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” 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.” 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.”
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.”
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.
Cite as: Wendy Anne Bach, Poverty, Privacy, and Living Out of Reach
(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/
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,” 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. 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. 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, then the authors’ provide a sensible way of accomplishing this goal. The Article is highly recommended!
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.
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. 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.
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.” 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.”
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
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.
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.
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
(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/
Every law student is told repeatedly to check that the cases they are relying on are still “good” law. They may even be told that not using a citator such as Shepard’s, KeyCite, or BCite could be malpractice and multiple ethics cases would support that claim. But how reliable are the results returned by these systems?
Paul Hellyer has published the surprising results of an important study investigating this question. Hellyer looked at 357 citing relationships that one or more of these three citators labeled as negative. “Out of these, all three citators agree that there was negative treatment only 53 times. This means that in 85% of these citing relationships, the three citators do not agree on whether there was negative treatment.” (P. 464.) Some of the differentiation between systems could be attributed to one system incorrectly marking a relationship as negative when it is not. This might be considered a less egregious mistake if one presumes that the researcher would review the flagged case and find no negative treatment, although it is a costly mistake in a field where time matters. However, Hellyer accounts for the false positive (or negative, in this case) problem and the results of his study are distressing.
We are told that the citators are reliable. I, along with numerous law professors and judges, have told students and attorneys that failure to use a citator could lead to anything from a judicial tongue lashing to disciplinary action to malpractice charges. As Hellyer points out (P. 450), the marketing for citators assures us that the systems produce reliable results. For example, KeyCite is marketed as “the industry’s most complete and accurate citator” and that you can be “confident you’re relying on valid law.” Similarly, the Shepard’s product page proclaims, “Is it good law? Shepardize® and be sure.” Bloomberg BNA is less boastful in its promotion of BCite stating, “Easy to use indicators…allow you to immediately (emphasis added) see how other cases have treated your case.”
Let’s look at some more data from Hellyer’s study, which he believes is “the largest statistical comparison study of citator performance for case validation” and the first to include BCite. (P. 450.) In addition to just looking at how the citators labeled the relationships, Hellyer assesses the case opinions to determine the nature of the citing relationship and whether it was correctly labeled by the citator. He differentiates between negative relationships that were not identified in any way and those that misidentified the relationship. An example of this would be if a case was in fact overturned but the citator labeled it as something else, such as “distinguished by.” When Hellyer examined whether the citators agreed on the subset of negative treatment, all three systems agreed on about only 11% of references.
Hellyer’s article is an important read for anyone who relies on a citator for case validation or, determining whether a case is still “good” law. The results are fascinating and his methodology is thorough and detailed. Before delving into his findings, Hellyer reviews previous studies and explains his process in detail. His dataset is available upon request. The article has additional value because Hellyer shared his results with the three vendors prior to publication and describes and responds to some of their criticisms in his article, allowing the reader to make their own assessment of the critique.
Even more interesting than the broader statistics, are Hellyer’s details of specific errors. He acknowledges that omission errors, as opposed to misidentification errors, were unpublished cases that might present less of a problem for attorneys. However, Hellyer goes on to examine the misidentification errors and concludes that all three citators exhibit the greatest issues not in identifying the cases but in the editorial analysis of what the citing relationship means. For example, in Hellyer’s dataset there were four cases later overruled by the United States Supreme Court. All three citators misidentified at least one citing relationship and one of them misidentified three of the four cases as something other than being overruled. Hellyer’s examination of these cases revealed how these misidentification errors can filter through to other citing relationships and create further errors. (Pp. 467-471.)
Analysis of citing relationships, and whether those relationships are positive and negative, is essential to the legal system and reliance on “good” law, or case validation, is the critical first step. Hellyer states that the results of his analysis mean “that when you citate a case that has negative treatment, the results you get depend mainly on which citator you happen to be using.” (P. 465.) This is a stunning assessment of a vital resource that is so widely and heavily relied upon by the legal community.
Cite as: Kristina Niedringhaus, Is it a “Good” Case? Can You Rely on BCite, KeyCite, and Shepard’s to Tell You?
(April 22, 2019) (reviewing Paul Hellyer, Evaluating Shepard’s, KeyCite, and BCite for Case Validation Accuracy
, 110 Law Libr. J.
449 (2018)), https://lex.jotwell.com/is-it-a-good-case-can-you-rely-on-bcite-keycite-and-shepards-to-tell-you/
International and domestic laws aimed at protecting children involved in human smuggling generally operate under the assumption that these children are vulnerable and defenseless prey to dangerous and violent criminals, for whom they work against their will. In her recent article, “Circuit Children”: The Experiences and Perspectives of Children Engaged in Migrant Smuggling Facilitation on the US-Mexico Border, sociologist Gabriella Sanchez uses original qualitative fieldwork to upend or at least nuance this claim that sits at the heart of current anti-smuggling laws. The children whose stories she tells offer a much more complex picture of their role in helping others navigate the U.S.-Mexico border.
