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Crowd-Sourcing Decolonization

Tendaye Achiume, Migration As Decolonization, 71 Stan. L. Rev. 1509 (2019).

At last—an article that squarely confronts the unquestioned authority of nation states to exclude economic migrants, and that moves the discussion beyond the red cape of open borders. Tendayi Achiume deconstructs the stone foundations of sovereignty in her ambitious and thought-provoking article, Migration as Decolonization.

Above the fever pitch of international debate surrounding global migration, one truth seems unassailable: that it is the prerogative of the sovereign state to exclude economic migrants. Faced with this unbreachable barrier, the battle around immigration moves elsewhere, pitched instead around how broadly to define the categories of those privileged to cross international borders—which citizens, residents, workers, humanitarian refuge-seekers, among others. Separated from the sound and fury of this debate is a silence around when purely economic migrants—“those who enter the territory of a foreign state in order to pursue better life outcomes”—have any legal claim to cross borders.

Achiume’s thesis is that the process of decolonization, which is ensnared in inequitable neocolonial relationships, must continue through the right of individual self-determination through economic migration. This right has boundaries. It belongs to individuals from nations subjected to the inequity-producing rules and institutions of colonization, who seek to better themselves within nations that hold “colonial advantage” over the country from which the individual originates. The journey to this conclusion takes three moves.

The first move is to reconceptualize traditional notions about sovereignty. Exclusion of economic migrants has long been sanctified as a sovereign power. Sovereign power to exclude makes sense when those excluded are political strangers. In the absence of some higher humanitarian reason to admit the stranger, there is no obligation under domestic or international law for a nation state to open the door. This framework narrows arguments for new legal pathways to admission for the political stranger other than expansion of established but exceptional criteria for admission, such as refugee status.

The article invites us to view the relationship between the nation state and the self-determining individual in a different framework, one that calls into question these accepted notions of the independent sovereign and the power to exclude. It turns to the history of colonization to shed light on the perseverance of legal and political institutions that maintain longstanding interconnections among colonized and colonizing nations and peoples.

This history highlights two related aspects of colonization. First, both law and migration were necessary elements in establishing what Achiume calls “colonial advantage,” defined as “the economic and political dominance of colonial powers at the expense of colonies” during colonization. (Pp. 1535-36.) Achiume posits that “reaping the full benefits of colonial expansion required specific transnational arrangements and distribution of labor and managerial personnel.” (P. 1538.)

The article describes how law served as the chassis for colonial advantage, based on layers of international and bilateral law among European nations, and agreements involving European private corporations legitimized by colonial law. Colonial migration was the means of exerting colonial power, riding on this legal and contractual chassis. This was no small stream of migrants. Between the 19th century and the first half of the 20th, the European colonial project enabled the emigration of approximately 62 million Europeans to colonies across the world. Achiume posits that these Europeans were the original economic migrants, that colonial migration was in fact a fundamental technology for the success of the enterprise. When Europeans “travelled out to the non-European world they traversed it and appropriated it relying on justifications that First World states now use to militarize their borders against today’s economic migrants.” (P. 1537.)

The result of the European colonial project, through law and migration, was to bring European and colonial peoples together as a transnational political community in a form that benefited Europeans politically and economically at the expense of the colonized subjects. These political communities did not evaporate upon independence. They continue to shape relationships between colonizing and formerly colonized communities. They are “politically interconnected in messy, complex ways determined significantly by historical imperial projects and their legacies.” (P. 1533.)

The shift to independence of colonized communities opened the way for former colonizing nations to exclude economic migrants from former colonies based on the justification that the two nations were now independent sovereigns. Social contract theory “locates the formation of political community in the putative mutual consent of individuals to live under common subjection to a shared government.” (P. 1547.) This meant that once those governments parted ways, the former colonial subjects were formally excluded from the political community and had no claim to physical inclusion.

Achiume contests this theory, outlining instead a de facto political community arising from the subjugation of colonized peoples:

[T]he posited political community (neocolonial empire), distinctively encompasses members whose induction into the community was decidedly coerced. This recalls the particular harm of colonialism…which is that it forged former colonizing and colonized peoples into a political association or community in which the latter were subordinate to the former, notwithstanding the full and equal personhood of Third World individuals. The failure of formal decolonization maintains the political association between Third and First World in a de facto political community of de facto co-sovereigns mutually instrumental to the prosperity of neocolonial empire, and mutually subjugated by the effective collective sovereigns of neocolonial empire: First World nation-states. (P. 1547.)

Decolonization did not erase colonial relationships founded on subjugation, as illustrated by the continuance after independence of property ownership established during colonial rule. International instruments and organizations affirmed the international and domestic legal structures that maintained those rules, creating quasi-sovereignty. As Achiume explains, “Modern international law—including the UN Charter itself—preserved colonial advantage for colonizing powers even as it professed the formal political independence of former colonies and the equality of all sovereign states, including these former colonies.” (P. 1543.) Legal doctrines that preserved this advantage included international rules that prevented and continue to prevent reparation or remediation of systems that sustained colonial-era exploitation of national resources in colonized nations, including “protecting the property rights of colonial minorities who had secured these rights through the colonial subordination and massacre of Africans.” (P. 1545.)

The sovereignty doctrine itself, the article posits, is chief among these sustaining neocolonial international legal doctrines. The result is quasi-sovereignty, pairing “Third World formal national political independence with Third World structural political and economic subordination to First World nation-states and the post-World War I international economic and financial institutions dominated by the latter.” This is an informal empire, one in which formerly colonized nations remain subordinate to First World nations.

Having redefined sovereignty, the article’s second move is to propose a way to continue the process of decolonization by stepping down from the level of nation states to examine the individual’s role. The article proposes that when nation states are interconnected in ways that create quasi-colonial relationships, law should recognize legitimate avenues for individuals to migrate from the quasi-colonized to the quasi-colonizing nation. Seen in the light of inequitable global interconnection arising from colonization, the goal of decolonization becomes—not independence—but more equitable interconnection.

The First World nation-state, by virtue of its beneficiary status within neocolonial empire and the effectiveness of its sovereignty (secured in part through Third World subordination), has no more right to exclude Third World persons from its institutions of equal political membership than it has over its de jure citizens, where the goods of neocolonial empire are at stake. (P. 1547.)

There are lots of places this argument could go, including questions about what forms inclusion in the political membership of First World nations might take. The focus of the article, however, remains on migration as one of the main strategies that enabled colonization in the first place. If political equality is the goal of nation-state decolonization, that goal may have to be pursued through individual approaches when purely structural approaches have failed. “Whereas decolonization is typically considered a practice of political collectives—the nation-state in particular—this Article proposes that in light of how badly this arrangement continues to fail Third World peoples, individuals among them can take actions that we should understand as de-colonial.” (P. 1552.) When economic migration enhances individual self-determination within neocolonial empire, where it is responsive to the conditions of neocolonial subordination, it should be understood as attempted decolonization on the individual level.

This is migration as decolonization. The article reframes economic migration as acts of opposition by individuals in subordinate positions within neocolonial relationships, understanding them as acts that are responsive to historically rooted political inequality. This personal pursuit is therefore also a pursuit of political equality, and a matter of corrective distributive justice.

Migration as Decolonization begins geographically and historically with European colonization, but it ends with the application of its thesis to First World nations like the United States, itself a former colony. This is the article’s third move, and it divides the issue into three categories. The first, following directly from the nature of colonization, is that First World nations like Britain have no right to exclude citizens of their own former colonies when subjugating relationships persevere. Second, the move from postcolonial independence to neocolonial empire and interconnection opens the way to a much more expansive conception of who “can make the political equality demands that obviate right to exclude claims.” (P. 1561.) Thus, “Britain should be seen as neocolonially connected to, and in a relationship of domination over, Third World citizens of nation-states formerly colonized by its European counterparts, in ways that produce co-sovereign relations even among peoples the British did not formally colonize.” (P. 1561.) This is not limited to Britain; it applies to all former colonial powers.

This vision of co-sovereignty that extends beyond formal colonization leads to the third category, which addresses the prerogative to exclude claimed by First World nations like the United States with a far more mixed history of formal colonization, but that benefit from the creation and maintenance of a neocolonial empire. That neocolonial structure takes the form of a multilateral, joint enterprise among First World nation-states, and provides structural advantage to First World nations states collectively. The article argues that the creation and domination of these multilateral institutions and inequitable interconnections between nations require the same openness to inclusion of Third World quasi-citizens.

