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Discovering (Tax) Rights that the Poor Have Post-Welfare Reform

Susannah Camic Tahk, The New Welfare Rights, Brooklyn L. Rev. (forthcoming 2017), available at SSRN.

Professor Susannah Camic Tahk’s newest article is a welcome and optimistic read that opens space for future work (re)constructing the idea that the poor have rights. The New Welfare Rights has much to offer scholars and advocates alike, showing that the poor have under-appreciated rights as taxpayers or as recipients of tax-based benefits. This is an important contribution because it shows the continued possibility of claims framed in terms of “rights” even in the aftermath of welfare reform.

The New Welfare Rights begins appropriately by presenting the rise and fall of rights-based claims to welfare. As Professor Tahk highlights, rights-based claims enjoyed a brief moment in the sun, but the Supreme Court stepped back from the promise of Goldberg v. Kelly, with a series of holdings—Professor Tahk focuses on Dandridge v. Williams and Eldridge v. Matthews—hostile to the idea that the poor have a right to public support. Professor Tahk explains, “After these cases, lawyers working on issues pertaining to government benefits and rights hit a wall.” (P. 12.) So far, this is not exactly new territory. Martha Davis’ masterful history of the rise and fall of welfare rights in her book Brutal Need: Lawyers and the Welfare Rights Movement, 1960-1973 (1993) is the leading account but numerous other articles and books tell a similar story.1 With only a few exceptions2, most scholars and advocates generally accept the notion that the Courts are not receptive to arguments that the poor have rights. Somewhat less strongly stated, in today’s environment it is understood that existing recognized rights are vulnerable and the list of rights is not likely to be expanded through litigation. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 or Welfare Reform Bill, which explicitly stated that welfare was not an entitlement, is treated as final proof that the law has slammed shut on the poor.

What makes The New Welfare Rights so helpful is it shows that such pessimism might not be entirely merited. Following welfare reform, welfare rolls plummeted and did not rise after start of the Great Recession3, but tax benefits to the working poor took off. With bi-partisan support, poor support morphed from welfare claims made by individuals, especially poor mothers and children, into money claimed by the working poor who file tax returns. This transition and the rising importance of the Earned Income Tax Credit (EITC) can rightly be critiqued for moving from a program geared towards supporting individuals as people or as citizens to a system of aid that values only people as workers.4 But as Professor Tahk shows, the move to provide assistance through the tax system “has opened the door to a new set of rights, the same rights that any taxpayer has.” (P. 5.) Post-welfare reform and after the Supreme Court turned away from Goldberg, state constitutions and state courts have been seen as a possible way for the poor to have their rights recognized.5 By showing the ways in which the poor, as taxpayers and as tax filers, have rights that are under-appreciated by advocates who focus solely on direct cash assistance, The New Welfare Rights creates space for additional rights-based claims on behalf of poor people. Professor Tahk notes, “Tax benefits come with rights. These rights accrue to poor recipients of tax benefits much as they do to wealthy individuals or businesses who obtain subsidies through the tax code. These rights arise from participating in the tax system.” (P. 26.)

I will admit I am not entirely convinced by Professor Tahk’s argument that the “tax-based welfare state does not operate along two tiers” and that “it presents a one-tiered vision of equal citizenship.” (P. 27.) A recent article by Professor Wendy Bach does a nice job attacking that argument6 and Matthew Desmond’s essay on the inequality connected to the mortgage interest deduction similarly challenges such a rosy view.7 But by highlighting the procedural rights that are part of the tax system, including those tied to the Taxpayer Bill of Rights, and connecting those rights to poor people (Pp. 35-43), The New Welfare Rights opens our eyes to ways in which to help the poor by leveraging rights built into the tax system. It is an article worthy of attention and is perhaps especially valuable to those of us who are skeptical about the government recognizing and responding positively to rights talk when it comes to poor people.

  1. The background stories of many of the seminal cases are presented as chapters in The Poverty Law Canon: Exploring the Major Cases (Marie Failinger & Ezra Rosser eds., 2016). []
  2. See Julie Nice, No Scrutiny Whatsoever: Deconstitutionalization of Poverty Law, Dual Rules of Law, & Dialogic Default, 35 Fordham Urb. L.J. 629 (2007) (arguing that advocates should not give up on rights-based claims). []
  3. See, e.g., Peter Edelman, So Rich, So Poor: Why It’s So Hard to End Poverty in America 82 (2012) (highlighting the “near-demise of welfare”); Jason DeParle & Robert M. Gebeloff, Living on Nothing But Food Stamps, N.Y. Times (Jan. 2, 2010). []
  4. For Professor Tahk’s presentation of this line of critique and her response to it, see Pp. 32-34. []
  5. See, e.g., William C. Rava, State Constitutional Protections for the Poor, 71 Temp. L. Rev. 543 (1998). []
  6. See Wendy A. Bach, Poor Support/Rich Support: (Re)Viewing the American Social Welfare StateFl. Tax Rev. (forthcoming, 2017). []
  7. Matthew Desmond, How Homeownership Became the Engine of American Inequality, N.Y. Times Mag. (May 9, 2017). []
Cite as: Ezra Rosser, Discovering (Tax) Rights that the Poor Have Post-Welfare Reform, JOTWELL (November 16, 2017) (reviewing Susannah Camic Tahk, The New Welfare Rights, Brooklyn L. Rev. (forthcoming 2017), available at SSRN), https://lex.jotwell.com/discovering-tax-rights-that-the-poor-have-post-welfare-reform/.

Protecting the Right to Family Life in Immigration Law

Kerry Abrams, Family Reunification and the Security State (forthcoming, 2017), available at SSRN.

Many Americans believe that one of the functions of United States immigration law is to facilitate family reunification. For example, the idea that if a non-citizen marries a United States citizen that person can reside in the United States with their U.S. citizen spouse. Yet another function of U.S. immigration law is border control to protect national security. Consequently, if the United States government deems a non-citizen a security threat, regardless of their relationship to a U.S. citizen, that non-citizen could be denied entry to the United States. The relationship between these two immigration law functions—family reunification and national security—has varied throughout American history.

Kerry Abrams’ forthcoming article, Family Reunification and the Security State, provides a framework for understanding the “shifting and complex relationship” between these two immigration law functions. (P. 1.) Professor Abrams identifies three periods of U.S. history in which the relationship between these two immigration law functions has varied. During the age of the unitary family there was little tension between the two immigration law functions, and family unity was paramount. In the subsequent age of security, the State’s concern about national security threats increased and family reunification was subordinated to border control. We are currently in the age of balancing in which family rights are viewed as individual constitutional rights that must be balanced with the State’s interest in border control. The implications of these shifts are highly visible today as citizens challenge President Trump’s executive order limiting migration from Iraq, Syria, Iran, Sudan, Libya, Somalia, and Yemen based on their interest in family reunification.

The age of the unitary family was one in which the family was understood to be a single legal identity—that of the husband and father. During this time period the State’s interest in border control was limited. The State was primarily interested in “expand[ing] its borders and settl[ing] new territory.” (P. 4.) Viewing the family as a unitary legal entity, and allowing the migration of all family members, assisted the State in achieving this goal.