While many scholars have decried the carceral turn in human smuggling laws, Sanchez offers a key piece of evidence demonstrating the fundamental problems with this move to criminalization. It is, as has been far too obvious of late, easy for politicians and governments to demonize actors in the migratory process, both migrants and those who help them to move. But the carceral approach masks the structural forces that render migration both necessary and nearly impossible to undertake lawfully for individuals who do not win the birthplace lottery. Sanchez’s body of work highlights the humanity and dignity of the individuals who facilitate migrant journeys—who might, from a different perspective, be viewed as part of a modern-day Underground Railroad. Though she refrains from hitting the reader over the head, the unmistakable take-away from her work is that these individuals are not the source of the problem; they are doing the best they can in the face of structural and geopolitical forces beyond their control.
Sanchez’s empirical research fills a crucial gap in the literature. Undocumented migration is by its very nature challenging to study; people moving outside the bounds of the law are not easy to track let alone interview. Sanchez engages with this challenge head-on to gather insights into the realities of human movement across borders that are often at odds with the assumptions animating laws that criminalize human smuggling. Her previous scholarship challenges popular depictions of migrant smugglers as ruthless criminals, using empirical work to demonstrate the symbiotic relationships and social networks that often connect migrants and those who facilitate their journeys. If migrants’ perceptions of smugglers rarely enter the legal or even scholarly discourse, it is rarer still to hear from children who participate in facilitating human movement across borders.
The voices of these children tell a story that, in Sanchez’s words, defies “the state-centric notion that the facilitation of informal, clandestine mobility strategies inherently constitutes a crime” as well as the assumption that “smuggling is the exclusive domain of organized crime.” Her interviews with 18 children aged 14 to 17 in Ciudad Juárez reveal conscious decisions to engage in smuggling that enabled them to support their families financially. These children empathized with the migrants, and appreciated the personal, social, and economic capital they gained through their smuggling work. Sanchez recognizes the risks faced by these children, but notes that they viewed law enforcement, especially U.S. Border Patrol, as the most fearsome danger.
Sanchez’s interviews raise the voices of a small group of children in one specific location. The story they tell cannot possibly be universal, but it raises important questions about the criminalization of migrant smuggling. Sanchez emphasizes that children involved in smuggling face serious risks, but refutes essentializing claims that all of these children are forced against their will to work for transnational organized crime. Their perspectives beg for further study, and starkly highlight the need for a reassessment of law’s carceral approach to migrant smuggling.
Cite as: Jaya Ramji-Nogales, Out of the Mouths of Babes
(March 19, 2019) (reviewing Gabriella Sanchez, "Circuit Children": The Experiences and Perspectives of Children Engaged in Migrant Smuggling Facilitation on the US-Mexico Border
, 11 Anti-Trafficking Review
103 (2018)), https://lex.jotwell.com/out-of-the-mouths-of-babes/
The recent report from the Intergovernmental Panel on Climate Change this fall has made clear the urgent need to address climate change. What should be the primary policy tool that we use to address the problem? Economists have vociferously advocated for the use of carbon taxes or cap-and-trade permit systems, on the grounds that they provide the most efficient way to decarbonize global economies. Yet carbon taxes have had little success in the political arena. Many of the existing policies that countries and states have used to address carbon emissions have been regulations or subsidies, not market-based approaches. Is this a fundamental misstep on the part of policymakers?
In her recent article, Energy, Governance, and Market Mechanisms, Alice Kaswan argues that this is not a misstep, and that in fact there are good reasons—political, democratic, even economic—to prefer non-market-based instruments to advance decarbonization. Her article is ambitious in its scope but effective in raising important questions about what approach is best.
Kaswan raises a couple of key points about why non-market-based mechanisms may be superior to address the transition to a decarbonized economy. First, she argues that government coordination of climate policies can allow the achievement of multiple goals in addition to reducing carbon emissions at the least cost (which is what market-based tools excel at). For instance, we might be concerned about the distributional impacts of a transition to a decarbonized economy and adding on social equity measures to market-based tools may not be as effective as a fully integrated approach. Similarly, there are a lot of additional issues we are concerned about in energy production than simply carbon emissions (e.g., bird mortality from wind turbines, or long-term waste disposal from nuclear power), and a price on carbon alone cannot help us resolve those tradeoffs.
Second, Kaswan argues that long-term planning is an essential component of a transition to a carbon-free energy system, given the interconnectedness of a wide range of elements of our energy systems and the long timeframes for many investments in those systems. According to Kaswan, market-based tools may not be the most effective in managing these kinds of planned transitions—particularly if carbon prices are low, and so far we have only observed relatively low carbon prices in practice.
Third, Kaswan argues that public participation would be more robust for non-market-based regulatory measures, and that this public participation will result in a more equitable and more accountable approach to carbon reductions. And finally, Kaswan argues that non-market-based mechanisms appear to be more politically realistic than stringent market-based tools—something that has been quite apparent this fall as the French protest against a new gas tax and Washington state voters turned down a carbon tax proposal.
One law review article will not be able to conclusively answer any of these difficult questions about the role of market-based mechanisms in climate policy—the challenge spans the entirety of the modern economy, across countries with very different political and cultural settings, and an incredible range of technical problems. But Kaswan’s piece is a vital starting point for the now-vibrant debate about which policy approaches will be more successful, and an important counterpoint to a policy discourse that has mostly been dominated by advocates of carbon pricing. Even if you don’t agree with her arguments, Kaswan’s analysis should give you important points to consider.