What I like (lots) about this piece, aside from its elegant prose, is that it wrenches into view a reality of inequality that has seemed so settled that we walk by it without glancing up. Achiume takes on the question of economic migration and stares it in the face. She loops her fingers through the lapels of international law and turns it—and us—to face the legacy of colonialism and its modern embodiment in the law of sovereignty. Standing on the shoulders of international legal scholars who have traced the outlines of neocolonialism, she proposes turning to individual self-determination to move the project forward. Some may disagree with the article’s proposal; good scholarship is not a popularity contest. Big ideas, though, lead to bigger conversations. This is a conversation worth having.

Cite as: Juliet Stumpf, Crowd-Sourcing Decolonization, JOTWELL (November 14, 2019) (reviewing Tendaye Achiume, Migration As Decolonization, 71 Stan. L. Rev. 1509 (2019)), https://lex.jotwell.com/crowd-sourcing-decolonization/.

Reclaiming Place-Based Development Incentive

Michelle D. Layser, The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path Toward Community Oriented Reform, __ Wisc. L. Rev. __ (forthcoming 2019), available at SSRN.

Professor Michelle Layser’s forthcoming article is an attack on the current form of place-based tax incentive programs. Layser argues that while rhetorically such programs are said to help the poor, by design they support gentrification in ways that harm the poor. The article ends with a call to reform place-based incentive programs so that the poor in selected areas actually benefit.

The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path Toward Community Oriented Reform speaks to a number of academic audiences. For tax folks, the article contributes to the expanding universe of critical tax scholarship. For property and local government people, the article does a valuable job connecting tax incentives with both urban redevelopment and place. And for poverty law scholars, Layser takes down an entire program type that might otherwise be seen as a rare bright spot when it comes to how the nation responds to poverty.

Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017, arguably the Trump administration’s signature legislative accomplishment. Ostensibly designed to encourage greater investment and siting of businesses in distressed areas, Opportunity Zones offer investors significant long-term tax advantages for siting businesses and investing in designated areas. The Opportunity Zones program is but the latest iteration of a series of place-based tax incentives such as enterprise zones, empowerment zones, and the New Markets Tax Credit Program. Like the programs that preceded it, Opportunity Zones enjoy bipartisan support: Democrats are happy to see money directed at poor communities and Republicans appreciate the business subsidies. Like the Earned Income Tax Credit (EITC), the other major antipoverty program that has been politically popular on both sides of the aisle over the last two decades, the Opportunity Zones program is a market affirming approach to dealing with poverty.

Yet, Layser insightfully observes that place-based incentive programs fit awkwardly alongside the simultaneous move in other antipoverty areas towards people-based strategies. For example, even as housing programs switch from place-based public housing to less geographically restricted vouchers, place-based tax incentive programs are all about designated areas. There is of course a risk of over-extending this contrast, but part of what makes place-based incentive programs attractive is that they seem to respond to the fact that place and poverty are linked. Layser does a tremendous job laying out, in a concise yet rich way, the importance of place and the adverse effects of concentrated poverty.

The article’s main argument is that the gentrification facilitated by these place-based tax incentive programs is not a design flaw but a design feature. Gentrification is the goal. Twenty years ago, Audrey McFarlane published one of my favorite poverty articles, Race, Space, and Place: The Geography of Economic Development,1 and in it she questioned development as an unambiguous good for poor urban areas. Though we are now in the era of Opportunity Zones and not Empowerment Zones, reading these two great works side-by-side shows the extent to which these programs continue to reflect a faith that markets, development, and investment will cure all. Promised jobs may not materialize, neighboring communities may be harmed, and even development within the designated areas can be problematic, especially if low-income residents are unable to participate in the growth or are priced out.

Given the problems with place-based tax incentive programs that she lays out so well in the article, one might have expected Layser to argue that it is time to abandon this approach. After all, Layser describes these place-based programs as inefficient and inequitable, which is the ultimate way for a tax professor to call a program “very bad.” But Layser is ultimately an optimist of sorts. She explains that her hope is that the article “helps bridge the fields of tax law and poverty law by demonstrating the untapped potential of place-based investment tax incentives as anti-poverty tools.” To get from her damning critique of place-based tax incentives as a response to poverty to the possibility that such incentives could help poor communities requires some work.

The article ends with a call to use mental mapping exercises in poor communities as a tool when designing tax incentives in order to ensure the incentives are structured to ensure the right benefits flow to those communities. “Past experience with spatially oriented investment tax incentives provides powerful evidence that the interests of poor communities, private industry, and governments will not align absent deliberate efforts to empower community stakeholders,” Layser continues, “One way to empower community stakeholders is through citizen participation.” Layser’s work fits nicely alongside other academic attempts at reviving community participation and a positive story can be told about how participation can lead to better outcomes.2 Frankly, I was not convinced by this final section of the article. It seemed too optimistic about both the politics of the moment and the likelihood regulators and investors would get behind a multiplicity of locally-tailored tax incentives. I worry that, worse-case scenario, participation will be window dressing, taking the form of tokenism. Or, best-case scenario, it will provide an effective tool for redirecting tax incentives in such a way that community needs are prioritized and gentrification is protected against, in which case investors will flee. Layser is quite right to acknowledge that her proposal is likely to face opposition by politicians and businesses.

My pessimism regarding the feasibility and workability of Layser’s idea of community-oriented tax incentives does not detract from the strength of the article. Though the EITC will continue to enjoy first position perhaps when it comes to scholarship that explores the intersection of tax and poverty,3 it is wonderful to see so much work coming out that shows how these two fields are deeply intertwined in other ways as well.4 I am not qualified to say how great a contribution this article makes to the tax literature, but it definitely makes a valuable contribution to the poverty literature. Having heard Professor Layser speak about the work before, I had high expectations and this article meets them. I encourage others to find a time and place to read this important work.

  1. 36 San Diego L. Rev. 295 (1999).
  2. See, e.g., Wendy A. Bach, Mobilization and Poverty Law: Searching for Participatory Democracy Amid the Ashes of the War on Poverty, 20 Va. J. Soc. Pol’y & L. 96 (2012).
  3. See, e.g., Sara Sternberg Greene, The Broken Safety Net: A Study of Earned Income Tax Credit Recipients and a Proposal for Repair, 88 N.Y.U. L. Rev. 515 (2013); Francine J. Lipman, Access to Tax InJustice, 40 Pepp. L. Rev. 1173 (2013).
  4. See, e.g., Ari Glogower, Taxing Inequality, 93 N.Y.U. L. Rev. 1421 (2018); Susanna Camic Tahk, The Tax War on Poverty, 56 Ariz. L. Rev. 791 (2014).
Cite as: Ezra Rosser, Reclaiming Place-Based Development Incentive, JOTWELL (October 22, 2019) (reviewing Michelle D. Layser, The Pro-Gentrification Origins of Place-Based Investment Tax Incentives and a Path Toward Community Oriented Reform, __ Wisc. L. Rev. __ (forthcoming 2019), available at SSRN), https://lex.jotwell.com/reclaiming-place-based-development-incentive/.

Incapacity Push-Back

Sean M. Scott, Contractual Incapacity and the Americans with Disabilities Act, 123 Dickinson L. Rev. __ (forthcoming 2019), available at SSRN.

What happens when a set of longstanding common law assumptions meets an assertive and vigorous civil rights act? Professor Sean Scott examines this question in terms of contractual incapacity and the Americans with Disabilities Act (ADA) in her aptly titled Contractual Incapacity and the Americans with Disabilities Act. She confronts the standard application of the doctrine of contractual incapacity in view of the ADA’s wide-ranging aim of upsetting traditional notions of disability and impairment.

To combine these two antagonistic ideas—contractual incapacity and the ADA—Professor Scott first outlines the texts and ambitions of each. Next, she introduces these two unwilling dance partners to one another and demonstrates that particular aspects of the idea of contractual incapacity do in fact undermine both the ADA and the goals of the disability rights movement. She concludes with nudging. She gives the law a small push, suggesting that our legal imaginations might reconsider contractual incapacity against the demands of disability rights activists. It’s a powerful nudge, one which has implications for various populations, from developmentally disabled persons to elderly individuals with dementia.

