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Research Paper Series

Recent Working Papers:


Of Sinners & Scapegoats: The Economics of Collective Punishment

1-2025 | J. Shahar Dillbary, Thomas Miceli

ABSTRACT:

“[I]t is better that ten guilty persons escape than that one innocent suffer.” 4 WILLIAM BLACKSTONE, COMMENTARIES *358.
 
“[I]t is better that ten innocent men suffer than that one guilty man escape.” Otto von Bismarck, Germany’s first chancellor, quoted in John W. Wade, Uniform Comparative Fault Act, 14 FORUM 379, 385 (1979).
 
Punishing the innocent is considered an “error” that the legal system must minimize. In reality, it is a choice. When evidence points to one of a few suspects as the victim’s assailant, society must decide whether to punish all, some, or none. Despite the stated distaste, in many cases lawmakers, regulators, and enforcers elect to sanction a large group of innocent actors. Mass arrests, sobriety checkpoints, profiling, even increasing the number of searches and seizures, and using excessive police force—are all forms of collective punishments. They allow the targeting and sanctioning of an entire population in the name of finding the culprit. The decision is often masked by confusing terms but its effect is the same. The freedoms of many are sacrificed to punish the one. These methods have been widely criticized, but what can economics say on the subject? Are these methods even effective? Under what conditions?
 
The standard economic model of crime has not offered a clear answer to these questions because it typically focuses on the apprehension and punishment of a single actor—the offender. It therefore does not consider the possibility of punishing a group of innocent actors as a policy tool.
 
This Article seeks to fill this gap. First, in deviation from previous models, it develops a realistic framework in which the enforcer can choose not only the probability of detection and the nature and severity of the punishment but also the size of the “punishment group.” Our model then analyzes the welfare implications of collective punishment and the menu of choices available to enforcers and regulators. To be clear, our intention is not to argue for group punishment as an enforcement strategy. Rather, our goal is to explain the logic of collective liability regimes and unravel the way detection of offenders is currently carried out. Our analysis also shows that in many cases enforcers applying collective sanctions are motivated by self-interest and bigotry. Concerningly, even when the enforcer’s goal is to enhance deterrence, the cost on members of the punishment group is discounted or ignored, resulting in a substantial loss of freedoms and welfare. The silver lining is that many of these concerns can be addressed by appropriate reforms. 

Assessing FHFA’s Pilot Program on Automated Title Decisioning: Promoting Competition and Reducing Housing Prices

1-2025 | Andrew Nigrinis, Todd Zywicki

ABSTRACT:

Housing affordability remains a critical economic, political, and social issue in the United States. High closing costs, including title insurance, significantly contributes to the problem. The title insurance industry is characterized by limited competition, high consumer search costs, and market structures favoring a few large incumbents. To address these challenges, in 2024 the Federal Housing Finance Agency (FHFA) introduced a pilot program that permits use of automated title insurance underwriting systems to replace traditional title insurance for low-risk refinance transactions.
 
This study evaluates the economic and consumer benefits of the Title Acceptance Program, focusing on cost savings, enhanced competition, and improved market efficiency. The findings indicate that the program can generate substantial consumer benefits, with estimated annual savings of $96 million and projected lifetime savings between $1.38 billion and $2.19 billion. These savings derive from direct cost reductions, competitive pressure on incumbent pricing, and increased consumer adoption of lower-cost alternatives. Preliminary evidence suggests that automated underwriting maintains loss rates comparable to traditional methods, ensuring financial risk remains low. The program also provides particular benefits to underserved populations, including low-income, rural, and minority consumers. By fostering innovation, enhancing transparency, and reducing costs, the Title Acceptance Program represents a significant step toward addressing housing affordability and advancing competition in the title insurance industry.

Defining the Human Right Against Cruel Punishment

1-2025 | Craig Lerner

ABSTRACT:

Over the past decade, there have been mounting criticisms of human rights both as an ideology and as a banner for a crusade.  Many political conservatives have lambasted the human rights movement as partisan, and some observers have expressed doubts about rights-based activism altogether.  Although scholars and lawyers have been roused to a defense, the human rights movement is plainly in the throes of a crisis of self-confidence.  This Article argues that some of the most acute challenges to the human rights movement arise from overconfidence and parochialism on the part of human rights advocates. It is today commonplace to make “rights” claims that are unmoored from the philosophical progenitors of the modern liberal tradition. The extravagance of those claims inspires doubts about the viability of human rights as a universal criterion to judge political actors throughout the world, given the vast differences in wealth and culture. 
 
