharing:  At times data exchange resembles an intellectual property problem, sometimes it looks like an antitrust problem, and sometimes it looks like an organizational theory problem.  Finally, the article examines whether the solutions suggested by these other disciplines can be adapted to the problems of information sharing.

Abstract:

Using George Stigler's rules of intellectual engagement as a guide, and applying an evidence-based approach, this essay is a critical review of former Federal Trade Commission Chairman Robert Pitofsky's How the Chicago School Overshot the Mark: The Effect of Conservative Economic Analysis on U.S. Antitrust, a collection of essays devoted to challenging the Chicago School's approach to antitrust in favor of a commitment to Post-Chicago policies. Overshot the Mark is an important book and one that will be cited as intellectual support for a new and "reinvigorated" antitrust enforcement regime based on Post-Chicago economics. Its claims about the Chicago School's stranglehold on modern antitrust, despite the existence of a perceived superior economic model in the Post-Chicago literature, are provocative. The central task of this review is to evaluate the book's underlying premise that Post-Chicago economics literature provides better explanatory power than the "status quo" embodied in existing theory and evidence supporting Chicago School theory. I will conclude that the premise is mistaken.  The simplest explanation of the Chicago School's continued influence of U.S. antitrust policy -- that its models provide superior explanatory power and policy relevance -- cannot be rejected and is consistent with the available evidence.

Abstract:

The claims of a patent are its boundaries, defining the scope of exclusion. This boundary function of claims is undermined by the fact that claims can be changed throughout the life of the patent, thereby moving the patent boundary. A boundary that can be moved-at-will is one that the public cannot rely upon.

This Article explores the problems of malleable patent boundaries. If claim amendment is made to permit a patentee to capture something he did not foresee when filing the patent application, the amendment confers an unexpected windfall that did not contribute to incentives to invent before filing. If claim amendment is done to permit a patentee to capture something he did foresee but mistakenly failed to claim initially, the amendment allows the patentee to shift the loss of his own mistake to third-parties. Either way, the amendment is inefficient.

I propose that patent boundaries should be fixed upon patent issuance, and post-issuance claim amendment disallowed. Because claims before issuance do not create public reliance, pre-issuance amendment should be retained. Nonetheless, the possibility of inefficient windfalls requires that pre-issuance amendment not be given retroactive priority to limit the ability to capture later developments.

Abstract:

Archbishop Chaput's book, Render Unto Caesar, signifies the continuation of ethical an impressive and persistent debate about what it means to be Catholic and how Catholics should live out the teachings of the Church in political life in our postmodern society. Render Unto Caesar provides evidence that America's identity and future are endangered by trends reifying radical human autonomy and choice. New threats surface in the form of legislation and judicial interpretations permitting choices that were once considered criminal to be accepted. This trend has been accompanied, if not facilitated, by U.S. Supreme Court decisions that have contributed greatly to the privatization of religion. In light of the emergence of such trends, and given the likelihood that some Catholics, guided by an ongoing process of assimilation, have failed to contest adequately these developments, Archbishop Chaput offers a splendid reply to Aristotle and Professors Scaperlanda and Collett's dense interrogation: how ought we to live together. Such questions are complex because the acceleration of trends favoring individual singularity in our own age signals that many humans prefer to distance themselves from a community and a tradition representing shared values. Instead of accepting the real world of human history they see themselves as an abstract instance of the human species, an autonomous being that remains the epicenter of the universe.

Against this inclination, and venturing to engage a nation that is exemplified by a diversity of incommensurable values and world-views, Charles Chaput stresses the special responsibility of Catholic public officials in sorting out the good and calls upon all Catholics to refrain from self-censorship regarding issues that ought to concern them. But in a postmodern society, the inevitable effect of modern liberalism is that some will view religion as "a private eccentricity" rather than as a central and formative element of the nation. This viewpoint is commonplace because giving religious voices space in the public square as a singularly important aspect of a believer's life locks in both society and individuality to the past from which modern liberalism seeks to deliver us. While Render Unto Caesar provides a laudable foundation that might enable Catholics to properly influence America's ongoing debate about public policy, the common good and the nation's identity, such a foundation must confront the insistent demands of modern liberalism, and the likelihood that Catholics themselves have been incubated in, and have accepted as normative, a process of equivocation and self-censorship. Given this outcome, the likelihood that American Catholics will surrender to Archbishop Chaput's persuasive intuition is remote.

Abstract:

This short essay uses a recent case study - the controversy surrounding the U.S. Department of Homeland Security's access to European airline reservation data - as a vehicle for exploring the European Union's new enthusiasm for projecting its data-privacy values globally.  We begin by discussing how DHS uses passenger name records, or "PNR," to detect potential terrorist operatives.  We then examine the legal authorities under which passenger data is collected and used, including domestic constitutional and statutory norms as well as principles of international law.  Next, the essay discusses the hostile response of some EU policymakers to DHS's use of reservation data, and offers possible explanations for their efforts to apply European data-privacy principles to American national-security initiatives.  Finally, we propose solutions to transatlantic conflicts that will help preserve both individual privacy and national autonomy.