The contractual incapacity doctrine boasts deep roots, traceable to Roman law and the Visigothic code. The basic idea is that a person lacking the cognitive wherewithal to understand a contract cannot be said to have entered into a contract at all. Incapacity is a defense. When the court finds that one party to a contract lacked capacity, the contract can be void or voidable. Given its ripe age, we might not be surprised to perceive in the doctrine some residue of outmoded and stereotypical tropes.

For example, Professor Scott explains, in contractual incapacity cases, “disability drift” commonly occurs, where “the presence of a physical disability is taken as evidence of a mental one….” (P. 25.) Historically, individuals who were deaf were presumptively “idiots” and therefore unable to contract. Even newer decisions can take disheveled hair or disordered mascara as evidence of mental incapacity. Other cases present individuals with mental disabilities as objects of pity with modifiers such as “tragic,” “lonely,” or “pathetic.” (P. 24.) Another cluster of decisions demonstrates the way judges can view disability as pathology; as something wrong. A pathological/medical vision of disability ignores the roles which societal restrictions and responses to the individual’s disability play. This kind of response can be exacerbated when an individual deviates from societal norms.

Despite the ADA’s attempt to deconstruct the notion of disability by lifting social barriers, the contemporary contractual incapacity doctrine continues to disregard the notion of disability as social construct. The notion that it is the impairment itself coupled with society’s response to it that results in a disability undergirds the ADA. Take away the social construction of the impairment and the affected individual’s barriers recede or even disappear. But focus on the impairment and pathology and there is no space for consideration of the societal aspect of a disability. This then represents a direct collision between the ADA and contractual incapacity as it is currently applied.

Professor Scott also discerns another point of conflict between the ADA and contractual incapacity in the “regarded as” definition of a disability. The ADA actually contains three alternative definitions of “disability.” The first is an actual disability (a substantially limiting mental or physical impairment). The second is a record of having an actual disability. The third is simply being “regarded as” having a disability. The ADA’s “regarded as” definition participates in the disability-as-social-construct notion. Both the statutory definition and this notion are concerned with the disabling effects of stereotypical and outmoded social constructs of disability; disability as pathology, an object of pity, or drift.

The ADA also implicitly rejects uninformed lay diagnoses. Great harm follows assumptions such as the assumption that someone with a stutter cannot possibly understand a complex contract. “Better to leave cognitive diagnoses to medical experts,” the “regarded as” prong seems to say to the American people.

Contractual incapacity cases, meanwhile, are only too quick to rely on lay testimony. Lay testimony routinely invokes questionable evidence such as a party’s idiosyncratic behavior, uncleanliness, or speech irregularities. Moreover, the question of whether one party to the contract “should have known” of the other party’s mental disabilities once again invites a parade of judgmental and archaic observations frequently having little to do with an individual’s actual cognitive limitations.

Here, then, Professor Scott identifies a secondary collision between contractual incapacity and the ADA, within the “regarded as” definition of disability. Professor Scott then proposes a rather radical solution. She rejects the protectionist attitudes of courts’ applications of contractual incapacity. Instead, parties in a breach of contract action would only be permitted to raise incapacity as a defense to enforcement when they had been adjudicated as mentally incompetent (e.g., in a plenary guardianship proceeding). This would drastically limit the incapacity defense to only a handful of cases. The doctrines of undue influence and unconscionability might fill the gaps.

Of course, one consequence of enacting Professor Scott’s proposal would be that a number of individuals with disabilities would be bound to contracts they lacked any capacity to understand. This is no small cost. Professor Scott concedes that she does not intend “to offer a definite solution to a definite problem.” (P. 76.) Rather, her proposal is intended to nudge our thinking and our imaginations in the direction of autonomy and equality for individuals with mental impairments.

Cite as: Tom Simmons, Incapacity Push-Back, JOTWELL (October 11, 2019) (reviewing Sean M. Scott, Contractual Incapacity and the Americans with Disabilities Act, 123 Dickinson L. Rev. __ (forthcoming 2019), available at SSRN), https://lex.jotwell.com/incapacity-push-back/.

Poverty, Privacy, and Living Out of Reach

Michele Gilman &  Rebecca Green, The Surveillance Gap: The Harms of Extreme Privacy and Data Marginalization, 42 N.Y.U. Rev. L. & Soc. Change 253 (2018).

If in general we are to understand that, in our new age of surveillance and pervasive use of data, privacy is dead, something else is happening in poor communities. In Poverty Law scholarship, privacy is framed more accurately as violently absent. Hypersurveillance, hyperregulation, criminalization, stigma, and structural racism have created a world in which, in Khiara Bridges’s words, “state intervention, coercion, and regulation”1 are the norm. Poverty Law scholars also know privacy as something that is, in its idealized liberal form, profoundly inadequate. As Dorothy Roberts argues, “merely ensuring the individuals ‘right to be let alone’—may be inadequate to protect the dignity and autonomy of the poor and oppressed.”2 Indeed a better notion of privacy “includes not only the negative proscription against government coercion, but also the affirmative duty of government to protecting the individual’s personhood from degradation and to facilitate the processes of choice and self-determination.”3

In The Surveillance Gap, Michele Gilman and Rebecca Green quite literally take all these realities and flip them over–revealing both the inevitable retreat that comes from intervention, coercion, and regulation, and the resulting lack of access to legal and institutional supports that might just support self-determination. But the flipping is just a piece of the contribution. After all, for those in the field, none of the facts are all that surprising. What is different here is what all this means for how we theorize privacy and how we create and support resistance.

Gilman and Green identify four groups who they describe as living at privacy’s extremes, groups that are “being seen or tracked too little or too much.” (P. 255.) The four are undocumented immigrants, day laborers, homeless people, and people with felony conviction histories. The “too much” piece of the tracking of these groups is well-known and well-told, both in the article and in the literature referenced above. Certainly the details vary, but all four groups are subject to hypersurveillance and punishment. And, being rational actors all, members of these groups resist through withdrawal. They meet pervasive attempts to track, control, and punish with often-successful attempts to evade detection and to retreat into some semblance of safety and privacy.

If all the surveillance and punishment are Gilman and Green’s “too much,” the “too little” are the real harms that result from that retreat. In one chilling example, “the 1.1 million undocumented children in the United States can suffer from health deficits, because parents are scared to take them to doctors, and educational delays, because parents are scared of enrolling them in school.” (P. 264.) So those who are most marginalized and stigmatized end up not being able to access what meager support might be out there. These harms not only lessen access to traditional social supports, but they also go to the center of our democracy. In short, it is tremendously difficult to participate in any meaningful way when you are deliberately retreating into the shadows.

Gilman and Green aptly describe both the causes and the conditions of living in what they term the surveillance gap. Initially, at least, all this is very depressing. If retreat is the logical and human response to surveillance and punishment, and is in fact a viable form of resistance, the retreat may create a little bit of safety or a semblance of autonomy, but it does not do much to, in Roberts’ framing, “facilitate the processes of choice and self-determination.”4

Gilman and Green acknowledge these enormous theoretical and practical problems, and along the way they provide a comprehensive summary of a wide range of privacy theories, but they do more than that. They conclude with a promising path forward. In short, if living in the surveillance gap means you trade access to support and participation for a minimal and degraded form of safety, then the only solution is to remake the terms of the bargain. Communities need a way both to emerge on different and safer terms, and to demand support separate from stigma. And of course, for that you need power.

For examples of this reframing and emergence Gilman and Green highlight several organizing campaigns. For example, Workers Centers allow day laborers to emerge collectively and make demands on their own terms. Homeless folks in Seattle fought the terms of a surveillance system (HMIS) purportedly designed to help provide services. The organized community wanted the support but they also wanted a different bargain–a choice to access services without an assumption of pathology and without succumbing to surveillance. As Gilman and Green describe, “after lengthy mediations the city adopted an ‘opt-in’ version of HMIS that did not require individuals to receive services or require shelters to participate as a funding condition.” (P. 304.)

In these and other examples, we see communities creating “strategies that give people the autonomy to assert or shed privacy.” These strategies are “essential to their individual dignity and to fulfilling our communal democratic promise.” (P. 305.) As Gilman and Green argue, these examples “show that grassroots organizing, driven by the objectives and insights of affected groups, can be powerful in enhancing autonomy.” (P. 305.) None of this is easy and certainly there is strong resistance to these organizing campaigns, but it is nevertheless a glimmer of a path away from the harms of the surveillance gap.