Professor Abrams notes that the even though transformations were taking place at the state level that undermined the idea of the unitary family, such as married women property acts, “the common law theory of marital unity was still so powerful that family unity was treated with extraordinary[] deference.” (P. 6.) Professor Abrams uses the story of Chung Toy Ho and Wong Choy Sin to illustrate the deference granted to the idea of the unitary family. Chung Toy Ho and Wong Choy Sin were the wife and child of Chinese merchant Wong Ham. During the era of Chinese exclusion laborers were excluded, but others like merchants could migrate to the United States. Yet federal law did not specify that merchants could bring their family members with them. Judge Deady of the United States District Court of Oregon heard their case and concluded that China and the United States could not have intended to prohibit merchants from bringing their wives and children with them when they could bring their servants. He noted that “[t]he company of the one, and the care and custody of the other, are his by natural right; and he ought not to be deprived of either, unless the intention of congress to do so is clear and unmistakable.” (P. 7.) Judge Deady concluded that Chung Toy Ho and Wong Choy Sin were admissible based on their familial relationship to Wong Ham.

The family unity principle at work during this time period did not provide migration opportunities for all families.  This principle protected the family that was “married and monogamous.” (P. 7.) Yet for the families that were within the accepted conception of family, the idea of family unity was “strong enough to override serious government interests in border protection and immigration policy.” (P. 8.)

This presumption shifted during the age of security when the State’s interest in national security increased significantly. The age of security corresponds with post-World War I America—a time when there was significant suspicion of the foreign-born population. The plenary power doctrine was used to outweigh an individual’s interest in family unity in large part because “[a] spouse might not be just a spouse but a spy.” (P. 12.) In several cases the spouses of U.S. citizens were denied entry to the U.S. because they were deemed security risks.

Professor Abrams argues that we are currently in the age of balancing. Within the last twenty years, two developments ushered in this age.  First, the constitutionalization of family rights, and second, less acceptance of the plenary power doctrine in its strongest form.  These two developments have created a context in which an individual’s right to family life is legally cognizable and the State’s interest in border control and national security is appropriately reviewed by courts. While the plenary power doctrine has not died, it is much more “malleable and nuanced” today, which means that the State’s interest in national security does not automatically trump an individual’s right to family life.  (P. 18.) Rather courts are increasing engaged in balancing the individual and State interests at issue.  Professor Abrams concludes that “[t]he development of a modern family reunification right has occurred slowly but is now ripe enough to be poised for affirmative recognition by our courts.” (P. 25.)

The history that Professor Abrams provides is particularly timely as courts are faced with several challenges to President Trump’s executive order addressing migration from Iraq, Syria, Iran, Sudan, Libya, Somalia, and Yemen. Family members residing in the United States have challenged the executive order as a violation of their right to family life as family members are denied entry to the U.S. based solely on their nationality. In an age of balancing courts may provide more review of the executive order to balance the President’s concerns about national security with United States citizens’ interest in family reunification.

Cite as: Angela Banks, Protecting the Right to Family Life in Immigration Law, JOTWELL (October 16, 2017) (reviewing Kerry Abrams, Family Reunification and the Security State (forthcoming, 2017), available at SSRN), https://lex.jotwell.com/protecting-the-right-to-family-life-in-immigration-law/.

To Authorize Sex with Oneself via Proxy or Advance Directive

Alexander A. Boni-Saenz, Sexual Advance Directives, 68 Ala. L. Rev. 1 (2016), available at SSRN.

May an individual consent to sex in advance of incapacity (or intoxication)? Can an individual consent prospectively to intercourse? Should we only recognize consent given contemporaneously with the sexual act? These are straightforward questions which reside within core human needs and autonomy, yet few have considered them in the elder law context. Consensual sex has been explicated by juries, lawmakers, and scholars with practically endless variations, but a temporal dimension to sexual consent has not.

A sexual advance directive might read: “I hereby consent to vaginal intercourse with my spouse upon and during my incapacity.” Advance directives are statutorily authorized for healthcare. What about for sex? Professor Boni-Saenz makes a convincing case for answering “yes!” in Sexual Advance Directives. An individual facing dementia may want to continue to have sex with her partner even after dementia has diminished or destroyed her capacity. If prospective sexual consent is invalid, her partner would be guilty of rape for an act of penetration with her even if she had unambiguously extended pre-incapacity consent.

Individuals may want to grant prospective consent to sex for different reasons. As Boni-Saenz observes, “They might have an interest in enabling sexually fulfilling lives for their future disabled selves, in preserving important sexual identities or relationships, or in protecting spouses from criminal prosecution for rape.” (P. 4.) An individual’s right to have intimate relations with the person of her choosing is so fundamental that we should consider carefully whether the right should be suspended by dementia if the individual thoughtfully considered the possibility of incapacitated sex while she was still competent. The questions posed by Boni-Saenz get at the basic concept of self. If a present-self consents to a future-self’s sexual act, has the individual consented?

This kind of abstract problem might interest some, but it can also be framed in concrete terms. It is an important practical question: Should we recognize an individual’s attempt to consent prospectively to sex? If the question is framed as an individual right, it is difficult – but not impossible – to argue that the right should be denied persons with advanced dementia, traumatic brain injuries, a stroke, or senility.

These kinds of questions, though, as difficult as they are, are actually more problematic than they might initially seem. We tend to think of dementia or incapacity as a light switch, either on or off. The law treats incapacity in fairly absolute terms: one has capacity or one doesn’t. In reality, a loss of capacity almost always appears in gradations of grey, not as either black or white. While an “on or off” of incapacity is legally convenient, it is biologically inaccurate. Many individuals without capacity can articulate their desires. Moreover, sexual disinhibition is often undiminished by dementia.

Hypothetically, let’s say, I once had a client with a diagnosis of early onset Alzheimer’s. She delivered a directive to her caregivers for the time when she would lose capacity. She wanted, she told them, to enjoy replays of her favorite television program, Gunsmoke. She was sure that this would give her comfort as she lost the ability to articulate her wants. Inevitably, she declined and lost capacity. Her caregivers dutifully played Gunsmoke for her, but the tapes were distracting, even distressing, to her. She angrily complained that the words “all ran together.” I’ve been told that this is a common complaint for dementia patients. Closely-spaced television dialogue can become indecipherable and even terrifying to individuals with dementia. If the caregivers had been bound to continue to subject her to Gunsmoke reruns, my clients’ former-self would have, in effect, infringed on the autonomy of her present-self.

The same kind of quandary with a sexual advance directive is even more important – and disquieting.

Next, Boni-Saenz injects another problem. Along with advance directives, healthcare proxies are among the most commonly utilized tools for elder law attorneys. A healthcare proxy is a kind of durable power of attorney which appoints a surrogate decision maker over healthcare decisions. These instruments permit an agent, such as a trusted friend or family member, to grant – or withhold – informed consent in various medical situations if the principal has lost capacity. (The “durability” of a power of attorney refers to its effectiveness notwithstanding incapacity, a statutory reversal of common law agency principles.) Not uncommonly, a healthcare agent is faced with whether to terminate artificial means of life support on account of a terminal or vegetative condition of their loved one – whether to “pull the plug.”