The Article sketches a possible road map to recasting human rights in a way that might garner broader support. It begins by distinguishing between those rights that have a counterpart in American constitutional law and those that do not. The latter rights, which have an aspirational character, are the ones that most often excite criticism.  Yet even the more modest rights, which have a counterpart in American constitutional documents, have proven difficult to operationalize as universal human rights.  One difficulty is that the rights embodied in American constitutional law are rooted in a history and tradition that span several centuries and channel the scope of those rights. Can human rights, even cast simply as limits on state power, be removed from a particular tradition?
 
The Article explores this question in the context of the human right to be free from cruel punishment. This right is codified in the U.S. Constitution’s Eighth Amendment and the Fifth Article of the Universal Declaration of Human Rights. It captures an intuition that human beings possess an intrinsic dignity that state actors, when inflicting judicial punishment, cannot violate. But even here, where the moral claim is compelling, it proves difficult to define cruelty in a way that does not draw upon a particular tradition. The Article concludes with the suggestion that the human rights movement should be more cautious in its demands of other nations and more tolerant of practices that have been rejected in Western Europe. If the human rights movement allowed for greater experimentation and was less dismissive of approaches that depart from those common in Western Europe today, it might revive as a salutary force.

Freeing State Courts from SCOTUS

1-2025 | Nelson Lund

ABSTRACT:

Congress is authorized to establish what the Constitution calls “inferior courts.” Those courts are required to follow the Supreme Court’s interpretations of federal law, at least when the interpretations are issued as holdings rather than dicta. It is almost always taken for granted that state courts have the same duty to accept the Supreme Court’s interpretive decisions. This short essay argues that this assumption is misplaced. Under the Supremacy Clause of Article VI, state courts are bound by the supreme law of the land, which includes the Constitution, federal laws made in pursuance of the Constitution, and treaties. The Constitution nowhere characterizes federal judicial opinions as the supreme law of the land and it nowhere characterizes state judicial tribunals as “inferior courts.”
 
Like everyone else, judges are certainly bound by Supreme Court judgments, even seriously mistaken judgments like the one in Dred Scott. But the Supremacy Clause does not say or imply that state judges are bound by that Court’s interpretations of federal law. The Constitution leaves them free, and perhaps even obliged, to disregard Supreme Court precedent when it conflicts with what is actually the supreme law of the land.
 
State court judges can and should exercise their freedom to follow what they believe is the supreme law of the land. This form of judicial independence could have a number of healthy effects on our dual legal systems. And if it had unhealthy effects, Congress could provide a remedy through the writ of habeas corpus and through its control over grants of jurisdiction to the state courts.

Takings and Choice of Law After Tyler v. Hennepin County

1-2025 | Eric Claeys

ABSTRACT:

This Essay contributes to a symposium on the future of regulatory takings. It focuses on choice of law in eminent domain disputes. When claimants bring eminent domain claims in federal courts, the courts must determine whether the claimants have constitutional “private property” in the entitlements allegedly taken. Should that determination be made with federal law, with the law of the state allegedly taking property, or law from some other source?
 
The 2023 Supreme Court decision Tyler v. Hennepin County addressed that issue. Under Tyler, it is a federal question whether an eminent domain claimant has constitutional private property. To answer the question, federal courts usually consult the law of the state where the alleged taking took place. But that presumption applies only if state law seems to secure and not to circumvent the federal right. And if that reservation is not satisfied, federal courts may consult a wider pattern of legal sources—Anglo-American history, the general law of the several United States, federal court precedents, and a broader cross-section of law from the state allegedly taking property. That approach resembles the approach taken generally for federal constitutional rights—especially in Indiana ex rel. Anderson v. Brand (1938)—but varies from the general approach in the sources it makes relevant to settle what counts as private property under the Fifth Amendment. This Essay interprets Tyler, and it offers a normative justification for Tyler’s approach to choice of law in eminent domain.