This article reads like the beginning of work by these scholars on reconceptualizing both privacy theory and remedies to the surveillance gap. I, for one, am going to be paying attention as they take us down that road.

  1. Khiara Bridges, The Poverty of Privacy Rights (2017), at P. 205.
  2. Dorothy E. Roberts, Punishing Drug Addicts Who Have Babies; Women of Color, Equality and the Right of Privacy, 104 Harv. L. Rev. 1419, 1478 (1991).
  3. Id. at 1479.
  4. Id.
Cite as: Wendy Anne Bach, Poverty, Privacy, and Living Out of Reach, JOTWELL (September 11, 2019) (reviewing Michele Gilman &  Rebecca Green, The Surveillance Gap: The Harms of Extreme Privacy and Data Marginalization, 42 N.Y.U. Rev. L. & Soc. Change 253 (2018)), https://lex.jotwell.com/poverty-privacy-and-living-out-of-reach/.

Making Punitive Damages More Predictable

Benjamin J. McMichael & W. Kip Viscusi, Taming Blockbuster Punitive Damages Awards, 2019 U. Ill. L. Rev. 171.

As tort reform heated up in the United States late in the last century, so too did the debate over the appropriateness of punitive damages awards, especially where those damages were seen to be excessive. Complicating the picture, of course, is what it means for such damages to be excessive in the first place, for, unlike traditional damages intended to compensate the injured party, punitive damages are intended to punish and deter the wrongdoing party. As a starting point, most courts and scholars are in agreement that the reprehensibility of the wrongdoing party and the amount needed to deter similar conduct in the future are important considerations that should be taken into account before awarding punitive damages. After this, however, all bets are off. For instance, scholars disagree with one another as to whether punitive damages are really out of control in the first place (most, but not all, seem to think that they are), and even if they are, they further disagree on what should be done about the problem. For instance, how predictable should punitive damages awards be, and what role, if any, should be played by the defendant’s wealth, or by other civil or criminal penalties the wrongdoer might be subject to, or by the probability of the defendant’s behavior escaping detection, or by the ratio between the compensatory and punitive damages, or by whether the claim is being reviewed as excessive on common law grounds or as unconstitutional on due process grounds, and how does all of this tie in to the twin (but frequently at odds) goals of punishment and deterrence? Indeed, there are few principles in all of remedies more contentious (and confusing!) than those governing the current punitive damages landscape, as a stack of recently-graded remedies exams sitting next to my desk will readily attest.

It is in part due to this confusion that hundreds of law review articles have been written on punitive damages since the 1980s alone—just when tort reform started to find its feet under the Reagan administration—initiating a cataclysmic shift in the punitive damages landscape whose aftershocks are still being felt today. Fortunately, one of the newest contributions to the literature—a well-researched, enjoyably-written, and cogently-argued Article called Taming Blockbuster Punitive Damages Awards by Professors Benjamin J. McMichael and W. Kip Viscusi—has found something new to say. The Article not only provides “the first empirical analysis of the effect of state punitive damages caps on blockbuster awards” (i.e., those awards exceeding $100 million, which arguably pose the biggest threat to fundamental notions of fairness), but also is the first to explore the dynamic interplay between the attempt of individual states to rein in and render more predictable punitive damages awards “with the effect of the Supreme Court’s current constitutional doctrine on punitive damages.” (P. 171.)

First, a little background. When it comes to federal constitutional law, the Supreme Court in State Farm tried to rein in the excessiveness of punitive damages award by holding that “few awards exceeding a single-digit ratio (i.e., 10:1) between punitive and compensatory damages … will satisfy due process,”1 and even suggested in Haslip that an award exceeding a 4:1 ratio between punitive and compensatory damages might come close to stepping over the line of constitutional impropriety.2 However, most state legislatures have dealt with the problem of excessive punitive damages awards quite differently. On the one hand, many have tried to rein in punitive damages by passing legislation capping the total amount of punitive damages (e.g., to $1 million) and/or by setting the ratio of punitive to compensatory damages much lower than that of the Supreme Court (e.g., 3:1 and 2:1 ratios are fairly typical). On the other hand, many legislatures have also provided statutory exceptions to these ratios to provide for larger awards in certain cases. Until Professors McMichael and Viscusi, nobody has thought to explore how these very different regulatory regimes have interacted with one another, especially as concerns blockbuster awards. So, what did they find?

Applying multivariate regression models, the authors found several interesting things worth the price of admission. First, they found that since State Farm, both the frequency and the size of blockbuster punitive damages awards has been reduced. This was about what one would expect: the combination of State Farm and Haslip suggests that a punitive award in excess of $100 million would typically only be available where compensatory damages already exceeded $25 million, but historically, where compensatory damages were this significant, courts and juries more frequently than not demonstrated a general reluctance to impose punitive awards with high punitive-compensatory ratios.3 More surprising, however, was the authors’ second finding that although state punitive damages caps reduced the frequency of blockbuster punitive damages awards (as should be expected), they had “no effect on the size of the awards that [did] cross this threshold,” a result that contrasted both with “earlier evidence suggest[ing] that State Farm ha[d] little effect on either the frequency with which punitive damages are imposed or the size of these awards” and with evidence suggesting that “caps ha[d] a statistically significant and negative impact on award size.” (P. 175.)

Based on their findings, the authors quite sensibly argue that if the Court really is serious about reining in outlier awards and rendering punitive damages awards that are more predictable, they should “take advantage of the available empirical evidence to formulate a new approach to governing punitive damages under the Due Process Clause.” (P. 175.) Specifically, they argue that because State Farm tends to do a better job of policing larger punitive awards while caps tend to do a better job policing smaller awards, they should combine these two approaches and reduce the punitive-compensatory ratio to 3:1 while providing an exception for wrongful death cases. But even here, the authors argue, the combined value of the punitive and compensatory damages should be set to “equal the value of a statistical life,” a proposal designed to “enable punitive damages to fulfill their proper deterrence role.” (P. 210.) Such a proposal, it is true, will limit the Court’s ability to punish and deter particularly egregious conduct (a fact that the authors are careful to point out at several places in their article), but if we are willing to trade off these goals for more predictability in the law, a step the Supreme Court seems already to have taken,4 then the authors’ provide a sensible way of accomplishing this goal. The Article is highly recommended!

  1. State Farm v. Campbell, 538 U.S. 408, 425-26 (2003).
  2. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991).
  3. See, e.g., Theodore Eisenberg, Michael Heise, & Martin T. Well, Variability in Punitive Damages: Empirically Assessing Exxon Shipping Co. v. Baker, 166 J. Inst. & Theoretical Econ. 5, 18, table 3 (2010) (showing that where compensatory damages were in excess of $1 million, both the median and mean punitive-compensatory ratios were less than 3:1, and usually less than 2:1).
  4. See, e.g., Exxon Shipping Co. v. Baker, 554 U.S. 471, 502 (2008) (“[A] penalty should be reasonably predictable in its severity, so that even Justice Holmes’s ‘bad man’ can look ahead with some ability to know what the stakes are in choosing one course of action or the other.”).
Cite as: Marco Jimenez, Making Punitive Damages More Predictable, JOTWELL (August 14, 2019) (reviewing Benjamin J. McMichael & W. Kip Viscusi, Taming Blockbuster Punitive Damages Awards, 2019 U. Ill. L. Rev. 171), https://lex.jotwell.com/making-punitive-damages-more-predictable/.

Indigenous Harms from Global Development—Can International Economic Law Provide a Cure?

Sergio Puig, International Indigenous Economic Law, 52 U.C. Davis. L. Rev. 1243 (2019).

States are the paradigmatic perpetrators of harms to indigenous rights, but this is changing. Increasingly, as Professor Sergio Puig points out, multinational corporations are the source of such harms, ranging from research extraction to commodification of indigenous knowledge and culture. Scholars and advocates typically turn to either domestic law or international human rights law to address these harms, and often treat international economic processes as themselves antithetical to indigenous rights. Professor Puig, however, convincingly lays out the ways that international economic law creates protections for indigenous rights, and analyzes needed enhancements for those protections. More radically, he argues that protecting indigenous rights is not contrary to economic globalization, but is core to justifying its legitimacy. International Indigenous Economic Law powerfully breaks down silos between human and indigenous rights and economic law, and will be valuable reading for scholars and advocates from these different fields.