If sexual advance directives are permitted to prospectively grant (or deny) consent to physical intimacy, then, by extension, sexual powers of attorney are also warranted. Vesting a trusted agent with the power to consent (or refuse) intimacy goes partway toward ameliorating the inherent problem of an advance directive; the difficulty of responding to unanticipated circumstances. With a healthcare proxy, an agent’s determinations can take account of evolving issues in ways that a static (and perhaps stale) declaration cannot.

In most cases, the named agent under a healthcare proxy will be a spouse or partner, with a successor agent named in the event of the primary agent’s unavailability; typically an adult child. Agents are named on the basis of occupying positions of trust and familiarity with the principal’s wishes. Spouses and children frequently fit the bill.

Now envision a husband-agent making the decision on behalf of his incapacitated wife-principal about whether to consent to have sex with him. He will – as agents often do – wear two hats. It’s the same conflict of interest scenario from numerous fiduciary cases, but of a particular kind heretofore unexplored by agency law, or criminal law, for that matter. And what if an adult child is the agent? Picture a daughter faced with the decision of sexual consent on behalf of her aged mother.

There’s much more in Sexual Advance Directives; it is highly recommended reading.

Cite as: Tom Simmons, To Authorize Sex with Oneself via Proxy or Advance Directive, JOTWELL (September 13, 2017) (reviewing Alexander A. Boni-Saenz, Sexual Advance Directives, 68 Ala. L. Rev. 1 (2016), available at SSRN), https://lex.jotwell.com/to-authorize-sex-with-oneself-via-proxy-or-advance-directive/.

The Real World

My very first law professor, Bob Ellickson, once said to my Torts class: “You know how law professors do empirical research? They sit in a room and think very hard.”

That was in 1984. A lot has changed since then, partly because of pioneering work by Ellickson himself.1 Since 2012, more than 500 law review articles have included the word “empirical” in their titles, and probably hundreds more – including every item in the most recent issue of the Journal of Empirical Legal Studies – report or analyze empirical data without titular advertisement. Many of these papers feature linear regressions or other complex statistical analyses aiming to tease out relationships between variables. Yet there remains much value in research that simply but rigorously informs us of what actually happens in the real world. Understanding environmental law, like understanding the environment, begins with observing. This Jot acknowledges the contributions of two recent articles that help us see.

Karen Bradshaw’s Settling for Natural Resource Damages explores a component of environmental law practice that, she persuasively argues, has received too little scholarly attention. Regardless of whether she correctly identifies the predominance of settlement as the reason for scholars’ indifference, she is unquestionably correct to observe that claims by governmental trustee agencies for natural resource damages (NRDs) – like most civil litigation – almost always settle. But how often? For what types of claims? For how much? These are the questions Bradshaw asks.

To find answers, Bradshaw takes the simplest approach imaginable. She asks the people who know. Through Freedom of Information Act requests, Bradshaw sets out to determine the number of NRD claims each federal trustee agency has settled under its particular legal authorities, the aggregate amount of damages those settlements recovered, and the distribution of recovery amounts. She acknowledges that the quality of her data is limited by the inconsistent and uncertain quality of agency responses to her information requests. Nevertheless, the data in Settling for Natural Resource Damages appear to paint a reasonably robust picture of most types of NRD settlements by federal agencies.

To her credit, Brashaw defines NRD claims broadly. She includes liability to federal land management agencies for damaging the resources they manage as well as the better-known NRD liability for hazardous substance and oil spills provided by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Oil Pollution Act (OPA, together with predecessor provisions of the Clean Water Act). As Bradshaw points out, the limited literature on NRD liability has focused almost entirely on CERCLA and OPA.

The results of Bradshaw’s inquiry, however, seem to vindicate earlier scholars’ emphasis. Federal agencies have settled more than 300 claims for damage to resources in national park units and national marine sanctuaries. These claims account for nearly half of the settlements in Bradshaw’s data set, but the reported combined value of those settlements is less than one percent of the total for all NRD settlements. The other ninety-nine percent came in settlements under CERCLA, OPA and the Clean Water Act.

Even excluding the outsize settlements of NRD claims related to the Deepwater Horizon blowout ($8.1 billion) and the Exxon Valdez grounding ($900 million), Bradshaw reports, the cumulative nominal value of federal NRD settlements under CERCLA, OPA and the Clean Water Act is nearly $1.4 billion. All that money is supposed to compensate the public for injury to, loss of, or destruction of natural resources, and is supposed to be used only to restore, replace, or acquire the equivalent of the resources harmed. How well have agencies’ settlement practices served the goal of obtaining appropriate levels of compensation? How successful have the federal trustees’ resource restoration efforts been? Should the tort-like NRD liability provisions of these statutes be emulated in addressing other environmental problems? How does the performance of non-federal trustees – which, as Bradshaw notes, includes some settlements that were subjected to withering criticism – compare to the performance of the federal trustees?

These are urgent questions. Settling for Natural Resource Damages makes no attempt to answer them, but invites efforts to do so. Bradshaw’s call for further research is well taken, in light of the scale of NRD settlements that she documents. That in itself is a significant contribution. In the world of NRD settlements, observing what’s going on out there is the first step in understanding what’s really going on out there.

James W. Coleman’s How Cheap Is Corporate Talk? observes a different aspect of environmental law practice. Coleman addresses the “regulator’s dilemma”: agencies must identify technically and economically feasible ways to meet statutory environmental goals, but their main source of information about technology and costs is the industry to be regulated – when the industry has obvious incentives to portray any regulation as infeasible and expensive. Coleman argues that one way to test the claims an industry makes to a regulator is by comparing them to what the industry tells its investors about the same regulatory risks – when the industry has obvious incentives to portray any potential regulation as no big deal. An industry’s “two-audience problem,” Coleman contends, can ease the regulator’s dilemma.

As Coleman acknowledges, it is hardly news that companies and trade associations facing potential environmental regulations (as well as many other actors in many contexts) talk out of both sides of their mouths depending on their audience. But Coleman strives to go beyond anecdote. He attempts a rigorous analysis to demonstrate this phenomenon in operation in a way that might be helpful to regulators, to investors, and to corporate counsel who give advice about statements made to both regulators and investors.

For his project, Coleman mines statements about a cleverly-selected instance of environmental regulation: EPA’s annual efforts to promulgate a Renewable Fuel Standard pursuant to the Energy Independence and Security Act of 2017. This rulemaking and statute, which underlie the notices at gas pumps that ethanol has been blended into the fuel, suit Coleman’s purpose for several reasons. The statute’s requirement for annual revisions to the Standard generates recurrent opportunities for affected industries to state clear views about the impact of proposed and final regulations in documents that are easily paired – comments submitted to EPA during the rulemaking process and Form 10-K disclosures released to investors. The number of affected companies is small enough for thorough review of the documents yet large enough to provide results amenable to statistical analysis. Perhaps most usefully, implementation of the Standard affects different industries differently. Increasing the market share of ethanol and other biofuels threatens the profits of petroleum refiners and allies but offers growth opportunities for agricultural producers and allies. Thus Coleman could observe, by reviewing more than 10,000 pages of documents, the way industries with opposing interests depicted the effects of the same rule in statements to both regulators and investors.