The Conservative Version of The Rule of Law

12-2024 | Todd Zywicki

ABSTRACT:

Establishing the rule of law requires two elements. First, an articulation of the concept that there is a higher law above the government from which the government derives its legitimate authority but which also constrains the exercise of that power. Second, there must be an effective institutional structure for actually enforcing the rule of law’s limits on the government in practice.

Three theories have been articulated that can meet these challenges of the rule of law: natural law, social contract theory, and a “conservative” version of the rule of law. This essay focuses on the last. Under the conservative version of the rule of law, both the legitimate authority of the government and constraints upon it are derived from history, tradition, and the particular character of a political community. Rather than the concept of the rule of law emerging as a pre-political concept which is then implemented in practice, under the conservative version of the rule of law, limits are first imposed on the government in practice and only later theorized into principles of constitutionalism. The logic of the conservative version of the rule of law is illustrated through a focus on the ideas of three thinkers: David Hume, Edmund Burke, and Russell Kirk.

Conflict or Continuity? An Analysis of the 2023 Merger Guidelines

11-2024 | Alexander Raskovich

ABSTRACT:

This Article addresses some key issues important to a prospective assessment of the possible effects on merger formation and enforcement of the DOJ and FTC’s 2023 Merger Guidelines (MGs) . The MGs differ from previous guidelines in several respects. First, rather than a single encompassing set of guidelines, eleven individual guidelines are called out. Some have argued that delineating separate sets of circumstances that can give rise to a violation provides the Agencies with greater analytic flexibility than the Agencies previously had. This claim is questionable. Second, the new market share thresholds in the MGs would ensnare many competitively benign mergers as presumptively anticompetitive, and this would suffice for a challenge, regardless of the absence of any reasonable finding of likely anticompetitive effect. Third, in contrast with earlier merger guidelines, the MGs emphasize how a merger “could,” rather than “would,” violate the antitrust laws. This weakening of the proof standard conflicts with case law precedent. Fourth, the MGs cite to a large number of legal precedents, many of them many decades old. Earlier merger guidelines had no such references to case law precedent, noting instead that guidelines may be revised from time to time to “reflect the ongoing accumulation of experience at the Agencies” and "new learning.” Finally, the treatment of efficiencies in the MGs appears to be more dismissive and hostile than in recent guidelines. The MGs discussion of efficiencies begins with the peremptory statement that “possible economies [from a merger] cannot be used as a defense to illegality.” But when efficiencies have affected enforcement outcomes by the Agencies, typically they have not been used as a defense against a finding of anticompetitive effect, but rather as an integral part of determining whether there is any anticompetitive effect in the first place. The 2010 Horizontal Merger Guidelines state that “a primary benefit of mergers to the economy is their potential to generate significant efficiencies and thus enhance the merged firm’s ability and incentive to compete.” Further, “[t]he Agencies seek to identify and challenge competitively harmful mergers while avoiding unnecessary interference with mergers that are either competitively beneficial or neutral.” The MGs offer no indication that mergers can have an upside. The foregoing innovations in the MGs are not only contrary to rational antitrust as a matter of economics and error-cost analysis, but are likely to have a chilly reception by the judiciary.

Comment of the Global Antitrust Institute on the Australian Digital Platform Services Inquiry 2020-2025 – Final Report

11-2024 | Tad Lipsky, Douglas Ginsburg, Alexander Raskovich, Dario da Silva Oliveira Neto

ABSTRACT:

The Global Antitrust Institute (“GAI”) submits this Comment to the Australian Competition & Consumer Commission (ACCC) in response to its request for public views regarding the 10th and final report of the ACCC’s Digital Platform Services Inquiry 2020-2025. This Comment is based on our extensive experience and expertise in competition law and economics. As an organization committed to promoting sound economic analysis as the foundation of antitrust enforcement and competition policy, the GAI commends the ACCC for inviting public submissions regarding competition in the rapidly changing digital platform sector. 
 
The ACCC’s request for public input (hereinafter “Inquiry”) follows a lengthy market studies examination of digital platforms that the Australian Competition Authority has been producing since 2017. The GAI has submitted two previous comments to the ACCC’s Inquiries projects on Digital Platforms: GAI Comment on the ACCC’ Digital Platforms Inquiry (2017-2019), Preliminary Report; and GAI Comment on the ACCC’s Digital Platform Services Inquiry’s Discussion Paper for Interim Report No. 5: updating competition and consumer law for digital platform services, (December 2018); and one comment to the Australian Treasury regarding the recommendations of the ACCC’s Digital Platform Services Inquiry, Interim Report No. 5: regulatory reform (September 2022). 
 