Global economic development, Professor Puig shows, has left many indigenous peoples behind. While comprising only 5% of the world’s population, indigenous peoples make up 15% of the world’s poor, and a third of the world’s one billion “extremely poor.” Although their traditional territories encompass some of the earth’s most valuable resources, resource development more often leads to displacement and impoverishment than to indigenous prosperity. When indigenous law scholars have studied these harms, they turn to human rights law to solve them, and often treat economic development as a threat. Professor Puig, however, argues that this focus ignores valuable tools provided by economic law, including tools that are more easily enforced against non-state actors than traditional human rights instruments. International economic scholars, in contrast, largely ignore indigenous rights, or at best treat them as exceptions to international economic law. But, Professor Puig demonstrates, international economic instruments themselves have long paid attention to indigenous rights, often in surprisingly progressive ways.

Professor Puig discusses how different areas of international economic law protect (and fail to protect) indigenous interests. The impact of international intellectual property law on indigenous peoples is the most discussed in the legal literature, and several international intellectual property regimes provide at least modest protection for indigenous rights. The Nagoya Protocol on the Convention on Biological Diversity, for example, requires identification of the indigenous and local sources of traditional knowledge, and fair and equitable sharing of benefits from such knowledge. The World Intellectual Property Organization has worked to create norms against exploitation of intangible cultural resources and encourage suis generis regimes to protect such resources. The 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions, meanwhile, mandates measures to protect indigenous cultural heritage.

Although less discussed, the rules governing international development banks also provide meaningful recognition for indigenous peoples’ rights. Long before the UN Declaration on the Rights of Indigenous Peoples, for example, the World Bank Group required development projects to recognize customary and traditional tenure systems and involve indigenous communities in decision-making. World Bank rules now demand that borrowers engage in “free, prior, and informed” consultation and avoidance of adverse impact on affected indigenous groups. Enforcement procedures include, as a last resort, loan cancellation and sanctions against the offending borrower. The Asian Development Bank, Inter-American Development Bank, and other lending groups have similar protections. The World Bank rules have also led private lenders to adopt the Equator Principles and other voluntary rules that recognize indigenous interests.

International trade and investment agreements, in contrast, have few explicit protections for indigenous peoples. Those that do exist are largely in the form of carve-outs intended to allow domestic protection of indigenous rights in the face of mandates to provide equal treatment to foreign entities. The controversial NAFTA chapter on foreign direct investment, for example, included modest exemptions from key provisions to maintain rights or preferences for aboriginal peoples.

Professor Puig notes the limitations of the protections of each of these regimes. Multinational actors may fail to abide by existing protections or seek a more permissive regime, such as that of a private lender rather than the World Bank. International bodies may not wish or be able to demand accountability to abide by their rules. Indigenous groups, meanwhile, do not have an automatic seat at the table in international economic development discussions, and are deeply under-resourced and disadvantaged in trying to assert their rights. At a deeper level, the language of international economic law, with its emphasis on individual property, commodification, and change, fits uneasily with the indigenous claims of collective rights and tradition. The result has been to rely on carve-outs from economic agreements rather than affirmative rights to make decisions about and benefit from economic development. To address the limitations of international economic law regimes, Professor Puig advocates measures to ensure indigenous representation in economic decision-making, increase indigenous bargaining power and capacity, and clarify that protections for indigenous rights do not violate and are required by international economic law.

Most radically, Professor Puig argues that protecting indigenous interests is a “key litmus test for the very legitimacy of international economic law.” (P. 1311.) The alternative is a legal regime concerned solely with facilitating transactions rather than with just distribution to indigenous and other marginalized groups. The result of such a regime is to exacerbate economic inequality and the instability inequality causes. Accepting a focus on transactional efficiency to the exclusion of distribution also fuels the fear that globalization is only about wealth transfers to elites. This in turn, encourages the embrace of isolationism seen in movements from the right and the left. The development of international indigenous economic law, however, shows ways that international economic bodies can incorporate human rights norms, enforce them against non-state actors, and catalyze private and state adoption of those norms. While Professor Puig acknowledges that the limitations of that law and its enforcement reveal “the systemic challenges posed by global economic interdependence,” the ways in which international economic law is beginning to address those challenges provide some hope for the future. (P. 1314.) They certainly, at least to this reader, present a convincing case for looking beyond human rights documents to enforce international human rights norms.

Cite as: Bethany Berger, Indigenous Harms from Global Development—Can International Economic Law Provide a Cure?, JOTWELL (July 24, 2019) (reviewing Sergio Puig, International Indigenous Economic Law, 52 U.C. Davis. L. Rev. 1243 (2019)), https://lex.jotwell.com/indigenous-harms-from-global-development-can-international-economic-law-provide-a-cure/.

Two Chapters in the GIGO Mess Epic

There are two problems with cost-benefit models for environmental policymaking: the model inputs and the model outputs. This is not exactly news. Researchers and reporters have documented honest overestimates of regulatory costs, honest undercounts of regulatory benefits, and dishonest attempts to cook the cost-benefit books.1 The authors of the articles reviewed here avoid such easy targets. Instead, they strike at the heart of the welfarist policymaking preference that promotes and privileges cost-benefit analysis.

Richard Revesz challenges the orthodoxy that distributional effects should not motivate regulatory choices. Bernard Harcourt assails the myth that cost-benefit analysis offers an objective motivation for regulatory choices.

Revesz has long argued that proponents of environmental regulation must learn to love, or at least to live with, cost-benefit analysis. He readily concedes that “all other things being equal,” regulations should be designed to maximize net benefits, that is, to be economically efficient. (Revesz, P. 1490.) But in Regulation and Distribution, Revesz reminds us that inequity prevents all other things from being equal—and that profoundly unequal distributive effects demand corrective action.

Regulation and Distribution does not bother with the simplistic claim that inequity can be ignored because welfare maximization trumps all other social goals. Instead, Revesz grapples with the more nuanced argument of Louis Kaplow and Steven Shavell: that redress for distributional effects of regulatory action should occur only through the tax code rather than through regulatory decisions themselves.2

Revesz replies that using the tax code, however attractive in theory, is impossible in practice. Redistribution through provisions of tax law requires legislative action, but such legislation seems exceedingly unlikely in today’s extended period of hyper-partisan legislative gridlock.

Even if redistributive legislation were possible, a system of taxation and money transfers is ill-suited to address many types of environmental injustice. In one of the most persuasive parts of Regulation and Distribution, Revesz analyzes the deficiencies of using a tax-and-transfer approach to respond to the unequal distribution of exposure to toxic pollutants. With higher exposures come a people who confront a greater risk of becoming sick, more eventual cases of disease, and more premature deaths. Revesz shows that any attempt to respond to this inequity through the income tax system will inevitably result in undercompensation. Some aspects of the harm are too difficult to attribute to individual taxpayers. Others are too difficult to quantify and monetize. Therefore, Revesz concludes, regulatory agencies, and not the Internal Revenue Service, should figure out and adopt measures to counter the harmful distributive effects of their regulations.

How should they do this? Revesz’s proposed solutions are interesting and thought-provoking, though they also raise questions.

Before presenting his recommendations, Revesz is careful to argue that only “unusuallylarge inequities” justify intervention, lest the welfare benefits of cost-benefit analysis be overwhelmed by the routine distributional effects of regulation. (Revesz, P. 1571.) Individual regulatory agencies cannot be trusted to make the call, Revesz seems to imply, so he suggests that the Office of Information and Regulatory Affairs (OIRA) define the trigger in a guidance document. Those who are already skeptical of OIRA’s outsized power might question this idea, although Revesz would doubtless answer that OIRA’s central role in regulation is simply a fact of life. Unfortunately, Regulation and Distribution offers no advice about how large an inequity is unusually large, or even about how to begin to make that decision. This would be a nice follow-up project.

Next, Revesz proposes creation of a standing interagency working group that would craft an appropriate redistributive response to any regulation satisfying OIRA’s triggering criterion. Revesz considers two types of possible responses: directly making the rule more equitable, or indirectly mitigating the rule’s inequitable effects.

Of the two, Revesz pays much more attention to the indirect mitigation option. Having argued that the tax code cannot be used for this purpose because of legislative gridlock, Revesz advocates executive branch action under existing statutory authorities. Citing efforts by the Obama Administration to help dislocated coal industry workers, he argues that Presidents have a host of options for ameliorating the focused economic harm that sometimes results from regulations that benefit society as a whole. Many of these options involve the targeted award of federal grants or the redeployment of contingency funds such as those set aside for national emergencies. The breadth of the possibilities supports Revesz’s proposal for an interagency working group.