How, though, can the comparison be made? Simply counting contradictions will not do, for as Coleman understands, “[m]ost actors facing a two-audience problem are smart enough to avoid direct factual contradictions.” (P. 66). Instead, Coleman codes the substance of individual statements about the Standard’s impact. Essentially, he counts the number of arguments about the standard that each company made to each of its two audiences (in regulatory comments and Forms 10-K) about how the Standard would affect the company.

Coleman found that companies with dominant interests in petroleum predicted more negative impacts of the Standard, on average, in their regulatory comments than in their Forms 10-K (2.78 versus 0.78). By contrast, companies with dominant interests in biofuels predicted more positive impacts of the Standard, on average, in their Forms 10-K than in their regulatory comments (0.58 versus 0.21). Applying two straightforward statistical techniques, Coleman implicitly tested the null hypothesis that each of the two sets of comparable discussions were drawn from a population with the same mean number of negative or positive impacts. The observed differences were statistically significant (P < .004 by either test) for the companies with petroleum interests and barely not significant (.05 < P < .055 by either test) for the companies with biofuels interests. Thus Coleman demonstrates that with respect to the Renewable Fuel Standard, “oil companies warn regulators and reassure investors.” (P. 70.)

There are methodological issues. Despite Coleman’s efforts to ensure data quality, the taxonomy of distinct predictions of negative and positive impacts of the rule, and the assignment of individual statements to codes within that taxonomy, must to some degree be subjective. And it is not clear that counting arguments is the best way to detect the “exaggeration, ambiguity and omission” that Coleman correctly describes as the hallmark of assertions by intelligent actors facing a two-audience problem. Moreover, affected interests in environmental regulatory disputes surely make many statements about potential rules, targeted to both regulators and investors, outside of officially submitted comments and formal 10-K disclosures.

These quibbles do not denigrate the work’s contribution. By choosing a consistent and limited set of documents to compare, Coleman avoids any possible allegation of cherry-picking. Counting arguments may miss differences in tone and emphasis, but is unlikely to understate the contrast between a company’s pitches to regulators and investors. Coleman’s analysis confirms, in a systematic rather than anecdotal way, our intuition that regulated industry tells different stories to different audiences to suit different ends. His findings suggest that regulators and investors should keep saltshakers handy when hearing from an industry to be affected by a pending regulatory choice – including an industry that stands to benefit. The lesson bears demonstration, even during an Administration more likely to deregulate than to regulate.

Karen Bradshaw’s Settling for Natural Resource Damages and James W. Coleman’s How Cheap Is Corporate Talk? have relatively modest goals. These papers are not burdened with grand theory or elaborate statistics. Instead, they collect and present data to describe clearly phenomena that we know exist, but that we have comprehended only vaguely. They help us see. 

  1.  E.g. Robert C. Ellickson, Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County, 38 Stan. L. Rev. 623 (1986). []
Cite as: Steve Gold, The Real World, JOTWELL (August 18, 2017) (reviewing Karen Bradshaw, Settling for Natural Resource Damages, 40 Harv. Envtl. L. Rev. 211 (2016) and James W. Coleman, How Cheap Is Corporate Talk? Comparing Companies’ Comments on Regulations with Their Securities Disclosures, 40 Harv. Envtl. L. Rev. 48 (2016)), https://lex.jotwell.com/the-real-world/.

Tracing the Roots of the Criminalization of Poverty

That Elizabeth Hinton’s From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America is a must-read for those interested in the origins of the U.S. carceral state has been made clear in a stream of well-deserved and laudatory reviews.1 Echoing and reinforcing Naomi Murakawa’s The First Civil Right: How Liberals Build Prison America, Hinton persuasively demonstrates that today’s racially-targeted carceral state did not originate in Ronald Reagan’s 1980s. Instead its roots are both older and disturbingly bipartisan.

The architectural foundations of today’s carceral policies were laid during the administrations of Kennedy and Johnson, in the moments when the federal dedication to Community Action, maximum feasible participation and the War on Poverty gave way to the pathologization of black youth. Hinton moves steadily forward from that moment, persuasively indicting along the way not only Kennedy and Johnson but Carter as well. As she reveals, “in full historical context, the policies of the Regan administration marked merely the fulfillment of federal crime control priorities that stemmed initially from one of the most idealistic enterprises in American history .” (P. 4.) But the book is not only relevant for those interested in carceral policies. For scholars of poverty law and social welfare history, and in particular for those who seek to understand the historical origins of what Kaaryn Gustafson termed the criminalization of poverty, Hinton’s book is equally important.2

When one wonders at the punitive and criminalizing nature of current U.S. social welfare policy, from federal housing policies that devastate families, to the over-policing of schools and the resulting school to prison pipeline, to the desperate turn to problem-solving courts to solve seemingly every social ill, Hinton’s book sheds disturbing light. Beginning in the late 1960s, federal policy-makers began not only radically disinvesting in community-based support, but they began integrating policing and surveillance of urban, African American youth into the very fabric of what remained of U.S. urban social welfare programs. Ever-focused on “potentially delinquent” black youth, 1960s Youth Bureaus integrated law enforcement into recreational, education and employment programs. “By the mid-1970s federal disinvestment from the public sector and the remnants of the War on Poverty programs meant that social welfare agencies in urban centers had little choice but to incorporate crime control measures in their basic programming in order to receive funding.” (P. 236.)

Over time, basic and vital social supports, like public housing, became the site for surveillance, policing and criminalization. Take for example the Carter-era Urban Initiatives Anti-Crime program, which “[established] stronger partnerships between social and law enforcement institutions and [devoted] the majority of funds to surveillance and security needs.” (P. 288.) In so doing it “vastly enhanced the scope and power of punitive authorities in the most deteriorated and segregated public housing sites in the country.” By that time, “. . . law enforcement and criminal justice institutions could involve themselves in virtually any community-based effort.” (P. 293.)

By the end of the Reagan era, the story was complete. As Hinton explains, “[w]hen Reagan took office, the rhetoric of community involvement vanished from the domestic policy arenas, never to return. Stemming from the punitive shift in urban social programs during the previous decade, over the course of the 1980s, law enforcement officers came to provide the primary (and in some areas the only) public social services to residents.” (P. 337-38.) No wonder then that today police fill our schools and policing dominates our welfare offices. No wonder that we criminalize addiction and poverty. No wonder too that problem-solving courts have emerged as a desperate attempt to address the deep social welfare needs of whole communities led inexorably into criminal systems. History, it seems, has led us to precisely this moment.

But Hinton’s book offers not only an origin story but also a way forward. For her, solutions lie in returning to ideas deeply embedded in the early War on Poverty. As she states, “[w]e must revisit the principles of community representation and grassroots empowerment that guided the early development of the Great Society in order to begin moving toward a more equitable and just nation.” (P. 336.) We would be wise both to learn the history she teaches and to heed her advice.