Regarding the current final report, and according to the Issue Paper released by the ACCC, the agency is focusing the Inquiry on three different topics: (i) recent international legislative and regulatory developments in markets for digital platform services and their impact on competition and consumers; (ii) major developments and key trends in certain markets for digital platform services (for example, those explored in earlier reports of the Inquiry), and (iii) potential and emerging competition and consumer issues which relate to digital platform services. Apparently, the ACCC report tends to advocate legislative and regulatory developments in Australia to adopt an ex ante digital markets regulation in accordance with Recommendations 3 (Additional Competition Measures for Digital Platforms) and 4 (Targeted Competition Obligations) of the ACCC’s Digital Platform Services Inquiry, Interim Report No. 5, Regulatory Reform.
 
This Comment identifies several economic considerations that suggest caution regarding adoption of novel limitations on competitive conduct by digital platforms – especially ex ante regulation – before greater experience can be obtained with the application of existing antitrust law to digital platforms. That experience will provide a better understanding of the reasons for the success or failure of particular antitrust approaches. This Comment describes economic methodologies that support these suggestions.

Presumptive or Presumptuous? The Global Antitrust Institute’s Comment on the EC’s Draft Guidelines on Exclusionary Abuse

11-2024 | Alexander Raskovich, Douglas Ginsburg, Tad Lipsky, John Yun, Dario da Silva Oliveira Neto

ABSTRACT:

We identify several flaws in the European Commission's Draft Guidelines on exclusionary abuse. The Commission’s choice to ground the Draft Guidelines in EU case law on Article 102— spanning both early case law that followed a formalistic approach to the enforcement of exclusionary abuse and modern case law that follows an effects-based approach—has resulted in internal inconsistencies and confusion. We recommend that more recent CJEU judgments predominate over earlier case law in the interpretation of Article 102. The most egregious flaw in the Draft Guidelines is the presumptuous introduction of presumptions of exclusionary abuse, which would relieve the Commission of its duty to determine whether conduct has anticompetitive effects. This flies in the face of not only modern EU case law but also a standard interpretation of the very text of Article 102. We urge the Commission to return to the spirit of the effects-based approach it articulated in the 2008 Guidance Paper, which has been influential in shaping modern EU case law. In particular, we propose that the Commission explicitly accept responsibility for showing anticompetitive effects, adopt the consumer welfare standard as the unifying principle for discerning competition on the merits, and adopt the As-Efficient-Competitor standard as the unifying principle for discerning whether exclusionary conduct by a dominant undertaking is likely to be abusive.

COVID-19 Exclusion, Policy Contagion, and Colonial Hangover in Africa

10-2024 | Olufunmilayo Arewa

ABSTRACT:

African countries have experienced multiple consequences from the COVID-19 pandemic that extend beyond its immediate impact on human health. In Africa, much like elsewhere in the world, the pandemic has had a significant economic impact, leading to profound global economic distress. African countries have also experienced consequences that are unlike those of much of the rest of the world. The pandemic has contributed to a surge in sovereign debt defaults, including in Zambia in late 2020, Mali in early 2022, Ghana in late 2022, and Ethiopia in 2023. Travel bans and COVID-19 vaccine exclusion have also had a particular impact in Africa. The experiences of African countries during the COVID-19 pandemic highlight key consequences of colonial hangover and fundamental structural impediments and inequalities evident in global and local contexts.

Second Amendment Originalism, the “General Law,” and Rahimi’s Two-Fold Failure

10-2024 | Nelson Lund

ABSTRACT:

New York State Rifle & Pistol Association v. Bruen (2022), set out a bold new standard of review for Second Amendment cases. The Court rightly repudiated the  intermediate-scrutiny approach adopted by a strong consensus of the circuit courts after District of Columbia v. Heller (2008). Bruen purported to require that any gun regulation falling within the plain text of the Amendment be upheld only if the government can demonstrate that the regulation is consistent with America’s historical tradition of firearm regulation. United States v. Rahimi (2024) confirmed what was already clear in Bruen: that a majority of the Justices are not prepared to take this seemingly rigorous historical test seriously.
 