Revesz’s mitigation goal is laudable. As he acknowledges, however, achieving it would require concerted action centrally controlled from the White House. Revesz argues that Presidential administration is, like OIRA, a fact of life; it may as well be deployed in support of beneficial environmental regulation. On the other hand, if a President may use emergency funds to help coal miners weather the effect of greenhouse gas emission limitations, what is to stop a President from using emergency funds to build a border wall? At this moment in history, the scope of Presidential authority inherent in Revesz’s proposal is arresting.

Mitigation approaches, notwithstanding the Presidential power they invoke, still amount to money transfers. Effectively, they use tax revenues (or federal borrowing) to achieve distributive goals, without requiring amendment of the tax code. Therefore, Revesz notes, these approaches are not the best way to address non-monetary harms, such as the environmental injustice of disproportionate exposures to toxic pollutants. To address inequitable non-monetary consequences of proposed rules, Revesz recommends that the interagency working group should consider directly changing the rule.

Regulation and Distribution discusses this option only briefly, leaving some interesting questions unaddressed. For example, could an agency ever justifiably reject a rule that maximizes net benefits in favor of a rule that is less efficient but more equitable? Might we be willing to accept a slightly smaller pie in exchange for keeping more people alive and healthy enough to enjoy partaking? Revesz very nearly implies an affirmative answer, but never quite says so. The follow-up question, “under what circumstances should an agency do this,” would surely lead to a very interesting conversation.

Bernard Harcourt, it seems, would eagerly join such a conversation. For if Regulation and Distribution challenges one pillar of cost-benefit orthodoxy without quite trying to bring down the whole edifice, Harcourt’s The Systems Fallacy has no such compunctions.

The Systems Fallacy argues persuasively that the claim that cost-benefit analysis provides policymakers with neutral, scientific, or objective guidance, is false. Harcourt contends that any cost-benefit analysis necessarily embodies normative political values and then, by guiding policymaking, in turn reshapes normative political values.

Harcourt traces the origins of cost-benefit analysis not to welfare economics but to military operations research and systems analysis. Systems analysis approaches worked well enough, he says, for military or engineering problems addressing the performance of tangible objects. But social policy problems do not define themselves. Before even confronting the problem of determining the values and functions to use in a policy analysis, Harcourt explains, an analyst must make a series of decisions about the scope of the analysis.

Harcourt identifies and illustrates five critical choice-of-scope decisions: conceptualizing the metaphorical social system to be analyzed, defining the system’s boundaries, determining the system’s objectives, selecting policy alternatives to be analyzed within the system, and choosing criteria to evaluate system performance under the various policy alternatives. With hypotheticals and real-world examples, Harcourt shows that each of these decisions “entail[s] normative choices about political values.” (Harcourt, P. 421.)

Although Harcourt concedes that systems analysis and cost-benefit analysis are not identical, it is easy to see – and Harcourt demonstrates—that cost-benefit analysis requires the same set of value-laden choice-of-scope decisions. Moreover, he contends, once those decisions produce a policy outcome, a feedback loop engages: cost-benefit analysis determines policies; the policies dictate allocations of social resources; the allocations of social resources affect people’s lived reality, altering the society’s balance of political values. This is what Harcourt finds most offensive about allowing cost-benefit analysis to set social policy: a supposedly objective analytical tool, often entrusted to technocrats, “silently impose[s] political values on society.” (Harcourt, P. 422.)

Harcourt acknowledges that smart welfare economists, again exemplified by Kaplow and Shavell, among others, have a response. If welfare is defined broadly enough to include people’s desires to implement political values such as fairness, then cost-benefit analysis can maximize welfare while including society’s political preferences, rather than privileging only some political values through choice-of-scope decisions. But Harcourt responds, devastatingly, that this catholic vision of welfare and welfare maximization exists only in theory. A real cost-benefit analysis inevitably addresses a particular, selected social problem. Therefore, a real cost-benefit analysis inevitably makes the normative choice-of-scope calls Harcourt describes. And, Harcourt notes, maximizing net benefits within the arbitrarily-defined metaphorical system being analyzed may not actually maximize overall social welfare, broadly defined to include political values.

The Systems Fallacy is not an article about environmental law. Harcourt’s arguments are general; his illustrations concern policies aimed at crime reduction. But any environmental lawyer will recognize at once that Harcourt’s argument applies strongly to environmental policy. Pollution control regulations, which so often promise benefits that are broadly dispersed and hard to quantify in exchange for costs that are concentrated and monetary, seem to face particularly stringent cost-benefit scrutiny from all three branches of government. And the problem Harcourt identifies goes beyond pollution regulation to pervade all environmental policy. The choice-of-scope decisions Harcourt describes, for example, are awfully familiar to anyone who has ever been involved with an environmental impact statement under the National Environmental Policy Act.

If there is a weak spot in The Systems Fallacy, it is the discussion of what to do about the problem the article identifies. Harcourt quite properly insists that he is not opposed to analytical rigor or to quantifying what can be quantified. But, he asserts, policy analysis should be limited to a single dimension, thereby evading the systems fallacy by avoiding the normative choices embedded in the construction of metaphorical systems to analyze. That solution seems unconvincing and unrealistic. Choosing the dimension for analysis would also be fraught with political value judgments, and the functional relationships between variables usually would turn a unidimensional metric into a multidimensional system.

Alternatively, Harcourt argues, the solution is to politicize cost-benefit analysis and policymaking, wresting back normative power from the technocrats. It is hard to argue with Harcourt’s objective; assuring political accountability for inherently political judgments is a good idea. But at this moment in history, when alternative facts are spun to serve political agendas, overbearing technocrats may not be society’s biggest problem.

Late in 2018, law professor and former OIRA administrator Cass Sunstein, in a keynote address at a conference of Revesz’s Institute for Policy Integrity, said: “We often think that the issues that divide us are issues of values. But the fundamental divisions involve issues of fact, not values.”3 No doubt that is true, sometimes. Not always, though. Sometimes, different people really do hold different values. Sometimes, even agreed-upon facts produce different policy positions in different people. Sometimes, different values even drive different perceptions of facts.

In distinct ways, both Regulation and Distribution and The Systems Fallacy teach us to be vigilant for those possibilities. Richard Revesz and Bernard Harcourt offer new reasons to be skeptical of cost-benefit policy prescriptions. They show us that cost-benefit analysis has limits that cannot be overcome by attacking the “garbage in” problem, by collecting more data, by refining functional models. Their work should inspire us to think outside the cost-benefit box. If we pay heed, we may be able to use cost-benefit analysis more wisely and to avoid the problem of policy “garbage out.”

  1. See, e.g., Lisa Friedman, E.P.A.’s Reckoning Is a Rosier View of Air Pollution, N.Y. Times, May 21, 2019, at A1.
  2. Louis Kaplow & Steven Shavell, Fairness versus Welfare (2002).
  3. News Release, N.Y.U. Inst. for Pol’y Integrity, The Institute for Policy Integrity Brings Economic Sense to Regulatory Debates (Nov. 30, 2018).
Cite as: Steve Gold, Two Chapters in the GIGO Mess Epic, JOTWELL (July 9, 2019) (reviewing Bernard E. Harcourt, The Systems Fallacy: A Genealogy and Critique of Public Policy and Cost-Benefit Analysis, 47 J. Legal Stud. 419 (2018); Richard L. Revesz, Regulation and Distribution, 93 N.Y.U. L. Rev. 1489 (2018)), https://lex.jotwell.com/?p=904.

Calibrating the Disgorgement Remedy for Design Patent Law

Pamela Samuelson & Mark P. Gergen, The Disgorgement Remedy of Design Patent Law, 108 Calif. L. Rev. __ (forthcoming, 2020), available at SSRN.

The law of design patents continues to evolve in dramatic ways. The law of remedies must also adapt to serve the underlying goals of design patent law and restitution. In creating and interpreting the disgorgement remedy, Congress and the Supreme Court have caused a crisis with unintended consequences. They have provided insufficient guidance on how to construe the remedy. Congress added this remedy to cure a perceived remedy deficit, but Congress crafted it too bluntly—authorizing disgorgement of “total profit” from one who sells, without a license from the owner, articles of manufacture that apply a patented design or colorable imitation. Meanwhile, the Court splintered the design patent right into smaller fragments without suggesting how to align the remedy.