  1. See e.g. James Forman, Jr., Fortress America, The Nation, Oct 17, 2016 at 35–37; Imani Perry, Book Review: ‘From the War on Poverty to the War on Crime’, by Elizabeth Hinton, N.Y. Times, May 29, 2016, at 15; Adam Hochschild, Our Awful Prisons: How They Can be Changed, 63 N.Y. Rev. Books 9, 30–32 (2016); Christine Canfield, Book Review: From the War on Poverty to the War on Crime; the Making of Mass Incarceration in America, ForeWord (Jan 23, 2017). []
  2. Kaaryn Gustafson, Cheating Welfare: Public Assistance and The Criminalization of Poverty (2011). []
Cite as: Wendy Anne Bach, Tracing the Roots of the Criminalization of Poverty, JOTWELL (August 11, 2017) (reviewing Elizabeth Hinton, From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America (2016)), https://lex.jotwell.com/tracing-the-roots-of-the-criminalization-of-poverty/.

Qui Custodiet Custodes? A Hard Look at International Arbitral Institutions

Arbitral institutions like to be discreet, and would perhaps be content if it were generally assumed that they perform a merely clerical and administrative function. Such a posture would be untenable. The tasks necessarily allocated to such bodies are central to any assessment of the legitimacy of the arbitral process. Given that commentators those looking for a soapbox seem to find it easy to have categorical opinions about arbitration, with an intensity inversely proportional to their acquaintance with facts, this is a welcome book, dispassionate but critical, which should allows its readers to bring greater discipline to their analysis—whatever may be their ideological predispositions.

Behind a deceptively bland title, Rémy Gerbay provides a conceptual framework which should allow evaluation of the international arbitral mechanism to be conducted with greater seriousness. A French scholar who has particularly cosmopolitan credentials, he holds degrees not only from his native country but also Switzerland, the United States, and the United Kingdom; and practicing licenses in the US and England. Now a lecturer at the School of International Arbitration at Queen Mary University of London, he had previously distinguished himself as a young Deputy Registrar of the London Court of International Arbitration—an experience which allows him to write with authority and meaningful perspectives on this subject.

In the national sphere, consumer arbitration is a salient example of the controversies that arise. Arbitration clauses, some say, is the dark art of unscrupulous corporations seeking to evade responsibility for their products and services by making it nigh on impossible for consumers to seek effective redress. The only thing left to do, in this view, is to treat arbitration clauses as presumptively unconscionable. Yet the school is out on two important questions: is it not possible to police abuse of asymmetrical bargaining power in arbitration clauses, for example by powerful safety valves like the American Arbitration Association’s Due Process Protocol? And is it a foregone conclusion that there is no type of arbitration which actually benefits consumers, despite the contrary conclusion of a number of studies?

International arbitration is criticized as a way of neutralizing sovereignty, displacing public courts with private decision-makers who tend to disregard the public interest. In answer, its defenders point out that especially outside the cleanest and institutionally most mature states, it is very much open to doubt that the court do a better job of looking out for the interests of ordinary citizens. Moreover, they point out that countries must provide credible neutral adjudication of legal rights and obligations, lest suffer from having the cost of all their international dealings augmented by a legal risk premium.

Arbitration constitutes the delegation of decision-making authority to persons who do not hold public office. As Gerbay perceives quite clearly, delegation generally implies some measure of residual control, or the thing would not be the delegation of authority but its simple relinquishment. Contrary to a widely-held belief (see below), arbitrants in the international domain are anything but sanguine about the idea of giving arbitrators free reign in the way they run the arbitral process (as opposed to—and no doubt as a counterpart of—according finality to their decision on the merits, without which arbitration would lose its appeal).

So who exercises this control? Who decides if the tribunals will have three members or only one? Who appoints arbitrators when the parties fail to agree? Who  decides whether a candidate nominated by a party is unfit? Who considers petitions to remove arbitrators for misconduct? Who decides what their fees should be? What about selecting the place of arbitration, consolidating claims, joining parties? It would be odd if this had to be national courts, given the asymmetry between international arbitration and national courts; when the arbitrants are of two different nationalities, the involvement of national courts can only be the product of the agreement or voluntary conduct of the parties, and is therefore functionally just a variant of delegation. Above all, each arbitrant is likely to be wary of its adversary’s home courts, and if the parties were attracted by third country courts they might as well have asked them to decide the case as a whole—as some courts in a few countries are willing to do even where they otherwise would not have jurisdiction.

That leaves arbitral institutions. Many of them insist that they fulfill nothing but an administrative function, and vaunt their “hands-off” approach. This is in a sense the fundamental and proper recognition that they have not been chosen by the parties to decide. On the other hand, the appointment and removal of arbitrators may be viewed as a critical function entailing controversial determinations. The modest labelling of the institutional role as “administrative” may seem somewhat like the practice of police detectives using unmarked vehicles in an attempt to blend in with the background, an unremarkable feature of daily routine. The car may be unmarked, but the conduct of the detective, when it affects rights of due process (e.g. the proper gathering of evidence) cannot be so dismissed.

Like it or not, the permanent institutions that administer arbitrations cannot hide behind the fiction that they are providing merely managerial functions; they are to some degree answerable for deficits in the legitimacy of the process. Have they done what they can? More than that one cannot ask, but that much yes.

Moreover, the seemingly unrecognized fact is that users want international arbitral institutions to be hands-on. Gerbay reports that a survey of in-house counsel in 2013 found that more than 70% of the respondents wanted a “hands-on” rather than “hands-off” approach to case management by institutions. Less than 5% wanted the opposite. (One quarter were undecided, perhaps because they would have said “that depends on the institution.”) More hands-on means more accountable. Gerbay quotes the Olympian personnage of Pierre Lalive, the Swiss maître-penseur of international arbitration whose seminal publications dominated the field in the 1970s and 1980s; he once wrote of the “legal schizophrenia” of arbitral institutions who claim to exercise “simultaneously a quasi-judicial mission” so as to justify their immunity and a “purely administrative mission” so as to avoid being held to the duty to ensure due process. (P. 191.)

Challenges to institutional decision-making have led to a number of judicial pronouncements, especially by the courts of France where the best-known international institute is located, namely the International Court of Arbitration of the International Chamber of Commerce. The very first in the digest provided by Gerbay is instructive. It is known by the name of the losing (and objecting) party, Appareils Dragon. It wound its way up to the Court of Cassation in 1983. The question was simple: given that the default rule of the French arbitration statute required awards to be rendered within six months, and that the ICC Rules provided that the institution could extend that deadline, was an award rendered by arbitrators following such an extension subject to annulment because the institution had not given reasons for its “administrative” decision? Surely a losing argument, we might immediately say—and the highest French Court agreed. But one can hardly be satisfied by the essential passage of its judgment (in Gerbay’s translation), referring to the ICC in the following terms: “lacking the quality of arbitrator, [it] was not bound to provide reasons for its decision of prolongation, which did not have a jurisdictional character.” (P. 127.)

The nature of a decision implying the exercise of a “jurisdictional” function is hardly self-defining. Imagine a case pending before an unknown arbitration institute in a country far down on the Transparency International corruption index. After the commencement of arbitration, the institute takes no steps to constitute the tribunal but periodically extends the limit for proceedings. Years pass. This may suit the respondent just fine, as arbitral litispendence on the face of it prevents alternative pursuits of remedies. Justice is denied to the claimant, who suspects collusion. Surely there comes a point when courts elsewhere will no longer accept that the institution is merely administering the case, but consider that conduct is equivalent to depriving the claimant of the right of legal redress.