This article considers and rejects an innovative interpretation of Bruen, offered by William Baude and Robert Leider, under which Second Amendment jurisprudence would become a form of common-law constitutionalism. It then argues that a better alternative to Bruen is the more traditional application of means-end scrutiny to advance the primary purpose of the Second Amendment, which is to protect the fundamental natural right of self-defense.
 
In addition to showing that Rahimi did not apply Bruen faithfully, the article explains why a sound constitutional analysis does not support Rahimi’s decision to uphold the statute at issue in the case.

The Dark Side of Codifying U.S. Trust Law

10-2024 | Thomas Gallanis

ABSTRACT:

For most of Anglo-American history, trust law was case law. The law of trusts was born and molded in the English Court of Chancery and then re-shaped by the courts of the U.S. states. The U.S. law of trusts primarily was to be found in the decisions of state courts and in respected secondary sources digesting and refining the rules from those decisions, such as the American Law Institute’s Restatements and the multi-volume treatises on trust law originally authored by Austin Wakeman Scott or George Gleason Bogert.

U.S. trust law no longer is primarily case law. In 2000, the Uniform Law Commission published the Uniform Trust Code. Thirty-five U.S. states and the District of Columbia have enacted enough of the Code to be counted by the Uniform Law Commission as enacting jurisdictions. The Commission also has enacted other statutes in or allied to trust law, such as the Uniform Powers of Appointment Act and the Uniform Statutory Rule Against Perpetuities.

This Article examines some of the consequences of this shift in the U.S. law of trusts from case law to statute law. For convenience, this shift is termed “codification” because we have no word in English for “statutification.”

Perversely, the codification itself of trust law sometimes has opened the door to outcomes diametrically opposed to the goals of the Uniform Law Commission and the American Law Institute. The perverse outcomes were not intended but should have been foreseen.

This Article analyzes the dark side of the codification of U.S. trust law and offers a path for future law reform.

The Folly of AI Regulation

9-2024 | John Yun

ABSTRACT:

The explosive growth of AI related technology has drawn the attention of government authorities around the globe. As these authorities consider various regulatory proposals, this chapter advocates a model similar to the one used when the internet first emerged, that is, a relatively restrained approach to regulation. This position is founded on several core tenets. First, there can be trade-offs between technological growth rates and addressing specific harms. Thus, even if a regulation is ultimately successful in addressing a specific harm, if it dampens the rate of innovation, then this could lead to a net welfare loss. Second, premature regulatory solutions can crowd out market-based solutions, which may offer more efficient solutions to emergent harms. Finally, premature regulations can have the consequence of entrenching incumbents and raising barriers to entry, which, perversely, harms the competitive process rather than promoting it. Importantly, this proposal is not a call to ignore the dangers that AI generated output can pose – nor is it a call for a “more permissive” treatment of AI under existing laws or existing regulatory schemes of general application.

Land Use Regulation

9-2024 | Ilya Somin

ABSTRACT:

Land use regulation is a major function of every government in the world. It raises many issues for classical liberalism. This chapter provides an overview of three of the most important areas of land-use policy: the use of eminent domain to forcibly take property for government-approved projects, regulations that restrict property owners’ use of their land, and the relationship between property rights in land and migration restrictions. 
 
Part I covers the use of eminent domain to take private property, and arguments for its limitation to genuinely “public” projects, as opposed to coerced transfers between private owners. Advocates of the latter argue they are needed to overcome “holdout” problems. But unconstrained use of eminent domain is a serious threat to property rights and hampers economic development. 
 
 Part II considers regulatory restrictions on land use that do not involve physical occupation of property. There is a longstanding debate about the value of such restrictions and whether the government should pay owners compensation. The most significant regulatory restrictions of this type in many nations are zoning rules restricting housing construction.
 
Finally, Part III provides a critical overview of property-rights rationales for restricting mobility, particularly in the form of international migration. Such theories justify severely constraining the liberty and property rights of both migrants and natives.