Abstract:

Scholarly interest in how anticommons theory applies to patents has skyrocketed since Professor Michael Heller first proposed a decade ago that excessively fragmented interests in land can frustrate its commercial development. There is now a vigorous debate on whether anticommons exist in patent law, and, if so, whether these "patent thickets" impede innovation in patented products. As Professor Heller writes in his recently published book, The Gridlock Economy, "the empirical studies that prove -- or disprove -- our theory remain inconclusive."

This article contributes to this debate by analyzing the rise and fall of the first patent thicket in American history: the "Sewing Machine War" of the 1850s. The invention of the sewing machine in the antebellum era represents many firsts in the American legal system -- the first patent thicket, the first "patent troll," and the first patent pool. Significantly, this case study verifies that patent thickets exist and that they can frustrate commercial development of new products. But it also challenges widely held assumptions in the patent thicket literature. Many scholars believe that this is largely a modern problem arising from a host of allegedly new issues in the patent system, such as incremental high-tech innovation, excessive litigation, and the rise of "patent trolls." Yet the sewing machine patent thicket exhibited all of these phenomena, revealing that patent thickets have long existed within the historically successful American patent system. The denouement of the sewing machine patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the widely held belief that patent thickets are best solved through new statutes, regulations or court decisions that limit property rights in patents. To the contrary, the Sewing Machine Combination was formed against the backdrop of the strong protection of patent rights in the antebellum era. Thus, the story of the invention of the sewing machine is a striking account of early American technological, commercial and legal ingenuity, which heralds important empirical lessons for how patent thicket theory is understood and applied today.

Abstract:

The American judiciary traditionally had a laissez-faire approach toward the admissibility of most categories of expert testimony. This approach ended in federal courts when the U.S. Supreme Court adopted a reliability test for the admissibility of expert testimony in a series of three decisions:  Daubert v. Merrell Dow Pharmaceuticals, Inc., General Electric Co. v. Joiner, and Kumho Tire Co., Ltd., v. Carmichael. An amendment to Federal Rule of Evidence 702 in 2000 then codified a stringent interpretation of the "Daubert trilogy." Many states also have adopted some version of the Daubert reliability test.

Contrary to many early predictions, the consequences of Daubert v. Merrell Dow Pharmaceuticals and its progeny have been quite positive.  Contrary to pre-Daubert practice, all expert testimony is now scrutinized for reliability before admitted into court. The result has been a significant decline in the presentation of "quackspertise" in the courts.

Nevertheless, Daubert has several significant limitations.

First, many state courts have declined to adopt it, and have instead retained more liberal rules of admissibility, some of which amount to a "let-it-all-in" philosophy.

Second, some federal judges simply refuse to acknowledge the sea change that has occurred in the law of expert testimony, and continue to rely on older, more inclusionary precedents.

Third, Daubert has been ineffective in limiting the use of junk science by prosecutors in criminal cases. Finally, Daubert is a poor match for certain kinds of expert testimony. Specifically, Rule 702 and the Daubert trilogy are ill-equipped to deal with "connoisseur" testimony that arises from a legitimate field of expertise, but whose reliability is ultimately dependent on the personal credibility of the testifying expert.

This paper addresses each of these limitations in turn, and suggests that the relevant problems demand resolution before one can conclude that the Daubert revolution is complete.

Abstract:

When should we grant injunctions against infringers of intellectual property?  Before the Supreme Court's decision in eBay v. MercExchange, the presumptive answer used to be "always," on the grounds that property consists of a right to exclude, and infringement - like trespass - is a direct negation of that right.  As property scholars Richard Epstein and Henry Smith have argued, this traditional dominance of property rules serves important purposes, reducing information costs and preventing the systematic undercompensation of rightsholders endemic to a liability rule regime.  Nevertheless, there are other common law doctrines-notably accession and nuisance-that sometimes countenance use of liability rules to rescue from holdout certain investors who create value without securing in advance all the property rights needed to realize it. Withholding injunctive relief for nuisance-as Epstein urges we do when there is a large disparity of value between the spillover-creating activity and the damaged one-is tantamount to allowing the acquisition of non-possessory use privileges via accession. This article seeks to explain why these limited departures from strict property rules make sense in the realm of tangible property, and argues that those reasons are particularly salient in the realm of IP.  The key insight is that sometimes information as to what property rights will be needed by a productive enterprise can only be generated by making the sorts of investments that give rise to holdout.  Moreover, the arguments for applying strict property rules to IP overlook the fact that doing so creates the very sort of liability rule regime with regard to tangible property that Epstein and Smith warn against.  While this analysis justifies the denial of injunctive relief in some cases of holdout however, there is an important caveat.  Accession doctrine only justifies the use of liability rules where there is great disparity in value, and IP rights lack the sort of fungibility that facilitates such a comparison.  Where a patent has been licensed only exclusively or not at all, injunctions may remain the only way to protect entrepreneurial value.