Gerbay does not propose detailed prescriptions; nor could he produce a formula, given the infinite variety of situations in which the legitimacy of the process may be tested. His important conclusion is an overarching one: arbitral institutions are not mere managers; they are what he calls “ancillary participants in the adjudicative process.” (P.185.) Will this conception bring about a dangerous blurring of the line between the arbitral and institutional functions, and subject institutions to costly and endless disputation initiated by unscrupulous respondents? Gerbay’s study, admirably well-documented with respect both to practice and commentary, answers this question in the negative. The fact that some dispositions made by institutions are difficult to distinguish from substantive adjudication is no excuse for seeking to hide the fact that they may materially affect the outcome — and will ultimately fool no one. In the long run, institutions must attend to the fundamental and well-known criteria of institutional legitimacy: striving for transparency, and striving against capture, cronyism, and entrenchment. If they do so, and fully assimilate the importance of observable fairness as they make indispensable determinations on the periphery of the core decision-making function reserved to arbitrators, they need not fear accountability, but may comfortably embrace it.

Cite as: Jan Paulsson, Qui Custodiet Custodes? A Hard Look at International Arbitral Institutions, JOTWELL (July 31, 2017) (reviewing Rémy Gerbay, The Functions of Arbitral Institutions (2016)), https://lex.jotwell.com/qui-custodiet-custodes-a-hard-look-at-international-arbitral-institutions/.

Living in Liminal Legality

Jennifer M. Chacón, Producing Liminal Legality, 92 Denver U. L. Rev. (forthcoming), available at SSRN.

Jennifer Chacon’s Producing Liminal Legality is a must read, and not only because the title so aptly reflects the liminality of the article itself. The work is betwixt and between criminal and immigration law, between formal and functional analysis, pointing back in history and forward towards social change. It appears in a symposium issue, itself a liminal form of academic discourse, suspended between the immediacy of the academic blog post and the timeless stand-alone academic article. In light of the seemingly permanent status of liminal legality, this article promises to be both hot and timeless, with an illumination in every section.

Chacón draws from the cresting edge of the social science around liminal legal subjects, using it to uncover and critique the legal mechanisms that produce liminal legality. She describes the liminal legal statuses that are proliferating within immigration law and beyond it. Liminal legal categories function in two ways: “to effectuate administrative resource conservation through community-oriented risk management strategies” and to allow governmental actors to assert control over identified populations in ways that avoid the rights-protective schemes of the twentieth century.

The piece begins with a taxonomy of liminal legal status. Liminal status is rooted in the experiences of marginalized noncitizens and the ever-present threat of being plucked away from one’s settled life through a contemporary form of banishment. Central examples of liminal statuses are the administrative granting of immigration parole and “deferred action,” two feats of affirmative administrative inaction. A noncitizen granted parole or deferred action experiences “a reliance on administrative grace to effectuate freedom from banishment, an obligation to pay one’s way to prevent that banishment, experiences of heightened monitoring by governmental actors, and a related vulnerability to control, exclusion, and abuse by private actors.” (P. 709.) This is two moves in one: Chacón reveals how an official decision not to act serves to create a pseudo-status, or what Geoffrey Heeren calls “The Status of Nonstatus.” More, Chacón evokes in the reader a sense of what it’s like to exist in such a state of liminal grace, simultaneously suspended by mere inaction and locked in a Damoclean suspense.

Chacón’s next conceptual move is to expand the class of those living in liminal legality beyond the group on the edge of banishment. She reveals as liminal the groups of noncitizens who have seemingly more stable legal privileges, such as lawful permanent residents “who live in heavily policed, restrictionist jurisdictions and who have old criminal convictions that might appear to render them deportable” and who “may experience greater liminality and a greater likelihood of banishment than an unauthorized noncitizen who is a low priority for removal and lives in a more immigrant-friendly jurisdiction.” (P. 732.) Liminality, then, is less dependent on formal immigration status categories than on the functional elements of time, place, and social context.

Liminality then crosses the citizenship divide to include citizens embedded in immigrant communities as well as citizens who don’t, but who nonetheless have regular contact with law enforcement officials. This is an important move, because it expands the map of liminal status in several ways. First, it illuminates how the operation of liminal legality is not confined to noncitizens, but affects citizens as well. Second, it demonstrates how the commonality of contact with law enforcement is a more accurate predictor of legal liminality than which system of governance—immigration or criminal justice—is operating on an individual.

Chacón advocates for using liminal legality because its transubstantive nature offers advantages over topical frames like “crimmigration.” She would return crimmigration scholarship to its original grounding in membership theory, thereby “reinvigorating the discussion of the role that race, class, and place play in structuring governance strategies both at the border of criminal and immigration law and beyond it.” (P. 764.)

This is why I think Producing Liminal Legality is such an important work for the current moment. Returning to membership theory with a transubstantive legal analysis like liminality is one way to stem the tide of immigration exceptionalism that the Executive Branch is now relying on to maximize its ability to exclude groups like Muslims and refugees. Also, Chacón uses the notion of liminality to make a series of connections that immigration scholarship often struggles with: the tenuousness of distinctions among the authorized citizenship and immigration statuses, the governance functions played by the interlacing of criminal and immigration law, and the role of race, class, and place in that complex interlacing. Having erased the citizenship line as a significant analytical boundary, and exchanged it for the level of governance through law enforcement that an individual or community experiences, the presence of race and class come into focus like elephants in a room.

Cite as: Juliet Stumpf, Living in Liminal Legality, JOTWELL (July 3, 2017) (reviewing Jennifer M. Chacón, Producing Liminal Legality, 92 Denver U. L. Rev. (forthcoming), available at SSRN), https://lex.jotwell.com/living-in-liminal-liability/.

Studying Specific Performance

Yonathan A. Arbel, Contract Remedies in Action: Specific Performance, 118 W. Va. L. Rev. 100 (2015), available at SSRN.

Parties that have a right to the very thing promised in a contract may opt not to have it delivered by the breaching party through specific performance. Even when the promised item is unique, the plaintiff may choose not to enforce the remedy. Why? Is it too difficult to execute the remedy? Are motivations mixed? Do lawyers advise clients to pursue money damages over specific performance? Will the breaching party behave in good faith when complying with the order? Professor Yonathan Arbel, former managing editor of the New Private Law Blog, offers a fascinating qualitative study of this underexamined issue. He explores why a contractual party that has established a right to the remedy of specific performance might opt out of the preferred remedy. Despite having a proven right to this coveted remedy, he shows why plaintiffs may choose not to force the breaching party to perform as promised. This, he claims, is true notwithstanding the “notoriously” under-compensatory nature of expectancy damages in comparison to specific performance.

Remedies and substance are intertwined. Professor Ariel Porat, in a Remedies chapter in the forthcoming Handbook of Law and Economics, declares that “[a]nalyzing the substantive law without its remedial part is almost meaningless.” Understanding remedial options and goals is essential. Professor Arbel’s work thoughtfully analyzes contract law’s pinnacle remedy of specific performance and the goals it serves. He then critically examines contract’s law primary competing theories—economic and rights-based conceptions—in light of parties’ actual behavior regarding specific performance. His treatment describes what parties actually do when confronted with the option of specific performance in the real world. His qualitative approach explores their practices “‘from the inside,’ tracking the internal view of litigants and their lawyers.”