The Presumptive Case for Organ Markets

9-2024 | Ilya Somin

ABSTRACT:

The debate over legalizing organ markets has gone on for years, and the basic arguments are well-known. This chapter recasts the issue by emphasizing not just the nature, but the enormous magnitude of the considerations weighing in favor of legalization: saving tens of thousands of innocent lives, preventing prolonged suffering for many thousands more people, and enhancing bodily autonomy. That magnitude creates a strong presumption in favor of legalization, at least in some substantial form. Any countervailing argument must not only be valid in and of itself, but also sufficiently weighty to overcome the presumption. Standard arguments based on the risks of kidney donation, concerns about the “exploitation” of the poor, and dangers of “commodification” and moral corruption, fall short of that standard. Recent evidence on the number of lives that can be saved by legalizing organ markets and the diminishing risks of donating kidneys further accentuate the enormous magnitude of the gap between the benefits and costs of legalization

Part I provides an overview of the kidney shortage in the United States and the immense potential gains of legalizing organ sales. Doing so would save tens of thousands of lives every year, and also save many thousands more kidney failure patients from the pain and suffering of enduring many months or years of kidney dialysis. It would also enhance rights of bodily autonomy for both sellers and users of kidneys put on the market. These enormous benefits create a strong presumption in favor of legalization. Part II goes over several standard objections and explains why they fail to meet that demanding standard. These include claims that organ markets would lead to “exploitation” of the poor, arguments that they would lead to the commodification of the body, and concerns that they impose too great a risk on sellers. Each of these arguments lacks the necessary weight. In addition, to the extent objections are valid, they can be addressed by steps short of banning organ sales entirely.

A Lost Opportunity to Protect Democracy Against Itself: What the Supreme Court Got Wrong in Trump v. Anderson

8-2024 | Ilya Somin

ABSTRACT:

In Trump v. Anderson, a divided Supreme Court achieved unusual unanimity in an important case. All nine Justices agreed that state governments could not use Section 3 of the Fourteenth Amendment to disqualify former President Donald Trump from running for the presidency in the 2024 election. Section 3, the Court ruled, is not self-enforcing. Unfortunately, the Court achieved unanimity by making a grave error. In so doing, they went against the text and original meaning of the Fourteenth Amendment and undermined a potentially vital constitutional safeguard of liberal democracy.

Section 3 states that “No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.” Plaintiffs argued Trump had engaged in insurrection by instigating the January 6, 2021 attack on the Capitol in order to stay in power after losing the 2020 presidential election.         

In this article, I explain what the Court got wrong. I also consider some of the broader issues raised by the case that the Justices did not address because they disposed of the litigation against Trump on the self-enforcement issue. Part I provides a brief overview of the history of the Section 3 litigation against Trump. Part II explains why the Court got the issue of self-enforcement badly wrong. In the process, I also address the argument that disqualification required a prior criminal conviction for “insurrection.” Part III considers the question of whether the January 6 attack qualifies as an “insurrection,” and—more briefly—whether Trump “engaged” in it. The answers to both questions are “yes,” though the second is a closer call than the first.  Part IV addresses broader implications of Section 3 for constitutional democracy. There is an obvious tension between respect for democracy and provisions that limit voter choice, as Section 3 necessarily does. Nonetheless, there is good reason for this and some other constitutional constraints that protect the democratic process against itself. The Supreme Court’s effective gutting of Section 3 gravely weakens one of those constraints. Finally, Part V summarizes the implications of the Trump v. Anderson decision for the future.

Breaking Barriers or Breaking Bad? The FTC’s Proposed Ban on Noncompete Agreements in Employment Contracts

8-2024 | Alexander Raskovich, Bruce Kobayashi, Tad Lipsky, Joshua Wright, John Yun

ABSTRACT:

There is no reliable support in either economic theory or empirics for the Federal Trade Commission’s proposed categorical ban on noncompete agreements (NCAs)—even if such a ban were limited to NCAs involving low-wage workers. The theories and evidence for NCA effects fall far short of meeting the Supreme Court’s standard that a practice be “always or almost always” anticompetitive to merit treatment as per se illegal. Applying the more flexible rule of reason approach to the facts of particular cases—as is appropriate for vertical restraints such as NCAs—is more likely to deliver benefits to both workers and consumers, on net and in the aggregate. The NPRM’s preliminary computations of the potential benefits of a ban to the contrary are deeply flawed, relying on a problematic out-of-sample forecast based on estimates from a single empirical study. Importantly, any sweeping ban on NCAs would likely have unintended consequences, hurting both workers and consumers.