In a thought-provoking critique, Professors Pamela Samuelson and Mark Gergen present a compelling, detailed argument for applying causation and apportionment to limit restitutionary disgorgement awards in partial design patent cases. This narrowing is essential to maintaining the utility of restitution in design patent law. The authors’ proposed solution also advances the normative purposes of restitution and its disgorgement remedy in design patent cases.

As Samuelson and Gergen demonstrate, a total-profits remedy risks overserving patent purposes and failing to adhere to restitution’s boundaries. The fragmentation of design patent rights calls for more precisely tailored remedies. The modern trend, as examined by Sarah Burstein, is to issue design patents on small parts of complex products and also on functionality more than ornamental designs. Samuelson and Gergen offer a thoughtful method of interpretation of the total-profits disgorgement remedy of § 289 of U.S. patent law.

But first they explore the flaws of recent judicial interpretation. They focus on the Apple v. Samsung case to reexamine the history and use of the disgorgement of total-profits remedy in design patent law. The Samsung Court construed “article of manufacture” for determining § 289’s disgorgement remedy so that it could be a component of the marketplace product rather than simply the end product. In other words, the infringement and remedy may be key to an element such as the Apple-inspired shape of the flat face of the smartphone rather than the Samsung phone itself. In so ruling, the Court vacated the lower court’s $399 million award that was intended to constitute Samsung’s total profit from sales of its phones that included infringing elements. The lower court judge had already remitted the jury verdict that exceeded $1 billion, which was the jury’s assessment of Samsung’s total profits. The Court vacated the award as remitted, but either award would be problematic under the Court’s new interpretation. It remanded for determination of the proper disgorgement amount in light of its narrowing of the right to the infringed elements (even if not separately salable) rather than the end product.

But as Samuelson and Gergen note, the Court fails to guide adjudicators on how to evaluate the relevant article of manufacture if not sold on the market and on how to determine the profits to disgorge where the infringement is partial rather than whole. On remand, the jury awarded $533 million in disgorgement of profits for Samsung’s infringement of Apple’s design patents. The parties settled after this verdict. Another case, Columbia Sportswear, raises similar concerns about a $3 million total-profits jury award for sales of gloves that infringed on a design patent on the lining material. The law remains unsettled and is also inconsistent with a Federal Circuit ruling.

The various awards during the Apple v. Samsung litigation process demonstrate the lack of precision in assessing the proper amount for disgorgement of profits under the Court’s new frame. Samuelson and Gergen forcefully critique the Court’s decision as “historically ill-informed and normatively unpersuasive.” (P. 3.) They lament that these flaws will lead to unsatisfying inquiries in complex technology cases. Further, the elusiveness of the examination will cause unpredictable, inconsistent, and occasionally grossly excessive awards. Instead, they advocate a more complete and detailed method for honoring the normative goals of restitution law that underlie the disgorgement remedy for design patent infringements.

Courts and scholars would be wise to incorporate restitution concepts to better protect the rights at stake. Restitution is not compensatory, but instead seeks to undo unjust benefits and deter wrongful behavior without punishing the infringer. A restitutionary disgorgement remedy like the one adopted by Congress for design patents alleviates proof problems for design patent owners who cannot prove actual damages with reasonable certainty and might otherwise be left with nominal recoveries. As Samuelson and Gergen’s article details, the legislative history confirms that Congress desired a meaningful remedy for design patent owners, but Congress did not intend the total profit remedy to be punitive.

It is key that a gain-based remedy of disgorgement of profits conform to restitution’s purposes—preventing unjust enrichment by stripping profits from wrongful infringement but not by punishing. The lack of guidance coupled with the greater fragmentation of the right is likely to result in inflated disgorgement awards. As the authors aptly state, disgorgement’s function is not compensatory but rather to erase the incentive to act wrongfully by stripping “from a wrongdoer profit that is causally attributable to his wrong, but not more than this (and sometimes less if apportionment is warranted).” (P. 3.) Accordingly, under a restitution frame using a counterfactual analysis, “wrongdoers are allowed to retain costs of committing the wrong and profits they would have made had they chosen to behave lawfully.” (P. 3.)

Proper calibration of disgorgement requires careful causation and apportionment analysis. Samuelson and Gergen acknowledge that determining causation and apportionment with precision will be challenging and inherently discretionary. For the interested reader, the authors meticulously explore the Solicitor General’s suggested test and VW Beetle design-patent hypothetical, and they compare various scenarios through a thought experiment with the famous restitution case of The Great Onyx Cave. This exploration demonstrates the distinction between causation and apportionment, the importance of alternative framing, and the correlation of these doctrines to goals such as fairness, efficiency, and desert. The legislative history does not foreclose this analysis, and if it does, Congress should amend this section to allow this inquiry especially for partial design infringement cases.

Who should conduct this remedial inquiry? The authors maintain that judges are better suited to make these assessments and attain more reasonable approximations than juries. Further, they show historical markers that support characterizing the remedy as equitable in this context. Despite the practice of using juries in determining design patent disgorgement awards, Samuelson and Gergen are convinced that a jury is not constitutionally required. The wise exercise of equitable discretion will go far in maintaining disgorgement as a powerful, yet restrained remedy to deter taking without asking, while preventing only the enrichment that is truly unjust.

Cite as: Caprice Roberts, Calibrating the Disgorgement Remedy for Design Patent Law, JOTWELL (June 25, 2019) (reviewing Pamela Samuelson & Mark P. Gergen, The Disgorgement Remedy of Design Patent Law, 108 Calif. L. Rev. __ (forthcoming, 2020), available at SSRN), https://lex.jotwell.com/calibrating-the-disgorgement-remedy-for-design-patent-law/.

William’s World: An Essay About the History of Just Price

Reading Professor William Boyd’s fine piece, Just Price, Public Utility, and the Long History of Economic Regulation in America, I couldn’t help but think of Jostein Gaardner’s international bestselling novel Sophie’s World. To be clear, there’s no teenage girl in Boyd’s essay receiving letters from a mysterious stranger that enlighten her on the history of philosophy (or, in Boyd’s case, economic regulation). But, like Gaardner, Boyd does an outstanding job of bringing to life and making accessible what many might otherwise consider a dense, perhaps even tedious subject matter—the history of price regulation. And unlike Gaardner, Boyd manages to do so with remarkably little sacrifice in breadth and depth of coverage.

Professor Boyd’s essay takes readers on an intriguing journey through time, tracing the doctrine of “just price” all the way back to the Aristotelian concept of corrective justice, devoted to preserving equality in exchange, commonly understood as an arithmetic proportion around a mean. From ancient Greece, readers are guided to medieval Italy where Thomas Aquinas and other Scholastics expanded Aristotle’s framing into the notion of commutative justice, a construct intended to encompass the full range of voluntary and involuntary interpersonal relationships, including but not limited to economic exchange.

Drawing on the work of Max Weber and Joseph Schumpeter, among others, Boyd relates cost-of-service pricing—a staple of modern-day regulation of public utilities—back to medieval markets and their notion that just price reflected the “common estimation” as the market clearing price under free competition. Another worthwhile stop is at the grain markets of France’s ancien régime where the police des grains enforced trading prices as the product of customary practices and formal rules of exchange to ensure a just price for life’s basic necessities, evidence of the emerging concept of a moral economy. At the dawn of industrialization, Boyd reminds us, price regulation, was widely accepted as a necessary means for maintaining social stability.

With this historic tour de force, professor Boyd sets the stage beautifully for his discussion of public utility regulation in the United States. From Munn v. Illinois over Smyth v. Ames to FPC v. Hope Natural Gas, his essay traces the defining moments in the evolution of the modern concept of public utility. Along the way, Boyd makes a persuasive argument that, Munn’s famous image of private enterprises “clothed with a public interest” notwithstanding, expanding government regulation of (previously) private economic activity was motivated primarily by growing concerns over deviations from the elusive ideal of just price. To drive this point home, Boyd reminds readers that the concept of just price had long been more than a mere numbers game, as the arithmetic mean promoted by Aristotelian corrective justice might suggest. The prevailing view among economists suggests that the just price doctrine was, at its core, about preventing coercion in economic exchange, especially in the context of essential services and other necessities.