The heart of Professor Arbel’s article centers on his findings from interviews with lawyers and their clients who were engaged in specific performance litigation. For the qualitative analysis, he uses a comparable legal system, but one where specific performance is the default remedy: Israel. The interesting findings are inconsistent with the two main contract theories: A utilitarian may view specific performance as a bargaining chip to extract more money from the breaching party, while a rights-based advocate may view the remedy as the ultimate vindication of the value of promise-keeping. In part, Professor Arbel opines that the growing empirical data to prove these theories relies upon faulty assumptions. For example, the theorists omit plaintiff’s remedial choices, assume parities will negotiate execution of the order, and fail to appreciate real-world motivations and implementation challenges.

The interviews reveal the complexity that lies beneath. Though not all plaintiffs opt out of this powerful remedy, significant numbers do abstain at various stages: (i) prejudgment, (ii) post-judgment renegotiation, and (iii) ultimate execution. Pursuing a remedy via the court system takes time. Reaching the desired judicial remedy via litigation suspends the parties in an adversarial posture, which may linger post-trial when it is time to execute the special performance decree. Attaining the promised performance may entail further negotiations, and plaintiff’s preference may alter over time. Such orders require good faith in implementation, despite lack of standards or court supervisory means to ensure high quality compliance. In the face of bad faith or even simply delay, plaintiff must choose whether to spend energy and money to demand compliance. Most interviewees reported real challenges enforcing specific performance. Contempt may be ineffective if defendant lacks funds. Plaintiff may be left to leverage defendant’s reputation or rely on social norms—both valuable tools but not full proof in operation.

Professor Arbel also seeks to bridge the binary nature of the two theoretical dialogues. He suggests the economics-minded align assumptions with actual practice—for example, a decree does not equate to receipt of actual performance as promised. For the rights-based theorists, he recommends they consider the strategic and utilitarian motivations plaintiffs demonstrate in the process. Per Arbel’s findings, a plaintiff may choose specific performance prejudgment to signal the strength of the case, minimize costs and delays, and leverage renegotiation after judgment. Both would be well served to enhance their exploration with the possibilities that these real-world findings signify.

Importantly, Professor Arbel maintains that to best protect nonbreaching parties, both theoretical schools should give plaintiff the option between specific performance and expectation damages. Ethical rules must guide lawyers to avoid self-serving advice. But even assuming sage advice, Professor Arbel warns that judges shouldn’t trust plaintiffs to choose wisely, which may necessitate judges exercising broad discretion to craft the remedial award. This harkens back to equitable cleanup jurisdiction in the United States in which the judge would render complete justice, including damages in lieu, should specific performance become unavailable or impossible. What about other possible remedies beyond compensation if specific performance is unattainable: for certain breaches of contract, should plaintiffs also be able to disgorge defendant’s unjust gains? See here, here, and here. Both the United States and Israel permit a disgorgement gain-based remedy for breaches of contract when appropriate. That is a topic for another day, but more research along the lines Professor Arbel conducts would go far in servicing the very goals that the substantive law of contract aims to attain.

Overall, Professor Arbel seeks to contextualize contract theory, break the stalemate between instrumental and deontological stances, and stimulate the collection of more data with larger samples. His article successfully contextualizes the debate, but only time will tell on the other two aims. It is my hope that he and the scholarly community will succeed on all three goals. Fine-tuning data to context and linking theory to practice will sharpen the theoretical debate and aid plaintiffs in achieving optimal results in the face of breach.

May the third generation of specific performance discourse begin.

Cite as: Caprice Roberts, Studying Specific Performance, JOTWELL (May 25, 2017) (reviewing Yonathan A. Arbel, Contract Remedies in Action: Specific Performance, 118 W. Va. L. Rev. 100 (2015), available at SSRN), https://lex.jotwell.com/studying-specific-performance/.

A Call, and Roadmap, to Create Legal Research Classes that Meet the Experiential Standard

Alyson M. Drake, The Need for Experiential Legal Research Education, 108 Law Libr. J. 511 (2016).

Experiential learning is currently one of the buzz words of legal education. Recent changes to the ABA Standards and Rules of Procedure for Approval of Law Schools have focused greater attention on learning outcomes and assessment and increasing opportunities for learning and practicing skills that students will use as attorneys. In fact, ABA Standard 303(a)(3) requires a minimum of 6 credit hours of experiential course work.

Traditionally, experiential learning was widely thought to be the domain of law school clinics and externships, or field placements. However, the increased credit hour requirement for experiential learning has caused law schools to review their curriculum and determine whether sufficient experiential learning opportunities exist to meet the minimum requirement. Accordingly, there is a push to design new courses, or redesign existing courses, to meet a third type of experiential learning termed simulation courses, as described in ABA Standard 304. In order to qualify as a simulation course under the standard, a course should provide an experience “reasonably similar” to client representation although the student is not working with a real client.

Professor Alyson M. Drake’s article calls for the creation or retooling of stand-alone research classes that will meet the requirements to be designated as experiential classes. An increase in the number of research classes categorized as experiential will provide two benefits. First, and most importantly, it can serve to provide additional legal research instruction beyond the first year of law school. It will also support the mission of law schools to expand course offerings that meet the experiential standard.

Although classes in legal research have traditionally been sparse and under-valued in law schools, this approach does not match the necessity for proficiency in legal research needed as a practicing attorney, or the amount of an attorney’s time that is devoted to legal research. Professor Drake notes that newer attorneys spend approximately 35% of their time on legal research. More experienced attorneys spend approximately 18% of their time doing research. In contrast, Professor Drake notes that hiring attorneys often assess new attorney research skills as needing improvement. Providing more legal research instruction, in a format that closely mimics the work of a practicing attorney, will produce students who are better prepared to transition to practice.

Professor Drake’s article provides a very useful overview of the history of this shift in the ABA Standards and legal education in general. Similarly, the article also provides a breakdown of the Standards and how they can be interpreted in regards to experiential education and, in particular, simulation courses. This background and analysis of the standards is quite useful for those seeking to understand the context of the shift toward increased experiential learning as well as those seeking to create experiential learning opportunities in legal research courses.

Finally, Professor Drake discusses several current legal research teaching methods and how they might be retooled to satisfy the requirements of Standard 304. She breaks down the components of different pedagogical structures, highlighting which components are likely to already meet the requirements, which aspects might not, and recommending ways in which those components might be restructured to meet the standard.

Professor Drake begins with the “traditional legal research course,” described as “those where the lecture takes place during class time.” (P. 529.) Some classroom practice is usually included, but the balance between lecture and practicing skills can vary significantly. A traditional class of this sort may be the most challenging to convert to an experiential model. However, Professor Drake offers several changes to a traditional class that could support its meeting the ABA requirements for an experiential class. These include ensuring the balance between lecture and practice weighs most heavily toward practice, using assignments that closely approximate problems likely to occur in practice, and limiting class size so that the professor can provide “direct supervision.”