Injunctions for Patent Infringement: Historical Equity Practice Between 1790 - 1882

8-2024 | Adam Mossoff

ABSTRACT:

A significant debate in patent law today concerns what remedy a patent owner may receive when a court finds a defendant liable for patent infringement. In eBay v. MercExchange (2006), the Supreme Court held that courts must use a “four-factor test historically employed by courts” in a “long tradition of equity practice.” This was the sole justification offered by the eBay Court for its four-factor test. Chief Justice John Roberts further claimed, from “the early 19th century, courts have granted injunctive relief upon a finding of infringement in the vast majority of patent cases.”

Both of these historical claims are conventional wisdom today in law and scholarship, and both claims are empirically unverified. This article tests both historical claims in reporting the results of a database of 899 opinions in which federal courts sat in equity in patent lawsuits. The database represents opinions by trial courts and appellate courts sitting in equity in all patent lawsuits filed between 1790 and 1880 compiled in the Federal Cases reporter.

The database confirms and challenges the conventional wisdom. First, eBay is wrong: there was no four-factor test in the “long tradition of equity practice” in patent cases. In the 899 opinions, no judge applied a four-factor test in granting an injunction, either for a permanent or a preliminary injunction. Second, Chief Justice Roberts is correct: courts did grant permanent injunctions in a vast majority of cases as a remedy for patent infringement. In the 899 opinions, courts awarded permanent injunctions in 91.2% of the cases in which a defendant infringed a valid patent. Given the stark absence of a four-factor test, the article describes the historical equitable doctrines applied by federal courts. Based on the opinions, it details how courts applied the same equitable doctrines and principles in patent cases as in redressing continuing trespasses of real property, protecting patents as much as they protected real estate and other property interests.

Global Antitrust Institute Comment on Australia’s Exposure Draft Regarding Amendments to the Review of Mergers and Acquisitions

8-2024 | Alexander Raskovich, Douglas Ginsburg, Tad Lipsky, Dario da Silva Oliveira Neto, John Yun

ABSTRACT:

The Global Antitrust Institute submits this comment regarding Australia’s proposed amendments to the review of mergers and acquisitions. The proposed move from a voluntary to a mandatory pre-merger notification system holds the potential to reduce false negative error in merger review. There is a “loophole” in the proposed amendments, however, that would tend to exacerbate the risk of false positive error by allowing the Australian Competition and Consumer Commission to extend the determination period for merger review indefinitely, in a way not subject to review by the Australia Competition Tribunal. This loophole would tend to have a chilling effect on mergers and acquisitions that are not likely to substantially lessen competition. We propose a simple fix to close the loophole.

“Law and Political Economy”: A Solution in Search of a Problem

8-2024 | David Bernstein

ABSTRACT:

Creating and implementing solutions to social problems requires a realistic assessment of the status quo. The authors of the Law and Political Economy Project movement’s ur-text instead tilt at windmills. They believe that law professors have a tremendous influence on public policy, when our influence, though greater than the average citizen’s, is insignificant relative to macro-trends in politics and society. They believe that the legal academy has been captured by Posnerians in private law and by neoliberals in constitutional law. In reaching this conclusion, they grossly exaggerate the influence of law and economics, misapprehend the focus of modern law and economics scholarship, and ignore the very strong leftward ideological leanings of public law scholars.

The authors believe that the American state has been “chastened” by neoliberalism, when it spends more and regulates more than ever. They think that economic policy is the font of inequality in America, while ignoring the changes in family dynamics that are the primary driver of multi-generational poverty and economic struggle. They blame public policy since the 1970s for oppressing women and non-white Americans, even though both groups are demonstrably better off today than they were fifty years ago. And their standard for a proper egalitarian democracy goes beyond the quixotic and into the impossible.

There may be a provocative, enlightening case to be made that the US needs to move its political and economic system closer to a left-progressive ideal. There may even be some reason to believe that an organized group of law professors interested in political economy is needed to move the US in that direction. But if either or both are true, the founders of the Law and Political Economy movement fail to demonstrate it.


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