Abstract:

During the first session of the 111th Congress (Jan. 6-Oct. 30), the Green Bag will be working out the kinks in a new project: FantasyLaw. We are looking for a few test subjects to help us - to share the joys of playing the beta version of FantasyLaw. If you know (or would like to know) enough about both the federal legislative process and traditional fantasy sports to enjoy leading a fantasy league in which the stars have all been elected to serve in the U.S. Senate or the House of Representatives, this might be for you. Please read on.

The basic idea behind FantasyLaw is to enable law fans to treat federal legislators roughly the same way sports fans treat major-league and NCAA athletes. In short:

• several friends or colleagues (each of whom will become a team "Owner") get together to form a "League" of teams;
• each Owner selects (normally via some sort of draft) a group of federal legislators (the "Players" who will be on a "Team") who the Owner believes will score well on a set of performance criteria (statistical and perhaps other measures relating to the Players' work) compiled and processed by an impartial "Administrator" that provides support for many Leagues (for FantasyLaw, the Green Bag is the Administrator);
• the Owners select either one of themselves or some other trusted friend or colleague to be the League "Commissioner" - that is, the person responsible for (a) dealing with the Administrator on matters such as registration of the League and its Teams and issues with the reporting of Player and Team performances and rankings, and (b) facilitating the resolution of disputes among the Owners in that League;
• the Commissioner submits the required paperwork and payment to register the League with the Administrator;
• the Administrator periodically posts Players' statistics - and the resulting individual and Team fantasy scores and League rankings - in a format that enables each Owner to (a) track the performances of his or her Players and Team; (b) make roster decisions - who to drop or add, who to trade, and so on; and (c) talk trash to other Owners in his or her League;
• play continues through the "Season" - in FantasyLaw, a regular session of Congress - with winners in each League announced with great fanfare at the end.

If you have ever participated in a fantasy league, this is familiar territory. However, one feature of FantasyLaw (other than its sources of players and performance criteria) will set it apart from the typical fantasy enterprise: the lengths to which the Green Bag will go to protect the identities of Owners. There is a good reason for the emphasis on secrecy: Some prospective FantasyLaw Owners are people who would enjoy the game, but who will (upon mature reflection) be willing to play only if they can be quite confident that their identities will remain secret.

Abstract:

Commercially speaking, law journalism was a risky business in the early Republic. According to Frederick Hicks, of the 30 legal periodicals that went into business before 1850, 24 also went out of business before 1850. And of the six that survived into the second half of the century, five expired by 1866, leaving just one to carry on over the long term. (That one is the Legal Intelligencer of Philadelphia, which is still in operation today.) A simple recitation of Hicks's body count does not, however, reveal the full intensity of the semi-Hobbesian existence of those early journals. A few features of their experience merit a bit more attention. First, the very short lifespans. Second, the total number of failures. Third, the persistence of failure despite enthusiastic support from pillars of the bar. And fourth, the depths of obscurity into which those failed journals have tended to fall.

Abstract:

In November 2008, the Federal Trade Commission petitioned the Supreme Court to review the D.C. Circuit's decision in FTC v. Rambus. That decision reversed the Commission's finding that Rambus knowingly failed to disclose a patent to a standard setting organization and, in so doing, acquired monopoly power in violation of Section 2 of the Sherman Act. In February 2009, the Supreme Court denied the Commission's petition. This article examines some deficiencies in the Commission's arguments, concluding ultimately that the Supreme Court was correct to deny review. Moreover, the article suggests that the patent holdup problem, and ex post opportunism generally, is more effectively handled by contract and patent law. Because parties cannot contract around heavy mandatory antitrust remedies, contract and patent law offer superior substantive doctrine designed to distinguish good faith contractual modifications from bad faith holdup, thereby minimizing the social welfare reducing decision errors.

Abstract:

This essay considers the implications of Treasury holding common equity in banks participating in the federal government's bailout under the TARP program.  The federal government's position as the dominant shareholder in the financial services and automotive sectors requires careful consideration of its shareholder rights. Governments are a very unique brand of shareholder. Without careful consideration and advance planning for how those shareholder rights and responsibilities will be managed, the unintended consequences to capital markets could be dramatic.

Abstract:

This essay, which is aimed primarily but not exclusively at audiences in the field of philosophy, originated in a lecture prepared for a series on "Natural Moral Law and Contemporary Society" at the School of Philosophy of the Catholic University of America. Using the Supreme Court's sodomy and abortion decisions as introductory examples, the essay briefly discusses the roots of judicial hubris in American constitutional law. The essay then looks more deeply into an institutional transformation rooted in Montesquieu's insight that it is both necessary and impossible to de-politicize the judicial function. The politically moderating role performed by judges in Montesquieu's English constitution does not translate easily into the American system of written constitutions with judicial review. The essay argues that the U.S. Supreme Court is not qualified to correct written human law through appeals to higher laws, including the natural moral law, and that this conclusion is consistent with the understanding of law both in our Constitution and in St. Thomas Aquinas' Summa Theologica.