Professor Drake goes on to discuss key components of flipped, online, and specialized legal research courses and outlines several suggestions for how these courses can be retooled to meet the experiential requirements. Her article is a call to create experiential legal research courses, but it goes farther by providing a roadmap that can be used to design new classes or restructure existing classes. Legal research is a critical lawyering skill; however, it is also an area where hiring attorneys believe new attorney skills are lacking. This gap between the necessity of efficient and effective research and ability at law school graduation creates an opportunity for the growth of legal research courses in the curriculum.

Cite as: Kristina Niedringhaus, A Call, and Roadmap, to Create Legal Research Classes that Meet the Experiential Standard, JOTWELL (May 2, 2017) (reviewing Alyson M. Drake, The Need for Experiential Legal Research Education, 108 Law Libr. J. 511 (2016)), https://lex.jotwell.com/a-call-and-roadmap-to-create-legal-research-classes-that-meet-the-experiential-standard/.

Calculating Damages in an Uncertain World

Tun-Jen Chiang, The Information-Forcing Dilemma in Damages Law (Wash. U. in St. Louis Legal Stud. Research Paper No. 16-08-03, 2016), available at SSRN.

There is a rule in the world of remedies that has always struck me as unfair. The rule, generally speaking, is that damages are not available unless they can be proven with certainty. For example, suppose that I own a pub and hire a karaoke DJ for Friday night. Karaoke is popular in my town and I advertise the event widely. On Friday afternoon, however, the DJ breaches and I’m left without entertainment. During the night, patrons show up and ask about the DJ. Many of them express disappointment; some decide to remain and have a couple drinks but some leave right away. I bring suit for $1,000 in damages. Even though liability is clear in this case, I am not likely to recover a dime in damages because my estimate of damages is, in the eyes of the law, little more than conjecture. If this seems unfair to you, you’re in good company. In fact, some courts see it the same way and have tried to soften the “certainty” requirement by awarding damages that seem like a “good guess.” But the “good guess” approach has its own downside. Guesses are sometimes wrong—especially when the guesser stands to benefit from guessing too high. So what is a court to do?

Scholars and jurists have wrestled with this problem for some time but nobody, to my knowledge, has done so as successfully as Tun-Jen Chiang in his new article, The Information-Forcing Dilemma in Damages Law. Unlike prior scholars, Chiang does not attempt to find the sweet spot between the “certainty” and “good guess” approaches. Instead, he takes a step back and tries to understand the problem. The problem is not simply that we have yet to find the sweet spot; it’s that information deficits force courts to fall back on a general sense of fairness. This sense of fairness will, of course, skew different ways in different cases. Chiang helpfully illustrates how courts oscillate between “certainty” and “good guess” approaches as they attempt to implement vague notions of fairness. In one case (or perhaps one period of time), courts move from “certainty” to “good guess” to ameliorate the unfairness to plaintiffs, but then move from “good guess” back to “unfairness” to ameliorate unfairness to defendants. And then the process starts all over again.

The same information deficit foils other attempts to solve the problem. Instead of choosing between a “certainty” or “good guess” approach, legislatures and courts have also experimented with solutions such damages caps or shifting the burden of proof. But these solutions, Chiang shows, are simply further attempts to pinpoint the appropriate level of fairness in a world of inadequate information. But that approach, like others, is prone to oscillation because fairness concerns will always re-assert themselves.

Once Chiang illustrates the real problem—inadequate information—he proposes a solution. Specifically, he argues that

Courts should require a party to produce damages information . . . if and only if two conditions are met. First, the social benefit of having additional information on some issue must outweigh the social cost of collecting the information and presenting it in court . . . . Second, courts should impose the burden of proof on the party that can more cheaply produce the information required. (P. 46.)

At first glance, the first of these two prongs seems unsatisfying. How in the world will a court determine the “social benefit” of presenting evidence of the business my pub lost when the DJ breached, the “social cost” of adducing this evidence? (Note that these costs and benefits are social, not private; if my private benefit exceeds my private cost, I would collect and produce the information without further incentive.) Chiang recognizes the problem, however. He acknowledges that courts will not be able to precisely calculate these costs and benefits. Yet he defends the criterion, persuasively in my view, as a tool for forcing courts to recognize the trade-offs that are inherent in the choice. When these trade-offs are submerged within the doctrine (as they are now), the doctrine oscillates over time because a given result, when stated in stark, black-and-white terms, appears to ignore costs. When a choice is explicitly acknowledged to be balance of costs and benefits, oscillation should be less common because costs are better (and more openly) accounted for.

The second prong of Chiang’s proposed solution does more than simply remind courts what should matter. It specifically instructs courts to consider who can more cheaply produce evidence of loss and penalize that party for failing to do so. But without knowing the nature of the evidence, how can a court know who can more cheaply produce it? Chiang’s solution is to impose a burden of producing evidence of both parties and then allow the court to penalize the party who could have produced more but didn’t. This would set off, as Chiang puts it, a

virtuous cycle where the threat of a penalty on one side (say the plaintiff) indices the plaintiff to produce more and better evidence, which in turn induces the defendant to produce more and better evidence, and so on—the cycle stops only at the point where both parties have produced all cost-effective evidence and therefore do not expect to be found negligent [in the production of evidence] at all. (P. 54.)

Chiang’s solution strikes me as worth a try. If there a cost-effective way for me to find out how many customers I lost at my pub, I should do so. If I don’t do, but instead throw a big damages number at the court, I should not get the benefit of a “good guess” rule. In contrast, if the DJ can cost-effectively determine how much business I lost but did not do so, he should not get the benefit of the certainty rule. What happens if both of us do our best? This is one place where Chiang comes up a bit short, at least on my reading. He does not appear to address that possibility. To his credit, the problem of damages should be less acute in this context because both parties have adduced as much evidence as feasible, thus making the court’s job easier. But there will still be situations when the amount of damages is uncertain even after both parties have done their best. If the court applies a pro-defendant certainty rule at that point, that would seem to diminish the plaintiff’s incentive to produce evidence up front. That is, the plaintiff can only obtain a pro-plaintiff “good guess” rule if (1) the plaintiff is non-negligent and (2) the defendant is negligent. Perhaps the plaintiff’s incentive to adduce as much cost-effective evidence as possible will still be strong enough given that she cannot capitalize on a defendant’s negligence unless she herself is non-negligent. If that is so, Chiang’s solution is a good one, though it would help to more fully explain that point (which is possible because the article still appears to be in draft form).

In sum, scholars, jurists or practitioners who have found themselves perplexed by the prospect of proving damages should read Chiang’s fine article. He helpfully explains why doctrine in this field has oscillated over time and offers an innovative and efficient way to solve the problem. I enjoyed reading it, lots.

Cite as: Jack Preis, Calculating Damages in an Uncertain World, JOTWELL (April 7, 2017) (reviewing Tun-Jen Chiang, The Information-Forcing Dilemma in Damages Law (Wash. U. in St. Louis Legal Stud. Research Paper No. 16-08-03, 2016), available at SSRN), https://lex.jotwell.com/calculating-damages-in-an-uncertain-world/.