With the doctrine of just price properly understood as a safeguard against the coercive exercise of market power, Boyd makes it easy to follow along on the final stage of his essay’s time travel through recent and ongoing efforts to complement, if not altogether replace, traditional regulation of public utility with competitive markets.  Pointing to agency capture and other pathologies of the regulatory process, Boyd persuasively reframes the move from cost-of-service regulation to greater reliance on competitive markets as a mere resurrection of the historically prevailing notion of just price as facilitating economic exchange free from coercive forces. Today, the Federal Energy Regulatory Commission and other regulators are retreating from the actual setting of prices, instead focusing on creating and monitoring markets with sufficient competition to realize the ideal of just price—whatever the exact number—properly conceived of as the product of economic exchange free from structural inequities.

Professor Boyd closes by musing that the experiment of just price may have run its course. It is this, the very last sentence that prompts my only gripe with his excellent essay. It is undoubtedly a tribute to Boyd’s refreshing intellectual humility that the author understates the importance of his own work. In doing so, however, an opportunity is missed to emphasize the critical role that the doctrine of just price, in its various iterations over time, has yet to play as we decide the future of public utility in the United States and beyond.

Two examples of the need for continued guidance from Aristotle and his intellectual progeny quickly come to mind: first, the ongoing debate over the “fairness” of policies that seek to promote the transition to a low-carbon future by enabling better-to-do homeowners to put solar panels on their rooftops and thereby reduce their electric utility bills. The doctrine of just price so ably unpacked and brought to life by professor Boyd has a lot to teach us in the assessment, and ultimately, design of policy incentives and electricity rates, among others. The second example builds on Boyd’s discussion of competitive wholesale power markets. With their (current) inability to internalize the social costs of carbon and other externalities, these markets remind us of the Scholastics’ insight that only fully competitive markets operating free from market failures, should be trusted to realize the ideal of just pricing.

With Just Price, Public Utility, and the Long History of Economic Regulation in America, William Boyd adds important historic perspective and a much needed voice of reason to the increasingly polarized debate over the future of public utility regulation. Boyd himself describes his fine essay as part of a larger project. I for one cannot wait to see the sequel. If it is as captivating and compelling a read as Just Price, we are all in for another treat.

Cite as: Felix Mormann, William’s World: An Essay About the History of Just Price, JOTWELL (May 16, 2019) (reviewing William Boyd, Just Price, Public Utility, and the Long History of Economic Regulation in America, 35 Yale J. Reg. 721 (2018)), https://lex.jotwell.com/williams-world-an-essay-about-the-history-of-just-price/.

Rightless Remedies

Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action, 27 N.Z.U.L. Rev. 1033 (2017), available at SSRN.

It is a familiar quip that a right without a remedy is no right at all. A recent article by Stephen A. Smith shows, however, that there is such a thing as a remedy with no right—something I might call a “rightless remedy.” In Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action, Smith explicates a category of judicial orders (i.e., remedies) that are not tied to any underlying legal right or wrong. In doing so, Smith tells us something important about both rights and remedies.

To appreciate Smith’s insights, it is first important to understand his taxonomy. The phrase “cause of action” can mean many things, but to Smith and other scholars writing in this area, a “cause of action” is a set of facts that justify a judicially-administered remedy. Understood as such, a cause of action is not necessarily co-extensive with substantive law. The substantive law contains instructions for citizens (e.g., “do not hit others,”) but cause-of-action law (sometimes called “remedial law”) contains instructions for courts (e.g. “if a person proves to you that she has been hit, order the hitter to pay her damages”). Causes of action will usually track the substantive law closely, and for that reason we often take it for granted that, where a wrong has been committed, a court will issue a remedy. But there are certainly situations in which remedial law does not authorize judicial intervention, even when a wrong has been committed (such as, for example, when a court declines to issue an injunction because it will impose an undue hardship on the defendant). Far less common (or even ignored until Smith showed otherwise) are situations in which a remedy issues where no wrong has been committed—but that is an issue we will get to in a bit.

Smith’s project is to explain, as a categorical matter, the circumstances in which courts will issue a remedy. Two of these—rights-threats and wrongs—are easily recognizable to legal scholars and practitioners. When your neighbor threatens to cut down your tree (i.e., threatens to infringe one of your rights), a court will put down this threat by ordering your neighbor not to do so. Relatedly, if your neighbor cuts down your tree before you can make it to court (i.e., commits a legal wrong), a court will order the neighbor to pay you damages. Neither of these grounds for relief upsets our common understanding of remedial law. But Smith’s third ground—injustice—introduces a new variation of remedial law.

An injustice, in Smith’s telling, is a judicially administered remedy that is not based on a rights-threat or a wrong. Smith offers several examples, but a useful one for our purposes is restitution in the case of defectively transferred funds. If I mistakenly transfer money to your account, a court will order you to return the money—even though you have done nothing wrong. One might counter that retaining money mistakenly transferred to you is wrongful, but Smith convincingly shows why that is false. There is no underlying duty to return such money because people who receive such money often have no knowledge of it, or even if they do, have no way to determine with any certainty—short of judicial intervention—to whom to return the money. Thus, in the case of mistakenly transferred funds, the traditional role of the court is not to enforce an underlying duty through a remedy, but simply to correct the injustice by ordering the money be returned.

Having shown that a remedy in injustice cases is, to use my term, a “rightless remedy,” Smith turns to the question of why such a phenomenon should exist in private law. Part of the reason is contained in the point above: people frequently cannot be expected to have sufficient knowledge to comply with such a duty. Thus, if society wishes the money to be returned (to continue with the example from above), it can only accomplish this by a judicial order.

Perhaps. Or perhaps not. Instead of an order, we could accomplish the same result with a judicial declaration that a certain sum of money was mistakenly transferred. The declaration would thus trigger a substantive duty to return the funds—but only if we recognize a substantive duty to correct injustices. So the real nub of the issue is: why we don’t recognize an underlying duty to correct an injustice?

Smith’s answer, which I find the most interesting part of his paper, is as follows:

To say that someone has a duty to do X is to say, roughly, that regardless of how costly or inconvenient X is, X must be done. Duties are correlative to rights, and rights, to borrow Ronald Dworkin’s terminology, are trumps. Thus we say (and the law confirms) that we have rights to physical integrity—and correlative duties to respect physical integrity—because we believe that, with rare exceptions, non-consensual interferences with another’s physical integrity are never permissible.

“Correcting injustices” is different than “not injuring”: it is a valuable thing to do, but it is not, or at least should not be, a duty. Private law duties are basically duties not to interfere with others’ persons, property, or liberty, and duties to keep contractual promises. The actions that are required to correct injustices have a different orientation. A failure to compensate a loss or to reverse an enrichment is not an interference with the beneficiary’s personal property or liberty; nor is it breaking a promise. It is simply a failure to correct an injustice. Correcting an injustice is valuable but failing to do so is not a wrong in the sense that stealing or lying or breaking promises is wrong. As a society, we regularly trade off the value of correcting injustices against other values. The courts clearly play a crucial role in correcting injustices….Yet it is clear that criminals are often not brought to court (or not pursued at all) because courts and prosecutors are in short supply.…[I]f our goal was to ensure that every injustice was corrected, there would be almost no limit to the number of courts, judges, lawyers, police officers and so on that the State ought to provide.” (P. 29.)

Summing up his point, Smith puts it thus: “Private law duties correlate to individual rights, but no one has a right that justice be done, and certainly not a right that another private individual ensure that justice be done.” (P. 30) This is not to say that the state may not concern itself with injustices, or that it may not refer them to the courts for resolution when it finds them. The fact that restitution cases are resolved by courts is enough to prove this point. But such adjudication is not, in a fundamental sense, the adjudication of rights. Instead, it is something that Smith calls the provision of “justice services”—the correction of an unjust circumstance that has arisen without any wrong being committed.

Smith’s article is both enlightening and thought-provoking. In explaining the phenomenon of rightless remedies—i.e., court orders untethered to underlying substantive rights—Smith shows us something important about both rights and remedies. In particular, he shows us how substantive rights are correlated with wrongs but always correlated with remedies. In doing so, Smith deepens our understanding of the complex relationship between the common law itself and institutions that both create and maintain it (i.e., the courts).

Cite as: Jack Preis, Rightless Remedies, JOTWELL (May 6, 2019) (reviewing Stephen A. Smith, Rights-Threats, Wrongs and Injustices: The Common Law Causes of Action, 27 N.Z.U.L. Rev. 1033 (2017), available at SSRN), https://lex.jotwell.com/rightless-remedies/.